Friday, December 26, 2008

Highly-Paid People Poo-Poo Profits

From the Washington Post, a passive-aggressive dig at for-profit loan modification firms. The gist: anyone who charges for a service that others do for free must be running a scam.

So, who are these angels dispensing loan modification miracles? Let's meet a couple.

"You don't need to go out and hire someone to help you," said Michael Gross, managing director of mortgage servicing for Bank of America. "It is very, at times, frustrating to find a homeowner who has paid a for-profit company $3,000 to $5,000 in an upfront fee, when they could have gotten the same or better assistance free."

I'm pretty sure managing director of mortgage servicing for Bank of America is at least a full-time job. Mr. Gross must truly have a heart of gold to work full-time for a for-profit company (especially a for-profit company on the dole).

"We are extremely concerned about the huge proliferation of for-profit companies making a buck on these people," said Laurie Maggiano, senior policy adviser at HUD's Office of Housing. The department has certified 2,300 nonprofit housing counseling agencies across the country, which are required have at least one year of experience administering a housing counseling program, Maggiano said.

I'm shocked that HUD has unpaid senior policy adviser positions. You would think with all those taxpayer dollars under HUD control, Ms. Maggiano could get at least minimum wage for her work.

Or, perhaps I'm being intentionally obtuse about the nature of a not-for-profit entity, mocking Ms. Renae Merle. As it turns out, the only differences between a for-profit and a not-for-profit is the manner in which they are taxed, and the disposition of net income (a for-profit has the ability to distribute some of net income as a return on capital to the owners). Both have bills and salaries to pay, and both provide services for a payment.

For-profit and not-for-profit are just two different business models, not a basis for delineating saints and sinners.

As for Mr. Gross and Ms. Maggiano? They are for-profit entities in their own right, providing services to the highest bidder and taking home extraordinarily large paychecks. The irony of disparaging quotes from that pair, along with Ms. Sarah Raskin, Maryland's commissioner of financial regulation, is that all of them work for entities that coercively extract payment for their services at the point of a gun.

I would not begin to defend fraud, if indeed fraud exists as you intimate, Ms. Merle. However, I sure don't need ethics lessons from people who profit from armed robbery.

Labels: , , , ,

Monday, December 22, 2008

Arm Twisting as Art

A review of Adam Knott's A Praxeology of Coercion. Seriously, it's a great read and answered a lot of questions that have been dogging me for some time.

I told Adam I really want to read a critique of his monograph from somebody steeped in praxeology.

Adam Knott sites (see if you can spot the trend):

Adam Knott Blog

Labels: , , ,

Zombie Furriners Strike Again


It was stupid when he stood in front of the cameras. Ten minutes later, when everybody had their chuckle, it was just a Bushism.

But now, you want to revisit the "Damn Furriners and their Propensity to Save" argument again?


Labels: , , , , ,

Thursday, December 18, 2008

Won't Somebody Think of the Children?

Is there any blog that doesn't use that as a headline at least once?

EVERYBODY's looking for their bailout. The latest:

Labels: ,

US Manufacturing Crisis

That is, crises that are manufactured.

First, Wall Street provided proof of a credit crunch by...not lending. With absolutely no clue about how banks or Wall Street even works, congress was cowed into diverting $700 billion from other, worthier investments.

With that lesson in mind, Chrysler is manufacturing a crisis in Detroit by...not manufacturing. And, to prove that auto sales are down due to the non-existent credit crunch, Chrysler Financial is threatening...not to lend. And, to prove that dealers are having a rough go of things, Chrysler is going to start fining dealers for rolling stock left on the lot too long.

See how that works?

But, here's the deal. Michigan credit unions say they have plenty to lend on autos. There's no outcry from the UAW; Chrysler employees are getting an extra two weeks' paid vacation. And, by the way, if you've got too much inventory, curtailing production is the only sensible thing to do (which explains why it didn't happen sooner).

Chrysler is making all the right moves to extort $7 billion (just a downpayment to get them into January) in diverted funds from other, worthier investments. One of those other, worthier investments may just be loaning money to Chrysler at market terms. Ask yourself just how bad the market terms have to be to extort taxpayers while opening your company up to the dictates of the federal government.

Who says the US doesn't manufacture anymore?

Labels: , , , ,