Holy Capitalism

Tis the season to spend a few hours wondering what to get your loved ones and feeling guilty about what you can't afford to buy them. In the spirit of the season, some Christians drove SUVs to the altar and asked God to bailout Detroit.

Being a good liberal, I don't want Congress to give GM and Ford $15 billion in loans. (We've given "too big to fail" banks enough billions to cover Detroit with the unenforceable expectation that the banks would loan the money they're actually hoarding.)

This economic Hail Mary will turn out exactly like the financial bailout. In three to four months we'll act surprised when GM and Ford ask for more loans.

popcorn for drama

Obaby

Obama calls himself a mutt at his first post-election press conference. YouTube here. The press doesn't laugh. I wish the camera was on them when he said it. He sounds a little annoyed/bored with the question but manages to cover it well. Then there's Newsweek's revelations on both campaigns. Palin's problems with geography and shopping habits are getting the most play, but at the very bottom of the article is this:

The debates unnerved both candidates. When he was preparing for them during the Democratic primaries, Obama was recorded saying, "I don't consider this to be a good format for me, which makes me more cautious. I often find myself trapped by the questions and thinking to myself, 'You know, this is a stupid question, but let me answer it.' So when Brian Williams is asking me about what's a personal thing that you've done [that's green], and I say, you know, 'Well, I planted a bunch of trees.' And he says, 'I'm talking about personal.' What I'm thinking in my head is, 'Well, the truth is, Brian, we can't solve global warming because I fucking changed light bulbs in my house. It's because of something collective'."

The give-and-take between the White House and the media for the press four years may be the most interesting we've seen in a while. More displays and frank admissions suggesting little patience with the press based on intellectual objections will vindicate Republicans on the charge that Obama is an elitist.

I don't care. The media often asks asinine questions of candidates aimed at uncovering personality traits to the detriment of policy.

uppity women

After The Election

Thank God it's over, huh? No more back to back campaign commercials for 1.5 years. Then Ohioans can look forward to voting on the casino issue for the nth time. I hate ballot measures.

I'm pleased most of the state voted the same way I did. No to casinos. Against predatory lending. Yes to increasing the ballot measure deadline from 90 days to 125 days before an election. Yes on bond issues for sewer, water, garbage, conservation and education.

The casino issue isn't a moral vote for me, and I suspect, for many Ohioans. My soul isn't in peril if I give others the option to gamble away their children's college savings account, but there is something wrong about giving one private casino exclusive access to a state market. Either every casino operator should be able to apply for a license or none should. The tax scheme was convoluted, too. We had Sunday breakfast at a Hometown Buffet two weeks ago and a friend tried convincing us to support it. Trouble is, he had a hard time explaining how taxing the casino would work himself.

Nationally I'm extremely happy with voters rejecting California, Colorado and South Dakota ballots that would have restricted abortion rights.

South Dakota is especially telling. Two years ago pro-lifers failed to convince voters to support a total ban on abortion. This year McCain took the state's 3 electoral votes by 8 percentage points but Measure 11 (restricting abortion to cases of rape/incest/health) failed by about as many percentage points.

Californians narrowly voted against requiring parental consent with a waiting period for minors seeking an abortion. This is the third time California rejects parental notification.

Colorado overwhelmingly rejected a measure to give fertilized eggs the same rights you and I enjoy. Part of me wonders what rabbit holes treating fertilized eggs as human beings could lead us down. How would a judge weigh inheritance rights between an only child and John Doe, the child's unborn frozen half brother literally hanging around in an IVF clinic tube?

Other progressive victories: Massachusetts decriminalized small amounts of marijuana (say "Supreme Court case") and Washington legalized physician assisted suicide (upheld by the Supreme Court in Gonzales v. Oregon).

Not everything is good news. Voters rejected gay marriage in several states. It was a close call in California until religious interest groups started pouring millions into a nasty ad campaign. California voted for giving chickens room to walk, but two gay adults can't get married. Go figure.

Oh look. Blacks didn't riot.

After The Bailout


Consumer spending is down. Manufacturing is down. Global markets are down.

Credit markets are slightly up.

Can the trillion-dollar bailout justify itself to Main Street? Some think the total cost will be $3 trillion. When the bailout was passed the national deficit was approximately $10 trillion.

Instead of loaning taxpayer money back to taxpayers with interest, politically connected and too-big-to-fail banks are rewarding failure by giving CEOs million-dollar bonuses and purchasing banks that weren't insolvent enough to participate in the Treasury Department's recapitalization program at plummeting prices. The latest round of financial mergers is happening with Treasury's blessing in the form of "a new tax break, worth billions to the banking industry, that has only one purpose: to encourage bank mergers".

Congress is once again surprised to learn former Goldman Sachs CEO and present Treasury Secretary Henry Paulson has questionable priorities. My hunch is the 111th Congress will give the mob theatrics with public hearings but won't do anything significant to stop it. In the meantime the FBI lacks the manpower to investigate crimes.

I'm surprised anyone asked Congress to do something in the run-up to the crisis, including liberals like Paul Krugman. We are talking about a regime that thrives on manufactured crises. From Iraq to prescription drug prices and Social Security, there is nothing a neoliberal, neoconservative ideology cannot make right. I'm looking at you Minerals Management Service, Department of "Justice", FBI, Department of Homeland Security and other executive agencies.

Eight years of ideologically driven decisions and failures ain't a thing to Krugman. He wants government to do something now—again. Christ on a cracker. He's not even waiting for the illusion a new Democratic regime provides to convince himself this time Congress will vote for the little people.

Shorter Second Presidential Debate


I rock. I'm super. I don't have to answer your questions, Town Hall Nobody. I can dance around your concerns. Smooth like butter. That's me. My opponent sucks. You have to vote for one of us and we don't have a clue how to make the credit crunch less painful. Yes! Wow, who would have thought a financial crisis could make the question of Iraq look easy by comparison?

We couldn't stand it and switched to Spike TV. I'll read about it in the morning.

benjies

Sky's Falling Presumably On Hold

The Senate version bailout bill H.R. 1424 (pdf) has passed. Several goodies were added to bring everyone on board. I have to wonder if the carrots were necessary as I watched C-SPAN last night.

I'm disappointed George Voinovich (Ohio), one of those rare moderate Republicans, voted for it. It's also disappointing but not at all surprising that the voters' mood shifted overnight. Watching your retirement/college funds drop a few thousand in value after Monday's stock plunge can tweak your attitude. The House will probably pass their bailout Friday night. Then it's adjusting differences and off to Bush's desk and everyone hopes he won't write another Executive Order for the greater good. Again.

I was impressed with democratic socialist Bernie Sanders (I-VT) and progressive Maria Cantwell (D-WA). Both voted nay.

Sanders pointed out several issues the bill fails to address: rolling back deregulation, too big to fail, consolidation and concentration, the fox guarding the hen house (Paulson's conflict of interest), etc. These—afterthoughts? deal breakers?—were left off the table on the assumption that Congress would address the problems after the upcoming elections. No word on Congress' commitment to address these issues now. No guess on how new representatives and senators could affect this airy commitment to finish the job later.

Cantwell talked about the irony of Congress trampling losers in the stampede to save everyone:

But Mr. President, the problem with the legislation before us is that it is choosing winners and losers. It is inserting the federal government in a role, in which they decide—along with the private sector—exactly how funds should be allocated. Now Mr. President, I am for the full faith and credit of the United States government backing these institutions. What I'm not for is turning the keys of the Treasury over to the private sector.

I ask you to just think of one institution in my state, Washington Mutual, who I wouldn't necessarily applaud for its sub-prime lending rates or for its use and backing of credit default swaps. But I would ask you to consider the fact that as that institution was forced into sale by this government who were the winners and losers in that. J.P. Morgan got the assets of that institution and benefited from that. In fact, they predicted that night on a conference call that after one year and their investment they would have a $512 million dollar return on that investment—a 27 percent return in one year.

Now, the FDIC got some money out of that and to say nothing about the over 60,000 shareholders that were wiped out with zero. My complaint is where is J.P. Morgan standing up for the retirement plans, the deferred compensation plans and other packages that the employees at [Washington Mutual] were due?

So it's very convenient for us to now choose that we are going to add to J.P. Morgan's bottom line. In fact, if we would instead do what I'm suggesting, have an equity proposal instead of having TARP, the Troubled Asset Relief Program, as the roof over America—instead an equity program where the United States would leverage our capital and get a 10 to 12 percent return our nation would be better funded for the onslaught of trouble that is still going to remain after we pass this legislation. I could not even get my amendment to be considered.

People/bloggers holding out for a nay vote are already thought of as irresponsible anarchs. Not one to skip skewering the establishment press, Glenn Greenwald exposes the Washington Post's Steven Pearlstein's naked condescension towards readers stubbornly expecting more than finger-in-the-dike legislation from Congress. The unspoken assumption is the holdouts don't have portfolios at stake and/or they get through by functioning outside the economic mainstream. "Serious" people don't question the political/economic/media establishment. Talk about elitist.

Finally, no, wingnuts, this wasn't caused by the Community Reinvestment Act of 19 freaking 77 (i.e. lending to the poor, blacks) or even government sponsored entities like Freddie and Fannie. Although, for the sake of protecting the public lending institutions should be private or public, not something in between.

I leave you cats with this video clip.

Pick Your Poison


And then [Paulson] ran into a thing called democracy.

TPMCafe has done a good job covering the politics of the rescue bailout plan. Jim Sleeper posts a handful of insider reactions to the House version of the bill. They agreed (1) the bill should die, and (2) the bill did not go far enough to protect taxpayers.

Transparency may be the soul of confidence, but it is at odds with the interests of the failing banks we are being asked to save. The FDIC won't force banks "to deliver an audited statement of all of their holdings including Credit Default Swaps within 30 days" as Jonathan Taplin suggests (click the picture to read his blog post). We lack the leadership in the executive and legislature to make any demands of our economic elites.

The Senate is voting today. Obama's proposal includes another tax break to get bipartisan support. I'm so tired of that word, bipartisan. We're up to our ears in debt.

Write your Senators and tell them to vote nay.