Time for Harrisburg Bondholders to Take the Loss, Bachmann Scared of Cuba, and More Green Energy Crony Capitalism

Though I tried to warn everyone back in July, it looks like the wonderful PA legislature is going through with its plans to try and take over the fiscally ailing city known as my hometown of Harrisburg.  From Bloomberg:

Harrisburg may become Pennsylvania’s first municipality to fall under receivership.
The City Council in July and August rejected fiscal rescue blueprints from consultants hired by the state and Mayor Linda Thompson. Today, The state House of Representatives voted 185-9 for a bill that would let Republican Governor Tom Corbett name a receiver. The Senate still must consider the plan.
The capital city of 49,500 faces a debt burden five times its general-fund budget because of an overhaul and expansion of a trash-to-energy incinerator, which doesn’t generate enough revenue to cover the obligations. It avoided defaulting on general-obligation bonds in September and last year by getting advances on state aid.

Barry Ritholtz has a great post today entitled "Take the Loss" which should be read by every PA politician, Gov. Corbett, Mayor Thompson, and every idiotic bondholder than lent Harrisburg money, an excerpt:

When Bear Stearns first began to wobble in 2007, the initial error in this era of bailouts was in rescuing their bondholders. Instead, in 2008, they should have been forced to take the loss.
Its the same for creditors of Citi, Bank of America et. al. — instead of rescue packages, their creditors should have had to take the loss.
Mortgage delinquencies growing? More and more defaults in the pipeline? We can extend & pretend, or we can take the loss.
Note that via the FDIC, some bank lenders did take the loss. Washington Mutual’s collapse led it to being bought by JPM. Wells Fargo picked up Wachovia. Other examples abound, In each case where losses were forced to be realized, we ended up with a healthier few banks, and no moral hazard.
Zombie banks get created when they do not take the loss.
Now we have the European crisis, wherein all of the parties involved refuse to (say it with me) take the loss.
Greek debt piling up? You can restructure, renegotiate, reneg, or you can take the loss. Portugal’s balance sheet a problem? Well, the ECB can kick the can down the road, or they can force lenders to take the loss.
The model for not taking the loss has to be Japan. Look at their stock market since 1989 and you will see the net result of not taking the loss. The Japanese have suffered through lost decades as a result of their refusal to take any write-downs, propping up their Keiretsu.

Allowing those who made dumb decisions to face the consequences?  What an absurd idea!  There is absolutely nothing that the receiver Corbett will potentially name could do that Mayor Thompson can't.  She is looking to preserve collective bargaining contracts while Corbett is looking for a power grab.  Taxpayers get to take the hit like always.  Here is an apt image via WilliamBanzai:

To continue on with the absurdities of politicians, here we have GOP presidential candidate Michele Bachmann, when not mistakenly labeling a cancer vaccine of causing mental retardation, accusing Cuba of providing cover for Hezbollah:

Republican presidential candidate Michele Bachmann said Monday that it would be “foolish” to normalize trade with Cuba because Hezbollah could soon have “missile sites” there.
“Why would you normalize trade with a country that sponsors terror?” the candidate asked a crowd of supporters in Cedar Rapids, Iowa. “There is reports that have come out that Cuba has been working with another terrorist organization called Hezbollah. And Hezbollah is looking at wanting to be part of missile sites in Iran and, of course, when you are 90 miles offshore from Florida, you don’t want to entertain the prospect of hosting bases or sites where Hezbollah could have training camps or perhaps have missile sites or weapons sites in Cuba. ”
Bachmann was most likely basing her fear on an unsubstantiated report from the Italian publican Corriere della Sera, which was picked up by numerous conservative websites earlier this month (see here, here, here and here.)
Even if that report were true, it makes absolutely no mention of “missile sites.”

As Bastiat says, "when goods don't cross borders, soldiers will." Trade is a policy of peace, barriers create tension and hatred.  Bachmann is a moron, plain and simple.  And of course she isn't alone:

Update: The Energy Department on Wednesday approved federal loan guarantees for two green energy projects totaling more than $1 billion. It approved $337 million for a Mesquite Solar project in Arizona and $737 million for a Solar Reserve project in Nevada. The projects would create a total of 52-55 permanent jobs, according to earlier DOE figures and company statements. That's about $20 million per permanent job.

Despite the massive success known as Solyndra, here we go again.  I wonder how much those companies donated to the Obama campaign.

I will end with mentioning Robert Wenzel's wonderful emails to the NY Federal Bank and the Fed headquarters in D.C. in response to Herman Cain's suggestion that one just dial them up with any questions.  I am 100% positive that Cain was telling the whole truth.....see the emails here and here.

Update- Here is a fantastic video on how fiat money really works and why it screws over the low class and enriches the upper class: