Saving Capitalism from the Capitalists

I have a favorite economist.  I was going to say I have a new favorite economist, but I don’t think I ever had a favorite economist before.  Anyway, his name is Luigi Zingales from the University of Chicago.  He authored far and away the best piece I have read on General Motors, which proposes putting GM into a pre-packaged bankruptcy and using federal funds to finance a DIP loan, but requiring a bank make the ultimate lending decisions.  In doing so, Zinglaes proposes that the bank would be liable for further losses made after the initial DIP loan, and thus would not allow GM to continue squandering the governments funds if its assets continue to decline in value.  Zingales also proposes solving the problem posed by consumers not buying a car from an auto manufacturer in bankruptcy by requiring GM to purchase third-party insurance and making management and workers responsible for the quality of cars by linking VEBA payments and executive compensation to an index based on the cost of warranty claims.

Even more thought-provoking, Zingales wrote a piece opposing the original Paulson bailout plan, entitled “Why Paulson is wrong.”

Recognizing that our financial institutions can not afford the often long and drawn-out chapter 11 process, he advocates “cramming down” a restructuring plan on creditors, where part of the debt is forgiven in exchange for some equity or some warrants.  In other words, Congress should pass a law allowing failing financial firms to initiate a quick bankruptcy (which would not trigger any defaults in loans) whereby partial debt forgiveness or a debt-for-equity swap is mandated.  The government could entice failing firms to enter this restructuring process by cutting off access to short-term debt windows.  This process would leave the taxpayers out of the picture, and avoid a long chapter 11 process.  Deposits would be exempt (so not to burden main street), as would credit default swaps (so as to avoid getting caught in the tangled webs that have burdened the Lehman Brothers bankruptcy).

But if this plan is so simple and at no cost to the taxpayer, why no expert has mentioned it?  I’ll let Zinglaes explain:

“The major players in the financial sector do not like it. It is much more appealing for the financial industry to be bailed out at taxpayers’ expense than to bear their share of pain. Forcing a debt-for-equity swap or a debt forgiveness would be no greater a violation of private property rights than a massive bailout, but it faces much stronger political opposition.

The appeal of the Paulson solution is that it taxes the many and benefits the few. Since the many (we, the taxpayers) are dispersed, we cannot put up a good fight in Capitol Hill; while the financial industry is well represented at all the levels. It is enough to say that for 6 of the last 13 years, the Secretary of Treasury was a Goldman Sachs alumnus. But, as financial experts, this silence is also our responsibility. Just as it is
difficult to find a doctor willing to testify against another doctor in a malpractice suit, no matter how egregious the case, finance experts in both political parties are too friendly to the industry they study and work in.

The decisions that will be made this weekend matter not just to the prospects of the U.S. economy in the year to come; they will shape the type of capitalism we will live in for the next fifty years. Do we want to live in a system where profits are private, but losses are socialized? Where taxpayer money is used to prop up failed firms? Or do we want to live in a system where people are held responsible for their decisions, where imprudent behavior is penalized and prudent behavior rewarded? For somebody like me who believes strongly in the free market system, the most serious risk of the current situation is that the interest of few financiers will undermine the fundamental workings of the capitalist system. The time has come to save capitalism from the capitalists.


i love this, so im posting it again…by Anna Quindlen

… Get a life in which you are not alone. Findgood friends and people you love, and who love you. And remember that love is notleisure, it is work. Pick up the phone. Send an e-mail.

Write a letter. Get a life in whichyou are generous. And realize that life is the best thing ever,

and that you haveno business taking it for granted. Care so deeply about its goodness

that you want tospread it around. Take money you would have spent on beers

and give it to charity.

Work in a soup kitchen. Be a big brother or sister.
All of you want to do well but if you don’t do good too, then doing well will never be

enough. It is so easy to waste our lives, our days, our hours, our minutes. It is so easy

to take for granted the color of our kids’ eyes , the way the melody in a symphony rises

and falls and disappears and rises again. It is so easy to exist instead of to live.
I learned to live many years ago. I learned to love the journey, not the destination.

I learned that it is not a dress rehearsal, and that today is the only guarantee you get.

I learned to look at all the good in the world and try to give some of it back because I

believed in it, completely and utterly. And I tried to do that, in part, by telling others what

I had learned. By telling them this: Look at the fuzz on a baby’s ear. Read in the backyard

with the sun on your face. Learn to be happy. And think of life as a terminal illness,
because if you do, you will live it with joy and passion as it ought to be lived.

by Anna Quindlen

Immigration explained through diagrams….



(i dont know how to link!!!!!1 sorry!!!!!) im an idiot!

to turkey philly or not to turkey philly?

its alright…its ok…We’ll have fun regardless… and if we have to stay sweetie…we will have a great thanksgiving!!!!!!!! most importantly i think what rosa park says here is truly applicable today:

Rosa Parks wrote in her book Quiet Strength: “I find that if I am thinking too much of my own problems and the fact that at times things are not just like I want them to be, I do not make any progress at all. But if I look around and see what I can do, and then I do it, I move on.” Youth, and indeed life itself, flashes by in the blink of an eye. That is why it is important for you young people to ask yourselves what you can do for those who are suffering, what you can do to resolve the contradictions that plague society and to boldly take on these great challenges.

SCORE: Rosa gets 3 thumbs up and also a hi five!!!!!

little things…

This year will be our first Thanksgiving together…

Thanksgiving, I’ve never understood…pilgrims, the indian massacre, little kids getting dressed and doing plays…why death to a turkey and not a cow or veggies? why a pie? and not a corndog? How has this ceremony or historical event evolved to what sum up to be a dreaded reunion for College kids and others as an opportunity for families coming together???? regardless…whoever invented the word THANKSGIVING, was from our planet!!

So, whenever I feel maybe i need to know what this is all about (i go Wikipedia). In my brain the history is another concept such as a phone number you memorize temporarily that dissipates as your priorities boot the concept out of your limited mind space given to short term memory.

To me, what does the word mean? this union of thanks and giving?

Well, how do we give thanks? sooo many ways, but to whom? our families, our friends, strangers, God? and more importantly how to we give thanks, by giving time? money? advice?

I think its a beautiful concept of giving thanks and reflecting on what you have and how lucky you are. As well as giving and sharing what you have, as a “thanks world you rock”!

So, i think its important that we help that weekend, since there will be tones of opportunities at shelters and churches.

The closes homesless shelter i found is the Christian Caring Center in Browns Mills NJ, OR in Camden (Although my favorite is in Newark). There are some around Philly as well, but it depends on what you want as well, schedule wise. (i just got an email from CCC they have no events that weekend)

It will be important to me to start a tradition of giving during bird day. The historical Thanksgiving dinner i think I’ll leave that permanent memory space for my kids to fill.

Maybe we can have KB packets and give them in Philly when we go?

Although there is something really special and almost romantic about giving someone something you made, because you are giving so much of you? like instead of giving easy a sandwhich, siting down with him and sharing some time really meant a lot to me and Im sure maybe a little to him as well.


A doctor in Afghanistan…amaaazing…makes you feel real real tiny

a letter written by Lee Buttz—

I am attaching a few pictures from a Community Medical Assistance (CMA)
program I went on this week.  These events are held on approximately a
monthly basis to provide medical care and supplies to the population,
and to try to instill a sense of trust in the Afghan police and army.

It is a daunting task to say the least.  The sites for these events are
generally underserved areas (that doesn’t exclude many places) that are
considered to be at risk due to location or Taliban influence.  Since
medical care and medications are extremely limited, we plan a day to
bring supplies and medical personnel to the villages and have a health
fair of sorts. For many it is the only time they may have seen a doctor
in their lives.

It is not really accurate to say that we are providing medical care, at
least by Western standards.  The 6 docs present saw over 400 patients in
the 4 hours of the event, and that was with more than half the docs
leaving early (Afghan national army) because they didn’t want to work
any more.  They just left the one other Afghan doc and me to see the

The departing docs were also all female, which caused a bit of a problem
since the female villagers will generally not see or talk to males other
than their husbands.  The police chief made an announcement to the
remaining females that the only docs left were male, causing many of the
women to leave.  Then when the women come in they are wearing Burkha’s
and any sort of physical exam is completely out of the question.  I
ended up talking to the side of the head of completely draped and
covered women who spoke only to the female interpreter who had limited
command of English and no medical training.  After describing their
symptoms I had to guess what condition they had and what medication to
give them from a limited checklist pharmacy.  A new look at the practice
of medicine.

There are so many aspects to this event that I could go on indefinitely.
The facilities, the geography, the threats, the standards of care (and
cleanliness- no running water in a medical clinic)….The pictures
attached show the general area (they farm there, but it’s hard to find
any green), the clinic, and one of my better dressed infant patients
with her Burkha mother.

One last quick story.  As we were pulling out in our up-armored Hummer
one of the US army embedded trainers stops the vehicle I was in to ask
if I can read EKG’s.  I say sure and hop out, not knowing quite what to
expect.  The chief of police is standing there with his medical
evaluation that was performed in Pakistan.  He has an angiogram report
that is written in some Arabic language, but with enough blockages with
70/80/90’s on the left anterior descending to indicate severe single
vessel CAD.  The echo report in Turkish seemed to indicate (through
numbers and percents) that his heart function was normal.  The question
to me was “what should he do”?  Well, in the US he would have had a PTCA
and stent without leaving the hospital.  In Afghanistan there is no such
thing as interventional cardiology.  To make a long story not too long,
I am working with the Army trainer in trying to find appropriate
treatment for this officer who is apparently very influential in an area
that is on the edge.

The things they don’t teach you in medical school.


Water Wings and the Sauna

The new White House Chief of Staff is a triathlete and defends his sport rather aggressively.

From Fortune Magazine:  “In off-camera chitchat with the shirt-sleeved lawmakers, Bush takes note of Democratic Congressman Rahm Emanuel’s deep tan, prompting the 46-year-old Emanuel to boast about the miles of swimming and biking in his triathlon training schedule. Testosterone oozes into the humid air space between the two men. Bush invites Emanuel down to Texas to do some real biking. “So I said, ‘I’ll make you a deal, Mr. President. I’ll bike if you swim.’ Now he didn’t exactly say swimming was a wussy sport, but you could tell…. So I said, ‘Mr. President, Laura can put your water wings next to the lake. You can have your water wings.’ ”

At that point you might think this graduate of the Evanston School of Ballet-a man whose office features sunset photos and who has the mellow chords of David Gray playing on his iPod-would leave well enough alone. But Emanuel is hard-wired to go for the jugular: Politics Chicago-style are part of his DNA. So he sharpens his drill bit on the leader of the free world. “I said to him, ‘You’re not one of those tribathletes, are you, Mr. President? You know-steam, sauna, shower?’

“And Bush goes, ‘That’s g-o-o-d.’ “