Bailout or slush fund?

From Rupert in Springfield,

Congress is right now debating a $700B bill for buying up what are considered bad assets in an effort to shore up the financial industry. The fact that Chris Dodd, head of the senate banking committee, and number one receiver of payola from Fmac/Fmae, did not recuse himself from negotiations of the bill should give everyone pause about the bill in general.

I worry when Washington gets involved in bailouts. They tend to very quickly become slush funds and this bill looks like it is being written under conditions tailor made for such a fund.

Congress and the White House are insistent this get done quickly and get the money out there as fast as possible. At a mere three pages long, one can be quite sure there are few specifics and very few oversight provisions in this legislation.

I would think that most of us old enough to buy beer would recognize those conditions as the perfect set up for another taxpayer fleecing. That said, it is impossible to deny that Congress and the White House don’t recognize this. Sadly, a version of economic dementia seems to plague all those who enter Washington’s hallowed halls. Any common sense about economics in general, and the stock market in particular seems to vaporize within the small craniums of those inhabiting elected office.

Success in the stock market, or finance in general, can be guaranteed by adherence to one simple principle outlined by Rudyard Kipling in his poem “If”.

If you can keep your head when all about you
Are losing theirs and blaming it on you,

Oddly, the human mind has a hard time with this and this is almost always the reason for failure financially. It is easier to panic and join the flock than it is to be a contrarian. This explains why Warren Buffet sees current conditions as an incredible buying opportunity and is following through on that. That’s fine for Warren Buffet, he uses some methodology for his investments. With this bill in Congress we can be assured that a different methodology will be present. Investments will be based upon friendships or payments to campaigns, not any sort of economic analysis. Chris Dodd has already demonstrated this with Fmae/Fmac, and since he sits at the head of the table, we can be assured of further adherence to the same insanity that got us into this position. Stand by, you are about to be robbed.