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Non-Wanker Of The Day

Cook County Sheriff Tom Dart.

I’m not entirely comfortable with Dart’s position, but it’s a stunt in absolutely the best sense. He tried to approach the legislature about banks and mortgage companies violating the law and attempted to get better oversight over their due dilligence. They blocked it and are essentially getting the sheriff’s office to due their jobs for them.

(…)

Mark Brown covers more:

It was the Albany Park Community Council and the neighbors it represents who brought to Dart’s attention the insane way banks were being allowed to evict innocent tenants whose landlords had lost their properties through mortgage foreclosure proceedings — even when the tenants had paid their rent and knew nothing of the problems.

Dart announced his office will quit carrying out evictions stemming from mortgage foreclosures until lenders start providing proof they have taken the necessary steps to identify who is living at an address and that those facing eviction have received proper legal notice.

Typical of the mindless lending practices that got the nation into this financial mess in the first place, lenders have been trying to conduct evictions without actually figuring out who lives at the property. That should come as no surprise, I suppose, since it’s now apparent they often never even bothered to find out to whom they were lending.

In the case of houses and condos that the previous owner was renting out, this careless practice has resulted in stunned tenants — rent paid in full — coming home from work to find their possessions on the curb. No notice. No opportunity to look for a new place to live. The same thing is happening with entire apartment buildings.

Dart said once he saw the abuse, he didn’t want his office to be a part of it, especially at a time when foreclosure evictions are running 400 to 500 a month — nearly triple what they were two years ago. “We’re no longer going to be a party to something that is so unjust,” Dart said.

A responsible bank should welcome the move and any Cook County judge should recognize their complicity in allowing mortgage brokers and banks to subvert the law with filings which are clearly false if they are claiming they have fulfilled their legal obligations.  The quickest way to solve the problem would be for the Bar to take disciplinary action against lawyers who submit such documents without knowing whether the process has been properly done. That would ensure pretty quick compliance.

Good for Dart.  Refusing to carry out callous, unlawful, and unfair evictions is the right thing to do.  Especially when the mortgage holders have refused to perform due diligence in any phase of the lending or foreclosure process.

Add comment October 10th, 2008 at 06:49am Posted by Eli

When The Going Gets Tough, Everyone Go Shopping

This is not the first time I’ve seen the “If this is the most important struggle ever, then why aren’t we investing more effort in it?” argument, but Bacevich does a nice job with it:

From the very outset, the president described the “war on terror” as a vast undertaking of paramount importance. But he simultaneously urged Americans to carry on as if there were no war. “Get down to Disney World in Florida,” he urged just over two weeks after 9/11. “Take your families and enjoy life, the way we want it to be enjoyed.” Bush certainly wanted citizens to support his war — he just wasn’t going to require them actually to do anything. The support he sought was not active but passive. It entailed not popular engagement but popular deference. Bush simply wanted citizens (and Congress) to go along without asking too many questions.

So his administration’s policies reflected an oddly business-as-usual approach. Senior officials routinely described the war as global in scope and likely to last decades, but the administration made no effort to expand the armed forces. It sought no additional revenue to cover the costs of waging a protracted conflict. It left the nation’s economic priorities unchanged. Instead of sacrifices, it offered tax cuts. So as the American soldier fought, the American consumer binged, encouraged by American banks offering easy credit.

(…)

Bush seems to have calculated — cynically but correctly — that prolonging the credit-fueled consumer binge could help keep complaints about his performance as commander in chief from becoming more than a nuisance. Members of Congress calculated — again correctly — that their constituents were looking to Capitol Hill for largesse, not lessons in austerity. In this sense, recklessness on Main Street, on Wall Street and at both ends of Pennsylvania Avenue proved mutually reinforcing.

(…)

At a Pentagon press conference on Sept. 18, 2001, then-defense secretary Donald H. Rumsfeld let the cat out of the bag: “We have a choice, either to change the way we live, which is unacceptable, or to change the way that they live, and we chose the latter.”…

But if the administration’s goals were grandiose, its means were modest. The administration’s governing assumption was that the U.S. military, as constituted in late 2001, ought to suffice to transform the Middle East. Bush could afford to tell the American people to go on holiday and head back to the mall because the indomitable American soldier could be counted on to liberate (and thereby pacify) the Muslim world.

(…)

The 2008 election finds the Pentagon cupboard bare, the U.S. Treasury depleted, the economy in disarray and the average American household feeling acute distress. Profligacy at home and profligacy abroad have combined to produce a grave crisis. This time around, telling Americans to head for Disney World won’t work. The credit card’s already maxed out, and the banks are refusing to pony up for new loans.

In other words, the Bush administration’s primary, all-encompassing goal was to keep the voters happy and stay in power.  Sure, defeating terrorism and spreading democracy would be great, but not at the expense of the true primary mission of consolidating their power to the point of invulnerability.

I’m not sure what they planned to do when their financial house of cards inevitably collapsed - either they believed their own propaganda and thought it was infinitely sustainable, that they would be able to spin the damage as inconsequential or someone else’s fault, or that they would be so entrenched as to be beyond retribution.

Or, alternatively, they knew the collapse was coming and are deliberately tanking the election to stick the Democrats with the bill.  As much as I want Obama to win, he’s going to be inheriting a major economic crisis and a crumbling civilian infrastructure and military, and he’ll have precious little budgetary latitude to fix any of it.

Add comment October 5th, 2008 at 06:27pm Posted by Eli

The Only Tool In The Kit

Yet another example of Dubya’s genius for foreign policy:

According to CNN, the US is going to sell $6.4B in Weapons To Taiwan

State Department deputy spokesman Robert Wood said Congress — whose approval is needed for the deal to go through — was notified Friday afternoon. He indicated the administration expects congressional approval quickly.

So, at the same time our economy is tanking, we poke a stick in the eye of our biggest creditor. I’m quite sure this makes some kind of sense in Bushland. Too bad the rest of us have to live with the results of their fantasies.

Like the old saying goes: When all you have is a stick, every problem looks like an eye…

Add comment October 4th, 2008 at 11:44pm Posted by Eli

The Death Of The Common Good

The bailout bill has already been aptly compared to previous travesties where the Democrats let Republican fearmongering  - and generous corporate donations - stampede them into voting for Very Bad Ideas, like the expansion of FISA and the invasion of Iraq.

But as bad as those cave-ins were, this one is worse.  Ian Welsh provides a detailed rundown of why the bailout will suck, and why $700 billion will only be the first installment of cash to be Hoovered out of our pockets.

The problem is that the common good has simply ceased to be a consideration to our lawmakers, at least when weighed against the short-term wants of corporate donors.

Consider global warming, which could make the entire planet all but uninhabitable.  Yet our government refuses to take decisive action to reduce carbon emissions or develop alternative energy sources, because the energy companies don’t like it.

Consider healthcare, where tens of millions of Americans are uninsured or underinsured, many of whom are going bust and thus contributing to the subprime crisis.  Yet our government refuses to even consider universal single-payer healthcare, because the insurance companies don’t like it.

The bailout is the same story.  We don’t have a majority that wants to impose any significant structural changes on the financial sector, or to give ordinary Americans mortgage or bankruptcy relief, or limit executive compensation, or raise upper-bracket tax rates to fund a bailout, because the financial companies don’t like it.

I would love to have a government that puts the common good ahead of what the corporations want, but I don’t see it happening anytime soon.  Publicly financed campaigns that eliminate politicians’ dependence on corporate donations to get elected would be a great start, but I don’t think the companies would like it.

4 comments October 4th, 2008 at 02:57pm Posted by Eli

Is There A Connecticut For Lieberman For McCain Party?

What’s good for the financial sector is good for McCain!

On Fox News today, Sen. Joe Lieberman (I-CT) discussed the downturn in Sen. John McCain’s presidential prospects, saying McCain “is behind now because of the economy.” Lieberman then said that he hopes the House passes bailout legislation tomorrow because “it will be good for our country.”

“But frankly, it will be good for John McCain too,” added Lieberman, explaining that “it will get people back to comparing the two candidates free of a sense of crisis that may make them want to turn against Republicans.”

Well, I guess that’s what really matters.  And I’m sure no-one would be at all upset about 700 billion of their tax dollars going to bail out the people who got rich creating this crisis.

Add comment October 2nd, 2008 at 07:07pm Posted by Eli

Shorter David Leonhardt

First the financial crisis came for the billionaires,
and I didn’t speak up because I wasn’t a billionaire.

Then it came for the millionaires,
and I didn’t speak up because I wasn’t a millionaire.

Then it came for me —
and by that time no one was left to speak up.

(h/t dakine)

Add comment October 1st, 2008 at 10:28pm Posted by Eli

Michael Moore’s Ten-Point Bailout Plan

Of course, as the Republicans are happy to point out, Michael Moore is fat, so you can safely ignore everything he says…

1. APPOINT A SPECIAL PROSECUTOR TO CRIMINALLY INDICT ANYONE ON WALL STREET WHO KNOWINGLY CONTRIBUTED TO THIS COLLAPSE….

2. THE RICH MUST PAY FOR THEIR OWN BAILOUT….

3. BAIL OUT THE PEOPLE LOSING THEIR HOMES, NOT THE PEOPLE WHO WILL BUILD AN EIGHTH HOME….

4. IF YOUR BANK OR COMPANY GETS ANY OF OUR MONEY IN A “BAILOUT,” THEN WE OWN YOU….

5. ALL REGULATIONS MUST BE RESTORED. THE REAGAN REVOLUTION IS DEAD….

6. IF IT’S TOO BIG TO FAIL, THEN THAT MEANS IT’S TOO BIG TO EXIST….

7. NO EXECUTIVE SHOULD BE PAID MORE THAN 40 TIMES THEIR AVERAGE EMPLOYEE, AND NO EXECUTIVE SHOULD RECEIVE ANY KIND OF “PARACHUTE” OTHER THAN THE VERY GENEROUS SALARY HE OR SHE MADE WHILE WORKING FOR THE COMPANY….

8. STRENGTHEN THE FDIC AND MAKE IT A MODEL FOR PROTECTING NOT ONLY PEOPLE’S SAVINGS, BUT ALSO THEIR PENSIONS AND THEIR HOMES….

9. EVERYBODY NEEDS TO TAKE A DEEP BREATH, CALM DOWN, AND NOT LET FEAR RULE THE DAY….

10. CREATE A NATIONAL BANK, A “PEOPLE’S BANK.” If we really are itching to print up a trillion dollars, instead of giving it to a few rich people, why don’t we give it to ourselves? Now that we own Freddie and Fannie, why not set up a people’s bank? One that can provide low-interest loans for all sorts of people who want to own a home, start a small business, go to school, come up with the cure for cancer or create the next great invention. And now that we own AIG, the country’s largest insurance company, let’s take the next step and provide health insurance for everyone….

I especially like the idea of using the now-nationalized AIG as a force for good.  And as you can see, the whole plan isn’t actually in all-caps…

Add comment October 1st, 2008 at 09:18pm Posted by Eli

Bailout Skepticism

Thomas Frank is skeptical about the causes:

There is no doubt that Fannie and Freddie enabled the subprime neurosis, but for certain conservatives they are virtually the only malefactors worth noting. The dirge goes like this: Fannie and Freddie were buying up subprime mortgages, and they were doing it for (liberal) political reasons. Mortgage originators thus had no choice but to hand out mortgages like candy. Had market forces been in charge, loans would, no doubt, have been administered with a rigor and sternness to make John Calvin blanch.

I asked Bill Black, a professor of economics and law at the University of Missouri-Kansas City and an authority on the Savings and Loan debacle of the 1980s, what he thought of the latest blame offensive. He pointed out that, for all their failings, Fannie and Freddie didn’t originate any of the bad loans — that disastrous piece of work was done by purely private, largely unregulated companies, which did it for the usual bubble-logic reason: to make a quick buck.

(…)

Ah, but truth is no ally to a conservative with his back to the wall. So much more helpful are the trusty narratives on which the movement was built. So when we have dispatched this first canard, we learn from other conservatives that it is the sub-prime people who are to blame; that by taking out loans they couldn’t possibly pay off, these undesirable borrowers have ruined us all.

(…)

Just imagine the flights of fancy that the theory of borrower malevolence and Wall Street victimization requires conservatives to take: All these no-account folks, you see, got together and forced investment banks to engineer subprime mortgages into highly leveraged securities. Then they tricked all manner of hedge funds and pension funds and financial institutions into buying these lousy products. Just for good measure, these struggling homeowners then persuaded bond-rating agencies to misrepresent the risk associated with these securities.

Ah yes, the all-powerful liberals and poor people who secretly control our government and force it to screw them over again and again to camouflage their influence.  Diabolical.

And Dean Baker is skeptical about the effects:

While all right-thinking people might know we need the bailout, just about all right-thinking people don’t have a clue as to what they are talking about.

….No one has yet sketched out the sequence of events that will give us ten years of double-digit unemployment. But hey, if the scare story helps get the bailout passed — and gets those uneducated skeptics in the hinterlands to buy it — why not talk about the Great Depression?

(…)

It is remarkable how the contemptuous comments that the elites have directed at the masses for opposing the bailout can be so much more accurately directed back at themselves. In fear and anger they have embraced a bailout that makes little sense in the context of the economic crisis facing the country. Rather than listening people who actually understand the economy (I doubt a single economist in the country believes that the bailout is the best way to help the economy) they have shouted down and shut out critics of the bailout and have been willing to spread all manner of outlandish scare stories to advance their case.

Just like being in favor of invading Iraq instead of focusing on where the terrorists actually live was (and possibly still is) a sign of Seriousness, so too is being in favor of a gargantuan, crippling “bailout” that wouldn’t actually fix the problem, and would cripple the government’s ability to enact reform for the next 10-20 years.

But what do I know, I post Mr. T videos and stories about Bat Boy.

Add comment October 1st, 2008 at 11:35am Posted by Eli

The Government According To Glenn

Glennzilla points out that the financial bailout legislation falls into the same pattern as all the other heinous legislation that the Republicans have passed with the Democrats’ willing cooperation, if not downright facilitation.

Of course, it didn’t end up passing, but that’s probably because it wasn’t quite heinous enough for the Republican caucus.  I have every confidence that the Democratic Congress will pass a bill that’s even worse, and that Steny Hoyer and Harry Reid will graciously usher it through.

Glenn’s ten defining characteristics of how our government works are still uncannily accurate, though:

(1) Incredibly complex and consequential new laws are negotiated in secret and then enacted immediately, with no hearings, no real debate, no transparency….

(2) Those who created the crisis, were wrong about everything, drive the process. Experts who dissent from the prevailing Washington orthodoxy, particularly ones who were presciently warning about what was happening, are simply ignored — systematically excluded from the process….

(3) Public opinion is largely ignored, as always, and public anger is placated through illusory, symbolic and largely meaningless concessions….

(4) The Government begins with demands for absolute power so brazen and absurd that anything, by comparison, seems reasonable….

(5) Wall Street, large corporations and their lobbyists own the Federal Government and both parties, and (therefore) they always win….

(6) The people who run the Washington Establishment are drowning in conflicts of interest….

Congressional leaders are, with very few exceptions, all vested heavily in Wall St. As but one example, Nancy Pelosi’s tens of millions of dollars are invested (.pdf) in firms such as AIG, AT&T and others. It only stands to reason — as always — that if Wall St. is both owning the Government and running it, it will prevail over the proverbial “Main Street” every time. And it does, and just did again.

(7) For all the anger over what Wall St. has done, the Government — as it bails them out — isn’t doing anything to rein in their practices. Nancy Pelosi today said: “We sent a message to Wall Street — the party is over,” but to the extent that’s true, the Government has done nothing to bring it to an end. To the contrary, by announcing — yet again — that there are never any consequences for recklessness and real corruption on the part of the ruling class, that behavior is only being further incentivized….

(8) When the Government wants greater and greater power and wants to engage in pure corruption, it need only put the population in extreme fear and it gets its way in every case. Establishment mavens rush forth to assure the public that they have no choice but to submit to what the Government is demanding. The anger and impotence level of the citizenry increases further, further alienating them from their Government and ensuring even greater levels of submission in the future, grounded in an accurate perception of futility.

(9) On the most consequential and fundamental questions that define the country, the establishment/leadership of both political parties are in full agreement, and insulate themselves from any political ramifications by acting jointly. Democrats in particular jump eagerly into line when told they must cooperate with the White House to avert whatever the Disaster du Jour is (and in this case, House Republicans were most impressive in defying these orders until they, too, were basically whipped into line), but ultimately, the differences between the parties at the level of their leadership are impossible to detect.

(10) Whenever you think that the Government has done things so extreme that it can’t top itself — torture, theories of presidential lawbreaking, a six-year war justified by blatantly false pretenses — it always tops itself….

I think Glenn has it just about covered.  Depressing, ain’t it.

Add comment September 29th, 2008 at 08:23pm Posted by Eli

Save The Bankers!

Jerome á Paris, being not an idiot, is skeptical that the bailout will be any good, and reminds us just how skewed our economic policy has been:

as the bailout calls for yet another transfer from poor to rich, it is worth noting that even in the good years, the vast majority of the population saw very little of the then much touted prosperity: incomes were stagnant or declining, while benefits declined, and healthcare and energy costs skyrocketed. Thus, current policies seem focused, at all times, on maximising the income of the few rather than that of the general population;

the next conclusion is that our political systems are completely geared towards fulfilling that last goal: politicians of all stripes are supporting the bailout despite massive protests by their constituents, just like they supported financial deregulation, labor market “reform”, “free” trade, the tax race to the bottom and other similar policy prescriptions in the past. Politicians are supported in that by a media system that brings to the fore pundits that are fully aligned with these prescriptions, and creates an incestuous class of insiders who, as it were, tend to personally benefit directly from the overall winner-takes-all policies put in place;

the quasi-unanimous support of the Serious People for the bailout, or at least their inability to point out that the current crisis was the inevitable conclusion of the policy framework pushed by the neolib cabal shows how successful they have been at killing alternative ideas as fringe or absurd or dangerous, and suggests that there still is an ideologial vacuum; alternative ideas are not “there” enough to be taken seriously despite the ongoing reality, and I’m not sure they will until the current elites are completely pushed out;

The most depressing part of this is the way our elected leaders, the ones we voted for to represent our interests, are completely ignoring the will of their nominal constituents - the people - in order to do the bidding of their actual constituents - the powerful.  It was the same with bankruptcy “reform,” and it was the same with telecom immunity.

Our senators and representatives are telling us, in no uncertain terms, that if we don’t have the big bucks, we simply don’t matter.  I wish I could say that it’s just those horrible Republicans, but the Democrats are even more on board with this bailout than Dubya’s own party.

Once again, the Democrats are in the wrong  morally, practically, and politically, which means that not only are they doing the country irreparable harm by blowing up the budget and making healthcare and energy reform impossible, but they are also putting their own congressional majorities in jeopardy by supporting something their voters despise.

Where is the leadership?  Where is the political savvy?  Where is the simple common sense?  Why are the Democrats so desperate to abdicate their power?

Add comment September 28th, 2008 at 02:53pm Posted by Eli

It’s Alive!!!

So once upon a time, I had this idea for a McCain cartoon comparing his track record as a pilot to his likely performance as a president, but I have no artistic talent whatsoever.  Fortunately, Kagro X knew someone who did, and the next thing I knew, Dave The Rave made my dream a reality.

I love it when a plane comes together…

1 comment September 26th, 2008 at 11:20am Posted by Eli

Oxymoron Of The Week

See if you can spot it:

Senate Democrats emerged from a meeting Wednesday with Treasury Secretary Henry Paulson to report a general, conceptual — but fragile — agreement on a $700 billion plan to rescue the U.S. financial markets.

Senators said Paulson and the Democrats struck very tentative deals on Democratic demands on oversight and transparency, executive pay limits, and equity interest on taxpayers’ behalf as part of the massive plan. A hard-fought Democratic provision to allow bankruptcy judges to revise mortgage terms was not likely to survive the horse-trading, however, as Paulson would not agree to the provision that is already in the House and Senate versions.

Majority Whip Dick Durbin (D-Ill.) said a bill could be produced as early as Thursday, with debate and a vote likely over the weekend. Ideally, Durbin said the Senate would finish the bill before Wall Street opens on Monday.

(…)

Senators described a very somber, serious meeting, with Paulson describing the risk of inaction and working hard to sell the plan to skeptical Democrats during the closed-door caucus meeting.

Fantastic.  Once again our heroic leadership saves the day by giving Dubya and Wall Street everything they asked for.  This will surely endear Obama and the Democratic Party to ordinary working Americans - the only thing that could make this even better is if the Republicans end up opposing it and McCain gets to pretend to be a mavericky populist.

3 comments September 24th, 2008 at 10:26pm Posted by Eli

Quick Bailout Thoughts

I hope Obama and the Democrats keep in mind that every dollar that goes towards the bailout is a dollar that can’t be spent on universal healthcare or lower-bracket tax cuts.  So they really need to make sure that the bailout cost is really the absolute minimum needed to stabilize the economy, and that none of it is wasted on making life easier for the Wall Street wankers who created the crisis.  I also like some kind of variation of Bernie Sanders’ 10% surtax on people making over a million a year.  Give the rest of us a break and let the rich pay for their own mess.

I also can’t help wondering: If the Republicans and Bush administration had given a damn about giving the rest of us a break, and had addressed the stagnation and even decreases in real wages and increases in the unemployed and underemployed (not to mention the lack of healthcare or protections against predatory lending practices)… would there even be as many people defaulting on their mortgages right now?  There is economic value to a healthy consumer class, but Republicans just can’t grasp the concept of trickle-up.

Add comment September 24th, 2008 at 07:25am Posted by Eli

Blue Dogs = Made Of Fail

Here’s a lovely little trip down memory lane, as Brendan reminds us that the Blue Dogs who are balking at bankruptcy reform now were totally on board with it in 2005.  Indeed, their default position on all matters financial is pretty much, “Whatever the corporations want.”

Are there, in fact, any issues that the Blue Dogs are with us on?  For the life of me, I just can’t think of any.  They’re pro-war, pro-business, pro-life, pro-warrantless-wiretapping, anti-healthcare, and anti-gay.  I’m pretty sure most of them are pro-torture and anti-environment, too.  Do they serve any positive purpose other than giving Democrats an ineffectual paper majority, or allowing Rahm to pretend he’s a genius for getting Republicans to run as Democrats?

I would be perfectly happy to see a bunch of them lose their seats this year, retaining just the bare minimum to maintain a Democratic majority.  I’m tempted to go beyond that, but I don’t want to see another president impeached for being a Democrat.

Add comment September 23rd, 2008 at 11:53pm Posted by Eli

I Knew It!

I knew Paulson’s bailout proposal reminded me of something…

Dear American:

I cordially correspond today to request you to support an urgent secret business relationship with a transfer of funds of great magnitude.

I am Ministry of the Treasury of the Republic of America. My country has had crisis that has caused urgent need for large transfer of funds of 800 billion USD. If you would assist me in this transfer, it would be most profitable to you.

I am working with Mr. Phil Gramm, lobbyist for UBS, who (God willing) will be my replacement as Ministry of the Treasury in January. As a former U.S. congressional leader and the architect of the PALIN / McCain Financial Doctrine, you may know him as the leader of the American banking deregulation movement in the 1990s. As such, you can be assured that this transaction is 100% safe.

This is a matter of great urgency. We need a blank check. We need the funds as quickly as possible. We cannot directly transfer these funds in the names of our close friends because we are constantly under surveillance. My family lawyer advised me that I should look for a reliable and trustworthy person who will act as a next of kin so the funds can be transferred. For this inconvenience you will be rewarded with grand fees of 1/1,000,000th of 1% of possible profits due to off shore laundering of skim funds due to reprinting of said funds.

Please reply with mother’s maiden name, routing and account numbers of all of your bank account, IRA and college fund accounts and those of your children and grandchildren to wallstreetbailout@treasury.gov so that we may transfer your commission for this transaction. After I receive that information, I will respond with detailed information about safeguards that will be used to protect the funds.

Yours Faithfully,

Minister of Treasury Paulson

This sounds like a really swell awesome deal, plus it’s good karma to help out a struggling third-world country in need.

(h/t All Spin Zone & Jesse Wendel)

Add comment September 23rd, 2008 at 11:18am Posted by Eli

Monday Media Blogging - Sudden Realization Edition

First they “reformed” FISA, then they nationalized AIG, Fannie and Freddie Mae.  You know what that means: The Bush administration is now Big Brother and The Holding Company.

Add comment September 22nd, 2008 at 07:05am Posted by Eli

Just Because You Need To Do Something, Doesn’t Mean You Have To Do Just Anything

It’s very clear that the Bush administration is running the same playbook they ran on Iraq and FISA: Give us everything we want or the world will end OMG!!1!1!  It’s not as clear whether the Democrats have learned their lesson:

Congressional Democrats have promised to work with Treasury on the Paulson plan, but they’ve also signaled that they’ll want it to include or be conditioned on the passage of provisions it doesn’t have now — among them, greater oversight, foreclosure-prevention measures and a cap on the compensation for CEOs whose companies would be helped.

In a statement, Senate Majority Leader Harry Reid (D-Nev.) said that the government’s “first priority” must be to prevent a “global financial meltdown” — but that the president still has to make the case for the plan his administration has sent to Congress.

“While the Bush proposal raises some serious issues, we need to resolve them quickly. I am confident that, working together, we will,” Reid said. “Meanwhile, I call on the president to better explain to the public the severity of the threat all Americans face, and why he believes his approach is needed.”

A House Democratic leadership aide said House Democrats won’t be in a position to send the message the White House wants until it’s clear that they’ll get more oversight into the plan. “There are concerns about these unprecedented powers, and we just want more oversight, a congressional board or [Government Accountability Office] oversight authority,” the aide said. “We just need to strengthen the oversight.

Harry Reid is sounding awfully accommodating.  Yeah, there will be some oversight provisions, but it doesn’t really sound like he’s pushing for massive structural changes.  Will they even be able to get that?

Dean Baker, a liberal economist with the Center for Economic and Policy Research, said he has told congressional Democrats that Bush is the one who is in the delicate situation and would therefore be unlikely to veto whatever package Democrats send to him, as long as it gives Paulson some of what he needs.

“I can’t imagine Bush would veto something Democrats send him,” he said. “I just can’t believe he’s prepared to say, ‘If you don’t give me exactly what I want, the financial markets collapse.’ I can’t believe he’d do that.”

Um… why on earth not?

Add comment September 21st, 2008 at 09:18pm Posted by Eli

The Republikons - Less Than Meets The Eye

Claire McCaskill on the free-market Republicans, by way of Bob Geiger:

“Here is the thing that is killing me — it is just killing me,” said the Missouri Senator. “All of the folks who have been screaming: Deregulation, get government off our backs, evil government off our backs, big bad government off our backs, deregulate, deregulate, deregulate — in the last 24 hours there has been — do you remember the transformer toys that went from an animal to a massive machine? We have transformers around here.”

“These massive deregulation advocates all of a sudden say: We have to enforce rules on Wall Street. We have to regulate.”

McCaskill also jumped on how GOP opportunists like McCain — who are also scurrying to cover for their records over the last two decades — suddenly think government has a role in protecting American taxpayers and now advocate a law-and-order approach with their Wall-Street benefactors.

“They are enforcing it today. Why wasn’t it enforced last week? Why weren’t the rules enforced the week before? Why weren’t the rules enforced last year?” asked McCaskill. “They didn’t want to. It is pretty simple. Nobody wanted to enforce the rules. Why not? Because the titans of Wall Street were in charge. The titans of Wall Street have had their way with this White House.”

(…)

“Do you think we are dumb? You can’t transform overnight from a big bad deregulator to I am now the cop on the beat; I’ll take care of Wall Street. It is not honest. Be principled,” she demanded of her colleagues across the aisle. “If you are a deregulator and you want to live with these consequences, you want to say to the American people: Hey, when we deregulate, this is the risk. This is the risk we are taking with your money.”

“If the law is on the books and this administration is not enforcing it, they need to explain to the American public why the taxpayers are now on the hook for hundreds of billions of dollars because these guys didn’t think it was important to enforce the rules against their friends.”

Yeah; what she said.  The Republicans have absolutely zero credibility on this.

Add comment September 21st, 2008 at 03:13pm Posted by Eli

Why We Can’t Let The Bush Administration Control The Bailout

Just a couple of reminders about how we got into this mess.

Dean Baker:

In March of 2007, after the first shock waves of the housing meltdown had already hit, the Associated Press reported Mr. Paulson’s view that the credit difficulties linked to the housing slump would be limited.

In August of last year, after the second round of financial shock waves disrupted markets worldwide, Paulson commented, “We have the strongest global economy I’ve seen in my business lifetime.”

Just last March he warmly endorsed a reduction in the capital requirements for Fannie Mae and Freddie Mac, saying “additional capital [invested in mortgages by Fannie and Freddie] will enable the companies to help more homeowners and will strengthen the underlying fundamentals of the mortgage market.”

At every point along the way, Secretary Paulson has failed to see the extent of the crisis resulting from the collapse of the housing bubble. This raises serious questions about his judgment. Reporters should be discussing Paulson’t track record in the context of this bailout proposal.

And Eliot Spitzer in February, speaking from beyond the political grave:

Predatory lending was widely understood to present a looming national crisis. This threat was so clear that as New York attorney general, I joined with colleagues in the other 49 states in attempting to fill the void left by the federal government. Individually, and together, state attorneys general of both parties brought litigation or entered into settlements with many subprime lenders that were engaged in predatory lending practices. Several state legislatures, including New York’s, enacted laws aimed at curbing such practices.

What did the Bush administration do in response? Did it reverse course and decide to take action to halt this burgeoning scourge? As Americans are now painfully aware, with hundreds of thousands of homeowners facing foreclosure and our markets reeling, the answer is a resounding no.

Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye.

(…)

Throughout our battles with the OCC and the banks, the mantra of the banks and their defenders was that efforts to curb predatory lending would deny access to credit to the very consumers the states were trying to protect. But the curbs we sought on predatory and unfair lending would have in no way jeopardized access to the legitimate credit market for appropriately priced loans. Instead, they would have stopped the scourge of predatory lending practices that have resulted in countless thousands of consumers losing their homes and put our economy in a precarious position.

When history tells the story of the subprime lending crisis and recounts its devastating effects on the lives of so many innocent homeowners, the Bush administration will not be judged favorably. The tale is still unfolding, but when the dust settles, it will be judged as a willing accomplice to the lenders who went to any lengths in their quest for profits. So willing, in fact, that it used the power of the federal government in an unprecedented assault on state legislatures, as well as on state attorneys general and anyone else on the side of consumers.

So just keep all that in mind when you think about who should get the keys to the bailout henhouse.

(h/t sadlyyes for the Spitzer piece)

Add comment September 21st, 2008 at 12:44pm Posted by Eli

I Want To Know Who This Is

So I can send them lots of money.

This email is from a lawmaker and it should give you a flavor for what’s going on right now in Congress.

Paulsen and congressional Republicans, or the few that will actually vote for this (most will be unwilling to take responsibility for the consequences of their policies), have said that there can’t be any “add ons,” or addition provisions. Fuck that. I don’t really want to trigger a world wide depression (that’s not hyperbole, that’s a distinct possibility), but I’m not voting for a blank check for $700 billion for those mother fuckers.

Nancy said she wanted to include the second “stimulus” package that the Bush Administration and congressional Republicans have blocked. I don’t want to trade a $700 billion dollar giveaway to the most unsympathetic human beings on the planet for a few fucking bridges. I want reforms of the industry, and I want it to be as punitive as possible.

(…)

I also find myself drawn to provisions that would serve no useful purpose except to insult the industry, like requiring the CEOs, CFOs and the chair of the board of any entity that sells mortgage related securities to the Treasury Department to certify that they have completed an approved course in credit counseling. That is now required of consumers filing bankruptcy to make sure they feel properly humiliated for being head over heels in debt, although most lost control of their finances because of a serious illness in the family. That would just be petty and childish, and completely in character for me.

I’m open to other ideas, and I am looking for volunteers who want to hold the sons of bitches so I can beat the crap out of them.

Awesome.  Whoever this is, I hope he or she has some influence, and isn’t just a lone angry voice screaming in the wilderness.

Add comment September 21st, 2008 at 11:07am Posted by Eli

People Unclear On The Concept

“Chutzpah” is too mild a word.

[Barney] Frank, who has been in phone discussions with Paulson, said the secretary appeared receptive to adding some foreclosure-relief language. The second Democratic proposal — to impose compensation limits on Wall Street executives — is meeting more resistance.

“Hank says it’s a poison pill,” Frank said. “I say I don’t  think it’s very patriotic for someone to not give up his golden parachute when we’re trying to save the markets.”

Oh yeah, because if there’s any one single indispensable element of the bailout, it should be to preserve golden parachutes and astronomical pay packages for the executives who destroyed our economy.

But wait, there’s more!

House Republican staffers met with roughly 15 lobbyists Friday afternoon, whose message to lawmakers was clear: Don’t load the legislation up with provisions not directly related to the crisis, or regulatory measures the industry has long opposed.

“We’re opposed to adding provisions that will affect [or] undermine the deal substantively,” said Scott Talbott, senior vice president of government affairs at the Financial Services Roundtable, whose members include the nation’s largest banks, securities firms and insurers.

A deal killer for the group: a proposal that would grant bankruptcy judges new powers to lower the principal, interest rate or both on a mortgage as part of a bankruptcy proceeding.

Yes, that’s right.  They are dictating terms.  And the Republicans are listening, just like they always do.  I sure hope the Democrats aren’t.

Add comment September 20th, 2008 at 11:13pm Posted by Eli

It’s Really Quite Spectacular, If You Think About It

The Republicans have managed to completely and utterly discredit themselves on not just foreign policy, but domestic policy as well - all in the span of one disastrous presidency. What an amazing, total, epic fail.

(Photo from Pundit Kitchen)

Add comment September 20th, 2008 at 08:03pm Posted by Eli

The Biggest Blank Check In Human History

…For the worst president in American history.  Yes, that sounds like an excellent idea.  Who needs oversight?  Just give the Bush administration $700 billion (at least) with no strings attached, and I’m sure they’ll use it wisely.

I’m certainly not opposed to a bailout of some kind - just not one of, by, and for the people who created the mess in the first place.  I’d much rather see one that stabilizes the economy in the short term, prevents further abuses in the long term, and that forces the financial malefactors to suffer some stiff financial consequences for their recklessness. (Dean Baker and Ian Welsh have the right idea.)

Interestingly, Sebastian Mallaby compares the bailout to the invasion of Iraq:

….In 1989, there was no choice. The federal government insured the thrifts, so when they failed, the feds were left holding their loans; the RTC’s job was simply to get rid of them. But in buying bad loans before banks fail, the Bush administration would be signing up for a financial war of choice. It would spend billions of dollars on the theory that preemption will avert the mass destruction of banks. There are cheaper ways to stabilize the system.

In the 1980s, the government did not need a strategy to decide which bad loans to take over; it dealt with anything that fell into its lap as a result of a thrift bankruptcy. But under the current proposal, the government would go out and shop for bad loans….

It’s the Bush Doctrine applied to the economy, and it doesn’t sound any better than it did the first time.  The Bushies are even using the same OMG-we-must-act-right-away-or-we’re-all-DOOOOOMED gameplan to stampede Congress into going along.

It is different in one respect, though.  When the C-Monkey invaded Iraq, he used a minimal invasion force that was too small to secure the country.  Now that he wants to invade the financial market, he intends to go massive rather than surgical - but I suspect the outcome will be the same.

(Image by Blueshifting)

Add comment September 20th, 2008 at 05:45pm Posted by Eli

The Death Of Conservatism

Bonddad writes about how Republicans completely fail to live up to their own supposed values, and former National Review publisher Wick Allison explains that he’s voting for Obama because Democrats are now the ones who best embody the conservative ideals he believes in (i.e., realism and a commitment to policies that have a proven track record).

Unfortunately, the death of conservatism has very little bearing on the health of the Republican party…

Add comment September 20th, 2008 at 12:15pm Posted by Eli

Attention World: Stop Confusing John McCain!

Superman, where are you now?

Look, you can’t expect the man to have Joe Lieberman whispering in his ear 24 hours a day.  So please, stop asking him to distinguish between Sunnis and Shias, Czechoslovakia and the Czech Republic (or Slovakia), Spain and Latin America, the FEC and the SEC, or the Army and the National Guard. It’s all just too complicated.

Also, I would really like for us not to invade the wrong country again, please.  Thanks.

Add comment September 19th, 2008 at 08:16pm Posted by Eli

The Free Market Isn’t Free

So let me get this straight: Now the laissez-faire, personal-responsibility, the-infallible-magic-of-the-free-market-will-solve-everything Republicans want to throw a trillion dollars of taxpayer money at a massive bailout of failing financial institutions, and to ban short selling on certain stocks (and maybe even all)?

It’s not compassionate conservatism, it’s conservatism of convenience.

Also: Does Halliburton have a financial services division?

Add comment September 19th, 2008 at 06:13pm Posted by Eli

Welcome To The Emergency Room

…[P]eople have access to health care in America. After all, you just go to an emergency room.
- George W. Bush, July 10, 2007

Remember that? It’s pretty much the Republican approach to healthcare in a nutshell.  Ignore all manner of prevention and treatment until the pain becomes excruciating and you’re forced to go to the emergency room, where they make a last-ditch attempt to fix what may already be beyond repair.

Well, you know what?  That’s their approach to the economy as well.  And after 30 years of deregulation, the financial sector’s sickness has finally become too painful for them to ignore.  Heckuva job, Grammie.

2 comments September 18th, 2008 at 07:21pm Posted by Eli

More Like This, Please.

ABC’s David Wright shreds McCain on the economy.  Even George Will gets in on it.

DAVID WRIGHT: John McCain was against the government bailout of AIG, before he was reluctantly for it. Here he was yesterday on “Today.”

JOHN MCCAIN: We cannot bail AIG or anybody else. We have to work through it.

WRIGHT: Asked about the same topic today on “Good Morning America” -

MCCAIN: I don’t think anybody I know wanted to do that. But there are literally millions of people whose retirement, whose investments, whose insurance were at risk here. And they were going to have their lives destroyed.

WRIGHT: Senator McCain appears to have changed his tune on regulation in a fundamental way. Today on the stump, he’s a champion of reigning in Wall Street with tough regulations.

MCCAIN: We’re going to put an end to the reckless conduct, corruption and greed that have caused a crisis on Wall Street.

WRIGHT: But for more than 25 years in the Senate, McCain has fashioned himself as a champion of smaller government, less regulation.

MCCAIN: I am less government, less regulation, lower taxes, et cetera.

WRIGHT: In the mid 1990s, he supported a measure to ban all new government regulations. McCain supported legislation a decade ago that broke down the firewalls between commercial and investment banks and insurance companies — the very rules companies like AIG exploited to get in the current mess. And as recently as March of this year, after the collapse of Bear Stearns, McCain was all for deregulating Wall Street.

MCCAIN: Our financial market approach should include encouraging increased capital in financial institutions by removing regulatory, accounting and tax impediments to raising capital.

GEORGE WILL: When the deregulation was the wave through Washington, he surfed that wave. Now it’s not, and the populist inside John McCain is out.

WRIGHT: Today, the Wall Street Journal accused McCain of selling out his free market ideals. Said today’s top editorial — “denouncing greed and Wall Street, isn’t a growth agenda,”

WILL: It’s a conversion of convenience, some will say.

Ouch.  Wright actually links McCain’s votes to the subprime meltdown.  That tends to kind of weaken his credibility as a potential reformer, when he’s one of the people who enabled the disaster in the first place.  (I don’t think a promise to convene a “blue-ribbon commission” to figure out the problem is impressing anyone either.)

If Obama can make the case that McCain, Gramm, and McCain’s 83 Wall Street lobbyists are personally responsible for the financial crisis, then I think he could potentially flip Ohio and other economically depressed states into the blue column for a decisive win in November.  That’s what I’m hoping for, anyway…

Add comment September 17th, 2008 at 10:51pm Posted by Eli

Fundamentals

Just imagine how bad it would be if the fundamentals weren’t strong.

Add comment September 15th, 2008 at 06:47pm Posted by Eli

Refine, Baby, Refine!

Well, I can’t say that this is much of a surprise:

A) high gas prices aren’t related to supply, and therefore drilling more won’t curb high gas prices and B) re-regulating Wall Street, cracking down on oil industry consolidation, and investigating energy company collusion is the best way to get at the problem. We know this not just because of whats happening now, but because of what has happened over the last decade.

Here is an excerpt of the energy chapter from my book, Hostile Takeover that spells it all out:

(…)

In October 2004, Consumers Union… found that in the first nine months of that year, oil companies’ profits increased by a whopping 35 percent. The watchdog group found that the price increases that created those profits came more from higher charges for refining the crude oil into gasoline, than from higher prices for the raw crude itself (i.e., supply). Why would those refining charges increase? Because federal regulators have allowed the oil industry to pursue their goal of deliberately reducing refining capacity to create artificial bottlenecks that drive up the overall price of gasoline. And it has been deliberate. “If the U.S. petroleum industry doesn’t reduce its refining capacity,” said a 1995 internal Chevron memo, “It will never see any substantial increase in refinery profits.”

(…)

This is the oil/gas version of the Enron speculators shutting down power plants in order to artificially jack up prices - and it is precisely what the “drill, baby, drill!” crowd doesn’t want to talk about, because that crowd is underwritten by the same oil industry and Wall Street speculators that are making a killing off the status quo.

Obviously, there is only one possible solution for out-of-control gas prices: We must give the oil companies tax breaks to build more refineries!

Horrible as it is, I can’t escape the sneaking suspicion that that’s exactly where we’re going to end up…

Add comment September 10th, 2008 at 07:15pm Posted by Eli