Supercommittee 2

I'd brag about how well I can call them, but this was too much like shooting fish in a barrel. Crippled fish, in a small barrel, with a grenade launcher at that.

Seems the members of the supercommittee are getting oodles of attention from lobbyists to the point that probably none of them will have to worry about the next election. Some people are complaining about this and rightly so, but it's the most natural thing in the world under crony capitalism.

The pols pass laws to "encourage" business to act in ways that are contrary to what would ordinarily be their best interests. In the case of financial institutions, making loans with a low chance of getting paid back, to people the pols are trying to curry favor with. They get the banks to engage in what would otherwise be suicidal behavior by offering to buy the bad loans from them, thus shielding the banks. The taxpayer assumes the risk, and gets to make up the losses, and the banks become the scapegoats for the losses, giving the hippies something to protest over.

Absent the government incentives, none of this would be happening. If your bank goes this route, however, threatening to remove the incentives would be a shock to the operational model which the bank directors don't want to see. Fair enough, bank directors, or for that matter any managers don't like to see big changes. Predictability makes their job easier and reduces their Maalox consumption.

As long as the media is willing to ignore this, it goes on and gets bigger, although nine-figure grants to companies with party fundraisers on the boards, who take the money, pass a percentage to the pols, then either go broke or move to China may prove the straw that breaks the camels back.

One could almost wonder if, post 2013, several high-ranking pols don't find themselves retired with their primary income source from being a director with an otherwise defunct solar panel company headquartered in the Cayman Islands.