A reader comment to Bill Gross Wants PIMCO Bailout stated that I was being unfair to Bill Gross. I was challenged to debate the case on its merits.

I asked that reader what vested interest he had in the bailout Gross was asking for. I wanted to know if the reader was a real estate agent, homebuilder, in the mortgage business, etc. After waiting many hours I gave up. No reply came. I did not expect one.

Nonetheless, to be completely fair, I presented an Ad Hominem attack on Bill Gross.

So let’s instead list reasons why the “Gross Bailout” is complete foolishness.

  • It bails out irresponsible lenders at taxpayer expense.
  • It bails out irresponsible borrowers at taxpayer expense.
  • It bails out irresponsible homebuilders at taxpayer expense.
  • It bails out irresponsible real estate agents at taxpayer expense.
  • It encourages more irresponsible lending.
  • It encourages more irresponsible borrowing.
  • It encourages more irresponsible homebuilding.
  • It encourages more real estate fraud.

The above is what is easily seen. The above is so easily seen that I am sort of amazed that it had to be spelled out.

The Seen
Let’s sum up the “seen” in a single sentence: The bailout is socialist nonsense that benefits select groups at the expense of others.

The Unseen
I cannot possibly state the “unseen” any better than Paul Kasriel so I will not try. Kasriel presented a stunning rebuttal of Gross’s proposal in There’s No Such Thing as a Free Bailout.

Bill Gross is bright enough to understand both the seen and the unseen. That is why it should have been obvious how disingenuous Gross was when he stated “Write some checks, bail ‘em out, and prevent a destructive housing deflation that Ben Bernanke is unable to do.

Mike Shedlock / Mish/