Stress Testing the Banks

If you have to prove you are worthy of credit, your credit is already gone. -Walter Bagehot

Timothy Geithner, the Treasury Secretary, has come out with a plan (really more of a vague idea) to "stress-test" American banks to determine whether they can survive this current recession. To be conducted in April, this testing will be performed on banks of over $100 billion who have taken government money. Using assumptions of average unemployment of 8.9% in 2009 and 10.3% in 2010, Treasury will determine whether they can survive.

There are two problems with this plan. The most obvious is that we haven't been in a crisis like this before so we don't know whether those unemployment assumptions are too pessimistic, too optimistic, or just right. We won't find that out until it's too late, but that won't stop Treasury from spending more tax dollars based on the model.

The more fundamental problem is that the very fact that these banks are being stress tested indicates that they are on the road to failure. People don't ask whether your company can survive if they think it can; they ask to confirm that it can't.

My opinion is that this is all political theater to convince the American people that their money has not been thrown down a giant rathole and to pave the way for a more smooth nationalization for some of the ratholes banks that have already received government funds.

This I Believe: Everyone Deserves Defense

I found out last Friday that my career as a public defender will be starting later than I'd like. Placement is by attrition and people aren't quitting as often as normal in this troubled economy. I'm disappointed, but still committed to being a public defender, albeit later than I had planned.

Derek pointed me to an NPR "This I Believe" essay by a former public defender. It's worth listening to, especially if you don't understand how I could choose a job where I fight for the accused, not the victim.

I passed the Colorado Bar Exam

Results of the Colorado Bar Exam were posted this morning and my name was listed in the list of people who passed. Now I just need to pass the background check, take a professionalism class, and swear in and I'll be a real lawyer.

Stop the bailout in the Senate

The Senate has scheduled a vote for Wednesday night at 7:30 pm on the bailout package. Now is the time to call your Senators and tell them not to support the bailout. Instructions on how to find your Senators and what to say are in my previous post.

Action: Stop Congress from giving away your money

Rumors of my demise are greatly exaggerated. The bar exam is over, though it's still 10 days away from results.

This morning I urge you to take three minutes (literally only three minutes) out of your day to stop this insane $700 billion dollar bailout.

1) Call your Representative. You can look them up here. Be polite and tell them (a) your name and that you are a constituent, (b) ask if they have a position on the bailout, and (c) urge them to vote against it.

Fun bonus game: If they don't have a position, ask out of curiosity how many people have called them supporting the bailout. When they give the answer (my Senator had received a total of ten calls in favor), ask them why they don't have a position when their constituents overwhelmingly oppose the plan. Kindly let them know you'll be calling back to check on the position as it develops.

2) Call each of your two Senators. You can look them up here. Do all the same things you did for your Representative.

All told, each call will probably take less than a minute of your day and with luck, you can stop one of the worst pieces of legislation in recent memory from getting shoved down our throats.

Report back in the comments if you have the time.

UPDATE: According to Politico, the vote is currently 228 Nay, 205 Yes. However, the vote is being held open for the moment, so call again to tell your Representative to vote against it.

UPDATE 2: We have won! 228 against, 205 for!

UPDATE 3: The roll call vote results are here. Be sure to call your Representative to either congratulate or criticize.

The Kooks - She Moves in Her Own Way

I was listening to Pandora the other day and heard an awesome song by the Kooks. Catchy, with a nice acoustic guitar riff running through it, I keep listening to it over and over after buying it from iTunes. If you want to pick it up, click

How to write with style

Kurt Vonnegut wrote a lovely essay on style. Why should you read it? I'll let him answer:

Why should you examine your writing style with the idea of improving it? Do so as a mark of respect for your readers, whatever you're writing. If you scribble your thoughts any which way, your readers will surely feel that you care nothing about them. They will mark you down as an egomaniac or a chowderhead --- or, worse, they will stop reading you.