Historical Hysterics and The Rest Of The Best Of 2008

Kinda pleased to have the Obama presidential win as  the most important thing that happened in the world this past year. With the collapsing economy trying to steal his limelight, his historic election still tops my list of historical hysterics we watched in 2008. I had a good friend “break up” with me, in an e-mail no less, because of my views about McCain and the atrocious way his votes treat the troops who are fighting for what they believe is our freedom. Although I cast my vote for the Green Party’s Cynthia McKinney it pleased me to see how the country was so hungry for some kind of change they voted in our first black president. Hopefully he tries to keep his promise of change even if he is surrounding himself with the good ol’ backroom boys of our capitol.

(The new bosses just before they came onstage in Chicago Nov. 4, 2008)

The Who “Wont Get Fooled Again”

The destruction of the American economy by the backroom boys (yes…if there are any women who helped shape the policies that caused this disaster I still call each of them a backroom boy as well.) comes up in second place as the most newsmaking story this year. Thousands lost their homes and jobs this year so the C.E.O.’s could take home billions in bonuses.

The only upside to folks losing their homes, jobs being cut, the collapse and bailouts etc. is they came just before the elections. John McClone and the You Betcha Babe were gaining on the “nigra boy” but his cronies part in the economic doom tainted the vote and even the hardcore racists had to look closer at promised “change”.  (The racism in that statement came from a conversation with my mom who called Obama that all the time. Now she is forced to say “Our President”.)

The wars in Afghanistan and Iraq still raged on. March saw the number of troops killed in Iraq reach the 4000 mark and the election news smothered the outrage that I thought would have had the American people marching in the streets demanding the end of this atrocity based on lies and deceit.  During this time the press kept us appeased with the ridiculous crap from the primary trail. President Bushit said all of the things the war machine wanted to hear and so did the candidates. Alien Trucker even posted a Pink song on this blog. The only Pink song I have ever thought listenable. It carries such a message I am going to repost it here and hope Mr. Obama listens to it as well, and considers taking that walk with Pink…or any regular world citizen…every day.

Hurricane Gustav visited the Gulf Coast in September and found many many homes and businesses there still bearing the “blue roof”. You know…the big tarps that were put there after Katrina 3 years ago to keep residents dry while waiting on FEMA or the insurance money to come through so they can be repaired. Funds that were supposed to go there have been diverted many times over and still the destruction has no fix. Even the beautiful Sanger Theater in New Orleans, the site of many a great song played for us, is still un-renovated because the people need housing worse than the entertainment that plays, dance or Government Mule can offer.

(Filmed at the Sanger)

Unemployment and homeless rates rose higher than they have in decades. Businesses and factories around the nation have cut back production or closed completely. Folks have taken to robbing or begging just to get by. More than one have robbed someone or asked to take a shift at the Cumberland Mine just to make a house payment.

The price of crude oil topped $100 a barrel and plummeted down again by mid-December. In the midst of financial hardship Americans paid the highest at the pump in our history and are now being thankful that prices are down again…to higher than they were five years ago.

California’s Proposition 8 won. WON!?!?? I believe it was a huge loss on the civil rights front as it shows that bigotry and prejudice is not a thing of the past. Backed by Big Religion the “moral” right fought civil rights again basing their hatred on Old Testament hatred. IT’S 2008 PEOPLE! Those laws handed down by “GAWD” are ancient and really have no part in today’s law making.

So as we make our way into 2009 and all of the marvels and wonder it brings I am not so sure we have loads to celebrate. I am looking forward to seeing the change the new administration brings. I do see that after a while of beans and rice I may be able to afford some chicken by the end of the year. Not everything is doom and dismay. Sometimes it just seems that way.

These are just a few of the important stories of the year. I really didn’t want to go into speculating how they would influence 2009 so I just stopped here.

I really hope it gets better.

Led Zepplin. “The Song Remains The Same”

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The News Hour

Now about that $350 mil that no one seems to know where it went…

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Michael Moore On The Detroit Crisis

From Michael’s email to his distribution list today:

They could have given the loan on the condition that the automakers start building only cars and mass transit that reduce our dependency on oil.

They could have given the loan on the condition that the automakers build cars that reduce global warming.

They could have given the loan on the condition that the automakers withdraw their many lawsuits against state governments in their attempts to not comply with our environmental laws.

They could have given the loan on the condition that the management team which drove these once-great manufacturers into the ground resign and be replaced with a team who understands the transportation needs of the 21st century.

Yes, they could have given the loan for any of these reasons because, in the end, to lose our manufacturing infrastructure and throw 3 million people out of work would be a catastrophe.

But instead, the Senate said, we’ll give you the loan only if the factory workers take a $20 an hour cut in wages, pension and health care. That’s right. After giving BILLIONS to Wall Street hucksters and criminal investment bankers — billions with no strings attached and, as we have since learned, no oversight whatsoever — the Senate decided it is more important to break a union, more important to throw middle class wage earners into the ranks of the working poor than to prevent the total collapse of industrial America.

We have a little more than a month to go of this madness. As I sit here in Michigan today, tens of thousands of hard working, honest, decent Americans do not believe they can make it to January 20th. The malaise here is astounding. Why must they suffer because of the mistakes of every CEO from Roger Smith to Rick Wagoner? Make management and the boards of directors and the shareholders pay for this.

Of course that is heresy to the 31 Republicans who decided to blame the poor, miserable autoworkers for this mess. And our wonderful media complied with their spin on the morning news shows: “UAW Refuses to Give Concessions Killing Auto Bailout Bill.” In fact the UAW has given concession after concession, reduced their benefits, agreed to get rid of the Jobs Bank and agreed to make it harder for their retirees to live from week to week. Yes! That’s what we need to do! It’s the Jobs Bank and the old people who have led the nation to economic ruin!

But even doing all that wasn’t enough to satisfy the bastard Republicans. These Senate vampires wanted blood. Blue collar blood. You see, they weren’t opposed to the bailout because they believed in the free market or capitalism. No, they were opposed to the bailout because they’re opposed to workers making a decent wage. In their rage, they were driven to destroy the backbone of this country, not because the UAW hadn’t given back enough, but because the UAW hadn’t given up.

It appears that the sitting President has been looking for a way to end his reign by one magnanimous act, just like a warlord on his feast day. He will put his finger in the dyke, and the fragile mess of an auto industry will eke through the next few months.

That will give the Senate enough time to demand that the bankers and investment sharks who’ve already swiped nearly half of the $700 billion gift a chance to make the offer of cutting their pay.

Fat chance.

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GM’s plan…read it and weep.

You can review it here. (pdf)  The boys from Detroit are getting grilled as I write this, by the banking committee. Thanks to EmptyWheel for hosting the plan on Firedoglake’s servers.

Jon Tester asked one of them if they can guarantee that this will be the only bailout money they will need considering the economy.

The exec said no, he can’t make that guarantee. Of course he can’t..and neither can the financial institutions.

No one can guarantee shit…unless it’s a guarantee that it’s gonna get worse before it gets better.

That, you can probably take to your bank…if it’s still operating or hasn’t been bought out by a bigger fish in that pond.

The UAW is willing to take a hit as well:

From the New York Times: “At a news conference in Detroit, the U.A.W.’s president, Ron Gettelfinger, said that his members were willing to sacrifice job security provisions and financing for retiree health care to keep the two most troubled car companies of the Big Three, General Motors and Chrysler, out of bankruptcy.”

If the Big Three are allowed to go into Bankruptcy, they will die. No one will buy a vehicle from a company in Bankruptcy. But will people buy a vehicle from them anyway?

I don’t know the answers and neither does anyone else.

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It ain’t over till the last Exec is done begging.

The Big Three are back on the Hill today, their hats in their hands and their jets out of sight. They got a plan, or so they say. From WaPo:

In its second attempt to persuade Congress to grant the U.S. auto industry $25 billion in emergency loans, Chrysler plans to make the case that automakers can cut their costs and point to the future by forging an alliance to share fuel-efficient vehicle technologies.

Ford will tell lawmakers that it intends to retool plants for smaller, more fuel-efficient cars as a part of its goal of becoming the fuel-efficiency leader in every vehicle category. General Motors will address its $43.3 billion debt burden and an upcoming multibillion-dollar payment to a union-run trust that will cover employee health-care costs.

Meanwhile, the Congress Critters are fighting amongst themselves over who is going to judge these plans. According to WaPo, Nan and Harry have said the following about which groups and/or departments will eyeball the automaker’s plans to get their collective shit together:

In their own letter to automakers last week, Reid and Pelosi said they “intend to give pertinent agencies within the executive branch, the Government Accountability Office, the Board of Governors of the Federal Reserve, as well as outside experts, the opportunity to comment on [the automakers'] work.”

It’s all so jacked up and it will not be getting any better any time soon. Meanwhile, Chase, who now owns Washington Mutual, announced they are shit-canning over 9,000 WaMu employees in the very near future.

Just in time for Christmas gents? How sweet of you.

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Hey Hank! Where did all that money go dude?

According to Robert Reich, $300 Billion has been spent and went to:

What happened to all the money? About a third has gone into dividends the banks are paying their shareholders. Some of the rest into executive salaries and bonuses. Another portion toward acquisitions designed to raise share values. Another chunk for bailing out giant insurer, AIG.

That’s not what taxpayers bargained for. Paulson originally told Congress he’d use the money to buy mortgage-backed securities that were clogging the financial system. He’d create a market for them by holding a kind of reverse auction, buying them from the banks at the lowest prices they’d be willing to sell them for.

But Paulson has abandoned that strategy and is now just handing the money directly to the big banks, and AIG — all of which are using the money for their own purposes. It’s the worst type of trickle-down economics. Taxpayers are sending the money upward, and almost none of it is trickling back down.

I really did not need to read that first thing this morning….no, I surely did not. I can’t have any coffee, I can’t eat anything, I can’t take my meds…all because I am getting an ‘upper GI’ this afternoon.

Man, I am friggin grumpy as hell and Bob didn’t make it any friggin easier.

Thanks Bob. Yes, the truth hurts..especially at 6:45 in the morning.

Hank Paulson, do you know what you are doing? Are you criminally insane or just leisurely fucking us in the ass dude?

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Piloting The Bailout: Pirates At The Wheel

Treasury Secretary Henry Paulson has spent his initial allotment of $350 million in bailout funds, and it doesn’t seem as if there has been any impact on the economy.  Banks are still not making loans, businesses large and small have seen revenues decline, Detroit is about to implode, American workers are being layed off, left and right, and everyone is girding for a lean holiday season.

During his testimony before the House Committee on Financial Services yesterday, Secretary Paulson stated:

Recently I’ve been asked two questions. First, Congress gave you the authorities you requested, and the economy has only gotten worse. What went wrong and why won’t you use this authority for other industries? Second, if housing and mortgages are at the root of our economic difficulties, why aren’t you addressing this?

The answer to the first is that the purpose of the financial rescue legislation was to stabilize our financial system and to strengthen it. It is not a panacea for all our economic difficulties. The crisis in our financial system had already spilled over into our economy and hurt it. It will take a while to get lending going and repair our financial system, which is essential to an economic recovery. This won’t happen as fast as any of us would like, but it will happen much, much faster than it would have had we not used the TARP to stabilize our system. Put differently, if Congress had not given us the authority for TARP and the Capital Purchase Program and our financial system had continued to shut down, our economic situation would be far worse today.

The answer to the second question is that the most important thing we can do to mitigate the housing correction and reduce the number of foreclosures is to increase access to lower cost mortgage lending. The actions we have taken to stabilize and strengthen Fannie Mae and Freddie Mac, and through them to increase the flow of mortgage credit, together with our bank capital program, are powerful actions to promote mortgage lending. We are also working actively to reduce preventable foreclosures.

…We have done what was necessary as facts and conditions in the market and economy have changed, adjusting our strategy to most effectively address the urgent crisis and preserving the flexibility of the President-elect and the new Secretary of the Treasury to address the challenges in the economy and capital markets they will face in the coming months.

According to Secretary Paulson he and his crew have stabilized the situation, they have prevented the dominoes of our financial system from all falling.   Stabilizing the situation does not make the problems in the financial houses go away, it only postpones an ultimate reckoning.  It seems that Secretary Paulson, like his boss, is going to blithely walk-away from the mess, and leave it to the Obama administration to figure out how we (ultimately the taxpayers) will prevent any further hemorrhaging and repair our flawed financial system, and apply preventive measures so there is no recurrence.   Thank you George W. Bush for your leadership as you steered our ship in to these financial shoals, have a nice retirement.

While Secretary Paulson claims the situation has been stabilized, perhaps the secretary and his boss should be required to complete a lessons learned exercise.  Never mind a root cause analysis,  we know what caused the problem, a greedy financial sector aided and abetted by an incompetent, and criminally negligent administration.  To help the secretary and the lame duck with their assignment here are a few lessons they can compile for the next administration and Congress:

1. Do not appoint a pirate to regulate the pirates.
2. Study the legacy regulations, many of which were repealed but which had protected American tax payers for generations and bring  back sensible and necessary regulations on any entity engaging in business in the financial sector.
3. When the financial sector dreams up investment “products” that sound too good to be true (e.g. credit default swaps) release the forensic accounting hounds.
4. Aggressively investigate and prosecute systemic financial fraud, holding senior corporate officers personally accountable for the abuses committed  by their institutions.

In terms of the strategy for managing the disbursement of the remaining $350 million of the bailout fund, we can only hope that the Obama administration and the new Congress exercise due dilligence, and not feel constrained to continue any of the strategies or tactics employed by the current administration.  Just as there is more than one way to “skin a cat” there is more than one way stop and repair the damage done by pirates.

Someone who has a strong opinion on all of this is former Secretary of Labor and current professor at the University of California, Berkely, Robert Reich, who thinks the remaining bailout funds should be focussed on bottom-up spending.

I am no economist, no accountant or financial genius, I am just an American tax payer and soon to be beneficiary (hopefully) of Social Security and as far as I am concerned, I expect my government to prevent piracy on Wall Street, after all there are already plenty pirates out and about, we don’t need it at home too.

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Living a Lie

The country is sinking deeper into an economic hole, and it’s likely to stay there for a while. That’s part of the latest outlook from forecasters in a survey to be released Monday by the National Association for Business Economics, also known as NABE. Approximately 96 percent of the economists polled believe a recession has started, and nearly three-fourths think it could persist beyond the first quarter of 2009. Under one definition, a recession happens when the economy shrinks for two quarters in a row. The economy contracted 0.3 percent in the third quarter as consumers cut back sharply on spending, the government reported last month. It was the worst showing since 2001, when the country was last in a recession.

NABE economists, among other experts, predict activity will continue to contract in the final quarter of this year and the first quarter of next year as weary consumers hunker down further under the stresses of rising unemployment, shrinking nest eggs and falling home values. “Business economists became decidedly more negative on the economic outlook for the next several quarters as a result of the intensification of credit market stresses and evidence of spillover to the real economy,” said NABE president Chris Varvares, president of Macroeconomic Advisers. NABE economists are now forecasting the economy to shrink at a 2.6 percent pace in the final quarter of this year and then at a 1.3 percent pace in the first three months of 2009. The new projections marked downgrades from the association’s previous survey, which called for growth of 0.1 percent in the final quarter of this year and 1.3 percent in the following quarter.

Weakest economy since 2001: For all of 2008, the association’s economists are predicting the economy’s growth will slow to 1.4 percent, down from 2 percent in 2007. If the new, lower projection proves correct, it would mark the weakest performance since 2001. The picture could turn worse in 2009. The NABE economists are projecting the economy will jolt into reverse, shrinking by 0.2 percent for all of next year. If that happens, it would be the worst showing since 1991, when the country was starting to pull out of a recession. With the economy losing traction, the nation’s unemployment rate will climb to 7.5 percent by the end of next year, the economists predict. Other analysts think it could rise to 8 percent then, It could hit 10 percent or higher if a U.S. auto company were to go under. Worse economy since 2001 and it is just beginning

I am sick of hearing the Great Depression can not be repeated! This was manufactured by greenspan under Bush, is just beginning, and will be much worse. As I keep saying the timing is no coincidence! Global Research, November 15, 2008:
The financial crisis is deepening, with the risk of seriously disrupting the system of international payments. This crisis is far more serious than the Great Depression. All major sectors of the global economy are affected. Recent reports suggest that the system of Letters of Credit as well as international shipping, which constitute the lifeline of the international trading system, are potentially in jeopardy. The proposed bank “bailout” under the so-called Troubled Asset Relief Program (TARP) is not a “solution” to the crisis but the “cause” of further collapse. The “bailout” contributes to a further process of destabilization of the financial architecture. It transfers large amounts of public money, at taxpayers expense, into the hands of private financiers. It leads to a spiraling public debt and an unprecedented centralization of banking power. Moreover, the bailout money is used by the financial giants to secure corporate acquisitions both in the financial sector and the real economy. In turn, this unprecedented concentration of financial power spearheads entire sectors of industry and the services economy into bankruptcy, leading to the layoff of tens of thousands of workers. The upper spheres of Wall Street overshadow the real economy. The accumulation of large amounts of money wealth by a handful of Wall Street conglomerates and their associated hedge funds is reinvested in the acquisition of real assets. Paper wealth is transformed into the ownership and control of real productive assets, including industry, services, natural resources, infrastructure, etc.

Collapse of Consumer Demand: The real economy is in crisis. The resulting increase in unemployment is conducive to a dramatic decline in consumer spending which in turn backlashes on the levels of production of goods and services. Exacerbated by neoliberal macro-economic policy, this downward spiral is cumulative, ultimately leading to an oversupply of commodities. Business enterprises cannot sell their products, because workers have been laid off. Consumers, namely working people, have been deprived of the purchasing power required to fuel economic growth. With their meager earnings, they cannot afford to acquire the goods produced. Overproduction Triggers a String of Bankruptcies: Inventories of unsold goods pile up. Eventually, production collapses; the supply of commodities declines through the closing down of production facilities, including manufacturing assembly plants. In the process of plant closure, more workers become unemployed. Thousands of bankrupt firms are driven off the economic landscape, leading to a slump in production. Mass poverty and a Worldwide decline in living standards is the result of low wages and mass unemployment. It is the outcome of a preexisting global cheap labor economy, largely characterized by low wage assembly plants in Third World countries. The current crisis extends the geographic contours of the cheap labor economy, leading to the impoverishment of large sectors of the population in the so-called developed countries (including the middle classes).

In the US, Canada and Western Europe, the entire industrial sector is potentially in jeopardy. We are dealing with a long-term process of economic and financial restructuring. In its earlier phase, starting in the 1980s during the Reagan Thatcher era, local and regional level enterprises, family farms and small businesses were displaced and destroyed. In turn, the merger and acquisition boom of the 1990s led to the concurrent consolidation of large corporate entities both in the real economy as well as in banking and financial services. In recent developments, however, the concentration of bank power has been at the expense of big business. What is distinct in this particular phase of the crisis, is the ability of the financial giants (through their overriding control over credit) not only to create havoc in the production of goods and services, but also to undermine and destroy large corporate entities of the real economy. Bankruptcies are occurring in all major sectors of activity: Manufacturing, telecoms, consumer retail outlets, shopping malls, airlines, hotels and tourism, not to mention real estate and the construction industry, victims of the subprime mortgage meltdown. General Motors has confirmed that “it could run out of cash within a few months, which could prompt one of the biggest bankruptcy filings in U.S. history”. (USNews.com, November 11, 2008)) In turn this would backlash on a string of related industries. Estimates of job losses in the US auto industry range from 30,000 to as much as 100,000.(Ibid This is just beginning1 Check the industries and how wide this will be

*As I keep saying relax, be prepared, stay together, hunker down, and ride this out. We can do it!

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global laughing at america

gloating at bush’s bailout

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what would $700 billion buy?

there’s a nice article that puts ideas out there at worldchanging:

“According to the United Nations, the entire debt for the entire continent of Africa was about $320 billion in 2003. Adjusting for inflation and further accumulated debt, let’s call it an even $350 billion.

You could install solar panels on 20 million American homes for $300 billion. (I’m ballparking a rather conservative $15k for full installation of enough solar infrastructure to fully power an average American house; the price would surely come down drastically at that scale.) By the way, 20 million houses is more than one-quarter of the entire stock of occupied detached houses in the U.S.”

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Leadership By Fire Drill

Like most of us, I learned about and participated in fire drills at a very early age, starting in primary grades, then continuing all through middle and high school, in the military, and in the work environment. Fire drills are important, they prepare us to react to a dangerous situation, to remove ourselves from harm’s way as safely and quickly quickly as possible. But fire drills do not prevent fires, nor do they guarantee to always protect us from sustaining casualties, nor do they extinguish fires. Fire drills are in essence an ad hoc response to an unplanned event, with temporary effect, minimizing but not always preventing casualties.

Common sense helps us to realize that in addition to fire drills, good management of fire protection involves fire prevention efforts, and effective fire suppression tools and tactics. Effective prevention includes knowledge of cause and effect coupled with appropriate proactive planning actions, effective suppression includes developing appropriate tactics to respond to individual and diverse situations, acquisition and training of effective manpower, acquisition and mastery of appropriate tools; taken together, this all adds up to effective strategic thinking by those charged with the responsibility to protect us from fires.

Over the course of the past seven plus years both the Bush administration and Congress (whether a Republican or democratic majority) have led our country through a series of fire drills, at varying degrees of success, but arguably, lacking in strategic thinking and action. Or have they? Has the strategy all along been to back the American people in to a corner through fear and intimidation garnered from natural events and human actions in order to consolidate power in to the office of the president, and perhaps more significantly consolidate the power and reach of corporate interests, who pull the strings of the Oval Office and both houses of Congress? All in service to the fulfillment of ever greater corporate greed.

The 1993 bombing of the World Trade Center should have been a wake-up call, and the intelligence about Al- Qaeda available to our government prior to the 9/11 attacks should have led to appropriate, proactive, strategic planning and action, instead government and civilian resources were left scrambling, in a catch-up effort at protecting the security of our nation in the intervening years. Then based upon fear and misinformation the Bush administration hoodwinked the country in to an invasion and start of a five year war in Iraq in which our military assets have been exhausted, been disabled from protecting us in other parts of the world, lead to needless casualties of Americans and Iraqis, and put future generations of American tax payers on the hook to the foreign nations that have loaned the money to the United States to conduct the folly that is the Iraq war. All the while enriching war profiteering corporations (Haliburton, Blackwater, KBR, et al).

In the midst of all of the damage done to our economy, to human life, to our reputation and influence in the world because of the Iraq war, our government has taken us through more fire drills:

The natural disaster that was hurricane Katrina and the bungled fire drill that followed, including the complete mismanagement of the situation by the local, state and federal government entities and in particular FEMA.

The fire drill that has followed 9/11 and the pursuit of the “war on terrorism” has resulted in the suspension of our constitutional protections, when prisoners of the United States have been denied the right of habeus corpus, and where, playing upon fear and claiming urgency the FISA rules were overridden and the government allowed to listen and read virtually all of our telecommunications at will. The Constitution has been discarded in this fire drill.

Now capping an era of uncontrolled corporate greed, an era in which many demanded less government oversight in to various facets of life in the United States (in the financial sector, in protection of the environment, in mine safety, in health care, etc.), an era in which government intervention in the form of sound regulation has been ridiculed and avoided, an era in which the government, corporations and individual American citizens pursuing short sighted, greedy financial gains, have resulted in the latest fire drill, with a claimed immediate need to inject as much as or more than $700 billion of our hard earned cash in to the financial system. In essence saying to those who put the country in to this situation, “OK, you screwed up, but we will bail your asses out, and let you go back to playing your games all over again”. The bailout bill as it seems to be presently constituted does little, if anything to address the root cause of the current financial disaster facing our country, it just, at best, restarts the economic cycle. It does not mandate any true change in behavior in the financial markets or in the conduct of business in the United States, it is simply just another fire drill, going through the motions of evacuating the financial industry principals, who through their playing with matches have started this conflagration, and evacuating them so they can play another day.

Is this really how we, as intelligent American people, as fathers and mothers responsible for providing a safe, nurturing environment compatible with a thriving life for our children want our society to operate, as one fire drill after another. With never an effort to embrace long term, strategic thinking, planning and actions. Never giving sufficient time, thought and effort towards building a better infrastructure, whether financial, medical, energy, transportation or telecommunications, to live safely and thrive in this county, but just constantly responding in a reactive, fire drill mode to the next crisis?

It is time that we, as American citizens, active in our role as owners of this society demand an end to governance by fire drill, time that we impose our will upon those who serve us in all governmental offices, whether elected or appointed, time that we say to the greedy, profit driven corporations and their lobbying agents that we have had enough of the fire drills, and that we demand more and smarter fire protection, that we demand fire suppression that serves not greedy corporation interests, but the greater good of all of the people.

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$700 Billion Buys What?

Hunter and Devilstower over at KOS seem to have the right questions that need answers in terms of the bailout.  My question is when will Congress come to the conclusion that it is the American people who they serve, not the corporate elite on Wall Street that have a stranglehold on our economy.

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The latest Email Scam

Hat tip to Snergly Bear for passing this along, the latest Nigerian Bushliburton scam to fleece the American public:

Date: 9/23/2008
Subject: Supper secret transaction Need you’re help

Bright Greetings Dear American:

I need to ask you to support an urgent secret business relationship
with a transfer of funds of great magnitude.

I am Ministry of Treasury of the Republic of America. My country
has had a crisis that has caused the need for a large transfer of
funds of 700 billion dollars US. If you would assist me in this
transfer, it would be most profitable to you.

I am working with renowned Mr. Phil Gram, lobbyist for UBS, who
will be my replacement as Ministry of Treasury in January. As a
Senator, you may know him as the leader of the American banking
deregulation movement in the 1990s. This transactin is 100% safe.

This is a matter of great urgency. We need a blank check. We need
the funds as quickly as possible. We cannot directly transfer these
funds in the names of our close friends because we are constantly
under surveillance. My family lawyer advised me that I should look
for reliable and trustworthy person who will act as a next of kin
so the funds can be transferred.

Please reply with all of your bank account, IRA and college fund
account numbers and those of your children and grandchildren to
wallstreetbailout@treasury.gov so that we transfer your
commission for this transaction. After I receive you’re information,
I will respond with detailed information about safeguards that will
be used to protect the funds.

Wonderful salutations to you cherish friend from Republic of America.
Yours Faithfully

Minister of Treasury Paulson

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The Bailout: Compounding Greedy Misbehavior

A hat tip to Jim Leff who passed along a link to an article by University of Chicago Professor Luigi Zingales on why Paulson is wrong with the bailout plan he is trying to foist on the American people.

The Paulson plan, at a cost of $700 billion to the taxpayers is nothing but a golden parachute for those greedy investment banking and fund managers who facilitated the disaster at hand.  Instead of holding these individuals and corporate entities responsible for their bad judgment, the Paulson plan let’s them off the hook, to be bailed out by all the rest of us.  Zingales lays out a more appropriate reManage All Categoriesmedy to the situtation:

When a profitable company is hit by a very large liability, as was the case in 1985 when Texaco lost a $12 billion court case against Pennzoil, the solution is not to have the government buy its assets at inflated prices – the solution is Chapter 11. In Chapter 11, companies with a solid underlying business generally swap debt for equity. The old equity holders are wiped out and the old debt claims are transformed into equity claims in the new entity which continues operating with a new capital structure. Alternatively, the debt holders can agree to trim the face value of debt in exchange for some warrants.

Even before Chapter 11, these procedures were the solutions adopted to deal with the large railroad bankruptcies at the turn of the twentieth century. So why is this well-established approach not used to solve the financial sectors current problems?

Zingales goes on to write that in the current situation Chapter 11 actions would be too time consuming, but he does suggest alternatives that Congress and the administration ought to consider.;

The Paulson plan is just another typical Bushliburton strategy of using scare tactics to force Congress and the American people to jump when Bush pulls the chain.  Do we really trust anything coming from Bushliburton anymore?   Allowing Henry Paulson (former CEO of Goldman Sachs) to push his plan through is in essence giving the fox the keys to the hen house.  Bushlliburton policies and management of the country have put us in this postion, and now as a final bad act of their administration, they will apply the Coup de Grâce to the taxpayers.

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