Defenestrating Thoughts from the Bivouac

So, there’s a lot that I want to say about the current economic conditions and the idiotic plans coming out of Washington. But for now the one thing that I wanted to talk about is the amount of simple fallacies in all these discussions and how the media and analysts repeat them without realizing how stupid they sound.

Consider “Bernanke: Recession certain in absence of bailout“. Um… a recession is coming no matter what. Unless you can figure out a way for homes to go up 10% a year while wages stay stagnant indefinitely, we’re in an asset bubble caused by loose credit standards. Home prices have to come back in line with wages. This isn’t speculation, it’s basic economics.

A recession is inevitable no matter what, even with the bailout. Notice the headline doesn’t say that the bailout will prevent recession, it just says, without it we’ll have a recession; that’s a nice lie of omission.

The headline may as well read, “The sun rising in the East is certain in absence of bailout.” or “Recession certain in absence of Vijay being named King of the World.”

Another one that’s annoying me is, “If we don’t pass this bailout, things will get a lot worse.” That’s just classic false dilemma. That tactic frames the discussion as just two choices: this bailout or nothing. Well, that’s just wrong; there are plenty of options.

Framing the discussion this way is disingenuous. When you have to resort to these tactics, your position is probably wrong.

Last one I wanted to mention for now is part of Obama’s four point plan. It’s not so much a fallacy as just stupidity:

Mr. Obama proposed a new “financial stability fee” on the entire financial service industry to repay any losses that affect taxpayers,

On the entire industry? So every bank is charged this fee? So the cost of business for every firm went up. And guess what? They will pass the cost on to their customers. So Americans will pay more for banking (more fees, etc.), the banks will take the extra payment, give it to the government, and they will give it back to us?

In the end, we pay for our refund!

Um, Obama? You graduated from Harvard right?

Apparently the vaulted Ivy League education is vastly overrated.

The flaw is the “entire” part of the proposal. The banks that should pay the fee are the ones that used the program. Not everyone. New banks and banks that didn’t take the bailout (if any) don’t have to pay the fee and can pass those savings up to the customer. This way the bad banks that take our money are punished and the good banks are rewarded.

It’s called free market economics. Apparently it’s not something presidental candidates need to know.