On This Week this week, Sen. Lindsay Graham came off as remarkably adult-like when he said that housing and banking are the critical components here and that if we don't fix them then all the stimulus is throwing good money after bad. Indeed, I'm stunned by how the Congress has been able to ignore the most critical issue - that of the freeze-up of the banking system due to 'toxic assets' - while indulging in spending that would make a sailor blush.
And hey I was just kidding, I thought, when I parodied the stimulus package as benefitting illegal immigrants but then I should know by now it's hard to stay ahead of the parody-generators in D.C.. When willst I learn?
On the issue of executive pay limits for bankers, some say that would cause a 'brain drain'. This is one of those situations where a brain drain sounds very appealing. If they had been dumb as rocks they wouldn't have gotten us into this situation, proving again that it takes an intellectual to really mess things up. Instead of managing risk, the banking industry managed to magnify it. It would be nice if instead of limiting exec pay their compensation was tied to some fancy unregulatable derivative that the execs actually had to understand in order to get paid.
Addressing the fear created by banks with bad assets is one thing, but to try to borrow your way out of a problem caused in good measure by too much debt is, to put it mildly, dubious. Extreme scarcity is driving up the price of common sense these days: if it was a commodity it'd be selling for higher than the price of gold.
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