Archive for September, 2008
Democrats and Republicans must share the blame for the failure to pass a $700-billion bailout plan.
Jonah Goldberg
September 30, 2008
On Sunday evening, Republican House Minority Leader John A. Boehner explained his considered opinion on the $700-billion Wall Street bailout plan: It’s a “crap sandwich,” he said, but he was going to eat it.
Well, it turned out he couldn’t shove it down his colleagues’ throats. The bill failed on a bipartisan basis, but it was the Republicans who failed to deliver the votes they promised. Some complained that Democratic Speaker Nancy Pelosi drove some of them to switch their votes with her needlessly partisan floor speech on the subject. Of course Pelosi’s needlessly partisan. This is news?
The Republican complaint is beyond childish. Democratic Rep. Barney Frank, a man saturated with guilt for this crisis, nonetheless was right to ridicule the GOP crybabies on Monday. “I’ll make an offer,” he added. “Give me [their] names and I will go talk uncharacteristically nicely to them and tell them what wonderful people they are and maybe they’ll now think about the country.”
Would that Frank had been imbued with such a spirit earlier. Frank, chairman of the House Financial Services Committee, has spent the last few years ridiculing Alan Greenspan, John McCain and others who sought more regulation for Fannie Mae’s market-distorting schemes — the fons et origo of this financial crisis. Now he says “the private sector got us into this mess.” His partner in crime, Senate Banking Committee Chairman Christopher J. Dodd (D-Conn.), a chief beneficiary of Fannie Mae lobbyists’ largesse, claims this mess is the result of poor oversight — without even hinting at the fact he is in charge of oversight of banks. They sound like pimps complaining about the prevalence of STDs among prostitutes.
And let us not forget that the Democrats, with a 31-seat majority, could not get 95 of their own to vote for the bailout, largely because it didn’t provide enough taxpayer money to their left-wing special interests. Would that they thought about the country.
The one man who truly tried to treat this crisis like a crisis — McCain — was ridiculed by Senate Majority Leader Harry Reid, who implored him to come to Washington to help in the first place. And the news media, which now treat any Republican action that threatens a Barack Obama victory as inherently dishonorable, uncritically accepted the bald Democratic lie that McCain ruined a bipartisan bailout deal last Friday.
This is not to say that McCain knows what to do. Faced with an unprecedented financial crisis involving frozen global credit markets and a maelstrom of moral hazard, his standard response is to talk about wiping out earmarks and eliminating waste, fraud and abuse. Memo to Mr. McCain: Waste, fraud and abuse are the only things holding the system together at this point.
Obama is no better. The man has spent two weeks irresponsibly excoriating his opponent for saying the fundamentals of the economy are strong — a perfectly leaderly thing for McCain to have said during a panic. Then, campaigning in Colorado on Monday, the day the market plunged 777.68 points, Obama proclaimed: “We’ve got the long-term fundamentals that will really make sure this economy grows.”
Perhaps after Al Qaeda seizes Baghdad, a President Obama would finally declare, “Hey, we can win this thing!”
Meanwhile, President Bush, his popularity ratings stuck at below-freezing numbers, has decided to cling to Treasury Secretary Hank Paulson for warmth on the grounds that the vaunted former Goldman Sachs chair has the credibility to sell the solution to a problem he’s been exacerbating for 18 months. When a reporter for Forbes magazine asked a Treasury spokesman last week why Congress had to lay out $700 billion, the answer came back: “It’s not based on any particular data point.” Rather: “We just wanted to choose a really large number.”
There’s a confidence builder.
As for the reputedly free-market firebrands of the congressional GOP, with whom my sympathies generally lie, I cannot let pass without comment the fact that they controlled the legislative branch for most of the last eight years. Only now, when capitalism is in flames, does this fire brigade try to enforce the free-market fire codes without compromise.
I loathe populism. But if there ever has been a moment when reasonable men’s hands itch for the pitchfork, this must surely be it. No one is blameless. No one is pure. Two decades of crapulence by the political class has been prologue to the era of coprophagy that is now upon us. It is crap sandwiches for as far as the eye can see.
jgoldberg@latimescolumnists.com
AP
Who wins, who loses under proposed bailout plan?
Monday September 29, 2:58 am ET
By Tom Raum, Associated Press Writer
Financial industry a big winner in bailout proposal, but not so troubled homeowners
WASHINGTON (AP) — The proposal to bail out U.S. financial markets to the tune of up to $700 billion creates a lot of potential short-term winners, as well as some losers.
Wall Street and the banking industry are perhaps the biggest winners. Scores of banks and other financial institutions faced with going under stand to gain a lifeline that should allow them to start making loans again.
Under the plan that congressional aide sought to put into final form Sunday, the Treasury Department can start buying up troubled mortgage-related securities now held by these institutions.
These securities are clogging balance sheets, leaving banks without the required capital to make new loans and putting the banks dangerously close to insolvency.
Banks not only have slowed lending to individuals and businesses, they have stopped making loans to each other. The rescue plan should help restore confidence to financial markets.
There are other winners, too, if the bailout works as intended: anyone soon trying to borrow money — for cars, student loans, even to open new credit card accounts.
Top executives at troubled financial institutions, on the other hand, are in the losing column because the proposal would limit their compensation and rules out “golden parachutes.”
Of course, these executives may take solace in knowing their jobs still exist.
Investors, including the millions of people who hold stock in their 401(k) and pension plans, should benefit. Failure to reach a deal over the weekend could have sent stock markets around the world tumbling on Monday.
Homeowners faced with foreclosure or those who have lost their homes get little help from the agreement. Nor will it help people whose houses are worth less than what they owe get refinancing or take out equity loans.
It would do little to halt the slide in home values that are one of the root causes of the current economic slowdown.
“It doesn’t deal with the fundamental problems that gave rise to the problem — or alleviate the credit crisis,” said Peter Morici, an economist and business professor at the University of Maryland
Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke are potential winners.
In just a few months, they have remade Wall Street. If the plan helps to get the economy moving again, they may be remembered for having kept the financial crisis from spreading throughout the economy.
“When I see Hank Paulson and Ben Bernanke on TV, I see fear in their eyes. Like on a battlefield when people are shooting at you. I think they are afraid to say how serious the problem is for fear of making it worse,” said Bruce Bartlett, an economist who was a Treasury official under the first President Bush.
Bartlett said the plan is flawed, yet the alternative of doing nothing could be catastrophic.
After the heavy dose of new regulation in the agreement, New York will have a hard time claiming it is the center of the financial universe. That title may have shifted to Washington.
If the plan stays together, Congress — with approval ratings even lower than those of President Bush — may be seen as having acted decisively at a time of national emergency.
Congressional leaders added new protections to the administration’s original proposal. That was only three pages long and bestowed on the treasury secretary almost unfettered powers.
Instead, the agreement would divide the $700 billion up into as many as three installments, creates an oversight board to monitor the treasury secretary’s actions and set up several major protections for taxpayers, including a provision putting taxpayers first in line to recover assets if a participating company fails.
The president, on the other hand, probably would get little credit for the deal. He allowed Paulson and Bernanke to do the heavy lifting. The only time he called all the players to the White House — late Thursday afternoon — the wheels almost came off the process entirely.
It’s hard to tell which presidential candidate benefits the most from an agreement they tentatively endorsed Sunday, a little more than five weeks before the Nov. 4 election. Democrat Barack Obama and Republican John McCain each sought to claim some credit for the deal, even though they played active roles only over the past few days.
Hard economic times traditionally work against the party that holds the White House, and in recent polls Obama has inched ahead of McCain. Furthermore, there is widespread consumer resentment over being asked to bail out Wall Street and lawmakers have learned the proposal has not been popular with their constituents.
That may help Democrats in general. The strongest opposition to the original bailout plan came from House Republicans.
Lawmakers and presidential candidates alike are “trying to orchestrate everybody jumping off the cliff together,” said Robert Shapiro, a consultant who was an economic adviser to President Clinton. “I think we’d have a different plan if we weren’t five weeks out from the election.”
And ordinary taxpayers?
Nothing that potentially adds $700 billion to the national debt — already surging toward the $10 trillion mark — can be considered a winner for those who foot the bills.
But lawmakers did put in taxpayer protections, including one to require that taxpayers be repaid in full for loans that go bad.
The package could even end up making money for taxpayers, supporters claimed.
But only if the loans and interest on them are repaid in full. Few expect that provision to be a winning proposition, however.
SUNDAY, SEPTEMBER 28, 2008
WHICH WAY TO OUR FUTURE?
By Merle Allshouse
NOTE: MERLE IS A GOOD FRIEND OF MINE. HE HAS DEVOTED HIS ENTIRE LIFE TO FURTHERING EDUCATON. THIS PARTICULAR PIECE IS UNDOUBTEDLY THE BEST THING I’VE READ ABOUT OUR CURRENT FISCAL CRISIS. I WANT TO SHARE IT WITH YOU.
– FRANK (Merle can be reached at merle.allshouse@gmail.com.
In this fiscal environment fools rush in where angels fear to tread. But since there are so few angels among the major players, the fools are prescribing everything from faith healing to major surgery. My foolish muse says it is time for a little demythologizing.
* Our democracy, since its founding, has struggled with the issue of how to create simultaneously a political and economic system that would both encourage the human desire for freedom and meet the quest for personal security and well being. Our Constitution and bill of Rights are case studies in the psychological recognition that our most noble and creative natures can thrive only if our social/political system will protect us from self destruction by our reptilian drives for domination and power. We call it “checks and balances.” In many ways we are reliving today the debates between Alexander Hamilton and John Adams. The issues have never been clearly resolved.
* For some, our economic system (free market capitalism) is viewed as independent of our social contract. For others, our economic system has evolved as a hybrid to meet the changing needs of our social contract. For the former folks, the Paulson “clean” plan makes sense. For the latter, it seems clear that this is a time to adjust the hybrid so that it is more transparent, promotes the public trust and produces an economy that is less skewed to reward the few at the expense of the many.
* In short, it is time to admit that the “free market” has not been “free” for many decades. The actual hybrid market is a byzantine mix of tax incentives, subsidies, price supports, import tariffs, etc., all fueled by special interest lobbies. We need to confess that for many years we have been operating much like the rest of our European democratic allies since W.W. II. “Socialism” is not an evil term if it means a system which advances our social good, abhors poverty and seeks justice (fairness) in our economic life. Remember John Kenneth Galbraith’s remark that the only type of respectable socialism in America was socialism for the wealthy.
So what does this all have to do with the current crisis?
* If we provide billions (maybe trillions) to rescue our monetary system, ala the Paulson “clean” plan:
a. The bail out will be subsidized by Federal bonds, a large percentage of which will be purchased by China, giving them a larger claim on America’s destiny.
b. The interest on the bonds will be added to the interest on the federal debt and paid in large part by our tax revenues.
c. The treasury Department will perform a symbolic wink and lease our economic system back to the same institutions (persons) that over sold our credit in the past, leveraged our assets and expanded our credit. We will do it all over again.
d. Most Americans will continue to play the game by consuming more than they need and maxing out their credit lines, while complaining about taxes.
e. The economic leaders will praise the “free” market and fund the political campaigns of these enablers.
* If we do nothing, just let the system blood-let itself and trust the invisible hand of the free market:
a. We would set off an economic earth quake the after shocks of which would be felt in most of the world’s economies.
* So what should we do? Take some hard medicine.
a. If we do not “prime the pump” we would face a serious economic recession from which may take several years to recover.
b. If we fully “prime the pump” (maybe over one $Trillion)with tight oversight, we would fuel inflation and risk another cycle of leveraging/deleverging with potential serious political instability and loss of international credit.
c. So the solution is a political compromise:
1. Prime he pump gradually with stringent government oversight and appropriate tightening of credit and encouragement to live more simply and trim our wants more to our needs. And then stop priming the pump as confidence returns. This first step has already been taken with the nationalization of Fannie Mae and Freddie Mac.
2. Establish a reincarnation of the Resolution Trust Corporation, as we did in the 1980s with the S&L failures. At the same time institute the most effective aspects of the Glass-Steagall act. (The new version might be given the ironic title, the Greenspan Memorial Act.)
3. Admit to Americans now that we have a “hybrid”and not a “free” market economy. Make it clear that we will n longer reward or give social status to greed and avarice. We will n longer be proud to let 4% of the world’s population consume 24% of its energy resources.
4. We will be balancing a recession with elements of inflation. We will need to tolerate an unemployment rate of between 12% and 15% with interest rates that do not exceed 10% and a GDP between 2% and 4%. The guiding hand will have to be very visible.
5. We will learn to be proud of a nation that invests its resources in education, health care and improving the quality of life for all of its citizens. We will strive to be known again as the land of opportunity for all.
M.F.A.
Whenever you witness non-inclusive, discounting, or discriminatory words and actions, you have a choice. You can choose to remain silent, which allows these behaviors to thrive. Or you can speak up on behalf of respect.
~~ Leslie C. Aguilar
At 12, Sarah Palin was re-baptised, together with her whole family, at the Wasilla Assembly of God Church.
Palin attended Wasilla Assembly of God Church for roughly two and a half decades.
We have now got the video of Sarah Palin being anointed in a previously secret ceremony during which her church was actively campaigning for her – an illegal move in its own right. The man doing the anointing was Thomas Muthee – who actually prayed that Sarah Palin be protected from witchcraft, and said that electing Sarah Palin would help keep witchcraft out of schools, and help right wing Christians invade and infiltrate the government. Throughout all this and more, Sarah Palin watched approvingly – and the video shows her accepting the holy protection from Alaska witches without even flinching once.
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Background information: Bishop Muthee ran a poor single mother out of town in Kenya. He got the townspeople so crazed up over a apparently “bewitched” woman that they ended up chasing her around town and even broke into her house and took shots at her. She is lucky to have gotten away alive and lucky that her children were not hurt or killed. And he is proud to say he chased the devil away from their town. This is absolute madness!
Therefore, Sarah Palin has been anointed by an outspoken and dangerous witch hunter. Where is the outrage in the MSM about this fact?
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More info about the “Wasilla Assembly of God”:
During that time Wasilla Assembly of God joined an Insurgent theological movement, initially arising with Pentecostalism, weich denounced in 1949, by tue General Council of tue Assemblies of God, as heretical.
Known as the Third Wave, this movement sees the earth largely under the influence of demon powers.
“Third Wave” believers seek to map out areas of “demonic influence” and drive out demon powers with prayer – from cities, towns and even entire geographic areas.
They also fight what they feel to be rampant human witchcraft.
The Wasilla Assembly of God and its Masters Commission Program enjoy a close relationship with a key Third Wave center, Rick Joyner’s Morningstar Ministries.
Wasilla Assembly of God both endorses Rick Joyner’s books and and also includes author Joyner’s works closely within its Masters Commission curriculum.
Key Morningstar leaders, and other prominent Third Wave figures, frequently visit the Wasilla Assembly of God.
