Saturday, August 18, 2007

The Real Welfare Queens

...London-based journalist William Bowles:

It should be obvious to all and sundry by now that capitalism is in dire straights. Last week’s meltdown of the world’s major capital markets was only ‘rescued’ by the injection of literally hundreds of billions of dollars from by the European Central Bank, the Bank of Japan and the US Federal Reserve.

So much for the magic of the ‘market’ which we are continuously told, solves all problems. And in fact, last week’s injection by the European Central bank of something like $100 billion dollars didn’t do the trick! More had to be ‘injected’ in order to stave off a total collapse of the world’s stock markets. The ‘injection’ is in reality a bail-out of the commercial banks.”

...“[A]dded to the sense of dread as investors have no idea which institutions own what debt, leaving the markets to be driven by rumor and counter-rumor. ‘There is great uncertainty as to how far risks are spread within the financial system and exactly where the losses reside,’ said Paul Niven, at F&C Asset Management. ‘The market is trading on fear.’ — (‘Central banks pour in billions - but global slide goes on’ — The Guardian, Saturday, 10 August 2007) Thus the real cause of the current panic is financial speculation caused by unrealistically cheap credit and almost no regulation of speculative markets…”

...That “entity we can’t even see,” in (Ethan) Miller’s words, has hit a big bump in the road and the “free enterprise for us” gang has turned, where else, but to the government to bail them out by lowering interest rates and pumping massive amounts of money into the system. The people who created the downturn are now lining up for subsidies so they can go out and buy “distressed properties” and restart the greed machine. Naturally, the Hedge Funds now want to profit on the misery they helped fund. Deals R’Us is still their mantra.

More here

Reagan Must Be Spinning In His Grave

The withdrawal of America from multinational agreements is not new. If anything, we've been at it for 25 years and more.

So one wonders what this is about?
The Bush administration is urging the U.S. Senate to ratify the Convention of the Law of the Sea. The treaty provides universal legal standards for shipping, fishing, and mining and codifies customary navigation and transit principles already followed by most states. Proponents of the convention, including President Bush, say it will enhance U.S. security on the high seas. But a number of conservative lawmakers remain concerned the treaty may harm U.S. industry and hinder counterterrorism efforts.
Fair enough, except that Ronald Reagan refused to endorse (meaning the Senate was never presented with) this treaty. He claimed that the seabed mining standards were unfair to America.

OK, fair enough. The standards were adjusted in 1994. Still, support for the treaty, particularly among Republicans, was tepid, even into the 21st century:
As former U.S. Ambassador to the UN Jeanne Kirkpatrick told the U.S. Senate in April 2004: “The formula for representation guaranteed that the industrialized ‘producer’ countries would be a permanent minority.”
So why is Bush hot to trot with this?

Here's why:For those of you still on dial-up...
In the next few hours, Russian scientists hope to dive in two mini-submarines to a depth of more than 4,000 metres, and drop a metal capsule carrying the Russian flag onto the seabed. Balyasnikov said the dive was to start this morning and last several hours. Each submarine will carry three people.

The symbolic gesture, along with geologic data being gathered by expedition scientists, is intended to prop up Moscow's claims to about 1.2 million square kilometres of the Arctic shelf, which, by some estimates, may contain about 9 billion tonnes of oil and gas deposits.
(emphasis added, and that's metric tons or about 20 billion imperial tons)

Ahhhhhhhhhhhhhhhh! Now I see, said the blind man, as he picked up his hammer and saw!

But there's still another piece to the puzzle. Currently, five nations have claim to the seabed under the North Pole: Russia, Canada, Denmark (by way of a ridge that runs to Greenland), and Norway. And the US. But the US claim is unenforceable because we never signed the Law Of The Sea treaty!

Disgusting little man, isn't he?

Friday, August 17, 2007

Friday Music Blogging

The one, the only Busboys - The Boys Are Back In Town

Watch out, Bonaire! Here I come!

Te aworo! See you in a week or so, I'm leaving you in the capable hands of my co-blogger, Katrina...

Friday Kitten Blogging

Some'in es goin' on...Dadby has all dese bags lyin' round da houze...

Nobody Asked Me, But...

1) Could you ever have imagined that K-Fed might be a better parent than Brittney?

2) Of course, naturally, I have a solution: put the kids in foster care. Michael Jackson's got time on his hands...

3) Enough celeb crap. I'm a knight! I never get invited to the cool castle seiges!

4) One more reason sanctions against Cuba should be lifted. My God, she's a widow AND an American!

5) Could you spare a moment of sympathy for Hawaii? I know it's Hawaii and all, and so the envy of the world, earthquake AND hurricane on the same day is no fun.

6) This says it best:

7) Last week it was floods. This week, Mother Nature shook things up a bit.

8) And storms. Don't forget storms!

9) Money changes everything?

10) Hm. This combines my two favorite activities...looks like I can extend my athletic career after all!

11) This is really scary. Family Security Matters is a wing of the Center For Security Policy, an uber-neo-con think tank that boasts of Dick Cheney as a former board member. It's so far out that FSM took it down when a hue and cry was raised about making Bush President For Life, but that's the least scary part!

Thursday, August 16, 2007

Not That This Was Unexpected, But...

...yer an idiot, Paulson:
TOKYO (Reuters) - U.S. Treasury Secretary Henry Paulson said the turmoil in global markets will "extract a penalty" on growth but the financial system and economy was strong enough to withstand it without provoking a U.S. recession.

"The economy and the markets are strong enough to absorb the losses," Paulson told the Wall Street Journal in an interview published on its Web site on Thursday.

Paulson also said the repricing of risk in markets should not surprise anyone and was inevitable, and that nothing should be done to guarantee market players against losses or restrain them from taking risks.
All this article really needs is a video of someone whistling past the graveyard. Or maybe this:So many reasons Paulson is an ass here, so little bandwidth.

First, he has a point: easy credit is no different than any other economic bubble and economic bubbles burst. Period. But here's the thing: this was a bubble the Fed could have AND SHOULD HAVE done something about years ago.

I find it hard to believe that Alan Greenspan (and now Ben Bernake) don't watch TV from time to time. Hell, you can't turn on the TV but for coming across and ad for or Countrywide Home Loans, advertising "No money down, no principal payment" loans at rates that make the prime interest rate look like a high-yield bond. Did it not occur to them, the way it occurred to me, that there might be something wrong in an economy where it's worthwhile for a predatory lender to run commercials hawking a dangerous financial product 24/7? So you bump up interest rates a bit, and you save a few people from making the biggest mistake of their lives.

You know, Alan, Ben, and now Hank, it's OK to do a little thinking about work while you're away from the office. Most of us have to do that, from time to time.

And now here's ol' Hank talking up the economy, you know, don't worry, everything's going to be fine, as the Fed pumps $50 billion dollars into the monetary system to shore up the credit markets.

OK, so a basic economic lesson here: when a government is forced to pump that kind of money into the system, where does it come from, in a nation running hundreds of billions in deficit spending each year?

Here's a hint: It ain't from a savings account.

There are two ways for the Fed to get their hands on that kind of dough that quickly: borrow it (meaning it will have to be paid back and then the question is, from whom was it borrowed?) or print it.

If it's just printed, then simple supply and demand will tell you what happens to the value of the dollar in your pocket: more supply lowers the "price" of that good, so by extension (and yea, I know, the analogy has holes in it, but it fits the argument more clearly than a real analysis), more money drives the value of your dollars down, meaning it will take more money to buy something.

In other words, inflation. Which the Fed tames by raising interest rates, thus stifling the demand for money.

If the money has been borrowed (ignoring for a moment from whom, tho I have my suspicions), then all this does is shift the risk off the original badder debts from the lenders (rapacious bankers and sub-prime mortgage companies) to, well, us.

In effect, the money the Fed has pumped into the credit markets is a guarantee that the government will stand behind the loans out there already (although not all of them, to be sure...I doubt we can get our mitts on something like $7 trillion to finance all the mortgages out there), meaning the ultimate responsibility for repaying this money isn't on the lenders, but on the guarantors, and since the Fed has authority but no responsibility, that privilege falls on our shoulders.

Where has this money come from?

Well, the make-up of the Fed is a bunch of money center banks, like say Citibank, Chase, Bank of America, who created and run the Federal Reserve System. No one knows for sure who precisely is on the Fed board, but these three are a safe bet.

These money center banks, which also sit on the central bank boards of nearly every other major nation in the world as well as the World Bank, would have the resources to finance, short term and at a rate of return commensurate with the critical nature of the emergency (in other words, usury) the hundreds of billions of dollars needed to stem the global economic collapse that is threatening the world.

As I said, for a price. They get us coming and going here, because who do you think funds the money to the mortgage markets to lend to people like you and me at attractive rates to pay off the credit cards (that they've issued) to try to get solvent by borrowing off our salaries in perpetuity? And now who's funding the bailout of those same sickening loans?

All this, so we could buy a new computer. Or car. Or second home.

So why is Paulson an idiot? He's bluffing, of course, and it's not a particularly good bluff this time. He sees (or he should) what should be evident to anyone after reading this far down: there's an enormous risk involved in the game the central bank is playing.

All it takes is one of the members to say "basta!" and the house of cards falls, forever. You've heard stories about The Great Depression, but you might (and I think you will) be living through something far worse in the very near future. And mind you, we were able to grow out of the Great Depression only by getting our asses into a world war, something we can't afford to do right now, because we've exhausted our financial and materiel supplies on this ill-starred and ill-fated invasion of Iraq, along with the more justifiable but still tragic war in Afghanistan.

Many of the 25%ers, the folks who still support George W Bush thru thick and thin, believe an apt comparison can be made to Harry Truman. It's clear from reading this, they're two Presidents too close.

Wednesday, August 15, 2007

Hump Day Comedy Blogging

In Living Color - Men On Fitness

Two snaps up in a Z formation, girl!

Texas Oilman Commits Treason

This is really disgusting. If this man had been a liberal, he'd have been strung up for what he did. More on the flip:
Houston oilman Oscar Wyatt is trying to ensure that a jury doesn't see an Iraqi document suggesting he discussed American troop levels and possible dates for an attack with a member of Saddam Hussein's regime prior to the U.S.-led invasion of Iraq.

Wyatt, 83, is slated to stand trial Sept. 5 on charges that he and others funneled millions of dollars in illegal payments to Saddam's government in order to win lucrative oil export contracts.

His attorneys are asking a federal judge in New York to prohibit prosecutors from presenting as evidence handwritten notes purportedly made by an Iraqi oil official, which suggest Wyatt conveyed information about when the United States might begin bombing, when ground forces would be sent in and how many soldiers would be deployed.
His lawyer claims none of the discussions were of confidential matters and that release of the notes would tend to prejudice a jury.

Still, one wonders where the prattling purveyors of purity are on this? A businessman, involved in an illegal transaction with an enemy nation, discussing troop movements and strengths ahead of an invasion to liberate said nation from the grip of evil?

Oscar Wyatt, along with Bayoil executives David B Chalmers and Ludmil Dionissiev, is charged with fraud and conspiracy, but not treason, in connection with illegal transactions under the UN "oil for food" program in 2003. Under that program, Saddam Hussein was allowed to "sell" oil to companies (other than US companies) in exchange for staples like food, clothing and other necessities. The intent was that no money could trade hands, so that Saddam could not profit from these deals.

As these things always go, some palms were greased and some other negotiations took place, such that Saddam indeed made out handsomely.

So nevermind about discussing troop movements, these guys committed treason from the get-go.

Yet, not a peep out of the right wing noise machine. And if you recall, a LOT of hay was made about how France and Russia were the major players in the scandal, and how then-UN Secretary General Kofi Annan's son was behind it all.

Eh...not so much, it turns out!

So why would two dumb hicks from the sticks warrant such a large distraction, drumming up lies about Kofi Annan and Russia and France?

Here's one reason. Here's the other, although to his credit (or debit), Wyatt and his father seem to have spread out their contributions amongst both parties. And here's a third.

But notice something: no man gave to any Presidential campaigns, even though all are obviously politically active, tend towards more conservative candidates and, critically, all are Houston-based oilmen!

Why, what magic! They didn't give to Bush-Cheney, '00 or '04????

Not likely, I'm sure. But it would take a lot more digging than I have either the time or resources to pursue.

The real question is, who fed them this troop information, which I recall was scrupulously NOT discussed on the major television networks in the run-up to the war, for fear of revealing, well, troop movements and deployments?

Hmmmmmmmmmmmmmmmmmmmmmm...pardon me, I need to sneeze...Dick Cheney.

There, that's better!

Tuesday, August 14, 2007

Rove'd And Rambled

I came across this little bit of news analysis from the Canadian Broadcasting Co's website. Read a bit of it. I'll meet you on the flip:
Karl Rove had no real expertise in foreign or domestic policy, but he knew how many votes it would take to win an election and, just as importantly, he knew what his Republican voters needed to hear to get them out to the polls.

He was not content simply to get George W. Bush into the White House. He wanted to turn the Republican party into a political force that would dominate the executive, legislative and judicial branches of government for a generation.

He believed he could do that with a Republican base made up of social conservatives, the Christian right and supporters of lower taxes, small government and a muscular foreign policy. The entire policy thrust of the Bush/Rove White House was directed at keeping those people happy and motivated.

At the same time, Rove could do the math. He understood that his Republican base was too narrow to ever make up a majority of American voters. He knew that most American voters were politically indifferent, waiting to be given a reason to get excited.

Enthusiasm is catchy. Neighbours influence neighbours. Energize your base, whip them into a frenzy of political activity, get them to donate their time and money to the cause, and others would follow in their wake. As George W. Bush demonstrated in both 2000 and 2004, you don't have to win by much to occupy the White House, you just have to win.

As for the other half of the country — the so-called blue states in the red-blue carve-up of the nation's interests — well, Karl Rove had little time for them. Other administrations may have tried to reach out to their political opponents, to build a big and welcoming tent as the saying goes. Uniting the country was generally seen to be a goal worth pursuing.

But Karl Rove had no illusions about attracting Democrats and left-leaning independents to his side. So why bother trying?

That way, if you don't care about reaching out to people on the other side of the political divide, and if your priority is winning elections, no matter how narrowly, then there is really nothing standing in the way of practising politics with the gloves off.
Much has been made in Blogtopia (© Skippy, the Bush Kangaroo) of the politics of the current crop of Democratic contenders and how they should be more vicious, going after Republicans more rather than talking about "inclusion" and "bi-partisanship".

Reading this, you begin to get a sense as to why the Democrats have backed away, somewhat, from those tactics (they did use the moral scandals of the GOP in 2006 to great benefit).

There's a strategy at work here, and one suspects the long term goal is to create a Democratic dynasty. Rove was onto something in that the country is ripe for one party to dominate the political landscape for a long time. It's just a sense I get that there's a brass ring just around the corner to grab.

Rove was successful at politics of division, that no one can or will deny. The question is, what did it cost the party and the American people, that he beat up on Ann Richards, John McCain, Al Gore, Max Cleland, and John Kerry so viciously?

A lot. And the 2006 elections showed, I think, just the first thrust of the backlash, which will be long and brutal for the GOP. Why?

Because if you're going to demonize the other guy, you'd better damned well make sure you're a saint. From before September 11, when Bush's poll numbers were floundering in the low 40s, through Katrina, the Scooter Libby indictments, Katrina, and mostly, the Iraq debacle, Rove has been unable to get this administration to prove its mettle just when Rove needed it most. For his dream of a Republican dynasty to take shape, he would have needed the perfect President.

What he had was the perfect candidate: malleable, affable, and idiotic. Simple, which for American voters translated into safe.

You really can fool all of the people some of the time, in other words. Bush could not actually run the country, and the people around him were too busy suckling at the teat of the administration to pay attention to Rove's political vision.

If this sounds like a paean to Rove, to a point it is. As a political junkie, he took a bushel of lemons and made a yellow liquid that could have been lemonade, but for the fact it wasn't. He paid attention to about 25% of the American people and made them feel like they were in charge.

Which explains the deep feelings some in the blogosphere feel for this administration, despite the fact that it will go down in history as the single biggest disaster to befall this nation since the British invasion of 1812. Buyer's remorse doesn't apply, because they didn't buy Bush, they sold him, and that creates an even deeper attachment. Ask any salesman.

We liberals owe Rove a debt of gratitude as well. See, Rove is like a forest fire in an old growth forest: he's burned up the little weeds and twigs at the roots, but never really got hot enough to take out the entire forest. All he's done is given us more nutrients to live off.

For nearly thirty years, liberals have watched as the progressive agenda-- an agenda of tolerance, of equality, of taking care to make sure everyone benefits from the bounty that is this land-- had been whittled away, a slice here, a sliver there.

Rove took an axe to it.

Already, massive grass roots movements have sprung up in response to the "frenzy of political activity" Rove created in the 25%. And those movements will march forward, slowly at first, but in greater numbers, and more strongly. 25% of the nation couldn't possibly hold back the tide of change. It will come. It is coming, and thanks to Rove, it will be more progressive and more liberal than ever before.

And the seeds of his failures are very apparent:
Rove's relentlessly polarizing tactics and his over-the-top use of government power for political purposes, critics say, were bound to wear out their welcome with a fundamentally pragmatic and moderate electorate.

"Karl will always be known as a brilliant political operative who has a great tactical sense," said Tony Fabrizio, a Republican pollster, "but tactics only get you so far. Did they change politics forever? No."

Fabrizio asked: "At the end of the day, is the party better off today than it was when it was taken over six or seven years ago?" He believes Rove's strategy has alienated middle-of-the-road voters and left the party in worse shape.

How Rove's approach could misfire in the evolving political climate was illustrated when Bush, after his reelection, sought converts to the GOP cause by pushing to create private investment accounts in the Social Security system.

In the Rove playbook, the proposal -- with its call for a new "ownership society" -- would attract younger voters distrustful of government and fearful that Washington would not deliver on promised retirement benefits.

The campaign failed. Democrats charged that Bush and the Republicans would weaken or destroy the whole Social Security program.

Rove also played a major role in advocating an immigration-law overhaul that would have offered some illegal immigrants a way to become citizens and would have tightened border security. Hard-line congressional Republicans deserted the White House on the bipartisan effort, which had embodied many of Rove's ideas.
There's much more to come. The long national nightmare is over.

Or to put it more succinctly,

Monday, August 13, 2007

Red Rover, Come Over

Obviously, the big story of the day is Karl Rove leaving the White House in a rush at the end of this month.

Much speculation will center on why:
"I just think it's time," Rove, 56, said in an interview with the Wall Street Journal published on Monday.

"There's always something that can keep you here and, as much as I'd like to be here, I've got to do this for the sake of my family."
Hm. The stock political excuse, and it covers all manners of sins. For some, it's covered a pending indictment. For others, it's covered internal clashes with others in the White House, which one has lost. To save face, one claims a family matter, and leaves graciously.

We can hope for the first, but I seriously doubt it's the latter. Rove has too much sway with Bush, having guided his political career for fifteen years straight to the Presidency.

Speculation is that he had a contempt of Congress charge hanging over his head. Leaving the White House takes away any executive privilege cover, and of course, he would now be subject to prison time for refusing to testify.

So not a likely reason.

The real clue is this:
Rove finally decided to leave after Joshua Bolten, the White House chief of staff, told senior aides that if they remained past early September, they would be obliged to stay until the end of Bush's second and final term in January 2009, the paper said.
Ah. There we are.

Rove intends to get back into the fight with another candidate. After all, why not run out the clock? Yes, he has a son heading to what? The last time I checked, the last thing a father has to do is be around for a college kid. By that point, they're either going to swim or sink on their own.

What clues can we look for to confirm this suspicion? Well, Rove and Karen Hughes were integral parts of Bush's 2000 campaign, and while Hughes left the White House (to return in 2005 as an Undersecretary of State in charge of burnishing the US image abroad, something she's fucked up worse than before she got involved), she's been very quiet for two years now.

Indeed, about the only news from State regarding Hughes has been the resignation of media affairs director Floyd Price, who quit after 17 years at State because he believed the Bush administration had so screwed up foreign relations that it would require a new President to get any glimmer of respectability back in the world's eyes, partly because he felt Hughes had approached it from the wrong angle.

You'd have to think that Hughes will be announcing her resignation shortly. Should that come, you'd have in place the strategy and communications team that very effective vaulted Dubya from a crappy governor of a middling state (in administrative terms) to the Presidency (no matter how obtained).

So who hires them? McCain? Old news. Giuliani? Possibly, but Rudy has this need to be the focus of attention and center of the universe, large and in charge of everything. I don't think he could cede the kind of dirty work that Rove is known for to him. He wouldn't trust him.

Which really only leaves Mitt Romney. And I think the fit is good. Mitt is a slightly more polished version of Dubya, all Ivy League, Massachussetts, coiffed and burnished. All it really requires is a little adjustment in the playbook, and Rove could make Mitt more than a viable candidate.

It's early enough in the process that Rove could even be pondering taking up Fred Thompson nascent campaign, but the fund raising difficultiues Thompson has demonstrated seem to tell me that his run is a non-starter. Just a sense I get, nothing more than that.

At 56, he's young enough to do this for at least two more campaigns, and his ego is big enough that I think he wants to prove it was him and not Bush who won the White House.

It will be interesting.

Sunday, August 12, 2007

Money. Money, Money, Money Moneyyyyyy!

Sorry, gang, it's Sunday, I know, and hardly the day you want to think about mooney and markets and economics...hell, my hangover has me hating writing this more than you hate reading it.

But it's important:
Global central banks, including the European Central Bank and the Bank of Japan, added more than $300 billion of extra cash to the banking system over the last 48 hours to stabilize credit markets.

"Central banks like the Fed and ECB are adding liquidity, and that has done a lot to calm the markets," said Rafael Martorell, chief dealer at BNP Paribas in New York.

That helped U.S. stocks recover from an early plunge, sending currency traders rushing to sell their newly acquired yen.

Recently, the Japanese currency has slipped when equity markets rose because investors could borrow in low-yielding yen to finance purchases of other risky assets. When stocks slid, the yen firmed as investors unwound those carry trades and bought back yen.
The Dow was down nearly two hundred points Friday morning, even after the Fed injected $19 billion. When that barely bumped it up to a hundred point loss, the Fed funneled another $16 billion. That made the markets go into positive ground, briefly, and it took an additional $3 billion to keep them about flat for the day.

$38 billion. About the cost of the Iraq invasion for a month and a half.

Shove it, Bush, seriously. This isn't the only news of the week that should be deeply tied (literally) to Bush's psychotic obsession with warmongering. The heavy price we've paid to secure perhaps ten percent of the known oil reserves could have basically bought us 25% of them without any military intervention whatsoever. Oh, but then there's the Republican obsession with not signing international treaties to contend with, but let's face facts: a trillion dollars buys a lot of goodwill.

Back to the stock markets. The Fed will have exhausted its ability to intervene in the markets probably by Wednesday. My guess is Bernake spent much of the weekend on the phone with the banks who control the Federal Reserve with his hat in hand, trying to find bail out money. All it will take is one banker to say no, and the entire house of cards collapses by Tuesday.

Why is this happening?

Two words: housing woes. Last year, 46% of home sales returned to the seller less than five percent equity. Since most mortgage require at least that much in a down payment, 46% of Americans either lost money or barely got back their down payment in selling a house.

I'd estimate maybe another 30% got back between 5 and 10% in equity, so about 3/4 of Americans who sold a house last year broke even. Maybe. It might be much much higher.

People have financed this recent economic growth, as feeble as its been, on their credit cards and home equity loans. Now, there will be no more home equity loans and credit card growth.

And you know who will be bailed out? Not the home owners, but the banks, who will keep lending money faster and faster and just get deeper and deeper in debt. Meanwhile, watch as people try to file bankruptcy only to find out that they can't, that they'll have to pay back each and every penny they borrowed...