Wednesday, October 1, 2008

U.S. Decline Under Bush Is Hot Topic at U.N.

The Paulson bailout is beginning to have ripple effects on world affairs:U.S. Decline Under Bush Is Hot Topic at U.N.:
"Not only are U.N. diplomats worried about the spillover of financial damage to their markets, but they find a free market-oriented administration's full-throated backing of a highly interventionist bailout galling, coming after years of Washington hectoring other countries about maintaining economic prudence and counseling against debt bailouts.

'Here's the U.S. engineering the mother of all bailouts,' marveled the diplomat. He says diplomats believe that poor Bush administration policy choices, the lengthy and unresolved military engagements in Iraq and Afghanistan, and the general rise of powers like Russia, China, and India have all eroded U.S. power in relative terms."
Now, I'm not much of a political creature, but if the current administration offered to leave, I'd offer to help them pack.

Forget the history of the past 7 years for a moment. If you were designing a financial intervention, what would it look like? I think good business leaders would try and rip the band-aid off quickly, rather than augment it with duct tape. Certainly, lots of pain will be felt, but not nearly as much pain as when it comes time to rip off that duct tape.

Hey congress! Do something sensible, just this once: If you have a bad company that is taking down the financial system, wipe out the shareholders, haircut the bonds, fire the board and CEO, recapitalize, and reboot.

And stop with the third world bailout tactics. It's unbecoming.

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