Regulate Wall St

Wall St is supposed to finance economic growth, funnel society's scarce capital into things that make us healthier, wealthier and wiser. Most economic activities require a lot of cash up front before they pay off at all. You have to pay construction workers while the building is under construction. Money from the sale of the building, or rent, doesn't come in until AFTER the building is finished. Manufacturing automobiles, airplanes, consumer goods, machine tools, damn near anything, requires paying the workers, and the parts suppliers, long BEFORE the product is shipped and paid for. To say nothing of paying for the factory. Most business is like this, you need to borrow money to get things going long before the profits come in. No loans, no business.
Wall St firms are SUPPOSED to take investor's spare capital and lend it to businesses that need it. Unfortunately, a lot of them were using investor's funds to play poker with each other. The entire "credit default swap" swindle was such a poker game. Credit default swaps sank AIG for $150 billion taxpayer bailout. The "secondary mortgage market" aka mortgage backed securities, sank Lehman and Merrill Lynch. In short, regulation should encourage loans to real businesses, and discourage gambling between themselves.
Banks in particular need regulation to keep them from gambling with FDIC insured funds. The real free market, where firms fail and go out of business when they do stupid things, or are merely unlucky, is stressful. Bank failures are painful, not only for the bank, but for all the depositors who loose their savings. The pain was so intense, that back in FDR's time, Uncle Sam guaranteed bank deposits. If the bank goes broke, Uncle pays off the depositors. No too big to fail here, Uncle guarantees EVERY US bank. With that kind of backup, we need stiff regulations to prevent banks from doing risky things with taxpayer money.
For instance, the depression era Glass-Stegall act used to prevent banks from playing the stock market. Banks lobbied against Glass-Stegall for 50 years and finally got it repealed under Clinton. Big mistake. Great Depression II was caused by banks speculating in mortgage backed securities, credit default swaps, and the stock market. We ought to outlaw all three activities for FDIC insured banks.
Let the un insured hedge funds do the gambling, not taxpayer insured banks.

Cap Wall St Salaries

Watched Meet the Press with David Gregory this morning. He interviewed Tim Geithner (Obama's Treasury Secretary) . Geithner managed to evade most of Gregory's questions, but when the conversation drifted around to salary caps for bailed out companies it did get interesting. Geithner is unhappy to see companies taking tax money and handing it over to the suits who drove their companies over a cliff, and took the world economy down as a side effect. Gregory worried that salary caps would cause a flight of talent.
Not to worry David Gregory. The people having their salaries capped are the turkeys who caused Great Depression II. They are not talent, and the companies would be well rid of them. Plus in the toughest job market since 1929, they are unlikely to find work anywhere else.

Union Leader backs off of Web

According to Now Hampshire, the Union Leader will no longer post political news and columnists on it's website. You want to read 'em, you gotta buy the paper. The Now Hampshire article is filled with wailing and whining about the unfairness of it all.
Let's see how this works out. The Union Leader has clearly decided that they only get revenue when people buy the paper. This is not rocket science. They have it right. So, they have decided to stop giving away the paper's best stuff on the web for free. If the content is that good, people will buy the paper to get it. And if it isn't that good, they won't.
And if it isn't that good? I think we know what happens then.
The business model of newspapers is straight forward, and in the absence of competition, it works. You get revenue for ad sales and paper sales. The business model for websites/blogs is unclear. Unless you are the Wall St Journal, people won't pay to read a website. Advertisers are harder to come by and don't pay as much as print ads. Websites/blogs are essentially free to operate, no bills for ink and paper, no wages to printers, delivery truck drivers and paper boys. It is doubtful that a Union Leader website could bring in enough revenue to support the reporters and editors they have now.
Dunno how this plays out in the end. Newspapers competed with radio and TV by offering more comprehensive coverage, and were readable on the commuter train. Webby competitors can be just as comprehensive, and if the WiFi ing of America works out, they will be readable on the commuter train too. Plus, who takes the train to work anymore?

Too big to read

The health care bill just porked up again. It's now 2000 pages long. Last month it was 1000 pages. Then it hit 1500 pages last week and yesterday it plumped up again. At this rate it will be 3 or 4 thousand pages after it gets out of the House-Senate conference committee.
This bill should be opposed, just 'cause it is so long. It's so long nobody knows what all is in it, what it will do, and what it will cost. Within 2000 pages of gobble-de-gook to search thru, a halfway bright bureaucrat can find a paragraph that permits what ever it is he wants to do. Or forbids what ever he doesn't like. So can lawyers and judges. In short, this bill turns control of health care over to un-elected bureaucrats, lawyers, judges, and pressure groups. And we have no control over any of these people. The bureaucrats are all protected by civil service and cannot be fired. Lawyers are like crab grass, they pop up everywhere and kill off the decent grass, and judges serve for life. In short, we give control of health care, 18% of the economy and growing, over to a bunch of people you wouldn't invite into your home.
Write your congress critters before they sell us down the river.

Too Big to Fail

Long discussion on the Lehrer News Hour about treatment of businesses "too big to fail" such as AIG or CitiBank/Group/Whatever. Not once during the discussion did anyone mention making them smaller. We pride ourselves on being a free market country. Well, you can't have a free market and have monopoly businesses. Once a business acheives a monopoly, it can charge whatever the traffic will bear, there are no competitors left, and we customers get robbed. Any company "too big to fail" is big enough to be a monopoly.
We used to have an anti-trust policy in this country. Anti Trust goes way back, to the 1880's with the passage of the Sherman Anti-Trust Act. This was used to break up Standard Oil, John D. Rockefeller's monopoly oil company, a hundred years ago. There is still an "Anti Trust" division at the Justice department, which was active enough to attempt a breakup of IBM back in the 1960's, and did acheive a breakup of the telephone company in the 1970's. Too bad they went to sleep and haven't done a thing (save draw their pay) for the last 20 years.
Antt-Trust used to go to court to block mergers of big companies. That was useful, 'cause the way companies grow is by merging, taking over, or buying out their competitors. If anti-trust have been doing its job, AIG never would have acheived the size it did before self destructing.
The Justice department would have objected to the mergers on anti trust grounds.
In short, the solution to the "too big to fail" company problem is simple, don't let companies grow that big, and break up the ones that have. We used to do that.

"At little or no cost to you"

You must have seen those Scooter Store and Hoveround ads on TV. They are right up there with the Gieco Gecko ads on Fox News. I got junk mail from them today. "You may be able to get a power chair or scooter at little or no cost to you with Medicare and private insurance." it says right up front.
Translation: They are so pricey that no one buys them with their own money.
Question. Should health insurance pay for power wheel chairs? As opposed to the standard you-push-it type? Are they not luxuries that ought to be purchased by the individual? Why should my tax money or insurance premiums go the the Scooter Store?

The well equipped home workshop

The well equipped shop needs an electric bench grinder to keep tools sharp. So far so good, I got one of those. Then of course you need a wheel dresser, a gizmo to flatten out any rough spots on the abrasive wheels. They used to be an all steel gizmo of no particular classiness.
Times have changed. You can now get a diamond wheel dresser, complete with a 1/4 caret diamond tip, for only $62.50 from Lee Valley, a maker of lovely but pricey tools. Quarter caret is close to engagement ring size. A replacement diamond, in case you get clumsy and break one, is only $21.50.
Them man made diamond folks are getting better and better at it.