Quick Hits

1) Barney Frank GQ interview. It’s sad that the GQ interviewer spent more time asking about Barney Frank’s boyfriend than about Barney Franks financial hypocrisy.

2) Ford Says Government Backed Debt for GMAC is Unfair. The story headline kinda makes Ford sound like a bunch of whiners, but I sympathize with them. The conundrum is that when the US Government guarantees the debt of a firm, the (healthier) competitors of that firm get screwed. In this case, GMAC recently issued government backed debt at a yield of roughly 2.25%, while Ford issued debt at 13 percent. Now, if the government didn’t back GMAC’s debt, Ford would still pay double digits for financing, but, more importantly for them, they’d probably pick up a ton of business (which would also eventually lower their debt costs) when their competitor went out of business. The government backstop on GMAC’s debt issuance is a double whammy for Ford – it keeps their competitor in business, and keeps Ford’s debt costs high.

3) NY Times Op-Ed: Five Ways to Fix America’s Scools: I was intrigued by the second suggestion, which was that truant officers should use higher pressure tactics to reduce school absences. The author cites the statistic “In many cities, including New York, roughly 30 percent of public school students are absent a total of a month each year. Not surprisingly, truants become dropouts.” This made me think – we should remove all government assistance programs for people who do not finish public schooling. If you’re not going to take advantage of the free education that the State provides you in an effort to ween you off the government tab, well then, you don’t deserve to receive the government’s aid! I ran this idea by my liberal but logical friend, Eric, who replied that he wasn’t crazy about my idea, and that “whether or not you think it’s a reasonable solution depends mostly on your outlook of whether the gov should guarantee a minimum standard of living for it’s people, or if the people have to earn it.”

I was surprised to hear the idea of requiring school attendance classified as requiring someone to “earn” something. Education is the first stepping stone to helping people get out of poverty, homelessness and unemployment. We provide that privilege without charge to the end user. It seems clear to me that if people don’t want to use this resource, they should also forego other resources designed to help those in need.

While I’m on subjects that will draw liberal ire (even though there is no reason for them to!), here’s my favorite: unemployment insurance. In a city like New York, where I live, I believe that no one who is capable of working should receive unemployment insurance for doing nothing. There is ALWAYS plenty of work to do – even if it’s just sweeping the streets, which are generally filthy. Essentially, it would be kind of like a larger version of The Doe Fund. Now, logistically, this may be difficult – as the cost of administering such a program could make it unfeasable – but I can’t understand how anyone can have a philosophical disagreement with this plan. If there is work to be done, which there is, people should do that work in order to earn their unemployment benefits. If you disagree, instead of making partisan political comments, explain to me why you think I’m out of line.



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