Ron Amundson’s Political Blog

Ben Bernanke brought this analogy up yet again as concerns bailing out AIG. However, it doesn’t hold water at all anymore, let me expand on it.

The situation:
The neighbors apartment complex is still burning after an extensive effort to put it out. So far, only minor fire damage has been occurred to the neighborhood. However, the reservoir is nearly empty, and the stress on the water table has resulted in homes in the city shifting, and drywall is cracking.

Only a few are noting the following:

1. The neighbor’s apartment complex if it was legit, would have either burned out, or water would have put it out long ago.

2. The council is concerned about the reservoir, but they think they can get neighboring towns to transport water, should it run dry. None have experienced in trucking, albeit there is some experience in firefighting, and significant experience in real estate.

3. The drywall cracks in town are getting worse, the council see’s this a bit, but takes a blind eye. Better to have cracks and a home, rather than none at all, not realizing if major sinkholes develop, the town will be worse off than had it been burned off the planet. A few on the council see this, but they are over powered.

4. Some think the neighbor had phosphorous and hazmat stored in his apartment complex. He was going to get rich in the fireworks business.

5. Why is the fire not out, something fishy is going on. Is the neighbor seeing the reservoir going empty, and diverting / stockpiling water for the future where they will make a killing selling it back to the town, even if his apartment complex finally ends up burning to the ground.

6. The neighbor sent a confidential message to the council, as he noted he was loosing support. Basically he said, keep up the water effort, or the town is gone, the residents will be hurt, the neighbors will be hurt. Your reputation will be ruined. Pretty much said, do this or else. The memo was leaked, and few if any were outraged.

7. While the neighbor knows he should move the contents of some apartments, and even put up a few barriers, just as good operating practice, he wont spend any money. Say’s its too hard to find good workers he can hire in this market for a song, and he would loose money. He did move a couple things, but its a slow process he says.

Some thoughts of an even smaller number of people early on:

1. We are sure their was hazmat in the apartment complex.

2. If we let if burn down, and loose half the town, we could rebuild pretty fast.

3. If we deplete the reservoir, trucking in water is not going to work. We may loose the town, and rebuilding after sink holes appear everywhere is a huge problem, it will take years to fill those in.

4. It would be a good idea to build barriers around the neighbors apartment complex, but to do so, we would need to dedicate much of the fire staff to barrier building, rather than water and hose work. Perhaps we would loose 50% of the complex, so we need to provide new housing for some of the residents. The towns residents will complain, why did those residents get help, their not getting any, plus we’d ask the neighbor to pay for the relocation. He is a good old boy, we owe too many favors too, we really can’t ask him.

5. It may be possible to bring in movers, and relocate the unburned parts of the neighbors apartment complex, as well as the adjoining neighborhood. Of course, that will require major council intervention in the apartment complex operations, as well as the adjoining neighborhood. The business community would have a bird, who gives the city the right to upend a business, irrespective of whether storing hazmat was ok or not. The city just doesn’t have the resources or skill to move houses, they best not touch this. Also if they outsource to the experts, the movers will make a fortune and it will cost the neighbor plenty both in cash and PR. We can’t do that to him.

6. Some guys on the council thought maybe they should put a watchman in place to make sure water is not diverted. Most of the council thought, no, if we do that, it will slow down our efforts to put out the fire, and to even suggest it could damage the neighbors reputation. Remember we owe him a lot already. Also, his friends will talk of this all over the county.

What should we do now? The neighbors house on fire analogy doesn’t hold water anymore…