Government Spending

Where Have You Gone, Oscar Gamble or, Will '70s-Style Fiscal Haircuts Ever Make a Comeback?


Over at The American, Jay Weiser asks whether '70s-style investor-debtor haircuts will make a comeback. Weiser teaches law and real estate (?) at Baruch College in New York and explains that when the feds helped out Abe Beame's Big Apple in the 1970s (contrary to headlines of Gerald Ford telling the city to "drop dead"), they "offered limited guarantees only after creditors and debtors took hits." How things have changed:

The post-Ford pattern has been for the feds to pay 100 cents on the dollar with no creditor concessions. Think Fannie Mae and Freddie Mac's implied federal guarantee (originating in the Rockefeller era with the same off-the-books motivation), investment bank credit backstops, and AIG's credit default swaps. Just as bad is after-the-fact insurance for hot-money depositors who chase yield in uninsured, lightly regulated instruments—jumbo savings and loan CDs in the 1980s, money market funds after Reserve Fund insolvency in 2008. (America leads a coalition of the willing: the governments of Ireland and Iceland guaranteed themselves into insolvency with ex post facto insurance for the obligations of their bloated private-sector banks.)

More here.

While I'd rather see the feds and taxpayers everywhere tell bankrupt states and cities and "implicit"GSEs everywhere to drop dead, I could get behind the notion that stupid investors cum debtors who made really awful bets on bonds, houses, commemorative plates, you name it take the biggest hit in any sort of restructuring plan.

That sort of first-order responsibility is simply not jettisonable (?) in a market economy, whether the bad actor is a public entity or a private firm. It's the very essence of the system: You bets your money and you takes your chances, whether you're the mayor of Idiotville or Warren Buffett, World's Greatest Investor and Omniscient Oracle of Omaha who somehow missed the fact that his left-hand man was playing fast and loose with petty change.

Indeed, there's something so freaking wrong (morally and economically) with letting willing debtors skate free or mostly free with all of their scalps, much less hair, intact.

Which brings me to Weiser's titular quesion, "Will 1970s Haircuts ever come back into style?" In terms of baseball—a gaping maw of government-subsidized slack if ever there was one—they already have. Take it away, Coco Crisp:

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  1. Oscar Gamble. The genius who brought us this quote:

    They don’t think it be like it is, but it do

  2. Just because your jacket occasionally transports you back in time to 1978 doesn’t mean we need to bring the 70’s to the future. Didn’t we have a stupid retro-70’s trend 20 years ago?

  3. contrary to headlines of Gerald Ford telling the city to “drop dead”

    Is he eligible to run again? *checks to see if Ford is even still alive…*

    1. Betty Ford for President in 2012!

  4. I have long suspected that the aggregate accumumlation of hairspray and activator in the atmosphere will eventually reach a critical parts-per-million threshold and give everyone big hair.

    1. Yes, but will it grow new hair!

      1. No, we’ll have to wait for the Ambient Rogaine Tipping Point for that.
        Of course if theories about chemtrails of Popeil scalp spraypaint turn out to be true…

  5. I would love for Obama to grow the fro. Heck, he could put on his platform shoes and go to work at the carwash. It would be great.

    1. It’d be like the comic book Prez. get an indian with disco beads and we’re set.

  6. I thought Iceland’s voters rejected IceSave a second time and continue to clean political house.

  7. Watching A’s baseball?

    On Saturday, Coco had the ‘fro wearing the 70s throw back uniforms.

    Last night, he was back the dreads.

    Jeez, I’m watching A’s on TV. Get a life.

  8. Coco! Say what you will, but he’s got some range to go with that hair.

  9. It’s good that somebody is bringing up the fact that investors in New York bonds got cornholed in the seventies. Bankruptcy is the legal mechanism for requiring creditors to take a hit. But New York never officially went bankrupt. It tried stiffing bondholders outright, and partially succeeded. Then it got bailed out by Jerry Ford, with bondholders taking haircuts. But there never was an official bankruptcy. So the government bond market can go on talking about how municipal bankruptcies are so rare that they almost never happen ? and they never have to acknowledge that within living memory the biggest city in the United States was, by any commonsense standard, bankrupt.

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