A Note Being Brief By I. Rabschinski
So, it is time for the first night of the Hanukkah, where we are celebrating lights and days of gifts for SmallChild 01 and SmallChild 02 (also being children which are mine), and for Spouse, who plots to kill the Dog who makes this blog -- though we are trying to talk her out of this extreme of position, usually with distractions ("Hey! Spouse -- Be looking up there!"), and chocolate -- but, the Good from the Switzerland, not krumbly Amerikanyets шоколад which tastes like animal has wiped its back part across your shagging carpet, and then you must lick it.
Hey; you notice how Cyrillic for 'chocolate' -- шоколад -- looks little like "Wonka", maybe? Is deep with the irony, yes? No? Oh, Пожалуйста - получите жизни.
We also enjoy to make the celebration with my Great-Uncle Yehudi, who was wounded in the fight in Great Patriotic War, where he had to have his sense of humor amputated.
This is the actual okay, however: We got him another one many years ago (they are like big grafting of the skin), and so he can watch now the reruns of The Mister Ed and make laughing.
Speaking for myself strictly, a television programme with talking horse ("Oh; Vilbur! Do Not Be Touching Me There!") is like something made by demons. Or Polish people. But, as Uncle Yehudi reminds us, he make the fighting at Kursk and Berlin and we did not ("I did not see you there!") -- so that he could watch 'The Mister Ed' and 'Leaving All To The Beaver' and 'My Three Suns', which Yehudi tells me is science-fiction show. Why he like them, I have not a guess. But still we love him.
So, to all the Mankind, we are wishing is Goot season, Nize season for you and your own SmallChilds, and pets, and the home appliances also. Treat them well -- they watch you when you are not looking and really holding the grudge. So says Uncle Yehudi, and as war hero we must listen to him.
This is same reason why John McCain is, I think, occasionally the popular guy.
I, Rabschinski, say this -- to Moldavish Guy; you also.
Wednesday, December 1, 2010
Saturday, November 27, 2010
The Great Curmudgeon
Eschaton Screenshot; Saturday, November 27th, 2010
(Click On Image To Increase Size. It's Easy And Fun!)
There were a large number of blogs I used to follow when it was a new phenomenon -- Hey, you can hang out there and pretty much say whatever you want!. By now, as with any industry, for those bloggers who have continued providing analysis and entertainment to the Intertubes, they've developed into tribes, circles of mutually-supporting friends, each with their own sites.
Woe betide you if you bore them, piss them off, or are identified as a Troll. Commenting at their sites is a bit like appearing, the stranger, at someone's party and if you just don't quite fit in... Well, ostracization, 'Blackballing', 'freezing out', or simply "being asked to leave" is what it was once called; I believe the blogging term is they don't get to sit at the cool kids' table, and for the most part, that's pretty much the level where it's at.
I don't try to sit at the kid's table; I'm not a concise or especially original blogger when it comes to social commentary or Left politics, and even when I make jokes as a commentor it's as if I'd made a bad smell in the room.
But, if acclaim as a blogger, or 'getting a name' as a commentor on other blogs is the reason why someone posts, they should forget it. That's the functional equivalent of going into acting just to read the reviews.
Since Before Nine was launched in the Fall of 2008, after a hundred-plus posts and perhaps a thousand individual pageviews, I've had... five comments. It's nice for anyone to receive compliments about what they do, but that isn't why I write; I'd hazard a guess it isn't why the Kool Kidz do their blogs, either.
Eschaton, one of the original, Left blogsites (the Right has it's own, but fuck 'em) I still read for the Pithy, and the links to other things I ought to know -- such as The Irish Crisis (about to be played out in Your Town), and the reminder that the Top Two Percent of America's wealthy
It may not help in a practical way -- but to know that there are others who recognize The Crazy as well as yourself, and are capable of expressing concisely and (hopefully) with humor that Yes, You Did Not Get This Wrong; We Are Fucked Beyond Measure... well, validation is incredibly important. And, we need voices to be raised when The Crazy comes -- as a testament, as a protest, as an assertion of our basic humanity.
As DailyKos is referred to fondly on Teh Left as The Great Orange Satan, I refer to Eschaton and its creator (who may or may not be named Duncan Black) as "The Great Curmudgeon" (If you read his site, you'll know what I mean; it's both a personal observation and a wry one -- somebody has to be the Blogger equivalent of the old man, shouting at the political Right Get Off My Constitution And Stop Fucking Us Over, Ya Damn Kids).
Anyway, Black doesn't need my poor Doggy seal of approval for his work -- he gets about a bazillion hits per week -- but if you don't at least occasionally follow his work, you should.
IT'S OFFICIAL!! 'CLASS WAR' OVER!!
By The Way, We Lost (Village Voice)
[From Bob Herbert's Op-Ed column, "Winning The Class War", in today's New York Times online:]
Even as millions of out-of-work and otherwise struggling Americans are tightening their belts for the holidays, the nation’s elite are lacing up their dancing shoes and partying like royalty as the millions and billions keep rolling in.
Recessions are for the little people, not for the corporate chiefs and the titans of Wall Street ... They have waged economic warfare against everybody else and are winning big time.
Spring, 2010: The Capo Gives The Soldiers A Taste
The ranks of the poor may be swelling and families forced out of their foreclosed homes may be enduring a nightmarish holiday season, but American companies have just experienced their most profitable quarter ever... the highest total since the government began keeping track more than six decades ago.
...On the same day that The [New York] Times ran its article about the third-quarter surge in profits, it ran a piece on the front page that carried the headline: “With a Swagger, Wallets Out, Wall Street Dares to Celebrate.”
'Wall Street Warrior' Parties Are Very Popular, These Days
...Families on the wrong side of the divide find themselves under increasing pressure to just hold things together: to find the money to pay rent or the mortgage, to fend off bill collectors, to cope with illness and emergencies, and deal with the daily doses of extreme anxiety...
(Photo: Go Here)
Extreme inequality is already contributing mightily to political and other forms of polarization in the U.S. And it is a major force undermining the idea that as citizens we should try to face the nation’s problems... in a reasonably united fashion. When so many people are tumbling toward the bottom, the tendency is to fight among each other for increasingly scarce resources.
...Aristocrats were supposed to be anathema to Americans. Now, while much of the rest of the nation is suffering, they are the only ones who can afford to smile.
Friday, November 26, 2010
Ashvin Pandurangi: "Plutocracy Now!"
(Ashvin Pandurangi, a third-year law student at George Mason University in Virginia, recently wrote this brief article for 'The Market Oracle' in the U.K., arguing for abolishing the Federal Reserve, which has been posted and reposted many times on the Intertubes.)
(I've broken up some large paragraphs into multiples for clarity or emphasis, but otherwise am passing on the post in full.)
PLUTOCRACY NOW!
By Ashvin Pandurangi
(I've broken up some large paragraphs into multiples for clarity or emphasis, but otherwise am passing on the post in full.)
PLUTOCRACY NOW!
By Ashvin Pandurangi
Every so often, Americans should stop everything they're doing for a moment, and reflect upon the nature of their country. Specifically, upon what has traditionally been this country's defining characteristic. Was it our capitalist economy? No, there are many capitalistic countries around the world and capitalism was not first formulated by Americans.
What about our emphasis on personal freedom? Well, once again, many countries preach the virtues of freedom and many groups of people have fought for freedom well before America was formed. Surely it has been our diverse populace and our tolerance of all races, genders, sexual preferences... yeah, right. Personally, I would answer that it was our written Constitution and the democratic values embodied within it.
No other country had ever codified the structures and processes of their governing institutions to such an extent in one single document. Many people focus on the Bill of Rights when speaking about the Constitution, but the first four Articles are just as important.
They synthesized political ideas that were developed over hundreds of years by some of the most insightful thinkers, such as separation of federal powers, checks and balances, vertical division of powers (federalism), an independent judiciary and, of course, representative democracy. The latter emphasizes the notion that any policies enacted by the federal government must be authorized by the people, through their elected representatives who are held accountable to constituents every few years.
So what's the state of our Constitutional democracy today? Simple, it doesn't exist. International corruption surveys typically rank the U.S. higher (less corrupt) than most other countries, but this simply proves how bad these surveys are at capturing the essence of real, hardcore corruption. We could write stacks of books on the prevalence of money in politics and the swarms of lobbyists who descend on Washington every single week, and many people have, but it's simpler to just focus on the most egregious example of corruption.
The most powerful, influential economic policy-making institution in the country, the Federal Reserve ("Fed"), is an unelected body that is completely unaccountable to the people. Well, let's back up and start with the fact that this institution's very existence is most likely unconstitutional. Here's why:
Article I, Section 8 of the Constitution states that Congress has the power to "coin money" and "regulate the value thereof". The Supreme Court has long held that Congress can delegate its legislative powers to Executive agencies as long as it provides an "intelligible principle" to guide the agencies' action. We don't even have to reach the question of whether the Federal Reserve Act sets out an "intelligible principle", however, because existing precedent states that Congress cannot delegate its powers to private institutions. (Schecter Poultry [Note: A case heard before the U.S. Supreme Court] held "a delegation of its legislative authority to trade or industrial associations...would be utterly inconsistent with the constitutional prerogatives and duties of Congress").
In that case, the Supreme Court struck down parts of FDR's National Industrial Recovery Act which authorized these private organizations to draft "codes of fair competition" and submit them to the President for approval.
The Fed, by it's own admission, is an independent entity within the government "having both public purposes, and private aspects". By "private aspects", they mean the entire operation is wholly-owned by private member banks, who are paid dividends of 6% each year on their stock. Furthermore, the Fed's decisions "do not have to be ratified by the President or anyone else in the executive or legislative branch of government" and the Fed "does not receive funding appropriated by Congress".
In 1982, the Ninth Circuit Court of Appeals confirmed this view when it held that "federal reserve banks are not federal instrumentalities... but are independent, privately owned and locally controlled corporations". Yet, the Fed has exclusive control over the government's ability to create money and regulate its value through the targeting of interest rates and open market operations (when the Fed buys an asset, it typically prints the purchase money out of thin air).
How Congress can delegate its Constitutional powers to this independent, privately owned and unaccountable institution is beyond me.
Still, the Constitutional issue is just the tip of the iceberg when it comes to this twisted institution's embodiment of all things undemocratic. When Congress (and the people it represents) makes a valid delegation of its powers to an executive agency, it almost always retains a level of control through its powers of appropriations, impeachment and oversight.
For some not-so-strange reason, the Fed isn't appropriated any funds by Congress, and so it cannot be financially "starved" like any other agency. The members of the Fed's Board of Governors also cannot be impeached by Congress, which is especially twisted, since the President of the United States can be impeached for "high crimes and misdemeanors".
What about oversight? Well, a Congressional committee holds "hearings" every once in awhile to ask the Chairman a few irrelevant questions, but if this process is what passes for "oversight", then we have truly gone off the deep end.
Speaking of committees and oversight, when Fed Chairman Ben Bernanke testified under oath to Congress in July, he said in no uncertain words, "the Federal Reserve will not monetize the [federal] debt". Fast forward to the day after mid-term elections, in which the American people clearly voted for LESS spending/printing, and the Fed announces its plan to monetize $900 billion in treasury bonds.
The Chairman has proven his previous testimony before Congress to be a blatant lie, but instead of condemning the Fed's recent actions, the federal government has welcomed it with open arms. That's quite some oversight we have there. Perhaps the best way to oversee the Fed's actions would be to actually figure out what in Lloyd Blankfein [CEO of Goldman-Sachs]'s name it's been doing.
In this country, that's easier said than done. The Government Accountability Office is not allowed to audit the Fed's transactions for or with foreign governments, central banks, non-private international organizations or those made under the direction of the Federal Open Market Committee ("FOMC"). It just so happens that these are the types of transactions which are most influential on global and domestic financial markets, especially the open market operations.
These operations are conducted by the FOMC, who is comprised of the Board of Governors (7 members appointed by President and confirmed by Senate) and five representatives from the regional Fed[eral Reserve] Banks. Although the President appoints the Board of Governors, he must choose from a list of candidates provided by private institutions, and the other five representatives are also typically nominated by private member banks.
Talk about an organization with conflicts of interest, lack of transparency and lack of accountability all tightly woven into its very fabric!
In the last two years, the almighty Fed has printed trillions of dollars in our name to buy worthless mortgage assets from "too big to fail" banks. It has lent these banks our hard-earned money at about 0% interest, so they could lend our own money back to us at 3%+.
These banks also used our free money to ramp equity and commodity markets, which mostly benefited the top 1% of our population who owns 43% of financial wealth, and conveniently, also owns the Fed. The latter has kept interest rates at next to nothing to punish savers and encourage speculation, making everything less affordable for average Americans who have seen their wages stay the same, decrease or disappear.
What's left standing is the perniciously powerful, highly secretive and entirely unaccountable Fed, who now epitomizes the state of American democracy.
We have all become subject to the misguided and/or malicious whims of a few wealthy individuals operating the levers of economic policy, with no adequate means of challenging their power. Our most treasured contribution to political society has been reduced to a bunch of meaningless articles and amendments, containing equally meaningless words.
We the people, in our pursuit of "a more perfect union", have fallen into an age-old trap. Our economic policies, currency and laws are all manufactured by our very own private dictator, who amasses a fortune from our collective exploitation and destruction.
Then, this despot continues to operate like nothing ever happened. We can scream "ABOLISH THE FED" all day, non-stop to every single politician at the top of our lungs, but it will never happen.
The reality is that there is only one way back to a true democratic system now, and this path will require nothing less of us than the courage of our forefathers.
Thursday, November 25, 2010
Thanksgiving: Immerhin
Immerhin: Adj., [Ger.]; In spite of; even so; despite everything.
I'm trying to be thankful today. It's a day off from work, and time to spend with family or friends, and some are lucky enough that both of those categories are the same.
Here's hoping your day, with whomever you spend it and however you celebrate or feast, is good.
I'm trying to be thankful today. It's a day off from work, and time to spend with family or friends, and some are lucky enough that both of those categories are the same.
Here's hoping your day, with whomever you spend it and however you celebrate or feast, is good.
Monday, November 22, 2010
When Trains Collide
You Lose
Collision Of Two Washington, D.C. Red Line Commuter Trains
June 22, 2009 (Photo: Reuters, via Washington Post)
In his New York Times column this morning, Paul Krugman quoted a recent remark by former Wyoming Senator Alan Simpson (who apparently has patterned his mental activity after Abe Simpson's), one of the co-chairmen of President Obama'sCatfood Debt Commission.
But a little backstory, first: Every year, the U.S. Congress votes to increase the Statutory Debt Limit of the government -- in other words, how far overdrawn the government can legally be on the national checking account. Without that Congressional approval, U.S. government spending, for anything, technically can't continue. The government wouldn't have to shut down, but a shutdown could be forced -- by the Republicans, say -- as they did in 1995.
The current Debt ceiling, voted into law in February of this year, is $14.3 Trillion dollars. Our current National Debt is $13.8 Trillion dollars, as of today, and it increases each year because of the National Deficit -- the amount the government went overbudget in a single year.
Earlier this year, President Obama issued an Order to create a Debt Reduction Commission of eighteen members (12 current members of Congress, and 6 private citizens) to provide ideas on reducing the National Debt. They were to complete their report and submit it to the President by December 1st. Erskine Bowles (D - Hereditary Wealth) and Alan Simpson (R - Cantankerous) were it's co-chairmen.
Erskine Bowles (Richie Rich) and Alan Simpson (OffLawnDamnKids)
(Photo: Stephen Crowley for the New York Times)
What Obama wanted were ideas to reduce current annual spending in the short term that did not reduce what we collectively consider "The American Dream", and did not manifestly change the policies -- Social Security, and Medicare -- that are the crown jewels of the social contract between America's government and it's citizens. What he got was... something else.
Anti-FDR Cartoon, 1940 (Graphic: Princeton University)
Rumors were that the Commission were discussing ways to destabilize, if not dismantle, Social Security and Medicare. Someone dubbed it the "Catfood Commission", bringing up an image of reductions to the National Debt made by slashing and burning bedrock social programs, which would affect the poor and the income of older, retired Americans, forcing them to live on catfood.
Earlier this month, CNN leaked a copy of the Commission's preliminary report, and suddenly the jokes about catfood weren't so funny. Simpson and Bowles decided to release the preliminary report publicly on November 10th (you can find a .pdf copy here); "It's good it's out there on the table," Alan Simpson said about the preliminary recommendations.
The New York Times reported that the Commission called for
For Congress to debate and act on any recommended legislation the Commission makes in its final report, 14 of the 18 commissioners must have voted in favor of it, and Congress was to move on that debate as quickly as possible.
Anti-Obama Billboard, Colorado, 2010
However, it appears that the preliminary findings are just one more Bellwether of the Rethug's political game plan. As Paul Krugman noted,
There’s a legal limit to federal debt, which must be raised periodically if the government keeps running deficits; the limit will be reached again this spring... But Republicans will probably try to blackmail the president into policy concessions by, in effect, holding the government hostage; they’ve done it before...
The fact is that [the Republican party has] made it clear that it has no interest in making America governable, unless it’s doing the governing... the G.O.P. isn’t interested in helping the economy as long as a Democrat is in the White House.
...Republicans ... demand that the Bush tax cuts be made permanent while demagoguing efforts to limit the rise in Medicare costs, which are essential to any attempts to get the budget under control. ... Right now, in particular, Republicans are blocking an extension of unemployment benefits — an action that will both cause immense hardship and drain purchasing power from an already sputtering economy. But there’s no point appealing to the better angels of their nature; America just doesn’t work that way anymore.
This April, debate about raising the Statutory Debt limit will begin in a Congress dominated by braying, addled, manifestly stupid idiots. The other day, Simpson -- who has been nothing short of foul-mouthed in response to criticism of the Commission -- said, "I can't wait for the blood bath in April."
It won't matter whether two [Commissioners] have signed this, or 14 or 18. When debt limit time comes, [the Democrats are] going to look around and say, 'What in the hell do we do now? We've got guys [i.e., new Republican members of Congress] who will not approve the debt limit extension unless we give 'em a piece of meat, real meat, [from the Commission's recommendations].' And boy, the bloodbath will be extraordinary.
Simpson has said openly for decades that he supports rolling back all of FDR's New Deal policies -- and to begin doing this, Simpson is saying that the Rethugs and Teabaggers will force Obama and the (essentially) spineless Democrats left in Congress to agree to whatever changes in Social Security, Medicare, and social spending they want, or they'll shut down the government... again.
Chicago-Tribune Anti-FDR Cartoon, April 21, 1934.
(For a Full Description Of The Cartoon, Go Here)
You agree to begin dismantling the entitlements to the goddamn Peasants that cripple Roosevelt forced down our throats, They say, or the trash bins will overflow at the National Parks before you have to shut 'em down, you socialist Kenyan illegitimate leader -- by the way, we'll do everything we can to make you and the rest of you Defeatocrats look bad between now and 2012 so we can win; it don't matter how many Little People get hurt in the process. It's all about winning, so we can get back to doing what we did to the country ten years ago..
And you can expect Little Rupert's right-wing vomitorium will be spewing 'facts', as they always have, in support of the Rethugs, twenty-four hours a day. The same with Glenn Beck, World's smartest Human; Lard Boy; Lil' Mikey Weiner; and of course, Little Sarah, Plain 'n Tall.
This is only going to get worse, you understand. The underlying cancer at the heart of our financial system -- bad mortgage loans, pooled to make Trillions in near-worthless securities our financial institutions still claim are assets -- is the same as it is in Ireland, or Greece, or Spain, but (as befits the world's largest economy) on a gigantic scale.
The same reductions in standards of living which the Irish and the Greeks now face are about to begin happening here. Have you wondered why the wealthy seem to be retrenching, why paintings at Sotheby's and Christie's auctions have brought record sales levels; or why they fight so hard to keep their Lil' Boots-era entitlements in tax rates? Because they know what's coming; and you can never be too rich.
German-American Bund Rally, Madison Square Garden, 1939
And as things slowly get worse, the political instability of the United States will increase; the siren's call of power, of our own version of Volk und Reich (more likely for us, Volk und Gott) will begin taking shape, and many people will passively allow it to metastasize because they will just want the confusion and anxiety to stop. Crowds respond to ideas that are presented in the guise of national myths and symbols they already accept, ideas which promise safety and purpose -- even if, later, what resulted from accepting those ideas become exhibits in court trials for corruption, aggression, and massacre.
There are people, like Krugman, who see this crisis as a defining moment in the future of America. In 1933, in the middle of an economic crisis as serious as the one we face now (only, we haven't hit bottom yet), FDR took the country in a direction that created a compact between government and its citizens -- one that (nominally, at least) said "You, The People, matter -- You, The People, come first", and programs like Social Security were the result.
The Rethugs and Teabaggers don't believe in a social contract based on the rule of law, social justice, or equality. They believe in the power and dominance of wealth. They intend to continue pressing America backwards, into the Gilded Age, when America's version of Oligarchs ran much of the country; and in politics, graft was a way of life.
The Little People lived and died anonymously, knew their places and respected their Betters, or else. Those who rocked the boat -- labor organizers; 'agitators' for workplace safety, better quality in medical care, safer food and water, racial and sexual equality -- were arrested, ridiculed, ignored.
Of course, the inequities of such a world contributed to the rise of Communism, Fascism, and were triggers behind two horrific world wars, and a long battle for equality on almost every level that isn't over. But change doesn't even have to be that large to have an impact.
This coming spring, the showdown Krugman mentions to force America backwards will be a train wreck. We can already see it coming -- but I'm only a Dog, and no one listens to me.
Krugman closed his column by saying,
My sense is that most Americans still don’t understand ... They still imagine that ... our politicians will come together to do what’s necessary. But that was another country.
It’s hard to see how this situation is resolved without a major crisis of some kind. Mr. Simpson may or may not get the blood bath he craves this April, but there will be blood sooner or later. And we can only hope that the nation that emerges from that blood bath is still one we recognize.
Collision Of Two Washington, D.C. Red Line Commuter Trains
June 22, 2009 (Photo: Reuters, via Washington Post)
In his New York Times column this morning, Paul Krugman quoted a recent remark by former Wyoming Senator Alan Simpson (who apparently has patterned his mental activity after Abe Simpson's), one of the co-chairmen of President Obama's
But a little backstory, first: Every year, the U.S. Congress votes to increase the Statutory Debt Limit of the government -- in other words, how far overdrawn the government can legally be on the national checking account. Without that Congressional approval, U.S. government spending, for anything, technically can't continue. The government wouldn't have to shut down, but a shutdown could be forced -- by the Republicans, say -- as they did in 1995.
The current Debt ceiling, voted into law in February of this year, is $14.3 Trillion dollars. Our current National Debt is $13.8 Trillion dollars, as of today, and it increases each year because of the National Deficit -- the amount the government went overbudget in a single year.
Earlier this year, President Obama issued an Order to create a Debt Reduction Commission of eighteen members (12 current members of Congress, and 6 private citizens) to provide ideas on reducing the National Debt. They were to complete their report and submit it to the President by December 1st. Erskine Bowles (D - Hereditary Wealth) and Alan Simpson (R - Cantankerous) were it's co-chairmen.
Erskine Bowles (Richie Rich) and Alan Simpson (OffLawnDamnKids)
(Photo: Stephen Crowley for the New York Times)
What Obama wanted were ideas to reduce current annual spending in the short term that did not reduce what we collectively consider "The American Dream", and did not manifestly change the policies -- Social Security, and Medicare -- that are the crown jewels of the social contract between America's government and it's citizens. What he got was... something else.
Anti-FDR Cartoon, 1940 (Graphic: Princeton University)
Rumors were that the Commission were discussing ways to destabilize, if not dismantle, Social Security and Medicare. Someone dubbed it the "Catfood Commission", bringing up an image of reductions to the National Debt made by slashing and burning bedrock social programs, which would affect the poor and the income of older, retired Americans, forcing them to live on catfood.
Earlier this month, CNN leaked a copy of the Commission's preliminary report, and suddenly the jokes about catfood weren't so funny. Simpson and Bowles decided to release the preliminary report publicly on November 10th (you can find a .pdf copy here); "It's good it's out there on the table," Alan Simpson said about the preliminary recommendations.
The New York Times reported that the Commission called for
deep cuts in domestic and military spending, a gradual 15-cents-a-gallon increase in the federal gasoline tax, limiting or eliminating popular tax breaks in return for lower rates, and benefit cuts and an increased retirement age for Social Security... It lays out options for overhauling the tax code that include limiting or eliminating the mortgage interest deduction, the child tax credit and the earned income tax credit. It envisions cutting Pentagon weapons programs and paring back almost all domestic programs.
The plan would reduce cost-of-living increases for all federal programs, including Social Security. It would reduce projected Social Security benefits to most retirees in later decades, though low-income people would get higher benefits. The retirement age for full benefits would be slowly raised to 69 from 67 by 2075, with a “hardship exemption” for people who physically cannot work past 62. And higher levels of income would be subject to payroll taxes.
For Congress to debate and act on any recommended legislation the Commission makes in its final report, 14 of the 18 commissioners must have voted in favor of it, and Congress was to move on that debate as quickly as possible.
Anti-Obama Billboard, Colorado, 2010
However, it appears that the preliminary findings are just one more Bellwether of the Rethug's political game plan. As Paul Krugman noted,
There’s a legal limit to federal debt, which must be raised periodically if the government keeps running deficits; the limit will be reached again this spring... But Republicans will probably try to blackmail the president into policy concessions by, in effect, holding the government hostage; they’ve done it before...
The fact is that [the Republican party has] made it clear that it has no interest in making America governable, unless it’s doing the governing... the G.O.P. isn’t interested in helping the economy as long as a Democrat is in the White House.
...Republicans ... demand that the Bush tax cuts be made permanent while demagoguing efforts to limit the rise in Medicare costs, which are essential to any attempts to get the budget under control. ... Right now, in particular, Republicans are blocking an extension of unemployment benefits — an action that will both cause immense hardship and drain purchasing power from an already sputtering economy. But there’s no point appealing to the better angels of their nature; America just doesn’t work that way anymore.
This April, debate about raising the Statutory Debt limit will begin in a Congress dominated by braying, addled, manifestly stupid idiots. The other day, Simpson -- who has been nothing short of foul-mouthed in response to criticism of the Commission -- said, "I can't wait for the blood bath in April."
It won't matter whether two [Commissioners] have signed this, or 14 or 18. When debt limit time comes, [the Democrats are] going to look around and say, 'What in the hell do we do now? We've got guys [i.e., new Republican members of Congress] who will not approve the debt limit extension unless we give 'em a piece of meat, real meat, [from the Commission's recommendations].' And boy, the bloodbath will be extraordinary.
Simpson has said openly for decades that he supports rolling back all of FDR's New Deal policies -- and to begin doing this, Simpson is saying that the Rethugs and Teabaggers will force Obama and the (essentially) spineless Democrats left in Congress to agree to whatever changes in Social Security, Medicare, and social spending they want, or they'll shut down the government... again.
Chicago-Tribune Anti-FDR Cartoon, April 21, 1934.
(For a Full Description Of The Cartoon, Go Here)
You agree to begin dismantling the entitlements to the goddamn Peasants that cripple Roosevelt forced down our throats, They say, or the trash bins will overflow at the National Parks before you have to shut 'em down, you socialist Kenyan illegitimate leader -- by the way, we'll do everything we can to make you and the rest of you Defeatocrats look bad between now and 2012 so we can win; it don't matter how many Little People get hurt in the process. It's all about winning, so we can get back to doing what we did to the country ten years ago..
And you can expect Little Rupert's right-wing vomitorium will be spewing 'facts', as they always have, in support of the Rethugs, twenty-four hours a day. The same with Glenn Beck, World's smartest Human; Lard Boy; Lil' Mikey Weiner; and of course, Little Sarah, Plain 'n Tall.
This is only going to get worse, you understand. The underlying cancer at the heart of our financial system -- bad mortgage loans, pooled to make Trillions in near-worthless securities our financial institutions still claim are assets -- is the same as it is in Ireland, or Greece, or Spain, but (as befits the world's largest economy) on a gigantic scale.
The same reductions in standards of living which the Irish and the Greeks now face are about to begin happening here. Have you wondered why the wealthy seem to be retrenching, why paintings at Sotheby's and Christie's auctions have brought record sales levels; or why they fight so hard to keep their Lil' Boots-era entitlements in tax rates? Because they know what's coming; and you can never be too rich.
German-American Bund Rally, Madison Square Garden, 1939
And as things slowly get worse, the political instability of the United States will increase; the siren's call of power, of our own version of Volk und Reich (more likely for us, Volk und Gott) will begin taking shape, and many people will passively allow it to metastasize because they will just want the confusion and anxiety to stop. Crowds respond to ideas that are presented in the guise of national myths and symbols they already accept, ideas which promise safety and purpose -- even if, later, what resulted from accepting those ideas become exhibits in court trials for corruption, aggression, and massacre.
There are people, like Krugman, who see this crisis as a defining moment in the future of America. In 1933, in the middle of an economic crisis as serious as the one we face now (only, we haven't hit bottom yet), FDR took the country in a direction that created a compact between government and its citizens -- one that (nominally, at least) said "You, The People, matter -- You, The People, come first", and programs like Social Security were the result.
The Rethugs and Teabaggers don't believe in a social contract based on the rule of law, social justice, or equality. They believe in the power and dominance of wealth. They intend to continue pressing America backwards, into the Gilded Age, when America's version of Oligarchs ran much of the country; and in politics, graft was a way of life.
The Little People lived and died anonymously, knew their places and respected their Betters, or else. Those who rocked the boat -- labor organizers; 'agitators' for workplace safety, better quality in medical care, safer food and water, racial and sexual equality -- were arrested, ridiculed, ignored.
Of course, the inequities of such a world contributed to the rise of Communism, Fascism, and were triggers behind two horrific world wars, and a long battle for equality on almost every level that isn't over. But change doesn't even have to be that large to have an impact.
This coming spring, the showdown Krugman mentions to force America backwards will be a train wreck. We can already see it coming -- but I'm only a Dog, and no one listens to me.
Krugman closed his column by saying,
My sense is that most Americans still don’t understand ... They still imagine that ... our politicians will come together to do what’s necessary. But that was another country.
It’s hard to see how this situation is resolved without a major crisis of some kind. Mr. Simpson may or may not get the blood bath he craves this April, but there will be blood sooner or later. And we can only hope that the nation that emerges from that blood bath is still one we recognize.
Saturday, November 20, 2010
Courage Of Our Forefathers, Part 2
(This has become far too long a piece by itself, and I consider it important enough to repost in two parts. Please see Part One below.)
Don't Fear The Reaper, Or, Enjoy Democracy While It Lasts
Everyone also knows the mortgage-backed securities that are at the heart of the current emergency are worth far less than their 'estimated' value because the mortgages in the 'pools' are either bad, or going bad as more and more people lose their jobs and foreclosures rise. If the true value of the CDO's was determined, the banks and financial institutions holding them would collectively lose Trillions of dollars, around the world.
Unfortunately, all this unacknowledged debt is an unacknowledged, badly fouled diaper everyone can smell. The MBS's and CDO's, worth pennies on the dollar, are like a grenade with the pin out being held by a drunk, standing in a room up to his waist in gasoline, who won't be able to stay awake forever. Everyone, I feel, knows the 'crisis', the 'Recession' that was supposed to have ended in 2009, is far from over.
The balance is so delicate, that the odds are good some confluence of events will occur (possibly a 'Black Swan' moment, a thing that appears unconnected and unanticipated) to trigger another massive drop in world stock markets, and another cycle of job loses, business failures... And because the Banksters will squeal and say, We've Got The Money!! We're The Glue Holding The World Together! We're Too Big To Be Allowed To Fail!, governments will be forced to step in, again, and bail out these freaks and cretins.
Only, governments can't take on another few Trillions in debt, without political repercussions -- as in Greece. As in France. As in Portugal, and now Ireland: Massive cutbacks in government spending, loss of public institutions and programs we thought would last forever; even the sale of Federal assets to investors and sovereign funds from foreign governments. These Fire Sales benefit some Oligarchs, the Chinese and Arab Emirates, and a few individuals and families here at home, like the Kochs' and Coors', and the rest of that layer of filth floating at the top.
But you and I and everyone else will live with less, and "bear the burden; pay the price" in a lowered standard of living, lower expectations; and in politicians who screech and squeal and move farther and farther to the Right both in rhetoric and actions.
The Banksters are trying to find something, anything to forestall that reckoning as long as possible, but even they know it's a zero-sum game: At some point, the debt everyone is holding will have to be paid, and it cannot be hidden forever.
Failing The The Greatest Test Of A Generation
...and the real bitter pill is, it absolutely did not have to end this way.
Our government's essentially handing money to the U.S. investment sector -- first, the TARP giveaway, and then the Obama subsidies to Wall Street, the major banks and insurance companies -- has only temporarily shored up the continuing corrupt thuggery, the rot and collapse of these same corporate banks.
The opportunity was available to President Obama to do what FDR had done, and rein in the power of the financial sector for the next fifty years: The institutions which created and profited from all this should have been allowed to fail. The FDIC would have done what it could; shareholders would have taken a bath and gotten pennies on the dollar -- business Darwinism, baby; red in tooth and claw, and the sociopathic greedheads who created this crisis would have had a comeuppance. Some might have ended up in jail.
More important, punishing the kind of behavior that destabilizes the largest economy on the planet would have taught our banking and investment community not to do this again, and follow it with New-Deal-style banking reforms. This would have found enormous public support. The Rethugs Right would have had to jump on the bandwagon or pound sand. The Democrats had control of both Houses of Congress -- all that was needed was the political balls to do so.
That this didn't happen, not even a variation of it, guaranteed the Recession will become a Depression, continue for at least another decade, and will become much worse (That's just One Dog's opinion, by the way. You may have your own, but we'll see). That it didn't happen has been the greatest single failure of Obama and his administration.
There are a huge chorus of voices, primarily on the Right, saying But you couldn't have done that! It would have triggered a complete financial catastrophe! Ragnarok! Armageddon! Government interferring in private industry!! The nation would have been bankrupted overnight; Teh Confidence of Teh Markets!! Teh MARKETTTTS!! Blah blah buh, uh, buh buh buh buh!!!
Not true. Barry Ritzholz' recently noted at The Big Picture ("Too Bad The Banks Didn't Get The GM Treatment") that GM -- a company badly-managed for decades, had to accept bankruptcy, reorganization, and a huge loan from the government -- meaning, the Taxpayers owned a huge chunk of GM.
... Uncle Sam’s involvement was to provide Debtor-in-Possession financing. The bankruptcy plan was obvious: Wipe out shareholders, give bond holders a haircut, fire management, pare the company down to a sustainable size without sentiment.
This was what was done. A turnaround plan was created and executed. If the company met its milestones, the firm would be taken public, which would allow the government to significantly reduce its stake and exposure to GM. The Fed also helped, keeping financing rates at ultra low levels... The long term stock sale plan would lead to the taxpayers being made nearly whole. All told, it was a wild success.
Rtizholz goes on to say that the same process should have been used against the Banskers -- but it wasn't, and as a result...
(Graphic: Mr Fish; Harper's Online)
Rather than listen to Nobel Prize-winning economists like Joseph Stiglitz, or Paul Krugman, and former Fed Chairman Paul Volker, Obama made a political decision to please the Banksters: He hired Larry Summers (who would turn out his mother to Turkish bikers if there was a percentage in it for him) as his chief economic advisor; listens to Ben Bernanke (who, given his knowledge of the history of the Great Depression, should know better), and chose Timmeh! Geithner as his Secretary of the Treasury.
So, nothing is different; the same creatures who created this disaster are still in control. As James K. Galibraith recently wrote [emphasis added],
And they have. They've continued to party like it's April 2005, and Alan Greenspan has just said
Take a look at the chart at the top of the first installment of this post: Gordon T. Long, an investment analyst, believes we're in the first third of another cycle of crisis (Note: Long believe that the very bad things he predicts may happen sooner than the 2011 - 2013 timeframe he indicates in the chart).
Quo What The Fuck Vadis, Dude?
The Too-Big-To-Fail Banks hold some $1 to 2 Trillion dollars in overvalued securities and bad mortgage loans (the fraudclosure industry is a topic for another time). They also hold at least as much exposure in the U.S. commercial real estate market, and analysts I've been reading have said for at least two years that this market will drop, hard.
This could lead to another round of bailouts: Banks, Too-Big-To-Fail. More private debt by stupid, greedy people becomes your responsibility, and mine.
What to do? Well, history is going to come to live with us. We won't be able to escape it -- it's Weimar Time, my friends. Our leaders chose to save the Banksters and their institutions, which have doomed the way of life we currently have -- but save them temporarily, giving them an opportunity to crawl down the cargo rope and off the ship with as much wealth as their little Rat paws can carry.
And there will be other ramifications, as Mike Kelly's Irish Times article observes about his own country's situation,
And, I offer a comment from the site, The Automatic Earth:
...I read an article by Ashvin Pandurangi... entitled "Plutocracy Now" [about possible] nationalization of... the Fed.
He concludes it can't be done, not even an audit will be achieved. And I think that goes for Wall Street banks as well. We can't nationalize the banks, because they have long since "bankalized the nation".
... [People underestimate the] level of political clout and power the financial industry has accumulated over the past few decades... Seeing them celebrate the birth of the Fed, and do so on Jekyll Island to boot, it makes me think the US is surely as far gone as Ireland is; it's just that fewer people seem to realize it, but that's not too comforting, is it?
... Pandurangi closes with a very insightful statement, one that every American should take to heart, and many Europeans too:
Don't Fear The Reaper, Or, Enjoy Democracy While It Lasts
Everyone also knows the mortgage-backed securities that are at the heart of the current emergency are worth far less than their 'estimated' value because the mortgages in the 'pools' are either bad, or going bad as more and more people lose their jobs and foreclosures rise. If the true value of the CDO's was determined, the banks and financial institutions holding them would collectively lose Trillions of dollars, around the world.
Unfortunately, all this unacknowledged debt is an unacknowledged, badly fouled diaper everyone can smell. The MBS's and CDO's, worth pennies on the dollar, are like a grenade with the pin out being held by a drunk, standing in a room up to his waist in gasoline, who won't be able to stay awake forever. Everyone, I feel, knows the 'crisis', the 'Recession' that was supposed to have ended in 2009, is far from over.
The balance is so delicate, that the odds are good some confluence of events will occur (possibly a 'Black Swan' moment, a thing that appears unconnected and unanticipated) to trigger another massive drop in world stock markets, and another cycle of job loses, business failures... And because the Banksters will squeal and say, We've Got The Money!! We're The Glue Holding The World Together! We're Too Big To Be Allowed To Fail!, governments will be forced to step in, again, and bail out these freaks and cretins.
Only, governments can't take on another few Trillions in debt, without political repercussions -- as in Greece. As in France. As in Portugal, and now Ireland: Massive cutbacks in government spending, loss of public institutions and programs we thought would last forever; even the sale of Federal assets to investors and sovereign funds from foreign governments. These Fire Sales benefit some Oligarchs, the Chinese and Arab Emirates, and a few individuals and families here at home, like the Kochs' and Coors', and the rest of that layer of filth floating at the top.
But you and I and everyone else will live with less, and "bear the burden; pay the price" in a lowered standard of living, lower expectations; and in politicians who screech and squeal and move farther and farther to the Right both in rhetoric and actions.
The Banksters are trying to find something, anything to forestall that reckoning as long as possible, but even they know it's a zero-sum game: At some point, the debt everyone is holding will have to be paid, and it cannot be hidden forever.
Failing The The Greatest Test Of A Generation
...and the real bitter pill is, it absolutely did not have to end this way.
Our government's essentially handing money to the U.S. investment sector -- first, the TARP giveaway, and then the Obama subsidies to Wall Street, the major banks and insurance companies -- has only temporarily shored up the continuing corrupt thuggery, the rot and collapse of these same corporate banks.
The opportunity was available to President Obama to do what FDR had done, and rein in the power of the financial sector for the next fifty years: The institutions which created and profited from all this should have been allowed to fail. The FDIC would have done what it could; shareholders would have taken a bath and gotten pennies on the dollar -- business Darwinism, baby; red in tooth and claw, and the sociopathic greedheads who created this crisis would have had a comeuppance. Some might have ended up in jail.
More important, punishing the kind of behavior that destabilizes the largest economy on the planet would have taught our banking and investment community not to do this again, and follow it with New-Deal-style banking reforms. This would have found enormous public support. The Rethugs Right would have had to jump on the bandwagon or pound sand. The Democrats had control of both Houses of Congress -- all that was needed was the political balls to do so.
That this didn't happen, not even a variation of it, guaranteed the Recession will become a Depression, continue for at least another decade, and will become much worse (That's just One Dog's opinion, by the way. You may have your own, but we'll see). That it didn't happen has been the greatest single failure of Obama and his administration.
There are a huge chorus of voices, primarily on the Right, saying But you couldn't have done that! It would have triggered a complete financial catastrophe! Ragnarok! Armageddon! Government interferring in private industry!! The nation would have been bankrupted overnight; Teh Confidence of Teh Markets!! Teh MARKETTTTS!! Blah blah buh, uh, buh buh buh buh!!!
Not true. Barry Ritzholz' recently noted at The Big Picture ("Too Bad The Banks Didn't Get The GM Treatment") that GM -- a company badly-managed for decades, had to accept bankruptcy, reorganization, and a huge loan from the government -- meaning, the Taxpayers owned a huge chunk of GM.
... Uncle Sam’s involvement was to provide Debtor-in-Possession financing. The bankruptcy plan was obvious: Wipe out shareholders, give bond holders a haircut, fire management, pare the company down to a sustainable size without sentiment.
This was what was done. A turnaround plan was created and executed. If the company met its milestones, the firm would be taken public, which would allow the government to significantly reduce its stake and exposure to GM. The Fed also helped, keeping financing rates at ultra low levels... The long term stock sale plan would lead to the taxpayers being made nearly whole. All told, it was a wild success.
Rtizholz goes on to say that the same process should have been used against the Banskers -- but it wasn't, and as a result...
Currently, the United States has a weakened financial sector. Many of the largest Banks are technically insolvent, but thanks to an accounting rule change, are not required to admit this ... They are carrying an enormous amount of bad loans on their books. They are sitting on several million ... bank owned foreclosures for which there is essentially no market... not mentioning the depressing effect the excess supply will have on [Housing] prices.
The reckless lending of the 2000s was merely the tip of the iceberg... we have learned about how poorly the banks not only made these loans, but also administered, securitized, serviced, and foreclosed on them. The entire process was reckless, it was done on the cheap, riddled with errors, fraud and felonious behavior...
The bank bailout plan was ill conceived and poorly executed. Trillions were thrown at them before Uncle Sam had any idea as to how much debt was actually on the books. What were once considered decent holdings were eventually revealed to be highly toxic assets.
Recapitalizing the banks is a huge priority. But after the first round of trillions were given away to the banks, the public was disgusted... But the banks were still under-capitalized, their balance sheets were still laden with junk. [Giving the Banks More] taxpayer monies was out of the question.
An easy backdoor was found: Arbitrage the Fed and Treasury. [Lowering the interest rate on Fed loans to banks to Zero] and [Qualitative Easing] allowed giant Wall Street banks to borrow at no cost from the Fed, and then turn around and lend this same zero cost money back to the Treasury at 3% or so.
Do this for another 10 years or so, and the banks would be recapitalized. By then, maybe there might even be a market for all those [Foreclosed Homes]. Sure, that would mire the nation in a decade long Japanese-like slump. Hey, at least the bonuses would be paid on time...
The results should not be surprising. The banks remain in a weakened condition, perilously at risk for additional problems in [Real Estate]. Despite the massive liquidity, Credit still remains tight. If financing is the fuel that drives the economy, the US is running on fumes.
(Graphic: Mr Fish; Harper's Online)
Rather than listen to Nobel Prize-winning economists like Joseph Stiglitz, or Paul Krugman, and former Fed Chairman Paul Volker, Obama made a political decision to please the Banksters: He hired Larry Summers (who would turn out his mother to Turkish bikers if there was a percentage in it for him) as his chief economic advisor; listens to Ben Bernanke (who, given his knowledge of the history of the Great Depression, should know better), and chose Timmeh! Geithner as his Secretary of the Treasury.
So, nothing is different; the same creatures who created this disaster are still in control. As James K. Galibraith recently wrote [emphasis added],
.. one cannot defend the actions of Team Obama on taking office. Law, policy and politics all pointed in one direction: turn the systemically dangerous banks over to Sheila Bair and the [FDIC]. Insure the depositors, replace the management, fire the lobbyists, audit the books, prosecute the frauds, and restructure and downsize the institutions. The financial system would have been cleaned up. And the big bankers would have been beaten as a political force.
Team Obama did none of these things. Instead they announced "stress tests," plainly designed so as to obscure the banks' true condition. They pressured the Federal Accounting Standards Board to permit the banks to ignore the market value of their toxic assets. Management stayed in place. They prosecuted no one. The Fed cut the cost of funds to zero. The President justified all this by repeating, many times, that the goal of policy was "to get credit flowing again."
The banks threw a party. Reported profits soared, as did bonuses... They could boom the stock market. They could make a mint on proprietary trading.
And they have. They've continued to party like it's April 2005, and Alan Greenspan has just said
Innovation has brought about a multitude of new products, such as subprime loans and niche credit programs for immigrants. Such developments are representative of the market responses that have driven the financial services industry throughout the history of our country...
Take a look at the chart at the top of the first installment of this post: Gordon T. Long, an investment analyst, believes we're in the first third of another cycle of crisis (Note: Long believe that the very bad things he predicts may happen sooner than the 2011 - 2013 timeframe he indicates in the chart).
Quo What The Fuck Vadis, Dude?
The Too-Big-To-Fail Banks hold some $1 to 2 Trillion dollars in overvalued securities and bad mortgage loans (the fraudclosure industry is a topic for another time). They also hold at least as much exposure in the U.S. commercial real estate market, and analysts I've been reading have said for at least two years that this market will drop, hard.
This could lead to another round of bailouts: Banks, Too-Big-To-Fail. More private debt by stupid, greedy people becomes your responsibility, and mine.
What to do? Well, history is going to come to live with us. We won't be able to escape it -- it's Weimar Time, my friends. Our leaders chose to save the Banksters and their institutions, which have doomed the way of life we currently have -- but save them temporarily, giving them an opportunity to crawl down the cargo rope and off the ship with as much wealth as their little Rat paws can carry.
And there will be other ramifications, as Mike Kelly's Irish Times article observes about his own country's situation,
As ordinary people start to realize that this thing is not only happening, it is happening to them, we can see anxiety giving way to the first upwellings of an inchoate rage and despair that will transform Irish politics along the lines of the Tea Party in America...
Ireland faced a painful choice between imposing a resolution on banks that were too big to save or becoming insolvent, and, for whatever reason, chose the latter. Sovereign nations get to make policy choices, and we are no longer a sovereign nation in any meaningful sense of that term.
And, I offer a comment from the site, The Automatic Earth:
...I read an article by Ashvin Pandurangi... entitled "Plutocracy Now" [about possible] nationalization of... the Fed.
He concludes it can't be done, not even an audit will be achieved. And I think that goes for Wall Street banks as well. We can't nationalize the banks, because they have long since "bankalized the nation".
... [People underestimate the] level of political clout and power the financial industry has accumulated over the past few decades... Seeing them celebrate the birth of the Fed, and do so on Jekyll Island to boot, it makes me think the US is surely as far gone as Ireland is; it's just that fewer people seem to realize it, but that's not too comforting, is it?
... Pandurangi closes with a very insightful statement, one that every American should take to heart, and many Europeans too:
The reality is that there is only one way back to a true democratic system now, and this path will require nothing less of us than the courage of our forefathers.
Courage Of Our Forefathers, Part 1
(This has become far too long a piece by itself, and I consider it important enough to repost in two parts.)
Analyst Gordon Long Posits It Is Not Getting Better
(via The Big Picture; click on image to see larger version)
The response of the American government, whether conservative or liberal, to the financial collapse that began in 2007 has been to do whatever the Banking and Investment sector wanted done. By saving the major banks and investment houses, it slowed the rate of collapse from a plummeting fall to a snail's pace, but we're still falling.
A lot of Americans can remain in denial, because we have 400-channel cable teevees and really big trucks, and can dial up as much internet porn as we want -- and, how often, recently, have you seen headlines or heard the comforting sounds of some talking heads, all saying Surprising Economic News Points To Recovery!
It's harder to stay in denial in Greece, or Portugal; or, Ireland -- which is about to experience a near-total financial collapse, and is anticipated to suffer the largest wave of emigration since the Great Depression, or even The Famine.
Broke Like You: Ireland Shows What's Coming
Morgan Kelly, writing in the Irish Times, describes what could easily be a description of what has been happening in the U.S. for two years:
The crisis in Ireland in our own, in miniature: Major real estate developers built housing developments; it was a major building boom, which kept a lot of other, allied businesses afloat. Five major banks were involved, and handed out mortgage loans with terms as insane as those offered in the U.S. The Irish homeowners, like their American cousins, also refinanced those mortgages, multiple times, using their properties like ATMs to fund their lifestyles.
And, like us, they expected property values would simply increase, forever. This was the the theory behind the American Housing Bubble, the Irish Housing Bubble, the Portuguese Housing Bubble; the Italian Housing -- well, you get the idea.
This Nifty Graphic Appeared In The U.S. In 2004, Three Years
Before Things Unraveled -- And It Applied To Ireland, As Well
When America's financial sector partially sank, the Irish bubble was affected, too -- and the Irish government paid to bail the Banksters out, just as we did.
Remember this part of the story: The Irish government, in giving / lending money to their failed banks, transferred the private debt of a bunch of greedy, stupid people into public debt, and made it the responsibility of every private citizen in Ireland.
Rather than allow the Banks to fail and force their stupid, greedy executives and directors to take responsibility for their bad decisions (which would also have affected other European banks which the Irish ones had borrowed money from) the present Irish government -- whose politicians were in very, uh 'cozy' relationships with the Banksters and the Real Estate Developers -- saved their pals and dumped everything on The Irish People.
I don't really have to say, Just as we did, here, but will anyway. It's a bit like throwing the Night Slops Jar out the second-story bedroom window into the Road, and not giving a damn who you'll hit.
But now, the Irish government can't continue to pay for all the things it does for its citizens, without a loan from the European Central Bank (it isn't a direct comparison but for the EU, think of the ECB as playing roughly the same role as our Federal Reserve), and the International Monetary Fund, which is under discussion.
This puts Ireland in the same category as Greece, or Portugal -- private banks and finance companies fail; governments rush to rescue them. Then, with no money to pay for public-sector programs or government employees, infrastructure upgrades or street cleaning or police officers down at the Garda... you get the picture. If not, you will, soon.
In his Irish Times piece, Kelly noted the ECB loan is, like our own bailouts, just a bandaid to slow the inevitable: Two things have delayed Ireland’s funeral. First... the [Irish] Government built up a large pile of cash a few months ago, so that it can keep going until the New Year before it runs out of money. Although insolvent, Ireland is still liquid, for now.
Meanwhile, On The Good Ship Lolly: POP Goes The Bubble
In America, it's about CDO's -- 'Collateralized Debt Obligations'; securities based on pools of mortgage loans. No one knows their true value without careful audits of their underlying 'pools' of mortgages, which no one wants to do. Their current value is based on theory, an estimate, which the Banksters who created and sold them all agree with so they can still be traded.
However, everyone knows that the estimate is a fiction. Every U.S. and foreign bank, investment house, insurance company, pension fund, and hedge funds which hold these CDO's have no idea of their real value.
So, how the mortgages were tracked to be bundled in pools, then offered as securities and traded all over the world, is the science-fiction part of the story:
Briefly put, the investment and banking community wanted to be able to trade in 'derivitaves' -- securities backed by something else; in this case, mortgage loans. But they couldn't create those securities without being able to 'pool' the mortgages, and to do so they needed to change the fundamental way home loans were recorded in America for nearly 200 years.
Changing The Rules: I'm Forever Blowing Bubbles
Real estate law and real estate transactions in the US have been subject to state regulation, and transferring ownership of land is to be recorded at the county level. This has been true since the establishment of the United States as an independent country.
Mortgage loans have always been traded, or sold to another bank -- usually as part or a merger or other deal, but the scale of these trades was small. And, every time a mortgage (which is both a deed of trust and a promissory note, obligating the borrower buying a home to pay on the debt) was sold or traded, it had to be re-recorded in a County court, and fees in that County had to be paid.
On the one hand, Real Estate developers began building large numbers of homes. Banks would issue and hold the mortgages. In 1998 - 2000, when Congress (principally Republicans) provisions of the Glass-Stegal Act were eliminated, this dissolved the barriers between Banks and Investment Houses -- Merrill-Lynch became a bank, just as B of A could offer investment advice. And, as the housing bubble began to expand, the financial sector wanted to start trading mortgage loans like any other commodity -- that meant, on a large scale, because that's where the money is.
What held them back were the county-by-county land, title, and promissory note recording requirements that had been law in America for generations.
So, the financial industry, eager to trade in Mortgage-backed securities, developed the Mortgage Electronic Registration Systems, Inc, or MERS. It was a little company in McLean, Virginia (oddly enough, a stone's throw from CIA headquarters at Langley and the nearby NSA), with a handfull of employees that, in 2004, the MBA contracted with to begin recording all mortgage transactions in America -- this bypassed every single County Recorder's office in the United States.
MERS is a shell company representing the Mortgage Banker's Association and its members -- a purportedly separate, private corporation, acting as the agent for a Lender (the "Bank") and the Lender’s successors and assigns (whoever the mortgages are traded to).
MERS, and not the individual bank or Lender, became the holder of the mortgage, and replaced the actual lender in U.S. real estate records at the county or state level. MERS was also responsible for tracking all subsequent changes in ownership of the mortages in MERS' databases, owned and run by its members. As a result, no county recordation fees have been paid and no county records have been changed, saving financial industry enormous costs and ensuring quick trades of any securities backed by large 'pools' of mortgages on national and international financial markets.
Okay, pencils down; let me ask a question: What if MERS were an incompetently-run business, and that its records (used as the only basis for determining the loan 'pools' supporting Trillions of dollars in mortgage-backed securities) were in any way defective? Wouldn't that make it nearly impossible to determine the true value of any of these securities?
Pencils back up -- please write down the following phrase and underline it: Single Point Of Failure. Please remember it, when you're living in a mud Yurt and watching children play with toys made of animal dung, as you are being photographed by groups of Swiss and Japanese tourists.
A Side Story
At my job, between late 2004 and 2006, the guy who sat in the cubicle beside me acted as the agent for a home loan broker. I listened as he spent his days performing cold calls, convincing people to buy properties through the broker he was shilling for. He asked people to pool together with their friends, and buy properties together -- multiple properties, as investment opportunities, because "man, the sky is the limit; it's all gonna be good, Dogg. Market's hot. It's just gonna go up and up -- you get in for nothing, hold 'em for a while -- then sell, and you're set for life."
He used our employer's telephones, faxes, computers, and time, to do this -- the kicker being that he had gotten his immediate manager and (so the rumor goes) others in our management chain involved as clients as well. So, any complaints made about what he was doing were ignored.
In 2006, he quit, having purchased an apartment building and several other properties, and allegedly made a killing. After the Bubble burst in 2007-2008, I'd heard the guy lost most of his properties and cash -- but had managed to get himself rehired in our company by the same management chain he'd done business with before. However, he turned out to be incompetent, and so was let go. Gee; tough sledding.
We Know What Happened, But It's Worse Than You Think
Everyone knows what happened between 2003 and 2007: Real Estate Developers built McMansions like there was no tomorrow. Banks / Investment Houses ("The Banksters") offered home mortgage terms that were insane. People jumped at the chance to own a large, new home for little down, or no down; interest-only payments; loans made on terms that meant house payments would reset and triple in three or four years, which the borrowers didn't have a hope of repaying.
And, so many people were refinancing their homes, over and over; KA-CHING! pulling money out for home improvements, to increase the value of their primary residence, sure... but also to finance lease of that new Beemer, or get Little Chippy into that private girls' school, or to take a cruise, a trip to Cabo for a week, or Europe in the summer; hell, let's look at buying s little place in Greece, or Ireland! We can get loans there with the same kinda terms!
And, people were trading up, to newer, better properties; remember all that frenzy? People purchasing additional properties -- and why not, with mortgage terms so ridiculously low?... because everyone seemed to believe that the value of real estate would go up, and up, forever. C'mon; what could happen?
I've mentioned this multiple times, but in addition to all the other hundreds of billions our government has given the financial sector, the Treasury has also assumed the risk for over 1.5 Trillion dollars in toxic CDOs still on the books of major financial institutions. Financial analyst and writer John Talbot, in a May, 2010 article in Salon, reported [emphasis mine]
...We now know that the financial crisis was not caused solely by a liquidity crunch, or an irrational loss of confidence, but rather by the fact that ... commercial banks held more than a trillion dollars of very poor-quality ... mortgage securities such as... CDO’s, and that these bad assets were sizable enough to bankrupt even our biggest banks...
The Fed, I am convinced, went to these commercial banks and offered to take many of their toxic mortgage assets off their books, often accepting them as collateral for loans [from the government] to the banks...
So the Federal Reserve, with no approval by the President, the Congress, the people or their elected representatives, ended up purchasing $1.5 trillion of new assets of unknown quality... What concerns many knowledgeable investors is that the Fed doesn't have the money needed to purchase these assets and instead prints new money.
As of March 2010, there was approximately $1 trillion of currency outstanding in the country, not including the more than $1 trillion of bank reserves at the Fed.
If I were you, I'd read Talbot's entire article. By the end of it, you might feel the Statue Of Liberty has been thrown over the hood of a '57 Chevy and gang-banged by the Banksters; and that our government, and We, The People, are owned by them.
(You know what absolutely blows my mind? How quick the Teabaggers and the Right are to defend the forces that created all this, and how they stroke and pamper and Fluff the Masters Of The Universe who run the banks. To these clowns, our current emergency is all the fault of some Liberal conspiracy, or lazy minorities. Unbelievable.)
Analyst Gordon Long Posits It Is Not Getting Better
(via The Big Picture; click on image to see larger version)
The response of the American government, whether conservative or liberal, to the financial collapse that began in 2007 has been to do whatever the Banking and Investment sector wanted done. By saving the major banks and investment houses, it slowed the rate of collapse from a plummeting fall to a snail's pace, but we're still falling.
A lot of Americans can remain in denial, because we have 400-channel cable teevees and really big trucks, and can dial up as much internet porn as we want -- and, how often, recently, have you seen headlines or heard the comforting sounds of some talking heads, all saying Surprising Economic News Points To Recovery!
It's harder to stay in denial in Greece, or Portugal; or, Ireland -- which is about to experience a near-total financial collapse, and is anticipated to suffer the largest wave of emigration since the Great Depression, or even The Famine.
Broke Like You: Ireland Shows What's Coming
Morgan Kelly, writing in the Irish Times, describes what could easily be a description of what has been happening in the U.S. for two years:
Where the first round of the [Irish] banking crisis centered on a few dozen large developers, the next round will involve hundreds of thousands of families with mortgages... Banks have been relying on two dams to block the torrent of defaults – house prices and social stigma – but both have started to crumble alarmingly.
People are going to extraordinary lengths – not paying other bills and borrowing heavily from their parents – to meet mortgage repayments, both out of fear of losing their homes and to avoid the stigma of admitting that they are broke... admitting that you cannot afford your mortgage is unspeakably shameful.
That will change. The perception growing among borrowers is that while they played by the rules, the banks certainly did not, cynically persuading them into mortgages that they had no hope of affording. Facing a choice between ... the banks and to their families – mortgage or food – growing numbers are choosing the latter.
The crisis in Ireland in our own, in miniature: Major real estate developers built housing developments; it was a major building boom, which kept a lot of other, allied businesses afloat. Five major banks were involved, and handed out mortgage loans with terms as insane as those offered in the U.S. The Irish homeowners, like their American cousins, also refinanced those mortgages, multiple times, using their properties like ATMs to fund their lifestyles.
And, like us, they expected property values would simply increase, forever. This was the the theory behind the American Housing Bubble, the Irish Housing Bubble, the Portuguese Housing Bubble; the Italian Housing -- well, you get the idea.
This Nifty Graphic Appeared In The U.S. In 2004, Three Years
Before Things Unraveled -- And It Applied To Ireland, As Well
When America's financial sector partially sank, the Irish bubble was affected, too -- and the Irish government paid to bail the Banksters out, just as we did.
Remember this part of the story: The Irish government, in giving / lending money to their failed banks, transferred the private debt of a bunch of greedy, stupid people into public debt, and made it the responsibility of every private citizen in Ireland.
Rather than allow the Banks to fail and force their stupid, greedy executives and directors to take responsibility for their bad decisions (which would also have affected other European banks which the Irish ones had borrowed money from) the present Irish government -- whose politicians were in very, uh 'cozy' relationships with the Banksters and the Real Estate Developers -- saved their pals and dumped everything on The Irish People.
I don't really have to say, Just as we did, here, but will anyway. It's a bit like throwing the Night Slops Jar out the second-story bedroom window into the Road, and not giving a damn who you'll hit.
But now, the Irish government can't continue to pay for all the things it does for its citizens, without a loan from the European Central Bank (it isn't a direct comparison but for the EU, think of the ECB as playing roughly the same role as our Federal Reserve), and the International Monetary Fund, which is under discussion.
This puts Ireland in the same category as Greece, or Portugal -- private banks and finance companies fail; governments rush to rescue them. Then, with no money to pay for public-sector programs or government employees, infrastructure upgrades or street cleaning or police officers down at the Garda... you get the picture. If not, you will, soon.
In his Irish Times piece, Kelly noted the ECB loan is, like our own bailouts, just a bandaid to slow the inevitable: Two things have delayed Ireland’s funeral. First... the [Irish] Government built up a large pile of cash a few months ago, so that it can keep going until the New Year before it runs out of money. Although insolvent, Ireland is still liquid, for now.
Meanwhile, On The Good Ship Lolly: POP Goes The Bubble
In America, it's about CDO's -- 'Collateralized Debt Obligations'; securities based on pools of mortgage loans. No one knows their true value without careful audits of their underlying 'pools' of mortgages, which no one wants to do. Their current value is based on theory, an estimate, which the Banksters who created and sold them all agree with so they can still be traded.
However, everyone knows that the estimate is a fiction. Every U.S. and foreign bank, investment house, insurance company, pension fund, and hedge funds which hold these CDO's have no idea of their real value.
So, how the mortgages were tracked to be bundled in pools, then offered as securities and traded all over the world, is the science-fiction part of the story:
Briefly put, the investment and banking community wanted to be able to trade in 'derivitaves' -- securities backed by something else; in this case, mortgage loans. But they couldn't create those securities without being able to 'pool' the mortgages, and to do so they needed to change the fundamental way home loans were recorded in America for nearly 200 years.
Changing The Rules: I'm Forever Blowing Bubbles
Real estate law and real estate transactions in the US have been subject to state regulation, and transferring ownership of land is to be recorded at the county level. This has been true since the establishment of the United States as an independent country.
Mortgage loans have always been traded, or sold to another bank -- usually as part or a merger or other deal, but the scale of these trades was small. And, every time a mortgage (which is both a deed of trust and a promissory note, obligating the borrower buying a home to pay on the debt) was sold or traded, it had to be re-recorded in a County court, and fees in that County had to be paid.
On the one hand, Real Estate developers began building large numbers of homes. Banks would issue and hold the mortgages. In 1998 - 2000, when Congress (principally Republicans) provisions of the Glass-Stegal Act were eliminated, this dissolved the barriers between Banks and Investment Houses -- Merrill-Lynch became a bank, just as B of A could offer investment advice. And, as the housing bubble began to expand, the financial sector wanted to start trading mortgage loans like any other commodity -- that meant, on a large scale, because that's where the money is.
What held them back were the county-by-county land, title, and promissory note recording requirements that had been law in America for generations.
So, the financial industry, eager to trade in Mortgage-backed securities, developed the Mortgage Electronic Registration Systems, Inc, or MERS. It was a little company in McLean, Virginia (oddly enough, a stone's throw from CIA headquarters at Langley and the nearby NSA), with a handfull of employees that, in 2004, the MBA contracted with to begin recording all mortgage transactions in America -- this bypassed every single County Recorder's office in the United States.
MERS is a shell company representing the Mortgage Banker's Association and its members -- a purportedly separate, private corporation, acting as the agent for a Lender (the "Bank") and the Lender’s successors and assigns (whoever the mortgages are traded to).
MERS, and not the individual bank or Lender, became the holder of the mortgage, and replaced the actual lender in U.S. real estate records at the county or state level. MERS was also responsible for tracking all subsequent changes in ownership of the mortages in MERS' databases, owned and run by its members. As a result, no county recordation fees have been paid and no county records have been changed, saving financial industry enormous costs and ensuring quick trades of any securities backed by large 'pools' of mortgages on national and international financial markets.
Okay, pencils down; let me ask a question: What if MERS were an incompetently-run business, and that its records (used as the only basis for determining the loan 'pools' supporting Trillions of dollars in mortgage-backed securities) were in any way defective? Wouldn't that make it nearly impossible to determine the true value of any of these securities?
Pencils back up -- please write down the following phrase and underline it: Single Point Of Failure. Please remember it, when you're living in a mud Yurt and watching children play with toys made of animal dung, as you are being photographed by groups of Swiss and Japanese tourists.
A Side Story
At my job, between late 2004 and 2006, the guy who sat in the cubicle beside me acted as the agent for a home loan broker. I listened as he spent his days performing cold calls, convincing people to buy properties through the broker he was shilling for. He asked people to pool together with their friends, and buy properties together -- multiple properties, as investment opportunities, because "man, the sky is the limit; it's all gonna be good, Dogg. Market's hot. It's just gonna go up and up -- you get in for nothing, hold 'em for a while -- then sell, and you're set for life."
He used our employer's telephones, faxes, computers, and time, to do this -- the kicker being that he had gotten his immediate manager and (so the rumor goes) others in our management chain involved as clients as well. So, any complaints made about what he was doing were ignored.
In 2006, he quit, having purchased an apartment building and several other properties, and allegedly made a killing. After the Bubble burst in 2007-2008, I'd heard the guy lost most of his properties and cash -- but had managed to get himself rehired in our company by the same management chain he'd done business with before. However, he turned out to be incompetent, and so was let go. Gee; tough sledding.
We Know What Happened, But It's Worse Than You Think
Everyone knows what happened between 2003 and 2007: Real Estate Developers built McMansions like there was no tomorrow. Banks / Investment Houses ("The Banksters") offered home mortgage terms that were insane. People jumped at the chance to own a large, new home for little down, or no down; interest-only payments; loans made on terms that meant house payments would reset and triple in three or four years, which the borrowers didn't have a hope of repaying.
And, so many people were refinancing their homes, over and over; KA-CHING! pulling money out for home improvements, to increase the value of their primary residence, sure... but also to finance lease of that new Beemer, or get Little Chippy into that private girls' school, or to take a cruise, a trip to Cabo for a week, or Europe in the summer; hell, let's look at buying s little place in Greece, or Ireland! We can get loans there with the same kinda terms!
And, people were trading up, to newer, better properties; remember all that frenzy? People purchasing additional properties -- and why not, with mortgage terms so ridiculously low?... because everyone seemed to believe that the value of real estate would go up, and up, forever. C'mon; what could happen?
I've mentioned this multiple times, but in addition to all the other hundreds of billions our government has given the financial sector, the Treasury has also assumed the risk for over 1.5 Trillion dollars in toxic CDOs still on the books of major financial institutions. Financial analyst and writer John Talbot, in a May, 2010 article in Salon, reported [emphasis mine]
...We now know that the financial crisis was not caused solely by a liquidity crunch, or an irrational loss of confidence, but rather by the fact that ... commercial banks held more than a trillion dollars of very poor-quality ... mortgage securities such as... CDO’s, and that these bad assets were sizable enough to bankrupt even our biggest banks...
The Fed, I am convinced, went to these commercial banks and offered to take many of their toxic mortgage assets off their books, often accepting them as collateral for loans [from the government] to the banks...
So the Federal Reserve, with no approval by the President, the Congress, the people or their elected representatives, ended up purchasing $1.5 trillion of new assets of unknown quality... What concerns many knowledgeable investors is that the Fed doesn't have the money needed to purchase these assets and instead prints new money.
As of March 2010, there was approximately $1 trillion of currency outstanding in the country, not including the more than $1 trillion of bank reserves at the Fed.
If I were you, I'd read Talbot's entire article. By the end of it, you might feel the Statue Of Liberty has been thrown over the hood of a '57 Chevy and gang-banged by the Banksters; and that our government, and We, The People, are owned by them.
(You know what absolutely blows my mind? How quick the Teabaggers and the Right are to defend the forces that created all this, and how they stroke and pamper and Fluff the Masters Of The Universe who run the banks. To these clowns, our current emergency is all the fault of some Liberal conspiracy, or lazy minorities. Unbelievable.)
Monday, November 15, 2010
Enough With The Economics
Just On Account Of Friggin' 'Cause, That's Why
A Photo Of One Of America's Best Women's Collegiate Volleyball Champions (Whose Name I Absolutely Cannot Recall, And Will Rue With Wailing And The Gnashing Of Mandibles), Just Because I Want To. And Because She Reminds Me Of A Friend Of Mine. So There.
More Depressing crap about the economy I will undoubtedly write later -- but until then, think about partying with her. Not only could she handle her Bushmills, but a definite round of fun would, in all likelihood, follow.
Well; even Dogs dream, man.
A Photo Of One Of America's Best Women's Collegiate Volleyball Champions (Whose Name I Absolutely Cannot Recall, And Will Rue With Wailing And The Gnashing Of Mandibles), Just Because I Want To. And Because She Reminds Me Of A Friend Of Mine. So There.
More Depressing crap about the economy I will undoubtedly write later -- but until then, think about partying with her. Not only could she handle her Bushmills, but a definite round of fun would, in all likelihood, follow.
Well; even Dogs dream, man.
Saturday, November 13, 2010
Lil' Boots: The Rehabilitation Begins
Lil' Boots has resurfaced, having written his Presidential memoirs, and is now engaged in a book-signing tour around this great land of ours. He's so expectant at a nation, ruined by the Liberals, being saved by the arrival of the New Order in Congress.
And there are photos of Bootsie, in wistful light as he stands on a presumably Texas porch, looking wistfully into the distance as he pines for power. Wistfully.
"I miss being pampered," Bush told more than 3,000 people at a sprawling central Florida retirement community on Saturday.
[He said] that he misses the convenience of Air Force One and never waiting in traffic jams. (Associated Press, via Salon)
For someone born in Connecticut into one of America's blueblood, old-money families, educated at Eastern boarding and prep schools; then undergraduate at Yale (uh, as a legacy), and
For the clueless fool who played guitar and brought John McCain a cake while people drowned in New Orleans; for a clown who started the wrong war and couldn't finish the right one, or tell the difference between the two; who made the Gestapo and the Soviet's legacy of torture into national policy, and surveillance on a scale that would have made Himmler and Beria's mouths water;
For the witless, Fredo-Corleone-Appointed-Leader ("I'm not stupid, like everybody says -- I'm smart!!") who gave the wealthy like himself, and the Banksters, everything they wanted and more without a shred of regulatory oversight;
For the idiot son who dry-humped America nearly to death as it's appointed President, then didn't even have the decency to kiss us afterwards or tell us the old lie ("I'll call ya")...
Misses being pampered? Right in character.
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