by JS O’Brien
Republican Representative Candice Miller of Michigan has a truly marvelous idea for getting the economy back on track: lie through your teeth. I suppose this shouldn’t be surprising, since it seems to be the first option for Republican politicians everywhere.
So, let me explain what she wants to do. Currently, accounting rules require banks to value assets (like mortgage-backed loans) at their current market value. Miller wants to allow banks to … well … value them differently … somehow. I mean, it’s not what you can actually sell those assets for, it’s what you can … ahm … pretend you can sell them for! If you can pretend those assets are worth more than they are, you can make the bank look as though it’s more solvent than it is. Then, if the other lenders are butt stupid, they’ll lend money to you based on what you say about your bank’s solvency instead of what the situation really is.
What a great idea! Let’s convince lenders to lend money based on underlying value that isn’t there.
Oh, hey, haven’t we done that already????
Categories: Economy, Politics/Law/Government
I just read this:
Mark-to-market accounting rules require assets to be valued at their current market value on a company’s books – and many believe mortgage-backed securities’ values have actually fallen below their inherent worth.
Inherent worth? As in the inherent worth of human life or justice or free will? Aren’t we talking about money? Isn’t anything’s monetary value simply what someone is willing to pay?
She can’t possibly mean what it sounds like she means…
It’s exactly what she means.
This is just what we need. The Euro has outpaced the dollar for quite a while now and part of the reason is trust in the European accounting over our Generally Accepted Practices so why don’t we make them even less trustworthy. Sure, That will get people and institutions to invest in our economy. What is she thinking. Thinking like that makes me believe she needs to have her head surgically removed from her rectum.
But, the Bush appointed SEC resists the change.
Oh, lord, Miller used to by my Secretary of State during the Engler administration. We got the whole Republican mantra heaped on us. And look at Michigan now: for a while it was suggested that we were having a “one state recession”. Turns out that we were just ahead of the curve.
Her education consisted of HS, Community College, and a place called Northwood University (which offers degrees in subjects such as sports promotion and management and fashion promotion and management, etc.)
Her district was redrawn so that it only includes the far NE suburbs of Detroit up through the tip of the thumb…all white and very rural. She supported Rudy for President. She’s a hack; she’s always been a hack; and my guess is that she’ll continue to be a hack. Consequently, her promotion of a hare-brained scheme like this one does not surprise me one bit.
This is what I was talking about in the other thread about the bailout. This bailout needs to be about FIXING things, instead it looks like the fix is in.
Fuzzy math and obfuscated accounting is not a solid base for an economy, the “fundamentals of our economy” are FAR from sound, or we’d not be in this mess.
And the fact that they are sticking more deregulation and looser rules on accounting while trying to “save us” tells me that the plan is not really to save us.