Treasury Bailing Out Insurers --- Hooray We're Saved

Today is going to be a great day. The Washington Post has revealed that preliminary approval has been granted to some of the nation's largest insurance companies for a capital infusion courtesy of TARP. http://www.washingtonpost.com/wp-dyn/content/article/2009/05/14/AR2009051403866.html?hpid=topnews

Anyone else other than me not reassured? Why stop at insurers? Rumor is trucking companies are going to be asking for bailouts next. After that retail. Where does the madness stop? Wouldn't it be nice if we could just bail everyone out? It sure sounds good. No suffering ever for anyone. Not a day goes by that I don't wish I was dumb enough to think it could work. Think of all the good things we could do (and probably will do in the future). We could pass laws stopping companies from firing people. Raise minimum wage to a million dollars an hour. Hooray we're all rich.

Anyway, aside from the ridiculousness of bailing anybody out how much money is actually left in the TARP? If we didn't live in Bizarro World it seems like this would be an easy question to answer. Instead the situation always plays out something like this.

Ron Paul: How much money is left in the TARP?

Timothy Geithner: Well Congressman Paul, first off I would like to thank you for your excellent question. I'd like to begin answering your very important question by first telling you about the overwhelming support Congress gave the Treasury when it passed the TARP. As you know, the program was necessary in order to stop the systemic collapse of the banking system.... [Here Geithner tries to use the words "systemic collapse" as often as possible].... Now this program along with many others that we have diligently instituted have done wonders for increasing liquidity in the capital system. As long as we persevere we have nothing to fear. [Wow that one is quite catchy. Geithner should seriously look into stealing it.]

Barney Frank: Congressman Paul your time is up

Ron Paul: Sigh

Now you see what just happened there? The question never got answered. Geithner said all kinds of things while managing to say nothing at all. Most likely because TARP funds are running dry and he doesn't want anyone to know it. It's much better when everyone thinks the money tree called TARP is in full bloom.

Of course who really cares if TARP runs out of money. At this point I have no doubt that they will somehow either legally pass more money through Congress or use an unconstitutional end around of Congress like they used the FDIC for in the PPIP.

Ah well, at least I can sleep better tonight knowing my life insurer has plenty of fun paper money it can throw around should I die. Goodnight All.

Barney Frank is a Genius

Barney Frank is my personal hero. His latest crusade is one of his most admirable yet. He has determined that municipalities are paying too high an interest premium to borrow debt and that he Barney Frank is going to save them by reducing their borrowing costs.

I'm not quite sure what it means when he says that rates are too high. I assume he doesn't like the way the free market works and is unhappy with the actual numerical interest rate municipalities are paying. I'm sure he is right too. Municipalities are being screwed. After all, everyone knows the private market has a vendetta against these municipalities and the fact that they are paying unfairly high rates has nothing at all to do with the fact that they are massively insolvent and therefore huge credit risks.

But this is why Mr. Frank is so amazing and is my personal hero. He is able to act with 100% confidence without anything at all resembling logic. He, Barney Frank, hero of the people, is going to lower the cost to municipalities so all the corrupt, inefficient payments to his voting constituents can continue unabated.

Now how is he going to do this you ask? How is he going to somehow magically lower costs without any unintended consequences?

Well this is why Barney Frank is my hero and you are not. You are a skeptic who doubts the power of the almighty one. Just believe. Don't question. God knows you will be happier. Of course if you, like me, are still skeptical I'll give you the answer. He can't. He is a buffoon who has no idea what he is doing but views himself as a Messiah - a savior of those who can't defend themselves.

Which brings us to a small but interesting philosophical tangent. Barney Frank doesn't believe he is evil. Nobody actually believes they are evil. Everyone is always trying to do good. Even Hitler thought he was doing good. Eliminating the evil Jews and restoring the Aryan race to its rightful place was his crusade.

Barney Frank is not evil but he is either horribly ignorant or tremendously arrogant. Barney Frank's plan calls for the Federal Government to guarantee part or all of municipal debt. By doing this Barney will most assuredly accomplish his goal of lowering cities' borrowing costs at the same time as he massively increases the credit risk of the United States. Aside from the fact that the United States is already a banana republic, this bill, if passed, would be the single most damaging thing Mr. Frank has ever done. It destroys the Constitutional concept of Federalism, it massively increases the United States' credit risk, and it creates moral hazards as far as the eye can see.

Let's hope it passes so this charade of a U.S. AAA rating ends soon.