Asleep at the Switch–With One Eye Open

Since I'm already antagonizing Toast today... Let me excerpt and link to an excellent column by Matt Taibbi that highlights the fundamental flaws in the financial system and its supposed overseers:

For what we’ve learned in the last few years as one scandal after another spilled onto the front pages is that the bubble economies of the last two decades were not merely monstrous Ponzi schemes that destroyed trillions in wealth while making a small handful of people rich. They were also a profound expression of the fundamentally criminal nature of our political system, in which state power/largess and the private pursuit of (mostly short-term) profit were brilliantly fused in a kind of ongoing theft scheme that sought to instant-cannibalize all the wealth America had stored up during its postwar glory, in the process keeping politicians in office and bankers in beach homes while continually moving the increasingly inevitable disaster to the future.

That's just about the most perfect capsulization of our recent history that I've seen anywhere. But he expands from there, getting into the failures of the regulatory agencies the media and both parties, and why we're really not in a position to make anything much better anytime soon.

Fannie, Freddie, and the New Red and Blue

Go read the whole thing.

A Wonderful Idea

I can get behind that plan. We currently have accounts with Wachovia (Wells Fargo) and SunTrust...not the biggest banks, but hardly local. One of the reasons for picking these banks was availability of branches (both have branches walking distance from or house and my office). And ATMs. Well, we hardly, if ever use ATMs so that's not really a factor. We don't even use debit/check cards anymore either...

Annoyingly, I still get paid via a check that needs to be deposited, but I'd be happy to walk a block to get to the Bank of Asheville if they have the online bill-pay capabilities Mrs F requires.

I'll be looking into it.

Fed Up

James K. Galbraith has an interesting review of a book about the bailout.

Dick of the Week: Harry Reid

Big surprise, right? This feckless asshole has GOT TO go...

Senate GOP Kills Auto Bailout Compromise
A proposed $14 billion automaker bailout bill, agreed to by Congressional Dems and the White House, collapsed late Thursday evening in the face of the opposition by Senate Republicans. "It's over with," declared Harry Reid.

Is is Harry Reid's fault that a group of Southern Senators want to jumpstart a new Confederacy and push the whole country towards a Depression just to score a few union scalps? No. But it's Reid's fucking fault that the Republicans get to scuttle badly needed action by quasi-filibustering without actually having to get off their asses.

Again.

Reid is yet again letting the whole Senate appear to blow it, when it's really a handful of "right to work" assholes actually colluding with foreign companies against American workers just to bust unions.

There's much more on this topic, but I'm on deadline, so it might be days til I can spend time on it...Have at it.

UPDATE: Another reason Harry sucks. His kiss-ass reaction to this bullshit.

Not Even Close

According to this analysis by Jim Manzi, it appears I spent more time and effort on my post Wed. night than GM did on their "restructuring" proposal to Congress.

As I read through Manzi's post I found myself growing angrier, further resenting these asshat execs running GM, and wishing them and the company nothing but ill will.

GM does not appear serious about doing anything that will help the industry—or even their own goddamn corporation—over the long haul. Their proposal appears to be nothing more than a PowerPoint presentation for getting in on the bailout bonanza and a way to extort concessions from the unions. Assholes.

Oh, and fuck Chrysler and Cerberus.

--

UPDATE: Ford says it's okay for now, but wants a line of credit in case things get worse—I think that's posturing and merely trying to avoid the "about to go under stigma" of GM and Chrysler. That USAT link has a side bar that includes a list of each automakers plans. Here's part of GM's:

Sell Saab, trim Pontiac, sell or close Saturn, sell fewer models. Reduce powertrain and stamping facilities to 38 by end of 2012, from 64 now.

A good start, but nowhere near what I suggested, and as Manzi pointed out doesn't get them anywhere close to financially viable.

UPDATE 2: An additional "Fuck you" to Cerberus, and can somebody explain to me how combining two "too big to fail corporations" into one even bigger failing corporation is a smart move? Republican Senators are pushing for a GM/Chrysler merger.

FAIL

The bailout doesn't even get through the House. I'm no economist, but then, none of the douchebags voting on this are either. My initial reaction is the same as Friday, "Good."

Again, the more I read about this "compromise plan" the worse it looked—even if Krugman and others thought it was worth passing. I don't see any reason why taking some time to make sure what passes is RIGHT instead of just QUICK is a problem.

Taking a bit more time to weigh options might give me a chance to find out what the hell might be wrong with this plan, because it sounds far preferable to this bailout to me.

Based on Paulson's original proposal, this whole thing reeked of the White House demanding the whole damn solar system when all they really want is the planet. Negotiations ensue and when the dust clears, the Dems stand around patting each other on the back for getting the GOP to "settle" for the Earth and the Moon.

Recommended Reading

The best breakdown of what happened to financial sector I've seen. Hilarious, but also breaks it down beautifully. Check it out...

Economic Disasters and Stupid Evil People

It's a thing of beauty.

A Better Bailout?

Sebastian Mallaby has a better idea

Within hours of the Treasury announcement Friday, economists had proposed preferable alternatives. Their core insight is that it is better to boost the banking system by increasing its capital than by reducing its loans. Given a fatter capital cushion, banks would have time to dispose of the bad loans in an orderly fashion. Taxpayers would be spared the experience of wandering into a bad-loan bazaar and being ripped off by every merchant.

[...] First, the government should tell banks to cancel all dividend payments. Banks don't do that on their own because it would signal weakness; if everyone knows the dividend has been canceled because of a government rule, the signaling issue would be removed. Second, the government should tell all healthy banks to issue new equity. Again, banks resist doing this because they don't want to signal weakness and they don't want to dilute existing shareholders. A government order could cut through these obstacles.

Meanwhile, ...the government should help not by buying banks' bad loans but by buying equity stakes in the banks themselves. Whereas it's horribly complicated to value bad loans, banks have share prices you can look up in seconds, so government could inject capital into banks quickly and at a fair level. The share prices of banks that recovered would rise, compensating taxpayers for losses on their stakes in the banks that eventually went under.

My wife could recite chapter and verse on how little I know about financial matters, but this sounds a hell of a lot better than just handing over a $700+ billion for bad paper.

UPDATE: Sounds like Dodd's counter-proposal is something similar...

Same with P-Krug:

[...] the financial system needs more capital. And if the government is going to provide capital to financial firms, it should get what people who provide capital are entitled to — a share in ownership, so that all the gains if the rescue plan works don’t go to the people who made the mess in the first place.

That’s what happened in the savings and loan crisis: the feds took over ownership of the bad banks, not just their bad assets.

Check My Math. Please

My calculator isn't big enough to handle the math, and it's been far too long since I had to do math unassisted...

So this "bail-out" is pretty much like handing my family a bill for $10,000. Is that about right? One trillion dollars divided by approximately 100,000,000 households?

Are you fucking kidding me?

And this isn't even going to buy us any assets like the S&L bailout did, or even any regulation or accountability?

This is handing the Bush Administration a blank check to dole out as they see fit?

Do I have all that right?

Where the fuck is Obama's ass-kicking ad on this?

Venn-detta

Slate.com has a chart that illustrates the different people involved in the Bush Administrations scandals crimes. It's more clever and cute than actually revealing or engrossing, but it does point out the common thread in all of them—Alberto Gonzalez.

It does, however, omit the one circle I would lay across the whole diagram...the complicity of the Democratic Congress.

And I JUST Filled Up!

Greeting me on my Yahoo! homepage is the following headline, so I click through...

Oil plummets on economy worries

By JOHN WILEN, AP Business Writer 2 hours, 55 minutes ago

NEW YORK - Oil prices fell sharply Monday, pulling back at least temporarily from record levels as investors feared that the financial crisis that forced the sale of Bear Stearns Cos. is a sign of deep economic troubles.

[...blah, blah, blah...]

Oil's steep decline — falling $4.17 to $106.04 a barrel on the New York Mercantile Exchange — came hours after futures rose to a new trading high of $111.80 on the Federal Reserve's surprise Sunday move to lower a key interest rate by a quarter point. In the past several months, Fed rate cuts have fueled rallies in oil prices.

When I see a headline that shouts "Oil Plummets!" I expect an actual, I don't know, decline! So, what this story actually says is that within hours of peaking at a record high it settles back to the same outrageous price it was the day before?

Gas is still 73 cents/gallon more than it was a year ago. Break the glass on the word "plummet" when we're back in that neighborhood.

Bushonomics

We can't get rid of these clowns fast enough...

[NYT link] The Pentagon on Monday will unveil its proposed 2009 budget of $515.4 billion. If it is approved in full, annual military spending, when adjusted for inflation, will have reached its highest level since World War II.

That new Defense Department budget proposal, which is to pay for the standard operations of the Pentagon and the military but does not include supplemental spending on the war efforts or on nuclear weapons, is an increase in real terms of about 5 percent over this year.

Overall since coming to office, the administration has increased baseline military spending by 30 percent...

[...] Defense Secretary Robert M. Gates and Admiral Mullen have said military spending should not drop below 4 percent of the national economy. “I really do believe this 4percent floor is important,” Admiral Mullen said. “It’s really important, given the world we’re living in, given the threats that we see out there, the risks that are, in fact, global, not just in the Middle East.”

[...] “The secretary believes that whenever we transition away from war supplementals, the Congress should dedicate 4 percent of our G.D.P. to funding national security,” Mr. Morrell said. “That is what he believes to be a reasonable price to stay free and protect our interests around the world.”

Over half a trillion dollars—not including the war? Fucking absurd. Almost as absurd as the idea of tying the funding of anything to G.D.P. Unless The Decider (or anybody else) is willing to index government tax revenues to G.D.P. as well.

If you want to set a floor percentage of the budget for defense, fine, but this idiotic.

UPDATE: Hilzoy did a much better job on this the other day...including this chart (via Ezra):

Ezra adds: "Our spending is 43 percent of the total. Not the total on that chart. The total of the world."

All of the candidates running for PResident are calling for various increases of some sort (Barack Obama included, apparently) This is unacceptable. You want to shift money from ridiculous weapons programs into human costs? Fine, do it. YOu want to add troops? Great, do it at the expense of whatever fucking nuclear weapons Bush is still buying. There is no reason we should be spending anything close to this much of our money on this. Not while the rest of the country falls apart. Fuck that. Not EVER.

And don't give me any shit about "what about at a time of war?" Remember, this doesn't even include the fucking war!!!

No Apex Tech Lawyers for Bush

Spinning off of the previous post, the lawyers that actually do work for the President got reinforced last week...

Besieged White House Reinforces Counsel's Office
[WaPo] President Bush has authorized another surge -- this time in the White House counsel's office. Facing a blizzard of congressional investigations, hearings and subpoenas, the White House has hired a new crop of lawyers to do battle with the Democratic Congress.

[...] "Obviously, there's been an increase in requests from the Hill, and we want to make sure we have the appropriate level of staff in place," said White House spokeswoman Emily Lawrimore.

Yeah, ya don't say? "Congressional investigators are looking into the dismissal of U.S. attorneys, the disappearance of White House e-mail, internal disputes over warrantless surveillance, partisan activities in federal agencies, various aspects of the Iraq war and other issues."

Do you think George is tapping a fresh crop of Pat Robertson's finest to defend him and his Administration? Not likely. All seven of the added lawyers are from Ivy League law schools. Tom Schaller at TAPPED put it best...

So, when it comes to policy-making over at the so-called Justice Department, a Regent University law degree, like the one held by Monica Goodling and a battalion of other fundies, suffices. But when it comes to protecting the president's backside, apparently a divine legal degree is no substitute for an East Coast elite Ivy School pedigree.

When hiring lawyers to defend the Constitution, the People, the Laws and our system of Justice, Lionel Hutz with a degree from the 700 Club is first in line, but for his own ass? Bush only hires the best.

Deputy A.G. Resigns…Alberto Pounces

Yesterday Deputy Attorney General Paul McNulty became the third (and highest) high-ranking DOJ official to resign over the US Attorney firings. Meanwhile, his boss Alberto Gonzales, the guy who should resign over this, threw McNulty under the bus with such vigor, it practically sucked my car under the bus as I listened to the A.G.'s comments on NPR...

"You have to remember, at the end of the day, the recommendations reflected the views of the deputy attorney general. He signed off on the names... And he would know better than anyone else, anyone in this room, anyone -- again, the deputy attorney general would know best about the qualifications and the experiences of the United States attorneys community, and he signed off on the names."

Of course he neglects to mention that he ALSO signed off on the names. And that McNulty had nothing to do with the list and was completely, and deliberately left out of the loop on the firings. Anyway, that is some Olympic-class buck-passing on display right there. Perhaps the most shameless display of scapegoating I've seen from a Bush Administration official, and that's saying something. What a piece of shit he is.

Alberto's widely publicized and praised immigrant mother must be very proud.