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esterday was a nice day. I drove with a Santa Margarita Water District board member and a Laguna Woods city council member from OC, across LA and into Kern County, to the beautiful, 97,000-acre Wind Wolves Preserve* for a meeting of the Southern California Water Committee. Unusual in today’s dreary SoCal water world, the meeting was productive. Plus, the conversations coming and going were terrific – and I went about 12 hours without news reports.

But when I got home, Incredible Wife was depressed. The difficult slog of being the CFO of a small biz in these times? Sort of, but more.

“You wouldn’t believe the things I’ve seen on TV today,” she said after listening to my report on my day, which cheered her up a bit.

“Geithner wants more control, so he can shut down a business if he thinks it’s a drag on the economy. The U.N. wants to take control of our economy. I don’t see the point of keeping on fighting against the economy if it’s going to be like this.”

That’s a bit worse than the usual recession worries about cash flow, eh?  As I got caught up on the news, the positiveness of my day diminished, and within an hour or so, I was ready to be mad as he** and not take it anymore, so I went on line to buy some “Don’t Tread on Me” stickers for our cars.

I found some beautiful ones – 6″ X 4″ with the orignal artwork of the extended rattler on a yellow background – at Gadson & Culpepper, and ordered up 10 of them. We don’t have 10 cars; it’s just that “DOTM” evangelism is in order.

This morning, I got this email back from the purveyor of said stickers:

Thank you very much for your order.

Please give us a  little extra time on your order this March and early April. Everyone seems to have the DTOM spirit and we will get everything to you as soon as we can.

So I have to wait, but is this good news or what? All across the country, people are typing “Don’t Tread on Me” into their browsers in search of a way to express their feelings, and they’re finding this site, and no doubt dozens of others that offer up this particular brand of rebelliousness.    Gadson & Culpepper probably isn’t feeling the recession as much as other companies because they’ve tapped the root of a broad and spreading frustration and anger.

This morning on my way into the office (yes, it’s a recession so Saturday is a work day), I was listening to “Wait, Wait … Don’t Tell Me,” NPR’s weekly quiz show.  The caller was asked to guess what the most popular question was during Obama’s on-line Q&A session last week. The hosts mentioned that the Q&A was a part of a week of appearances by Obamarx, including “A prime-time press conference, Jay Leno and Home Shopping Network,” then it went something like this:

“Something about the economy?” guessed the caller.

“No, it was the one about his position on marijuana,” said one  host.

There was some patter about pot, then one of the hosts said, “Maybe the financial stimulus plan would make more sense on pot.”

The joke got a solid round of applause – on NPR! – as did the Home Shopping Network jab.  Things are not all peaches and cream for Rahmbama, folks.

* The Wind Wolves Preserve runs from the prairie-like grasslands at the southern edge of the San Joaquin Valley floor to the peaks of the Tehachapi range.  It gets its name from the wave-like movement of tall prairie grass in the wind … wind wolves.  A very cool word picture, until you imagine yourself in the 1800s, on your Conestoga wagon, surrounded by miles of tall grass filled with all nature of beasts and think for a moment that every ripple of wind through the grass could indeed have been a wolf. And that one … and that one … a pack of wolves all around you.

Or are they just wind wolves?  Brrrr.

Feel free to make the easy analogy to being surrounded by Obamarxists.

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orry for the repetitious Geithner flag pictures, but I just can’t get over how flag-crazy the Obama admin has become since he was criticized for not wearing a flag lapel pin.  Anyway, flags or no flags, the market might be up, but the prognosticators are down, including me.

It’s obvious the latest offering is more of the same:  an offer of federal cover for downside risk in return for letting the federal fox in the financial hen house.  There is no free market at work here, since individuals’ downside risk is guaranteed, so it’s just a costly postponement of the inevitable.  As for those with more financial pundit prowess than yers truly, a quick scan of headlines at Real Clear Markets reveals that cynicism and anger are overwhelming optimism over the newest rehash of Bush’s, now Obama’s, Wall Street bailout.

I already quoted Paul Krugman; here’s one more cut at his column:

And now Mr. Obama has apparently settled on a financial plan that, in essence, assumes that banks are fundamentally sound and that bankers know what they’re doing.

It’s as if the president were determined to confirm the growing perception that he and his economic team are out of touch, that their economic vision is clouded by excessively close ties to Wall Street. And by the time Mr. Obama realizes that he needs to change course, his political capital may be gone.

Even the Keynesian Klugman is seeing the wisdom of an application of free market Draino to the financial sector.

At the New Republic, John Judis is pretty straightforward, calling his piece The Geithner Disaster:

As my colleague Noam Scheiber has suggested, Geithner’s plan could work if the bad loans and seamy securities that the banks hold are actually worth something–say, 60 percent rather than 30 percent of their original value. If not–and there are plenty of skeptics who question that–then Geithner’s plan will transfer more money from taxpayers to private investors and bankers without reviving the big banks. That will amplify the growing populist outcry against the Geithner and the Obama administration, and make it more difficult to do what is necessary to revive the economy.

Sorry, Sec. Geithner, but re-naming the toxic sludge of Wall Street mega-errors “legacy” funds will not increase their value to anywhere near 60 percent of their original value.

Here’s the obvious solution from RCM columnist Louis Woodhill. Too bad it’s got zero chance of going anywhere:

Unfortunately, the government is now trying to solve a problem created by printing too much money by printing even more money (plus tax increases, plus economic-superstition-based “stimulus” borrowing and spending). This will not work.

What will work is the Constitution of the United States. On February 3, Congressman “Judge” Ted Poe (TX-02) introduced H.R. 835. This bill would require the Federal Reserve to “regulate” the value of our money by making the dollar equal in value to 0.002 ounces of gold. The Fed would do this by using its Open Market operations to establish and maintain a gold price of $500/oz. H.R. 835 would also give a powerful supply-side stimulus to the economy by providing “first year expensing” for all capital investment.

Once the integrity of the dollar (and the Constitution) is restored, the markets can begin to right themselves. Stabilizing the dollar is an essential ingredient in any recipe for economic recovery.

Finally, over to the WSJ’s story on the market’s positive response to Geithner’s announcement, where I found this cynical reader comment:

Now remind me, wasn’t this what we were told they needed the first Trillion in TARP money for? Oh, wait, we used that to pay bonuses and allow banks to make foreign loans. Why does anyone on wall street think they will actually use another Trillion for the purpose the initial Trillion was to be used for?

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im Geithner is holding his breath. Will his announced new financial plan result in a repeat of his last debacle, when Wall Street roller-coastered downward after he ineptly punted on his plans? Early signs – the Dow opening up nearly three percent, Tokyo, Hong Kong, U.S. market futures up – indicate no, he won’t single-handedly destroy billions in wealth today.

But is it a good plan? The test of any plan is simple enough:  Will people accept it and get on board, or in this case, will financial institutions bundle toxic assets – now called “legacy” assets in a ridiculous bit of sophomoric word play – and sell them through a federal program?  Here, Geithner has real problems. The AIG bonus bruhaha, complete with radical zealots on bus tours by AIG exec’s homes, has made a lot of financial institutions wary of taking public funds – and the new plan has disincentives in spades. It’s not in Geithner’s op/ed, but Bloomberg reports:

Geithner will also announce plans later this week to ask Congress to give the Treasury and the Fed authority to step in and more easily tackle problems at systemically important financial institutions that are in danger of failing. Such powers would give the government the ability to limit payments to creditors, break contracts on executive compensation commitments and provide guarantees on particular categories of debt for companies that need bailing out.

It’s not clear whether these heavy-handed new powers will be wielded on all financial institutions (gasp!) or only on those who cozy up to the feds on the new plan (suckers!), but it’s evident that Obamarx and Geithner see statism as the solution to the economic problem – we give you guarantees, you give us power. I don’t think  Wall Street is about to go cowardly into the night, giving up authority and decision-making to the folks who run Amtrak, the post office and social security.

Paul Krugman doesn’t see it that way. Of course, he sees too much Bush in the plan:

Over the weekend The Times and other newspapers reported leaked details about the Obama administration’s bank rescue plan, which is to be officially released this week. If the reports are correct, Tim Geithner, the Treasury secretary, has persuaded President Obama to recycle Bush administration policy — specifically, the “cash for trash” plan proposed, then abandoned, six months ago by then-Treasury Secretary Henry Paulson.

This is more than disappointing. In fact, it fills me with a sense of despair.

That’s hardly the lead Geithner was hoping for.  Krugman says the new plan is just rehash number three of the first Obama/Geithner plan, with more bells and whistles, as if they were obsessed with one idea and unable to move on to another.  He can’t quite get his fingers to type the words “free market,” but his advice to Obama:  Don’t subsidize the assets as this plan does; let the market price them, get them off the books no matter the cost, and move on.

That’s far too foreign to Obama’s belief system, so he’s let his Treasury Sec move a plan forward that is a high risk one for the admin.  If it doesn’t work out, Obama will have wasted time the economy doesn’t have to lose.

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reasury Dept tax-cheat in chief Timothy (“Only Little People Pay Taxes”) Geithner told the Senate Finance Committee today that the feds will aggressively go after companies that use offshore locales to avoid paying taxes, and will close corporate tax loopholes the Senate Finance Committee happily approved previously after pocketing campaign contributions.

The Bloomberg report on the testimony doesn’t go into whether Geithner squirmed and the gallery squealed when he said this:

“We’re going to have a much more ambitious effort to deal with offshore tax havens,” Geithner said in response to questions from the panel. Allowing companies and individuals to escape paying their share “isn’t fair, particularly given the scale of the fiscal challenges we inherited,” he said.

As Mrs. Gump almost said, fair is as fair does, and Geithner doesn’t do fair particularly well.

If the Congress doublecrosses the folks they took campaign funds from and closes the loopholes that allow offshore “shadow banking” in the Caymans and the Isle of Mann, more power to them – as long as they understand that the action will raise consumer prices.  But there should be an amendment to their bill that prohibits Geithner from talking about what’s fair and what’s not.

One thing you can say about Geithner, though, is that he’s consistent.  Once again, he spoke and the market plummeted, today hitting its lowest point since 1996 and the index Obama likened to no more important than tracking polls, the Dow, falling 200 points by mid-afternoon in NY.

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