Tuesday, September 30, 2008

Rep. Brad Sherman explains why the bailout IS a bailout

We know that the Bailout Bill allows million-dollar-a-month salaries to executives of bailed-out firms, and it allows hundreds of billions to be used to buy toxic assets currently held by foreign investors. But we are told: "don't worry, this $700 billion bill won't cost us anything. We will get it all back next decade through a revenue bill."

I. Section 134 of the Bailout Bill merely says that the President must submit a revenue bill to Congress in 2013 that recoups from the financial industry the taxpayers' net losses.
a. If the President has any revenue ideas he actually likes, he would submit them to us anyway.b. If the President submits revenue ideas only because he is forced to by Section 134, he will send it to us with a note saying that he believes they are bad for the country, and reserves the right to veto.c. The Bailout Bill does not automatically enact any revenue increases, nor protect a revenue bill from filibuster or veto.

II. Congress is unlikely to pass a tax increase bill of hundreds of billions of dollars in 2013.
a. Tax increase bills are anathema to many.b. 41 Senators can block the plan. We're giving Wall Street enough money to hire 4100 lobbyists.c. In recent years, Wall Street has easily defeated every attempt to close every loophole that they exploit, no matter how pernicious-even the abusive use of Cayman Island tax havens by hedge fund managers, who thereby pay zero tax.

III. Any tax on the financial industry would make the good banks pay a huge tax so we can recoup what we gave to the bad banks.
a. Section 134 says the tax will be on "the financial industry." It does not provide for a tax on just those firms that received bailout payments.b. A bank that doesn't get a bailout payment still pays the tax.c. Community banks and perhaps credit unions will also be subject to the tax, so we can recoup what we gave to Wall Street.

IV. It is impossible to draft a tax that hits only those firms that received bailout payments, and even more impossible to draft one that taxes each bank in proportion to how much money we lost on its toxic assets.
a. There are no provisions to even keep track of losses on each asset purchased as it is managed over the years. Assets purchased from several banks will be pooled, managed, and sold together, and we can never know how much we lost on assets purchased from any one bank.b. If three banks in the year 2013 have the same income and size and operations, they will all pay the same tax-even if one got no bailout payments, a second got a million dollars, and a third got a billion dollars.c. Many bailed-out firms won't exist in 2013.
1. Some will go under.2. Some bailed-out firms are only shell companies. Example: Assume the Bank of Shanghai has $30 billion in toxic assets. It will sell these to the tiny subsidiary it has incorporated in California. The subsidiary will then sell these to the Treasury in 2009, and will be dissolved long before 2013.3. Many bailed-out firms will still be unprofitable in 2013.4. Some bailed-out firms will move offshore before 2013.
d. The whole purpose of the bill is to improve the balance sheets of the bailed-out firms. If particular bailed-out firms owe us the money they receive, they would have to list this as a liability, and the bill would fail to improve their balance sheets.
In 2013 we will not pass a tax bill that imposes hundreds of billions of dollars of taxes on the financial services industry, including those banks that got no bailouts, community banks, and credit unions. A tax bill imposed only on those entities that got bailout payments is impossible to draft, and contrary to the purposes of the Bill.
If it were easy to pass a bill to recoup hundreds of billions of dollars through taxes to be imposed in 2013 and thereafter, then provisions imposing such taxes would be in today's bill.

Wall Street gets their money now, and we get it back never.

The Vote

I'll admit I was a bit surprised that the "bailout" bill failed, but not shocked. I've felt that the chances that something would be done this time were slimmer than the conventional wisdom suggested. Not based on any analysis, of course, just on a gut feeling that they were going to the well one too many times.

The entire unfolding of this crisis has caught most of the mainstream figures by surprise, although there have been no shortage of voices in the wilderness warming that trouble was ahead. Checkout http://housingpanic.blogspot.com/ for example.

While the exact course of things has been hard to predict, there has been one constant, and that is whatever the government says and does will be too little and too late. This "bailout" seems to be just another chapter in that story.

I don't have the expertise to judge the plan on its details, but if past performance is any guide, time will prove that this plan will be inadequate.

It's certainly possible that there is nothing the government can do that would actually stop the meltdown, of course. It may be that some future Bernanke-like scholar will determine that the last chance for effective intervention passed many years ago.

Friday, September 26, 2008


The spectacle of the FBI director and Acting AG rushing to the bedside of the seriously ill AG to head off the White House Chief of Staff and White House Counsel sounds like the kind of overwrought drama one might expect to see in the TV show"24" than in real life.

Yet the drama is critical to what may well prove to be the most explosive issue of the whole Bush administration over the long haul. While there are myriad disasters that can be laid at Bush's feet for the judgment of history such as War in Iraq, torture, budget deficits, financial meltdowns and more -- the secret wiretapping program may be the one that finally puts Bush in the Nixonian category.

This Atlantic online article is highly disturbing : http://www.theatlantic.com/doc/200809u/gonzales-investigation

But, if true, it will show that Bush betrayed his oath of office.

Thursday, September 25, 2008

Can McCain escape the blame?

I'm sure it's not so simple as this, and there's plenty of blame to go around, (and I'm not even sure that McCain and the Republicans may not be right) but it sure looks like everything was all sort of set for The Big Compromise to be struck and everyone look like did something good (at least until the next shoe drops -- BTW WaMu bit the dust) and then McCain rides into town and screws it all up.

If the market tanks tomorrow because the deal they expected has gone belly up, how does McCain escape the blame?

McCain's gambit

I'm long past being completely objective about this race. My disappointment with Republicans in general, and McCain in particular is too profound to claim a dispassionate viewpoint.

My observation, however, is that whatever might have been left in the benefit-of-the-doubt reservoir seems to have run dry for the GOP and I doubt that McCain's attempt to get out of Friday's debate will work to his credit.

Likewise, I think Bush's squandered credibility will mean that tonight's address will have little impact.

Tuesday, September 23, 2008

Ben Stein NOT being funny


Ben Stein NOT being funny


George Will on McCain being ill-suited to the presidency

As always, well said:

Conservatives who insist that electing McCain is crucial usually start, and increasingly end, by saying he would make excellent judicial selections. But the more one sees of his impulsive, intensely personal reactions to people and events, the less confidence one has that he would select judges by calm reflection and clear principles, having neither patience nor aptitude for either.

It is arguable that, because of his inexperience, Obama is not ready for the presidency. It is arguable that McCain, because of his boiling moralism and bottomless reservoir of certitudes, is not suited to the presidency. Unreadiness can be corrected, although perhaps at great cost, by experience. Can a dismaying temperament be fixed?

The Reich stuff

Robert Reich on the Bail Out


Monday, September 22, 2008

As usual, Balkinization has good coverage


As usual, Balkinization has good coverage


Bailout appears unconstitutional on its face to me

As written this bailout bill seems to me to be completely unconstitutional, as it delegates legislative powers to an executive agency while denying review to the courts.

More details to follow, but I have to say this looks like just another awful, rushed Bush administration power grab.

Wednesday, September 17, 2008

Wise men recommend a new RTC

Details here:

AIG is done

And just like that, another huge firm pops and the Taxpayer is on the hook:


At this rate the governmet will own everything. We're turning into communists!

Tuesday, September 16, 2008

Now this IS funny -- Black comic introduces McCain

Check it out


The Flood

It was flooding.

As the flood waters were rising, a man was on the stoop of his house and another man in a row boat came by. The man in the row boat told the man on the stoop to get in and he’d save him. The man on the stoop said, no, he had faith in God and would wait for God to save him.

The flood waters kept rising and the man had to go to the second floor of his house. A man in a motor boat came by and told the man in the house to get in because he had come to rescue him. The man in the house said no thank you. He had perfect faith in God and would wait for God to save him.

The flood waters kept rising. Pretty soon they were up to the man’s roof and he got out on the roof. A helicopter then came by, lowered a rope and the pilot shouted down in the man in the house to climb up the rope because the helicopter had come to rescue him. The man in the house wouldn’t get in. He told the pilot that he had faith in God and would wait for God to rescue him.

The flood waters kept rising and the man in the house drowned.

When he got to heaven, he asked God where he went wrong. He told God that he had perfect faith in God, but God had let him drown.

“What more do you want from me?” asked God. “I sent you two boats and a helicopter.”

Monday, September 15, 2008

More of the same

Gee, this sounds familiar:

Throughout her political career, she has pursued vendettas, fired officials who crossed her and sometimes blurred the line between government and personal grievance, according to a review of public records and interviews with 60 Republican and Democratic legislators and local officials.


Interviews show that Ms. Palin runs an administration that puts a premium on loyalty and secrecy. The governor and her top officials sometimes use personal e-mail accounts for state business; dozens of e-mail messages obtained by The New York Times show that her staff members studied whether that could allow them to circumvent subpoenas seeking public records.

From the New York Times. The whole story here: http://www.nytimes.com/2008/09/14/us/politics/14palin.html?_r=1&oref=slogin

More of the same

Gee, this sounds familiar:

Throughout her political career, she has pursued vendettas, fired officials who crossed her and sometimes blurred the line between government and personal grievance, according to a review of public records and interviews with 60 Republican and Democratic legislators and local officials.


More of the same

Gee, this sounds familiar:

Throughout her political career, she has pursued vendettas, fired officials who crossed her and sometimes blurred the line between government and personal grievance, according to a review of public records and interviews with 60 Republican and Democratic legislators and local officials.


More of the same

Gee, this sounds familiar:

Throughout her political career, she has pursued vendettas, fired officials who crossed her and sometimes blurred the line between government and personal grievance, according to a review of public records and interviews with 60 Republican and Democratic legislators and local officials.


Sunday, September 14, 2008

Lehman death watch

This is really a damned if you do, damned if you don't situation.

It's like being trapped in a blazing inferno in a high-rise. You can stay and burn to death or jump and die from the leap.

Likewise the Lehman crisis provides the government a similar awful choice. It can let the firm fail and see a major financial collapse. Or it can bail the firm out, and delay the financial collapse until the next giant firm gets in trouble, like Merrill Lynch or Goldman Sachs.

Frankly, if it's going to happen they might as well get it over with. The bubble will have to be pricked and delaying it merely increases the eventual pain.

We should know if a few hours.

Friday, September 12, 2008

Media has had it with the lies

Just read an AP story that spelled out no less than six different untrue or misleading McCain statements. That's six in one story -- and that was a regular campaign story, not some expose.

As a former reporter myself, I know nothing is more aggravating than to have someone lie to you to your face and expect you to print it, even though you know it's a lie, they know it's a lie and they know that you know it's a lie.

It's bad when even the ladies on The View are calling you out as a liar.

The definitive list of McCain course reversals

76 and counting so far: http://www.thecarpetbaggerreport.com/flipflops

Thursday, September 11, 2008

Zero Tolerance For Common Sense

Every year we're treated to stories of school systems run by people with advanced degrees have no common sense and less moral backbone and therefore they feel obliged to give some poor kid an awful day that they will remember for the rest of their lives just so the educators can follow some rule.

The latest one from South Carolina:

Some kid uses a broken pencil sharpener and the teacher decides the little blade is a "weapon" and makes a federal case about it.

You know, how about some common sense and a little damn love for the poor child here. Evidently this was not a trouble-making child and there's no question that it was simply a kid using a broken pencil sharpener, Now the child is going to be suspended for two days. A teacher with some common sense and real concern for their student (as opposed to being primarily concerned about No. 1 and getting in trouble for not following the rule strictly enough) would have simply pocketed the blade and sent it home with the child at the end of the day, perhaps with a little not to mom and dad asking that they replace the broken tool. I have no doubt that every day, across America in thousands of classrooms most teachers are exercising just that level of common sense and love for their charges dealing with similar cases that don't make the news.

Wednesday, September 10, 2008

Black enough?

A good word: http://ta-nehisicoates.theatlantic.com/archives/2008/09/obama_and_the_onedrop_rule.php

The disappointment of John McCain

Andrew Sullivan sums it up:
So far, he has let us all down. My guess is he will continue to do so. And that decision, for my part, ends whatever respect I once had for him. On core moral issues, where this man knew what the right thing was, and had to pick between good and evil, he chose evil. When he knew that George W. Bush's war in Iraq was a fiasco and catastrophe, and before Donald Rumsfeld quit, McCain endorsed George W. Bush against his fellow Vietnam vet, John Kerry in 2004. By that decision, McCain lost any credibility that he can ever put country first. He put party first and his own career first ahead of what he knew was best for the country.
And when the Senate and House voted overwhelmingly to condemn and end the torture regime of Bush and Cheney in 2006, McCain again had a clear choice between good and evil, and chose evil.
He capitulated and enshrined torture as the policy of the United States, by allowing the CIA to use techniques as bad as and worse than the torture inflicted on him in Vietnam. He gave the war criminals in the White House retroactive immunity against the prosecution they so richly deserve. The enormity of this moral betrayal, this betrayal of his country's honor, has yet to sink in. But for my part, it now makes much more sense. He is not the man I thought he was.

The rest is here: http://andrewsullivan.theatlantic.com/the_daily_dish/2008/09/mccains-integri.html

I, too, am disappointed. Of all the GOP candidates I liked John McCain the best. I thought he was a man of honor and I expected, for a change, that we would be treated to an above-board, issues-based campaign between these two men.

Instead we're getting the Rovian politics that have robbed the Republican party of its soul in a Faustian bargain for power. It's evident now that it didn't matter who the GOP picked (with the possible exception of Huckabee), the Republicans no longer even know how to campaign on issues. The Reagan era is dead. Issues no longer matter.

For the good of the party, (not to mention the country) McCain must lose. Perhaps, out of that wreckage someone can rebuild the party based on some authentic conservative values. Maybe it will be Huckabee, with his populist and faith-based but optimistic vision. Maybe it can be Petraeus, who will be a bona fide war hero and is apparently a "Northeastern Republican" (a nearly dead breed, but one that could actually win over independents) in the mold of Eisenhower. Perhaps there is some Obama-like young Republican who can take the party in a new direction.

Being driven away in disgust

As a life-long Republican voter, the last few years have been agonizing for me as I've found my political world turned topsy-turvy. Between torture, war, spending and lawbreaking it's been harder and harder to find anything worthwhile left about the modern GOP.

At least I thought McCain wasn't too bad and he'd run a reasonably honorable campaign, but even that forlorn hope has been dashed.

You know, I am heartily sick and tired of the government lying to me. I'm not naive enough to think that the government will never lie, nor even that there are times when the government should lie. But lies should be rare and when discovered repented of. Not doubled down.


A campaign built on lies cannot be healthy for the country.

Monday, September 8, 2008


Force protection is somewhat of a mantra in U.S. military policy, and as the beneficiary of that policy, I feel I need to tread carefully in being too critical of it.

But the fact remains that airstrikes and other uses of heavy firepower carry enormous risks for bystanders in the area.

The controversy over a recent airstirke that reportedly killed some 90 people in Afghanistan, including as many as 60 children, shows no sign of abating. New video evidemnce has emerged that suggests that the U.S. reports of no mor ethan seven dead civilians is incomplete.


I'm not sure why the military is having such a hard time pinning down the truth here. The U.N. and Afghan authorities seem to have information, one wonders if it's simply not accepted by the military as valid.

The bottom line, however, is that firepower is of limited use in counterinsurgency and is no substitute for numbers on the ground and presence. This has been, all along, the fatal flaw of the Rumsfeld strategy for war in Afghanistan and Iraq. There are many reasons why Gen. Petraeus has seen some success in Iraq, but foremost among them seems to have been changing the deployment of U.S. troops from centalized bases to forawrd positions among the population. This carried risks, of course, and initially casualkty rates did climb, but eventually they fell and now Iraq is safer for U.S. forces than ever.

A similar thing nees to happen in Afghanisatn, where, really, the overall situation should be more favorable. A cost of the Iraq venture has been in preventing the U.S. from having reserves avaikable to influence the Afghanistan fight.

Petreaus is moving up to Central Command and one expects he will apply his talents to redressing that deficiency.

Sunday, September 7, 2008

Just how stupid do they think we are?

So supposedly Rep. Westmoreland, a true Son of the South, had no idea that "uppity" had racial connotations.

This really falls in the category of pissing-on-me-and-telling-me-it's-raining.

I mean, come on. If you're going to lie at least make it a half-way believable lie.

Background and amusement from Jack and Jill : http://www.jackandjillpolitics.com/2008/09/completely-hilarious-retort-to-westmorelands-uppity-comment/

Thursday, September 4, 2008

A small point that sums up the GOP's problem

Reality Based Community notes this during McCain's speech:

One of the ordinary people he's going to work for is someone who "lost his real estate investments in the downturn." Not, of course, someone who lost his house.

Some words that are really needed

Roger Simon "apologizes" on behalf of the emdia for daring to do its job this week with Palin: http://www.politico.com/news/stories/0908/13143.html

Tuesday, September 2, 2008

No words needed

To Serve and Protect

The Richland County, S.C. , sheriff has an M113 APC with a .50 caliber MG.
This makes sense, right?

Other ways to measure Olympic success

The BBC noted that China liked to count how many gold medals were won (which put it first) and the Americans liked to count total medals won (which put them first) but there are other ways to look at medal success, and by several of them Jamaica lands right near the top.:

Monday, September 1, 2008

Of course the GOP believes in the free market, certainly and without a doubt

Unless, of course , the free market would disadvantage the big corporations.


The General

Here's an interesting New Yorker piece on one of the few top leaders involved in the Iraq affair who appears destined to have his reputation enhanced, instead of trashed.


Slate - Encyclopedia Baracktannica