Category: Good Writing

Have I Mentioned that I Love Barney Frank?

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In a completely heterosexual kind of way, as the General would say.

In any case, the distinguished gentleman from Massachusetts asks, “Is There an Antidote to the Republican Amnesia?“

Memory eventually fails us all, but apparently the decline strikes one party far more than the other.

In recent weeks, my friends across the aisle have expended a lot of breath proclaiming that the Democrats caused the present financial crisis by failing to pass legislation to regulate financial services companies in the years 1995 through 2006.

There is only small one problem with this story — throughout this entire period the Republicans were in complete charge of the House and for the most critical years they controlled the House, the Senate, and the Presidency.

In the House of Representatives, the majority party has almost unlimited power over the minority party. The majority party owns the committee chairmanships; it controls what bills come to a vote; and it is under no obligation to consider the ideas of the beleaguered minority. When the Republicans were in the majority they ruled with an iron first; it is no accident that Tom DeLay was known as “The Hammer.”

That is why I find it particularly flattering the Republicans now claim that in the years 1995 to 2006 I personally possessed supernatural powers which enabled me to force mighty Republican leaders to do my bidding. Choose your comic book hero — I was all of them.

…..

Brutal and very funny.

Nouriel Roubini Gives Good Rant

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Hoocoodanode? Normally, he is calm and analytical, but when asked about Madoff, he really gives what for:

Here is my answer fleshed out in full:

Americans lived in a Made-off and Ponzi bubble economy for a decade or even longer. Madoff is the mirror of the American economy and of its overleveraged agents: a house of cards of leverage over leverage by households, financial firms and corporations that has now gone bust.

When you put zero down on your home and you thus have no equity in your home your leverage is literally infinite and you are playing a Ponzi game.

And the bank that lent you with zero down, a NINJA (no income, no jobs and assets) liar loan that was interest only for a while with negative amortization and an initial teaser rate was also playing a Ponzi game.

….

Go read the rest.

It’s one answer to how the economy is different from the machinations of Bernie Madoff: it isn’t.

It’s thought provoking.

Someone Who Gets it

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David Leonhardt, who notes in the New York Times that the banks took outrageous and stupid risks because they expected to be bailed out by the taxpayer:

….

The economists were George Akerlof, who would later win a Nobel Prize, and Paul Romer, the renowned expert on economic growth. In the paper, they argued that several financial crises in the 1980s, like the Texas real estate bust, had been the result of private investors taking advantage of the government. The investors had borrowed huge amounts of money, made big profits when times were good and then left the government holding the bag for their eventual (and predictable) losses.

In a word, the investors looted. Someone trying to make an honest profit, Professors Akerlof and Romer said, would have operated in a completely different manner. The investors displayed a “total disregard for even the most basic principles of lending,” failing to verify standard information about their borrowers or, in some cases, even to ask for that information.

The investors “acted as if future losses were somebody else’s problem,” the economists wrote. “They were right.”

On Tuesday morning in Washington, Ben Bernanke, the Federal Reserve chairman, gave a speech that read like a sad coda to the “Looting” paper. Because the government is unwilling to let big, interconnected financial firms fail — and because people at those firms knew it — they engaged in what Mr. Bernanke called “excessive risk-taking.” To prevent such problems in the future, he called for tougher regulation.

….

Do you remember the mea culpa that Alan Greenspan, Mr. Bernanke’s predecessor, delivered on Capitol Hill last fall? He said that he was “in a state of shocked disbelief” that “the self-interest” of Wall Street bankers hadn’t prevented this mess.

He shouldn’t have been. The looting theory explains why his laissez-faire theory didn’t hold up. The bankers were acting in their self-interest, after all.

….

In effect, the bankers had siphoned off this bailout money in advance, years before the government had spent it.

About the only thing that I disagree about is that he does not suggest real and deliberate criminality.

Go Read.

Paul Krugman Is Freaking Out

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Specifically, he is freaking out over the “let them eat cake” policies of Mssrs. Geithner and Summers with regard to the insolvent banking giants:

….Policy is stuck in a holding pattern.

Here’s how the pattern works: first, administration officials, usually speaking off the record, float a plan for rescuing the banks in the press. This trial balloon is quickly shot down by informed commentators.

Then, a few weeks later, the administration floats a new plan. This plan is, however, just a thinly disguised version of the previous plan, a fact quickly realized by all concerned. And the cycle starts again.

He is referring, of course to Geithner’s insistence that the big sh%$pile has an “artificially depressed value”, and Ben Bernanke’s denial of zombie financial institutions, including AIG (!).

These, quite honestly delusional preconceptions have a very real cost, as the Nobel prize winning economist notes:

But this refusal to face the facts means, in practice, an absence of action. And I share the president’s fears: inaction could result in an economy that sputters along, not for months or years, but for a decade or more.

(emphasis mine)

Personally, I lay even more of this at the feet of Lawrence Summers than I do either Geithner or Bernanke: He was one of the most vociferous free-market mousketeers, and his professional life has been marked by failure and misery left in his wake.

Of course, Summers will come out of this clean, as he has mastered the art of failing up even more than Dick Cheney.

Update on the Santelli Story

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So, Playboy pulled the posts, but it remains up at the Exiled, and Mssrs. Ames and Levine confirm pretty much every aspect of the story, though, to be fair, Rick Santelli has disavowed any involvement with any of the AstroTurf sites.

That being said, Santelli also canceled tomorrows appearance on The Daily Show, and is declining interviews, which is a polite way of saying, “That’s a fair cop, officer.”

I recommend that you read the whole article, if just for the delightful evisceration Megan McArdle’s attempted to refute a Freedomworks connection, despite the fact that she, you know, shares bodily fluids a man who was only recently running AstroTurf campaigns for Freedomworks, but finally even she is forced to admit that Freedomworks is hip deep in this:

Meanwhile, I’ve spoken with Brendan Steinhauser, the chap at FreedomWorks who has helped organize the tea parties. FreedomWorks has been, as far as I can tell, completely open about their interest in furthering the tea parties, which is not surprising because they’ve been completely open about opposing bailouts since before Obama took office. As Brendan describes it, he and FreedomWorks were calling for demonstrations against the stimulus even before it passed, but he got the teaparty idea from Michelle Malkin’s blog. FreedomWorks emailed its members and set up a website to encourage people to join in. This seems like pretty standard political organization tactics.

Ms. McArdle must thank her lucky stars every day for Amity Shlaes, because it’s only in comparison to Mrs. Lipsky that she does not come across as a complete tool.

What the Shrill One Said

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Go read the latest Krugman OP/ED, he is at the top of his game:

Mr. Bernanke cited “the depth and sophistication of the country’s financial markets (which, among other things, have allowed households easy access to housing wealth).” Depth, yes. But sophistication? Well, you could say that American bankers, empowered by a quarter-century of deregulatory zeal, led the world in finding sophisticated ways to enrich themselves by hiding risk and fooling investors.

And wide-open, loosely regulated financial systems characterized many of the other recipients of large capital inflows. This may explain the almost eerie correlation between conservative praise two or three years ago and economic disaster today. “Reforms have made Iceland a Nordic tiger,” declared a paper from the Cato Institute. “How Ireland Became the Celtic Tiger” was the title of one Heritage Foundation article; “The Estonian Economic Miracle” was the title of another. All three nations are in deep crisis now.

(emphasis mine)

Keynes was right when he warned on how unrestricted torrents of capital could destabilize destroy an economy.

Well, That Makes 3 F-22 Shootdowns in Excercises

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Stephen Trimble had a walkaround at Electronic Warfare Appreciation Day at Andrews AFB, and he noticed noticed this EA-18G “Growler” electronic warfare aircraft.

Look at the bottom picture: the pilot bagged an F-22 in exercises at Nellis.

This does raise an interesting question, how does an aircraft largely dedicated to electronic warfare bag what is supposed to be the hottest jet out there.

I think that it comes down to the fact that the F-22 had to get close to burn through the jamming, and once it did, its size, the aircraft is roughly as large as an F-14 Tomcat, made rather more visible to the Mark 1 eyeball than the F/A-18.

This raises an interesting question as to the effectiveness of the aircraft in a heavily jammed environment: will this require the Raptor to get close enough to its target that it is then in a visual conflict, where it will be more visible than its opposition.

Hrm….

What Gail Collins Says

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Seriously:

Louisiana has gotten $130 billion in post-Katrina aid. How is it that the stars of the Republican austerity movement come from the states that suck up the most federal money? Taxpayers in New York send way more to Washington than they get back so more can go to places like Alaska and Louisiana. Which is fine, as long as we don’t have to hear their governors bragging about how the folks who elected them want to keep their tax money to themselves. Of course they do! That’s because they’re living off ours.

You go, girl.

A Good Article on Why the CDS May Still Destroy US

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This is a good read on why credit default swaps are destroying our financial system.

The money quote:

These are deliberate flaws built into the game that include the lack of a central counterparty, no effective limit on dealer leverage and a schizophrenic pricing methodology that has nothing to do with the several different types of underlying risk contained in these contracts. It is a market designed by and for the seller, to the disadvantage of the buyer. But CDS may also be thought of as a poker game where the dealers have few chips on the table.

It comes down to excessive leverage, and the author, Christopher Whalen, is rather more of an optimist than I am about the outcome and how soon the mess will be straightened out.

Essential for Any Parent

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My Liary, “A journal to record all my fibs, white lies, and larger distortions of the truth.”

It is for recording those times when one stretches the truth, along with turn of the last century (c 1900) cartoons, which appeals to me, since I grew up with the original illustrations of A.A. Milne’s Winnie the Pooh, and so they feel comforting.

I got a copy from a reader, and as a parent, it proves useful.

Between the tooth fairy and Keith Olbermann, I have to keep what I say to the kids straight.

It’s available for purchase at the link.

Pictures of interior below:

Once Again: What Paul Krugman Said

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Just go and read the shrill one’s latest:

What do you call someone who eliminates hundreds of thousands of American jobs, deprives millions of adequate health care and nutrition, undermines schools, but offers a $15,000 bonus to affluent people who flip their houses?

A proud centrist. For that is what the senators who ended up calling the tune on the stimulus bill just accomplished.

Good writing. Go Read.

Richard B. Cheney Will You Please Go Now!

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On July 30, 1974, Art Buchwald, with permission of Theodore Seuss Geisel (Dr. Seuss), made a column of the book, “Marvin K. Mooney Will You Please Go Now!”

It appears that Mr. Geisel sent his friend Buchwald a copy of the book and replaced “Marvin K. Mooney” and with “Richard M. Nixon.”

Buchwald wrote, “It sounded like fun so I asked him if I could reprint it” with the suggestion that it be read aloud.

Needless to say, do not have the writing chops of either the late Mssrs. Geisel or Buchwald, but this has to be shared.

At the bottom, is Keith Olbermann’s special comment from last night, saying the same.

“Richard B. Cheney will you please go now!
The time has come.
The time has come.
The time is now.
Just go.
Go.
Go!
I don’t care how.
You can go by foot.
You can go by cow.
Richard B. Cheney will you please go now!
You can go on skates.
You can go on skis.
You can go in a hat.
But
Please go.
Please!
I don’t care.
You can go
By bike.
You can go
On a Zike-Bike
If you like.
If you like
You can go
In an old blue shoe.
Just go, go, GO!
Please do, do, do, DO!
Richard B. Cheney
I don’t care how.
Richard B. Cheney
Will you please
GO NOW!
You can go on stilts.
You can go by fish.
You can go in a Crunk-Car
If you wish.
If you wish
You may go
By lion’s tale.
Or stamp yourself
And go by mail.
Richard B. Cheney
Don’t you know
The time has come
To go, go, GO!
Get on your way!
Please Richard M.!
You might like going in a Zumble-Zay.
You can go by balloon . . .
Or broomstick.
Or
You can go by camel
In a bureau drawer.
You can go by bumble-boat
. . . or jet.
I don’t care how you go.
Just get!
Richard B. Cheney!
I don’t care how.
Richard B. Cheney
Will you please
GO NOW!
I said
GO
And
GO
I meant . . .
The time had come
So . . .
Richard WENT.”

Visit msnbc.com for Breaking News, World News, and News about the Economy

Geithner Needs to Work for the People of the United States of America

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Barry Righolts of The Big Picture puts his finger on what is bothering me about Geithner:

  • You no longer work for the Banks: The NY Fed is a private corporation, doing the bidding of the FOMC and its private sector owners — primarily, the primary dealers. In other words, the President of the NY Fed works for the biggest commercial and investment banks in New York. That is no longer operational for you.
  • As Treasury Secretary, your immediate boss is the President, and your ultimate charge are the citizens of the United States, and the finances of the country.
  • When any conflict comes into play between the nation and the banks, you as Treasury Secretary are on the side of the Nation.
  • You cannot serve two masters, especially when they are in direct conflict with each other.

In its most basic form, all this talk about nationalization being somehow beyond the pale is really about people who do think that whatever is good for the banks is good for the county, and Geithner and Summers are both on that side….Or they are for now.

The question is not, “How do we save the banks,” it’s, “How do we get normal access to credit going again with a minimal impact on the taxpayer,” and throwing trillions at banks for their sh%$pile assets does not serve the nation or the taxpayers.

Mad Magazine Still Has it Now and Again

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You know, I just got the news that Mad Magazine is going quarterly from monthly, which unfortunately means that it’s circulating the drain.

Still, it appears that they still have comedic chops:

This is just as funny, in a Mad Magazine kind of way, as when the Onion says, “Black Man Given Nation’s Worst Job“.

It’s also a reason why I shouldn’t be President. I’d be mainlining bat guano right now.

Click pic to go to Mad.

An Army of Over-Promoted, Ideologically Vetted Homunculi

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That’s the way that commie/pinko publication The Economist describes Bush appointees in general, and Alberto “Abu” Gonzales in particular, in an article describing his legacy.

It’s nice to see the knives come out from the right, even if it’s just the UK right.

I’m waiting for the Weekly Standard to do the same.

If I were a betting man, I would bet on their Labor Day issue of this year.

H/T WallStreetJackass.

Nationalizing the Banks

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Well, it appears that we have Nobel Prize winner Paul Krugman, Portfolio’s Felix Salmon, and the Financial Times’ Willem Buiter’s all calling for nationalization.

Basically, all three of them say, and I agree, that that the banks are “zombie banks”, dead but still walking, and that the most effective, and the most cost effective for the taxpayer, solution is for the government to take them over and allow their problems to unwind.

They all agree that the idea of the “bad bank”, basically the Resolution Trust Corporation (RTC) from the S&L bailout, but without taking over the banks, is among the worst possible solutions.

Basically, if you buy these banks assets at market value, they are still insolvent, and if you overpay, the taxpayer loses and the banks are encouraged to do more stupid things.

To my mind, I would actually set up a government agency to directly make loans to business, and let the banks all hang…What I have repeatedly called “amputating the financial sector.”

I would add that with banks publicly declaring that they will take the money and not open up their lending, we need some serious tough love hate headed towards the banks.

Matt Taibbi is a National Treasure

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And his devastating take-down of New York Times columnist Thomas Friedman is one of many jewels that drip from his mouth.

A sample:

My initial answer to that is that Friedman’s language choices over the years have been highly revealing: When a man who thinks you need to break a vase to get the water out of it starts arguing that you need to invade a country in order to change the minds of its people, you might want to start paying attention to how his approach to the vase problem worked out.

Brilliant.

On Centrism

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Words I never sought that I would say, but this is a great editorial in the Wall Street Journal.

Thomas Frank calls centrism a “chump’s game”, and notes that the “triangulation” of Bill Clinton and his ilk did nothing but allow the radical right wing to move the “center” further right.

Mr. Frank is right, and here is my favorite bit:

And centrism’s achievements? Well, there’s Nafta, which proved Democrats could stand up to labor. There’s the repeal of the Glass-Steagall Act. There’s the Iraq war resolution, approved by numerous Democrats in brave defiance of their party’s left. Triumphs all.

Histories of conservatism’s rise, on the other hand, often emphasize that movement’s adherence to principle regardless of changing public attitudes. Conservatives pressed laissez-faire through good times and bad, soldiering on even in years when suggesting that America was a “center-right nation” would have made one an instant laughingstock.