The American Spectator

While the article makes sense, its details leave us in the same mess where we are — i.e. more government management of economic assets in order to insulate us from poor and criminal management by both private and public officials. If we proceed along this path we owe Mussolini a huge apology and Eisenhower a huge slap in the face concerning the dangers of the military-industrial complex.

What expertise does the government have in banking? If it has so much talent that it can cure the banking insolvencies, then all banks should be nationalized today.

The solution to the banking crisis is not to play shell games with corrosive assets but to let the orderly and perhaps not so orderly liquidation of them occur in the private market with as much alacrity as possible. The government’s role would be to provide incentives and support for those who need to deliver food and shelter to those on the losing end.

Such an approach would introduce a great deal of instability to the banking system for the rest of the year but it would recover its balance. The large incompetent money center banks would dissolve into vapors with second tier banks to step into the void. If the government wants a role it can begin investigations into root cause analysis of the crisis but with a Senate which confirmed a tax cheating liar like Timothy Geithner I suspect that more cellars than roots would be found.

Government and bankster led solutions are the same as letting the fox guard the hen house. Ultimately resolution trust type solutions are akin to bloodletting in an age of modern medicine. There are too many differences between now and the late 1980s to cover here but I assert that the efforts to bail out the savings and loan institutions removed the moral hazard needed to avert our present crisis.

The discipline of moral hazard is very powerful. Bankers did not become irresponsible for 65 years until a new generation with no conception of the banking holiday of 1933 took over. Until the new generation of bankers is taught the indelible lesson that the mismanagement of banks — even if mandated by government — is fraught with dangers and devastation, then we ensure a quick repeat. All of this talk of saving the banks and banksters from themselves is the talk of a corrupt, gasping, collapsing regime.

I look forward to articles addressing causation of the banking insolvencies as most mainstream analysis has completely ignored the issue of capital destruction.
— David Bonn

AXIS OF EVIL, TV EDITION
Re: Jeffrey Lord’s The Limbaugh-Hannity Administration:

When I was twelve, one of my chores was to watch the evening news on television and note down the stock market report for my dad. We lived in the Midwest and there was no way to get the report back then except to wait for the morning newspaper if you did not get the report from the television news. Old Uncle Walter one evening during the Tet Offensive showed the execution of a war criminal who was the commander of an attack on school children in Saigon. But Walter did not say that this was a war criminal and that the Geneva Convention calls for summary execution of the illegal combatant on the field of battle. I would not learn that until I was seventeen. I had never seen anyone executed before then and to see that without context was certainly more shocking than when I first saw people having sex.

Walter and the other liberals did not openly call for the execution of the three and half million Indo-Chinese who were killed but were certainly aware that they would be killed. It had been discussed by Howard K Smith on ABC in his commentaries. There should be some way to fine CBS for allowing the network to become party to one of the three greatest crimes of the twentieth century. Maybe a fine of $1000 per person killed. CBS was after all a government-licensed broadcasting agent with government troops at the ready to put down any pirate broadcaster who dared to speak up with a dissenting view.
— Gregory Franke