God Bless Susan Boyle! The Scottish spinster with the fantastic, beautiful voice who managed to sneak in a blow against the tyranny of image that has come to dominate our media and the public square. And props to the two judges on the Britain's Got Talent who were adult enough to own up to what she had done, teaching us all a lesson about judging by surface appearance alone.
So, for at least a shining moment, we can return to looking more deeply at the people around us.
To my fellow Americans who are completely outraged that we, through the U.S. Government, have financed bonuses to a bunch of people who paid pivotal roles in creating our current economic situation: Get over it.
Yes. It is outrageous that some of these people were able to put together legally binding deals that benefited them in this way at our expense. Yes, if we had caught the bonuses early we should never have paid them through pressuring the recipients to renounce them. But we didn't and unless we are ready to accept a form of mob rule in overturning law to make them give the money back, we should get over it and move on.
Frankly, I am more disturbed that 328 U.S. legislators in the House of Representatives thought it appropriate yesterday to pass a law that, ex post facto, sought to tax income which had already been made. Hello? Yes, this was a law passed to hurt scoundrels, but the principle involved is far more dangerous and harmful than the bonuses would ever be.
Of much more importance are the efforts are the government is making to help banks deal with these toxic assets on their balance sheets. Folks, according to the most recent data from the Federal Reserve, US banks have $679 billion on their books as reserves as of February, compared to about $45 billion on their books in August of last year, the last month before the meltdown. That means banks are not lending the money they have and the reason they are not lending it is because they are either deeply concerned and uncertain about the value of these assets on their books or already know that the assets on their books are not worth nearly their face value and they need every single penny of reserves to keep their balance sheets balanced.
There is something almost surreal seeing various politicians demand that banks start lending these reserves. Unles demanded that all bankers immediately start defying gravity and flying: its just not going to happen. Ns the toxic assets are dealt with, in the banking world its as though these politicians have arrived from Mars andot because bankers are some perverse lot that don't want to do the right thing, but because under the rules governing financial institutions they cannot make loans with money which is already claimed as a counterweight to the declining assets.
And the ironic thing is that assets are not all that bad. Some of them, maybe many of them, can and will make money, according to this story from the folks at Planet Money:
Maybe if the market goes off its head in either direction, up or down, the mark to market rule that forces financial institutions to value their assets as though they were selling them today, makes little sense?
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