The Giant Bear roars again…

Prime Minister Putin – er – President Medvedev has laid out five “principles” of foreign policy, according to this article from the BBC. The funny thing about principles is that there things people aspire to, but often times don’t meet. And Russia is no exception. And to be fare, principles often conflict with one another. Let’s see…

3. No isolation

“Russia does not want confrontation with any country; Russia has no intention of isolating itself. We will develop, as far as possible, friendly relations both with Europe and with the United State of America, as well as with other countries of the world.”

You would think that means not overrunning your neighbors with troops, but the Russians may choose to hide behind the next one to get around that little inconvenient fact:

4. Protect citizens

“Our unquestionable priority is to protect the life and dignity of our citizens, wherever they are. We will also proceed from this in pursuing our foreign policy. We will also protect the interest of our business community abroad. And it should be clear to everyone that if someone makes aggressive forays, he will get a response.”

While one cannot argue with the general idea, there are many Russians in neighboring countries who have Russian passports. Is that grounds for invasion? But if it is not, perhaps the next one is:

5. Spheres of influence

“Russia, just like other countries in the world, has regions where it has its privileged interests. In these regions, there are countries with which we have traditionally had friendly cordial relations, historically special relations. We will work very attentively in these regions and develop these friendly relations with these states, with our close neighbours.”

As Bill Cosby would say, “Riiggght.” Read: if you aren’t friendly to us, we’ll invade to “protect our citizens”.

Cuba, are you listening? Still, better to oppose the principles and the bad behavior of one state rather than compound it. Of course that might depend on who makes the decision. President Bush might decide that one more crusade is in order.

Another Downturn Another BuyOut

Americans love capitalism. We love to tell the government to stay out of the business of business. “That which governs least governs best” and all that hoo ha. This holds true until something goes wrong. The World Trade Center and Pentagon are attacked: let’s change our way of life. The mortage industry fails to properly regulate itself, and now it appears that the government will come to the rescue of Fanny Mae and Freddy Mac.

Given the circumstances I don’t see any recourse but to bail out these two pseudo-corporations, but wuoldn’t it have been more cost effective to employ some amount of regulation to avert the need for the U.S. tax payer to step in – again? Let’s recall the last fiasco in the 1980s where the savings and loan industry all but collapsed and the Resolution Trust Corporation was formed to recover the mess.

Instead of paying through the nose at the end, perhaps a little LESS liquidity would have done nicely. For instance, debt was sold from one bank to another like candy without any notion of the risk. What if the bank that issued the note had to hold it? At that point the risk is the bank’s and the bank’s alone. Perhaps this is also an argument for a higher reserve ratio for subprime mortages. Another approach would similarly require a ration of prime to subprime loans so that there is a maximum risk portfolio.

One of the reasons this isn’t done is that people say that the market should sort itself out. And that works up until a certain point, after which Americans who are not delinquent foot the bill.

Update: No Sooner Had I Finished Writing, When…

The U.S. Circuit Court of Appeals for the District of Columbia threw out an entire raft of regulation, regarding CO2 emmission. Either as planned or unplanned incompetence, the Bush administration’s protection of the environment has simply been incompetent. Or worse. The Wall Street Journal reports today that President Bush is renewing his ridiculous calls for more drilling in sensitive areas.