Tuesday, September 30, 2008

In Which Every Thought Goes to the Mouth, Indeed

Via Taegan Goddard:
On the campaign trail, Gov. Sarah Palin jokes about listening to Sen. Joe Biden's speeches since she was in second grade. In a just-released CBS News segment, Katie Couric asks if that isn't an odd thing to say given her own running mate's age.

Said Palin: "Oh no, it's nothing negative at all. He's got a lot of experience and just stating the fact there, that we've been hearing his speeches for all these years. So he's got a tremendous amount of experience and, you know, I'm the new energy, the new face, the new ideas and he's got the experience based on many many years in the Senate and voters are gonna have a choice there of what it is that they want in these next four years."
Sounds like somebody should be consulting Ozzie Guillén's thought process map, as illuminated by Carl Skanberg:


Monday, September 29, 2008

Washington, District of CYOA*

The always-excellent Nate Silver highlights a very important piece of the bailout's defeat in the House:
Among 38 incumbent congressmen in races rated as "toss-up" or "lean" by Swing State Project, just 8 voted for the bailout as opposed to 30 against: a batting average of .211.

By comparison, the vote among congressmen who don't have as much to worry about was essentially even: 197 for, 198 against.
Now, I'm not particularly enamoured of this bailout proposal. If we're going to spend $700 billion of our own , I'd much rather we invest it in the American people than blow it on the irresponsible American banking industry.

That said, any Congressman who allowed their vote on this bill to be dictated by their poll numbers deserves to be dragged out into the streets and pilloried by their constituency.

God forbid our legislators ever stick their necks out, make a tough vote, and join their constituents in the unemployment lines because they wouldn't abandon their convictions.

* "Cover Your Own Ass" for the uninitiated

Saturday, September 27, 2008

Round 1: Fight! (Kinda)

I'm not going to go through the debate with a fine-toothed comb, playing "spot the lies" (I do have other things to do this weekend), but I will address a few things:
  • I found myself wondering - McCain says he saw the current economic crisis coming; as the two-time chair of the Senate Commerce Committee, did he ever hold any hearings based on his alleged concerns?
  • I've been around animals long enough to know that submissive ones avoid eye contact while others assert dominance by engaging it. McCain was shrinking away from Obama's gaze all night.
  • The exchange on earmarks left me wanting more. McCain kept on yammering on about Obama's requests for Illinois (something like $900 million?). Why Obama did not bringing up Palin's addiction to earmarks is beyond me. He could have easily said "John, if you're so concerned about earmarks, why did you pick a running mate who governs a state which had the highest per capita ratio of earmarked dollars this year - some $550 million dollars for a state of only 680,000 people? And to continue, John, why did you pick a running mate who submitted $127 million worth in earmarked requests from 2002-2003 as the mayor of a town of 8,000?" Those two sentences would have buried the issue and inflicted some serious damage on McCain/Palin, but Obama didn't even throw the punch.
  • When McCain was talking about strategic military strikes against Al-Qaeda in Pakistan, he critiqued Obama's support of said strikes by saying something to the effect of "If you're going to point a gun at someone, you'd better be prepared to pull the trigger." All Obama had to say in response was "Really, John? Let me quote you directly: 'Bomb, bomb, bomb, bomb, bomb Iran.' Are you going to pull that trigger?" Thank God, Obama did bring it up, but he didn't emphasize it or leverage it. If you can show your opponent to be a hothead while appearing calm and collected while under attack, you're doing well. Obama didn't capitalize the way he should have here; this would have been another potential knock-out blow.
  • When McCain was talking about Georgia, Obama should have brought up the fact that McCain's top foreign policy advisor was a lobbyist for Georgia, which doesn't exactly provide McCain with an unmolested view of the situation.
  • As a student of Russian and Eastern European history, I've got to say that McCain's belligerent posture toward Russia (and his "I see three letters in Putin's eyes: K-G-B" line) are extremely troubling. Make no mistake, I'm not advocating the current brand of Russian foreign policy, but the United States need a President who is less bellicose and more nuanced. That President is not John McCain.
Overall, it was a mixed night, though I think Obama "won" the debate in the eyes of most potential viewers. My disappointment with Obama tonight isn't because McCain got the better of him in the debate, but because Obama didn't send McCain home reeling and bloody from an encounter with Facts and Truth.

Friday, September 26, 2008

But in all sincerity...

What's the consensus? A draw? A win? A loss?

I honestly expected more assertiveness from Obama, though McCain was quite predictably ornery.

Right now I'll leave the incisive analysis of Debate I to Tim and Wyl, but let me just say...


...at least I have my wardrobe for November 4 officially confirmed.

Wednesday, September 24, 2008

The Tale of Sen. McCain

Brave Sir Robin ran away,
Bravely ran away, away.

When danger reared its ugly head, he bravely turned his tail and fled.

Yes, brave Sir Robin turned about

And gallantly, he chickened out. Bravely taking to his feet,

He beat a very brave retreat,

Bravest of the brave, Sir Robin.


- Monty Python and the Holy Grail (1975)

Since brave Sen. McCain is ducking the debates and running away from the public (something Eric Rauchway points out was not done by Lincoln in 1864, Hoover or FDR in 1932, FDR or Willkie in 1940, or FDR or Dewey in 1944), why not shout after him a good question that no one is asking:

"Senator McCain, what does your buddy Phil Gramm have to say about all your Wall Street pals that are currently whining so loudly?"

McCain's Suspension Ploy

John McCain has just announced that he'll be suspending his campaign in order to help deal with the economic crisis.

Why this is respectable:
It's pretty much universally agreed upon right now that the economy is in rough shape. The debate is over how to deal with it. One of the most obnoxious things to me about watching high level political campaigns is listening to congressmen, senators, and other high ranking elected officials talking about what they would do, or what should be done. These are people that are fully capable of moving the process forward to get those Woulds and Shoulds done, but they're too busy talking and not acting. I'm all about officials running their campaigns by putting on display that they're doing their jobs and doing it damn well.

Why this is clever political posturing:
McCain's poll numbers have been plummeting this week (even a Fox News poll has him down 6 points nationally, ABC has him up 9). Most people seem to agree that Obama is better equipped to cope with the economy, and have decided that he's not an elitist, but rather that his years helping poor people that had lost their jobs made him more aware of the plight of people who are afraid of losing their jobs and becoming poor. John McCain himself has announced that he's not a very good student of the economy, and he's been digging his own free market grave since he first came to Congress as part of the Reagan Revolution. Senator Six-Homes McCain is making a mad dash to make himself seem more sympathetic to the people his top economic advisor refers to as a "nation of whiners." Not only does it make McCain seem like he's rushing to the aid of the American people, and if Obama doesn't go along with it, Obama looks like he doesn't care. So either McCain's determining the staging of the race and looking more leaderly in the process or making Obama look aloof.

Why this is just a big load of crap:
This would all be very noble, except John McCain has no intention of being any less visible to the voting populace. He's not going to be "suspending" his campaign, he's just going to be campaigning from Washington in between meetings, and from the Senate floor. McCain is pushing this as a way to put himself a rung above electoral politics (the cornerstone of our democracy, by the way, and not something to consider yourself "above") as a man who cares nothing for himself and only about you, but he's only doing this to propagate an image so he can bring his poll numbers back up and get elected. If he weren't running for President, John McCain would be off talking to some B-list newspaper explaining yet again that he doesn't know much about the economy and staying on the fringes of the debate until another war came up that he could support.

To be fair, it's very well executed bullshit, but it is bullshit nonetheless.

Tuesday, September 23, 2008

"Substituting Vehemence for Coherence"

It's not like me to enjoy a George Will column. I generally find him stuck up and priggish. However, today's column is one of his occasional exceptions. Some excerpts:

Under the pressure of the financial crisis, one presidential candidate is behaving like a flustered rookie playing in a league too high. It is not Barack Obama.

[...]

By a Gresham's Law of political discourse, McCain's Queen of Hearts intervention in the opaque financial crisis overshadowed a solid conservative complaint from the Republican Study Committee, chaired by Rep. Jeb Hensarling of Texas. In a letter to Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke, the RSC decried the improvised torrent of bailouts as a "dangerous and unmistakable precedent for the federal government both to be looked to and indeed relied upon to save private sector companies from the consequences of their poor economic decisions." This letter, listing just $650 billion of the perhaps more than $1 trillion in new federal exposures to risk, was sent while McCain's campaign, characteristically substituting vehemence for coherence, was airing an ad warning that Obama favors "massive government, billions in spending increases."

[...]

It is arguable that, because of his inexperience, Obama is not ready for the presidency. It is arguable that McCain, because of his boiling moralism and bottomless reservoir of certitudes, is not suited to the presidency. Unreadiness can be corrected, although perhaps at great cost, by experience. Can a dismaying temperament be fixed?
And there you have it. George F. Will has given a backhanded, extremely reticent, lesser-of-two-evils endorsement of Barack Obama over John McCain.

Also, for the record, I personally think "Substituting Vehemence for Coherence" should be McCain's campaign slogan. Thanks George!

Friday, September 19, 2008

Bridging the Chasm

The other day I was reading this Consumerist post on the 10 largest Chapter 11 bankruptcies in US history. Most of us are old enough to remember when United Airlines bit the bullet in late 2002. United held pre-Ch. 11 assets of $25.2 billion, which ranks as the tenth largest bankruptcy.

I remember the talk when Texaco became insolvent in 1987 (my great uncle owns a service station which formerly sold Texaco gas). Texaco's assets at the time of receivership amounted to $35.9 billion, which is bad enough for 5th on the all-time list.

Baseball fans in particular remember when Enron went bust because of the scandal surrounding the naming rights deal the company had signed with the Houston Astros. Enron's pre-bankruptcy assets were valued at $63.4 billion in 2001. That places Enron a distant third.

Remember WorldCom (aka MCI WorldCom), the long-distance carrier and rival of AT&T which tried to merge with Sprint in 1999 until the Department of Justice and the EU got antsy? Three years later WorldCom went down to the tune of $103.9 billion, the largest bankruptcy filing ever at the time. Today, WorldCom is merely second...

...to Lehman Brothers. Prior to this Monday, Lehman's assets amounted to $639 billion, outstripping the previous bankruptcy record by $535.1 billion. This is a massive number that's incredibly hard to contextualize, but thanks to the information provided by Condé Nast Portfolio, I think I've managed to accord it proper scale.

Ford Motor Company's total assets, including global operations in Europe, Australia, and Latin America amount to $178.82 billion as of August. Entities owned by Ford include Ford, Lincoln, Mercury, Mazda, Volvo, Motorcraft (parts and service), Ford of Europe, Ford of Australia, the Ford Motor Credit Company (financing), and manufacturing facilities throughout Latin America and Africa.

General Motors is the maker of Chevrolet, Pontiac, Saturn, Buick, Hummer, Saab, Cadillac, Holden (Australia), Opel (Germany), Vauxhaul (UK), Daewoo (South Korea), Delphi Electronics, and 49% of GMAC Financial. GM's total assets, including operations in Europe, Australia, South Korea, and China, amount to $65.92 billion, also as of August.

Chrysler's assets are a bit harder to ascertain. The company's divisions include Chrysler, Dodge, Jeep, Mopar (Chrysler's parts and service arm), ENVI (hybrid vehicle development), and Chrysler Financial, and previously was part of the now-defunct DiamlerChrysler consortium. Now a private company, with 80.1% owned by Cerebus Capital Management, 19.9% owned by former partner Daimler AG (think Mercedes-Benz, plus a ton of truck companies like Freightliner and Sterling and a bank), I couldn't find any data on the Condé Nast site. An estimation is possible, though. In 2007, Cerebus paid $7.4 billion for the privilage of owning Chrysler, this despite the later's $18 billion in liabilities. If you believe assets minus liabilities equals a sales price, then Chrysler's assets would be in the range of $25 billion.

Lehman Brothers' $639 billion in pre-bankruptcy assets outstrips the combined assets of Ford, GM, and Chrysler ($269.74 billion) by $369.26 billion. So, since we're still not even halfway across the abyss, let's make a few more additions.

Toyota Motor Corporation's operations encompass the Toyota Group (Scion, Toyota, and Lexus), Toyota Financial Services, and 521 other subsidiaries, including a majority stake in Daihatsu, nearly 9% of Fuji Heavy Industries (makers of Subaru as well as ventures in aerospace and eco tech). According to the Fortune Global 500, Toyota is the 6th largest corporation in the world. The total assets for Toyota in August of 2008 amounted to $120.86 billion.

Honda Motor Company is another multinational engineering and manufacturing concern. Honda manufactures cars (Honda and Acrua), trucks, motorcycles, scooters, robots, jets, jet engines, ATVs, watercraft, generators, marine engines, lawn mowers, and aeronautical equipment. As of August the company's total assets amounted to $48.47 billion.

Combine Toyota and Honda with Ford, GM, and Chrysler and the Lehman Brothers Canyon shrinks to only $199.93 billion.

Apple, Incorporated needs no introduction. The company's assets amounted to $28 billion in August. Only $171.93 billion to go!

Likewise, Microsoft Corporation is familiar to everyone. In August the company was valued at $43.24 billion. Lehman Brothers' lead is shrinking - merely $128.69 billion left!

Google, Incorporated adds another $16.32 billion in assets to the pile. Down to a mere $112.37 billion loss!

Dell, Incorporated pulls off another $21.78 billion from Lehman's Ravine, now $90.59 billion.

The Boeing Company eliminates $25.94 billion more. Lehman's Gulch has shrunk to $64.65 billion.

Hey, what it Bill Gates had a really bad day at the track? His $57 billion fortune gone, the Lehman Gap narrows to $7.65 million.

Let's say that Rupert Murdoch's NewsCorp empire goes down, taking with it HarperCollins Publishers, Dow Jones & Company, the Consumer Media Group (including The Wall Street Journal), all of FOX media entities, and hundreds more newspapers, magazines, etc. That's another $6.8 billion gone. Now there's only $850,000,000 left to account for.

California's Governator has an estimated worth of about $800 million, something I found rather surprising (more than Mitt Romney? Really?).

And the last $50 million? That's about what Rudy Giuliani spent to win a single delegate in the Republican primary (the Times' headline is somehow wrong).

Finally!

Ready for the bloodletting? To equal Lehman Brothers' pre-bankruptcy assets, the following companies and individuals would have to lose all value:

  • Ford Motor Company
  • General Motors
  • Chrysler, LLC
  • Toyota Motor Company
  • Honda Motor Company
  • Apple, Inc.
  • Microsoft Corporation
  • Google, Inc.
  • Dell, Inc.
  • Boeing
  • Bill Gates
  • Rupert Murdoch
  • Arnold Schwarzenegger
  • Rudy '08

That's how big Lehman Brothers was. Was. Now it's not worth a Roosevelt dime. Finita la commedia.

And now we know that Bernanke and Paulson told Congressional leaders that up to $1 trillion will be needed to prevent a second Great Depression.

Ladies and gentlemen, if you're scared shitless about Lehman Brothers' failing, you have every right to be. If you aren't scared, you should be.

Wednesday, September 17, 2008

Who watches the watchmen?

So, all week, the major financial collapses have been all over the headlines, and I've been silent on it, because high-falootin' finance and money games are well beyond my expertise. So, I did what I always do in cases like this: I asked someone I know who's smarter than me. In this case, my friend Nick, who follows finance closer than anyone I know and has more expertise to assess it. And in order to really communicate how much Nick just scared the hell out of me, I'm just going to post everything he just wrote to me.

Obviously, there's a lot of subjectivity when it comes to economic prediction, but a lot of this makes sense to me. If you have any conflicting or supporting information and ideas, I'd love to hear them.
___________________________________________________________________________________

Q: On a scale of 1-10, where 1 is "minor fluctuation" and 10 is "start looking for refrigerator boxes to sleep in," how bad is this crisis?

A:
As far as our lifetimes are concerned? 9.5.

Q:
Can you give me a concise, idiot-proof explanation of how we got into this mess? I have a decent idea that it involves mortgage companies giving loans to people who couldn't really afford them(sub-prime rates, 100% financing, etc.), and then that somehow fed back to investment banking and insurance.

A:
This sub-prime mortgage mess has been building for a couple of decades and the largest financial bubble in HISTORY is popping. There are three issues you should know about.

1.) At the heart of the issue is poor lending practices to people that cannot afford mortgages. Investments that are risky typically cost more, preventing people from investing too heavily. Banks took these bad mortgages, wrapped them up into securities (think stocks), and sold off the different layers at a non-risky price. They were able to do this because rating agencies (watchdogs that give ratings based on the risk of an asset) gave really risky investments very good ratings. This allowed banks to trade and sell these assets at prices that soon ballooned and created this bubble.

2.) Another problem is lack of oversight from federal regulators. When Enron collapsed the government created stricter standards on accounting through the Sarbanes-Oxley legislation preventing abuse from CEOs. The banking industry has a HUGE lobby that has the sole purpose of deregulating the industry so they can get away with outright fraud. If you've heard of pyramid schemes, this is the mother of all pyramid schemes. Just an FYI, Obama has received $10m in campaign contributions from Wall Street and McCain accepted $7 million.

3.) Lastly, these banks were gambling with our money KNOWING the government would bail them out. If they thought for one instance they couldn't recoup their losses, this wouldn't be happening now. Banks lent out billions of dollars on these risky investments without the ability to cover their bets. They were somewhat cautious, however, taking out insurance from AIG…but who insures the insurer?

Q: The federal government has now taken control of Fannie Mae, Freddie Mac, and AIG. What exactly are they going to do to make these companies stay viable that the private sector couldn't do (other than prop them up with taxpayer dollars until they can stand on their own)?

A: The last major financial crisis involving financial institutions was the Savings and Loan scandals in the 80's and 90's. The same thing happened with S&L institutions making outrageously risky bets by lending money to unviable firms and people. Do you see any S&L companies now? Not really, because most of them tanked (WaMu is one current example, but it will soon tank as well). 747 S&L institutions fell costing a total of around $160 billion, most of which was paid by the US government (aka US people). As it stands the current fallout from this crisis is $900 billion and still counting.

When the government lends a helping hand to these institutions its first task is to keep them afloat by pursuing precisely the same policies that caused the crisis in the first place. Fannie Mae and Freddie Mac purchased these toxic mortgage securities from failing institutions and went bust as a result. What policies has the US government put in place so far? They will continue normal functioning until the end of 2009, and then consider changing course afterwards. Same with AIG. A major concern is that these companies and the government don't even know what the problem is let alone how to fix it. So they put a temporary band-aid on a huge structural issue that cannot be fixed by money. The only way to fix these companies is to let the house of cards fall.

Q:
In addition to the aforementioned 3, Lehman Brothers, Bear Stearns, and Merrill Lynch have died or been absorbed by someone else in very recent memory. Washington Mutual is on the rocks and the feds are trying to find a buyer before it crashes entirely. We've got anti-trust laws for a reason, but it's looking like competition in the banking and financial services sector is evaporating because of some very, very bad investments over the last decade. The market was already dominated by a few very powerful firms: what happens when that number gets dramatically reduced?

A: The Daily Show last night had a funny skit showing one of the cast in front of a sign "Bank of America and Merrill Lynch." As the skit continued, the sign said, "Bed, Bank of America, and Beyond." Monopolies should be a huge concern to all Americans. When someone is in power, they are able to take advantage of the system at the expense of customers. Competition prevents many of these abuses by giving people a choice to pick banks that won't screw them over. I believe the larger more sturdy banks like Bank of America and Barclays will come out of this with some key purchases making them ENORMOUS institutions. B of A has already purchased LaSalle Bank, Countrywide, and now Merrill Lynch. Unfortunately for them, the credit crisis is still in full swing and the company may have buyer's regret if the asset values of the acquired companies continue to fall. As mentioned earlier, no one truly knows the full extent of the problem and this makes it difficult to put a dollar value on affected companies. Additionally, new regulations will surely cripple the flexibility of operations. Finally, a global recession is about to ensue and banks can't make money when no one wants to borrow money. Growth through acquisition may be a double-edged sword and only time will tell.

The government is also purchasing companies so you have to wonder what's worse, a socialized or monopolized economy?

Q: Who's next?

A: The fallout is just beginning and you'll see effects on the real economy soon enough. First, regional banks will start closing as people borrow less money. They operate on smaller margins than these behemoths and are more susceptible to fluctuations. Second, the auto industry has been asking for bailouts and will likely not receive anything as the core of our economy (Finance, Insurance, Real Estate or FIRE compose 30% of our economy) is shutting down. Any other company that has big ticket and luxury items such as cars, consumer electronics, appliances, etc. will surely feel the effects as consumers buckle down and purchase only necessities. Starbucks and retail operators are closing down stores and will continue until the slump abates. As houses go into foreclosure, property taxes will decrease and local government services will be hurt as a result. The airline industry will have less business and personal travelers and the local tourism industries may see a boost.

From an international perspective, countries that have invested heavily in the US or have exported large amounts to our consumer culture will be hurt dramatically. China's sovereign wealth fund, the largest in the world, is mostly composed of US dollars. They have been inflating the value of the American dollar through their sale of cheap goods for a decade. Not only will their investment in US dollars decrease in value, their export-based economy will suffer accordingly. The US is the largest economy in the world so the ripples will be far-reaching. Already international markets are greatly affected by this credit crisis.

Q: What's going to be the effect of these billions of dollars of bail-outs on the federal deficit, and will it have any appreciable effects on the economy from that end?

A: The bailouts are merely band aids on a mortal wound. The million dollar question is what will happen to the value of our money? Sadly there are both inflationary and deflationary concerns and a coin toss can tell you how it will end up. Inflationary concerns are based on the assumption that the US government will continue to bail out institutions or incur large costs from the current bailouts. To cover expenses, the US can either borrow or print more money. Both will lead to the devaluing of the dollar and cause prices to increase. Oppositely, as consumers and business spend and borrow less, the velocity of money will decrease allowing fewer dollars to circulate in our economy. Fewer dollars increases the value of dollars outstanding and your current savings should be fine (given that you still have a job, and the bank that holds your money doesn't collapse).

To combat inflation, you should invest in gold and silver and other commodities that consistently hold their value. Dollars are paper and are inherently worthless except by popular misconception (fiat money). I have put a little money into gold and silver just in case. If there's deflation, make sure to kiss your boss' ass now so that you retain your job through bad times.

Q: Is there anything I didn't ask that you feel it's necessary to comment on?

A: This is fundamentally an issue of class and neo-liberal capitalism. If our economy were purely capitalistic things might be different. However, the current system provides a reinforcing mechanism for the wealthy and elite through various transfers of wealth. Big business and their lobbyists retain control over our elected leaders pushing through policies that benefit them at the cost of the average American. Wall Street, the Military-industrial complex, and the Healthcare Industry have created an economic system that transfers a majority of people's earnings into a few pockets. Indeed inflation itself is caused by the careless borrowing of our government to fight wars overseas and creates an indirect tax in the form of less bang for your buck. The Federal Reserve is a private company (really a consortium of privately held banks) that creates our money and enacts policies to hurt the average American. Alan Greenspan (former Fed Chair) was a huge supporter of adjustable rate mortgages (ARMs) that were a partial cause of the current credit crisis. John McCain's former financial advisor Phil Gramm pushed through legislation that allowed banks to pursue these risky investments. Our credit card companies and educational institutions encourage debt-spending graves that people are unable to dig themselves out of. Our army and emergency services are composed of private companies. Our prison systems are built and monitored by private companies.

There is no magic bullet or well-spoken leader that can bring about the change that is needed. The only change that matters is from an educated populace. Internet bloggers and other grass-roots organizations will help expose lies and bring together communities to enact change.

Buy a gun, read more, spend within your means, and get involved.

Website links:

http://benbittrolff.blogspot.com/

shadowstats.com

rawstory.com

buzzflash.net

Morning thoughts

Three things.

1) I had a dream last night about going to see Sarah Palin speak. It was in a school gym. The crowd, was already staunch Republican: she was preaching to the choir. I remember listening to her spout off all of her standard venom, and listening as the crowd got more and more riled up, and getting more and more pissed off at them. And then she made some line to the effect of, "and then we'll have peace, just like when Nixon was president." And then, unprompted and in complete unison, the crowd chanted "VIETNAM AND CAMBODIA" and then burst into roaring laughter. This is my worst fear about America: that all of the people who are excited about John McCain and Sarah Palin, that 47% of the electorate or whatever it is today, are fully aware of what it is that those two are promising us, they fully understand the truth behind the lies, and are playing along with the joke anyway. I'm terrified by the prospect that all of America understands how we would get screwed by a McCain presidency, and half of them are going to vote for it anyway. My better hopes for the country insist that most McCain voters are good people who just understand the world in a completely different way, but I was still rattled anyway.

2) Perk up though! For all of those of you who feared the worst after McCain and Palin got their convention bump in the polls, you can ease up on your apartment search in Toronto. McCain's little spike is on its way right back down.

3) Harold Meyerson has a fascinating op-ed in the Post this morning giving his final "screw you, you earned this" to Wall Street as we know it. He blames the investment community for creating a whirlwind circle-jerk where big money breeds bigger money without actually contributing anything to the community that allowed it to flourish, allowing the broader national economy to falter enough that when it was time to collect the "projected earnings" (a.k.a. theoretical future money), the actual money wasn't there to back it up.
During the late, lamented Wall Street boom, America's leading investment institutions were plenty bullish on China's economy, on exotic financial devices built atop millions of bad loans, and, above all -- judging by the unprecedented amount of wealth they showered on the Street -- on themselves. The last thing our financial community was bullish on was America -- that is, the America where the vast majority of Americans live and work.

Over the past eight years, the U.S. economy has created just 5 million new jobs, a number that is falling daily. The median income of American households has declined. Airports, bridges and roads are decaying. Rural wind-power facilities cannot light cities because our electrical grid has not been expanded. New Orleans has not been rebuilt. And as productive activity within the United States has ceased to be the prime target of investment, household consumption -- more commonly known as shopping -- has come to comprise more than 70 percent of our economy.

[...]

Finance set the terms of corporate behavior over the past quarter-century, and not in ways that bolstered the economy. By its actions -- elevating shareholder value over the interests of other corporate stakeholders, focusing on short-term investments rather than patient capital, pressuring corporations to offshore jobs and cut wages and benefits -- Wall Street plainly preferred to fund production abroad and consumption at home. The internal investment strategy of 100 years ago was turned on its head. Where Morgan once funneled European capital into American production, for the past decade Morgan's successors have directed Asian capital into devices to enable Americans to take on more debt to buy Asian products.

Wednesday, September 10, 2008

Cut the Crap

It's worth making a separate post to add to the one about the Lipstick issue, Obama's personal remarks on the matter.

Some of you may have -- I'm assuming you guys have heard this, watching the news. I'm talking about John McCain's economic politics, I say, "This is more of the same, you can put lipstick on a pig but it's still a pig."

And suddenly they say, "Oh, you must be talking about the governor of Alaska."

[Laughter from audience]

See it would be funny, it would be funny except -- of course the news media all decided that that was the lead story yesterday. They'd much rather have the story -- this is the McCain campaign -- would much rather have the story about phony and foolish diversions than about the future.

This happens every election cycle. Every four years. This is what we do. We've got an energy crisis. We have an education system that is not working for too many of our children and making us less competitive. We have an economy that is creating hardship for families all across America. We've got two wars going on, veterans coming home not being cared for -- and this is what they want to talk about! this is what they want to spend two of the last 55 days talking about.

You know who ends up losing at the end of the day? It's not the Democratic candidate, It's not the republican candidate. It's you, the American people. because then we go another year or another four years or another eight years without addressing the issues that matter to you. Enough.

I don't care what they say about me, but I love this country too much to let them take over another election with lies and phony outrage and swift-boat politics. Enough is enough.

Furthermore (and thanks to our friend Anna for tipping me off on most of this) even Mike Huckabee has come out on Obama's side on this.

"It's an old expression, and I'm going to have to cut Obama some slack on that one. I do not think he was referring to Sarah Palin; he didn't reference her. If you take the two sound bites together, it may sound like it."

Stop Proving Mencken Right

"It is hard to believe that a man is telling the truth when you know that you would lie if you were in his place."
"In the United States, doing good has come to be, like patriotism, a favorite device of persons with something to sell."
-- H.L. Mencken
__________________________________________________________________
Q: Do politicians lie?
A: Of course.

Q: Why do politicians lie, despite a near-unanimous longing for honest public officials?
A: Because lies work.

Obama has proposed eliminating income taxes on seniors making less than $50,000 a year, but 41 percent of those seniors say their income taxes would go up in an Obama administration.
Keep this in mind when you hear about the current "lipstick on a pig" kerfuffle. Barack Obama is being accused by the Wall Street Journal (whose editors should have been on this like a rash) and Drudge (predictable) of using the common saying "you can put lipstick on a pig; it's still a pig" in reference to Sarah Palin. Here's the actual quote.
Let's just list this for a second. John McCain says he's about change, too. Except -- and so I guess his whole angle is, "Watch out, George Bush, except for economic policy, health-care policy, tax policy, education policy, foreign policy, and Karl Rove-style politics. We're really gonna shake things up in Washington." That's not change. That's just calling some -- the same thing, something different. But you know, you can -- you know, you can put lipstick on a pig; it's still a pig.
So if John McCain wants to get mad about being called a pig with lipstick, that's fine. But let's be clear that A) it was McCain, not Palin, B) Obama was talking about the policy, not the man, and C) IT'S A METAPHOR.

Once again, humanity has the dubious honor of having been described accurately by H.L. Mencken. Knock it off, people.

Tuesday, September 9, 2008

Living Too Late

Eight years too late, The Bush Administration may have learned that tact can be used for good, not just for evil.

"So this is what it has come to for the Bush administration in what may be its last foreign policy crisis: No saber-rattling; no calls to expel Russia from the G-8, a la McCain. Instead, a patient effort to work with Europe, in partnership with French diplomats, for heaven's sake! And a policy premised on the idea that global capital markets are a better constraint than U.S. bluff and bluster. "
--David Ignatius

Back to good-ol' fashioned Bush-bashing

Fun with quotations:

"Big government is not the answer." George W. Bush, 4 August 2000, at the Republican National Convention.

"To create jobs, my plan will encourage investment and expansion by restraining federal spending, reducing regulation, and making the tax relief permanent." George W. Bush, 2 September 2004, at the Republican National Convention.

and yet...

"I am, one, pleased with the Secretary of the Treasury's decision; and two, believe that it will stabilize the markets, which is necessary at this point in time," Bush said in an interview with Fox News Channel to air on Tuesday morning.

"I wouldn't call it a bailout. I'd call it a stabilization," he said according to the transcript.

Reuters, 8 September 2008.


No Bridges for Old Money

CQ has a fascinating article about Sarah Palin's involvement in the proposal, modification, and eventual tanking of the "Bridge to Nowhere." The basic timeline:

1) Rep. Don Young (R) earmarks nearly half a billion dollars for two bridges to islands with tiny populations.

2) Congress decides that maybe the earmark isn't a great idea. The money will be given to Alaska's Transportation department, but to be used however they see fit.

3) Sarah Palin runs for governor in 2006 promising to defend the bridge project from federal intervention, though the money has long since been given over to the discretion of the state government. "“We need to come to the defense of Southeast Alaska when proposals are on the table like the bridge and not allow the spin-meisters to turn this project or any other into something that’s so negative."

4) Upon taking office, Palin decides that the bill is, in fact, as wasteful as everyone else has already said, and kills the project. Nevertheless, she keeps the money from the appropriation.

5) (and this part is not in the CQ article) In her Vice Presidential nomination speech, Palin claims to have created a budget surplus in Alaska, which she has returned to the people of Alaska in the form of tax breaks. These tax breaks, I'm sure, were not hurt by Rep. Don Young (R)(currently under investigation for taking bribes and other unreported "gifts") and Sen. Ted Stevens
(R)(currently under indictment on seven counts of corruption) giving her $400+ million of money gathered from all 50 states to play with as she sees fit.

Conclusion: Palin can legitimately claim that she killed the project. However, she can also be taken to task for killing a project she campaigned to defend, although she faced no federal interference.

For further reading: Michael Kinsley on "Sarah Palin's Alaskonomics"

Friday, September 5, 2008

McCain

Thankfully, Senator McCain's speech last night was a reprieve from the hate-fest run by Sarah Palin and Rudy Giuliani on Wednesday. It had some moments that bothered me, but I left the speech remembering why I can't hate John McCain. He may be conservative, he may be dangerously unpredictable, he may be a philanderer, he may be he may have sold his independence this winter for a boost up the ladder, and he may be gratuitously milking his war stories to gather all the slack he can to make up for those flaws, but he really does believe he can make America a better place, and that's all he wants. I just can't agree with his definition of "better" or the means he's going to use to get there.

There are two parts that stuck in my craw. The first:
Matthew died serving our country in Iraq. I wear his bracelet and think of him every day. I intend to honor their sacrifice by making sure the country their son loved so well and never returned to remains safe from its enemies.

McCain wears the bracelet and pledges to honor the memory of a man who died fighting an unnecessary war that the good Senator helped us get into. He pledges to keep our country safe from a country that never posed a direct threat to us. John McCain helped send Matthew Stanley to his death in pursuit of a farce, and now comforts himself with the belief that he's on the side of the soldiers, and uses that poor boy's name to gather votes. It's exploitation of the most petty sort that all politicians get into, and I really wish they'd knock it off.

The other thing that bothered me came after his lengthy depiction of life as a POW. He started talking about why he loves America so much, and it broke my heart because it's so far from what his party has been pushing our country to. So I'm just going to post the text, with some links added, so you can get the flavor of how much this tore me up.

I fell in love with my country when I was a prisoner in someone else's. I loved it not just for the many comforts of life here. I loved it for its decency, for its faith in the wisdom, justice, and goodness of its people.

I loved it because it was not just a place, but an idea, a cause worth fighting for. I was never the same again; I wasn't my own man anymore; I was my country's.

I'm not running for president because I think I'm blessed with such personal greatness that history has anointed me to save our country in its hour of need.

My country saved me. My country saved me, and I cannot forget it. And I will fight for her for as long as I draw breath, so help me God.

My friends, if you find faults with our country, make it a better one. If you're disappointed with the mistakes of government, join its ranks and work to correct them. Enlist...

Enlist in our Armed Forces. Become a teacher. Enter the ministry. Run for public office. Feed a hungry child. Teach an -- an illiterate adult to read. Comfort the afflicted. Defend the rights of the oppressed.

Our country will be the better, and you will be the happier, because nothing brings greater happiness in life than to serve a cause greater than yourself.

I'm going to fight for my cause every day as your president. I'm going to fight to make sure every American has every reason to thank God, as I thank him, that I'm an American, a proud citizen of the greatest country on Earth. And with hard work -- with hard work, strong faith, and a little courage, great things are always within our reach.

Fight with me. Fight with me.

Fight for what's right for our country. Fight for the ideals and character of a free people.

Fight for our children's future. Fight for justice and opportunity for all.



John McCain has a beautiful vision of what America could be again, and he's leading us away from it.

Thursday, September 4, 2008

Palin's speech

Now, if a Republican were to read this blog, he or she would say that I'm biased, and that I wasn't listening to Palin's speech with an open mind and I was just going to pick through her speech anyway. It's absolutely true. What I was hoping for was some evidence that this woman had a brain and a heart, that there was a good reason that John McCain picked her. The reason I have come up with is that she's a spectacular demagogue. Let's dig through this speech and all of the things that the GOP was cheering last night.
_____________________________________________________________

"The voters knew better, and maybe that's because they realized there's a time for politics and a time for leadership, a time to campaign and a time to put our country first."

This implies that Barack Obama has been campaigning while John McCain has been "putting our country first," which she seems to think involves doing something that isn't campaigning. Clearly, this is not the case.

You know, from the inside, no family ever seems typical, and that's how it is with us. Our family has the same ups and downs as any other, the same challenges and the same joys.

Yes, every family has a mother being investigated for corruption and nominated for Vice President. It must have happened to my mom three or four times.


"And Todd is a story all by himself. He's a lifelong commercial fisherman and a production operator in the oil fields of Alaska's North Slope, and a proud member of the United Steelworkers union. And Todd is a world champion snow machine racer. Throw in his Yup'ik Eskimo ancestry, and it all makes for quite a package. And we met in high school. And two decades and five children later, he's still my guy."

I don't have a problem with anything she's saying here, actually, I just think it's really badly written.

"So I signed up for the PTA because I wanted to make my kids' public education even better. And when I ran for city council, I didn't need focus groups and voter profiles because I knew those voters, and I knew their families, too."

If she's planning on knowing every voter she's going to represent as Vice President, she's got an awful lot of work to do in the next 60 days.

"Before I became governor of the great state of Alaska I was mayor of my hometown. And since our opponents in this presidential election seem to look down on that experience, let me explain to them what the job involved. I guess -- I guess a small-town mayor is sort of like a community organizer, except that you have actual responsibilities."

I don't even know where to begin with this. The GOP loves the "bootstrap" story. They love saying that the free market will take care of itself. They love small-town values. They love "faith-based initiatives." When you have a community that is in poverty, when the jobs and the money go away, people need to do something. Some people with big hearts, with skills, and a lot of patience come in and help the community
become a community. They pool their resources, raise money, and start programs to get people trained for new jobs. They help people help themselves (bootstraps), they teach people to look out for each other (small-town values), they teach people to do things without having to resort to government interference in the market (free markets) and they do it in church basements (faith-based initiatives). So who in the hell does she think she is saying that Barack Obama had no responsibilities as a community organizer, teaching poor, uneducated people in Bullethole City USA to take care of themselves without resorting to crime or relying on welfare? Yes, she had responsibilities, but so did he. Community organizing is to society what a conscience is to the mind.

"I might add that, in small towns, we don't quite know what to make of a candidate who lavishes praise on working people when they're listening and then talks about how bitterly they cling to their religion and guns when those people aren't listening."

Let's look at the Obama statement she's talking about.

"You go into some of these small towns in Pennsylvania, and like a lot of small towns in the Midwest, the jobs have been gone now for 25 years and nothing's replaced them. And they fell through the Clinton Administration, and the Bush Administration, and each successive administration has said that somehow these communities are gonna regenerate and they have not. And it's not surprising then they get bitter, they cling to guns or religion or antipathy to people who aren't like them or anti-immigrant sentiment or anti-trade sentiment as a way to explain their frustrations."

Okay. So we have Obama talking about how, on a bipartisan level, the working class is getting screwed. He says that when they have little else in their lives that they're in control of, they look for conservative religion and so forth to provide order and meaning to a life filled with chaos. It's a God that says to them, "you are living the righteous way, and the rest of the world is screwed up." And he's not judging them, he's saying that we need to actually help them, because they have gotten screwed, and the bitterness (which many underemployed folks in rural Pennsylvania will tell you is absolutely real) is just emblematic of a bigger problem that needs to be fixed, not embraced because of how all-American and wonderful the current situation is.

As for my running mate, you can be certain that wherever he goes and whoever is listening John McCain is the same man.

Ah yes, because being the same man in one place as you were in another is qualification enough for being president.

The right reason is to challenge the status quo, to serve the common good, and to leave this nation better than we found it.

I believe the expression is "change we can believe in," and it's what you get when you don't except that things are already perfect in Scranton.

This was the spirit that brought me to the governor's office when I took on the old politics as usual in Juneau, when I stood up to the special interests, and the lobbyists, and the Big Oil companies, and the good-old boys. Suddenly, I realized that sudden and relentless reform never sits well with entrenched interests and power-brokers. That's why true reform is so hard to achieve. But with the support of the citizens of Alaska, we shook things up. And in short order, we put the government of our state back on the side of the people. I came to office promising major ethics reform to end the culture of self-dealing. And today, that ethics reform is a law.

I have never heard such a long string of tired political catch-phrases spewed continuously without any explanation. What did she shake up? A can of Pepsi? A baby? No-bid government contracts? What?

When oil and gas prices went up dramatically and filled up the state treasury, I sent a large share of that revenue back where it belonged: directly to the people of Alaska.

Wait a second, what? Chicago's paying $4.50 a gallon and she's giving that money out in tax breaks? Nuts to that!

Our opponents say again and again that drilling will not solve all of America's energy problems, as if we didn't know that already. But the fact that drilling, though, won't solve every problem is no excuse to do nothing at all.

Okay, this is fair. But we do need to be aware of where we're drilling. Permanently obliterating the Arctic National Wildlife Refuge is not worth a few more years of oil.

Starting in January, in a McCain-Palin administration, we're going to lay more pipelines, and build more nuclear plants, and create jobs with clean coal, and move forward on solar, wind, geothermal, and other alternative sources. We need... American sources of resources. We need American energy brought to you by American ingenuity and produced by American workers.

I believe Barack Obama had a very similar line in his nomination speech. Something to the effect of, "As president, I will tap our natural gas reserves, invest in clean coal technology, and find ways to safely harness nuclear power. I'll help our auto companies re-tool, so that the fuel-efficient cars of the future are built right here in America. I'll make it easier for the American people to afford these new cars. And I'll invest $150 billion over the next decade in affordable, renewable sources of energy -- wind power and solar power and the next generation of biofuels; an investment that will lead to new industries and 5 million new jobs that pay well and can't be outsourced." We agree on this. Why are we fighting over it? Let's just do it.

America needs more energy; our opponent is against producing it.

Ahem. Bullshit. See last comment.

Al Qaida terrorists still plot to inflict catastrophic harm on America, and he's worried that someone won't read them their rights.

*cough*

And let me be specific: The Democratic nominee for president supports plans to raise income taxes, and raise payroll taxes, and raise investment income taxes, and raise the death tax, and raise business taxes, and increase the tax burden on the American people by hundreds of billions of dollars.

Now, I haven't gotten into the hard math of either candidate's tax plans. But at no point does she say which segment of the population this money is coming from. Because I believe it's from the people who are more than capable of affording it, and that the vast majority of Americans will actually see decreased taxes. I won't say for sure it's the case but she says nothing to refute this.

And though both Senator Obama and Senator Biden have been going on lately about how they're always, quote, "fighting for you," let us face the matter squarely: There is only one man in this election who has ever really fought for you.

Yeah, I definitely don't want to have a president who dodged military service.

And it's a long way from the fear, and pain, and squalor of a six-by-four cell in Hanoi to the Oval Office.

It would be a great story of triumph if he made it from that cell to the Oval Office and had a presidency to outshine all others, but the fact is that having been tortured in a pit in Hanoi does not qualify you to be President of the United States. That he's made it to the Senate is triumph enough, especially if you don't believe his presidency would be all that spectacular.

More fun with photos.

This picture accompanied last Friday's NYT article about Sarah Palin...and now all I can think is, damn, I really want to see Sarah Palin fight a live bear and a live king crab.

Jawohl, mein veep!

Thank you, oh thank you so much, CNN.



I'm going to dig through her speech when I have time, but man, that says it all.

Wednesday, September 3, 2008

No matter where it rises, the Sun will melt Mitt's plastic hair

I'm paraphrasing Mitt Romney here, but this is essentially what he just said:

"For years, the leaders in Washington have looked for the Sun to rise in the East, with the media elites at the Times, the Post, and the broadcasters on the coast. But now, it's time to look for the Sun in the West, from Arizona and Alaska!"

My first thought: The Sun sets in the West. Are you saying the Sun is setting on America, Mitt?

My second thought: If he means that if McCain/Palin win in November, then the Sun will rise in the West, surely that's a sign of the Apocalypse, right?

Tuesday, September 2, 2008

Quote of the Day, Planet Paul Edition

From Bill Kauffman, speaking at Ron Paul's Campaign for Liberty event at the Target Center in Minneapolis:

"Locating the antiwar wing of today’s Republican Party is like looking for the Juice Newton wing in the Rock and Roll Hall of Fame."