Dark Times

Dark Times

(apologies to Ted Roethke)

In a dark time
the mind begins to search,
It asks
what is a variable,
what is chosen
that no longer works.

People want the President
to solve unemployment,
but they don’t want taxes
and fear bigger debt.

Asset values have dropped
and loans have gone bad.
Do taxpayers have to pay to save the banks?

Is there a variable in there somewhere?
Or must we pay for our sins of greed?

The bank loans created money
from thin air.
Can the process work in reverse?
Release these debts into ether space
and start over.

A.A.S.
27 January 2010

A. I. G. bailout

The Federal bailout of AIG, the insurance giant, was not just for AIG, but for all of the banks that held their derivative securities.

"E-mail messages made public in recent days show that A.I.G. sought the New York Fed’s advice on the contents of its filings about the bailout to the Securities and Exchange Commission. The New York Fed crossed out certain passages, including references to the fact that A.I.G.’s trading partners would get 100 cents on the dollar on their soured derivatives trades." NYT 27 Jan 2010.

Goldman Sachs came out smelling like a rose and could pay back its direct grant from the government. Given the fact that they were not required to share any of the AIG losses, it is hard to believe that they were not favorably treated.

Electric Power Grid & Wind

"Adding wind gets progressively more difficult as the amount used rises because of wind’s intermittent nature and the need for back-up power generation, according to the study, which was prepared for the National Renewable Energy Laboratory. Without a better (electric) grid, the system would often waste large amounts of wind power because at many times during the year, the power grid would not be able to handle the traffic." New York Times, 20 january 2010
The country needs a modern electric power grid. The present one was built largely a piece at a time by different companies. It reminds me of the telegraph in its early days. Lots of pieces that connect two points here and there, but no cross country lines and connections, We could use some national planning and both private and public investment within it. Now, with high unemployment would be a good time for major investment in our infrastructure.
The country could also use a national system of high-speed trains, we are pathetic compared to other western countries.

for related view see, www.modernizethegrid.com

Haiti

If the U.S. would spend half as much on helping Haiti and other poor countries as we spend fighting in Iraq and Afghanistan, we would be betterloved instead of hated. Benevolence would remove some of the motivation for terrorism.

Bank tales

The following appeared today in the Washington Post:
JPMorgan Chase received $25 billion in bailout money in the fall of 2008 at the peak of the credit crisis. It paid back that money in the middle of 2009.
Goldman Sachs didi much the same. Don't you wonder how they earned so much in such a short time. Are they making the same risky investments that got them into trouble in the first place? Certainly the absurd bonuses paid to investment bankers provide the incentives for it.

Reported 20 Jan 2010
Morgan Stanley, revealed today it had set aside $14.4bn for pay and bonuses in 2009 despite showing a net loss