Clarion Content

Sports talk radio show host Jim Rome speared the recently collapsed investment bank Bear Stearns this afternoon with a heck of a skewer. Paraphrasing what Rome said, 'Today, Tiger Woods and Alex Rodriguez, both of them, are worth more than Bear Sterns!!'

Rome may be technically correct based on the bargain basement $236 million, $2 per share price JP Morgan paid for Bear Sterns yesterday. Was this price the final insult of a deal railroaded through by the Federal Reserve and Treasury Secretary Hank Paulson, favoring the fear of the status quo crisis over the future moral hazard?

The Clarion long a detractor of insurance, a conservative with a tiny 'c' loathes the interference of the government, this administration. There is no arguing that this administration has been a massive expander of the Federal Budget and the Federal debt. They will tell you it had to be done, this rescue, and it will be years from now before we can see clearly, if ever, who was right and wrong. But in the long decline of the American hegemon, mark this as another notch on the bedpost. A clichéd sequence in time where the overdependence of the economy on financial services kicked the taxpayer square in the groin. This deal will cost billions. Did it head off catastrophe? Quien sabe? But even if it did, doesn't that need point to major systemic issues for the American economy?

Two other notes. This first neither proves nor disproves the merits of the deal, but it is ironic. The New York Times' Andrew Sorkin pointed out that Bear's headquarters on Madison Avenue is valued at $1.2 billion. This would value Bear Stearns at $8 share (not $2) if it could truly fetch that hefty price.

The other note seemingly unrelated except in the Clarion's minds eye, the physical cracking of the infrastructure of the American state was on display today in Philadelphia. A six foot crack opened in a pylon on Interstate 95 that will close a three mile section of highway used by an estimated 190,000 commuters per day. Traffic was snarled today on the pothole ridden streets of Richmond Avenue according the Philadelphia Inquirer.

While money is poured down the drain maintaining the Empire, the streets and highways of America are crumbling. (Not to mention the water pipes.)

Labels: Economy, Politics