Thoughts about our National Pastime and occasional thoughts for the Good and Welfare of the Reader (and maybe the writer)

Thursday, March 19, 2009

Cluttered Desk, Cluttered Mind, Cluttered Thoughts

The Federal Reserve Board took action yesterday by agreeing to buy $300 billion dollars worth of long term Treasuries and four times that amount of Mortgage Backed Securities. That is old school, traditional monetary policy that has a risk involved. I did not read much about it, but my Treasury Management text says that when the government monetizes the debt and puts that much cash into circulation either productivity increases or inflation follows. So, the question is – is inflation a bad thing? Ask yourself, is paying more for the same thing a bad thing? The answer might be yes if by doing so you are helping companies make money and rehire staff. But in a real inflationary economic scenario that does not happen because the company making the good is also paying more for the same and cannot afford to expand. That is why no one likes an inflationary economy.

What that means to me is the following has to happen: The liquidity pumped into the market ends up in the vaults of the banks who bought the Treasuries that the Fed is now buying from them. Manufacturers line up to borrow the new liquidity in order to go into a higher level of production. Retailers line up to buy the increased production in order to restock warehouse and shelves. Consumers line up to buy the stuff, using cash or using credit card with a careful eye on limits and ability to repay.

To make this longed-for economic scenario real, BHO has to take another look at his 10-year, overloaded, unprioritized, do-everything fiscal plan and get real.

The Congress is like a gaggle of children in a bathtub fighting over the toys. We can let them do that as long as some adults supervise how many toys are in the tub at once. We can tolerate the posturing, the hypocrisy and the pandering to the TV cameras just so long as they stand aside and let the fiscal authorities do their job. Ronald Reagan was more right than wrong when he said that government is not the solution, it is the problem. Congressional leadership has become an oxymoron.

How about a prisoner exchange? Part I: Republicans will stop caring about when BHO and his treasury secretary knew about AIG bonuses if Democrats stop trying to blame the Bush Administration for not shutting AIG down. Part II: Senator Dodd will give back his AIG political donations and Representative Frank will admit he insisted on including AIG in the first round of bailouts (Oh. Wait. They are both Democrats).

On to the World Baseball Classic for the USA means on to California and TV competition with the sprint to the Sweet Sixteen. Which would you rather see – your bracket coming through the weekend or the USA winning the WBC? This week there has been a lot of talk about the injury toll. Who would you blame – the WBC for holding its tournament when the players were still tuning up or the USA team authorities for not obtaining its own pre-tournament training site and bringing the players in two weeks earlier? Here in Florida the facility built for the Indians and never occupied and Dodgertown in Vero Beach were both vacant and available for Team USA. Meanwhile, Cuba has gone home with their entire team intact – no defections. Does that mean that [a] people in Cuba are happier with Raul than they were with Fidel [b] things have gotten so bad here that defecting is no longer that good a deal or [c] security was so good that Scott Boras could not get through to sign anyone?

There are 17 days until opening day. But with the disparity between good and bad wider than ever, we might as skip right to the playoffs. It is September, the Yankees, having beaten, the Angels will beat Minnesota in the ALCS. The Twins spent their energy outlasting the Red Sox. In the NL the Dodgers top the Marlins (wild card but still without a firm stadium plan) and the Cubs beat the Mets (NL East leader). Los Angeles wins the NLCS despite the goat sacrifices in Chicago. Yankees win the World Series in 6 games and Alex Rodriguez donates his share to charity.

RIP: Whitey Lockman. Whitey Lockman is the answer to the trivia question – who was the runner who scored just ahead of Bobby Thomson when Thomson hit the shot that was heard around the world? If Lockman had not hit the double first, Don Newcomb might have still been on the mound to face Thomson.

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