Author: Matthew G. Saroff

Once Again, the Germans Are a Menace to the Civilized World

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I know, Godwin’s law, but I completely with Paul Krugman calling out the Germans on economic policy.

Specifically, he calls out Peer Steinbrueck, the Germany finance minister, who suggests that spending programs are “Crass Keynesianism”, and indirectly he calls out Angela Merkel, who is strongly resisting spending to stimulate the economy, and is instead keeping, “her trump card – tax cuts – in reserve.”

So in the middle of the biggest financial crisis since the Great Depression, Merkel and Steinbrueck are advocating Hoovernomics.

I understand the hyperinflation of the 1920s and how it shaped German thought, but this is insane.

AIG Again

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Well, it looks as if the largest welfare sponge, AIG is now dawdling on its asset sales to return to viability:

The CEO of U.S. insurer American Insurance Group, which is looking to shed assets around the globe as part of a $152 billion U.S. government rescue package, said that difficult markets may delay the sale plans, though certain units have attracted heavy interest.

The translation here is: as long as we can rely on our sugar daddy at the US treasury, we won’t sell until prices go up, and if we run short on cash, we’ll hit up the taxpayer for some more.

And they will need more taxpayer money, because they are selling insurance at rates that are clearly below cost, so as to rebuild their market share.

They don’t care that they lose money on each sale, Uncle Sugar will bail them out…Again…and Again…and Again…and Again…

Another Failure of Economic Philosophy

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The economic philosophy of the free trade Evangelicals is not just destroying our banking system, it’s also creating starvation in poor nations:

Inside and out, the rusted towers of El Salvador’s biggest grain silo show how the World Bank helped push developing countries into the global food crisis.

Inside, the silo, which once held thousands of tons of beans and cereals, is now empty. It was abandoned in 1991, after the bank told Salvadoran leaders to privatize grain storage, import staples such as corn and rice, and export crops including cocoa, coffee and palm oil.

…

“The World Bank made one basic blunder, which is to think that markets would solve problems of such severe circumstances,” said Jeffrey Sachs, director of the Earth Institute at Columbia University and a special adviser to UN Secretary-General Ban Ki- moon. “But history has shown you need to help people to get above the survival threshold before the markets can start functioning.”

It appears that the person who got this ball rolling, with “structural adjustment” loans, which required countries to disinvest in staples in favor of cash crops for export, was that guy who ran the Vietnam war so well, little Bobbie McNamara.

Cover-Up Much?

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It appears that Michael Mukasey and His Evil Minions™ are refusing to provide documents to the Obama transition team.

It appears that they are unwilling to supply the torture and snooping memos drafted by the Office of Legal Counsel for the CIA and the NSA:

The opinions, some of which have been released to Congress in redacted form, contain the legal rationale of the NSA’s warrantless spying program and the CIA’s detention and interrogation policies, among other intelligence initiatives.

The claim is that the spy agencies have, “own equity or interest in the information.”

Un-dirty-word-believable.

OK, This Might Explain why NASA is so Dysfunctional

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It appears that the relationship between Mike Griffin, NASA Administrator, and Lori Garver, head of Obama’s space transition team are not going well.

More accurately, the relationship between the current NASA Administrator, and the , a former NASA associate administrator now working for Obama, has gone completely pear shaped, and it appears to be Griffin’s doing:

In a heated 40-minute conversation last week with Lori Garver, a former NASA associate administrator who heads the space transition team, a red-faced Griffin demanded to speak directly to Obama, according to witnesses.

In addition, Griffin is scripting NASA employees and civilian contractors on what they can tell the transition team and has warned aerospace executives not to criticize the agency’s moon program, sources said.

This is completely whack…..You have a program that you want to continue, and you proceed to piss off the transition team, and institute gag orders, when you cannot help but know that this will insure your rapid exit in January.

This is more than nuts, this is “Illinois Governor Rod Blagojevich” nuts.

Election Update

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In Minnesota, it looks like there were twice as many improperly rejected absentee ballots as previously thought, so in addition to the challenges, we now have something on the order of 2,000 wrongly rejected absentee ballots.

here is the part that I do not get:

The fate of those ballots is hotly contested but unclear.

On Friday, the state canvassing board, made up of four judges and the secretary of state, will decide whether to count the votes on those ballots that election judges mistakenly didn’t count on Election Day.

If they were legal votes, why shouldn’t they be counted?

Is there something in the finer points of MN election laws that I don’t get?

Economics Update

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Woah, new claims for jobless benefits just jumped by 58,000, to 573,000, a 26 year high.

Continuing claims, which is a far less noisy metric, also jumped to a 26 year high, 4.43 million, up from 4.09 million.

In real estate, the average rate for a 30-year fixed mortgage hit 5.47%, a 4½ year low, and forclosures fell in November, but this appears to be as a result of new state laws requiring more time for the process and/or temporary moratoriums, so there will likely be a significant spike in the next few months.

In the more general economy, we have a first, or at least a first since the Federal Reserve began collecting the data in 1951, the level of consumer debt held in the US has fallen, by 0.8%.

Of course, consumer net worth fell by 4.7%, so it’s a net loss.

In international finance, the Swiss Central Bank cut its interest rate by 50 basis point, and China’s exports fell 2.2% year over year, the steepest drop in nearly a decade.

In currency, the dollar weakened significantly, by about 4¢.

My guess is that it was some combination of extremely low interest rates in the US, or the demonstration of batsh%$ insanity by the Republican senators on the auto bailout vote.

In energy, oil is back above $45/bbl on strong calls by OPEC for production cuts, and retail gasoline prices continued their slide.

Sit Down Strike Ends: Workers Get Owed Benefits

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Bank of America and JP Morgan loaned a total of about 1¾ million to the owners, with specific stipulations that it be paid for, “60 days severance wages, vacation pay and a two-month extension of health insurance.”

Still, the more I hear, the more I think that the banks were set up by the owners, who were attempting to close down the plant, because they set up a new one down the road.

Murtha Calls for Cuts in DoD Budget

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This is no surprise. Anyone with eyes can see that the defense budget is wasteful, bloated, and not serving the current security needs of the country.

It’s also refreshing that he wants to bring the “emergency wartime supplementals” back into the regular budget process, as well as noting that the defense procurement process is broken.

Of course, he also gets on his high horse about reinstating the draft, where I have mixed emotions.

KB Toys Files Chapter 11 (+2)

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This is the third time since 2004, they, as both KB and FAO Schwartz, did a twofer in 2004.

Filing for bankruptcy as a tow store less than 3 weeks before Christmas?

Looks like liquidation this time.

Here is the obligatory scare quote:

Sales were little changed from Feb. 3 until Oct. 4, KB Toys said. Since then, sales have dropped almost 20 percent, the company said.

Sales fell as the Xmas season buying frenzy ramped up….Not good.

This is Going to Get Ugly

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Well, it appears that the Republicans have successfully filibustered the auto bailout, with the aid of Max Baucus (DINO-MT), though to be fair to Baucus, his objection was to a particularly egregious tax loophole, the SILO (Sale-In Lease-Out), which basically allowed municipal transit agencies to sell their rolling stock, and lease it back, so that companies could get undeserved tax breaks for a cash payments to said agencies.

As to the Republicans, it comes down to two things, they have transplants in their states, and they want to break the UAW.

I expect to see the Big e (Big 2½) and the transplants to start having problems with their suppliers withing a week, because if I were supplying parts to an automaker right now, I’d be demanding cash on delivery, not 90 or 120 days net.

This will get ugly, and if Harry Reid had any balls, he would make the Republicans actually stand up and talk, and not just throw up his hands when he loses the vote.

Chuck Colson

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So, George W. Bush just gave the Presidential Citizens Medal to Charles W. “Chuck” Colson.

Charles Colson, notwithstanding his “finding God” in the stir, is a nasty piece of work, and arguably the single person most responsible for bringing down Richard Nixon.

When Nixon vented about shooting someone, Colson would buy a gun, and it was largely covering up for Colsons excesses that got the scandals flowing.

Of all the rat-f&^%ers in the Nixon administration (their term) he was the worst, and now as head of the Prison Fellowship, he has repeatedly engaged in efforts to use the prison system to force conversion of inmates.

I don’t mean outreach, I mean the creation of special programs with special privileges to coerce prisoners into being “born again.”

I hope that Gary Sinise, who also got the award, felt embarrassed to share a stage with Colson, but since he’s a wingnut too, I would think any feeling of discomfort or shame unlikely.

Joseph E. Stiglitz on Free Market Evangelicals

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Read his article, and you will understand that this is not a failure of regulation or legislation, but one of world view:

The truth is most of the individual mistakes boil down to just one: a belief that markets are self-adjusting and that the role of government should be minimal. Looking back at that belief during hearings this fall on Capitol Hill, Alan Greenspan said out loud, “I have found a flaw.” Congressman Henry Waxman pushed him, responding, “In other words, you found that your view of the world, your ideology, was not right; it was not working.” “Absolutely, precisely,” Greenspan said. The embrace by America—and much of the rest of the world—of this flawed economic philosophy made it inevitable that we would eventually arrive at the place we are today.

It’s also a very entertaining read.