Balance sheet baloney
There’s a turn of phrase I hate in the current discussion, because it sounds smart and serious but is in fact a complete evasion of the key issue. And I’m sorry to say that Ben Bernanke uses it in today’s testimony:
More generally, removing these assets [i.e., toxic mortgage-related waste] from institutions’ balance sheets will help to restore confidence in our financial markets and enable banks and other institutions to raise capital and to expand credit to support economic growth.
“Removing these assets from institutions’ balance sheets” — what an evasive phrase.
I mean, any bank that wants to remove toxic assets from its balance sheet can do it at a stroke — just declare them worthless, and poof! they’re gone. But of course, that would reduce confidence and capital, not increase it — and that’s not what Hank and Ben are talking about. They’re talking about turning the assets over to Uncle Sam, and getting cold hard cash in return. And then the question is how much cash they get in return. It’s all about the price.
Now, if the price Treasury pays is very low — anything comparable to what financial institutions are able to sell the stuff for now — it’s going to do nothing for confidence and capital. If the price is high, confidence and capital will improve — but taxpayers may well take a big loss. The premise of the Paulson plan– though never stated bluntly — is that these assets are hugely underpriced, so that Uncle Sam can buy them at prices that help the financial industry a lot, without big losses for taxpayers. Are you prepared to bet $700 billion on that premise?
But how can we help the financial situation without making that bet? By taking an equity stake. That way, if it turns out that the feds are pumping money in at above-fair prices, at least they get ownership, just as a private white knight would have.
There is no, repeat no justification for refusing to grant equity warrants that provide some taxpayer protection. This is, for me, an absolute deal or no-deal point.
9/23/08
More Krugman On The Bailout
Krugman isn't buying the bailout. He is busy exposing the nonsense for us. You need to read his blog regularly. Here is the latest.....
Palin's Lies, Documented
Andrew Sullivan has a list of 12 lies Sarah Palin has told that can be proven, with documentary evidence. Go and see them here
- She has lied about the Bridge To Nowhere. She ran for office favoring it, wore a sweatshirt defending it, and only gave it up when the federal congress, Senator McCain in particular, went ballistic. She kept the money anyway and favors funding Don Young's Way, at twice the cost of the original bridge.
- She has lied about her firing of the town librarian and police chief of Wasilla, Alaska.
- She has lied about pressure on Alaska's public safety commissioner to fire her ex-brother-in-law.
- She has lied about her previous statements on climate change.
- She has lied about Alaska's contribution to America's oil and gas production.
- She has lied about when she asked her daughters for their permission for her to run for vice-president.
- She has lied about the actual progress in constructing a natural gas pipeline from Alaska.
- She has lied about Obama's position on habeas corpus.
- She has lied about her alleged tolerance of homosexuality.
- She has lied about the use or non-use of a TelePrompter at the St Paul convention.
- She has lied about her alleged pay-cut as mayor of Wasilla.
- She has lied about what Alaska's state scientists concluded about the health of the polar bear population in Alaska.
9/22/08
Conservatives. Can't Live With 'Em, Can't.....
Here's a Huffpo story forwarded to me from reader mom2015. Finally, an explanation of why arguing with conservatives is futile...
A new study out of Yale University confirms what argumentative liberals have long-known: Offering reality-based rebuttals to conservative lies only makes conservatives cling to those lies even harder. In essence, schooling conservatives makes them more stupid. From the Washington Post article on the study, which came out yesterday:
Political scientists Brendan Nyhan and Jason Reifler provided two groups of volunteers with the Bush administration's prewar claims that Iraq had weapons of mass destruction. One group was given a refutation -- the comprehensive 2004 Duelfer report that concluded that Iraq did not have weapons of mass destruction before the United States invaded in 2003. Thirty-four percent of conservatives told only about the Bush administration's claims thought Iraq had hidden or destroyed its weapons before the U.S. invasion, but 64 percent of conservatives who heard both claim and refutation thought that Iraq really did have the weapons. The refutation, in other words, made the misinformation worse.A similar "backfire effect" also influenced conservatives told about Bush administration assertions that tax cuts increase federal revenue. One group was offered a refutation by prominent economists that included current and former Bush administration officials. About 35 percent of conservatives told about the Bush claim believed it; 67 percent of those provided with both assertion and refutation believed that tax cuts increase revenue.
In a paper approaching publication, Nyhan, a PhD student at Duke University, and Reifler, at Georgia State University, suggest that Republicans might be especially prone to the backfire effect because conservatives may have more rigid views than liberals: Upon hearing a refutation, conservatives might "argue back" against the refutation in their minds, thereby strengthening their belief in the misinformation. Nyhan and Reifler did not see the same "backfire effect" when liberals were given misinformation and a refutation about the Bush administration's stance on stem cell research.
If you've ever gotten in an argument with your conservative friends (assuming you haven't offered each other a mutual Carville-Matalin-style political ceasefire to preserve the friendship), you've probably seen this "backfire effect" in action. The more you try to tell people that Sarah Palin is lying when she says she was against the Bridge to Nowhere, the more they believe she was telling the truth. The more you try to explain how similar McCain's policies are to Bush's, the more they maintain he's "the original maverick."
The typical mantra of the left is that we don't need to sink to the Republicans' level because we have the truth on our side. But if the other side is utterly immune to the truth -- and indeed, the truth only makes them dig deeper into their fantasy world in which the economy is fundamentally strong and the War in Iraq is a staggering success -- what's a leftie to do?
I ain't got the answers, ace, except to say this: When arguing with conservatives in front of on-the-fence independents, remember that you're not trying to convince the conservative to actually buy into silly notions like facts and reason. You're highlighting the differences between left and right for the outside observer. If the other guy insists on political views that belong only in Disney World's Fantasyland, other folks will realize what's happening.
But if there is no third party, do yourself a favor and save your breath. As the study demonstrates, you're only making matters worse. Consider that aforementioned ceasefire. It is football season, after all. There's plenty of other things to argue about. Go Mizzou!
The Chinese Hold Their Fuckups Accountable, Shouldn't We?
From Matt Yglesias:
In the People’s Republic of China they have this crazy system where if a huge problem emerges in an area of policy, the person who was supposed to be in charge of that area loses his job, rather than getting $700 billion to spend at his absolute discretion:Imagine if we held people accountable!
The head of China’s top quality watchdog agency resigned Monday in the wake of a growing scandal over the country’s tainted milk supply, which has already sickened more than 50,000 infants and killed at least three children, according to the state-runs Xinhua News Agency.They sure are inscrutable over there.
Quote Of The Day: tristero
The Republicans fielded a buffoon and a sociopath while Democrats chose genuine leaders. Racism explains a lot of it. Media bias explains a lot of it. But it is also the case that Democrats are hellbent on avoiding mentioning anything that could possibly be thought "unclean" when the Republicans have demonstrated that no sewer is so foul they won't stoop to disgorge its stinking mess into the public discourse.tristero
They Should Be Wearing Barrels!
There's really nothing else to say about this. Take their money!
In 2007, Wall Street’s five biggest firms — Bear Stearns, Goldman Sachs, Lehman Brothers, Merrill Lynch, and Morgan Stanley — paid a record $39 billion in bonuses to themselves.
That’s $10 billion more than the $29 billion loan taxpayers are making to J.P. Morgan to save Bear Stearns.
Those 2007 bonuses were paid even though the shareholders in those firms last year collectively lost about $74 billion in stock declines — their worst year since 2002.
9/21/08
The Bailout Is A Problem
Still more, this time from L, G & M. Money quote:
One reason careful oversight is crucial in this situation is that the most basic question of whether this is a good proposal can't even begin to be answered until Congress and the American people know what exactly the government is proposing to pay for all this bad debt.
In the legislation's present form, we have absolutely no idea. Being asked to sign off on it is equivalent to being asked to buy a bunch of condemned properties on the condition that you'll only find out later what you paid for them. On second thought, I guess that's not actually a metaphor.
From Louis XIV to George W. Bush
Here, in just 32 words, is a summation of the state of American democracy in our time: "Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency."
Translation: Congress will take $700 billion from the pockets of ordinary Americans, and hand it to Henry Paulson. Paulson then has absolute, unreviewable authority to do with this money what he thinks best.
Many people have pointed out in the past day or so that this is bad. What no one seems to be raising is the question of whether it's even legal. Of course after eight years of George W. L'etat, C'est Moi Bush, the question of whether the biggest financial rescue operation in American history is actually legal is considered nothing more than a bothersome technicality, if that, to be dealt with by the administration's lawyers to the satisfaction of Very Serious People everywhere.
I'm not an expert in administrative law, but I would be curious to learn what in the Administrative Procedure Act authorizes Congress to delegate this kind of completely unreviewable spending power to an executive branch agency. [Update: An administrative law expert tells me that as a formal matter it won't be difficult to work around the APA itself, but that "if the non-delegation doctrine still means anything at all then this proposal pushes it to or past the breaking point." On non-delegation, see below].
Furthermore, even if Congress authorizes itself to do something like this, there's another act, the Constitution of the United States, which requires something called "due process." When it comes to making laws, due process has been interpreted by our courts to include the basic principle that while Congress can delegate substantial rulemaking authority to executive branch agencies, it can't simply hand the executive a blank check and beg our leaders to spend the money wisely, while promising not to interfere in any way, and moreover barring the courts from inquiring into any aspect of the matter.
This legislation as written is the equivalent of taking the view that it's legal for Congress to give the president an enormous army equipped with lots of shiny weapons and big beautiful bombs, while leaving it to his complete discretion to start wars against any country he believes might come to pose a threat to the United States at some point in the future.
And speaking of the Bush doctrine, when considering just how questionable all this is, let's not forget there's a good chance that the man who thought Sarah Palin was a good choice to succeed him as president will in a few months be appointing Paulson's successor.
A further point: The legality of this sort of completely unregulated executive branch discretion isn't merely a formal matter. One reason careful oversight is crucial in this situation is that the most basic question of whether this is a good proposal can't even begin to be answered until Congress and the American people know what exactly the government is proposing to pay for all this bad debt.
In the legislation's present form, we have absolutely no idea. Being asked to sign off on it is equivalent to being asked to buy a bunch of condemned properties on the condition that you'll only find out later what you paid for them. On second thought, I guess that's not actually a metaphor.
Obama Quits Race!!
Late breaking pseudo-serious news alert!!! Please expand. Please expand....
In the wake of an epic financial meltdown that threatens to derail the U.S. economy for years, Barack Obama announced he was ending his run for President of the United States, declaring to a stunned nation, “Man, this is bullshit.”h/t Pancake City
In a boisterous and hastily-called press conference, Obama detailed his reasons for the decision. “I was prepared to fight global warming, reform the health care system, repair our crumbling roads, create a 21st century electric grid, find Bin Laden, end the war in Iraq, and bring peace to Israel and the Palestinians. But now you tell me I have to clean up the worst financial mess since the Great Depression too? One that’s going to plunge our economy into a recession for most of my administration while I take the blame? Fuck that. That’s fucking ridiculous. You guys clean up your own shit. I’m outta here.”
He elaborated: “From the time I was a little boy, I dreamt of being President one day. Of having the power and resources to enact a bold vision for the country, to set this great land on a path to a better future. Now we’re fucking broke. What the hell can I do when we’re $9 trillion in debt and got 1 billion Chinese hankering to cash their IOUs? I can’t even buy a three-fingered handjob now.”
Obama also revealed that he previously thought about quitting when Sen. McCain picked Gov. Palin as a running mate (”What is this, a reality TV show?”), when the media covered the faux lipstick-on-a-pig scandal for two days straight (”Why would I call her a pig? She’s a fucking MILF, for Christ’s sake”), and when he realized he was still neck and neck with McCain in the polls in spite of being his opponent’s superior in every possible metric and running as the exact opposite of one of the worst administrations in U.S. history.
Obama took no questions from reporters. After reading his statement, he threw his suit jacket on the ground, made an obscene gesture to the press corp, and dashed out a back exit, where he hopped on a motorcycle and yelled “See ya, bitches, I’m off to do my wife” as he rode away.
The new de facto leader of the Presidential race, Sen. John McCain, was unaware of the development until told about it by a reporter. When asked how he felt about Obama quitting, McCain replied: “Senator Obama would like to fool the American people that he is the quitter in this race. He’s not. I already quit in 2005, well before Obama even thought of quitting. That’s quitting you can believe in.”
It is unknown at this time where Sen. Biden will replace Obama at the top of the ticket, but it is unlikely as the Obama campaign announced plans to return all unspent money to its supporters along with a 20% off coupon to flights to Canada.
Quote Of The Day: George F. Will
John McCain showed his personality this week and made some of us fearful.George F. Will
As seen on ABC News "This Week":
h/t swimming freestyle
President Bartlet Gives Obama Advice
Dowd gives her column to Aaron Sorkin:
Aaron Sorkin Conjures a Meeting of Obama and Bartlet
By MAUREEN DOWD
Published: September 20, 2008
Now that he’s finally fired up on the soup-line economy, Barack Obama knows he can’t fade out again. He was eager to talk privately to a Democratic ex-president who could offer more fatherly wisdom — not to mention a surreptitious smoke — and less fraternal rivalry. I called the “West Wing” creator Aaron Sorkin (yes, truly) to get a read-out of the meeting. This is what he wrote:BARACK OBAMA knocks on the front door of a 300-year-old New Hampshire farmhouse while his Secret Service detail waits in the driveway. The door opens and OBAMA is standing face to face with former President JED BARTLET.
BARTLET Senator.
OBAMA Mr. President.
BARTLET You seem startled.
OBAMA I didn’t expect you to answer the door yourself.
BARTLET I didn’t expect you to be getting beat by John McCain and a Lancôme rep who thinks “The Flintstones” was based on a true story, so let’s call it even.
OBAMA Yes, sir.
BARTLET Come on in.
BARTLET leads OBAMA into his study.
BARTLET That was a hell of a convention.
OBAMA Thank you, I was proud of it.
BARTLET I meant the Republicans. The Us versus Them-a-thon. As a Democrat I was surprised to learn that I don’t like small towns, God, people with jobs or America. I’ve been a little out of touch but is there a mandate that the vice president be skilled at field dressing a moose —
OBAMA Look —
BARTLET — and selling Air Force Two on eBay?
OBAMA Joke all you want, Mr. President, but it worked.
BARTLET Imagine my surprise. What can I do for you, kid?
OBAMA I’m interested in your advice.
BARTLET I can’t give it to you.
OBAMA Why not?
BARTLET I’m supporting McCain.
OBAMA Why?
BARTLET He’s promised to eradicate evil and that was always on my “to do” list.
OBAMA O.K. —
BARTLET And he’s surrounded himself, I think, with the best possible team to get us out of an economic crisis. Why, Sarah Palin just said Fannie Mae and Freddie Mac had “gotten too big and too expensive to the taxpayers.” Can you spot the error in that statement?
OBAMA Yes, Fannie Mae and Freddie Mac aren’t funded by taxpayers.
BARTLET Well, at least they are now. Kind of reminds you of the time Bush said that Social Security wasn’t a government program. He was only off by a little — Social Security is the largest government program.
OBAMA I appreciate your sense of humor, sir, but I really could use your advice.
BARTLET Well, it seems to me your problem is a lot like the problem I had twice.
OBAMA Which was?
BARTLET A huge number of Americans thought I thought I was superior to them.
OBAMA And?
BARTLET I was.
OBAMA I mean, how did you overcome that?
BARTLET I won’t lie to you, being fictional was a big advantage.
OBAMA What do you mean?
BARTLET I’m a fictional president. You’re dreaming right now, Senator.
OBAMA I’m asleep?
BARTLET Yes, and you’re losing a ton of white women.
OBAMA Yes, sir.
BARTLET I mean tons.
OBAMA I understand.
BARTLET I didn’t even think there were that many white women.
OBAMA I see the numbers, sir. What do they want from me?
BARTLET I’ve been married to a white woman for 40 years and I still don’t know what she wants from me.
OBAMA How did you do it?
BARTLET Well, I say I’m sorry a lot.
OBAMA I don’t mean your marriage, sir. I mean how did you get America on your side?
BARTLET There again, I didn’t have to be president of America, I just had to be president of the people who watched “The West Wing.”
OBAMA That would make it easier.
BARTLET You’d do very well on NBC. Thursday nights in the old “ER” time slot with “30 Rock” as your lead-in, you’d get seven, seven-five in the demo with a 20, 22 share — you’d be selling $450,000 minutes.
OBAMA What the hell does that mean?
BARTLET TV talk. I thought you’d be interested.
OBAMA I’m not. They pivoted off the argument that I was inexperienced to the criticism that I’m — wait for it — the Messiah, who, by the way, was a community organizer. When I speak I try to lead with inspiration and aptitude. How is that a liability?
BARTLET Because the idea of American exceptionalism doesn’t extend to Americans being exceptional. If you excelled academically and are able to casually use 690 SAT words then you might as well have the press shoot video of you giving the finger to the Statue of Liberty while the Dixie Chicks sing the University of the Taliban fight song. The people who want English to be the official language of the United States are uncomfortable with their leaders being fluent in it.
OBAMA You’re saying race doesn’t have anything to do with it?
BARTLET I wouldn’t go that far. Brains made me look arrogant but they make you look uppity. Plus, if you had a black daughter —
OBAMA I have two.
BARTLET — who was 17 and pregnant and unmarried and the father was a teenager hoping to launch a rap career with “Thug Life” inked across his chest, you’d come in fifth behind Bob Barr, Ralph Nader and a ficus.
OBAMA You’re not cheering me up.
BARTLET Is that what you came here for?
OBAMA No, but it wouldn’t kill you.
BARTLET Have you tried doing a two-hour special or a really good Christmas show?
OBAMA Sir —
BARTLET Hang on. Home run. Right here. Is there any chance you could get Michelle pregnant before the fall sweeps?
OBAMA The problem is we can’t appear angry. Bush called us the angry left. Did you see anyone in Denver who was angry?
BARTLET Well ... let me think. ...We went to war against the wrong country, Osama bin Laden just celebrated his seventh anniversary of not being caught either dead or alive, my family’s less safe than it was eight years ago, we’ve lost trillions of dollars, millions of jobs, thousands of lives and we lost an entire city due to bad weather. So, you know ... I’m a little angry.
OBAMA What would you do?
BARTLET GET ANGRIER! Call them liars, because that’s what they are. Sarah Palin didn’t say “thanks but no thanks” to the Bridge to Nowhere. She just said “Thanks.” You were raised by a single mother on food stamps — where does a guy with eight houses who was legacied into Annapolis get off calling you an elitist? And by the way, if you do nothing else, take that word back. Elite is a good word, it means well above average. I’d ask them what their problem is with excellence. While you’re at it, I want the word “patriot” back. McCain can say that the transcendent issue of our time is the spread of Islamic fanaticism or he can choose a running mate who doesn’t know the Bush doctrine from the Monroe Doctrine, but he can’t do both at the same time and call it patriotic. They have to lie — the truth isn’t their friend right now. Get angry. Mock them mercilessly; they’ve earned it. McCain decried agents of intolerance, then chose a running mate who had to ask if she was allowed to ban books from a public library. It’s not bad enough she thinks the planet Earth was created in six days 6,000 years ago complete with a man, a woman and a talking snake, she wants schools to teach the rest of our kids to deny geology, anthropology, archaeology and common sense too? It’s not bad enough she’s forcing her own daughter into a loveless marriage to a teenage hood, she wants the rest of us to guide our daughters in that direction too? It’s not enough that a woman shouldn’t have the right to choose, it should be the law of the land that she has to carry and deliver her rapist’s baby too? I don’t know whether or not Governor Palin has the tenacity of a pit bull, but I know for sure she’s got the qualifications of one. And you’re worried about seeming angry? You could eat their lunch, make them cry and tell their mamas about it and God himself would call it restrained. There are times when you are simply required to be impolite. There are times when condescension is called for!
OBAMA Good to get that off your chest?
BARTLET Am I keeping you from something?
OBAMA Well, it’s not as if I didn’t know all of that and it took you like 20 minutes to say.
BARTLET I know, I have a problem, but admitting it is the first step.
OBAMA What’s the second step?
BARTLET I don’t care.
OBAMA So what about hope? Chuck it for outrage and put-downs?
BARTLET No. You’re elite, you can do both. Four weeks ago you had the best week of your campaign, followed — granted, inexplicably — by the worst week of your campaign. And you’re still in a statistical dead heat. You’re a 47-year-old black man with a foreign-sounding name who went to Harvard and thinks devotion to your country and lapel pins aren’t the same thing and you’re in a statistical tie with a war hero and a Cinemax heroine. To these aged eyes, Senator, that’s what progress looks like. You guys got four debates. Get out of my house and go back to work.
OBAMA Wait, what is it you always used to say? When you hit a bump on the show and your people were down and frustrated? You’d give them a pep talk and then you’d always end it with something. What was it ...?
BARTLET “Break’s over.”
More Reasons To Dislike The Bailout
This is an email Matt Stoller got from a lawmaker (and another one) from Open Left:
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.
Henry Waxman has suggested corporate government reforms, including CEO compensation, as the price for this. Some members have publicly suggested allowing modification of mortgages in bankruptcy, and the House Judiciary Committee staff is also very interested in that. That's a real possibility.
We may strip out all the gives to industry in the predatory mortgage lending bill that the House passed last November, which hasn't budged in the Senate, and include that in the bill. There are other ideas on the table but they are going to be tough to work out before next week.
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.
Matt Stoller :: Yes, There Are Deeply Angry Democratic Members of Congress
Another email.
Here's the industry's play: progressives will approach Nancy with ideas for reform, and she'll agree to push for their proposals, and she'll really mean it. Then industry lobbyists will go to Dennis Moore, Melissa Bean and a few other Democrats, and tell them how dire the consequences of the proposals would be, and that the members who understand how the economy works need to step up to stop Nancy and the crazy liberals from doing something rash. Then those Democrats will go to Steny and tell him how terrible Nancy's crazy ideas would be, and how we can't rush into something like that without much, much more thought. Maybe Barney will try to talk to Dennis or Melissa, but it will become apparent quickly that they have no idea what they're talking about; they're just repeating by rote what the lobbyists told them to say. Melissa may actually be dumber than Sarah Palin. Barney will realize he might as well talk to the lobbyists directly and save a step. The lobbyists will agree to something inconsequential, but certainly nothing that would really affect the industry's conduct. Then the leadership will do the math and conclude that because the vast majority of Republicans will vote against any bill, we can't get enough votes without the Dennis and Melissa crowd. The only way, our leadership will conclude, to get anything at all passed is to include nothing more than the inconsequential proposals that the lobbyists agreed to. Then we'll all go along because it would be wildly irresponsible not to act when we're staring over the brink of a complete collapse of world financial markets.
I'd diagram it for you if I had a chalkboard. I've seen the play again and again, and it always goes for long yardage.
The only defense for the play is for a significant group of Democrats to say they won't vote for any proposal that isn't unpalatable to industry, and mean it. It's a pretty high stakes game of chicken, but otherwise we come out of this with nothing but a $700 billion giveaway to a crooked industry.
Ouch.
If anyone out there is good with diagramming software it'd be a neat picture to put together.
Bailout Bad. This In Case You're Not Convinced
Here is a nice summary of how GWB spends the money he in entrusted with. Bottom line--you can't trust him.
Bush is demanding unprecedented control over billions of dollars — with no oversight. His history of mismanaging taxpayer dollars should make Americans skeptical of his buyout plan:h/t Think Progress
IRAQ RECONSTRUCTION
-$142 million wasted on reconstruction projects that were either terminated or canceled. [Special Inspector General for Iraq, 7/28/08]
-“Significant” amount of U.S. funds for Iraq funneled to Sunni and Shiite militias. [GAO Comptroller, 3/11/08]
-$180 million payed to construction company Bechtel for projects it never finished. [Federal audit, 7/25/07]
-$5.1 billion in expenses for Iraq reconstruction charged without documentation. [Special Inspector General for Iraq Reconstruction report, 3/19/07]
-$10 billion in spending on Iraq reconstruction was wasteful or poorly tracked. [GAO, 2/15/07]
-Halliburton overcharged the government $100 million for one day’s work in 2004. [Project on Government Oversight, 10/8/04]
KATRINA
-Millions wasted on four no-bid contracts, including paying $20 million for an unusable camp for evacuees. [Homeland Security Department Inspector General, 9/10/08]
-$2.4 billion in contracts doled out by FEMA that guaranteed profits for big companies. [Center for Public Integrity investigation, 6/25/07]
-An estimated $2 billion in fraud and waste — nearly 11 percent of the $19 billion spent by FEMA on Hurricanes Katrina and Rita as of mid-June. [New York Times tally, 6/27/06]
-“Widespread” waste and mismanagement on millions for Katrina recovery, including at least $3 million for 4,000 beds that were never used. [GAO, 3/16/06]
DEFENSE CONTRACTS
-A $50 million Air Force contract awarded to a company with close ties to senior Air Force officers, in a process “fraught with improper influence, irregular procedures, glaring conflicts of interest.” [Project on Government Oversight, 4/18/08]
-$1.7 billion in excessive fees and waste paid by the Pentagon to the Interior Department to manage federal lands. [Defense Department and Interior Department Inspectors General audit, 12/25/06]
-$1 trillion unaccounted for by the Pentagon, including 56 airplanes, 32 tanks, and 36 Javelin missile command launch-units. [GAO, 5/18/03]
Sam Harris On Palin, Again
Sam Harris has a new piece up about Sarah Palin. I like his honesty and his lack of deference. Reminds me of someone.....
Money quote:
Money quote:
Ask yourself: how has "elitism" become a bad word in American politics? There is simply no other walk of life in which extraordinary talent and rigorous training are denigrated. We want elite pilots to fly our planes, elite troops to undertake our most critical missions, elite athletes to represent us in competition and elite scientists to devote the most productive years of their lives to curing our diseases. And yet, when it comes time to vest people with even greater responsibilities, we consider it a virtue to shun any and all standards of excellence.
When Atheists Attack
A noted provocateur rips Sarah Palin—and defends elitism.
Sam Harris
NEWSWEEK
From the magazine issue dated Sep 29, 2008
Let me confess that I was genuinely unnerved by Sarah Palin's performance at the Republican convention. Given her audience and the needs of the moment, I believe Governor Palin's speech was the most effective political communication I have ever witnessed. Here, finally, was a performer who—being maternal, wounded, righteous and sexy—could stride past the frontal cortex of every American and plant a three-inch heel directly on that limbic circuit that ceaselessly intones "God and country." If anyone could make Christian theocracy smell like apple pie, Sarah Palin could.
Then came Palin's first television interview with Charles Gibson. I was relieved to discover, as many were, that Palin's luster can be much diminished by the absence of a teleprompter. Still, the problem she poses to our political process is now much bigger than she is. Her fans seem inclined to forgive her any indiscretion short of cannibalism. However badly she may stumble during the remaining weeks of this campaign, her supporters will focus their outrage upon the journalist who caused her to break stride, upon the camera operator who happened to capture her fall, upon the television network that broadcast the good lady's misfortune—and, above all, upon the "liberal elites" with their highfalutin assumption that, in the 21st century, only a reasonably well-educated person should be given command of our nuclear arsenal.
The point to be lamented is not that Sarah Palin comes from outside Washington, or that she has glimpsed so little of the earth's surface (she didn't have a passport until last year), or that she's never met a foreign head of state. The point is that she comes to us, seeking the second most important job in the world, without any intellectual training relevant to the challenges and responsibilities that await her. There is nothing to suggest that she even sees a role for careful analysis or a deep understanding of world events when it comes to deciding the fate of a nation. In her interview with Gibson, Palin managed to turn a joke about seeing Russia from her window into a straight-faced claim that Alaska's geographical proximity to Russia gave her some essential foreign-policy experience. Palin may be a perfectly wonderful person, a loving mother and a great American success story—but she is a beauty queen/sports reporter who stumbled into small-town politics, and who is now on the verge of stumbling into, or upon, world history.
The problem, as far as our political process is concerned, is that half the electorate revels in Palin's lack of intellectual qualifications. When it comes to politics, there is a mad love of mediocrity in this country. "They think they're better than you!" is the refrain that (highly competent and cynical) Republican strategists have set loose among the crowd, and the crowd has grown drunk on it once again. "Sarah Palin is an ordinary person!" Yes, all too ordinary.
We have all now witnessed apparently sentient human beings, once provoked by a reporter's microphone, saying things like, "I'm voting for Sarah because she's a mom. She knows what it's like to be a mom." Such sentiments suggest an uncanny (and, one fears, especially American) detachment from the real problems of today. The next administration must immediately confront issues like nuclear proliferation, ongoing wars in Iraq and Afghanistan (and covert wars elsewhere), global climate change, a convulsing economy, Russian belligerence, the rise of China, emerging epidemics, Islamism on a hundred fronts, a defunct United Nations, the deterioration of American schools, failures of energy, infrastructure and Internet security … the list is long, and Sarah Palin does not seem competent even to rank these items in order of importance, much less address any one of them.
Palin's most conspicuous gaffe in her interview with Gibson has been widely discussed. The truth is, I didn't much care that she did not know the meaning of the phrase "Bush doctrine." And I am quite sure that her supporters didn't care, either. Most people view such an ambush as a journalistic gimmick. What I do care about are all the other things Palin is guaranteed not to know—or will be glossing only under the frenzied tutelage of John McCain's advisers. What doesn't she know about financial markets, Islam, the history of the Middle East, the cold war, modern weapons systems, medical research, environmental science or emerging technology? Her relative ignorance is guaranteed on these fronts and most others, not because she was put on the spot, or got nervous, or just happened to miss the newspaper on any given morning. Sarah Palin's ignorance is guaranteed because of how she has spent the past 44 years on earth.
I care even more about the many things Palin thinks she knows but doesn't: like her conviction that the Biblical God consciously directs world events. Needless to say, she shares this belief with mil-lions of Americans—but we shouldn't be eager to give these people our nuclear codes, either. There is no question that if President McCain chokes on a spare rib and Palin becomes the first woman president, she and her supporters will believe that God, in all his majesty and wisdom, has brought it to pass. Why would God give Sarah Palin a job she isn't ready for? He wouldn't. Everything happens for a reason. Palin seems perfectly willing to stake the welfare of our country—even the welfare of our species—as collateral in her own personal journey of faith. Of course, McCain has made the same unconscionable wager on his personal journey to the White House.
In speaking before her church about her son going to war in Iraq, Palin urged the congregation to pray "that our national leaders are sending them out on a task that is from God; that's what we have to make sure we are praying for, that there is a plan, and that plan is God's plan." When asked about these remarks in her interview with Gibson, Palin successfully dodged the issue of her religious beliefs by claiming that she had been merely echoing the words of Abraham Lincoln. The New York Times later dubbed her response "absurd." It was worse than absurd; it was a lie calculated to conceal the true character of her religious infatuations. Every detail that has emerged about Palin's life in Alaska suggests that she is as devout and literal-minded in her Christian dogmatism as any man or woman in the land. Given her long affiliation with the Assemblies of God church, Palin very likely believes that Biblical prophecy is an infallible guide to future events and that we are living in the "end times." Which is to say she very likely thinks that human history will soon unravel in a foreordained cataclysm of war and bad weather. Undoubtedly Palin believes that this will be a good thing—as all true Christians will be lifted bodily into the sky to make merry with Jesus, while all nonbelievers, Jews, Methodists and other rabble will be punished for eternity in a lake of fire. Like many Pentecostals, Palin may even imagine that she and her fellow parishioners enjoy the power of prophecy themselves. Otherwise, what could she have meant when declaring to her congregation that "God's going to tell you what is going on, and what is going to go on, and you guys are going to have that within you"?
You can learn something about a person by the company she keeps. In the churches where Palin has worshiped for decades, parishioners enjoy "baptism in the Holy Spirit," "miraculous healings" and "the gift of tongues." Invariably, they offer astonishingly irrational accounts of this behavior and of its significance for the entire cosmos. Palin's spiritual colleagues describe themselves as part of "the final generation," engaged in "spiritual warfare" to purge the earth of "demonic strongholds." Palin has spent her entire adult life immersed in this apocalyptic hysteria. Ask yourself: Is it a good idea to place the most powerful military on earth at her disposal? Do we actually want our leaders thinking about the fulfillment of Biblical prophecy when it comes time to say to the Iranians, or to the North Koreans, or to the Pakistanis, or to the Russians or to the Chinese: "All options remain on the table"?
It is easy to see what many people, women especially, admire about Sarah Palin. Here is a mother of five who can see the bright side of having a child with Down syndrome and still find the time and energy to govern the state of Alaska. But we cannot ignore the fact that Palin's impressive family further testifies to her dogmatic religious beliefs. Many writers have noted the many shades of conservative hypocrisy on view here: when Jamie Lynn Spears gets pregnant, it is considered a symptom of liberal decadence and the breakdown of family values; in the case of one of Palin's daughters, however, teen pregnancy gets reinterpreted as a sign of immaculate, small-town fecundity. And just imagine if, instead of the Palins, the Obama family had a pregnant, underage daughter on display at their convention, flanked by her black boyfriend who "intends" to marry her. Who among conservatives would have resisted the temptation to speak of "the dysfunction in the black community"?
Teen pregnancy is a misfortune, plain and simple. At best, it represents bad luck (both for the mother and for the child); at worst, as in the Palins' case, it is a symptom of religious dogmatism. Governor Palin opposes sex education in schools on religious grounds. She has also fought vigorously for a "parental consent law" in the state of Alaska, seeking full parental dominion over the reproductive decisions of minors. We know, therefore, that Palin believes that she should be the one to decide whether her daughter carries her baby to term. Based on her stated position, we know that she would deny her daughter an abortion even if she had been raped. One can be forgiven for doubting whether Bristol Palin had all the advantages of 21st-century family planning—or, indeed, of the 21st century.
We have endured eight years of an administration that seemed touched by religious ideology. Bush's claim to Bob Woodward that he consulted a "higher Father" before going to war in Iraq got many of us sitting upright, before our attention wandered again to less ethereal signs of his incompetence. For all my concern about Bush's religious beliefs, and about his merely average grasp of terrestrial reality, I have never once thought that he was an over-the-brink, Rapture-ready extremist. Palin seems as though she might be the real McCoy. With the McCain team leading her around like a pet pony between now and Election Day, she can be expected to conceal her religious extremism until it is too late to do anything about it. Her supporters know that while she cannot afford to "talk the talk" between now and Nov. 4, if elected, she can be trusted to "walk the walk" until the Day of Judgment.
What is so unnerving about the candidacy of Sarah Palin is the degree to which she represents—and her supporters celebrate—the joyful marriage of confidence and ignorance. Watching her deny to Gibson that she had ever harbored the slightest doubt about her readiness to take command of the world's only superpower, one got the feeling that Palin would gladly assume any responsibility on earth:
"Governor Palin, are you ready at this moment to perform surgery on this child's brain?"
"Of course, Charlie. I have several boys of my own, and I'm an avid hunter."
"But governor, this is neurosurgery, and you have no training as a surgeon of any kind."
"That's just the point, Charlie. The American people want change in how we make medical decisions in this country. And when faced with a challenge, you cannot blink."
The prospects of a Palin administration are far more frightening, in fact, than those of a Palin Institute for Pediatric Neurosurgery. Ask yourself: how has "elitism" become a bad word in American politics? There is simply no other walk of life in which extraordinary talent and rigorous training are denigrated. We want elite pilots to fly our planes, elite troops to undertake our most critical missions, elite athletes to represent us in competition and elite scientists to devote the most productive years of their lives to curing our diseases. And yet, when it comes time to vest people with even greater responsibilities, we consider it a virtue to shun any and all standards of excellence. When it comes to choosing the people whose thoughts and actions will decide the fates of millions, then we suddenly want someone just like us, someone fit to have a beer with, someone down-to-earth—in fact, almost anyone, provided that he or she doesn't seem too intelligent or well educated.
I believe that with the nomination of Sarah Palin for the vice presidency, the silliness of our politics has finally put our nation at risk. The world is growing more complex—and dangerous—with each passing hour, and our position within it growing more precarious. Should she become president, Palin seems capable of enacting policies so detached from the common interests of humanity, and from empirical reality, as to unite the entire world against us. When asked why she is qualified to shoulder more responsibility than any person has held in human history, Palin cites her refusal to hesitate. "You can't blink," she told Gibson repeatedly, as though this were a primordial truth of wise governance. Let us hope that a President Palin would blink, again and again, while more thoughtful people decide the fate of civilization.
Another Against The Bailout
From Newshoggers: A letter to a Senator from a guy who knows of what he speaks. Money quote:
Once you give Paulson the authority he seeks, he will buy these securities at 65 cents/dollar, then quietly auction them off at a nickel each. It will be "unfortunate but necessary" to revitalize the banking industry, even though you will discover the banks won't be lending after this is all over to any but the finest credits. You will have rewarded the banks for their calamitous decisions, stuffed the taxpayers with huge losses, squandered your remaining ability to shore up the FDIC, not prevented the big banks from collapsing anyway, done nothing to help the community banks that will constitute the new banking system in this country when these problems are solved, and in the end made the situation much worse.[emphasis mine]Read it all here
A Letter To Congress
By Cernig
Sean Paul Kelly at the Agonist has a pretty hot record as a fund manager in his day-job, and he puts forward a letter from a commenter there to his senator, Barack Obama. The commenter, "Numerian", has worked for many years in the banking industry and been closely involved with risk management and derivatives. Sean Paul says it "hits all the right notes". Here it is, in full:
Dear Senator Obama-The original author says feel free to copy his letter and send it to your own congresscritter, if you wish to. There's far more, including more very knowledgeable analysis from Numerian, in the comments at the Agonist post. Definitely worth a read.
Chances are most if not all of the major commercial and investment banks are insolvent. Not one of them is opting out of the do-not-short list, and they don't seem to have the confidence in their survival to opt out of the L3 asset swap program Secretary Paulson is proposing.
It is also very likely that acutely dangerous systemic risk already exists, not merely from direct lines of credit among the banks, but especially from credit default swaps, which if activated by more than one large bank default would probably bring down many others. Remember, though, that this systemic risk is highly concentrated in the top 25 or so banks in the world, and does not jeopardize the 6,000 other community banks in the U.S.
Third, it is also highly probable that as this recession worsens, and as housing values continue to sink, forcing more foreclosures, the large banks will be even closer to collapse.
Having worked for many years in the banking industry and been closely involved with risk management and derivatives, I can tell you that it looks like catastrophe is already here.
What Sec. Paulson wants you to believe is that catastrophe is approaching, but it can be averted if only Congress acts urgently to give him the extraordinary authority he is requesting. The implication is if you don't give him $700 billion in borrowing authority within a week, markets will collapse and it will be all your fault.
We've seen this drill before, with the Patriot Act and with the Iraq War authorization. The scare tactics, the urgency, the implied threat of blame for any failure - this is what the Bush administration does. Some of you in the Senate were able to stand up to this pressure, and that type of strength is desperately needed now.
If insolvency is here now for the big banks, the last thing you want to do is throw $700 billion of money that is not yours at bailing out the banks who created this disaster. You'll need every bit of that money to protect the taxpayers and their deposits in these banks when these financial companies are thrown into the bankruptcy courts. You'll need that money to make sure consumer deposits are protected with insurance, and you'll need it to keep the healthy parts of these banks that deal with consumers and businesses functioning until they come out of bankruptcy.
And forget about comparing Paulson's plan to the RTC. These L3 assets aren't homes, condos, or commercial real estate that can be easily sold at the right price. They are bits of paper giving the bond holder the right to some small portion of thousands of mortgages, a right that is shared with all the other investors, who are required to agree on what is done with foreclosed properties in the pool. This is one of the reasons no one wants to buy this stuff, and no one will for many years until it is crystal clear what the final losses will be.
Once you give Paulson the authority he seeks, he will buy these securities at 65 cents/dollar, then quietly auction them off at a nickel each. It will be "unfortunate but necessary" to revitalize the banking industry, even though you will discover the banks won't be lending after this is all over to any but the finest credits. You will have rewarded the banks for their calamitous decisions, stuffed the taxpayers with huge losses, squandered your remaining ability to shore up the FDIC, not prevented the big banks from collapsing anyway, done nothing to help the community banks that will constitute the new banking system in this country when these problems are solved, and in the end made the situation much worse.
If you want to do something practical, require the SEC to go into these banks, open up their L3 holdings to public scrutiny, auction off a sampling of these securities, and apply those prices to the L3 portfolios of all the banks. In this way we will know which banks are insolvent. You won't need to go through this charade of having the Treasury take ownership of these assets, because the core of the problem is not that these assets are clogging up bank balance sheets, as Paulson says (which is tantamount to saying, by the way, that no one will buy them). The core of the problem is that there is no transparency about these portfolios and their real worth. Congress doesn't need $700 billion of our money to create that transparency, and if it shows as I suspect that many of these banks are insolvent, that's why we have bankruptcy courts. You can certainly protect the banks from bank runs while they are in bankruptcy.
Paulson is basically rolling you and the rest of Congress into giving him unprecedented power to protect his friends on Wall Street. This decision you are making is probably as momentous as the Iraq War resolution. Don't fall for this bailout disguised as the only way to prevent Armageddon. Armageddon is already here - at least for the big banks - and it needs an entirely different solution. Spend our money protecting us, by ensuring the FDIC is properly funded, by throwing these too-big-to-fail banks into bankruptcy if they truly are insolvent, by preserving the healthy parts of these banks while in bankruptcy, and bringing them back out again so they function under much better safety and soundness regulations. We've had airlines functioning properly and safely for years while in bankruptcy, and there is no reason we can't do the same with banks.
Please, please, do not fall for some useless compromise or bipartisan agreement that gives the administration what it wants in the end. Kill this proposal here and now, protect us from this bailout, and deal with the real problem - the insolvency of the major banks, not the paper that is supposedly blocking their lending capabilities.
Sincerely,
More Reich On The Bailout
Reich tells us under what conditions we should lend the $700,000,000,000. We need to listen to him!!! Read it here
What Wall Street Should Be Required to Do, to Get A Blank Check From Taxpayers
The frame has been set, the dye cast. Treasury Secretary Hank Paulson, presumably representing the Bush administration but indirectly representing Wall Street, and Fed Chief Ben Bernanke, want a blank check from Congress for $700 billion or possibly a trillion dollars or more to take bad debt off Wall Street’s balance sheets. Never before in the history of American capitalism has so much been asked of so many for (at least in the first instance) so few.
Put yourself in the shoes of a member of Congress, including our two presidential candidates. The Treasury Secretary and Fed Chair have told you this is necessary to save the economy. If you don’t agree, you risk a meltdown of the entire global financial system. Your own constituents’ savings could go down with it. An election is six weeks away. Besides, in the last two days of trading, since rumors spread that the Treasury and the Fed were planning something of this sort, stock prices revived.
Now – quick -- what do you do? You have no choice but to say yes.
But you might also set some conditions on Wall Street.
The public doesn’t like a blank check. They think this whole bailout idea is nuts. They see fat cats on Wall Street who have raked in zillions for years, now extorting in effect $2,000 to $5,000 from every American family to make up for their own nonfeasance, malfeasance, greed, and just plain stupidity. Wall Street’s request for a blank check comes at the same time most of the public is worried about their jobs and declining wages, and having enough money to pay for gas and food and health insurance, meet their car payments and mortgage payments, and save for their retirement and childrens’ college education. And so the public is asking: Why should Wall Street get bailed out by me when I’m getting screwed?
So if you are a member of Congress, you just might be in a position to demand from Wall Street certain conditions in return for the blank check.
My five nominees:
1. The government (i.e. taxpayers) gets an equity stake in every Wall Street financial company proportional to the amount of bad debt that company shoves onto the public. So when and if Wall Street shares rise, taxpayers are rewarded for accepting so much risk.
2. Wall Street executives and directors of Wall Street firms relinquish their current stock options and this year’s other forms of compensation, and agree to future compensation linked to a rolling five-year average of firm profitability. Why should taxpayers feather their already amply-feathered nests?
3. All Wall Street executives immediately cease making campaign contributions to any candidate for public office in this election cycle or next, all Wall Street PACs be closed, and Wall Street lobbyists curtail their activities unless specifically asked for information by policymakers. Why should taxpayers finance Wall Street’s outsized political power – especially when that power is being exercised to get favorable terms from taxpayers?
4. Wall Street firms agree to comply with new regulations over disclosure, capital requirements, conflicts of interest, and market manipulation. The regulations will emerge in ninety days from a bi-partisan working group, to be convened immediately. After all, inadequate regulation and lack of oversight got us into this mess.
5. Wall Street agrees to give bankruptcy judges the authority to modify the terms of primary mortgages, so homeowners have a fighting chance to keep their homes. Why should distressed homeowners lose their homes when Wall Streeters receive taxpayer money that helps them keep their fancy ones?
Wall Streeters may not like these conditions. Well, you should tell them that the public doesn’t like the idea of bailing out Wall Street. So if Wall Street doesn’t accept these conditions, it doesn’t get the blank check.
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