Flimsy Sanity: July 2008

Flimsy Sanity

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. - Friedrich Nietzsche

Wednesday, July 30, 2008

This kinda sums up our economy - speech from 2006

This guy is Ron Paul's economic advisor so he is free market all the way, which is not to say that he wasn't right on his assessment of the future. I say that the only way the free market could work (unregulated) was if fraud was punishable by life imprisonment or death. In my dreams I get to swab my last mechanic's arm for his lethal injection!

Now Bush signed a bill to bail out "homeowners" which is actually a lifeboat for banks and mortgage junk bond holders. Print up some more money, we've got lots of paper and ink and while you are at it, send us more stimuli and another war.

It always makes me chuckle that the treasury is always coming up with new bills that will be less likely to be counterfeited at the same time the money loses value faster than they can print it. What country was it that had the billion dollar bill that couldn't buy a loaf of bread? Welcome to our future. I really don't think it matters which party gets in, we are so screwed even Nader couldn't save us now. If you want to know how the finance game is played, this is a brief synopsis.

1978 Car

Monday, July 28, 2008

Robert Novak is Having a Bad Week

First the pedestrian blocking his windshield view and now diagnosed with a brain tumor . Lots of speculation about whether he lost part of his mind before the callous hit and run.

Found While Browsing

I was reading an entry on Metafilter about marketing "cool" to teens and someone on the comments linked to this old comment about the death of Mister Rogers:
You know, it's quite a strange thing. The single most common adjective applied to Mister Rogers in this and other thread is the word 'creepy'?

I think I know why he strikes people as creepy. It's because his isn't at all 'cool'. There is no cynicism, no irony, no condescension in him at all. He is not simply unhip, he is ahip. And this is what people calling him creepy are picking up on.

We are conditioned to traffic in cool. You have to look cool, not look nice or distinguished or presentable, but cool. But it's all so generic. Everyone seems to have the same new haircut that no one 5 years ago had. We all have the same cynical politics.

Something about the counterculture from the 60's is still with us but it has been co-opted into a form of synchronized periodic obsolescence and mockery of that which came before. There is something fundamentally anti-intellectual about this, but I can't quite articulate it. There some element of arrogance there. Like everyone is perpetually 18.

Cool is America's code, and I really do think this is an American problem, because cool is propagated mainly though mass media, and there is no greater media saturated culture on earth than America's. Will I look cool wearing this? Will I sound cool saying this, or reading this or doing this. We're committing mass murder in other parts of the world because somebody figured out how to make violence cool and tough-talk politics cool, and then they combined the too. Swagger is cool. Cowboys and fighter jets and JDAMs and war porn are cool. So that's what we have. We are the Kingdom of Whatever.

Of course he hated ad-libbing on camera, because ad-libbing on camera is inexcusably lazy. It's what you do so you don't have to write or rehearse. Actors and comedians and musicians improvise as a way of living within a moment that is in some way artificial. A method actor may improvise because he is trying to become the character, but he isn't the character to begin with. A Jazz musician improvises because while the structure and the changes are the same, and the audience is familiar with them, the particular moment of performance is not, and that has it's own emotional context.

Mister Rogers was the same guy, so why improvise? The show wasn't about his character, it was about the kids, os you have to work out ahead of time how best to communicate with the child viewers. Everything was planned.

He talks slowly not because kids are dumb but because as studies have shown, children's brains are considerably more active than adults', and they need time to return to the original thought communicated to them after branching off in multitudinous directions.

The puppets? Puppets are good because they are considerably smaller than the human actors around them, and thus kids perceive them as safe. They look like toys. Contrast this with a giant seven foot all yellow bird, and ask yourself which inspired more nightmares.

The show is glacially paced and had the same structure with the same things happening in the same order because children respond to structure and routine is a source of comfort, particularly in children whose lives were anything but predictable.

Maybe that's what cool is - withdrawing from the context of one's life into an artificial one, in which the cool perceives itself to be somehow outside of reality, looking in and commenting on it. But this isn't insight, it's not reflecting on the world. It's standing at the edge of the world sniping into it.

Mister Rogers isn't creepy. CSI with is gruesome bloody corpses every Thursday at promptly 9:14 EST is creepy. Thirty million people looking at that and snaking on chips while they watch is creepy.

Listening to some rapper sing about his genitals and sexual conquests is creepy. Approach crowds of people and talk to them about the aroused state of your genitals, and watch how quickly you end up in a squad car. But somehow it's ok on TV because...why exactly?

Watching a war unfold on television in near real time is beyond creepy. It is obscene. You watch people screaming over their dead loved ones, and then you turn it off and go have dinner, or go to bed? No empathy, no revulsion. What the hell kind of civilization is this?

You know, I watched some 9-11 footage on youtube the other day (because I'm a masochist, apparently), and it occured to me that in the 6 years since it happened, I've never once heard anyone say "I'm sorry for those people who are so consumed by hate for people they've never met and places they've never been. What can we do to lift that burden from them?"

Because that isn't cool. That's being a pussy (or a fag if you are on FreeRepublic). There's no posture to be struck there, no pose. It's something that has to be done in earnest, and that's what's been lacking in the American culture.

Think about the Pope, entering the cell to confront his assassin. He forgave him, we all know that. But can you imagine the conversation? Can you imagine either someone being so perceptive that they can reach into a perfect stranger and expose their soul, or someone whose personality is so shallow that their emotions or ideologies are so shallow that any attempt to probe their depth displaces them entirely?

Mr. Rogers may have been the last earnest man.
posted by Pastabagel at 2:00 PM on June 1, 2007 [484 favorites]

Saturday, July 26, 2008


Friday, July 25, 2008

Quote for the Day

I find it interesting that people who like the free market can marshal facts and figures to show that the living standard of the world's people has grown by leaps and bounds since globalization took hold in the 1990s, with all its new agreements and virtually no opposition. Anti-capitalists and nationalists can marshal facts and figures to prove that third world people--and the working class in the advanced world--are facing economic destruction on an unprecedented scale, because globalization has taken hold with virtually no opposition. The facts and figures used by each side may be entirely accurate.

Our mutual friend Robert Anton Wilson wrote, "The prover proves what the thinker thinks." I always try to keep that in mind. So as I get deeper into advocacy, I always have to remind myself to take even my own glorious bullshit with many grains of salt.
-Ken Goffman

Michael Hudson talks on oil and housing

How do you explain the soaring price of oil? Is it mainly a supply/demand issue or are speculators driving the prices up?

MH: It’s true that enormous amounts of speculative credit are going into commodity index funds. Forward purchases increase the demand for deliveries of oil and other raw materials. But bear in mind also that as the dollar depreciates, OPEC countries have sought to stabilize their receipts in euros, and to offset their losses they are suffering on the dollar-denominated securities they have bought with past export proceeds. For over 30 years they have been pressured to recycle their oil earnings into the U.S. stock market and make loans to U.S. financial institutions. They have taken large losses on these investments (such as last year’s contributions to bail out Citibank), and are trying to recoup them via the oil market.

OPEC officials also point to a political motive: They resent America’s military intrusion in the Middle East, especially in view of how much it contributes to the nation’s balance-of-payments deficit and federal budget deficit.

Look at it from their point of view. They see that the U.S. invasion of Iraq was a win-win situation as far as the oil industry is concerned. If America conquers Iraq and forces the Oil Agreement through, U.S. companies will be able to grab the world’s largest available pool of oil for a generation, and U.S. officials can use the oil weapon against oil-deficit countries. Last week the U.S. oil firms managed to bump Russia’s oil industry out of the Iraq picture, reversing the trend that had been developing under Saddam.

And if the war continues to be a military and economic disaster, the price of oil will skyrocket, providing a price umbrella for domestic U.S. producers – as you can see from how the stock market is raising its valuation of Exxon and other oil majors. So the question is by no means just an economic one.

The U.S. press prefers to blame Chinese, Indian and other foreign growth in demand for oil and raw materials. This demand has contributed to the price rise, no doubt about it. But the U.S. oil majors are receiving a windfall “economic rent” on the price run-up, and are not at all unhappy to see it continue. By not building more refining and shipping capacity, they have created bottlenecks so that even if foreign countries did supply more crude oil, it would not be reflected in refined gasoline, kerosene or other downstream product prices.

The Fed has traded over $200 billion in US Treasuries with the big investment banks for a wide variety of dodgy collateral (mostly mortgage-backed securities). How can the banks hope to repay the Fed when their main sources of revenue (structured investments) have been cut off? Are the banks secretly using the money they borrow via repos from the Fed to dabble in the carry trade or speculate in the futures markets?

MH: The Fed’s idea was to buy enough time for the banks to sell their junk mortgages to the proverbial “greater fool.” But foreign investors no longer are playing this role, nor are domestic U.S. pension funds. So the most likely result will be for the Fed simply to roll over its loans – as if the problem can be cured by yet more time.

When a bubble bursts, time makes things worse. The financial sector has been living in the short run for quite a while now, and I suspect that a lot of money managers are planning to get out or be fired now that the game is over. And it really is over. The Treasury’s attempt to reflate the real estate market can’t work, but can only cut losses for the financial institutions who have become the nation’s major political campaign contributors. Mortgage arrears, defaults and foreclosures are rising, and much property has become unsaleable except at distress prices that leave homeowners with negative equity.

This prompts them to do what Donald Trump would do in such a situation: to walk away from their property. The banks will be left holding the bag, just as they were in Japan after 1990. In Japan’s case, real estate prices declined steadily every quarter for 17 years! That should give you a flavor of how serious the U.S. problem is today.

The banks are trying to win back their losses by arbitrage operations, borrowing from the Fed at a low interest rate and lending at a higher one, and gambling on options and derivatives. But this is a zero-sum game: one party’s gain is another’s loss. So the banks collectively are simply painting themselves into a deeper corner. They hope they can tell the Fed and Treasury that if it doesn’t keep bailing them out, they’ll fail and cost the FDIC even more money to make good on insuring the “bad savings” that have been steered into these bad debts and bad gambles.

The Fed and Treasury are following the traditional “Big fish eat little fish” principle of favoring the vested interests. They are more willing to bail out the big financial institutions than to bail out savers, pensioners, Social Security recipients and other small fry.

--Many of the TV financial gurus --as well as Henry Paulson--keep assuring us that the worst is behind us, but I don't see it. Foreclosures are increasing, the dollar is falling, unemployment is rising, manufacturing is sluggish, food and fuel are soaring, and consumers are backed up on their credit cards, student loans and house payments. Where would you say we are in the present cycle? What will it take to rebound from the current slump? Will the stock market take a beating before all this is over? What do you think the greatest problem facing the economy is; inflation or deflation?

MH: The idea that we’re even in a business “cycle” is whistling in the dark. To think of the economy being in a cycle is to imply an automatic recovery is in store. This free-market idea was developed at the National Bureau of Economic Research by opponents of government regulatory policy. The fantasy is that the economy oscillates in a fairly smooth and regular sine curve. But this always has been a fiction. 19th-century writers didn’t speak of economic cycles, but rather of periodic financial crises. There is a slow buildup, and a sudden plunge, so the shape is ratchet-shaped.

Today’s plunging real estate and stock market prices are not a self-correcting ebb and flow in which downturns set in motion automatic stabilizers that produce recovery. Each U.S. recovery since World War II has started out from a higher level of debt. The result is like driving a car with the brakes pressed more and more tightly. Alan Greenspan at the Federal Reserve flooded the banking system with enough credit to enable debts to be carried by borrowing against the rising price of homes and office buildings, corporate stocks and bonds. In effect, the interest charge was simply added onto the debt balance. But now prices are falling, leaving families, companies and many Wall Street firms with negative equity. Asset-price inflation fueled by the Federal Reserve – is giving way to debt deflation.

Today, the prospects are dim for paying off debts out of further price gains for homes and real estate. Speculators have pulled out of the market – and as late as 2006 they accounted for about a sixth of new purchases. The United States and other countries have reached the point where interest and amortization payments are absorbing the entire economic surplus of so many individuals, so many companies and so many government bodies that new construction, investment and employment are grinding to a halt. Families, real estate investors and companies are obliged to use their disposable income to pay their creditors. This leaves them without enough money to sustain the living standards of recent years – and they no longer can wipe out their debts by declaring bankruptcy as in times past, because Congress has passed the harsh bankruptcy law that credit-card and bank lobbies paid them to pass.

This means that there won’t be a rebound, and it will take longer than 2009 to recover.

Michael Hudson is a former Wall Street economist specializing in the balance of payments and real estate at the Chase Manhattan Bank (now JPMorgan Chase & Co.), Arthur Anderson, and later at the Hudson Institute (no relation). In 1990 he helped established the world’s first sovereign debt fund for Scudder Stevens & Clark. Dr. Hudson was Dennis Kucinich’s Chief Economic Advisor in the recent Democratic primary presidential campaign, and has advised the U.S., Canadian, Mexican and Latvian governments, as well as the United Nations Institute for Training and Research (UNITAR). A Distinguished Research Professor at University of Missouri, Kansas City (UMKC), he is the author of many books, including Super Imperialism: The Economic Strategy of American Empire (new ed., Pluto Press, 2002)

America's prop

“Religion even requires people to swear on the Bible when they testify in court. Why should swearing to God on the bible mean you’re telling the truth? As kids, every time we wanted to disguise a whopping lie, we’d say ‘I swear on the Bible’ or I swear on my mother’s tits.’ Swearing on the Bible never induced a cop to tell the truth on the witness stand. They lie routinely when they take the stand just to insure a conviction. The Bible is America’s favorite theatrical prop.” - George Carlin

Thursday, July 24, 2008

FDIC Insurance

Thanks to Clinton, commercial banks have not been paying fair premiums to the FDIC insurance. Nader warned about the FDIC Insurance scam in 2002.

Do you know the real meaning of "moral hazard"? Just a cute way to say: private profit, social loss.

The conservatives always talk about personal responsibility. William Buckley's son Christopher wrote the book Thank You for Smoking that was made into (in my opinion) a pretty funny movie. Is responsibility only for individuals or is it time we let the big guys be responsible and let the market work - even if it means economic collapse? The last time laissez-faire economics was king, we had the great depression which led to reform and then a spell of prosperity. Seems we have to have the death of one to usher in the other and then that eventually succumbs to greed again and on and on it goes.

Sometimes I have the radio on and all I hear is that we have to maintain our confidence as though the only thing that can destroy the dream is if we just stop believing. At the same time NBC is telling us to "keep the faith", their Mom and Dad (GE) is moving offshore with a "strategy of shifting its financial operations away from volatile segments such as those influenced by U.S. consumer spending toward areas of higher growth". Probably too late to make the big guys suffer for their greed - they are already going, going, gone.


My mom gets a small payment from an oil well. She expected it to go up since the price of oil has risen so dramatically. When it didn't, she asked about it and was told that it was "old oil" and the price for it was set at the level it was when it was first drilled. No wonder there is so little new exploration even though the land is leased.

I am just guessing but I believe that the payments for oil on government land (ANWAR and Off-shore) will be small. Mining and logging on government land is basically gifts to private corps and the taxpayer even pays for the roads to the booty. There is no reason to believe oil will be any different, particularly in light of the oilmen in control and the delusion that it is a national emergency.

Tuesday, July 22, 2008

Why No Outrage?

The CBS Evening News on Saturday, July 19, had an important segment devoted to people who were losing their homes because they had been misled into accepting risky mortgages. Yet not once during the program was the question raised about prosecuting the crooks — for that’s what they are — who tricked them into their predicaments.
The Wall Street Journal, the same day, had a lengthy article asking Why No Outrage and pointing out how the stewards of other people’s money, from the Fed on down, had made a hash of high finance.

Yet not once in these presentations was the obvious conclusion offered. Thousands of bankers, mortgage brokers, rating companies and more have committed fraud. Why aren’t they being prosecuted? Not by ones or twos, but by the droves? And why aren’t our newspapers and broadcast outlets demanding that the laws be enforced? Each individual ripoff artist needs to be pursued. Instead, he/she gets a pass because they were just doing what everyone else did. Does that mean crooks shouldn’t be prosecuted because there are just too many of them? The question isn’t Why No Outrage? The question is Where’s the Outrage? You ought to be able to find it in the media, but you can’t.
-George Lardner Jr.

Of course the news did mention the 300 or so meat packing plant illegal aliens who will spend 6 months in jail for id fraud (which means jail rather than exile) because their employers gave them phony social security cards. (By the way, social security was deducted from their checks but they could not qualify when they got old, so who was screwing who here and committing a fraud?) All the bankers will cost taxpayers billions, but it is the immigrant who will be targeted when the crap hits the fan.

We the citizens of this country would be far safer with 300 sneaky, fraudster bankers in jail than imprisoning 300 desperate-to-work immigrants. We will need the Mexicans to show us how to live on nothing when the economy collapses.

Saturday, July 19, 2008

Interesting interview

Naomi Klein on Democracy Now

I learned a lot from this interview. I had read that Canada was our main oil supplier, but I didn't know that NAFTA rules give the US priority to that oil over even Canada's domestic needs. She also (like others) observes that the off-shore drilling leases are just part of Bush's gift to his buddies and like the terrorism specter, public support has been manipulated by the disaster capitalists. Also her description of the tradition of nationalized oil in Iraq is great.

The Olympics has been a windfall for testing total surveillance.

The agri-businesses have developed "climate-ready" seeds and like their "Roundup Ready" seeds are proprietary.

Not much hope with Obama, considering his choice of advisors.

Friday, July 18, 2008

Found while browsing

There's a particular moment known to all Baby Boomers when Wile E. Coyote, in a rapture of over-reaching, has run past the edge of the mesa and, still licking his chops and rubbing his front paws in anticipation of fricasseed roadrunner, discovers that he is suspended in thin air by nothing more than momentum. Grin becomes chagrin. He turns a nauseating shade of green, and drops, whistling, back to earth thousands of feet below, with a distant, dismal, barely audible thud at the end of his journey. We are Wile E. Coyote Nation.

Is there anyone in the known universe who thinks that the US financial system is not fifty feet beyond the edge of the mesa of credibility?

Nothing will avail now. Not even if Sirhan Sirhan were paroled at noon today and transported directly to the West Wing with a .44 magnum in each hand (and a taxi driven by the Devil waiting outside to take him to the US Treasury and the offices of the Federal Reserve).

It's hard to imagine what kind of melodramas were unspooling on the Hamptons lawns this weekend, while everybody else in America was watching Nascar, or plying the aisles of BJs Discount Warehouse for next week's supply of mesquite-and-guacamole flavored Doritos, or having flames and chains tattooed on their necks, or lost in a haze of valium and methadrine.

With the death of the IndyMac Bank last week, and the GSEs Fannie Mae and Freddie Mac laying side-by-side in the EMT van on IV drips, headed for the Federal Reserve's ever more crowded intensive care unit, there was a sense of the American Dream having passed through the event horizon that denotes the opening of a black hole.

What would happen if the US Government acted to bail out these feckless enterprises (and what if they don't)? Either way, it's not a pretty picture. If Mr. Bernanke does start shoveling loans into the GSE black hole, he'll further undermine the soundness of his own outfit and do nothing, really, to repair Fannie and Freddie's structural problem of having securitized too many loans that will never be paid back. If instead Fannie and Freddie are flat-out taken over entirely by the US government (and remember the Federal Reserve is not the government), then the national debt will roughly double overnight -- which will pound the US dollar down a rat-hole.

Meanwhile, the foreign holders of those decrepitating dollars might not rush to the redemption window, but they certainly would use them to buy up every oil futures contract on God's not-so-green Earth as fast as possible -- they'd be dumb not to -- which would leave American Happy Motorists with gasoline prices north of $5 a gallon, and possibly north of $10. (In that case, say goodbye to the airlines. In fact, say goodbye to what passes for the rest of the US economy, including especially the vaunted retail sector that supposedly counts for 70 percent of the action.)

If Fannie and Freddie are left to die out on the desert floor, say goodbye to the housing market, the major investment banks, countless regional banks, the retirement accounts of virtually everyone in America, the viability of all fifty states' governments, and the day-to-day operating ability of all their municipalities -- and very likely the current incarnation of the world banking system.

This process is really out of control now. The bottom line is the comprehensive bankruptcy of the United States. The Republican Party under George Bush will be known as the party that wrecked America (release 2.0). Painful as it is, Americans had better get a new "Dream" and fast. It better be a dream based on the way the universe actually works, which is to say an operating procedure run on earnest effort and truthfulness rather than merely trying to get something for nothing and wishing on stars. We might begin symbolically by evacuating Las Vegas and calling in an air strike on the loathsome place -- to register our new reality-based attitude adjustment.

After that, we've got to get to work re-tooling all the everyday activities of life, including the way we grow our food, the way we raise and deploy capital, the way we do trade and manufacturing, the way we go from point A to point B, the way we educate children, the way we stay healthy, and the way we occupy the landscape. I know, it sounds like a lot, maybe too much. But grok this: we don't have any choice if we want a plausible future on this portion of the North American continent.

Of course, none of that is likely to happen. Instead, and under the worst imaginable economic conditions, we'll probably embark on a campaign to prop up the un-prop-up-able and sustain the unsustainable -- that is, defend every status quo habit and behavior that we're used to, whether it can be salvaged or not. Of course, this would be a fatal squandering of our dwindling resources, but it it tends, historically, to be the last act of the melodrama in any faltering empire.

The result, pretty soon into that process, will be social breakdown and political upheaval. Every tattoo freak out there who has been prepping for his own starring role in some kind of comic book armageddon will finally get his chance to shine. Lots of people will get hurt and starve. Property will change hands in a disorderly way. And at the end of this process an American corn-pone Hitler may be waiting to set everything and everyone straight.

Event Horizon by James Howard Kunstler

He also wrote this interesting take on the real oil speculators:

One consequence is that other nations sitting on our exported dollars (from our massive trade deficit) have apparently decided to spend off those dollars rather than wait for the fullblown financial collapse of the nation issuing them. My guess is that they are spending those dollars on oil, the primary resource of industrial economies, and that they are prepared to outbid other contestants (including the USA) no matter what -- because they know the dollar is losing value, and that those losses are apt to accelerate over time, and what else would they spend them on? I suspect this is behind the rising price of oil more than anything else.

Republicans spout the gospel that there is plenty of shale oil (in addition to the arctic oil, of course). This says they are nuts:
The production of oil from oil shale has been attempted at various times for nearly 100 years. So far, no venture has proved successful. One problem is that there is no oil in oil shale. It is a material called kerogen. The shale has to be mined, transported, heated to about 900 degrees F, and have hydrogen added to the kerogen to make it flow. The shale pops like popcorn when heated so the resulting volume of shale after the kerogen is taken out is larger than when it was first mined. The disposal problem is large. Net energy recovery would be low at best. It also takes several barrels of water to produce one barrel of oil. The largest shale oil deposits in the world are in the Colorado Plateau, a markedly water poor region. So far shale oil is, as the saying goes: "The fuel of the future and always will be." Fleay (1995) states: "Shale oil is like a mirage that retreats as it is approached." Shale oil will not replace oil.
Walter Youngquist, Consulting Geologist, Eugene, OR.USA.

Charity Walk

Thursday, July 17, 2008

Cover Wars

Wednesday, July 16, 2008

A clip from the film, Ralph Nader, an Unreasonable Man

So you think you live in the greatest democracy on earth?

Tuesday, July 15, 2008

An opinion piece written right before Gramm called US a bunch of whiners

McCain & 'Foreclosure Phil'

AS SOMEONE who's politically conservative, I'd like to see John McCain outsmart Barack Obama and take the White House in November.
The only problem is I'm wondering just how smart John McCain is turning out to be.

In particular, I find it hard to believe McCain has chosen ex-Texas Sen. Phil Gramm to be his economics adviser. For those who don't remember Gramm, he's associated with two major issues facing America's struggling economy: the failing real-estate market and rising gas prices.

The collapse of the real-estate bubble, also known as the "sub-prime mortgage meltdown," has clear ties to Gramm. In December 2000, at the urging of lobbyists from Enron, Gramm pushed through Congress the Commodity Futures Modernization Act.

Known as the "Enron loophole," this law protected financial institutions from overregulation by the government. In essence, it opened the door for something called "credit default swaps," and allowed many Americans with bad credit and no money to get mortgages they had no right receiving. Of course, when these same Americans defaulted on their mortgages, the result was billions of dollars in foreclosures.

The Commodity Futures Modernization Act is also associated with rising gas prices. Critics argue that this legislation is responsible for driving up the price of oil because it exempts energy speculators, who make trades electronically, from the regulation of the Commodity Futures Trading Commission. In other words, big banks are free to manipulate the price of oil by buying huge blocks of energy futures and driving up demand.

Not to mention that the "Enron loophole" was a major factor in the Enron scandal, which wrecked the California electricity market and cost consumers billions. Amazingly, McCain still stands by Gramm, his former Senate colleague. Some believe McCain will appoint Gramm secretary of the Treasury should McCain be elected.

I find this hard to comprehend. McCain admitted to the Wall Street Journal editorial board earlier this year that he "doesn't really understand economics," but is his knowledge so limited he can't see what kind of liability Gramm might be to his campaign?

When it comes to presidential politics, Americans seem more concerned with emotional issues than economic ones. YouTube, which co-sponsored a presidential debate with CNN this year, is a case in point.

Run the names Jeremiah Wright and Phil Gramm through their search, and you'll see what I mean. As I write, 2,620 YouTube videos call Wright, Barrack Obama's former pastor, a "racist" and an "anti-American" - in comparison to only 58 that accuse Gramm of being an economic "manipulator" and financial "scam artist." These results are curious. You'd think Americans would be more outraged over Gramm's controversial economic policies than Wright's racially charged sermons.

Think about it. How has Jeremiah Wright had a direct effect on the average American? How has he made our lives harder, more expensive? Sure, his use of racial slurs is shocking to those not familiar with "black liberation theology," but on a daily basis, Wright's sermons don't make much difference.

But ex-Sen. Gramm - "Foreclosure Phil" - is a whole different story. We feel the aftershock of his reckless policies regularly.

Regardless of whether you're liberal or conservative, socialist or capitalist, one thing's very clear: Gramm's policies are associated with the Enron scandal, the subprime mortgage meltdown and the fiasco on the energy futures market.

McCain should consider cutting his ties with Gramm if he wants to have a shot at the White House in November. And, as Americans, we should pay as much attention to economic matters as we do emotional ones. *

Christopher Paslay is an English teacher at Swenson Arts and Technology High School in Northeast Philadelphia.

Sunday, July 13, 2008

Life through the eyes of cartoonist Dan Piraro

Catch of the Week

Privatize Profit, Socialize Loss

Interesting account of when the FDIC comes to close a bank. A bank from Watford City ND(a town of 1400???) bought the Minnesota bank.

The FDIC has $51 billion in assets, but only $4.2 billion in cash. For all banks. And there are a lot of banks that are going to go bust later this year and next year and the year after that. Banks that made far worse loans than even IndyMac. Banks that have have more regular insured accounts -- never mind the shortfalls! -- than the entire budget of the FDIC
Banks that have more depositors and assets and liabilities than anything the FDIC has ever had to deal with before.

You want names? Busted banks that are very likely coming soon: Downey Savings and Loan (DSL), National City (NCC), BankUnited (BKUNA), First Federal (FED), Corus (CORS). After that come the big boys: Washington Mutual (WM), Wachovia (WB - used to be WorldBank). And that's when the real fun starts...
When the FDIC starts to sell off IndyMac's piece of shit mortgages assets, it thereby be defining what the market price is for those items, because it will be finding out what an actual sale price is on them. That means that every other bank or financial institution that has had similar assets tucked away off their balance sheets in magical "Level 3" land (i.e. "there's no easy way to define what the price for these assets are because there's currently no market for them, so their price is what we say it is") suddenly has to bring those assets back onto their balance sheets, and do so at their new fire sale price.
asparagirl comment on Metafilter

And this is what Ralph Nader had to say in his July 1 column:
Top management on Wall Street has been beyond incompetent. Wild risk taking camouflaged for years by multi-tiered, complex, abstract financial instruments (generally called collateralized debt obligations) kept the joy ride going and going until the massive financial hot air balloon started plummeting. Finally told to leave their high posts, the CEOs of Merrill-Lynch and Citigroup took away tens of millions of severance pay while Wall Street turned into Layoff Street.

The banks, investment banks and brokerage firms have tanked to levels not seen since the 1929-30 collapse of the stock market. Citigroup, once valued at over $50 per share is now under $17 a share.

Washington Mutual – the nation’s largest savings bank chain was over $40 a share in 2007. Its reckless speculative binge has driven it down under $5 a share. Yet its CEO Kerry Killinger remains in charge, with the continuing support of his rubberstamp Board of Directors. A recent $8 billion infusion of private capital gave a sweetheart deal to these new investors at the excessive expense of the shareholders.

Countrywide, the infamous giant mortgage lender (subprime mortgages) is about to be taken over by Bank of America. Its CEO is taking away a reduced but still very generous compensation deal.

Meanwhile, all these banks and brokerage houses’ investment analysts are busy downgrading each others’ stock prospects.

Over at the multi-trillion dollar companies Fannie Mae and Freddie Mac, the shareholders have lost about 75 percent of their stock value in one year. Farcically regulated by the Department of Housing and Urban Affairs, Fannie and Freddie were run into the ground by taking on very shaky mortgages under the command of CEOs and their top executives who paid themselves enormous sums.

These two institutions were set up many years ago to provide liquidity in the housing and loan markets and thereby expand home ownership especially among lower income families. Instead, they turned themselves into casinos, taking advantage of an implied U.S. government guarantee.

The Fannie and Freddie bosses created another guarantee. They hired top appointees from both Republican and Democratic Administrations (such as Deputy Attorney General Jamie Gorelick) and lathered them with tens of millions of dollars in executive compensation. In this way, they kept federal supervision at a minimum and held off efforts in Congress to toughen regulation. These executives are all gone now, enjoying their maharajan riches with impunity while pensions and mutual funds lose and lose and lose with no end in sight, short of a government-taxpayer bailout.

Over a year ago, leading financial analyst Henry Kaufman and very few others warned about “undisciplined” (read unregulated) and “mis-pricing” of lower quality assets. Mr. Kaufman wrote in the Wall Street Journal of August 15, 2007 that “If some institutions are really ‘too big to fail,’ then other means of discipline will have to be found.”

There are ways to prevent such crashes. In the nineteen thirties, President Franklin Delano Roosevelt chose stronger regulation, creating the Securities and Exchange Commission (SEC) and several bank regulatory agencies. He saved the badly listing capitalist ship.

Today, there is no real momentum in a frozen Washington, D.C. to bring regulation up to date. To the contrary, in 1999, Congress led by Senator McCain’s Advisor, former Senator Phil Gramm and the Clinton Administration led by Robert Rubin, Secretary of the Treasury, and soon to join Citibank, de-regulated and ended the wall between investment banks and commercial banking known as the Glass-Steagall Act.

Clinton and Congress opened the floodgates to rampant speculation without even requiring necessary and timely disclosures for the benefit of institutional and individual investors.

Now the entire U.S. economy is at risk. The domino theory is getting less theoretical daily. Without investors obtaining more legal authority as owners over their out of control company officers and Boards of Directors, and without strong regulation, corporate capitalism cannot be saved from its toxic combination of endless greed and maximum power—without responsibility.

Uncle Sam, the deeply deficit ridden bailout man, may have another taxpayers-to-the-rescue operation for Wall Street. But don’t count on stretching the American dollar much more without devastating consequences to and from global financial markets in full panic.

Thursday, July 10, 2008

McCain and Energy

On June 17, the same day his campaign premiered a TV ad on which he boasted to have stood up to the White House's global warming policy, Sen. McCain changed course by announcing his plan, which was supported by President Bush, to open up the rest of the country's coasts to oil drilling. This, he said, "would be very helpful in the short term in resolving our energy crisis."

But two weeks earlier, on May 29, the same Sen. McCain reiterated his opposition to opening up the country's coasts to oil exploration by saying that the necessary infrastructure would take "years to develop" and that "it would only postpone or temporarily relieve our dependency on fossil fuels."

Which McCain is right, the June 17 one or the May 29 one? Are you and the rest of consumers going to benefit from drilling our shores and our dearest and most pristine places? Let's put all this crude rhetoric through the truth refinery.

For starters, Sen. McCain's plan will not benefit the consumer until 2030 and only marginally. For instance, the big prize of the new oil drilling boondoggle would be the Arctic National Wildlife Refuge in Alaska. If drilling this, one of the last complete ecosystems left in the Western Hemisphere, would start right now, consumers would not see the first drop of fuel until 2018, it would take another decade to reach peak production and even then it would lower gasoline prices by just three cents, according to federal estimates.

Implicitly, the Senator McCain and President Bush plan blame the environmental movement for hand-cuffing the country's energy alternatives by opposing opening more coastal areas to oil drilling. What neither Senator McCain nor President Bush would tell you is that Big Oil already has access to 6,000 offshore leases that they are not using.

The federal Minerals Management Service reports that out of the almost 9 billion barrels of oil that are thought to exist offshore, 80 percent of them are already open to the industry, mostly in the Gulf of Mexico and Alaska.

Even so, Senator McCain insists this would be a great idea, since "exploiting those reserves would have a psychological impact that I think is beneficial."

As the New York Times opined, "The only real beneficiaries will be the oil companies that are trying to lock up every last acre of public land before their friends in power -- Mr. Bush and Vice President Dick Cheney -- exit the political stage."
McCain's Energy Plan Will Drill Us Into a Deeper Crisis By Javier Sierra

The Battle of the Sexes

Q: How many men does it take to open a beer?
A: None. It should be opened when she brings it.
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Q: Why do women have smaller feet than men?
A: It's one of those "evolutionary things" that allows them to stand closer to the kitchen sink.
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Q: How do you fix a woman's watch?
A: You don't. There is a clock on the oven.
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Q: If your dog is barking at the back door and your wife is yelling at the front door, who do you let in first?
A: The dog, of course. He'll shut up once you let him in.
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I married a Miss Right.
I just didn't know her first name was Always.
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Scientists have discovered a food that diminishes a woman's sex drive by 90%.
It's called a Wedding Cake.
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Why do men die before their wives?
They want to.
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Women will never be equal to men until they can walk down the street with a bald head and a beer gut, and still think they are sexy.

How can you tell if a man is happy?
Who cares?
How does a man show he's planning for the future?
He buys two cases of beer instead of one.


How many men does it take to screw in a light bulb?
Three - one to screw in the bulb, and two to listen to him brag about the screwing part.
What do you instantly know about a well-dressed man?
His wife is good at picking out clothes.


What's the difference between Big Foot and an intelligent man?
Big Foot has been spotted several times.


What's the fastest way to a man's heart?
Through his chest with a sharp knife.


When would you care for a man's company?
When he owns it.


Why do female black widow spiders kill the males after mating?
To stop the snoring before it starts.


Why does it take 100 million sperm to fertilize one egg?
Because not one will stop and ask for directions.


Why is it so hard for women to find men that are sensitive, caring, and good-looking?
Because those men already have boyfriends.


What does it mean when a man is in your bed gasping for breath and calling your name?
You didn't hold the pillow down long enough.


How can you tell when a man is well hung?
When you can just barely slip your finger in between his neck and the noose.


How do men exercise on the beach?
By sucking in their stomachs every time they see a bikini.


Wednesday, July 09, 2008

Independence Day Parade

Our town had a July 3 parade and one entry was a Hummer pulling a sign saying “Illegal immigrants cost jobs, hospitals and courts.” The parade entry came from the Minnesota Coalition for Immigration Reduction and some kids threw rocks at it, unfortunately hitting an old woman across the street.

Albert Lea resident Paul Westrum, founder of the Minnesota Coalition for Immigration Reduction, said the throwing of rocks shows the degradation of society. “What happened was unfortunate.”

He said his group hasn’t learned who the children were.

“More than likely they were here illegally, and we were surprised they could read the sign,” Westrum said. “It’s unfortunate if you can’t state your opinion and free speech, what can be done?”

He said his entry should be allowed again in next year’s parade even if it doesn’t fit the theme.

“What about fire trucks? Do they fit the parade theme?” he asked.

Westrum said he is a afraid the Minnesota Coalition for Immigration Reduction will be singled out and he mentioned possibly going to court if the group isn’t allowed an entry in the 2009 parade

Newspaper account here. I thought only the square states were dumb - guess this proves the video is wrong about that and right about Hummer drivers.

20 Facts About Voting in US

Bunny Suicides

My favorite from this long list of various bunny suicides.

Sorry for my lack of postings. I have been painting my house and hosting family visits for the last couple weeks.

Tuesday, July 01, 2008

George Carlin

We were founded on a very basic double standard. This country was founded by slave owners who wanted to be free. Am I right? A group of slave owners who wanted to be free, so they killed a lot of white English people in order to continue owning their black African people, so they could wipe out the rest of the red Indian people and move west and steal the rest of the land from the brown Mexican people, giving them a place to take off and drop their nuclear weapons on the yellow Japanese people. You know what the motto of this country ought to be? You give us a color, we’ll wipe it out. - George Carlin

It bothers me that all the media remembers George Carlin for a few censored words when he said so much about so many topics. He was fed up with politics, religion and stupid people. As a youth, he quit school and joined the service and was court martialed repeatedly because George was anti-authoritarian and saw that most people in authority were self-serving and he had trouble with stupid orders. I will miss his ability to show the obvious human condition in a way that could make you laugh instead of cry. No sense saying some stupid platitude like "rest in peace" cause Mr. Carlin didn't buy that bullshit, so I will just say "good bye" and "thanks for stopping".