Only 2 ways out

I've come to realize that there's only 2 ways the entire crisis of 2008 could have been dealt with.

(1) Let the banks fail and face the depression that the pundits promised would follow.
(2) Big governments saves the banks, averts a depression.

Method (1) would have been the capitalist way out. The free market way out. The fiscally conservative way out. Method (1) would have instilled a fear of misbehavior in the banks and other financial institutions - and thus ensured that the crisis would not have occured again.

However, method (2), the "big government" solution was implemented. The banks were saved by taxpayer guarantees. A depression was averted (say Krugman et al.). Let us pause here and note that the more fiscally conservative politicos decided that capitalism was a no-go. Bush et al. decided that they needed a strong state to "guide" capitalism. They decided that the invisible hand was too harsh a fitness function for the Genetic Algorithm that is the market, especially when one is dealing with banks.

Now that method (2) has been implemented, we must forget about method (1). There is no way we should even consider unfettered capitalism in the short run (with the same companies which benifited from the handout still in existence). The only way out is to regulate the banks to hell. If politicians manage to impose method (1) characteristics on the system what will result is a bastard child of socialism and capitalism -- one where losses are socialized and profits are privatized. There is a bunch of people that believe this has already happened.

So, my understanding is that there is no option but to regulate everything, sit down and shut up and accept all the inefficiencies that come with it. If you want to say "market knows best", then I will remind you that in your worldview, you are dealing with financial institutions which should have died. If you let them get away with no regulation, you should realize that what is happening is not capitalism anymore. Moral Hazard, yada yada yada.

So, in essence, fiscal conservatives should also realize that their philosophy is fundamentally incompatible with democracy. After all, a fiscally conservative president rescued the banks with government money. This should be enough evidence for us to throw these ideas (from Ron Paul et al.) into a bottomless pit.

Portland

Was in Portland for a couple of days for a hectic training trip. This was my second trip to the city (the first one having been in November).

I have been told that it is a beautiful city with snow covered peaks in the vicinity (Mount Hood), beautiful evergreen forests and the rugged pacific coast. Unfortunately, there was no way to verify this claim, as the city's skies were saturated with clouds all along. This was the case in November -- and it was also the case now. For all I knew, all the maps and photos could be an elaborate ruse, and that surroundings of the city could be as flat as central Texas.

Did I mention the gloom? I believe most native Portlanders believe that the sun exists only for 3 months a year, and the rest of the year it is replaced by some sort of hazy continuum in the sky. Stands to reason that Copernicus, Galileo and the like did not hail from Oregon. And it rains all the time. It rains so much that there's moss on the asphalt!

My employer (who shall remain unnamed) has several campii in the area -- and each campus hires several thousands people, who commute on the perpetually wet streets of Portland. I found one fairly ironic thing on campus: a covered parking area with solar panels on top. It certainly is the height of optimism to expect to produce any useful amount of electricity from the 270 days of utter gloom that the city encounters. I'd like to meet whoever did the ROI calculations on that.

I could now relate to why Nirvana, Alice in Chains and the like produced such gloomy music -- Seattle essentially has the same weather. There is no way you could expect bubblegum pop to arise from such a setting.

On a concluding note, I look forward to one of my subsequent trips to Portland being in Summer. I have been told that those 3 months (from July to September) begin to resemble paradise. This will be a welcome change from the 50C temperatures in the Valley of the Sun, which spring, summer and fall invariably bring with them.