The Paper Empire and the Piper's Bill

"As soon as A observes something which seems to him
to be wrong, from which X is suffering, A talks it over with B, and
then A and B propose to get a law passed to remedy the evil
and help X. Their law always proposes to determine what C shall
do for X. . . . What I want to do is look up C. I want to show you
what manner of a man he is . . . He works, he votes, generally
he prays--but he always pays."
---William Graham Sumner, 1883

When I was in college in the early '80's, my Dad the Libertarian got involved with something called the Universal Life Church. As best as I can recall, the purpose was to designate his house as a church and get the benefits of tax-exempt status. So Dad the Libertarian became a minister through the Universal Life Church and he needed two other people over the age of 18 to comprise the board. My mother and I were drafted . . . er, I mean we volunteered.

I didn't live at home at the time, but I wasn't too far away, so I could have attended the annual board meetings. If we had actually had any.

I guess Dad is probably still a minister, he's not been defrocked, and so could perform weddings and funerals legally. I'm not sure. And I am not sure if Dad ever reaped the benefits of tax-exempt status, either. I expect not.

But through this improbable chain of events that led to me being on the board of the Universal Life Church of S-- Street, I got some free tapes from the founder of the Universal Life Church. Instead of preaching salvation or damnation, though, this libertarian maggid* preached economic and personal self-sufficiency. So every Sunday morning, when my roommate and other denizens of my dorm floor were at actual worship services--I would sit in the beanbag chair in the lounge, coffee at the ready, and pop one of these Universal Life Church tapes into the Walkman. The messages were sensible and uplifting, and always ended with a song by the reasonably good Universal Life Swing Choir.

*Hebrew for a teller of tales, literally a preacher.

This is how, as a young person with only one introductory economics course under my belt, I understood that the whole financial system was/is, according to the Dean of the Universal Life Church, a Paper Empire. And this is why, even though my kids and I have lived through some pretty rocky financial situations, I never owned a credit card or had any other form of consumer debt. (To be completely honest, I also did not believe anyone would actually give credit to a person with no reliable way of paying it back. I have always been naive).

And this is why, when I married the Engineering Geek, I set to work convincing him to protect what had become "our" assets should the house of cards that was Wall Street, Fannie Mae and Freddie Mac, the Fed, and the U.S. Treasury. I was relatively successful. We own our house lock, stock, and barrel. We have no debt and modest savings. Our investments were all moved to low-risk mutual funds two years ago. (If I had been really successful, we'd have gotten out of them altogether).

The EG has been walking around saying: "I should have done what G-d told Abraham to do. 'Listen to your wife!' "
It's in Genesis.
Really.

Now it looks as though the Paper Empire has collapsed.
There are a lot of reasons why it did.
People treated their homes like banks.
The government legislated bad loans to people who could not afford houses.
The government has been treating money like Monopoly dollars.
Trade has been badly regulated. (Note I did not say under-regulation. We have no free market and to blame this on the free market is ludicrous).
And last Wednesday evening, there was a complete freezing of liquidity; there was no commercial paper. This meant that most businesses would have collapsed by Friday, since most businesses rely on loans for operation.

In short, the Paper Empire has collapsed just as the Universal Life Prophet predicted. Just as smoke and mirrors have a way of doing.
How's that for a mixed metaphor? Here's another one:
The party's over!

And, as my Dad the Libertarian would have said--back when he was an active minister of the Universal Life Church: "They that dance must pay the piper."

But the Nanny State has been protecting the dancers. Fannie Mae and Freddie Mac, for example, a quasi-government agency, riddled with cooked books and corruption. Instead of jail for fraud, the crooks at the top get a bail-out and a golden parachute. And now I understand that We the People own 80% of AIG.
Does this mean that I get an invitation to their Holiday party? Maybe I should buy a new dress . . .

And now other irresponsible parties--like those who bought more house than they could afford or racked up the credit cards and funded it with serial mortgages--now these people also want a bail-out. As do the big investment banks and the owners of bundled securities comprised of the bad mortgages.

All the dancers want to be relieved of their responsibility to pay the piper.

And the bill is steep, too. They are saying $700 billion (700 with nine zeros after it), but it could easily become over $2 Trillion. (That's 2 with 12 zeros after it, which is why I capitalized Trillion. It's a sufficiently weighty amount that it needs that capital T).

I suppose I'd better hold off on buying that new dress . . .

And now the weasels in Washington want to get their cut, too. They want another stimulus package. They want special favors added to the bill. They want to prove, in this election year, that they are DOING SOMETHING.

Of course, for most of the Pols in Washington, it was their DOING SOMETHING that got us into this mess.

I guess those of us who didn't dance are going to be paying the piper.
And so will our children.
And their children.
Talk about slavery.

Somehow, I don't think this is what the framers of the Constitution had in mind when they wrote in the Preamble:

"We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America."

Nowhere in this Mission Statement for the Federal Government do I see these items:
" . . . to bail-out the Irresponsible, nationalize the Mortgage Industry, and secure the Curse of endless debt for ourselves and Our Posterity."

Sigh.

It is you and I who will have to pay the piper's bill.
And we will get nothing but heartache for our money.
Maybe I should have danced.
At least I'd have the memories . . .

The State of New Mexico Would Like to Raise Your Child For You...

...But should you let them?

Last week I was sympathizing with friends in Connecticut about plans for new regulations that would interfere with families over the first thousand days of life in that state. For more information on those plans, check out this entry over at Consent of the Governed. Imagine my surprise when yesterday I opened the paper to read of a similar plan in New Mexico.

Yes, folks, the great State of New Mexico, where it takes 20 years to get a bridge built across the Rio Grande, wants to authorize home visits to new families by social workers, as well as mandatory health insurance ("Can you say 'corporate welfare,' junior?"), and pre-school classes for every four year old in the public schools. All because those poor people don't know what their children need.

Leaving aside for a moment the question of whether it is the job of the state to do all of these things, ask yourself honestly, do you think the State of New Mexico, where the high school drop-out rate is one of the highest in the nation, is competent to raise your kids? Given what I read in the paper, the whole idea that the state wants to interf...er, 'help me' raise my kids scares the living daylights out of me!

It scares me even more as I read other stories about how our local and state governments function. Is the great State of New Mexico going to help me teach my kids ethics and morality? Like how to solicit bribes, for example, which happens regularly in the state insurance commission where our public servants protect citizens by making small regulatory infractions "go away" if large contributions are made by insurance companies to the commissioner's favorite charity? You know, the one that he controls? Or perhaps they will teach my kids how to accept kickbacks for contracts to build public buildings, like the county courthouse? Or perhaps, they'll show us how to teach our kids to read and write by siphoning off most of the money intended for classrooms to buy swank new offices for the superintendents and middle management of the government schools?

No, thank you, State of New Mexico. I really don't want you to raise my kids for me. In fact, I want to keep my kids as far away from the antics that regularly occur in the Round House as I can. And anyway, isn't there a law against being a corrupting influence on a minor? I sure wouldn't want to have to bail you out of jail for that. I am running out of money after paying for the lawsuits regularly filed against the State.

I am no fool. You are going to come to me on April 15th and hold me up for the funding to pay for all of this, as well as the bribes, kickbacks and lawsuits that go with your corrupt and dissolute lifestyle. The best thing you can do to help me with my kids, State of New Mexico, is to reform your evil ways and demonstrate to them the beauty of repentence. From a distance, at that. You can let us New Mexican families keep our money so that we can raise our own kids. We know what they need. We just need you to get out of the way so that we can do it.

Good-bye, Trans-Fats

Today, as N. and I were driving to the library, we heard on the news that trans-fats are being banned in New York City. All kinds of questions immediately came to our minds:

Are New Yorkers going to be sneaking across the New Jersey state line to get their supply of Crisco?
How are Jews who keep kosher going to make Kugel to go with meat without parve margarine?
If some buys a Big Mac with fries in New Jersey on their way to work in New York City and the fries are not eaten by the time they go through the Holland Tunnel, are they guilty of transporting a controlled substance across state lines? Will the FBI get involved?

When we researched the question, it became apparent that the reality is much more boring than our imaginations. We were thinking there'd be a movie like "Escape from New York II: Addicted to Oreos." However, Oreos are now trans-fat free. And you can buy trans-fat free Crisco, too. Kosher bakers will have to go back to palm oil. Oh, and we did find out that the food industry did it to themselves. People want the choice of whether to eat the nutritionally value-less but somewhat unhealthy trans-fat. The food industry did not want to label it. Last year, the FDA began to require labeling but if a product has less than 0.5 grams of trans-fat, they could put O grams trans-fat on the label. So, since people can't know how much trans-fat they are getting if they eat one serving or less, they started a movement to ban the stuff.

I tend to think the government should keep out of John and Joan Q. Public's business as much as possible. Still, you can't make a choice without having information. If information is incomplete or deceptive (and saying zero grams when you should say less than 1 or trace can be argued to be deceptive) then people will find a way to assure themselves they are not getting small amounts of something they'd rather not eat at all.

McDonalds, you shot yourself in the foot!