While my focus is intensely family-oriented these days, I couldn’t help but catch wind of the ruckus over the Treasurey Dept. plan for a banking bailout. I have seen some strongly-worded opinions saying that the bailout is a bad idea. My gut says they are right.
Having opinions about political events is a perilous and hubristic endeavor at the best of times. As I have said before, I have no great background, understanding, or insight into the financial bind we are reportedly in; nor into the solutions that might obtain. On the other hand, having no opinion is reckless in a democratic society. While we can’t expect our detailed plan of action to be implemented on a national scale, our society rests on our ability, colectively, to vote for the guy or girl with the least harebraned schemes. But how do we judge, when we barely have the time and resources to keep track of our own lives, let alone the complexities of economics and policy?
My solution is to fall back on heuristics. For instance: I am reasonobly certain that the 9/11/2001 terrorist attacks were not the work of U.S. government operatives, Israeli spies, or the Bavarian Illuminati. I cannot hope to arrive at such a conclusion based on detailed study – I simply don’t have the time, nor would I be likely to discover the truth even if I did, if the government really were using all their resources to cover it up. Instead, I have to base my conclusion on simple rules of thumb:
- Occams Razor (the simplest explanation is usally the correct one) – Islamic terorrists are real, have stated their intent to attack targets in the west, and have previously demonstrated a capability to do so. Not only that, but they have publicly claimed responsibility for the attacks. The conventional explanation is also the simplest.
- People, as a group, are incompetent. Based on my experience with human organizations, successfully keeping a conspiracy on the scale of the 9/11 attacks secret is well-nigh impossible.
Likewise, when evaluating the proposed $700 bullion bailout, I must again resort to heuristics. To wit:
- The "doing something is better than doing nothing" argument is usually wrong. In any given crisis, there is usually a conversation that goes like this: "we have to do something now!" "moving to Tahiti is something" "we have to move to Tahiti now!". The proposed something almost always makes things worse. Things are hardly ever as urgent as they are made out to be.
- Economists are smarter than me. Congresscritters are also smarter than me – if it were otherwise, I’d be the one voting myself more taxpayer money and then sleeping off lobbyist-bought martinis, not the one writing this up in a dank basement at 12:27AM. However, nobody is smart enough to evaluate a long-term solution to a systemic market weakness in a matter of days. That’s not even enough time to grasp the extent and root causes of the problem, let alone properly weigh the pros and cons of a solution
- Honest men don’t skulk around in the bushes. Or in other words, one times out of a hundred a crook turns out to be Robin Hood, but the other 99 times someone behaving in a sneaky, underhanded manner turns out to be just plain crooked. In the aftermath of the first failed bailout vote, the news reported that the Senate was debating – not why the bailout was or wasn’t a good idea – but which Republicans should trade votes with which Democrats in order to minimize the chance of losing their seats for voting for a massively unpopular measure. In other words, they were all in agreement over the bill itself, they were just debating how best to sneak it through with the minimal risk to their precious jobs. That is not the behavior of men and women who are acting in good faith. Nor is trying to sweeten the deal with a bunch of highly specific tax-breaks like a skeezy guy with a Ron Jeremy ‘stache offering sweets out of the back of a rusty van. Nor is threatening to route around the whole process by tacking it onto an unrelated bill. This kind of behavior casts doubt on the legitimacy of the whole affair.
- $700 billion dollars is, to use the metric scale, a fuck-ton of money. I know it’s burning a hole in congress’ pocket, but I submit that they could stand to sleep on the idea.
These are my meta-reasons for believing the bailout is a bad idea. Yes, there are a lot of much more specific arguments to be made against it, but again, I am not qualified to judge their veracity. Let alone to come up with a better plan. I just know when a plan smells bad, and I have a feeling that we could probably afford to give it a few weeks thought without risking being eaten by a giant mutant star-goat.