 |
| David Corn |
David Corn: Tea Party Needs Anger Management
Progressive Mag: Tea Party Goon Squads
Policies That Got Us Here - Part III
See Part 1 of Policies that got us here - Part II and See Pivot Points in History Less than a decade after Robert Rubin, Bill Clinton, and a host of Republicans successfully argued for the destruction of the Glass-Steagall Act on the grounds of “fairness” the investment and commercial bankers from Wall Street were back in Washington begging for a rescue. A truly “fair” policy response to the threat of a system-wide financial implosion would have been for the government to step in and appoint independent trustees to oversee a very deliberate and orderly dismantling of A.I.G. And all the reckless commercial and investment banks that were basically insolvent should have had trustees appointed as well. Relative order could have been maintained and the stock and bondholders that voted for the boards that allowed their management teams to gamble recklessly (while receiving astronomical compensation packages) would have taken every nickel of the losses. What Would Have Been a “Fair Policy Response to the Financial Crisis?”
Fairness would have required President George W. Bush, and candidates Barack Obama and John McCain to demand an immediate reinstatement of Glass-Steagall. These were the “fair” things to do, but of course this was not what the policy response was. Washington isn’t fair. Instead, it is a place where influence is acquired wholesale and sold retail. So instead of fair policies, armies of mercenary lawyers descended on Washington D.C. With access to both elected and appointed officials they argued for a slightly different version of fairness. Peddling a sense of “fear” the commercial and investment banks in New York swayed leaders to be get this.......bi-partisan Carefully crafted predictions of total financial catastrophe were offered to the Bush Administration officials. Both Nancy Pelosi and Harry Reid quickly hopped on board. 
The scare tactics worked. No doubt investment and commercial bankers must have been sighing in relief as both the outgoing and incoming members of the executive and legislative branches of our government all found something they could agree to late in 2008; this being a fresh round of taxpayer-financed government folly. 
Adding insult to taxpayer injury, our elected officials and their chief regulators also encouraged each gigantic Wall Street investment firm to quickly file for bank holding company status. By being designated as depository institutions, investment banks and the poorly managed financial service subsidiaries of industrial companies (like General Electric) were allowed to float hundreds of billions of dollars in FDIC guaranteed notes at minuscule interest rates. In the meantime, all responsibly behaving individuals and organizations were already required by tax laws to pick up these government dining tabs.
Adding insult to taxpayer injury, our elected officials and their chief regulators also encouraged each gigantic Wall Street investment firm to quickly file for bank holding company status. By being designated as depository institutions, investment banks and the poorly managed financial service subsidiaries of industrial companies (like General Electric) were allowed to float hundreds of billions of dollars in FDIC guaranteed notes at minuscule interest rates. In the meantime, all responsibly behaving individuals and organizations were already required by tax laws to pick up these government dining tabs.
The Financial Media and Populism - Unfortunately, many members of the financial news media are remarkably biased towards what is good for their geographic neighbors. They also are also predictably protective of their personal sources of so-called financial news. Accordingly, the most of the blatant conflicts of interest and insidious liaisons between Washington D.C. and Wall Street are completely ignored or treated as minor afterthoughts by our financial press.
Eliminate All Opportunities for Fat Cats - In the end, President Obama is right about “Fat Cats.” Fat Cats devising ridiculous financial schemes that wind up getting backstopped by other campaign contribution collecting “Fat Cats” are weakening America. Unfortunately, the truth is considered discomforting by most elected officials. Under our current system, all incumbents have huge campaign fund raising advantages. And by definition, the very nature of these advantages creates unacceptable conflicts of interest that leave them unable to govern wisely.
The greatest deficit a woefully uninformed American electorate faces is a wisdom deficit. With all the partisanship, the distractions, and the conflicts of interest, anyone still hoping the majority of the electorate will some day summon the wisdom to demand that the financial advantages our system provides for all elected officials be eliminated is engaging in wishful thinking. Fat Cat accusations coming from incumbents are hollow. Until all elections are funded by taxpayers instead of Fat Cats, we should recognize that ALL elected officials are “Fat Cats” too.What can voters do if they want to be better informed? First they can stop worshipping blowhards like Bill Clinton as he travels all over the country talking about policies that led us into the ditch. They can understand the reason why partisan Democrats don't wish to point to the profound words of their own prophet (Senator Byron Dorgan). Dorgan being right while Clinton was wrong does not serve any immediate political purpose for Dems. Being right as Dorgan most certainly was about policies that would lead us into a deep sense of regret tend to spread the blame around. And any accomplished huckster like Bill Clinton certainly doesn't need to the financial equivalent of another blue dress staining his carefully constructed presidential legacy. He knows what to do. Pretend he had nothing to do with it. It was all the Republicans fault!
Dirty Laundry About to be Hung?
Fed In Unchartered Waters 1970's a Distant Reminder
 |
| Ben Bernanke |
For the second time since he became chairman in 2006, Ben S. Bernanke is leading the Federal Reserve into uncharted monetary territory. Bernanke next week is likely to preside over a decision to launch another round of large-scale asset purchases after deploying $1.7 trillion to pull the economy out of the financial crisis, comments from policy makers over the past week indicate. This time, with interest rates already near zero, the Fed will be aiming to increase the rate of inflation and reduce the cost of borrowing in real terms. The goal is to unlock consumer spending and jump-start an economy that’s growing too slowly to push unemployment lower. Read more here:
Dr. Terry McMillan to Appear on NewsNM
 |
| Dr. Terry McMillan |
Policies That Got Us Here Part II
 |
| Robert Rubin |
What A.I.G. and Goldman Did - One of the most notorious intermediaries of financial lunacy in the perverted post Glass-Steagall era was A.I.G. This insurance company underwrote reckless financial policies (known as credit default swaps) for commercial and investment banks. A.I.G. did this because it collected what management thought were generous premiums. At one time A.I.G. deluded itself into thinking it was generating huge underwriting profits for the company the C.D.S. business. Wall Street investment houses including Robert Rubin's former employer Goldman Sachs believed A.I.G. was capable of actually hedging trillions of insane bets. As a result, commercial and investment banks collectively and individually escalated the scheming, becoming practically drunk with embodiment. Virtually every New York-based bank borrowed and bet as much as it could on flimsy mortgages. Even Goldman's management team suffered from greed-induced delusions. However, eventually Goldman's management began to see that mortgage defaults were bound to mushroom and that credit default swap claims against A.I.G. could run tens of billions of dollars. Since Goldman was hardly sufficiently reserved for this sort of colossal-sized folly, it began to write synthetic securities where it could bet against the process of sub-prime mortgage underwriting.
New York, Washington D.C. and Corruption - For decades large commercial and investment banks have provided a steady flow of campaign contributions to the re-election war chests of most elected officials in Washington. For many years Goldman Sachs has been the biggest contributor of the pack. The payoff for commercial banks wasn’t more "fairness" and less bank risk taking as Presdient Clinton, Robert Rubin, and Senator Phil Gramm claimed. Instead, it was the end of the taxpayer protections provided by Glass-Steagall for decades that Senator Byron Dorgan predicted.
 |
| Hank Paulson |
As A.I.G. catapulted towards complete insolvency it gradually became clear to C.E.O.’s at the largest commercial and investment banks that they were getting trapped. Having unwisely borrowed to buy flimsy mortgage securities, they too were at the point of insolvency. And as their sense of greed receded and their sense of reality set in, these C.E.O.’s quickly secured the ears of their former colleagues (Treasury Secretary Hank Paulson and others), who just happened to be working in the Bush Administration as high level banking system regulators. The goal of Wall Street C.E.O.’s in the late summer of 2008 was to quickly gain access to taxpayer guarantees and cash injections to cover mistakes they made. Their errors should have required wipeouts of their stock and bondholders and receiverships for an interim period. That did not happen. Instead, first Paulson and Co. used Lehman Brothers as a stage setter for the remaining firms. After the panic that ensued with the Lehman failure the rest of the street including Goldman Sachs was able to gain access to the seemingly infinite resources of the taxpayers. Under pressure, Hank Paulson went to Capital Hill. Publicly and privately he injected a gigantic dose of FEAR for official consumption. The extraordinary government intervention he sought had to be framed as an effort to “Save the American Financial System from Catastrophe” instead of a bailout for the greediest on Wall Street.
Sowell: Brass Oldies
 |
| Thomas Sowell |
From Townhall.com - Classic songs from years past are sometimes referred to as "golden oldies." There are political fallacies that have been around for a long time as well. These might be called brass oldies. It certainly takes a lot of brass to keep repeating fallacies that were refuted long ago. One of these brass oldies is a phrase that has been a perennial favorite of the left, "tax cuts for the rich." How long ago was this refuted? More than 80 years ago, the "tax cuts for the rich" argument was refuted, both in theory and in practice, by Andrew Mellon, who was Secretary of the Treasury in the 1920s. Read more here:
Las Cruces City Council Work Session Notes
Item # 1 - Potential Partnership with Tresco concerned a presentation made by Tresco, a non-profit organization that specializes in employing the disabled and has more than 500 employees in the Las Cruces area. They provide many services to the disabled free of charge. They have contracts with several agencies and departments at White Sands Missile Range to perform contract janitorial and maintenance services. Seventy-five percent of their labor must be performed by the disabled. Their economic impact to the community is underscored by an annual payroll of $14 million. Each employed disabled person saves the community approximately $6,000 annually in reduced disability related benefits and services. Tresco has created its own community service organization, Action Club similar to Kiwanis, to provide community volunteer service. Tresco suggested the City could partner with them in four specific areas to improve employment opportunities for the disabled and potentially reduce costs for the City. These were:
a. Increase employment for disabled persons by contracting services with Tresco. Because it is a non-profit organization the City can contract with it without competitive bids at fair market value.
b. Provide opportunity within the City government for temporary employment
c. Provide opportunity for people with disabilities to volunteer with City Departments for community service projects which are often a pathway to regular employment.
d. Contract with the City to assist in after school programs for children with disabilities
· Councilor Silva wanted to know what kind of Hispanic outreach and training programs Tresco offered. He was informed that the have designated staff positions that are bilingual and offer training in specific needs areas
· Councilor Sorg liked the win/win scenarios at Tresco and wants to conduct further discussions about after school programs
· Councilor Thomas thinks that contacts with Tresco provide good learning experiences for both Tresco and the other employees.
· Mayor Miyagishima wanted to know whose Workers Comp covered Tresco employees. He was informed that Tresco had the primary responsibility. He wanted to know if Tresco had licensed (electricians, plumbers, etc) and was informed that they did and that Tresco looked for opportunities to find work for them. The Mayor also wanted additional information about Tresco’s role in after school programs and was informed that Tresco staff members could augment or supplement the City of Las Cruces staff and also conduct appropriate training for dealing with persons with disabilities.
Item # 2 – After School Program Update was presented by Mark Johnston. He said six schools and about 250 students are involved in this program. It conducts is activities in the cafeterias of the appropriate schools provided without cost to the City by the Las Cruces Public Schools. Students are selected by lottery and currently everyone who desired to participate has been accommodated. Parents pay $519 per year ($3.50 per day) for the program which runs from 2:30-5:30 pm on school days. The program is based on the “Beyond the Bell Curriculum” used in Southern California. It provides supervision and assistance with homework, teaches “go green concepts” and provides healthy nutritional snacks as part of the program. (Editorial comment: Now we provide students with “nutritional” breakfasts, lunches, and dinners at schools). It is essentially a low-cost baby setting service funded by the taxpayers and costs much less than similar private sector programs that cost on an average of $25 per day. Current annual costs are $147,000 but the program runs a 25% deficit because fees to participate in the program are insufficient to cover the actual costs. Mr. Johnston offered several options for the Council to consider for the next budget year.
a. Encourage Las Cruces Public Schools to become involved in the staffing of the program.
b. Increase the fee from $3.50 to $5.00 per day per participant. This money could be shared with LCPS to cover the additional staffing costs.
c. Reduce the number of participating schools
d. Reduce the part-time staff and reduce programs offered
e. He also stated he would rather add more supervision than increase participation.
· Councilor Thomas said we should consider charging more for the program and Las Cruces Public Schools should support the program Editorial Comment: Why should the LCPS fund this City of Las Cruces program and isn’t their role to educate them in the classroom? Also where would the money come from?
· Councilor Small also supports an increase in fees especially in light of the pending City budget cuts but wanted to know who would perform this service if it wasn’t the City. Mr. Johnston informed him that there are currently other private sector organizations providing similar programs (Boys & Girls Club, FYI, and others). He stated that this program was essential for low-income families that could not pay the higher costs for private after school child care.
· Councilor Connor asked what happens when school is on a half-day schedule or on holidays? She was informed that the program is not available on those days. She also asked if they had considered using senior volunteers to support the program? She was informed that they were working with the Munson Senior Center and with NMSU Engineering Department.
· Councilor Pedroza commented she was impressed with the educational component of the program but wondered if they had considered other staffing options such as College Service Unit Credits for students to earn college credits for volunteer work?
· Councilor Silva asked what are you looking for from the Council? Mr. Johnston stated that the needed budget support, a fee increase, and/or staff reductions. He stated he will have to cut the part-time programs first. He then added that with any fee increase there will be an initial decline in participation.
· Councilor Sorg commented that even with a fee increase this program was cheaper than child care. Editorial Comment: Again this begs the question “Why is the City involved in providing Child Care?”
· Mr. Johnston concluded the presentation.
Item #3 – School Safe Zones was presented by Information Technology Director, Don Bustamante. Mayor Miyagishima has requested the staff to look into creating “safe corridor or streets” for students walking home. The City is considering acquiring and installing cameras along selected streets for surveillance of student behavior. Mr. Bustamante informed the Council that the concept was technologically feasible and the cameras would cost approximately $4000 each for acquisition and installation. There are some infrastructure issues with one of the schools and there are no funds available for this program. Chief Williams also appeared before the Council and said that there is a LCPD officer at each middle school and high school. The Las Cruces Public Schools picks up half of the salary costs for these officers.
· Mayor Miyagishima suggested that perhaps El Paso Electric would consider donating the utility costs for these cameras.
· Councilor Connor commented that there are solar or battery cameras that could be purchased with would reduce the utility costs for the City. It was suggested the City consider using the Department of Justice “secure our schools” grants to fund this project. The problem is that this requires a 50% match and there are no funds available for this project.
Public Comment: As an exception to policy Mayor Miyagishima allowed Mr. James Carlyle, a musician who plays every Thursday for the dances at the Las Cruces County Club to address the Council. He requested that the City work with his group to find a replacement site since the Country Club will not be available. He suggested the Munson Senior center and stated that dancing is a great physical activity for seniors. Mayor Miyagishima directed Assistant City Manager Robert Garza meet with Mr. Carlyle to discuss it.
Old Stealing from Young under Obama's 'Reforms'
From the Cato Institute - by Gene Healy - Ridiculing the French is an obnoxious right-wing cliche that I thought I'd outgrown. But sometimes they make it so hard to resist. Right now, France is paralyzed by Greek-style anti-"austerity" protests, triggered by President Nicolas Sarkozy's plan to raise the retirement age — one of the lowest in Europe — all the way from 60 to 62. Across the West, aging populations have exposed the false promise of retirement schemes based on intergenerational transfer payments. By 2050, every French working couple will have to carry one retiree on their backs as France's public debt hits 337 percent of GDP. Sarkozy's plan thus looks like a modest gesture toward fiscal sanity. Yet the French masses see it as cause for torching cars and barricading streets. Sigh. Pass the "Freedom Fries." Most galling is the zeal with which French youth have joined the retirement-age riots. They're the ones who are going to pay the tab for a sclerotic entitlement state that eats its young. Yet by Monday, student protests had rocked some 300 schools, with French youths throwing rocks and Molotov cocktails at police in Paris suburbs. If there's a better example of misunderstanding your own class interests — what Marxists call "false consciousness" — I don't know what it is. On Thursday, just as French students hit the streets, U.S. President Barack Obama held an MTV "town hall" before a hand-picked student audience — part of his all-out effort to mobilize the youth vote for November. This gives rise to an important question: Are America's youth as dumb as the French? Read more
Posts
