*Please... Cut the Crap

Getting Over Our GOP-Warped Concept of Investment

Under President Obama's guidance, the economy is definitely improving. The stock market is breaking records; the Dow has more than doubled since we hit bottom on the Bush recession, and the S&P is also breaking records. The housing market has largely recovered, and we're back on track, albeit this time as a saner pace. 

We could be doing a lot better, if not for Republican obstruction. There are still too many people out of work, even as the Republican House continues to sit on a massive jobs bill that is coming up on its second anniversary. 

But while the problems we have right now are largely the fault of the current Republican Party, a lot of it comes from our warped sense of the concept of "investment," in which we demand that our investments bring huge, quick financial returns, without concern for a solid, sustainable future. It shouldn't even be controversial to make the switch from fossil fuels to solar, wind and other renewable energy sources; it's common sense. It may not make us a boatload of money now, but over the course of our lives, the payoff for such a conversion will be enormous. And that's the problem. We only look at financial profit as "success," and we seem unable to look beyond the next quarter or the next year. 

Either Strip Religious Groups of Their Tax-Exempt Status or Enforce the Law

A number of churches have asked for and received a small exemption in the Affordable Care Act that would prevent them from having to "pay for" health insurance that included coverage for contraception, citing a religious problem with "providing" such coverage. The exemption will essentially create a small side insurance plan, that will cover contraception, anyway, and relieve such churches from feeling as if they're doing something that goes against their dogma. 

Forget the act that these churches are employers in this situation, and they aren't actually paying for anything; it's part of the employee's compensation package. It's still another case of religion pushing its way into the political arena and using political power to get its way. If the people who are actually buying these insurance policies think contraception is wrong, they have the option of not using that service; it shouldn't be up to an employer to tell them what they can and cannot use, based on that employer's personal religious beliefs. If I work for a Jehovah's Witness, does he get to nix blood transfusions? In other words, how far do we go with this? 

A Look at Where We Are Compared to 4 Years Ago. We're Much Better Off. Thanks, President Obama

Blaming President Obama for all of the bad things in the economy is just absurd. If you want to blame someone, feast your eyes on the Republican Party.  George W. Bush and the GOP Congress watched and congratulated themselves as the mortgage bubble grew and then burst, causing the Great Recession, the worst downturn in 80 years.  Obama and the Democrats were able to stop the bleeding and restore some semblance of order to the economy, but a population that expects instant results wasn't satisfied.

The GOP was elected in 2010 to get things moving even faster, but they've largely stood by and done nothing for almost two years now.  For example, a year ago September 8, President Obama submitted the American Jobs Act to Congress, and most of the bill still sits in the House. They won’t take it up, they won’t discuss it, and they won’t even offer up an alternative. It just sits there, because they can't bring themselves to do anything that President Obama may take credit for. 

Obama's Record Compares Favorably With the Real FDR

Many liberals, including myself, refer to themselves as "FDR Democrats" And why not? Franklin Delano Roosevelt was a great president. He came in during the worst circumstances in our history and turned the country around economically in many ways. He instituted regulations that were necessary at the time to steady the financial markets and to let people know they could be trusted again, and he helped create the Social Security program, and such agencies as the Securities and Exchange Commission, to keep markets honest, which is the key to a thriving economy. 

But many folks use FDR's alleged record to detract from President Obama's accomplishments as president. They use a few offhand mythical comparisons to claim Obama isn't liberal, or to suggest that Obama isn't as bold as FDR. The problem, however, is that they use the FDR myth, and not his actual record, for comparison's sake. When you look at what FDR actually was able to do, President Obama has nothing to be ashamed of at all. 

Like Obama, FDR was quite the pragmatist both when he ran for office and when he held office. He spent much of his early pre-presidential career going after the abuses of New York's infamous Tammany Democrats, who were nearly as corrupt as Republicans today. But when it came time to run for Governor of New York, he realized he had to embrace Tammany in order to win election. FDR knew that the only way to get things done was to get elected to the office, which meant he had to appeal to as many people as possible. Sometimes, a candidate has to at least entertain points of view you don’t always agree with. That doesn’t mean you’re adopting their views; it means that you’re flexible, and willing to try to build a consensus.

There's No Such Thing as a "Free Market!"

One of the greatest fictions that has been perpetrated by the current incarnation of the Republican Party over the last 32 years is their notion of a “free market.” They often express their belief in this silly concept in the same way they express belief in God. That's not to say there is no God, but their belief that “In the Free Market, all things are possible” sounds more like an article of faith than a statement of fact. 

To hear Republicans tell it these days, only a purely capitalist system can work, economically. And yet, there is no such thing as a “free market” in a purely capitalist system.  In such a system, Joe Blow creates a product, manufactures and sells it, and makes a profit. Then, someone copies that product and sells it cheaper, putting the actual creator out of business. A third entity could then copy the same product, sell it cheaper still, and put the previous seller out of business. Or someone with a lot of money could conceivably build the product, sell them for a penny, put everyone else out of business, and control the market and the price. 

The ultimate aim of every player in a purely capitalist system is to become the only one on the block, and to eliminate competition, in order to increase profits every year.

The Founding Fathers understood this, even more than 200 years ago, when capitalism in its current form was an experiment. That's why they imbued the government with the power -- no, make that the obligation -- to “regulate commerce.”

Cutting the Crap on the Debt Ceiling

It's amazing how often I'm forced to listen to teabaggers. That is because we are being ill-served by a news media that is populated by idiots who seem to be under the impression that the definition of “objective journalism” is to present all sides of any argument, no matter how stupid and uninformed any one of those arguments is.  I’ll get to that in other columns, I’m sure. This column, however, I'd like to clear a few things up about the debt ceiling. Call it a public service to teabaggers. 

The debt ceiling is the somewhat artificial barrier Congress put in place many years ago in order to pretend they were being responsible with our money. It is absolutely illegal for the United States to borrow more than the debt ceiling allows. So every so often (more often when Republicans are running things, for some reason), Congress votes to raise the debt ceiling to a number a bit higher than the projected deficit, and Congress may then borrow money at will up to the new limit.

The debt ceiling is once again coming up for a vote, and the Tea Party is chomping at the bit to make a stand on it. They won’t be successful in the long run, but it will be fun to watch the less-lunatic Republicans in Congress hem and haw and stammer and pose just to make the teabaggers happy. That’s what happens when you allow your base to be populated by the most ignorant people on the planet; you are made to look stupid.

And face it, folks; these people are dumb as rocks, and that may be unfair to rocks, since at least rocks have the good sense to simply lie there and not screw things up. As idealistic and naïve as some portions of the far left are at times, at least one has a sense that they can be taught. Teabaggers can’t be taught anything, because they see everything in simple black-and-white terms, and they’re too convinced of their own genius that they can’t absorb anything about which they have not preconceived a notion.

So, last night, I’m watching the news, and reporters were talking about the looming vote to raise the debt ceiling. They spoke to an economist, a couple of politicians and, for “balance”, a Tea Party spokesperson, who came on to tell us all that it’s important to not raise the debt ceiling, because that will once and for all force the government to live within its means, and it will make them cut spending. She had such a smile on her face. It was clear that at least one person in that discussion thought she was brilliant. 

Gosh, I wish life was so simple. I wish economics were so simple, you know? But in an economy that was built on debt, and thrives on debt, they’re dreaming.

Obama’s Created More jobs in Two years Than Bush Did in Eight

On April 1, I Tweeted the following statement, and it was not a joke:

More jobs created under Obama in 2 years than were created in eight under Bush.

When I made the initial statement last Friday, some silly person (by the tone of the messages, I suspect this was a male, but I could be wrong) who claimed expertise on the subject because his anonymous handle included the word “math” immediately jumped on it and threw up some numbers of his own. Here’s his reply:

137M employed when Bush took office, 142M when he left. We're now at 139M. Where's your math?

He kept on me, even after I explained that it was pretty much impossible to cite “my math” in 140 characters or less. Seriously, some folks think they can “prove” their statements simply by declaring them true in less than 140 characters. He claims he was getting his numbers from the Bureau of Labor Statistics, and his simplistic answer was actually stunning. His claim of 142 million employed? He got that from the January 2009 report, which indeed lists the total number of employed individuals as 142 million.I give him a little credit for at least blaming Bush for January. Many folks basically use the December number as the cutoff. 

But he’s looking at the wrong number, anyway. The number to look at is “non-farm payroll.” That is the number the BLS uses. When they claim the economy grew by 216,000 jobs in March, they’re using non-farm payroll numbers, not the total number of employed. 

But regardless of which numbers he cites, he’s still wrong, because he doesn't understand what I said. The first mistake he makes is his false assumption regarding time. I said “in 2 years,” not “since January 20, 2009.” I also don’t use BLS raw (easy) numbers as my sole source, because they don't tell the whole story. But just for the hell of it, let’s start off with BLS numbers. I refuse to cite numbers beginning with February 2001 and ending with February 2009, though, because presidents aren’t magicians. They don’t take office and immediately influence job creation. I think a more accurate measure is to use fiscal years, especially since the stimulus, passed by Democrats with ZERO Republican support, didn’t become law until April 1, 2009, and nothing but the tax cuts actually took effect then, anyway. The first stimulus money started being distributed in June.  But since I’m being fair, I’m not going to give Bush credit/blame for the first months of his administration, either. I was going to use the beginning of each fiscal year as a comparison, but then I realized that October 2001 was right after the 9/11 terrorist attacks, which might be unfair to Bush. We’re not talking about his incompetence with regard to security, but rather his incompetence with the economy. So, I’m going to go with July 2001. That works, because the numbers aren’t influenced by 9/11, and July 2009 is about when the stimulus money started reaching its recipients. I would also note that most economists agree that the Bush Recession ended in June 2009, so July seems like a relatively fair beginning and ending period.

In the July 2001 report, the total nonfarm payroll was 132.4 million. Eight years later, in the July 2009 report, it was 131.4 million. So, even without giving Bush credit for the rest of the fiscal year, the net loss of jobs under Bush in eight years was over 1 million, even just using raw BLS numbers. The number in the March 2011 report, which was just issued last Friday, is 130.7 million. I know what you’re thinking; it’s still a negative, right?

Wrong. First, I’ll remind you, I’m using the July numbers as a courtesy to Bush. But you can’t simply use raw BLS numbers and compare one month to another month, because it doesn’t tell the whole story. That brings up the second false assumption my critic makes. I spoke of “the number of jobs created,” not the net jobs gained. There is a difference.The fact that some folks can’t read basic English, or insist on jerking their knee when they’ve been told something they don’t believe, doesn’t make me wrong. Even using the pure raw numbers, Bush shows a net loss of 1 million, and Obama’s shows a net loss of 700,000, and that number is shrinking rapidly, and will probably be in the positive territory by early summer. So, even using the simple-minded math this guy seems to prefer, I’m still correct. But there’s more.

See, at no point in Bush’s eight years could it be said that the economy added a net of more than 4 million jobs, even using just the BLS raw numbers. At one point, at the height of the bubble economy, there were 135.3 million non-farm employees, which means in the last two years of the Bush fiasco, the economy overall LOST 5 million jobs. If I wanted to be a real prick, I could point to just private sector employment. If I did that, then the economy lost 7 million jobs during the last two years of the Bush era. In fact, though, it was the public sector jobs that Obama created and/or saved with the initial part of the stimulus package that prevented us from hurtling toward 15% unemployment, and which set the stage for a boom in private sector jobs. At the time, some local districts were looking at laying off half their teachers, as well as lots of police officers and firefighters, until the stimulus bailed them out. If you don’t think that had an overall positive effect on private sector jobs, than you must be a Right Winger. Those teachers, police and firefighters spend a lot of money in the economy. That’s why it’s just too simplistic to simply add and subtract one number from another and declare "well, that's the truth. Period."

Obama deserves credit for the jobs the stimulus created, even as the rest of the economy was shedding others. For example, according to most economists NOT hired by the Fox News Channel, the stimulus package alone was responsible for 2.5-3 million jobs. In addition to the teachers, police and firefighters who got to keep their jobs, it’s estimated that the Cash for Clunkers resulted in nearly 500,000 jobs. The fact that many of those jobs were offset by the continued loss of jobs in other areas of the economy caused by the Bush recession does not change that fact. 

If I use annual figures, the only positive Bush years were 2004, 2005, 2006 and (barely) 2007.  And 2006 and 2007 were only positive because he was having the Fed print money in the hope that he could hide the mortgage meltdown that actually started in late 2005 (and which I predicted on my old blog back in 2003). That means half of his Administration found the economy in the shitter. Using just numbers from FY 2010 and FY 2011 so far, Obama beats that track record by a mile, even if you subtract temporary census workers from the mix. In fact, when you remove the census workers from the mix altogether, Obama has seen 13 straight months of positive job growth; a record Bush didn’t accomplish until September 2004. Between March 2010 and March 2011, the private sector has seen its first positive annual job growth in more than four years, adding nearly 3 million jobs, all told. If Obama had continued doing the same things Bush was doing in the last year of his presidency, we would have lost 2.5-3 million jobs more than we did, and most economists estimate that the unemployment rate would have ended up north of 15%.

But Obama and the Democrats acted fast, and they stopped the bleeding. (Yes, I know; in a perfect world, the stimulus should have been larger.) He has also turned the economy into a job producer again. It’s not enough to just count the number of jobs that were created; it’s also necessary to count jobs that weren’t lost. I will grant you, the overall job numbers still look anemic, but the fact that nearly 3 million jobs have been created in the private sector over the past year alone points to major progress. Companies are making more profit than ever, and they have begun hiring again. I’m still feeling a little wary, especially with the GOP bozos who are in charge of the House, but the positive growth should start feeding itself as the employment picture catches up to the economy. And the 3 million private sector jobs created in the last year, combined with the 2.5-3 million jobs created with the stimulus package put him up near Bill Clinton in job creation territory, even though he’s just started his third year.

Once again, George Bush’s record on jobs was an overall negative, when you look at his record honestly. The effects of the Bush recession didn’t magically end on January 20, 2009. As you can see if you look at the actual numbers, job numbers bottomed out in late 2009, just as the stimulus was taking effect, and they have been showing a positive trend since. When you add in the jobs that were proven to have been created by the stimulus package, there is no doubt that Obama’s job creation numbers are better in the last two years than Bush’s were in eight years. Every job created under Bush disappeared, while the jobs created during the Obama era seem to be here to stay. He’s created new jobs and new industries that promise enormous growth in the future, so that record will get even better.

Like I said:

More jobs created under Obama in 2 years than were created in eight under Bush.

At What Point Do "We The People" Take Back Our Own Economy?

When did the economy get away from us?

What I mean is, why are we allowing people who claim to have all sorts of mysterious knowledge about finances create all sorts of exotic “financial instruments” that the rest of us can’t possibly understand? We’re in the economy, too, and goddamn it; they’ve been using OUR MONEY to do all of this. If we’re all supposed to be equal, and they’re using our money, shouldn’t we at least have a working knowledge of how they’re using it? I’ll put it another way; if a used car salesman says “Trust me,” immediately our guard goes up and we immediately get suspicious. But for some reason, when someone puts on a suit and dons the term “financial advisor” or something equally odious, we just smile and hand over the checkbook.

What the hell is wrong with us?

Now, I am not a professional investor, nor do I claim to be a “financial adviser.” In other words, I’m just like most people who invest; we just want our money to be safe and grow at a reasonable rate. I do not want to have to spend all of my time staring at a computer screen and moving my money around, trying to outthink everyone else who’s doing the same. So, why are we trusting people we don’t know with putting our money into financial instruments we don’t understand? How many times do we have to get burned before we figure out how to stay away from the flame?

What Will it Take to Give Up Our Oil Addiction?

What will it take to make us get serious as a nation about switching from oil to clean, renewable energy sources? How much of our environment so we have to completely ruin, and how many people have to die before we figure out that what we’re doing is simply killing us?

Even if the terrible ecological disaster caused by BP oil rig in the Gulf of Mexico wasn’t the unmitigated catastrophe it will probably turn out to be be over time, the reality is, the same scenario is pretty much guaranteed to happen again and again. Why do we continue with the same behaviors that keep leading us to disaster after disaster? Why do we keep doing this to ourselves?

Why do Americans think things will just get better over time, when they’re only destined to get worse? Why do we always wait for "someone else" to take the reins and fix problems? As you are seeing over the last few weeks, oil companies will use any excuse to jack up prices, and they will do it over and over again, because they can.  if they can jack prices up 50 cents a gallon when there is no shortage (and there isn't one, folks -- there is no serious danger to oil supplies in any of the countries currently experiencing change in the Middle East.), imagine what they will be able to do when there is a shortage. 

Cutting the Crap on Cutting the Deficit

If you’re an average American, you probably have a lot of debt right now. A mortgage, a car, a few credit cards, perhaps some hospital bills; who knows? Debt is a part of life these days, or at least his has been in recent decades.

Now, imagine, if you will, that you make $50,000 a year, and you’re suddenly hit with a debt of about $30,000. Those without insurance, or whose insurance company screwed them, know exactly what I mean.

You have two choices; you can either go into bankruptcy, or you can pay the debt. Most people will opt to pay the debt. But how would you do that?

Of course, you’re going to cut back on food a little, and maybe lower the thermostat, buy fewer clothes; maybe cut off the cable altogether. But how long do you think it’ll take you to pay off $30,000 in debt at that rate? If you can manage t0 save $500 a month, which would be extremely difficult for most people, it’ll still take at least 5 years, even if there is no interest accumulating. At $200 savings per month, which is more realistic, it could take a decade or more.

So, what do you do?

The Definition of Newtie: To Fix The Economy, We Do What We Did Before, Right?

How big an idiot is Newt Gingrich?

Apparently, he’s a pretty big one. And trust me when I tell you, you do not want him running an economy. Although, the thought of him and Caribou Barbie (Sarah Palin) being the political face of the Republican Party makes me giggle. 

In this morning’s Forbes, Newtie provides commentary on just what President Obama can do to get the economy moving and create jobs. The opinion piece, entitled “Job Killers vs. Job Creators, can be found here. Feel free to follow along.

I’m going to start at the beginning:

The National Bureau of Economic Research officially scored the recession as starting in December 2007. Since World War II, 65 years ago, the average duration of recessions has been 10 months, with the longest being 16 months. In April of this year, NBER issued a statement saying it could not yet determine an end to the recession, 28 months after it began.

What we do know is that in July 2010, 31 months after the recession started, the economy was still losing jobs. The Labor Department reported yet another 131,000 jobs lost in July. The department also revised the June report downward to show 221,000 jobs lost that month from 125,000. The unemployment rate remained at 9.5% only because 181,000 additional discouraged workers left the work force and so were not counted as unemployed.

Indeed, since April 1, 115,000 former workers have fled the work force in hopelessness and despair. Without that work force decline, the unemployment rate would be 10.4%.

Those Fiscally Irresponsible Republicans; Do You REALLY Want Them in Charge AGAIN?

The problem with the far right is, they want all of the rights without any of the responsibilities that are expected of good citizens. And this column will prove that statement.

I know, let's have some fun. Let's talk about three things that right-wingers can't seem to discuss without turning themselves into blithering idiots and demonstrating the above adage as true. Those three things are taxes, deficits and government spending. Those are their favorite subjects, and they talk about them ad nauseum. But they really don’t know what they’re talking about.

The most amazing thing about of any right-winger’s discussion of these subjects is the absolute certainty they have that their position is the correct one, and they’re seemingly automatic declaration that they, and they alone are "fiscally responsible." That’s the term that they use to describe themselves, and it makes me chuckle every time. Look back in history, if you want a clue. Go look it up; The Great Depression, the 1982 Recession and the Great Recession that we are currently living through all have Republican fingerprints all over them. And the debt that they suddenly seem so concerned about? Well, we’ll get to that.

Wherein We Cut Some Frank Luntz Crapola on Wall Street Reform

You know, while many people look upon Frank Luntz as a political genius, most of the time, he’s little more than a right wing con man. And now, he’s set his sights on the financial services reform that sits in the Senate; you know, the one that Republicans tried to block debate on for several days.

In a post on today’s Huffington Post, Luntz tries to tell everyone how bad the Dodd bill is for all Americans, and how it will absolutely backfire on the Democrats come this fall. In other words, everything Democrats accomplish is bad for us. After eight years of complete incompetence and sloth, the Democrats pass an economic stimulus that's working, collects bailout money BACK from the banks and car companies we lent it to (and be serious; would Bush have even asked for repayment?), passed a health insurance bill that allows 30 million people to pay their medical bills, and passes a bill that reforms Wall Street, and he really thinks swing voters will choose to return to incompetence and sloth?

And every reason he gives is made of classic right wing talking points that have no factual basis whatsoever.  I am curious of one thing, however; given the Republican track record on major legislation during this session of Congress, if this bill is so bad for Democrats, why would they block it? It seems to me that, if it was so incredibly bad, Republicans wouldn’t block it; they’d want it passed, so they can be elected in 2010 on a promise of “repeal and replace.” They seem to love that term, don’t they?

No, this bill is great for consumers, and it’s about to get even better with some of the amendments that are being proposed. In fact, it’s so good, Luntz, who is one of the greatest bullshit artists of all time, can’t even produce a solid reason why this bill is actually bad for Democrats. Instead, he lists three incredibly lame rationales for why it's bad for Democrats, and then goes off on another health care rant.

Observe:

The dirty secret of the Senate financial reform bill is that some of its biggest supporters work on Wall Street. Recipients of taxpayer bailout money have no concerns about the bill -- in fact, the CEOs of Citi and Goldman Sachs have publicly endorsed it, and several of the other big banks have expressed support. It keeps the "too big to fail" guarantees in place for another generation of financial services companies.

This is classic Washington Republican double-speak, and it’s actually beneath someone with Luntz’s pedigree. The entire populace wants financial reform, and like it or not, the CEOs of Citigroup and Goldman Sachs need to clean up their reputations in order to make money going forward.  In my memory, only health insurance companies are stupid enough to pull a PR stunt that actually makes them worse in people’s minds. Of COURSE big banks SAY they want financial services reform.  But Luntz is also wrong, at least with regard to the Goldman CEO. Check out this exchange between Sen. Tom Coburn, who voted against even debating this bill, and the CEO of Goldman Sachs just two days ago:

LLOYD BLANKFEIN, Goldman Sachs CEO: “I Listened To A Speech By Barack Obama At Wall Street, And One Of The Points He Made Resonated With Me Because I’d Said It Myself. He Said That The Biggest Beneficiaries Of Reform Will Be Wall Street Itself.” 

SEN. TOM COBURN (R-OK): “Let me ask you a few questions about the bill that's being proposed. Your Executive Vice President and Chief Financial Officer said you embrace it, you’re generally supportive of the Dodd bill. You've been fairly high profile in your support for it. Do you still maintain that support for this bill? Do you think it solves the problems that caused the problems that we got into?” 

LLOYD BLANKFEIN, Goldman Sachs CEO: “I think execution – well, first of all, some aspects of the bill, I think have morphed over the last - maybe even over the last few days, I’m just not sure.” 

COBURN: “I don't think so. The vote was turned down again. I don't think we've gotten there.” 

BLANKFEIN: “I see, right. I'm generally supportive. To be sure, there are details of it that I think I'm less sure of, but I think, on the whole, financial reform is, absolutely is essential and I will say that last week, in New York, I listened to a speech by Barack Obama at Wall Street, and one of the points he made resonated with me because I’d said it myself. He said that the biggest beneficiaries of reform will be Wall Street itself.”

(From the Homeland Security & Government Affairs, Permanent Subcommittee on Investigations, U.S. Senate, Hearing, 4/27/10)

Oops.  You see, Luntz would have done well to pay attention the last few days, because while the CEO of Goldman thinks the idea of reform is a great idea in the abstract, he's not too crazy about this bill. And if he's not too crazy about this bill, well, doesn't that undermine Luntz's main premise, which is that this must be a bad bill because bank CEOs love it? At least one of the two he mentioned doesn't love it at all.

Then, Luntz turns to one of the most-used rhetorical weapons in the right wing’s arsenal; the incredibly lame argument that corporations don’t pay taxes, people do.

(…) The Democrats supporting the current legislation have assured an anxious electorate that whatever funds are used to create whatever regulatory scheme created will come from the banks, not the taxpayers. Let me emphasize that so that even casual readers will catch it: the Democrats promise that you won't pay for their legislation, banks will.

Really?

Since when have corporations ever paid taxes, fees or penalties? Employees end up paying in the form of lower salaries and benefits. Customers end up paying in the form of higher costs.

And in this case, every account holder will be forced to pay higher fees on their checking account and savings account. That's you, my friendly reader. Can you say "checkbook tax"? I can, and I think lots of candidates will be saying it come November. Is that what you really want to do to your constituents, Senator Lincoln? Is that what you really want to explain on the campaign trail, Senator Bennett?

The sophistry in the above can’t be over-emphasized.

If corporations never pay taxes, fees or penalties, then please explain why the largest ones have such huge legal departments in order to fight these things? I mean, all they're going to do is pass it all on to consumers, so why fight it?

As I said, this is a common argument for right wingers to use against any sort of tax increase on corporations and it’s actually pretty easy to explode. If you're going to take the position that corporations don’t pay taxes, then you have to stop bitching about your own taxes, because you don’t actually pay them, either; your employer does. Of course, that’s not true, either; your employer can’t possibly pay your taxes unless someone pays them for the goods and services they provide. But wait; someone paid the people who paid your employer, so that won’t work, either...

See what I mean? Based on the ludicrous concept that corporations don't pay taxes, the reality would have to be that no one actually pays taxes. The entire economy works based on the premise that money circulates through it, and the concept that a corporation simply passes on all of its expenses to its customers depends entirely upon their competition and their customers’ willingness to pay for their product or service.  

The way the Dodd system works is, banks pay into a fund, and if a bank fails, that fund decides whether or not to bail out the bank, or kill it and sell off the pieces. This concept works on roughly the same principle as the FDIC. When a bank fails, the money to rescue it and make depositors whole doesn’t come from taxpayers; it comes from the FDIC trust fund. And banks pay into that fund, and have been paying into that fund since the 1930s. Yet, they all offer free checking, and free ATM use; go figure. Of course, that's not to say that banks don't charge outrageous fees on some "services." But if the fees are so high now, does Luntz really think people will notice an increase to pay for reform?

Ah, but Luntz isn’t finished. He’s used the “Wall Street likes it, so it must be bad” argument, which wasn’t true. Then, he switched to the “checkbook tax” argument, which is complete crap, but the word "tax" sends right wing clowns and teabaggers into a major frenzy. Let’s just eliminate the FDIC and FSLIC, while we’re at it, based on "Luntz Logic"? Now, he’s about to use the “scary lobbyists” dodge.

You’ve seen this "evil lobbyists" argument from both sides, but while the left uses it, the right excels at manipulating people with it. Check this out:

Regardless of what side you're on, the financial reform bill is special interest heaven -- a bill written by lobbyists, for lobbyists, and will probably be implemented by lobbyists. The Dodd bill has carve-outs right from the get-go. Real estate agents, title companies, the Farm Credit system, even Fannie Mae and Freddie Mae are exempt from its onerous and costly provisions. And for everyone else, it's been a special interest feeding frenzy.

More than 130 companies have publicly hired lobbyists seeking their own loophole. Mars Candy wants to continue to use derivatives to hedge against price hikes in sugar and chocolate, so they've hired a lobbyist. Harley Davidson wants to protect dealer financing of their bikes, so they've hired a lobbyist. And eBay wants to not harm its subsidiary, PayPal, so they've hired ... well ... a team of lobbyists.

But most average Americans -- the ones who bailed Wall Street out in the first place -- cannot afford lobbyists, and won't be exempted from the legislation.

If the bill is a “special interest heaven,” then why are Republicans trying to kill it? I mean, if they wanted “better” financial services reform, they had more than enough opportunity when they held both the House and Senate and the White House. And what was about to happen to the financial services industry was pretty well known by 2006, when they were in charge, and could have "saved the day."  Yet, while the Republicans spent the last 30 years removing regulations that had served to turn us into an economic superpower, we’re suddenly supposed to worry because there are (GASP!) lobbyists in Washington?

But this argument falls flat on its face even without all of that.

The man who crafted this particular bill is Christopher Dodd. Forget the fact that Chris Dodd is one of the more honest politicians in Washington, which is not a high bar, admittedly, but the fact is, Dodd has announced his retirement. He’s not running for reelection. Therefore, the initial bill was crafted by a guy who just wants to reform Wall Street, who has no need to raise money or to court voters.

Luntz’ implication is that the mere presence of lobbyists in Washington should signal to voters that this is a bad bill, which is wholly ridiculous. It also demonstrates just how weak Frank Luntz’ arguments are when he tries to claim this bill is bad for Democrats. Seriously; we just experienced six years of Republican Congresspersons employing lobbyists to WRITE bills, and eight years of a Republican administration that not only put lobbyists for moneyed interests into key positions in its own administration, but let lobbyists write administration policy. Why would any Republican  even want to mention lobbyists at this point in time?

By the way, did you notice the lobbyists he mentioned? Look at the list again. The lobbyists he mentioned -- the ones we should fear – are all for industries that have direct contact with the public. They are lobbyists for companies and industries that have direct contact with consumers.  Think about that a moment.

And that’s pretty much his entire argument against the financial services reform bill. Go read the rest of the article, where he goes off on another rant about the health care bill, because that's so relevant to Wall Street reform.

And now you know just how good a bill this is. When an uber-Republican can only bring out three extremely lame and generalized arguments, you know they’re out of ammunition and they’re forced to throw the gun.

Oh, and about the health care rant; all summer, we’re going to hear all about how bad health reform is. But the fact is, about the time swing voters actually start thinking about the coming election, millions of people will be signing up for health insurance who haven’t been allowed to for years. Good luck, Republicans.

Are You Pissed Off Enough Yet? Only a Moron Will Vote GOP in November

The next time someone tells me there’s no difference between  Democrats and Republicans, I swear I’ll kick 'em in the shins.

Ok. I won’t. I’m amazingly non-violent. But I’ll still call you an ignorant sop, because while neither party is perfect, the fact of the matter is, the Democratic Party does give a damn about the country, and the current incarnation of the Republican Party simply does not. 

And to you “independents” who plan to vote for a Republican this year, because the Democrats haven’t done enough, or because the change hasn’t come fast enough, or some other such nonsense, well, screw you, too. I’m sick of hearing it.

Have you heard? Not one Republican Senator voted to allow Wall Street reform to make it to the Senate floor. Not one!  Isn’t this a hell of a democracy, when 57% of an elected body votes in favor of something, and it dies? The Democratic House passed even more stringent reform this past December, and received no support from Republicans on that, either.

And why do Republicans vote in lockstep on absolutely everything? I mean, why they always vote against the people is a good question. But is everything Democrats want to to so completely and utterly wrong that not one Republican can support it? And why do people refer to that as “party discipline”? That’s not discipline; that’s cowardice.

At The Top of the List: Financial Reform -- Lottery Capitalism Has to GO!

For those of you who have just started reading this series of columns, I am discussing the “lottery capitalist” mentality that has gripped our economy and threatens to strangle it if we don’t wake up and fight it off. I call this phony strain of capitalism “lottery capitalism” because it benefits a very small number of people – the jackpot winners – and leaves the bulk of us to split the rest of the money.

A healthy economy is one in which everyone is on essentially equal footing and has an equal opportunity to generate the wealth needed to live freely and comfortably. In a lottery capitalist economy, wealth is based almost solely on luck; the ability to make a living is completely dependent on someone else – the lottery winner – and whether or not they do the right thing from a business perspective.

Think about it. Even during "good times," Americans are one pink slip away from total disaster at any given time. Whether or not we continue to get a paycheck is dependent on whether someone else wants to hire us for a job, and is willing to pay us a reasonable wage.  Virtually all employment is now at-will, which means that, absent a contract, an employer can fire you for any reason, or no reason at all. Want to form a union? The Republicans have successfully taken that right away from you, as well, for all intents and purposes.

In short, lottery capitalism favors a very small number of people, with the vast majority of us forced to cross our fingers and hope for the best, which is why it should come as no surprise to anyone that our financial system is failing. It's rigged in favor of the jackpot winners and against the rest of us. Such economic systems always fail, especially in a supposedly democratic system. 

As a consequence of this lottery capitalist mentality, we have been taught to believe that responsibility is a one-way concept; that we have to be responsible when we borrow money or use a credit card, but the lender has no responsibility at all. Hence, the system is horribly broken, and seems to collapse on a fairly regular basis. We’ve been taught to rejoice during economic bubbles and to take the blame when they inevitably burst. We accept constant,  unrelenting and debilitating penalties as part of our responsibility as a consumer, even as those  entrusted with caring for our money suffer seem to feel entitled to bonuses even as they lose our money.

Broadcasting Industry in Danger -- Lottery Capitalists Run Amok

The Communications Act of 1934 was one of the most important pieces of legislation ever passed by Congress. It established the reality that we the people own the airwaves and those who broadcast over them merely possess a license to use them. No one who holds a broadcast license is expected to make money. If they do, fine; if not, hey; it's not our problem.

In return, licensees have to agree to broadcast programming and information “in the public interest.” In other words, in order to use the public airwaves, they agree to make time available for the public to broadcast messages that may only be of interest to a small segment of the public. In other words, the airwaves are supposed to represent all of the people, not just those with the most cash.

They are our airwaves for a very good reason; a “national security” reason, actually. If there is an emergency, the airwaves are our main lines of communication, folks. When something bad happens or is about to, people need to be able to turn to their radios or their televisions and find out what’s going on. When the power goes out, you can’t turn on your cable tv and your Internet may not work. But authorities can always get information out over AM and FM radio. Broadcast television is somewhat less reliable for information than radio, but there are portable battery powered televisions out there and sometimes visual evidence of a catastrophe has a greater impact on folks than audio evidence, so it’s just as important.

Well, due to our fascination with lottery capitalism, we are dangerously close to losing our broadcast industry. Truly moronic corporate whores thought they could become rich by monopolizing the industry, their attempt failed miserably and now they’ve put our broadcast airwaves at risk by strangling the life out of it. And with the various corporate-whore-friendly modifications to the Communications Act passed by Congress in recent years, our own government sold us out and let them do so.

Lottery Capitalism: Bono's Crazy; File Sharing is Good for Artists

I was reading the New York Times this past weekend when I came across a little passage in an po-ed piece that made me think of another example of lottery capitalism; the music business. How many of us know musicians who are really good, but either never got a record deal, or got a record deal with no support from the record company they signed with? There are probably a few hundred artists and bands who make a ton of money from recording, while the rest of the music business is left to starve. There are a lot of industries like this, but the music industry is actually the best example of how we can move away from lottery capitalism in other areas of the economy.  

The news article in question was an op-ed in last Sunday’s Times, written by Bono, the lead singer for U2. What he says shows a cluelessness brought on by having been a winner in lottery capitalism:

A decade’s worth of music file-sharing and swiping has made clear that the people it hurts are the creators — in this case, the young, fledgling songwriters who can’t live off ticket and T-shirt sales like the least sympathetic among us — and the people this reverse Robin Hooding benefits are rich service providers, whose swollen profits perfectly mirror the lost receipts of the music business.

I’m sorry folks, but I repeat; this is absolutely clueless.

Lottery Capitalism is Bad for Business

(Part one of a series)

Businesspeople have apparently become phenomenally stupid in recent years. Maybe they were always stupid, but I doubt it. I suppose I can’t blame them; we've been led by some seriously disturbed wingnuts for most of the last 30 years, and they’ve warped the system to the point that it no longer resembles capitalism.

You see, to make money in a truly capitalist system, you’re supposed to earn it; you’re not entitled to become rich just because you want to.

But our system no longer works the way it used to.  I’m 51 years old, so I’m not ancient, but I can remember a time when going to the supermarket was a destination our family took once every couple of weeks. Of course, the supermarket was locally owned and carried mostly local and regional items. When we needed some groceries in the interim, we would go to Lane’s; a little grocery nestled in the basement of the Lanes’ home on Elm Road. If we wanted shoes repaired – you know, back in the days when people did that -- we would take them to the guy who worked in a little shop across from the old Hollywood Theater; his shop, as well, was in the basement of his home. The Hollywood Theater was a little local movie house with one screen, and it was packed every weekend. It was owned by an old lady who looked similar to Elvira Gulch, who lived in an apartment above the theater.

All of those places are gone these days; victims not of a booming economy, but rather a phony economy, in which capitalism’s main purpose – to create a marketplace in which everyone can make a living – has been perverted by the right and changed into a lottery system of sorts. The goal used to be entrepreneurialism, whereby wealth was created on a mostly-equitable basis through hard work, and in which almost every dollar was earned. Now, because of the snake-oil salesmen on the right, wealth is an entitlement for a very few, who don’t actually earn it, but just happen to get lucky and get rich.

Cutting it Deep: Supply-Side is NOT Capitalism; Right Wingers HATE Capitalism!

Let's start by making something crystal clear; for all of their talk, the right wing is not a fan of capitalism.They like it when their heroes make a lot of money, but as organized crime, Enron and Jack Abramoff have proven over many years, it is possible to make a ton of money doing something that isn't capitalism.

I suppose we're supposed to be relieved by the current spike in the Dow Jones Industrial Average. It is a sign that the economy has bottomed out. But we can't allow ourselves to fall into this trap again, folks. The Dow going to 10.000 means diddly squat when it comes to the overall economy. And if we don't gain some perspective, and do so soon, we're in danger of allowing ourselves to be taken in by another bubble. A rising Dow should be seen as a warning sign, not as a hopeful sign. The stock market is no longer about capitalism, which is why the right wing loves it so much.

You see, capitalism is supposed to work this way:

The Absurdity of Preserving Profit in the Health Insurance Industry

You know, one component of the health insurance reform debate that has always puzzled me is this notion that somehow health insurance companies are entitled to make a profit for using your money to pay for your health care.  It's truly one of the strangest concepts I've ever heard of, and I think it's time we put that notion to rest, once and for all.

 

Did you know we're the only industrialized nation on the planet whose health care financing system is controlled by a for-profit health insurance industry? Yeah, that's right; and we're also the only industrialized nation in which health care makes up significantly more than 10% of its GDP (Health care accounts for  nearly 17% of our GDP), even though we're also the only country that doesn't cover virtually anyone living within its borders legally. (Fully one-fifth of our population has no coverage, or access to health care.)  Coincidence? Not even a little. If you think about what for-profit insurance companies do to maximize their profits, it actually makes perfect sense that our system is screwed. Health insurance, even when it works, doesn't actually provide a marketable service. Essentially, they take money from a bunch of people, who give it to them in good faith to pay for any health problems that might arise but they alone seem to decide what is necessary and what is not. And whatever they don't spend, they get to keep.

 

How is that fair? More importantly, I'd like for some wingnut to explain to me how that meets any sort of rational "free market" capitalistic model.

How The Neocons Screwed Us, And Why We Can't Let It Happen Again

I hope no one is betting the farm on Congress being able to tax AIG bonuses to get the money back. The Constitution kind of forbids that sort of thing, and for good reason.

Say the party in power was the Republican Party, and they proposed a bill that instituted a special tax for auto workers to pay for the bailout of General Motors?

Yeah, now THAT doesn’t seem fair, does it?

I know we’re pissed off, and I know we’re tired of this crap, but we have to keep our heads in this situation. This economy took neocons a long time to screw up, and there is no “magical formula” which will fix the whole mess in a couple of months. This situation is the end result of 28 years of supply-side economics, culminating in the “free market uber alles” of the last eight years, in which deregulation was championed, and the regulations Republicans couldn’t kill were routinely ignored by an administration that decided that, as long as it LOOKED like someone was making money, whatever “the market” did was perfectly okay.

If you want to know what brought our economy down, it’s actually relatively simple, even though it looks complicated.

Don't Let 'Em Fool Ya! The Neocons Screwed Our Economy

One of the more fascinating arguments used by right wingers to justify their continued belief in the ridiculous concept of supply-side economics, or "trickle-down" as they like to call it, is the truly hilarious argument that "private investment in markets created your job."

Yeah, I know. The concept is pretty laughable. The only thing that's been "trickling down" to the masses is the urine from the rich, who are pissing all over you as they laugh themselves silly.

But to a typical right winger, this is an airtight argument. And why wouldn't it be? I mean, if you’re somewhat addled, mentally speaking, then it makes sense to think that, if no one invests in a company, it might not be able to pay its bills, and it won't be able to make any money, right? Keep in mind, these are the same people who have argued for years that the best way to go after al Qaeda was apparently to lure them into Iraq, where we would be able to attack them with huge Halliburton and Blackwater contracts.

In basic capitalist economic theory, this is how investment is supposed to work:

Joe’s company invents a widget. Joe then forms a company, which manufactures widgets. If Joe’s company is able to demonstrate a market for widgets, by selling a warehouse full of them. In order to meet market demand, Joe sells stock in his company, and raises money to expand its widget factory, so that it can make and sell more widgets. As Joe sells more widgets, he pays the stockholders a portion of his profits, as a reward for their support during his expansion.

See, first comes the research, development and manufacturing, and then comes the investment, which should facilitate economic growth. That's how investment in this country actually worked for many, many years.

Then Ronald Reagan was elected, and the neocons hit the fan. Since then, the whole concept of investment has been bastardized, and the notion that “investment creates jobs” is now patently absurd.

Bank Execs Bonuses Should Go to Pay Their Bail

It’s time to speak up, folks.

And I’m not just talking about me, and other bloggers ranting about this; I’m talking about every single citizen writing their Congressperson, using an actual card or a letter and inundating their staffs with them. E-mail and phone calls are just not going to cut it for this one; they need to be overwhelmed.

I understand why banks need to be bailed out; I really do. The government didn’t do its Constitutionally-mandated job for eight years, and they were allowed to run amok and get as big as they wanted, as if there was no sheriff in town, because there was no sheriff in town. It was a crazy situation. Banks were engaging in risky behavior, and justifying it because crooks were allowed to work as mortgage brokers, and they felt as if they had to compete with the rest of the market. This is crap, but given the mentality of the time, it’s understandable. Again; there was no sheriff to keep order, and since banks have to answer to shareholders and others, they felt the need to compete in the marketplace, even when that marketplace is made of twigs and even when that marketplace is doomed to failure.

Pity The Rich People Who Lost Money in the Markets? They Can Kiss My Ass!

I’m tired of this crap.

Why do these right wing idiots and so many economic "experts" bitch so much about how those poor put-upon rich people are suffering far more than the rest of us due to the collapse of the markets? Do they even realize how stupid that sounds?

Here’s the deal, folks; The stock market was in a BUBBLE. The mortgage securities market caused housing values to BUBBLE. What that means is, most of the “gains” in those markets were only gains on paper, so few actual monetary losses actually occurred. The people I feel bad for are not the rich CEOs, who took a few million dollars worth of stock in their companies, and now those shares – which they got for free, by the way – are now worth half as much.I feel bad for the working people who were screwed by these creeps, and who put so much of their hard earned money “retirement accounts,” which gave these people seed money for their nefarious activities.

See, the fact that the market was in a BUBBLE means most of the market valuation of the last few years was bullshit. I don’t feel bad for Warren Buffet because he used to be worth $62 billion, and now he’s “only” worth $30 billion or something like that. But I was watching Real Time with Bill Maher the other night, and Erin Burnett of CNBC actually suggested that increasing taxes on the rich might be “unfair,” because they’ve lost the bulk of the $30 trillion in market value that’s been lost. Is she kidding with that shit?(I checked my podcast later, and sure enough; she said it. And you wonder why we have such little regard for economic "experts" these days.)

Making Money From the Messes They Made, When They Should be on the Way to Jail

This has to stop, folks.

Apparently, a couple of former executives at Countrywide have gone into business for themselves. Now, for those of you who have really short memories, Countrywide was pretty much at the epicenter of the mortgage meltdown, and had to go out of business because of the billions and billions of dollars in bad loans they made with their customers' money. In other words, they were irresponsible with others' money.

Can you guess what they're doing now?

This is from today's NYTimes.com.

Whether they deserve to be or not, Countrywide Financial and its top executives would be on most lists of those who share blame for the nation’s economic crisis. After all, the banking behemoth made risky loans to tens of thousands of Americans, helping set off a chain of events that has the economy staggering.

So it may come as a surprise that a dozen top Countrywide executives now stand to make millions from the home mortgage mess.

Stanford L. Kurland, Countrywide’s former president, and his team of former company executives have been buying up delinquent home mortgages that the government took over from other failed banks, sometimes for pennies on the dollar. They get a piece of what they can collect.

(...)

PennyMac was born last spring after Mr. Kurland received a phone call from a childhood friend, Lawrence Fink, now the chief executive of BlackRock, which along with other investment groups is trying to figure out how to profit from the decline by buying up distressed loans at fire-sale prices. Mr. Fink lured him back in business, and BlackRock invested.

PennyMac, whose full legal name is the Private National Mortgage Acceptance Company, also received backing from Highfields Capital, a hedge fund based in Boston. Other investors include Atlantic Philanthropies, based in Bermuda and created by the billionaire former owner DFS Group, a chain of airport duty free shops. PennyMac makes its money by buying loans from struggling or failed financial institutions at such a huge discount that it stands to profit enormously, even if it offers to slash interest rates or make other loan modifications to entice borrowers into resuming payments.

Its biggest deal has been with the Federal Deposit Insurance Corporation, which it paid $43.2 million, or the equivalent of 38 cents on the dollar, for $560 million worth of mostly delinquent residential loans left over after the failure last year of the First National Bank of Nevada. Many of these loans resemble the kind that Countrywide once offered, with interest rates that can suddenly balloon.

Under the initial terms of the F.D.I.C. deal, PennyMac is entitled to keep 20 cents on every dollar it can collect from borrowers, with the federal government receiving the rest. Eventually that will rise to 40 cents.

Telephone operators at PennyMac’s offices — working in shifts — spend 15 hours a day trying to reach borrowers whose loans the company now controls. In many cases, they offer drastic cuts in the interest rate or other deals, which PennyMac can afford, given that it paid so little for the loans.

PennyMac hopes to achieve a profit of at least 20 percent annually, and it is actively courting other investors in an effort to build its portfolio, which now consists of $800 million in loans, to as much as $15 billion in the next 18 months, executives said. For the borrowers whose loans have ended up with PennyMac, it can translate into an extraordinary deal.

You know what? There was a time when financial people who were irresponsible with other people's money were shunned by society, or forced to pay restitution and banned from the industry, or even thrown in jail, if the negligence was bad enough.

David Gregory's Question Deserves an Answer

David Gregory's Latest Tweet:

Q for Obama on housing: does keeping people in their homes (who can't afford to be there) help the economy or is it only social policy?

deserves an answer...

With apologies to President Obama, I'm going to answer it, even though I am just a regular guy; not an economist, or even a genius.

Before the Republicans took over the economy, it was possible for a family to own a home with one income, and the economy boomed at almost all levels for the first 28 years after World War II. The economy started to hit the skids while Nixon was president, and we never really recovered, because Ronald Reagan threw the entire economy into supply-side nonsense. Bill Clinton had the economy on the right track in the 1990s, with the first real increases in wages since 1973, but Gramm-Leach-Bliley put the economy back on the skids.

The problems that President Obama and the Democratic Congress face were a long time in the making, and they stem from several decades of mismanagement, and an economic model that was unsustainable in the long run. If you look closely at the economy in the post-war period, it was marked by a constant investment in infrastructure, a strong manufacturing base, and an almost constant investment in technological development.

Republican Stupid Idea of the Day: Nationalize the Banks!

Was I dreaming?

Didn't the Republican noise machine spend the last few months of the presidential campaign trying to portray Barack Obama as a socialist?

So, what the hell is this? This is from Lindsay Graham yesterday, speaking on ABC's This Week:

"I would not take off the idea of nationalizing the banks" from the table, Graham, R-S.C., told George Stephanopoulos on ABC's "This Week" program

"This idea of nationalizing banks is not comfortable, but I think we have gotten so many toxic assets spread throughout the banking and financial community throughout the world that we're going to have to do something that no one ever envisioned a year ago, no one likes," Graham said. "But, to me, banking and housing are the root cause of this problem. And I'm very much afraid that any program to salvage the bank is going to require the government.."

The first question I have is, why the HELL are Republicans still all over the goddamn talking head shows, spouting their bullshit, while Democrats, who are in charge, are still standing on the sidelines, when it comes to the major media? 

It's a good question, but one I'll get into that in another post, though. Let's talk about this, the stupidest damned idea to EVER come down the pike from a Republican, and that's saying a hell of a lot.

Stimulate THIS, Republicans!

Look, Democratic Senators; it is this simple. The current incarnation of the Republican Party will only play ball when they lose enough fights, and realize they have no choice but to either help craft legislation, or get the hell out of the way while you do.

The people want and need a stimulus package, and they will get one. The most Republicans might be able to do is to delay it a bit, but they can’t stop it, so stop acting as if they can. If moderate Republicans make decent proposals that make sense, and could help move the economy along, you’d be crazy not to consider it. But stop listening to the bullying tactics and the promises to “not vote” for the package. They lost the last election, and they seem poised to lose the next few elections, and it really doesn’t matter what they like and don’t like.

And don’t worry about a filibuster. If they do filibuster this, they will be sorry. See, the unemployment figures are about to come out, and they’ll be the highest we’ve seen in many decades; possibly even higher than they were in 1982; the last time supply-side economics pushed us over a cliff. And if Republicans delay or kill a stimulus package that might work, or even if they vote against a stimulus package that ends up working, they will be screwed, and they know it.

Bipartisanship With Petulant Children; Is it Possible?

Look, I'm all for President Obama seeking support from Republicans.  After all, he is the president of all of the people, and Republicans are people, too. But for Chrissakes; at what point does he get that the leadership representing the Republican Party in Congress -- especially the Senate -- is made up mostly of people whose election hasn't come around yet, so they haven't had the opportunity to be tossed out on their asses. Yet. Moreover, they have no concept of what "bipartisanship" actually means, so you have to teach it to them. To them, bipartisanship means, "you do what we want." They sound very much like the biggest kids in fifth grade, who have gotten to ninth grade, but don't seem to realize all of the other kids are now bigger. 

 

When you listen to these morons, I swear to you they're living in a goddamn echo chamber or something. They seem to be sealed off from the real world somehow; to them, 2006 and 2008 never even happened.  First, the idiot Republicans in the House voted as a bloc AGAINST a stimulus package designed to relieve the current economic mess that THEY caused in the first place. And what did they choose to bitch about? I mean, besides the pennies the bill was scheduled to toss at contraceptive programs.

 

The DEFICIT!

 

I kid you not! I almost fell out of my chair! Suddenly, John Boner (sp?), the House MINORITY Leader (I made the letters bigger so that he understands that's who he is now -- the MINORITY Leader), decided he finally gives a shit about the deficit, and perhaps we shouldn't add to it, because, well, it's pretty big. HIS PARTY is responsible for adding $10 trillion of the $11 trillion debt we find ourselves with, and they accumulated that debt at a time when they were declaring the economy was just humming along. Now, suddenly, after they tossed our tax money to their friends and supporters for the last eight years, they've decided we're borrowing too much, and we should really be a little more responsible with the people's money.

 

Bite me, Boner (sp?).

It's Time to Change Our Energy Mindset; Green Will Bring in the Green

One of the key aspects of the current stimulus package that is exciting is its investment in new energy production, that is more attuned to the needs of the average person and the planet, than anything we've seen before. It reflects a new reality, and it's about time.

 

The way we've designed our lives has necessitated the use of energy to fuel every aspect of  them. We have to heat and cool our homes, we have to travel and move goods around the country and around the world, and we depend greatly on electrical energy these days, to the point that electrical energy must be plentiful and dependable.  In other words, most of the world has chosen not to live like the Amish. Whether or not that is a wise choice is a matter of debate, but we are what we are.

 

One thing is not debatable, however. No matter how we as humans choose to live our lives, we still need the world around us in order to function. Therefore, we must balance our production and use f energy with the need for clean air, wholesome, nutritious food and a clean and plentiful supply of water. And as everything in nature works in harmony, we have to figure out a way to produce what we need, while disturbing as little of the natural world as possible. It doesn't matter if you "believe" in global warming or not, nor does it doesn't matter how many jobs, companies and countries are "dependent" on the extraction of fossil fuels for their economies. What I am talking about is the survival of the human race, and the planet as a whole.

 

Okay, that last part probably overstated things just a bit. We won't kill the planet; this planet is pretty resilient, and will probably survive whatever we can do to it. But the survival of the human species depends greatly upon the health of the planet. So, how do we reserve as many of the technological gains we have made in recent generations, and still preserve the natural worlld, so that we survive?

If we want to increase the chances of human survival, -- and we do -- and preserve the planet we love, then we have to change our approach to energy production. Production of energy must involve two concepts; first, we must stop using natural resources as if they belong to humans alone;. The world belongs to every plant and animal species here, as well. Therefore, we have to be more careful when extracting resources, and we must stop burning things to supply us with energy.

 

We must solve this energy crisis. But first, we have to recognize that there is a crisis. The fact is, we have been in an energy crisis since we first realized that we could burn oil and gas to make light. and run machinery. But the crisis has been most acute in the last 40 years, and it will not end until we create most of our energy naturally, without burning natural resources, and to make maximum use of every bit of energy we produce.They keys are natural energy production and conservation.

We Can't Fix the Economy Without Fixing Health Care

Here are a couple of questions to ponder…

If you’re an average American, you’re sitting in front of your computer reading this and simultaneously wondering if you’ll even have a job in a year or two. How does the prospect of health insurance premiums doubling by 2016 strike you?

And if you’re a business owner who’s now providing health insurance to his employees, how would you like to be paying double the current premiums by 2016?

I would also point out that this is a conservative estimate, made before the economy took a nosedive. Given some of the bills people are receiving in their mail these days, the problem may be more acute than we thought. On his program Wednesday, Ed Schultz told listeners that his health insurance had increased by  almost 20% over last year. At that rate, his insurance premiums would double by the time Obama's being inaugurated a second time.

A current report by the United States Public Interest Research Group estimates that, if something drastic isn’t done by the President and the current Congress, the cost of health insurance premiums will more than double betweeb 2006, when the average annual premium was $11,381, and 2016, when it estimates they will reach an estimated $24,281, even when adjusted for inflation.

Who the hell can afford that possibility, seriously?

How can a country that arguably has the best health care system in the world, and the best doctors in the world, be so absolutely boneheaded when it comes to financing the system? No one in their right mind would fund one industry using money from a competing industry, the mission of which is at absolute cross purposes with the industry needing the financing.

Think about it.

Banks Take US Tax Dollars, Use it to Hire Foreigners

Why do bankers hate America?

Check this out. Apparently, while they were heading for meltdown, and as they were laying off thousands of American workers and then demanding taxpayers bail them out, major US banks were apparently trolling for foreigners to fill high-paying jobs. What gives with this?

This is from the Associated Press Investigation: Banks sought foreign workers. Major U.S. banks sought government permission to bring thousands of foreign workers into the country for high-paying jobs even as the system was melting down last year and Americans were getting laid off, according to an Associated Press review of visa applications.

The dozen banks now receiving the biggest rescue packages, totaling more than $150 billion, requested visas for more than 21,800 foreign workers over the past six years for positions that included senior vice presidents, corporate lawyers, junior investment analysts and human resources specialists. The average annual salary for those jobs was $90,721, nearly twice the median income for all American households.

As the economic collapse worsened last year — with huge numbers of bank employees laid off — the numbers of visas sought by the dozen banks in AP's analysis increased by nearly one-third, from 3,258 in the 2007 budget year to 4,163 in fiscal 2008.

I have to admit, I didn't get this. I have been wracking my brain, trying to figure out why these banks would go to foreigners to fill positions that could easily be filled with recently laid-off Americans.

If they're looking for "cheap labor," then perhaps they would do well to just offer Americans the lower wage, and see who takes it. Ya think?

For their part, Republican Charles Grassley and Democrat Dick Durbin are equally pissed, and working on a bill that would force companies getting bailout money to consider American workers first.

Gee, thanks.

Grassley should look at himself if he wants to locate a culprit here. For a generation, his Republican Party has been facilitating the move of manufacturing and jobs overseas, and even paying companies to do it. When you call the warranty center of your local American company, and you speak to a perfectly nice person living in Mumbai, isn't that basically the same thing? Apparently, it's perfectly okay to hire foreigners to do jobs from other countries, but to come here and do them is suddenly wrong.

Oh, please cut the crap, Grassley!

Yeah, what the banks are doing is wrong. But it's only slightly more wrong than hiring foreigners in other countries to do jobs that people here are perfectly capable of doing. The only reason our workers are forced to "compete" with China is because the government, led by Republicans, has done nothing to protect them. We could make stuff to sell here. We can make cars that people want to buy, and we can make spatulas that sell for $1.50, instead of a dollar. It can be done, and done successfully.

The Republicans have raped our economy for years, and now, all of a sudden, one Republican senator is incensed, because a handful of $90K a year bank jobs are being given to "furr'ners."

Guess what, Senator; we've been bitching about the same thing for years; what made ya change your mind all of a sudden?

Hypocrisy, they name is Republican.

If We're Going to Bail Out the Big 3, It Must be Done Right...

The concept of an auto industry bailout is a tough one. My first instinct is to bail the Big Three automakers out, in order to curtail the possible employment ramifications if they're allowed to go under. Somewhere around three million workers depend on the US automakers for jobs, and at this point in the economy, losing all of those jobs could deal a spectacular blow to our economy; one that may take years to recover from.

 

But another part of me says, "let them fail." It's not like they'll actually immediately disappear. They'll have to go into bankruptcy, and a bankruptcy trustee can work with the companies to cut costs and make them solvent again. It's not like the three companies have no value; Americans will still have to buy cars, and a lot of people still want to buy American.

 

Then there is the fact that at least two of the companies, Ford and GM, have actually shown signs of awakening in the last couple of years, and they have been retooling for the future, which is very. very green. The current problems they're experiencing aren't entirely of their making. They've been hurt largely by the economy, high gas prices, the credit crunch, and the rising cost of health care.

 

There's another aspect to this, as well. One of the reasons our auto industry sucks so badly, and has sucked for so many years, is because there are the "Big Three." There has essentially been little or no real domestic competition in the industry for at least 25 years. Look more closely at the market; the foreign companies made mostly cars and a few trucks and SUVs, while the domestic car companies have sold mostly trucks and SUVs, but only a few cars.  When gasoline prices spiked -- which everyone knew would happen, and which will continue to happen repeatedly for the foreseeable future -- foreign automakers were prepared, and domestic automakers weren't, primarily because the foreign companies staked out one part of the market, and domestic companies staked out another. 

Buying Bad Mortgage Policy from McCain

I know what a lot of you think you heard from John McCain last night about the government buying bad mortgages and all that. And in a way, it kinda sorta sounded like an idea Barack Obama had earlier, and that Congress included in its final bailout package last week.

But I listened to it again, and it sounded different. So, I looked at the transcript, and what I figured out is that John McCain really doesn’t know what the hell he’s talking about, and cannot be trusted with the economy.

See, the idea that I thought McCain was discussing, and claiming as his own, was this idea that many have recommended (including me), in which people who are upside down on their mortgages can negotiate a new mortgage, reflecting the current, lower value of their home. The banks could be partially subsidized for any losses, and in almost no time, we’d all be back on our feet. People who were previously screwed would be made whole, and it would then be largely unnecessary to bail out the gamblers who pissed their money away by creating a phony market based on no actual value. In other words, he may be trying to paraphrase the plan Obama and the Democrats have been pushing all along.

But read carefully, because McCain actually stands this idea on its head.

The Financial Mess and a Solution We Can ALL Live With

I would probably be the first person to admit that I'm no economic expert, especially as it's defined these days. But then, whoever said economy was supposed to be as incredibly complicated as it's become?

 

Think about it. The way capitalism is supposed to work is, you make something or perform a service, and when you've delivered that product or performed that service, you get paid for it. Then, in order to make sure everything is open and fair, the government is supposed to enforce basic regulations. And you need those regulations because, while most people are actually quite fair and honest, there is always a segment of the population who will try to gain unfair advantage of people.

 

I even understand the introduction of credit and debt into the economy. The vast majority of people want to buy things, and can be trusted to pay for them over a reasonable period of time, along with a fair rate of interest going to the lender.There's absolutely nothing wrong with that.

 

So, how did we get to where we are today? Why do we keep having to bail out the economy, just to keep ourselves afloat?The answer is deceptively simple. For the last 30 or so years, the government has been in charge of a government that deregulates everything, and believes that any economic device the market creates that generates cash is perfectly okay, and should be operated without oversight.

This Isn't About Institutional Failure - It's About System Failure

And you wonder why I don't listen to so-called "financial experts"?

The following is from an "analysis" appearing in Time magazine yesterday, Let Risk-Taking Financial Institutions Fail.;

Do not be fooled. The $700 billion (ultimately $1 trillion or more) bailout is not predominantly for mortgages and homeowners. Instead, the bailout is for mortgage-backed securities. In fact, some versions of these instruments are imaginary derivatives. These claims overlap on the same types of mortgages. Many financial institutions wrote claims over the same mortgages, and these are the majority of claims that have "gone bad."

At this point, such claims have no bearing on the mortgage or housing crisis; they have bearing only on the holders of these securities themselves. These are ridiculously risky claims with little value for society. It is as if many financial institutions sold "earthquake insurance" on the same house: when the quake hits, all these claims become close to worthless — but the claims are simply bets disconnected from reality.

The only thing "disconnected from reality" is the above.

See, here's the problem. Money flows through the economy like water. While it sounds good to isolate parts of it from other parts, in practical application, that's a lot more difficult than it seems. That's precisely why we need regulation in the first place, and why regulatory bodies should be there to make sure no one is doing anything untoward with our money.

Oh HELL to the NO!

There seems to be so much worry among many in the electorate, and with good reason.

EVERYONE should see something incredibly fishy about a $700 billion bailout of an investment banking industry that must be completed before Congress goes to recess to run for another term.

Here are some things to think about, folks.

1. The Bush Administration is claiming they've been working on this bailout plan for months. If they thought this might happen months ago, then why is there suddenly the rush?
2. The investment banks that have gone down have obviously been going down for many months, if not years, and covering it up. Financial institutions don't simply go belly-up all of a sudden. Actions usually lead to such things.
3. If someone borrowed $1000 from you, and lost his wallet, would you lend that person another $1000, without making sure there is a likelihood that you'll get $2000 back?
4. We, the taxpayers, have already taken a huge hit from this. Hundreds of thousands of homes have been foreclosed upon, and all of our 401(k)s have been hit hard by this crisis. What logical sense does it make to hand these people even more money?

It Really Is the Economy, Stupid -- This Time, Let's REALLY Change It!

You know, one of the greatest frustrations in being somewhat liberal is the tendency for others of my ideological ilk to demonize individuals, and to focus on specific people as "the problem."

Our economy is damn close to a total meltdown, and we're closer to being a Third World country than at any time in our history. In a system that purports to be capitalist, we the taxpayer are now expected to bail out these "Captains of Industry" to the tune of $1 TRILLION, just to prevent the collapse of the economy.

Let me make something clear here, folks. This is not the fault of a few select individuals; it's about ideology. This election represents a turning point for this country. It's not about Republican vs. Democrat, it's not about Obama, or McCain, or Bush and Cheney, or Palin. This election is about repudiating an IDEOLOGY; an ideology that has kept us stagnate since the far right took over the government in 1981, that has managed to make the economy look better than it was with a series of bubbles and an unprecedented amount of debt, and which has pushed us to the brink of economic annihilation.

A good economy makes things and sells them for a profit. A good economy provides good jobs for as many people as possible, and pays them enough to create a good life. A good economy encourages entrepreneurship.

We do not have a good economy, and we haven't for at least 35 years. We started to recover in the right way under Bill Clinton, because he guided programs that propped up the bottom rungs of the economy, and he encouraged manufacturing and increased trade. But overall, our economy has been shipping most good jobs overseas, pay has been largely stagnant since the mid-1970s, and the level of actual entrepreneurship is so low as to be frightening. And has anyone even begun to comprehend the amount of debt we hold as taxpayers? We'd better start thinking about it, because that debt has to be paid back at some point. And the higher that debt goes, the harder and more expensive it will be to borrow money later. And since we're currently counting on borrowed money just to make ends meet in the current right wing economic environment, that will eventually cause us serious problems in the near future. 

And no matter what the people on the right tell you, make no mistake; it's not liberal policies, or free-spending liberalism, that is causing our economic problems.

The culprit is a right wing Republican ideology, which takes money from the poor and hands it to the rich. They still push the completely discredited concept of "trickle down economics," even though it's been nearly 30 years, and the only thing that's "trickled down" to the poor and working classes is the urine from the rich fat cats who have made out like bandits on your dime, and who are proceeding to piss all over you.

This election is about returning us to an economic model that worked, and abandoning the failed economic policies of a generation of right wing Republican theory that has proven itself to be both economically and morally bankrupt. Again; this isn't juast about a difference between Obama and McCain;this is about  complete change in mindset; to making people count again.

Obama and Frank Raines: The GOP Should Be More Worried

A new McCain campaign ad attempts to link Barack Obama and Franklin Raines. It goes so far as to suggest that Raines advises Obama.

Of course, Raines himself says that he has never advised the Obama campaign in any capacity, and the Obama campaign has reiterated that.

But there's another angle you should look at when considering this crap.

I don't mean the racial angle; that's easy. The McCain campaign obviously used Raines, because he's a "scary black man;" there's no denying that. You know William Jefferson will be brought up at some point, because it's all they have.

No, Franklin Raines represents something that should remind you why you shouldn't vote for John McCain.

Franklin Raines represents, in many ways, the Republican style of doing business.

Let me note, first of all, that Frank Raines has never been convicted of a crime. The Office of Federal Housing Enterprise Oversight (OFHEO), which is supposed to provide oversight of Fannie Mae, has accused Raines of shifting Fannie's book losses for several years, in order to lessen the negative effect on Fannie's stock price, and so that he and several other senior officers could receive bonuses.

In other words, he overstated earnings back in the day. If you'll remember, before Enron collapsed, that was pretty much the order of the day in the deregulated world of high finance; a deregulated world created and nurtured by the Republican Party.

Franklin Raines' chairmanship of Fannie Mae was reprehensible, but it was in no way atypical. He cooked the books to keep the stock price high, and to get his bonus. Under the Republican deregulation scheme, such a thing was de rigeur.  If you reject what Fannie Mae did under Raines, then you have to reject the Republican Party's approach to economics, which is the cause of the problem.

I would also point out that, with the Bush Administration in charge of the investigation, Fannie Mae was fined almost $400 million, but the main officers who cooked the books for Fannie were only fined $3 million each. Not only that, but they were allowed to settle, without having to admit any wrongdoing. So much for law and order under Republican rule, huh?

When Did the United States Become a Nation of Pussies?

Today is the 39th anniversary of the day that American astronauts first set foot on the moon.

Think about that a moment. Within ten years, this great country was able to go from being unable to fire a rocket into space, to putting men into space, then creating a way for them to land on the moon, take off from the moon, and return home safely, six out of seven times.

Contrast that with today, 39 years later, when we're looking at taking 20 years to increase the average gas mileage of our cars to 34 miles per gallon, and lessening our use of "foreign oil."

When World War II was declared, a factory in Detroit that made Ford automobiles was retrofitted to manufacture helicopters for the war effort, and was able to do so in the space of eight weeks.

Contrast that with today, when all American car companies claim they can't compete in the global market, and they have to shut down for years, just to be able to make cars that people want to drive, cars they should have been making all along.

During World War II, our leadership was able to mobilize the entire country to defeat the Nazis and Japanese Imperial Forces, two of the most formidable powers in the history of world, and helped defeat them within four years.   

Contrast that with today, when our leadership expects us to cower in fear at rogue actors who might strap a bomb to their waist and blow up everyone within a short distance.

What have we become? We're afraid of everything these days. How have we gone from "The only thing we have to fear is fear itself," to the current attitude, whereby; we're afraid of terrorists, because they might want to "kill us for our freedoms;" we're afraid to switch to alternative fuels, because it might entail pumping something other than gas; we're afraid to try anything new, because it may not work?

When did the United States become a nation of pussies?

Double-Digit Inflation Confirmed

Even the over-weighting of computers and digital televisions (no, I'm not kidding!) can blunt the inflation numbers this time. This just in from the BLS:

On a seasonally adjusted basis the Consumer Price Index for
All Urban Consumers (CPI-U) rose 1.1 percent in June after
increasing 0.6 percent in May.  The index for all items less
food and energy increased 0.3 percent, following an increase
of 0.2 percent in May.

Do the math, ladies and germs, that translates to double-digit inflation. But the news is even worse than that.

Real average weekly earnings fell by 0.9 percent in June 2008. The change resulted from a 0.3 percent increase in average hourly earnings partially offset by a 1.2 percent increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Average weekly hours were unchanged. Real earnings were down 2.4 percent from a year ago.

What this means is simple. Even a government led by a douche who just yesterday stood behind a podium at a press conference and lied to the people he works for can't hide the numbers any longer. We're paying a hell of a lot more for stuff, and we're no longer even keeping up with inflation.

But the above is merely the e-mail news release from the BLS. Want to see something really funny? Read the entire news release. This is the main paragraph:

On a seasonally adjusted basis, the CPI-U advanced 1.1 percent in June, following a 0.6 percent increase in May. The index for energy rose sharply for the second straight month, increasing 6.6 percent in June following a 4.4 percent increase in May. The increase in the energy index ccounted for around two-thirds of the overall increase in the all items index in June. The index for petroleum-based energy advanced 10.0 percent and the index for energy services rose 1.5 percent. The food index rose 0.8 percent in June after rising 0.3 percent in May. The index for food at home went up 1.0 percent in June, with indexes for four of the six major grocery store food groups sharply accelerating. The index for all items less food and energy increased 0.3 percent in June, following a 0.1 percent rise in April and a 0.2 percent increase in May. Larger increases in the indexes for shelter and for tobacco and smoking products and an upturn in the apparel index contributed to the
larger increase.

Did you note that last part? Watch the pro-Bush media (Fixed Noise) spin the numbers all day, to make you think inflation isn't as bad as it is. They HAVE to lie, because they're desperate. Tobacco seems to be an odd thing to include in a Consumer Price Index, wouldn't you say?

I'll have more on this in coming days and weeks, but in the interim, for your homework, I want you to Google "hedonic analysis."

The Economic "Wizards" Behind the Curtain

Okay, I have to ask...

When do you get tired of this?

When do you get sick to death of a bunch of rich Republicans telling you how great the economy is, and showing you numbers that you know are bullshit, in order to convince you that you're crazy?

Look at the idiots in politics and the press who are trying to convince you that the economy isn't really all that bad. They're all millionaires many times over, aren't they?

To a man/woman, few have have had to go into a supermarket in many many years, to buy a week's groceries for the family on a budget, and had to cut corners on meals, because prices have gone up, or they have $20 less, because the price to fill up their old, but paid-for car has gone up that much in the last month.

How many of them, do you think, have had to purposely pay the rent late, because the late fee on that is a hell of a lot less than the late fees on the credit cards, if they're late?

How many of them have had to forego going to the doctor for an infected cut, because they lost a good job in the last eight years, and have been forced to take a job that pays far less and has no benefits?

How many of them have been forced to shop yard sales and swap meets in recent years, because they need a few extra dollars to pay a bill?

How many of them have been forced to suffer the humiliation of having to ask someone for assistance, whether it's the government or a family friend, just so that you could feed your kids, or pay the electric bill?

Rules Changing on Mortgages -- too little, too late?

This is why the Constitution REQUIRES Congress to regulate interstate commerce. I know the neocons running the government seem to have an aversion to  government regulation, but even 221 years ago, the framers had an inkling that stuff like this might happen.

From The New York Times: Fed to Clamp Down on Exotic and Subprime Loans

With no end in sight to the turbulence in the housing and financial markets, the chairman of the Federal Reserve said on Tuesday morning that it would issue new lending rules next week to restrict exotic mortgages and high-cost loans for people with weak credit.

The chairman, Ben S. Bernanke, also said that the Fed was considering extending its program of low-cost overnight loans to the nation’s largest investment banks into next year. The lending program, which is supposed to be temporary, began in March in response to liquidity problems on Wall Street during the near-collapse of Bear Stearns, which was sold to JPMorgan Chase to avert going into bankruptcy.

(...)

The Federal Reserve is expected to announce new mortgage lending rules at a meeting on Monday. It is not known whether the Fed will significantly change the proposal it made last December, which provoked more than 5,000 letters, including heavy criticism from the mortgage industry and other parts of the housing industry.

Industry lobbyists maintained that at a time of tight credit, tougher rules could make many mortgages more expensive by creating more paperwork and potentially exposing lenders to more lawsuits. They also complained that the restrictions were too broad and would restrain lenders from issuing otherwise creditworthy loans. Three of the industry’s most influential trade groups — the American Bankers Association, the Mortgage Bankers Association and the Independent Community Bankers of America — separately filed letters criticizing the proposals.

On the other hand, consumer groups complained that the proposed rules would not be strong enough. They maintained that any efforts to further weaken the proposal would render it all but useless.

See, the part of this that a lot of people seem to have a hard time understanding is that all of this could have been avoided in the first place, had the far right morons in Congress not written these types of mortgage instruments into the law in the first place.

It's Not Just About Foreclosures

I discuss politics with a lot of wingnuts, and I have yet to come across one who actually comprehends the scope of the current financial crisis to any degree at all. It simply stumps them. Invariably, their understanding of this crisis begins and ends with the fact that people who shouldn't have qualified to buy homes in the first place are now about to lose theirs.

But this crisis goes far beyond the people who are losing their homes. This crisis actually affects the entire economy, and will continue to do so for many years to come, especially if no one does anything about it. Throwing money into the situation relieves bank pain on the front end, but it does nothing to resolve the actual crisis.

Here is an example of what I mean, from this morning's New York Times:

Auto lenders and banks, closing their wallets, have prevented hundreds of thousands of consumers from obtaining the financing for a car. Home equity loans, which had been used in at least one of every nine deals, when lenders were more generous, are no longer a source of easy money for many prospective buyers. And used-car prices have fallen nearly 6 percent as repossessed cars and gas-guzzling trucks and S.U.V.’s flood auction lots.

Those forces, on top of the softening economy, are putting enormous pressure on the American auto industry as it faces what may be its worst year in more than a decade. About 15 million vehicles are expected to be sold in 2008, down from 16.2 million last year, as sales reach the lowest levels since 1995, according to the marketing firm J. D. Power & Associates.

The impact on the broader American economy could be profound. Not only is the car a consumer'€™s biggest purchase after the home, but the auto industry remains one of nation's most important economic engines. With less money available to bolster the industry'€™s growth, the businesses that support it are also facing the prospect of a sharp slowdown.

Government Lies: Inflation is all in Your Mind!

You know how you go to the gas pump, and every day the price is higher than the day before?

And when you go to the grocery store, the price of milk, bread and eggs is much higher than it was last month?

Well, you'll be happy to know that it's not actually happening. Your wallet isn't draining any faster than it was last month. You know how I know? Because the government says so.

I got this in my e-mail this morning, from the BLS:

Consumer Price Index:
On a seasonally adjusted basis the Consumer Price Index for  All Urban Consumers (CPI-U) rose 0.2 percent in April after  increasing 0.3 percent in March.  The index for all items  less food and energy increased 0.1 percent, following an  increase of 0.2 percent in March.

Don't you feel relieved? That means, if you spent $2000 on basic consumer goods in March, you paid $2004 in April. And we know it's true, right? The government would never lie to us, right?

But wait... there's more...

When you go to the press release, you're told the following:

On a seasonally adjusted basis, the CPI-U advanced 0.2 percent in April, following a 0.3 percent increase in March. The index for energy was virtually unchanged after advancing 1.9 percent in March. In April, the index for petroleum-based energy fell 1.6 percent, offsetting a 2.5 percent increase in the index for energy services. The food index rose 0.9 percent in April. The index for food at home increased 1.5 percent, reflecting substantial increases in all six major grocery store food groups. The index for all items less food and energy advanced 0.1 percent in April, following a 0.2 percent rise in March. Downturns in the indexes for public transportation, for household furnishings and operations, and for recreation, coupled with a larger decline in the index for lodging away from home, more than offset an upturn in the index for apparel.

During the first four months of 2008, the CPI-U rose at a 3.0 percent seasonally adjusted annual rate (SAAR). This compares with an increase of 4.1 percent for all of 2007. The deceleration thus far this year reflects smaller increases in the indexes for energy and for all items less food and energy. The index for energy advanced at a 6.3 percent SAAR in the first four months of 2008 compared with 17.4 percent in 2007. Petroleum-based energy costs decreased at a 0.7 percent annual rate while charges for energy services rose at a 17.7 percent annual rate. The food index has increased at a 6.9 percent SAAR thus far this year, following a 4.9 percent rise for all of 2007. Excluding food and energy, the CPI-U advanced at a 1.8 percent SAAR in the first four months, following a 2.4 percent rise for all of 2007.

Read that again, and feel free to laugh. Prices for everything you buy only went up 4% last year, and they're going up even less this year.

This is how the government comes up with its inflation figures; the figures it uses to determine how much to pay its employees, and how much they should be paying out in Social Security and other programs. They throw out these numbers, and they'll repeat them on the news as short headlines, but they won't actually ask any questions about what the numbers mean.

Think about that energy cost figure; The index for energy was unchanged why? Well, one reason could be that you're not heating your house for winter anymore. Therefore, the fact that gas went up 35 cents a gallon, or 12%, last month doesn't matter as much, because you're not burning as much gas or electricity to heat your home. Okay, that might be a fair assessment, at least until summer. But look more closely; the index for petroleum-based energy FELL 1.6%? Offsetting a 2.5% increase in the index for energy SERVICES? So, it wasn't the gas that was going up in price all month; it was the cost of providing it to you?

Do you get the impression that someone is pulling your leg? When did this get complicated? The gasoline I purchased in March at my local station was $3.29 in March, and it was $3.69 at the end of April. My gas and electric bill was $158 in March and $92 for April. all you have to do is figure out how much gas i purchase on average, and add it to my gas and electric bill and you get my personal energy "index" for the two months. It's not difficult. But they want it to be complicated, so that they can figure out a way to keep the number low, and hope you won't notice.

Take the last part of the paragraph above, and think hard. The price of groceries is up 1.5%, and the cost of energy, even with their convoluted methodology, is "unchanged." of course, we all spend more on food each month than energy, so the average should still be above 1%, right? Plus, if you look closely, they also mention a small uptick in clothing prices, something we all need pretty regularly, although I'm not sure we buy that stuff every month. Well, it's not that high, if you include downturns in indexes for public transportation (which I don't get; are some cities reducing fares or something?) household furnishings (because retailers are cutting prices to lure people into stores, perhaps?) and -- I laughed out loud at this one -- lodging away from home.

In other words, what the government is telling us is this; don't be whining about inflation, just because the cost of food, energy and clothing are climbing; the price of taking the bus is apparently down, as is the cost of a new couch and a night at a Hilton Hotel. Of course, you can't afford the gas to go to a hotel in the first place, but hey, they are lower, you cheapskate.

This is such a scam, folks. I'd love to blame Bush for this one, but they've been lying to us for quite some time. they fudge the inflation numbers, because government payments are indexed to it, and if they told us the truth, the deficit would have to be bigger.

See, this is why voters have to trust their instincts, and not what anyone in government tells them. People have good instincts; government's first instinct is to cover its butt. 

Economic Doldrums

Welcome to the 1970s.

I know, I know... a lot of people have been predicting a return to the Great Depression, thanks to Bush's Hoover-like economic stewardship, but I'm slightly more, um, optimistic. I think it's going to be more like the 1970s than the 1930s. And if Bush and Cheney want to heave a sigh of relief that the economy will be more like the 1970s than the 1930s, then they should thank the Lord for Franklin Delano Roosevelt.

What's happening right now, economically speaking, is really, really bad. it is likely we will lose our status as the greatest economic power in the world, and may even drop to third or fourth by the time this shakes out. The dollar is beyond shaky, and we're running out of ways to make money.

Here's the problem, in a nutshell; we've spent most of the last 30 years pretending to have a strong economy. Thanks to the neocons who have run the government since 1981, most of our economic "growth" has been through sleight of hand. We have essentially been creating money out of thin air, and then shifting it from one pocket to another, and convincing ourselves that we were rich. Our economy has been kept afloat through a series of bubbles, thanks to the neocons.

The first bubble, which had been deflated for a bit, and then re-inflated to record levels by the Bushies was the government spending bubble, in which the economy was faltering, but by borrowing unprecedented amounts of money, the government made it look as if it was healthy.

Then came the tech bubble, in which new technology was seen as the economy's "savior," and irrationality took over for a while, until people figured out that a company whose only product is a browser that they have to give away for free can't possibly promise to make billions of dollars over the course of a few years, and that people weren't likely to buy trillions of cans of cat food via the Internet.

The next one was what is unfairly referred to as the "Enron Bubble," in which large corporations inflated their value, their profits, their assets, and anything else that would get people to buy their stock, so as to have enough money to actually run things. I know a lot of people (mostly neocons) blame the first Bush recession, and the stock market collapse on September 11, but that wasn't the cause. It happened because companies were forced, en masse, to restate their financial figures.

But the fourth bubble, which started off being referred to as a "mortgage crisis" is the most dangerous bubble yet. I know it's tempting to look at it as little more than a spate of foreclosures, but it goes far deeper than that. Combined with the continuing government spending bubble (otherwise known as "the deficit") will probably sink our economy for some time.

Here's the problem, if it's possible to put all of this into a nutshell.

It starts with the constant deregulation of banking and mortgage markets that happened over the last 30 years. One would think the Savings and Loan mess of the early 1980s would have taught us that regulation of commerce is a specific Congressional duty  set in Congressional stone, for a very good reason. Greed is hard-wired into some people, and the rest of us have to keep them on the straight and narrow.

Between deregulation, the creation of some ridiculous mortgage mechanisms, little or no oversight, and a neocon administration who could point to the number of homeowners and crow that the economy wasn't as bad as we thought, we created a situation ripe for fraud and abuse, and the crooks came running. 

Mortgage "brokers" would put ads everywhere, advertising something that should have been outrageous, like a $400,000 home for $600 a month, or some such nonsense. You've all seen them; they're all over the Internet, people leave flyers on your door saying "buy for less than you can rent!" -- these people were all over. And they preyed on people who didn't make enough money to actually qualify for a home. Not that it mattered, really. Potential buyers would fill out an application, knowing they would never be approved, but magically, they were approved. And they were approved because brokers would falsify the details of the application. The broker goes to the underwriter, gives them a line of crap, the underwriter goes to the bank, the bank approves the mortgage, and the broker takes his commission and runs. Then, after the mortgage is approved, it's sold and resold and re-resold, parts of it are sold off to different groups. Often, it's difficult to figure out who owns a mortgage, because it's been sold so many times.

You can see what this is so difficult to put into a nutshell.

For years, mortgage "brokers" were allowed to get away with this, because it meant tons of home sales, and with the stock market only doing so-so, and the tech and corporate crook bubbles having burst, there just were no more major investments that could make someone a whole lot of money in a really short time. All sorts of people became "brokers," and many of them sold homes to people who couldn't afford them, because no one was watching, and they could make good commissions by doing so. Everyone looked the other way, because it was so lucrative. Home builders sold their inventory in record time, banks wrote record numbers of mortgages; no one lost on such a situation. As home values artificially increased, even the states made a lot of money in property tax revenues. People who owned existing homes suddenly found themselves flush with equity, and took out cash loans against it, to consolidate bills, fix up their house, or take a great vacation. the entire economy benefited on the short term from this bubble.

The problem is, when a bubble like this one bursts, everyone loses. It's not possible for someone who spends more money than he has to be better off later, and that's the situation in which we find ourselves. There are still millions of mortgages in the hands of people who can't afford them, so the foreclosures won't abate for a few more years yet. But worse than that, home values are dropping like a rock, because so many homes shouldn't have been built and/or sold in the first place. This means a lot of homeowners with legitimate mortgages are suddenly finding themselves upside down. Plus, a whole lot of home equity loans are suddenly unsecured, which puts the banks who lent the money in a difficult situation. Suddenly, banks have a whole lot more unsecured credit than they normally have, which makes credit extremely tight, and causes interest rates to increase.

Bottom line; we have a glut of available homes on the market, with no one available to buy them, combined with a tight credit market, in which those who want to buy a lot of them can't get approval. We have condo buildings that are being forced into becoming apartment buildings. As homes are revalued, states and municipalities will have to make cuts, as revenues from property taxes decline. Add to that the still spiraling  federal budget deficit, and what we are facing is a precarious situation that can't simply be cured by throwing money at it.

And yet, the Bushies are throwing money at it, and leaving the clean up to the next president.

Thanks again, President Hoover-Bush.

 

Jack Cafferty Attacked for Telling the Truth!

I know this will seem very politically incorrect of me, but this type of story makes me laugh:  Protesters target CNN after Jack Cafferty's remarks on China - Los Angeles Times.

Throngs of Chinese Americans protested outside CNN's offices in Hollywood on Saturday morning, calling for the dismissal of commentator Jack Cafferty, whose recent remarks about Chinese goods and China inflamed a community already angry about international condemnations directed at the host country of the upcoming Olympic Games.

The protesters lined Sunset Boulevard from Cahuenga Boulevard to Wilcox Avenue chanting "Fire Cafferty" and "CNN liar" and singing the Chinese national anthem and other patriotic songs. They waved Chinese, American and Taiwanese flags and directed their anger at the news channel's dark glass tower.

Oh, my God! What could possibly cause so many Chinese-AMERICANS such grief that they would demand the firing of a guy who's one of the most honest commentators in the news media? The story continues...

On the April 9 airing of "The Situation Room," Cafferty said of America's relationship with China: "We continue to import their junk with the lead paint on them and the poisoned pet food and export . . . jobs to places where you can pay workers a dollar a month to turn out the stuff that we're buying from Wal-Mart. So I think our relationship with China has certainly changed. I think they're basically the same bunch of goons and thugs they've been for the last 50 years."

Yes, those were the remarks. Let's parse this a bit, shall we?

Do we import Chinese-made junk? Have you ever been inside a Wal-Mart, or any "dollar store" in the country? Yes, we do import a lot of crap from China, and most of it is of low quality, which is why it costs a dollar.

Have the Chinese been reckless with their quality control? Well, yes, of course they have. Lead paint on toys that children might put into their mouths; toys that turn into roofies if swallowed; pet food that killed many a pet (full disclosure; I can't prove it, but I'm pretty sure that's how my son's cat died last year.).

Do the Chinese take advantage of lower labor standards to put out their junk, and sell it to us by the boatload? Well, yeah. There are factories over there that serve as de facto slave quarters, for Chrissakes. And why should that surprise anyone? How the hell do you think they make a spatula that can be sold to you for a dollar, with everyone along the supply chain making money?

In other words, there is nothing untrue in what Jack Cafferty said, and these Chinese-Americans who are protesting have a lot of nerve, if nothing else. If they really want to protest something, how about protesting the shitty conditions under which the Chinese workers labor? How about demanding that the United States start demanding that the Chinese government stop cracking down on people who dare express themselves? If you don't like the truth, then change the truth of the situation. But don't blame Jack Cafferty.

We have shipped boatloads of jobs to China, China does make a lot of junk, and the government over there is oppressive, and they do act like a bunch of thugs. That's not an insult to "the Chinese," those are stone cold facts.

"It's really unacceptable," said John He, an organizer of the event. "It maliciously attacks all Chinese. This would not be accepted if it was directed at any other ethnic group."

This is how clueless some people are. Cafferty wasn't directing his remarks at people who are ethnically Chinese. The remarks clearly were directed at people now living in China, and who are flooding our market with shitty goods, made with something akin to slave labor. Get a clue, Johnny.

I dare you to protest me.

Watching the Recording Industry Kill Itself Slowly... with maximum bloodletting...

The music industry is killing itself, and the idiots running the record companies are too brainless to understand why.

Jammie Thomas is on trial for downloading and sharing 1702 songs. According to "the recording industry," the copyright violations by this 30 year old mother of two are worth millions.

You see, Ms. Thomas is on trial because she refused to allow the RIAA to extort money from her, as they have thousands of others.

From: Music Download Trial Begins in Minn..

But Richard Gabriel, lead attorney for some of the nation's largest record companies, sought to pick those ideas apart one by one by calling witnesses to document each step the record companies used to point the finger at Thomas.

What he will fail to point out is that this is happening to the recording industry, because they're too greedy to be believed. They used to have the market cornered on the manufacture and distribution of music, and because of technology, they no longer have that.

You see, it doesn't matter what he actually points out. See, she's not on trial for downloading the music, exactly. She's on trial for making the music on her computer available to others. I know that sounds odd, but these cowards know they can't test the "fair use" provision of the copyright laws. So they portray these people as "distributors" because the music on their computer is available to others, while they look for songs to download themselves. It's the 21st century equivalent of lending someone an album so he can make a tape of it, which probably happened a lot more than file sharing.

The Recording Industry Association of America, which is not a party to the lawsuit, says record companies have brought more than 26,000 actions against people alleging they shared files in violation of copyrights.

The action against Thomas is the first to get to trial because most defendants have settled by paying a few thousand dollars.

Jennifer Pariser, head of litigation and antipiracy at Sony BMG, portrayed the trial as a fight for survival.

"It is imperative for Sony BMG to combat this problem," Pariser testified Tuesday. "If we don't, we have no business anymore."

See what I mean? These people are too stupid to realize that their time has passed. Their problem is not "illegal downloading," anymore than it was people being able to make cassettes of music from the radio or records in the past. In the past, it was quite common for 4-5 people to pitch in and buy some albums, and make a tape for each of them, yet the RIAA didn't go after anyone then. They're only concerned because it's easier now. 

The recording industry model as it has existed for years is now dead, and they're too stupid to know it. Now, it is very possible for a band to make a recording, make copies of the CDs themselves and sell them at their own shows, in local shops, on the Internet, or many other places. As time goes on, record companies will become more and more marginal, unless they embrace the online model.

Most music lovers don't download from "filesharing" services very much. The quality of the music is spotty at best, and once in a while, some prankster attaches something to a song that messes with your computer. It is far more convenient for me to go to Rhapsody, pay them $10, and download and burn a CD-quality album, and rip it to my iPod. Then, when the iPod crashes, or I replace it, I can rip it again. I will eventually put all of my CDs on a large-capacity hard drive, because CDs are just too bulky to carry around. I, like most people, would rather pay for my music. But what record companies have to understand is, I will NOT pay $18-20 for a CD. And I especially will NOT pay that much for a CD I remember paying $5 for 25 years ago.

And here is another aspect of this that record companies have to understand. I can't tell you how many albums I did NOT buy, because there were only a couple of songs that I even liked. I would never pay for an entire CD of music, if I only liked one song. Now, I have a choice. I can take a song or two from several different CDs and make my own. I can also download and listen to a few of the other songs on the CD, and decide if I want to buy it. 128 kbps is not a high quality recording, and most downloads come with that bit rate. So, if I listen to a song, and I like it, I will buy the higher quality recording of that song.

Cheapskates who download all of their music aren't going to  buy CDs, record companies. And attacking this problem one mother of two with 1702 songs at a time is the functional equivalent of pissing in the ocean in Boston, and then flying to Europe to see the stream arrive on the other side.

The solution to this problem is to ditch the old model altogether. Trying to hang onto your "rights" to specific performances of music is the old model, and eventually won't make you any money. The new model could even make you more money, if you play it right.

Make it about the music and the musicians. Instead of selling music as a commodity, how about using your marketing expertise, and using the music to sell the artists. Artists are increasingly making their own recordings, but they need distribution help. Instead of signing musicians to contracts that amount to indentured servitude, how about offering them your marketing expertise, and selling THAT to them.

Seriously... imagine your industry can make its goods without plants, manufacturing or distribution. can you even envision not being able to make money in that environment?

In response to a question from Toder about whether the industry was making millions off all the settlements, Pariser said the campaign has actually lost money.

Thomas, who works for the Department of Natural Resources of the Mille Lacs Band of Ojibwe, is at risk for a judgment of more than $1.2 million if jurors found against her for all 1,702 songs. The recording association is seeking damages set under federal law of $750 to $30,000 for each copyright violation.

Besides Sony BMG, the companies that sued Thomas are Arista Records LLC, Interscope Records, UMG Recordings Inc., Capitol Records Inc. and Warner Bros. Records Inc.

Why doesn't this bother more people? Why isn't Congress investigating the collusion here? Why are so many huge companies allowed to pool their resources and go after this young mother of two? They're supposed to be competitors, yet it's the RIAA that is going after these people and extorting "settlements" from them. At what point does RICO kick in, anyway?

Summers Hedges on Recession Talk

Here's a guy who knows a thing or two about economy. Of course, he worked for Clinton, so wingnuts will dismiss him as a kook...

From: Ex-Treasury chief Summers warns on recession risks on Yahoo! News.

Former Treasury Secretary Lawrence Summers said on Sunday the risks of a recession are greater now than at anytime since the September 11 attacks due to real estate and mortgage market troubles.

"I do not think we yet would have a basis for making a prediction that there will be a recession," Summers said.

"But I would say that the risks of recession are now greater than they've been anytime since the period in the aftermath of 9/11," he said on ABC's "This Week."

Summers headed the Treasury Department from 1999 to 2001. He resigned last year as president of Harvard University. In October, he joined a Wall Street hedge fund group.

I disagree with him, though. We have a basis for thinking there will be a recession. First is the fact that millions of homes are over-valued, and must now be 'corrected.' Second, the greedheads are running out of scams with which to dupe the American people into pumping more fake money into the economy. Third, foreign countries are increasingly turning to the Euro, at a time when our government is running huge deficits.

I will not only predict, but I will guarantee... the next president will inherit a recession.

And that will be TWO Bush recessions. And don't blame the last one on 9/11, because that's not what caused it.

 

Large Webcasters Reach Deal Small Webcasters ok till 2010 on Royalty rates

Apparently, someone in the record industry has begun to figure out that cutting off their noses will only spite their faces.

From Billboard: Major Labels, Large Webcasters Reach Agreement Over Rates.

Major record labels and SoundExchange have just reached a deal with the large webcasting services over crucial terms covering royalty rates that webcasters must pay to stream sound recordings through 2010, Billboard.biz has learned.

Under the deal, reached during a confidential meeting held in New York today, large commercial webcasters ... will not have to pay more than $50,000 per service as a per-station or per-channel minimum royalty to webcast sound recordings, according to a source close to the negotiations.
(...)

Also, the large webcasters will not be required to implement any particular kind of technology to prevent the streamed music from being ripped, i.e. copied, by users, the source says. But the services have agreed to cooperate and discuss implementation of anti-stream ripping technology on their services with labels and artists.

(...)

No final agreement has been reached yet with small webcasters. SoundExchange sent a letter to them this week offering to carry forward old rates through 2010, which is the last year for which rates were set by the CRB under copyright regulations.

Think the record companies will ever get it? Digital technology WAS the best thing to ever happen to them. Instead of embracing it, they fought it, and now they're screwed. Musicians, for the most part, aren't harmed by file sharing; only record companies are. if record companies were smarter, they could turn this to their advantage. Instead, they keep giving in to their short-term greed.

Here's one hint, RIAA; $18.99 for a Beatles CD at a music store? An album we bought on LP 35 years ago for $3.99? And you want to know why people download from peer to peer services? Get real.