Sep 30, 2008
THE CRASH DEFINED
A crash is pretty much just a redistribution of wealth, from the rich to the poor. The very rich stand to lose 90 percent of their wealth. With the poor, 90 percent of nothing is still nothing.
The bail out is a tax on everyone in the country ranging from $5,000 to $20,000 depending on the fool talking. For a family of 4 that’s $20,000 to $80,000. If you consider that 3/4ths of the population pay little tax, this is going to be a very heavy wagon to pull.
If we do absolutely nothing to fix the mess, there will be a blood bath. The top 10% of the population get their lunch in Spades. After that, Mr. Rich guy is going to be looking for a job.
This doesn’t mean that we silver foxes walk away Scott free. We are going to get burned badly. That would have happened after the bail out failed anyway. We can’t print our way out of this mess, but can't we let the idle rich implode into nothingness?
If the government wants to do something, let the house of cards collapse. Then print money to keep people in food and shelter; this is a transfer payment I understand (plus it is a government responsibility). There should be no bail out support for the super rich. Paulson kiss your absurd 700 million dollars goodbye.
This event if understood for what it is, is a great redistribution of wealth. With the government buying failed assets; it doesn’t make them worth any more. What good does it do for the government to own them? Private industry has a loss, let them eat it!
We have survived one House of Representatives vote, we need to make sure that they understand, that we understand that printing money won’t solve the problem. This cannot be pushed into the future. The money is not there even if it was an option.
If you have a moment click on THIS LINK and express your concerns to your Congressman. Do we give the rich their money back? ---Or do we say “Suffer with the rest of us!” Vote now, and write your Representative a letter. I really think that we are being listened to, take the time to give your Representative your view; we are not billionaires, just voters.
Remember one thing, for government to pay the bills, we the people have to earn it. There are no quotes around the word earn. This next election could be all about, “Toss the Bums Out.” We don’t need a President as much as we need Congressmen that have some testosterone.
Please do me a favor and click on the link and give your Congressman you view, we can’t print our way out of this mess.
Thank you and good night
The Boston Globe
By Derrick Z. Jackson September 30, 2008
CONGRESS has been rushing to save financial CEOs from themselves with a $700 billion bailout that amounts to a tax of $2,333 on every man, woman, and child in America. This is after three decades of the nation's leaders punishing struggling Americans for their lack of personal responsibility, from Ronald Reagan's assault on "welfare queens" to the bipartisan slashing and capping of welfare benefits by President Clinton and House Speaker Newt Gingrich.
More recently, presidential candidates John McCain and Barack Obama have said undocumented folks should pay fines to get in line for citizenship.
Then, of course, there were the 1.5 million home foreclosures last year and the 2.5 million foreclosures projected for this year by Treasury Secretary Henry Paulson. Many economists and politicians have washed their hands of them, saying, tsk, tsk, they were irresponsible for taking on too much responsibility!
If scapegoating struggling Americans on personal responsibility fails to work, we just ignore them, as sure as the Ninth Ward of New Orleans remains the American Dresden after Hurricane Katrina - while rebuilt Gulf Coast casinos break new revenue records.
All those millions of Americans, facing everything from slashed food stamps to swamped homes, live in a patronizing America where Clinton signs the 1996 welfare bill by saying, "We're going to take this historic chance to try to recreate the nation's social bargain with the poor. We're going to try to change the parameters of the debate. We're going to make it all new again and see if we can't create a system of incentives which reinforce work and family and independence. We can change what is wrong."
No broad parameters are being changed for greedy or incompetent Wall Street CEOs, as the financial sector assures itself a compliant Congress with $2 billion in campaign contributions since 1990 (Obama and McCain have respectively received $25 million and $22 million in campaign contributions from the financial sector in this campaign cycle, according to the Center for Responsive Politics).
Negotiators on the hill do say they will tax bailed-out companies for executive salaries over $500,000, but Wall Street found its way around similar rules in the past.
Yesterday, amid increasing outrage, the House failed to pass the bailout bill.
No bailout should happen without recreating the nation's social bargain with the rich. The nation can no longer afford the disparity where the average American CEO makes 344 times the pay of the average worker, according to the Institute for Policy Studies and United for a Fair Economy. The CEOs and their boards should pay toward the bailout before a penny of that possible $2,333 comes out of the pockets of Americans.
There is more than enough money among the financial elites to pay for the bailout. The Institute for Policy Studies last week calculated that a securities transaction tax of a penny for every $4 invested would add $100 billion a year to the treasury. Had such a tax been in place after the 2001
A wealth surcharge of no more than 3 percent on households worth more than $10 million would add another $300 billion. In response to the news this year that two-thirds of American corporations paid no income tax between 1998 and 2005, a corporate minimum income tax could add another $60 billion.
The institute said a 50 percent tax on salaries of $5 million or more and 70 percent on salaries of $10 million or more - until the bailout is over - would add another $105 billion. Killing overseas tax shelters, loopholes for excessive CEO pay and the sale of mansions, and creating a progressive inheritance tax would add another nearly $300 billion.
Institute senior scholar Chuck Collins said that would be a much more fair way to deal with the consequences, and discourage a worsening of "casino capitalism," than the rush to dump this on the taxpayer. "Many of these things have been examined, but not implemented," Collins said, "But Congress essentially punted on how to pay for the bailout."
If Congress is the punter, the people are the football being kicked once again far downfield as Congress and the CEOs high-five with relief from the skybox.
Derrick Z. Jackson can be reached at email@example.com.
Sep 29, 2008
Sep 28, 2008
According to an article by Christopher Keating in the Hartford Courant, the town and state are bracing for lower tax revenue. There are no signs yet that Greenwichers are hurting–Saks, Tiffany and Brooks Brothers are still busy and the local Rolls Royce dealers (there are two) say their clientele is largely immune. Yet local residents like Lehman Brothers’ Dick Fuld–he of the $700 million stock loss–just won’t be writing the big tax checks that they used to. Charities are expecting a lighter haul this year.
There also is the human cost to the financial floods, the collective psychological breakdown that occurs when Greenwich’s billionaires become mere millionaires.
“It’s the human toll that is frightening,” said State Rep. Livvy Floren, a friend of Mr. Fuld. “Dick Fuld has spent 39 years of his life doing this. It’s more than just money. They’re not going to be in the streets starving….I think the man worked 24/7. His family and Lehman are his life.”
A deeper analysis was offered by local Democrat Ned Lamont, who in one fell swoop compared Greenwich’s money woes to the Japan malaise, Asian tsunami and the New Orleans flood.
“It really is a financial tsunami, and it could go either way,” said the multimillionaire telecommunications mogul who ran for the U.S. Senate in 2006. “It took Japan 20 years to recover from their buying binge. How long does it take us to work through excessive leverage? That could take years not months. This is our Katrina.”
Sep 25, 2008
"...Instead, they issued a statement of economic rescue principles that calls for Wall Street to fund the recovery by injecting private capital - not taxpayer dollars - into the financial markets. Easing tax laws would prompt investors to put in their own dollars, they said.
The plan also calls for: participating firms to disclose the value of the mortgage assets on their books, ending Fannie Mae and Freddie Mac's securitization of "unsound mortgages," reviewing the performance of the credit rating agencies and having the Securities and Exchange Commission audit failed companies to ensure their financial standing was accurately portrayed.
House Republicans also want to create a panel to make recommendations for reforming the financial industry by year's end."
Sep 24, 2008
Step 1. Have the UN declare Wall St a “terrorist state” and freeze all the assets (paper?) Next prosecute the heads of the top banks, the top regulators, and Paulson. If they flee to St Barts instead of standing trial, let’s do some shock and awe on St Bart’s. Let our most traumatized and depleted Iraqi soldiers get first shots. Shooting from airplanes will be allowed.
Step 2. President Obama, instead of handing $700 million to these slime-balls plunderers, make them pay back to the US Treasury $700 billion. Trust me, they have it.
Step 3. Never return to the quaint Victorian notion of a free-market. Free markets are free-for-alls, ie, survival of the greediest. Attempt to recreate the America I learned about growing up in school, the one I never saw in my 50 years. Fairness, justice, responsibility...ideals that were offered up as history, but now turn out to be fairy-tales.
Sep 23, 2008
“Paulson and Bernanke urged senators on the banking committee to quickly approve the unprecedented $700 billion plan to prop up the shell-shocked U.S. financial system, saying failure to do so would risk the stability of financial markets and the U.S. economy.”
Oh how I laugh, chortle chortle - choke. Ya see, in the “other America” where most of us live, we’re already “shell-shocked” from 20 years of greedy capital markets reaming us. If anyone asked me, I’d like to see the financial markets have their stability undermined, and not function properly. From the other America, which hasn’t functioned properly for years, it would be nice to have your company.
Of course, that would make Wall St a part of America again. I’d bet my bottom, or even “under a buck” dollar (someone will make up the diff - right?) that living like regular Americans is a fate worse than death for the financial f@#k-heads who have just run the capitalist system into the ground.
Bail-out? I say get in line Wall St scum-bags. The line starts about 250 million back.
Or, better yet - bail ourselves out. Cash in your Swiss bank accounts, your Cayman bank accounts, sell your third and fourth homes and a few of your sports cars, and yes, even shutter your “private family foundations” if you need help. You’ve already had the taxpayers help, for like 30 years now. We’re tapped out.
A nation of sheep will beget a government of wolves. ~Edward R. Murrow
Sep 22, 2008
While the "Little People" quibble over nickels and dimes, the biggest financial rip-off in the history of the world plays out...
Many of the same economists and opinion-makers who'd provided a bipartisan sheen of consensus to Treasury Secretary Henry Paulson's previous moves have quickly begun casting doubts on the wisdom of a policy that would allow Treasury to purchase without oversight hundreds of billions of dollars of difficult-to-price assets from financial institutions.
Under the proposal, Paulson would not have to report to Congress until December, and the only safeguard for taxpayers was a provision that the “Secretary shall take into consideration means for — (1) providing stability or preventing disruption to the financial markets or banking system; and (2) protecting the taxpayer.”
Skepticism toward the plan reflected more than the predictable desires of the left to spread the wealth to Main Street or of the right to reject government bailouts, although those sentiments were also expressed.
"We need to take a bold move. In that sense I think Paulson is right," Luigi Zingales, a Professor at the University of Chicago School of Business who wrote a widely circulated short essay titled "Why Paulson is Wrong,” told Politico.
Zingales fears that the Treasury bailout would effectively turn the entire financial sector into a Government Sponsored Enterprise, complete with the same murkiness and moral hazard that sunk Fannie Mae and Freddie Mac. “It might achieve the final outcome, but it will do so at an enormous cost," he said. "All the troubles we’ve seen with Fannie and Freddie would be seen again and again across the entire financial sector."
President Bush is “asking for a huge amount of power,” said Nouriel Roubini, an economist at New York University who was among the first to predict the crisis. “He's saying, ‘Trust me, I'm going to do it right if you give me absolute control.' This is not a monarchy.” (Roubini told the New York Times that despite these concerns, he also thought the plan could help stave off a recession.)
Paul Krugman, the Princeton University economist and liberal columnist for The New York Times who had until now been cautiously supportive of Paulson's and Federal Reserve Chairman Ben Bernanke’s efforts to prop up the system, wrote that the new plan would be a taxpayer rip-off. “I hate to say this, but looking at the plan as leaked, I have to say no deal,” he wrote on his blog at 4:46 p.m. Saturday. “Not unless Treasury explains, very clearly, why this is supposed to work, other than through having taxpayers pay premium prices for lousy assets.”
Yves Smith, a longtime banker and contributor to the influential finance blog Naked Capitalism, published an angry post there titled, "Why You Should Hate The Treasury Bailout Proposal":
"Given that continuing to buy U.S. assets will come under increasingly harsh scrutiny overseas, the U.S. needs to bend over backwards to devise a plan that at least looks credible in terms of directing the funds that come from taxpayers and lenders to their highest and best uses and implementing reforms that will restore active and prudent oversight of financial firms," she wrote. "The administration's demand for a free pass, even if Congress unwisely goes along, is likely to backfire with our foreign creditors."
Gregory Mankiw, a professor at Harvard University and a former chairman of Bush's Council of Economic Advisers who was the economic guru for Mitt Romney's campaign, favorably linked to Smith's post under the headline "A Blank Check" and approvingly quoted a correspondent who wrote, "Has more money ever been given with fewer restrictions on how it is used? Ever?"
Sebastian Mallaby, the center-right economic columnist for The Washington Post and scholar of the modern financial system, was equally dubious. “The plan is being marketed under false pretenses," he wrote in his Sunday column, rejecting comparisons of the plan to the Resolution Trust Corporation, which the government formed in response to the savings and loan crisis to purchase and sell off the bad loans made by bankrupted thrifts.
“The administration proposes to buy up bad loans before the lenders go bust,” Mallaby noted, keeping the banks alive but doing little to solve the problem infecting the markets. “Bad loans are weighing down the financial system precisely because private-sector experts can't determine their worth. The government would have no better handle on the problem.”
Justin Fox, Time magazine's top financial writer and columnist, also worried about the lack of an upside for the taxpayer. "What I still can't figure out is how Treasury hopes to structure the bailout so there's at least a chance of getting a fair return on that risk-taking," he wrote on his blog.
"How on earth will these things be priced?" Portfolio's Felix Salmon asked about the bad debt Paulson plans to purchase. He also pointed out that Treasury would need to stock its office with bond-trading professionals. "All we know so far is that it's going to be set up as a reverse auction, but that raises more questions than it answers."
One notable proponent of the plan was The Financial Times' unsigned Lex column, which acknowledged the lack of oversight but mostly praised the plan:
"This bailout is necessary and the bill should be pushed through quickly. … Nor is the package necessarily a disaster for the taxpayer or the U.S. dollar. If the Treasury buys assets well, and confidence is restored, there is [a] chance that Mr. Paulson could win fund manager of the year."
Zingales, though, writes in "Why Paulson Is Wrong" that "For somebody like me who believes strongly in the free market system, the most serious risk of the current situation is that the interest of a few financiers will undermine the fundamental workings of the capitalist system. The time has come to save capitalism from the capitalists."As usual congress has given up its power again to corporate fascists to try and grt off the hook for something that is their fault as well as Bush.
Unfortunately the public cannot see the harm in what has just happened and by the time the bell rings suck ass Paulson will be long gone and Bush will be counting his loot in Switzerland."
Sep 17, 2008
"(Sarah Palin) is anti-abortion, anti-gay-marriage, anti-Big Oil, a lifetime member of the N.R.A., she hunts, she fishes - she is the perfect woman!"
"Many parishes distributed a voter guide, produced by an outside conservative Catholic group called Catholic Answers, which identified five NON-NEGOTIABLE issues for faithful voters: abortion, embryonic stem-cell research, human-cloning, euthanasia and same-sex marriage."
Yeah - nada about poverty, war, the environment, greed, racism, justice, or child abuse.
I put down the paper in disgust at the endless fascination (perversity?) of conservatives with what other people do with their own bodies. I went to read my email and this was the first thing I saw, from good moral life-affirming people I know:
"I don't know who came up with this fantastic idea, but for a mere $5 you can let the McBush folks know what you think. Here's all you do.
Make a $5 minimum donation to . In 's
name. A is tax deductible, while a
political donation isn't.
And when you make that PP donation in Palin's name, they'll send her
a card noting that the donation was given in her name.
Here's the link to the Planned Parenthood website
Fill in the address to let PP know where to send the "in Sarah
Palin's honor" card. Use the address for the McCain campaign
McCain for President/Sarah Palin
Tell all your women friends as well as your men
friends and urge them to do the same."
Consider my $5 sent...
Humm - The ultra business rag WSJ finds Obama more understanding of the financial crisis and it's causes? What?
McCain and the Markets
It's easy to see how a 21-year member of the U.S. Senate like John McCain, or even a Senate rookie, could regard Wall Street as a mysterious and distant planet. Indeed, on the evidence of the past few days, Senators McCain and Obama would appear to know more about Mars than they do about financial markets.
On Monday as these markets and the broader world tried to absorb the news about Lehman, Merrill Lynch and AIG, our two Presidential candidates spent the day trading punches over the meaning of the "fundamentals." After Senator McCain suggested that the "fundamentals of the economy are strong," Senator Obama mocked Mr. McCain's view of "the fundamentals."
We'll leave it to the debates to elicit just what each Senator regards as the "economic fundamentals" in a $13 trillion economy, but for our money the notable thing about the exchange was how fast John McCain let his opponent's sarcasm push him off message, such as it is.
One whiff from Barack Obama about "the mountain in Sedona where he lives," and by day's end Senator McCain was ranting about "corruption" and how he was going to "reform the way that Wall Street does business." Yesterday Senator McCain's inner populist had cooled enough to admit the existence of "honest people on Wall Street," but it still sounded as if this week's version of the McCain Presidency would be more about restructuring private financial markets he doesn't understand than fixing the Washington he knows.
Flip-flopping between assertions that the economy is fundamentally strong and populist promises to rip apart its financial plumbing creates confusion about what exactly Mr. McCain really thinks. His opponent, meanwhile, stayed on message, explaining Monday's events with the sort of dogged persistence reflected in the headline across the front page of yesterday's New York Times: "Wall St. in Worst Loss Since '01 Despite Reassurances by Bush."
Likening Monday's events to "the Great Depression," Senator Obama explained them by restating his campaign's core economic idea -- that what he calls the McCain-Bush "economic philosophy" is behind all these problems. His solution, laid out in detail in the Denver acceptance speech, is higher taxes on what he said Monday were "those with the most" and a return to the paternalist economic policies of the 1960s. In short, we become France, but with a higher corporate tax rate.
The problem with Senator McCain's blustery Wall Street broadsides is that they don't offer an explanation for what is happening. How is it supposed to reassure people to hear Mr. McCain intone, as he did yesterday, the words "derivatives" and "credit default swaps" as if it's the first time he'd ever heard of them?
Agree with it or not, Senator Obama is identifying a problem and a path toward solution. Mr. McCain needs his own narrative for how we arrived at this point. If he wants to run as the populist protector of the middle class, he has ample targets.
He could start with the perils of "easy money." The Federal Reserve's low interest-rate policies -- virtually free money -- created excesses in credit expansion that led to what all now call a credit bubble. That bubble has been bursting, from Main Street to Wall Street.
As well, it eroded the value of the "greenback," as Rudy Giuliani noted in his barn-burner convention speech. Every American knows something's gone wrong when the dollar's value drops way below currencies in Europe or Canada. True to his campaign theme, Senator McCain might ask since when has dollar "weakness" become an American virtue? Barack Obama won't do it, so Senator McCain has a chance to step forward and defend the purchasing power of middle-class budgets against inflation in the prices they pay every trip to the supermarket or gas station.
We'd also bet that most voters have a better understanding of the excesses that forced Washington to take over Fannie Mae and Freddie Mac than what happened to Lehman and AIG. Greed is a big subject, and Senator McCain should train his message on the variety he understands best, in Washington.
Finally, Senator McCain should bring his worthy tax-cut plan out of hiding, and if anything refine it for immediate impact with an across-the-board income tax reduction. He then should ask, since when, as Senator Obama's proposals suggest, have we been able to tax our way out of economic trouble? If the U.S. economy is teetering on the edge of a recession or downturn, how has it become bad economics to propose a broad-based tax cut to revive the economy?
Wall Street right now is passing through a searing dose of market discipline and correction for its mistakes. After Monday's 504-point plummet in the Dow Jones index, it gained back 141 points yesterday. Barack Obama thinks he can win by explaining all this in terms of the Bush "philosophy." Mr. McCain is going to need a better reply than agreeing with his opponent about "greed" and Wall Street.
Sep 13, 2008
Palin: wrong woman, wrong message
nothing but a chromosome with Hillary Clinton. She is , only younger.
September 4, 2008
Here's the good news: Women have become so politically powerful that even the anti-feminist right wing -- the folks with a headlock on the Republican Party -- are trying to appease the gender gap with a first-ever female vice president. We owe this to women -- and to many men too -- who have picketed, gone on hunger strikes or confronted violence at the polls so women can vote. We owe it to , who first took the "white-male-only" sign off the , and to Hillary Rodham Clinton, who hung in there through ridicule and misogyny to win 18 million votes.
But here is even better news: It won't work. This isn't the first time a boss has picked an unqualified woman just because she agrees with him and opposes everything most other women want and need. Feminism has never been about getting a job for one woman. It's about making life more fair for women everywhere. It's not about a piece of the existing pie; there are too many of us for that. It's about baking a new pie.
Selecting , who was touted all summer by Rush Limbaugh, is no way to attract most women, including die-hard Clinton supporters. Palin shares nothing but a chrom osome with Clinton . Her down-home, divisive and deceptive speech did nothing to cosmeticize a Republican convention that has more than twice as many male delegates as female, a presidential candidate who is owned and operated by the right wing and a platform that opposes pretty much everything Clinton's candidacy stood20for -- and that Barack Obama's still does. To vote in protest for McCain/Palin would be like saying, "Somebody stole my shoes, so I'll amputate my legs."
This is not to beat up on Palin. I defend her right to be wrong, even on issues that matter most to me. I regret that people say she can't do the job because she has of care, especially if they wouldn't say the same about a father. I get no pleasure from imagining her in the spotlight on national and about which she has zero background, with one month to learn to compete with 's 37 years' experience.
Palin has been honest about what she doesn't know. When asked last month about the vice presidency, she said, "I still can't answer that question until someone answers for me: What is it exactly that the VP does every day?" When asked about Iraq , she said, "I haven't really focused much on the war in Iraq ."
She was elected governor largely because the incumbent was unpopular, and she's won over Alaskans mostly by using unprecedented oil wealth to give a $1,200 rebate to every resident. Now she is being praised by McCain's campaign as a tax cutter, despite the fact that Alaska has no state income or sales tax. Perhaps McCain has opposed affirmative action for so long that he doesn't know it's about inviting more people to meet standards, not lowering them. Or perhaps McCain is following the Bush administration habit, as in the Justice Department, of putting a jo b candidate's views on "God, guns and gays" ahead of competence. The difference is that McCain is filling a job one 72-year-old heartbeat away from the presidency.
So let's be clear: The culprit is . He may have chosen Palin out of change-envy, or a belief that women can't tell the difference between form and content, but the main motive was to please right-wing ideologues; the same ones who nixed anyone who is now or ever has been a supporter of reproductive freedom. If that were not the case, McCain could have chosen a woman who knows what a vice president does and who has thought about Iraq ; someone like Texas Sen. Kay Bailey Hutchison or of Maine. McCain could have taken a baby step away from right-wing patriarchs who determine his actions, right down to opposing the Violence Against Women Act.
Palin's value to those patriarchs is clear: She opposes just about every issue that women support by a majority or plurality. She believes that creationism should be taught in public schools but disbelieves global warming; she opposes gun control but supports government control of women's wombs; she opposes stem cell research but approves "abstinence-only" progr ams, which increase unwanted births, sexually transmitted diseases and abortions; she tried to use taxpayers' millions for a state program to shoot wolves from the air but didn't spend enough money to fix a state school system with the lowest high-school graduation rate in the nation; she runs with a candidate who o pposes the Fair Pay Act but supports $500 million in subsidies for a natural gas pipeline across Alaska; she supports drilling in the Arctic National Wildlife Reserve, though even McCain has opted for the lesser evil of offshore drilling. She is Phyllis Schlafly, only younger.
I don't doubt her sincerity. As a lifetime member of the National Rifle Assn., she doesn't just support killing animals from helicopters, she does it herself. She doesn't just talk about increasing the use of fossil fuels but puts a coal-burning power plant in her own small town. She doesn't just echo McCain's pledge to criminalize abortion by overturning Roe vs. Wade, she says that if one of her daughters were impregnated by rape or incest, she should bear the child. She not only opposes reproductive freedom as a human right but implies that it dictates abortion, without saying that it also protects the right to have a child.
So far, the major new McCain supporter that Palin has attracted is James Dobson of Focus on the Family. Of course, for Dobson, "women are merely waiting for their husbands to assume leadership," so he may be voting for Palin's husband.
Being a hope-a-holic, however, I can se e two long-term bipartisan gains from this contest.
Republicans may learn they can't appeal to right-wing patriarchs and most women at the same time. A loss in November could cause the centrist majority of Republicans to take back their party, which was the first to support the and shoul d be the last to want to invite government into the wombs of women.
And American women, who suffer more because of having two full-time jobs than from any other single injustice, finally have support on a national stage from male leaders who know that women can't be equal outside the home until men are equal in it. Barack Obama and Joe Biden are campaigning on their belief that men should be, can be and want to be at home for their children.
This could be huge.
Gloria Steinem is an author, feminist organizer and co-founder of the Women's Media Center . She supported Hillary Clinton and is now supporting Barack Obama.