“But, but, but… but we have to control things! We can’t let people make free, independent decisions. We can’t let bad investments liquidate. People could loose their overpaid jobs!!”

For fuck sake… could someone read America’s Great Depression to them before mommy government puts them to bed at night? A chapter or two at least.

Economic Grief

http://news.yahoo.com/…

House Speaker Nancy Pelosi said Wednesday that a $150 billion economic stimulus plan is needed now because of the faltering economy and she may call the House into session after the election to pass it.

“We may have to go back into session before the next Congress,” Pelosi said.

Pelosi said a stimulus package would create jobs by investing in public works, increasing food stamps benefits and extending unemployment insurance for the long-term jobless. She said lawmakers need to “hunker down” and look closely at the federal budget for possible savings, and reconsider whether the U.S. can afford to fight “a war without end” in Iraq.

“We have some very harsh decisions to make and some of them can’t wait until January,” said Pelosi, D-Calif.

“What we can’t wait for is a stimulus package,” Pelosi added. “We may have to go back into session before the next Congress.”

Invest? No… the government doesn’t invest. It steals or borrows and spends. Public works aren’t jobs but make work projects. Food stamps and unemployment insurance increase unemployment and will help prolong the recession.

Someone needs to tie Pelosi down, A Clockwork Orange style, and make her read America’s Great Depression, The Case Against the Fed and Economics in One Lesson.

http://www.marketwatch.com/…

The U.S. Federal Reserve is reportedly looking at getting into unsecured lending, an extreme step that could allow it to directly purchase commercial paper, according to a report in the Financial Times. The report said the Fed had never done so in its history, but doing so could allow it to participate in the frozen inter-bank money market and the contracting commercial paper market. The Fed doesn’t believe it has the legal mandate to make unsecured loans, so it would need the Treasury to guarantee any losses. The Fed had said in a statement on Monday that “the Federal Reserve and the Treasury Department are consulting with market participants on ways to provide additional support for term unsecured funding markets.”

This charade is sad at times. They are grasping at straws… either because they think they have to or because they don’t know any better. Unfortunately for us their mistakes are our hard times.

http://news.yahoo.com/…

Hoyer, though, said on NBC’s “Today” show he was concerned that the tax issues could complicate the chances of final congressional passage when the legislation comes back to the House floor for a vote.

“There’s no doubt the tax package is very controversial,” he said, adding that “there’s no doubt in my mind that the Senate added this because they thought that’s the only way they could get it passed.” He said he wasn’t pleased the tax provisions were attached to the bill.

Adding a set of popular business tax breaks and legislation to prevent more than 20 million middle-class taxpayers from feeling the bite of the alternative minimum tax promised to win House GOP votes for the plan even as it angered moderate “Blue Dog” Democrats concerned about the tax cuts adding to the deficit.

I reported earlier on the some of the changes made to the House amendments by the Senate. Unfortunately the only way to find out is through piecing together random news articles as at last I checked the actual bill to be voted on was not publicly available. So… I hadn’t seen that the AMT was part of this supposed tax reduction. We’ve all have heard the horrors of the AMT and yet Congress has been unable to do anything about it until now? It’s not even a carrot for passage, as a real tax reduction would be, but the promise not to use the stick… as hard. Another example where government regulation has lead to an unforeseen problem that would simply not have existed in any sort of resemblance of a free market. Now they are trying to sweeten this poison bill with it. Getting rid of the AMT is a great idea… but not on the back of one of the most egregious corporatist bills to come our way in a generation.

Speaking of negative unforeseen consequences.

http://www.bizjournals.com/…

The U.S. Securities & Exchange Commission Tuesday decided to ease “mark to market” accounting rules which have hurt banks, mortgage lenders and the housing sector during the downturn.

Mark to market is a Sarbanes Oxley accounting rule that requires holdings, assets, and loans be valued at their current value. It was aimed at keeping company’s books on the up and up but it has devastated banks and mortgage lenders in the housing slump.

On Tuesday the SEC said companies and financial institutions have some leeway in assessing value, not just the current market, which is of course way down.

There is also some talk in Congress of a temporary or permanent mark to market repeal to allow for a more long-term valuation of assets and loans.

What a surprise? Government regulation which manipulated the market values of assets caused the market to negatively react to that misvaluation. It’s unfortunate there isn’t a way to translate the economic distortion into something the politicians could understand. Like a punch in the face.