BETRAYAL

Is Obama counting on the fact that a bankruptcy judge can abrogate GM's contracts with its unions? Or is that just an unfortunate side effect of his policy?

What IS his policy, anyway?

What he's said is that GM has to restructure or it doesn't get any more bailout cash. If it doesn't, it goes to bankruptcy. What the hell is he doing, and why is he doing it? Why is it his business to restructure GM? (All he really HAS to do is to bail them out or not.) And what is the purpose of the restructuring?

If his goal is to make GM a leaner, meaner, more efficient company, he's doing the work of a corporate raider. Why should the public care if GM is lean and mean? That's only a concern to the markets and share- and bondholders. All the public cares about is if GM makes decent cars.

I hate to say it, but this regime is getting dangerous. They are now engaged in the business of trashing the union in order to bolster the attractiveness of GM to financial circles. The evidence is mounting daily that this is a Wall Street administration. And a betrayal of, at least, me.

ASTOUNDING

The New York Times reports astounding news out of Iraq (a little hyperbole there): al Qaeda and former Baathists are linking up for insurrection.

Why is this surprising? It's actually not. Although when Saddam was alive the Baath Party was secular and hated al Qaeda (and vice versa), al Qaeda and Baath are both Sunni, and the government primarily Shi'a. This is preparation for the war - if there are enough combatants - which was always going to come when we pulled out. And it's a good move for Baath, most of whose members are not really interested in becoming suicide bombers. They get the benefit of al Qaeda, but not the risk. 

At least not now. If by some chance this insurgency should succeed at taking the government back from the Shi'a, you can bet al Qaeda and Baathists will turn on each other. But right now the enemy of my enemy is my friend.

This should not, by the way, retard the US pullout - because it is going to happen no matter when we leave. Ultimately it will sort itself out, as it has before - although the result is likely to be continued Shi'a control, making a former enemy of Iran into a friend. But that's another story.

Netanyahu To Obama: Stop Iran, Or I Will

Netanyahu To Obama: Stop Iran, Or I Will

Unemployment Olympics: Out-Of-Work Compete in Phone Toss, Boss Pinning (PHOTOS)

Unemployment Olympics: Out-Of-Work Compete in Phone Toss, Boss Pinning (PHOTOS)

In '68 they would have taken possession of the Stock Exchange. This is pathetic.

TARP Watchdog: "We Do Not Seem To Be A Priority For The Treasury Department"

TARP Watchdog: "We Do Not Seem To Be A Priority For The Treasury Department"

Congress Wants AIG Mole's Documents

Congress Wants AIG Mole's Documents

Nominee For Treasury’s Number Two Helped Draft Legislation Deregulating Banks | The Plum Line

Nominee For Treasury’s Number Two Helped Draft Legislation Deregulating Banks | The Plum Line

Taliban Leader: We're Planning Attack On D.C. "Soon"

Taliban Leader: We're Planning Attack On D.C. "Soon"

WHAT TO DO?

TRUST NO ONE. TRUST NO ONE. TRUST NO ONE. TRUST NO ONE. TRUST NO ONE. TRUST NO ONE. TRUST NO ONE.

Israel Drops Gaza Probe, Calls Claims Hearsay

Israel Drops Gaza Probe, Calls Claims Hearsay

Henry Blodget: The Question Tim Geithner Refuses To Answer

Henry Blodget: The Question Tim Geithner Refuses To Answer

David Sirota: Why Not Bank CEOs?

David Sirota: Why Not Bank CEOs?

Jeffrey Feldman: Fear and Anger in Michigan

Jeffrey Feldman: Fear and Anger in Michigan

IMF BEHAVIOR

So Obama tells GM they get no bailout unless they seriously restructure. He throws out their CEO and demands new faces on their board. Among the things he is requiring is that GM get tougher with the unions. What the hell is going on here?

This is IMF behavior right here in the US - Chicago School tough guy stuff. Ok, Obama's from Chicago, but he didn't tell us he took Milton Friedman seminars.

The market didn't like seeing the government running roughshod over a company. I don't like Obama busting unions. I could tolerate this if he did the same with the banks. He now has demonstrated that it can be done. I just really don't like the selectivity as to where he's doing it.

When Press Secretary Gibbs, as Sam Stein put it, was "pressed repeatedly to explain why Wagoner was told to go but bank CEOs were not -- or, for that matter, why labor contracts for auto-workers were reworked when it was deemed illegal to revamp bonus contracts for AIG execs -- he declared a "hesitancy" to "look at every entity the same way." Earlier, when he was asked if Wagoner's departure would serve as a warning to the CEOs of bailed-out banks -- that poor performance with taxpayer funds could result in the loss of a job no matter the industry -- Gibbs refused to be nailed down once again. The Wall Street Journal reported that the administration had considered removing Citibank CEO Vikram Pandit, but demurred, in part because of the paucity of candidates to replace him. Oh yeah? Who do they have in mind to replace Wagoner?

The WSJ also quoted Rep. Thaddeus McCotter (R., Mich.) as follows: "When will the Wall Street CEOs receiving [bailout] funds summon the honor to resign? Will this White House ever bother to raise the issue? I doubt it." McCotter, of course, has an axe to grind. But I bet he's right.

Houston, we have a problem.

Rick Wagoner, GM CEO, Will Step Down

Rick Wagoner, GM CEO, Will Step Down

This is a political and PR triumph for Obama. It will make it much easier to bail out GM. What we don't know, though, is whether it was necessary - other than as a political facilitator - to get rid of Wagoner to put GM on the right track. I'd like to hear much more about what Wagoner did and didn't do at GM. Otherwise, I'll have to consider him a sacrificial lamb - the guy who was in the wrong place at the wrong time.

PERHAPS

Maher, Olbermann, Maddow - their shows are getting weak. With the Democrats in power, the issues they have to talk about are so much less earth-shaking than whether or not Cheney was a lying dog.

Olbermann is trying to save himself by continuing his attacks on Fox News - but once you realize how insane Fox is, do you really want Olbermann to force you to listen to it?

As for Maher, matters are too serious - and the level of Republican buffoonery has gone from funny to dangerous. He's got nothing to laugh about.

The problem for all of them, I guess, is that liberals are not particularly interested in demonizing the opposition now that the opposition is out (other than bringing Bushies to trial, which is not quite the same thing. They still hate Bush, but hating John Boehner seems like a waste of energy.) People who watch Olbermann and Maddow are pretty well informed; sometimes they watch to learn, but more often to have their own views confirmed. Their views have been confirmed for a long time now. They just don't hate Republicans enough to need to keep hearing the same old stuff. They're busy focused on issues. They'd rather ignore the GOP - as would I.

Fox never had that problem - they continue demonizing whether their guys are in power or not. For Fox, it's an ideological jihad. It doesn't end until liberals no longer walk the earth. Liberals aren't feeling that way about conservatives these days. Perhaps, since politics is cyclical, they should. If they hate you and you don't hate back, you're cruisin' for a bruisin' a few years down the road.

GETTING THERE

I think Obama's wrong. Outsourced jobs could come back.

With unemployment nearing 10% and the likelihood of corporate rehiring slim in the near term, we've got the workforce to compete with China. Corporations could actually save money using them, since they wouldn't be paying for shipping their stuff half way around the world and then shipping it back here, which has been their biggest market. And they can put all the workers in New Orleans, where it's cheaper to live.

This is the best argument against card check: don't join a union so we don't have to send your job to Guangdong province.

America is not quite third world, since we have a higher percentage of people earning a decent living.

But we're getting there.

Mary Mapes: The Evolution of Texas

How long have I been saying that madness comes out of Texas?

Mary Mapes: The Evolution of Texas

Huffington Post Launches Investigative Journalism Venture

Want to know the answer to all the concern about where we're going to get responsible paid journalism if we let the newspapers go down? Here's the initial paradigm.

Huffington Post Launches Investigative Journalism Venture

TO REMEMBER

The Passover holiday exists, they say, so that Jews will not forget that they were once slaves in Egypt. (Unfortunately, the holiday, for many Jews, has turned into a self-congratulatory one: look how far we've come from slavery! I think, however, the intention behind the holiday was to remind Jews of their humble origins and of those who remain in their former situation. That one don't get through, though, particularly here in Palm Beach. It would be nice, too, if Passover reminded people that giving lots of money to charity is like buying the Pope's indulgence; it doesn't substitute for really giving a shit about others - particularly when you're giving the dough so something gets named after you and so you can get into Bernie Madoff's fund.)

Well, that took me far afield. What I was going to say was that there should be a yearly holiday for reading Frank Rich's "The Greatest Story Ever Sold." It's all old news now, but it's written so well and it puts things together so beautifully that it needs to be reread once a year, so we remember what can happen when we don't pay attention.

I was just listening to the book, and Rich reminded me of Katrina. I remember, back then, the press was saying that America had suddenly remembered the poor and was feeling pretty badly for them about then. Obviously, the bankers didn't get the message then, and they still don't have it now - which, considering that the poor as bankers define them are everyone who isn't making millions a year, is pretty all-encompassing. Empathy for others not like you is a lost art around here. Until he fixes that (somehow), I don't care what Obama does, it isn't going to turn America into a shining city on a hill. Unless it's Reagan's shining city, which already exists - a temple surrounded lower down by refuse dumps.

Annals of National Security: Syria Calling: Reporting & Essays: The New Yorker

Annals of National Security: Syria Calling: Reporting & Essays: The New Yorker

IT'S GOING TO MATTER

Wyoming has the country's lowest unemployment rate, at 3.9%. Why?

I suspect in part because Wyoming is a bastion of rugged individualism. Probably a large percentage work for themselves. I also suspect you can't run a ranch without people. Finally, I suspect that if there's only one of each kind of store within a hundred miles, too much competition is not going to wreck jobs. They need people to do the jobs they provide. They're too small to have excess capacity.

Well, most of that can't be applied in larger states. Except, of course, rugged individualism. So let's suppose everyone who's been laid off by Circuit City decides they're going to employ themselves. We can't expect a high percentage of them to come up with brilliant business plans. They could decide to be plumbers, or carpenters.

So, as a result, we will  have a lot more plumbers and carpenters than we actually need. Competition gets fierce among plumbers and carpenters, and all of them earn less than they did before. This is no joke - I've seen it among lawyers. They flood the market with themselves and drag everybody down.

The solution to this problem used to be corporate employment. (The other thing corporate employment did was encourage socialization. If everyone's out there on their own, we've got anomie.) But there's no reason to trust that anymore. So how do you solve this problem? I don't know. But I think it's going to matter before too long.

SCALE

I'm sure they're pleased at Fox News, whose ratings - and particularly O'Reilly's - have skyrocketed since Obama was elected, averaging 2.73 million prime-time viewers in March as opposed to MSNBC's 1.16 million and CNN's 1.14 million. But we need to put all this in perspective.

There are 300,000,000 Americans. 100,000 copies sold makes a book a blockbuster. A record which sells 1,000,000 goes platinum. On its own, the book has reached .003% of Americans, the record .3%, Fox .9%. What's to get excited about numbers like that?

It's the chattering classes that read the books, listen to the records, watch cable news. And since the chattering classes chatter, you hear a lot about Fox - that is, if you're a chatterer yourself. Otherwise, you probably don't have a clue what they do - or, if you have a clue, you don't give a damn. So if you're angry at Fox, or MSNBC, all you're doing is declaring your own importance, your tuned-in-ness, your access for God's sake, as if you had to do or be anything to listen to Fox other than turning the TV on and remoting the right channel.

Admittedly, if Fox got 2.73 million people to join up for armed insurrection, I'd be a lot more concerned about their viewership - that would be one hell of a military. Otherwise, people, calm down. We don't have to be concerned that the country's full of madmen. We just have to watch about .9%

Critics Call Freedom Tower Name Change Unpatriotic

Critics Call Freedom Tower Name Change Unpatriotic

This is what people are wasting good brain time on?

AFGHANISTAN

Obama's plan, he says, is to train Afghanistan's army. But is there such a thing, really? I doubt it.

Afghan fighting forces are tribal, or, even smaller, clans. Who makes up the Afghan army can vary from day to day, depending on the current objective. Obama says he isn't into nation building there, but to have a national army you have to have a nation. On this course, there's no way he can avoid nation building. And it probably wouldn't work.

He says the objective is to eliminate al Qaeda, or at least to prevent them from using Afghanistan and Pakistan. There's an easier way to do that than nation building.

What it most requires is excellent intelligence coming out of those countries. He can put Americans on the ground for that purpose, or he can buy locals. Knowing what's coming makes it easier to hit. And we have plenty of ways to hit it.

So that's where the money and the effort should go. Forget about fighting the Taliban. That's the Afghan's business. If they want to fight the Taliban, they know how. Target al Qaeda wherever it is - and have an understanding with Afghanistan and Pakistan that that is what we're going to do. If they don't like it, sorry. They could have done it themselves.

One word of warning: if al Qaeda gets the idea that after all these years we are finally trying to wipe them out, they will strike in the US, if they can. So Obama had better set up Americans to understand and accept that risk.

[Posted with iBlogger from my iPhone]

PAT ON THE BACK

Looks like I got it right again. All the numbers are up except employment. We're going to have a recovery which seals job losses in cement.

This is not a surprise. Outsourcing, wage stagnation and corporate slim-downs have been the trend for over 20 years. Obama's push for education improvement is a not so tacit admission that low end jobs ain't coming back. It's also a not so tacit recognition that a large and permanently unemployable underclass could be dangerous.

I admit it's unlikely that these people will ever understand what's happened to them. But some day they might, and God help America then.

[Posted with iBlogger from my iPhone]

JUSTICE

I want to clarify something - for myself.

To the extent that big financial industry payouts come from making rich people richer - or even making them poorer, as recently - I have no problem with them. If the rich want to take risks, why shouldn't they? As a matter of fact, I don't have much sympathy even with many Madoff victims. Although they may have lost even all of their cash, they still have their houses, their Picassos, their Bentleys. With just those they can live a comfortable life - not what they're used to, perhaps, but more than what 99% of Americans are used to. Under other circumstances, they'd be the first to tell you life isn't fair.

Some Madoff victims are completely wiped out. They say they're now greeters at Walmart. For them, I do have sympathy - except for this: they had it really good for a while. Nothing lasts forever.

But to the extent that big financial payouts come from fleecing average folks, I am enraged. The argument can be made that those who bought big houses with bad mortgages knew what they were getting into, and share responsibility. But let's talk about credit cards.

I will bet that when most people went into debt, it was when credit card rates were around 3%. Now of course no one ever told them that the rate would stay that way - but then other than in very fine print, no one ever told them that they wouldn't. (Actually, they were often told that a particular rate would stay in effect on a particular transaction until it was paid off. That was the inducement for balance transfers. They're still saying the same thing - but nobody believes them, because no one has ever held the banks to their advertising promises.)

Americans were being pressured to spend on many fronts: Bush told them it was their political duty, but worse than that, the huge sums going to the rich raised all expectations. The middle class has always sought what the rich have, and in many cases gotten it, either through a rise in their own worth or the reduction of the price of things the rich have. But when there's so much money at the top, the cost of those things goes up, not down, because the market will pay. And those who were trying to keep up used their credit cards to do it.

And then, when as a result of their own schemes profits of financiers fell because stock prices were dropping and corporate profits too, the finance industry started raising rates on credit cards - in some cases to 30% and for no reason related to real non-compliance by the borrowers. That's a pre-condition for revolution - and I'm still surprised we haven't seen one yet.

There used to be legal limits on credit card interest. There aren't now. They should come back. They used to be around 8%. I'd settle for 10. Considering that the banks are paying 2-3% for depositors' money, isn't a spread of 8% enough? How many billions does one person need? How many does a family of four need? You'd think the idea was to guarantee the wealth of their offspring down to the 50th generation, but it isn't. The idea is to get as much as you can. Even if you can't spend it. Even if your wife and kids help you try.

Further, if a company issues a card at 5%, the interest rate should be capped there for whatever is bought while that rate was in effect. If the company wants to raise the rate on the card to 10%, that rate should only be applied to what is bought when that is the rate. Otherwise it's simply legalized theft - and that's not changed by fine print which allows rate hikes across the board. It used to be that the courts would not enforce fine print like that because the unsuspecting public was not charged with being aware of it. Nobody cares about justice any more. That's what has to be fixed.

Mitchell Bard: Why I Have No Sympathy for Jake DeSantis

Mitchell Bard: Why I Have No Sympathy for Jake DeSantis

Precisely.

THE RABBIT HOLE

Re today's Obama online forum:

Whether you agree with what he said or not (and of course I mostly do, except that I can't trust him on the economy) it has to be a pleasure for anyone who uses a brain to listen to him explain what he's doing in terms most of us can understand, without jargon or cant or flat out lies. I suspect Republicans are upset with it because it's been so long - if ever - that they've run into someone who can do that, or wants to do that. So long that they can't understand what it is.

Actually, it hasn't been that long. Clinton used to do it, and so did Gore. But these past eight years have done so much brain damage that an undamaged brain seems like something alien. We have been subjected to so much arrant moronism - all the weirder because it's scripted - from Republicans, congresspeople, the media, the godly, the financial sector ... I can't actually remember when and from whom, before Obama, I actually heard anything that made any sense. The level of Republican dialog (and conduct) has slipped below the juvenile to the marginally autistic. They obviously have arguments that can be intelligently made (see this), so why they aren't doing that boggles the mind. Either they're stupid or they think we are. (Actually, those two possibilities go together quite well.)

Actually, it isn't just a Republican thing. Jean Shaheen is one of the so-called conservadem senators whose intent it is to force Obama to submit his health plan, etc. to a filibusterable vote rather than the procedure which requires just a majority vote. Why? On Maddow yesterday, she claimed to be supporting Obama's priorities but that people are "divided on geographic lines", and so "it's important for us to build those relationships so we can bring everybody along ..." This is nursery rhyme nonsense. Maddow didn't ask her what she meant by "geographic." And I certainly have no clue. Was she saying it's the south against the north? If so, that's only saying it's Republicans against Democrats. And it sounds like she's allying herself with the south (she's from New Hampshire!) - though she was so vague and used so much doubletalk it was possible to conclude that what she was really saying was that she wanted to help Obama, somehow, against the Republicans. Which certainly would explain why she's in favor of allowing Republicans to filibuster big bills.

Maddow kept after her, asking why, since Democrats have the votes to pass Obama's agenda in the senate if the filibuster could not be used, it's necessary to get Republican votes. Shaheen: "I don't think the issue there is 60 vs. 51. I think the issue is how do we get the votes to get major pieces of legislation done." She must have been taking Franz Kafka lessons. If "we" is Democrats and Obama, it seems perfectly obvious that the way "we" get the votes is to vote in favor of the procedure which lets Democrat votes control. Which is the opposite of what she intends to do. So who is this "we"? No idea.

I understand that there is a political talent which consists of not answering a question. But by what application of mental ability do you come up with what she came up with? Considered in psychological terms, it's perseverative. It's the kind of thinking associated with the hopelessly insane.

But that's what we're used to. Insanity. To the point that if you try to analyze these minds, you run the risk of going insane yourself.

So thank you, Obama, for showing us what sanity is. But you better keep doing it, because we're already halfway gone and you are singlehandedly going to have to pull us out of the rabbit hole.

IGNATIUS

I went to hear David Ignatius speak tonight. Here's what I learned:

He's very proud of being a Washington insider. He dropped more names than Liz Smith.

He's very sympathetic to Wall Street. I. E., Washington insiders are very sympathetic to Wall Street.

He doesn't like Nancy Pelosi. He thinks the stimulus bill was a left wing plot.

He thinks bipartisanship is a blending of Republican and Democratic ideas. Not very possible these days. Like crossbreeding a hare and a tortoise. Anyone need a hortoise?

He doesn't like bloggers because they're opiniated. Despite the fact that columnists exist only to express opinions.

So what I learned is not to go see columnists speak. Unless they're like Krugman and come at op eds from some other expertise. Ignatius has no expertise. His opinion is worth what mine is -it's only of value if he comes up with a new way of looking at things that alters the way you think.

He didn't.

[Posted with iBlogger from my iPhone]

BURGER KING

The remarkable thing about American politics is that those people with whom we have been obsessed for eight years - excepting those who still remain in Congress - have essentially disappeared. In two months! They pop up infrequently - but nobody cares. This sort of thing happens with every change of administration - but this one is different in that everyone hopes never to hear from them again - even their own party members.

Does Condoleeza Rice have a job? I hope not. Will any respectable academic institution hire her? I hope not. She'll probably be found teaching at some second rate school, or working for a think tank that doesn't require one to think. Or maybe she'll work on Wall Street. That would suit. She's got looks and she lies well. I take that back. She lies, but not well. We always knew. Maybe she'll be a concert pianist, or teach ice skating in some small town. But me, I'd like to find her behind a window at Burger King.

FOR A WHILE

OK, so we can forget about nationalizating or breaking up problem financial institutions. Whew, that's a load off my mind.

Now we get to think about whether there will be any re-regulation. That should keep us busy for a while.

Geithner and Bernanke today asked for authority to temporarily take over non-bank financial institutions. So everything's ok until it shows up in the ER. So far no one has suggested preventive medicine - going back to the era in which you could be a bank or a broker or an insurance company but not a combination of these. I know Obama gets this - but will he see it through?

[Posted with iBlogger from my iPhone]

Obama Protest: Bishop Boycotting Notre Dame Graduation Over President's Stem Cell, Abortion Views

Obama Protest: Bishop Boycotting Notre Dame Graduation Over President's Stem Cell, Abortion Views

So fucking what?

Franz Kafka International Named World's Most Alienating Airport (VIDEO)

Franz Kafka International Named World's Most Alienating Airport (VIDEO)

Steven Weber: The Aging of Enlightenment

Steven Weber: The Aging of Enlightenment

HAIKU

And I didn't want Hillary because she was too close to Wall Street?

When do I get to vote for Bernie Sanders?

Go back and re-read "The Shock Doctrine." it's happening again.

[Posted with iBlogger from my iPhone]

Henry Blodget: Geithner's Five Big Misconceptions

Henry Blodget: Geithner's Five Big Misconceptions

Jane Hamsher: Why Does Timothy Geithner's Plan Make Countrywide's Stanford Kurland Even Richer?

Jane Hamsher: Why Does Timothy Geithner's Plan Make Countrywide's Stanford Kurland Even Richer?

BLOWS MY MIND

There is an article in today's WSJ that simply blows my mind. Here's the lede:

"The Obama administration, after months of criticizing Wall Street, has been scrambling to woo top bankers aqnd financiers to back its latest bailout plan."

Now, I don't remember Obama or his administration being particularly critical of Wall Street. They responded to public outrage, but that was more in their own defense than gratuitous attacks on the banks. In fact, they have been more temperate than they ought to have been. The reason for that will shortly come clear.

According to this article, in recent days Geithner has been opposing restricting bonuses in response to what were essentially demands that he do so from Wall Street. Wall Street has also been threatening to return federal bailout money. We know that's true. But so what? Why would Obama cajole them not to?

Because the administration has concluded that, rather than function as government should, it needs a private-public partnership to buy toxic assets off the books of the banks to open them up to lending. (As has been pointed out, this was the initial Paulson approach, which he abandoned as unworkable.) Once they decided on that approach, they needed Wall Street to participate. Which is why they should never have decided on that approach.

David Axelrod is quoted as saying: "Our great challenge is to make clear that we can't have an economic recovery without Wall Street." Really? Axelrod? Good policy has fallen on hard times.

An officer at Morgan Stanley says: "The White House understands that to have a healthy Main Street you need a healthy Wall Street." Well, we had a very healthy Wall Street. And it murdered Main Street.

The banks complain that they were frozen out of internal administration discussions about the economy, and that in filling economic posts market veterans were not brought on. In other words, Wall Street was not directly controlling government economic policy. And this is a bad thing?

Unfortunately, it's not even true. Market veterans were brought into government. And although most positions were staffed by people with either government or academic experience (as opposed to Bush, who handed Treasury directly to Goldman Sachs), Wall Street had and has plenty of input. Are we supposed to forget that Geithner and Summers are tied to Robert Rubin, of Citigroup, and that when Geithner as head of the New York Fed was putting together the bailout it was with Paulson and GS head Lloyd Blankfein? The difference between Obama's and Bush's Treasury Departments (and Clinton's, come to think of it) is a matter of one degree of separation. But Wall Street got used to having the government in its hands.

As a symbol of Obama's turnaround, the article quotes Summers as saying the past decade contained "too much greed and too little fear ... Today, however, the problem is exactly the opposite." I.e., too much fear and TOO LITTLE GREED. Oh, good God!

What really pissed off the bankers was Obama's expressed anger over executive bonuses. They told Obama's people directly that they had to cut that out if they wanted any help in getting credit flowing again. I see. In order to get the cooperation of the banks, we have to let them operate exactly as they have been.

Obama wants recovery quick and short-term, and to get that he thinks he has to forget about changing the system. It isn't necessary, it's cowardly and it's unforgivable.

Wall Street is back in control - if it ever wasn't. And as soon as the market gets back to 9,000, nobody's going to care (just like they don't care about hybrids now that gas prices are down). And he thinks he's going to get health care after surrendering like this? He'll get nothing. And that's what he deserves.

Unfortunately, it's not what we deserve.

This article is now the headline at the Huffington Post.

Obama Dials Down Wall Street Criticism - WSJ.com

The Big Takeover : Rolling Stone

Somebody needs to read this article and then ask Obama some pointed questions - because I no longer believe he's innocent. That's impossible.

The Big Takeover : Rolling Stone

UP DOW

The 500 point rise in the Dow on Geithner's announcement doesn't mean Geithner is doing the right thing. It means he's doing what Wall Street wants him to do. Remember, I said a rising market takes pressure off Wall Street to correct its underlying corruption. It makes people happy, and distracted. It's bread and circuses, ala Ronald Reagan.

Is it possible this is what Obama had in mind all along?

Tammy Bruce Calls The Obamas "Trash In The White House"

Tammy Bruce Calls The Obamas "Trash In The White House"

Michele Bachmann: I Want People "Armed And Dangerous" Over Obama Tax Plan

Michele Bachmann: I Want People "Armed And Dangerous" Over Obama Tax Plan

HUMILITY

Every once in a while Obama - whose political instincts are quite good - makes a political mistake. And it's usually a reflection of who he is.

For example, his comment about the Special Olympics. Obama has a quick wit and some at least of the cynicism of the intellectual left. He's been used to conversing with people who share that wit and cynicism, so it is not easy for him to avoid slipping into it in inappropriate circumstances. He has not quite learned to control that mannerism. You can see that when he takes long pauses to think through a response. He's reasoning, and that's great, but it's not fluid. When he knows he has to be careful, he can manage it. But Leno was a relaxed environment, and he just let it fly - just as he did in whatever environment he was in when he made the bitter guns and religion comment. He was right about that, and let's face it, it's not disrespecting the handicapped to say that their performance can be substandard. But these are things a politician shouldn't say.

He also uses the tactical self-deprecation often used by those who feel themselves superior. He may be saying he's humble, but that isn't what he means. It's just that he knows it's graceless to declare yourself a genius.

On the other hand, he has even done that once in a while - for example, when he said some time back that he has better political instincts than his advisors. I.e., as he often says, he wants to hear opposing views - but he may not allow himself to be convinced by them.

Which brings me to Obama's current dilemma. Way back when, Geithner and David Axelrod fought it out in front of Obama over how to handle the bank debacle. Axelrod, who really is a genius, warned Obama not to try to work things through the banks. But Geithner convinced him to follow the Paulson paradigm. That was a very bad decision. And Obama is still stuck in it. As many people have pointed out, his praise of Geithner on Leno was just another "great job, Brownie." An opinion with which 12% of the population agrees.

Obama is never going to convince the public that what Geithner is doing is right. Even if it IS right - with which of course I don't agree. Obama may feel that pulling Geithner out now will only do more damage to his political clout. As to that, remember Johnson and Vietnam. If Obama is going to retain any ability to jawbone the nation, he's going to have to line up with the nation on this one. If the nation gets ahead of him, or moves away from him, he will never be able to pull them back.

Fortunately, Obama has an out. In what I thought was a great move to avoid precisely his current situation, Obama appointed a 16-member Presidential Economic Recovery Advisory Board, headed by former Federal Reserve Chairman Paul Volcker. Yet this group has never met, and Obama has made it clear that they are not going to play a role. The fact that Obama has not called on this group tends to bolster the conclusion that he is in the thrall of Rubinomics and does not want to hear a different perspective. If that's true, the blame for the economic mess has already shifted from Bush onto Obama and, baby, it's downhill from here for him.

Maybe Obama should recognize that he may be a hotshot but he is not the quintessential hotshot - who doesn't exist. Maybe a little humility might ensure that his huge self-confidence is not misplaced. Maybe if he brought these people in, he could shift responsibility from Geithner to them, without having to pay any political price.

He fails to do so at his peril. Which is getting pretty huge.

Op-Ed Columnist - Financial Policy Despair - NYTimes.com

Op-Ed Columnist - Financial Policy Despair - NYTimes.com

Econ board has yet to meet publicly - Josh Gerstein - POLITICO.com

Econ board has yet to meet publicly - Josh Gerstein - POLITICO.com

THEY GET IT

Embattled bank JPMorgan Chase, the recipient of $25 billion in TARP funds, is going ahead with a $138 million plan to buy two new luxury corporate jets and build "the premiere corporate aircraft hangar on the eastern seaboard" to house them, ABC News has learned.

If somehow they are so obtuse as not to understand what the public reaction to a move like this would be, they've got highly paid PR folks to explain it to them. If they really don't get it, it would suggest that the best and the brightest are not so bright. But it's not that they don't get it. They do.

They are throwing down the gauntlet - declaring the utter irrelevance of non-corporate America. They are sticking it in the public's face and telling them they don't matter.

I can't think of a better way of letting us know that there are in fact two Americas, as John Edwards said. Or of igniting a genuine period of trust-busting. But we'll see.

TARP Funds Get Recycled as Political Contributions | Newsweek Periscope | Newsweek.com

TARP Funds Get Recycled as Political Contributions | Newsweek Periscope | Newsweek.com

Robert Kuttner: Geithner's Last Stand

Robert Kuttner: Geithner's Last Stand

LITTLE BOY

All four of the N Y Times' heavy-duty columnists pounded Obama today for a failure of leadership and a misguided economic plan. They were right to do so. Obama's economic team - at least Geithner and Summers - are looking more and more culpable both for the current situation and the failure to do what's necessary to correct it. Geithner's plan is supposed to revealed tomorrow. It's already being panned (having been leaked), and I don't think anything anyone - including Obama - can say can turn it around. This failure was built in before Obama took office, and he is looking either naive or implicated. I suspect he runs a great risk that people will soon stop believing him.

But I want to focus on Tom Friedman because ... because I always focus on Tom Friedman. There's always something wistful about Friedman's columns, as if his analytical capabilities peak at the level of a precocious eleven year old, or as if he were a Catholic kid before he begins to question. There are beliefs and hopes in him which don't bear up.

In his latest column, he calls Congress, bankers and Obama immature for their failure to lead in the banking crisis. He leaves out the public and the media, particularly including himself.

The crux of his argument is that in this crisis there are no adults at the top. Congress, he says, is acting childish, particularly with regard to AIG (Congress is certainly childish for a hundred reasons.) Republicans are acting childish by focusing on going after Democrats rather than solving the crisis (he's got that right). And Obama is childish for failing to exhort.

Congress is certainly childish. So are Republicans. So are Democrats. So is the public and so is the David Gregory media. Obama is not childish. Obama is just wrong. And Friedman is the most childish of all.

Friedman says that if you attack Geithner (who is struggling to find a way out of this crisis and has "stumble(d) once" (his tax issue?)) you ensure that no capable person enlists in government. So we need to leave Geithner alone, right or wrong? That's not immature thinking, it's infantile. Or it's a marvelously devious argument for trusting the banks and continuing down the path that has led us to this pass. I think it's the former. Friedman isn't being devious. He trusts the banks. Even now.

There are plenty of capable people who don't agree with Geithner who would love to get into his position and do the right thing. How many minutes do you suppose it would take Paul Volcker to decide to accept the job? If criticizing someone for mistakes or wrongheadedness is not to be tolerated, then how come Friedman hasn't shut up yet? Oh, I forgot. It's we who can't criticize. Friedman can do whatever he wants.

He then says that if you criticize Geithner "you will ensure that every bank that has taken public money will try to get rid of it as fast it can, so as not to come under scrutiny." Oh - it's public outrage that has made the banks want to give TARP money back? I thought it was the scrutiny they want to avoid. How immature of us to want to know what the hell these banks are doing - and to question whether they should be left to do anything anymore.

You get the picture. Friedman likes the banks. He goes on to castigate Obama for not "calling on those AIG brokers ... to return their bonuses for the sake of the country." For not posing those brokers a "great national mission to join." He figures if Obama had done that, these guys would have been so inspired that they would already have given most of the bonus money back. He thinks inspirational leadership will convince the banks to do the right thing. And he thinks Geithner's plan - which is headed for opprobrium - is the right thing to do.

Right. I would ask what Friedman is smoking, except I just can't see him doing anything that rebellious.

Bankers are already inspired - to get as much money as they can, anyway they can get it. If, as Friedman argues, they need inspirational leadership, it can only be because they're decent folks who just haven't managed to understand the national quandary yet. Once they realize how many people they've hurt, they'll turn right around and fix everything. Even the public has figured out what crap this is.

Grow up, Tom. Or stop writing. Little boy.

RANDOM SUNDAY THOUGHTS

1) During his appearance on Leno, Obama said that the government had a program to bypass the banks and directly loan for auto purchases, mortgages, to small business, etc. Those comments were not highlighted - but comments like that have been around for a while now. I argued months ago that the solution to the credit crunch was exactly that, rather than handing money to banks and leaving them the choice of whether to lend or not. I was very pleased to see that it's being done, to some extent - although we have no idea how they're doing it, whether they're actually doing it yet and how much money is involved.

Arianna Huffington pointed out that if the government is going around the banks, there was no need to bail banks out. There are several reasons to at least attempt to protect the banks. One is that anti-government forces will attack direct loans - as a matter of fact, I'm surprised Republicans haven't gone after that program already. Maybe they think it's just rhetoric. But in order to forestall the "socialism" argument - and direct government loans is not socialism - and to maintain as much of the private finance sector as is consistent with the country's economic health, some attempts had to be made to bolster the banks. That being said, there's a limit to how far Obama should go in that direction, and I think he recognized that in his statements on Leno.

The anger over the AIG bonuses may be anger over a small part of the bailout, but the essence of the anger is much more germane. It's the beginning of a feeling among the public that power has to be redistributed in this country - not just money, but direction and control has to be taken away from the oligarchy. That's very healthy, and I hope it winds up that we move in that direction, rather than the anger dissipating with nothing accomplished.

2) If you want to know how Washington thinks, watch David Gregory on "Meet the Press." Not the guests. Him. His questions reflect Washington's trivial and skewed perspective. We can hope that if America gets smarter out of this crisis, we will get rid of media people who can't think straight.

BACK TO THE STREETS

As usual, there's talk of campaign finance reform, directed particularly to minimizing the influence of big money on high-profile issues like banking, global warming, health care, etc.

That's foolishness. There is always a way around any campaign finance reform. That's what they pay lawyers for.

The influence of big money can only be counterbalanced by very visible mass movements. Politicians will only resist a lobbyist if they are convinced either that they'll be voted out if they don't adhere to the public's interest, or fear they will be made to look ridiculous.

Internet-based movements have had some effect, but the fact that corporate interests remain very strong probably shows the limits of pseudo-populist approaches in which the people never actually agglomerate in force. What's necessary is the kind of grass roots approach that won the election for Obama. People pushing for global warming have to be very visible, have to present themselves in high numbers and have to direct themselves not only at the media and the politicians but to the uncommitted public.

In other words, as I've been saying, back to the streets - but in an unthreatening way (that is, unthreatening to the public, not the vested interests). I'm afraid the tendency to sit in your room and connect on the internet works against any real directable power. I may be wrong, and we'll see.

Administration Seeks Increase in Oversight of Executive Pay - NYTimes.com

Administration Seeks Increase in Oversight of Executive Pay - NYTimes.com

Activists Hosting 'Bus Tours' Of AIG Executives' Homes

Activists Hosting 'Bus Tours' Of AIG Executives' Homes

Earl Ofari Hutchinson: Smoking Gun Points to Geithner

Earl Ofari Hutchinson: Smoking Gun Points to Geithner

Greg Lukianoff: Oklahoma Legislature Investigates Richard Dawkins' Free Speech

Greg Lukianoff: Oklahoma Legislature Investigates Richard Dawkins' Free Speech

Jeffrey Sachs: Capitalism and Moral Sentiments

Jeffrey Sachs: Capitalism and Moral Sentiments

Despair over financial policy - Paul Krugman Blog - NYTimes.com

Despair over financial policy - Paul Krugman Blog - NYTimes.com

Israeli soldiers say army rabbis framed Gaza as religious war | McClatchy

Israeli soldiers say army rabbis framed Gaza as religious war | McClatchy

Dead Palestinian babies and bombed mosques - IDF fashion 2009 - Haaretz - Israel News

Dead Palestinian babies and bombed mosques - IDF fashion 2009 - Haaretz - Israel News

BUICK AND JAGUAR??

Buick and Jaguar (made by Ford) are in a tie for first place in the J.D. Power study of vehicle dependability. Buick and Jaguar?? Holy shit!

Mercury is also in the top five, and Chrysler and Ford have moved up. Chrysler overall is rated better than BMW.

This proves that American car makers can make good, salable products. It also proves that the recent attack on American car makers in Washington is at least to some extent anachronistic, based on old information and perceptions. If GM can accomplish this, it should not be allowed to fail, and its workers should not be penalized with substantial wage cuts.

One more sign that recovery is near, if Washington doesn't torpedo it.

AGAIN

Nobody goes to Florida Marlin baseball games. Yet the city of Miami has just approved public financing for a new Marlins stadium.

It's all legal, of course. But it is also corruption in the truest sense of the word. It's being sold as a stimulus move - "people need the work." But money spent to benefit private interests is not what government stimulus is about.

Again, plus ca change ...

LOW

Interest rates for fixed rate 30 year mortgages have dropped to their lowest point since 1965. Home prices are already low. So we are on the way to eating up the backlog in unsold homes and home prices should at least stabilize.

There is one more thing that would be helpful. That is that mortgages be offered only to people who intend to live in their homes, or use them as vacation homes. Doing this, if only for a limited time, should eliminate (for now) the speculation that drove the housing bubble.

LET'S JUST LAY IT OUT THERE

Israel is the country we were afraid we were going to become under Bush. In fact, considering Bush's religious beliefs (never adequately explored) and the beliefs of advisors like Perle, Feith and Wolfowitz, it is not ridiculous to presume that Bush specifically intended to turn us into an Israel.

Stories are now coming out from Israeli soldiers that during the Gaza incursion women were purposely shot when they clearly presented no threat. Palestinian lives, one soldier said, were essentially entirely devalued.

This attitude results from a number of factors. The most valid is fear of Palestinians, which could be considered legitimate because of suicide bombings and rockets - although Palestinians have never been able to pose the existential threat to Israel that Israel poses to the Palestinians.

The second is Israeli feelings of entitlement arising out of the Holocaust - although it is the ultimate irony that Israel used that justification to victimize others. There used to be a moral requirement imposed on Jews by Jews to treat others as they wanted to be treated. With military power, that has faded away.

The third reason is religious and has two parts. The first is the conviction of some Jews, founded in Kabbala, that Gentiles (and even secular Jews) have been ruled inferior by God. The second is the belief that if the Messiah is to come, Jews must hold the lands of the ancient Jewish kingdoms.

This is a deadly combination of beliefs.

I am convinced there is something special about Jews. I think that is proved by their eminence which is far beyond what their numbers would suggest. But with that blessing of talent and intelligence comes an obligation - even if it's only felt as noblesse oblige -to recognize others' humanity and render them respect, or at a minimum refrain from enslaving them. This is an obligation Israel owes, not to Palestinians, but to itself and all Jews. To which Palestinian barbarity and nihilism is absolutely irrelevant unless and until they are an existential threat. Yet Israel is enslaving Palestinians - not in the sense of forcing them into anything but in taking away their freedom to be what they want to be.

This is the most pro-Israel and pro-Jewish position I can take. Otherwise I would have to conclude that Israel is no more a special place or people than anywhere or anyone else, and that if they are opposed by people as immoral as they, they deserve whatever they get. And that would be a tragic loss both for me and the world.

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ONE DAY'S GROWTH

Since one day's beard growth is now the mark of the superior male, I suggest that Tim Geithner skip shaving before attempting in public to explain what he's doing. At least that way they won't call him a wimp. Although maybe he'll have to wrestle an alligator before anyone believes him.

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MAJOR MISTAKE

The flap over AIG bonuses and who killed provisions in both the bailout and stimulus bills intended to block such bonuses is going to hurt Obama pretty bad. But hey, we saw it coming when he put Summers and Geithner in charge. Major mistake, baby. Who knows what the cost will be?

LYRICS

For anyone who's curious, I am posting my old Ten Wheel Drive lyrics at tenwheeldrive.org and aramschefrin.com.

They're pretty good.

VIBRATO

I was watching "Wrestling with Angels", about Tony Kushner. They showed an opera singer for a few bars, and I understood what I hated about some opera singers.

When their vibrato is so broad that you can't find the pitch of the note they're supposed to be singing - that's when I hate them.

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Cenk Uygur: What Did Geithner Know and When Did He Know It?

Cenk Uygur: What Did Geithner Know and When Did He Know It?

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Robert Scheer: Perp Walks Instead of Bonuses

Robert Scheer: Perp Walks Instead of Bonuses

Posted using ShareThis

QUICKIE

Judging by the figures on consumer spending and housing starts, and the persistence of the banks in conducting themselves as usual, the continuing rise in the Dow, and the G20's unwillingness to do much about the "crisis", I believe the crisis is over. I think everything will return in short order to business as usual. There will be very little, if any, change in the conduct of capitalism.

What will remain of this crisis will be the unemployed and the continuing huge compensation inequalities. Even the protests against AIG are anomistic; the web, and not physical groups, is where people have gathered to vent. The article I recently linked to establishes that Americans are still enthralled by cowboy Reaganism. So I don't see a union revival or any concerted action toward redistribution of wealth - and I don't believe Obama would attempt it alone.

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CLASS WAR? NO THANKS

On my recent post on class war, read this. It explains just about everything.

HMM

The Commerce Department reported Tuesday that in February construction of new homes and apartments jumped 22.2 percent from January to a seasonally adjusted annual rate of 583,000 units. Economists were expecting construction to drop to a pace of around 450,000 units.

This is impossible to understand unless you assume that developers are out of their minds - or that things are seriously looking up. Couple this with Citibank's announcement that they don't need any more bailout money and AIG's bonus giving and you have to conclude that the big scare was hollow and is about to end.

Hmm.

WRONG GREEN

Hybrid cars are not selling. They are
not selling worse than other cars are not selling. Nobody wants them with gas prices low.

Yet car companies are continuing to make them because politicians insist they do as a precondition for government help.

I pointed out months ago that as hip and cool as green is in certain circles, and as much as green makes scientific sense, a green strategy is probably not how you rescue a car company. Or, in fact, just about any other business.

Green is an advertising strategy to ease some people's guilt over buying something they've always bought which was never green before. It's about as meaningful as filters on cigarettes. Green also convinces people who don't have that kind of social consciousness or guilt that by buying green products they can be just as hip as those who do. Since they've already been convinced of how hip green is.

Very few people want to buy green for the reasons environmentalists lay out.

Businesses succeed by selling what people want. Or what they can be made to want. People have not been avoiding GM cars because they're not green. They avoid them because they think they're crap. Outside of LA what sells cars is not gas mileage. It's sex, and it always has been. No matter how hip green is. Or maybe it's safety, if you've got two kids.

Car companies know this. Environmentalists don't. It's foolish to make car companies produce something few people want. It's a triumph of ideology over common sense.

I have long said that GM can't be revived short term. Not that they couldn't make good cars, but because they have so devalued their marques, no one believes they can. It will take them 20-30 years and a whole new set of marques to bring them back to where they used to be.

But if you're going to insist that they can't be allowed to fail, let them at least try to make what people want. And if you want people to want green cars, dont depend on Detroit to create that demand. You'll need years of education and the kind of marketing that sells a concept on its own. And it should not come from the government. That's too much social engineering. It needs to come up from the people, ten years from now.

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RIDICKALOUS

The Washington Post is saying that Obama's inability to stop the AIG bonuses is eroding his political capital and support for his agenda. That's the most ridickalous thing I ever hoid.

1) He is trying to stop it.
2) He probably has no way to do it.
3) The bonuses are far from the most important thing he's doing.
4) They have no relation to the rest of his agenda.
5) it's highly unlikely that the public Is blaming him.
6) the people who write these articles want the public to blame him, and are trying to convince them that they already do.
7) they're also trying to convince the public that they've lost faith in his policies because of the bonuses.
8) sole aim of these articles? Republican return to power.
9) propaganda disguised as news.

So what else is new?

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IS THAT YOU, GEORGE?

Didya ever notice that Bernie Madoff looks like George Washington?

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FAIRY TALE

Here's a simplistic little story that is probably true:

Market makers are caught between a rock and a hard place. They need the Dow to go up to prove there's no need for a bank bailout (and the consequent government controls over the banks, weak as they are.) But, since the CW now says Obama is to be judged on the Dow's performance, they need the Dow to go down to weaken him.

Today, though the market slipped a little bit, gainers outnumbered losers by 3-2. That's the kind of split we're used to seeing on the Supreme Court. Obviously they haven't solved the conundrum yet. But we'll be watching.

You think this is a dumb analogy? It's no dumber than saying the Dow reflects Obama's success or failure - and a lot of allegedly smart people have been peddling that fairy tale.

BUST THE TRUSTS

It's now obvious that, in addition to FDR, we need a little bit of TR. Companies like AIG, which can hold the world hostage, need to be broken up. That is absolutely critical to ensuring that what we have now will never happen again.

RAMBLIN' GAMBLIN' MAN

So now Obama is to be judged on the performance of the Dow - which is in the hands of people who don't believe in what he's doing. It's like judging him on the results of a series of hands of blackjack, when you know the dealer is fixing the deck. 

Sad. But inevitable. You have to hope that the people who own the market have other reasons to boost the Dow - as they did last week, for instance. Right now the Dow is up 130. If we have another up week, it might be safe to assume that the idea that the Dow should be going up has caught on beyond the market makers. Step one toward recovery of confidence.

And then will they give Obama the credit? We'll see.

CLASS WAR

Is there class war in America? There never has not been. Well, almost never.

I leave aside the early years, because I believe labor did not begin to be a factor until the industrial revolution and the end of slavery. At that time, economic theorists - including Marx - began to argue that the people who actually made a product should participate more fully in the profits it produced. From the 1870's through the 1920's, labor struggled to get some of what management was taking home. The fight was often bloody. 

Labor benefitted from TR's trustbusting and FDR's New Deal. But the class war - recognized as such by both sides - continued until after W.W. II. Then the class war took a break - temporarily - for two reasons:

1) Management needed labor's cooperation to rebuild civilian industry, and

2) It was considered unacceptable to deny the people who had fought the war some more significant participation in the boom that followed it. It was just gauche to be anti-labor then - except in the South, which is always a Different Story.

That honeymoon lasted about twenty years. It launched the broadbased American urban middle class. It also launched a generation of kids who were comfortable, because of their parents' ability to make a good living. Those kids launched the counterculture and the civil rights movement, both of which turned the public against the left, which at least nominally included labor unions. Undeniably, labor was a power in the Democratic party, and the party was tied to the liberal left. When people turned against the left, they turned against unions - even if they would have benefitted from union organization. So, after 1968, the class war reignited.

It was Ronald Reagan who made it possible to believe that there no longer was a class war in America. Through their own corruption, in some cases; through internecine jealousies inside the labor community (which, for example, did not support Patco against Reagan because they thought the air traffic controllers made too much); and through seduction by bread and circuses and the idea that any American, acting entirely alone, could join the wealthy class, unions began their downward slide and people began to think that the rich were just like them - or better, that they could be just like the rich.

It was true that Americans acting alone could join the wealthy class - if they had either a marketable talent or a good idea, the skill to market it, the ability to get to know who had to be known, and a decent sized tranche of luck. At first it was actors, then sports figures, then music figures and finally the broadbased entrepreneurial class which technology created. These examples were held out to folks who had none of the requisites, and the argument was that if didn't have the talent or the gumption, you deserved to inhabit the bottom rung - even if what you were doing was essential either to the quality of most people's lives or the success of a particular product. What we had known of as "workers" had been devalued. If you couldn't create a Google, or at least a hair salon, the rest of us were entitled to, in Marx's concept, rip off your labor for our benefit. 

But the argument worked. And the class war was finally won by the wealthy when 1)workers were seduced into relying first on the stock market and then on credit, rather than increasing wages, for an improved life, so that they saw no difference between themselves and capitalists; and 2) people came to believe that they were rich because their houses were said to be permanent equivalents of ever-growing pots of cash. I haven't seen much on this last point, but it's definitely true. The housing bubble won the class war for the rich. And the non-rich didn't even know there had been a war; they had no memory of the thirties and didn't understand the eighties. To them this was just the way it was supposed to be.

The current economic situation has the potential to reignite the class war and move us toward a more balanced share of the wealth. But I don't think it's going to. The fact that the Republicans can win over trailer-park pishers by using the term "class war" as if these pishers were on the same side as the wealthy against some undefined entity, or welfare queens*, doesn't augur well for general public understanding of what has really been going on since 1968. Anyone born after 1968 - i.e., forty and under - has no idea of the concept of collective action. They've never seen it. They've certainly never read about it.

This country is not sophisticated enough to know what's good for it. And you can say that about the rest of the world, too.

* This brings me back to the Different Story. The South has always used race (and once used slavery) to convince poor whites that they should identify with rich whites, rather than think of themselves as another class. This concept spread to the North first through racism. Now racism is not needed to underpin the concept. Because any other concept has simply ceased to exist.

SUPPOSE

Suppose the stock market makes a quick and substantial recovery, everybody starts making money, things are heading back to where they were. Everybody's exhausted by what they've just been through, they're tremendously relieved and all they want to do is go back to their favorite expensive restaurant.

So they don't want to hear about systemic problems. They don't want to try to make sure it doesn't happen again. All they want is the sweet glide they used to be in.

So Obama becomes annoying with his overarching plan. They want him to go away like they made Churchill go away after W.W. II. They don't want to be reminded of any of it.

All you have to do is bring the market back fast to put an end to all of Obama's initiatives. It's like when gas prices drop, we all go back to SUV's. Obama becomes the embodiment of a bad memory.

And it can be done.

A LITTLE LATE

Okay, now we know where the concept that to improve corporate performance you have to destroy labor came from - at least in recent times.

The Financial Times reports:

"The birth of the shareholder value movement is commonly traced to a speech Jack Welch gave at New York's Pierre hotel in 1981, shortly after taking the helm at GE. In the speech, entitled "Growing Fast in a Slow-Growth Economy," Mr Welch outlined his beliefs in selling underperforming businesses and aggressively cutting costs in order to deliver consistent profit rises that would outstrip global economic growth."

There it is. You cut costs to maximize shareholder profit. Cutting costs means trashing your work force. It also means thinking short term, often at the expense of the company's future.

Welch now: "On the face of it, shareholder value is the dumbest idea in the world," he said. "Shareholder value is a result, not a strategy...your main constituencies are your employees, your customers and your products."

So why didn't he say so like ... twenty years ago?

1981 ... who was president then? Who took this ball and ran with it? Welch can comfortably think of himself as the godfather of raptor capitalism.

IN ABOUT TWENTY YEARS

The whole Bernie Madoff story stinks.

Here's a guy who voluntarily confesses he stole fifty billion dollars. But did he? And if he didn't, why did he say he did?

Money has to keep coming in to a Ponzi scheme because the schemer must, to keep the thing going, be paying decent interest to those "investors" he already has. Madoff was apparently paying 10-12% for years. So, because he actually invested none of the holdings, he had to keep taking in enough, or at least have enough in hand, to make the interest payments over and over again - an amount which had to be growing constantly, since from what I hear people were not often taking their principal out. So there was, at least in theory, always more and more principal on which interest had to be paid. If new "investors" stopped coming, he could keep the scheme alive for some period of time by using the principal he already had to make the interest payments.  The only thing that would stop him would be the moment when he used up the last of the principal.

This fifty billion figure - what does it mean? I haven't seen any explanation so far. Was it the total of all the "investments" ever made in the fund? Let's assume so for the moment. In that case, he could not have stolen fifty billion, because he would have paid interest out to his "investors" out of that fifty billion. Since this scheme was running for twelve years or so, he had to have paid out a hell of a lot. How much of the total he paid out will be difficult to calculate, unless it's known how and when each piece of the fund came in. I.e., he would have paid a lot more to someone who had been with him for twelve years than to someone who'd been there for one. But, at any rate, he no doubt paid out a lot. He also must have paid out at least some of the money to people who wanted to withdraw from the fund.

Let's assume he paid out twenty or thirty billion in interest. That leaves thirty or twenty billion he could have stolen. If he stole it, what did he do with it? Either he hid it somewhere, in which case it is retrievable; or he spent it, and how the hell could he have done that? Did he have twenty billion in visible assets? Not that I know of. And how much does the average Palm Beach Dinner cost?

There needs to be much more information available to figure this out. But I don't believe he spent twenty billion dollars, and I rather doubt he hid it, either. I figure it's more likely he stole about 500 million max - unless he was giving multiple millions to his wife, kids and friends. So what's the most we can get to that way? Maybe a billion?

So why did he say he stole 50 billion? Why did he rat himself out? Why didn't he put up any fight at all? Why did he plead guilty, why is he going to jail so easily? Is this the kind of behavior you'd expect from a 50 billion dollar thief?

Either God talked him into confessing, or someone with godly power did.

I hate to say it, but I think Madoff is a fall guy. I think he's taking the rap for someone else. I have no idea who that could be, but I hope we find out. And I hope we find out what they had on him. Because it had to be a lot worse than the theft of fifty billion.

The other possibility is that he claimed to have stolen so much because he (or those behind him) knew it would cause panic and drive the market down,  on top of the panic already caused by the alleged insolvency of the banks. That leaves all sorts of possibilities as to who could have profited from such a move. 

I think everything that has happened is all of a piece. I think Paulson was in on it, and plenty of others, too. I think the entire goal was to scam the government into handing the bankers billions with no strings attached. I think we have seen the greatest robbery in human history. And I think in about twenty years we're going to find that out.

But we're not going to find it out now, because Madoff copped a plea. He doesn't have to testify. And the pressure is off the prosecutors to prove what he did and how he did it.

We need Seymour Hersh on this case.

By the way, do we really believe that it was incompetence which stopped the SEC from investigating Madoff, despite clear evidence over ten years from at least Harry Markopolis - or do we believe someone stopped the investigation with intent? Personally, I no longer believe in the "Bush's government was incompetent" meme. They were very competent. They accomplished precisely what they intended to. 

This whole thing shapes up in my head like a massive conspiracy. Unfortunately, in America, things that smell like massive conspiracies never get proved out. Madoff is today's lone gunman, they say. And any commission is likely to support the theory, just like the Warren Commission did.

Ever wonder what Americans would do if they ever found out that their world was being shaped by a secret cabal? My guess? They'd go back to American Idol. The people with spines in America are, unfortunately, mostly the ones we have to worry about.

HELP!

I'm fascinated by African Americans processes for naming their babies. I'm going to do some speculation, but since I have no knowledge whatsoever, I would love it if someone would step in and straighten me out.

Specific names are a blank to me at the moment, but my impression is that the initial movement away from what were essentially slave names was intended to be Afrocentric - i.e., they were supposed to sound like African names. They didn't, and for the most part they still don't. But that was what was initially the ignorant perception.

These names were remarkable for their innovation, imagination and creativity. They seemed to be telling the kids they could be anyone they wanted to - that they were special, different. After a while, they were copycatted and in some cases overused. But the amazing thing is that the creativity continues - normal spellings are altered to produce exotic names, syllables are put together for onomatopeia, hyphens and apostrophes are sprinkled liberally. The whole thing feels like a reinvention of a race, a declaration of independence and the kind of spiritual soulfulness that produced jazz, rock 'n' roll, r&b etc.

I know some people find these names laughable. I think they ought to be celebrated.

Whites are still giving their kids status names - Heather, Kimberly, Brittany, etc. In other words, for whites the naming process is intended to lock the kid into a particular social stratum, whether earned or not. It is the precise opposite of the African American process. Conformity and social climbing vs. liberation (or at least that's how it started. Maybe by now African American names are starting to be an indication of status. Maybe you have to have a certain type of name to succeed. I don't know. Somebody please help me out here.)

READY TO FREAK

From the Huffington Post:

The Commerce Department reported Thursday that retail sales edged down 0.1 percent last month, less severe than the 0.5 percent drop that economists had expected.

The government also revised January's performance to show a 1.8 percent rise, the biggest increase in three years and stronger than the 1 percent gain that was originally reported.

The weakness in February reflected a big 4.3 percent plunge in sales of autos and auto parts, the biggest monthly drop since October.

Excluding the auto sector, retail sales would have risen by 0.7 percent following an even stronger 1.6 percent gain in January, an increase that was originally reported as a 0.9 percent rise. The strength outside of autos was led by a big 3.4 percent jump in sales at service stations, a gain that primarily reflected a rise in gasoline prices during the month. Excluding gasoline sales, retail sales would have fallen by 0.4 percent in February. However, there were a number of areas which showed gains ranging from department and other general merchandise stores, up 1.3 percent, to specialty clothing stores, up 2.8 percent, and furniture stores, which saw sales increase by 0.7 percent.

--------------------------------------------

SO - where is this huge drop-off in consumer spending everyone's talking about? That was supposed to be the key reason for the loss of jobs. Is it possible that this whole Depression is an illusion? Are corporations laying off employees in anticipation of lost profits which they are not actually losing now? Are they using this "crisis" as an excuse to slim down for short-term gain?

After Citibank reported good profits in the first two months of this year, I was getting suspicious. Now I'm ready to freak.

UPDATE:

Now Bank of America is not only reporting a profit over the last two months, but says it expects the same for the rest of the year. And GM withdrew a request for more bailout money, saying it won't need it. Meanwhile the stock market has gone way up again. Something is going on here. What could it be?

All I can say is that it is simply impossible that two days ago these banks etc. were in desperate condition and now are reporting a profit. I have to assume that their position was never as dire as they were saying it was. I.e., they were bullshitting to get their hands on bailout cash. Once Obama started imposing some conditions on that cash, they backed away from it. And I will bet the market's surge is managed, too. 

To put the best face on it, Obama has put an end to a scam. The next week or so will tell, but I'm beginning to think we can expect a pretty good sized market rally and corporate reports which will put an end to the need for a bailout. The question is: will the jobs come back? That I rather doubt.

If in fact we are going to see a quick recovery because the recession was all PR hype, there is a huge political risk for the corporations - because Obama is going to get the credit. Although the Republicans will certainly argue that a quick recovery proves there was never a need for the stimulus or bailout. 

I think the banks, etc. have realized that Obama is serious about what they call "socialism." I think they think he was going to change the nature of government, and they're trying to take away his excuse.

This is all premature, but it's what I think right now.

SNARK ATTACKS

Nixon had an enemies list. So do the Republicans. So should the left. 

It's healthy to have an enemies list. The question is what you do with it, and how you define "enemies."

If "enemies" meant to Nixon people who opposed him, there wouldn't be enough paper in the world to write down all their names. If it meant people who believed things that he didn't, the same would be true. But to Nixon "enemies" meant people he thought were out to destroy him, and so it was his intention to destroy them first. Without regard to whether they really wanted him destroyed, or whether they were capable of destroying him. Nixon's destructive tactics ranged from character assassination through spying on them to arresting them. I would not be surprised to find that he had killed some of them - although I know of no evidence of that.

I don't think Republicans have a list of people they believe want to destroy them. I think they recognize that there is very little inclination out there among the left to actually destroy conservatives. The left is in a primarily defensive posture, although they are using offensive tactics to keep from being marginalized. What they want is to be in the position to push their goals, not to wipe out the opposition. The liberal catchwords are "live and let live" - or would be if they were being left to themselves.

For Republicans - as with anyone for whom ideology (or personal power) is the driver - "enemies" are anyone who opposes them. There has been some evidence that they have used Nixonian tactics, but for the most part their attack consists of ridicule and the clever use of clever words to denigrate their opposition and define it downwards. It's amazing, when you stop to think of it, how dependent on - and effective with - words they are. At the moment, words are their only weapon, and they are doing a marvelous job with them. I would define this as "snark attacks." They are addicted to the politically effective bon mot, and many of them can actually craft them. Republicans are the collective Oscar Wilde. (Actually, their wordplay is notably common to queens - and I don't mean Queen Elizabeth. It's bitchy. I wonder if they realize that.) And I suspect that the media, infatuated with words, is giving them so much coverage out of admiration more than policy agreement. 

The left, as much as destruction of the other haunts their dreams, aren't going to destroy anyone. They need an enemies list primarily so they know who it is who wants to destroy them. They have no particular skill with words (how odd is that!) and so they won't be battling Republicans on their turf. Basically what they are doing is fending off, trying to push the opposition out of the way so that they can continue to proceed toward their goals. Their sole offensive tactic is to stay one or two steps ahead of the opposition - something Obama seems to be pretty good at. But not most Democrats. For them, holding onto some sort of equality is the best they can manage.

EXCUSE ME?

Everyone's all excited because the Dow went up almost 400 points. To tell the truth, so am I. Some people think it's a market turnaround. But I think it's just another irrational day. What will really excite me is seeing the market go up 25 points a day for two weeks.

And this rally was based on Citibank's reported earnings? All I could think of was: who did they steal that 19 billion from? And: if they had that kind of profit, why are we bailing them out?

I don't think I will ever trust anyone again.

[Posted with iBlogger from my iPhone]

THEY GOT HIM

The Israel lobby got Charles Freeman. Making them the last obstructionist group to defeat Obama. It's to be expected that the entrenched neocons would fight, but still I get so tired of hearing this crap.

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WAITING FOR IT

The following is from Tim Geithner on Charlie Rose:

"The lending program you referred to, which is a joint treasury fed program, starts over the next couple weeks. It's going to be sustained over a long period of time. Although we're beginning with the program, this targeted small business lending, student lending, auto finance, consumer credit markets, we're going to expand that program in terms of the scope of types of financial assets. We're going to provide financing and expand the scale, could get as large as a trillion dollars. This is the largest program you've seen in any country, in any period of time, and it's a very important thing. Because it goes around the banking system to try to get the securities markets working again."

If I understand him correctly, this is what I've been waiting for.

GOING DOWN UNTIL IT GOES UP

In an article on staggering job losses, the New York Times quoted a Wachovia economist as saying: "These jobs aren't coming back."

There are two reasons for job losses. One is a current national cutback in spending. The second is the realization that the job was unnecessary, productive of nothing anyone really wanted or needed. The first sort may be refilled some day, sooner or later. The second will only be refilled if we return to the habits that brought us to this pass.

So what do we do with these people who did something nobody needed, if we don't return to past practices? Some of them will be retained by the stimulus package - although I think there will be very few of those, since the jobs the stimulus package supports are hardly unnecessary. This is a case of there being too many people doing the same kind of work - i.e., people in construction. We're going to need some of them, but we won't need them all.

Some of them may be retrained to take jobs in new industries the stimulus package, or other foresight, helps to create. But I rather doubt there will be many of those either. The world has been changing rapidly. The new jobs are for the young who understand that change - not for people who've spent their lives in a now-dead economy.

So what do you do with these people? How do you support them, even temporarily. No unemployment package can help them long. We can't afford it. The only thing I can think of that will carry them is the creation of a labor pool for third world work. They'll compete with the Chinese, or whoever the next phalanx of cheap labor happens to be. They'll work for next to nothing. America will divide, and it will not be put back together again until all these people are dead.

Short of an almost inconceivable quick return of confidence, there is nothing the government can do which will bring the economy back quickly. In the current situation, there is nothing the government can do which will bring back confidence. In a couple of years we'll be analyzing whether Obama has just failed us. But we are now, for whatever reason, past the point of preventing disaster. It's going to go down until it starts to come back up, no matter what any government or corporation does. And then we'll see what we're left with. I have no doubt that America will come back stronger - unless current political trends fracture us completely. But that strength will not involve all of us. Many will be left out. Life as they know it is over, and they're beginning to understand that.

HOW YOU CAN TELL

How can you tell whether or not someone is sincerely concerned to get us out of this mess?

If he is calling universal health care, or stronger unions, or temporary bank nationalizations "socialism", he either has no idea what socialism is, or he is trying to scare the shit out of people who don't know what it is. Ignorant or playing class war politics. Not serious.

[Posted with iBlogger from my iPhone]

HELL IN A HANDBASKET

You want to know why we're going down?

Because there is no sense of common purpose. Class warfare has been declared. Who you think declared it depends on your political perspective.

Of course this is nothing new. The Depression ignited class warfare - or rather sent it to new heights, since the war was on as early as the 1890's.

The difference is, though, that back then everyone was on one side or the other, and knew it. Now the rich know what side they're on, as do their flunkies in politics, the press and banking. And the flunkies know they're on track to joining the world of wealth.

Everyone else, however, hasn't a clue. You have to wonder if they'll ever know which side they're on, and what they'll do if they figure it out.

It's going to go much deeper - far deeper than Obama will be able to handle. The rage on one side is already out of control. That will probably be true of both sides one of these days - because nothing that's being tried or planned is going to work.

Obama can beat this outcome by taking it on immediately. Nationalizing bad banks would do it, and he'd have widespread support for it. But the resulting drop in the market caused by investors for whom such an action would be anathema would only make the situation worse. The other choice is: let bad banks go under, and have the government take over their function temporarily; that is, make the loans they should have made.

Tonight SNL mocked Geithner and intimated that Obama's cool was inappropriate at the moment. Geithner will be gone soon. So will Obama if things don't change.

[Posted with iBlogger from my iPhone]

DISGUSTING

In case you are not already outraged by current credit card practices, I received the following email:

IMPORTANT SUPPLEMENT TO YOUR PAYPAL PLUS MASTERCARD ACCOUNT AGREEMENT

The following provision is being added to your PayPal Plus MasterCard account agreement:

You agree that GE Money Bank and any other owner or servicer of your account may contact you about your account using any contact information or cell phone numbers you provide (whether previously provided or provided in the future).
You expressly agree to the use of any automatic telephone dialing system and/or artificial or prerecorded voice when contacting you, even if you are charged for the call under your phone plan.
The above provision will become part of your account agreement if you consent to the provision by (i) using your account more than 15 days after this notice is delivered to you or (ii) keeping your account open after March 15, 2009. If you do either of these things, we will conclude that you have consented to being contacted on your cell phone in this way. If you do not want to be contacted on your cell phone in this way, you may call us at 866-630-2763 at any time.

Obama says don't keep your money under your mattress? Then give us a bank we can stand to deal with.

MY AHA MOMENT

Re my post about the war on the wealthy:

Since so many of America's rich made their money in the financing practices which have brought us low, what conservatives and the media have been saying are really just reiterations of these people's historical unwillingness to fund government from their profits and a further refusal to accept any responsibility for what we're going through. I fail to comprehend how any non-implicated American could accept this line.

They're entitled to keep their profits - they figured out how to make them - but if they're unwilling to contribute in some proportion to fix our mess, it's time for them to move to Antigua or whereever else they have havens. They are not Americans any more.

BRADLEY

I had to fly to New Haven to do a deposition. Southwest does not fly to New Haven, and it would have cost to fly there on another airline double what it cost to fly to Hartford on Southwest. Hartford is an hour from New Haven.

Unfortunately, Southwest has decided that it isn't going to fly anyone to Florida after 3 pm. My deposition ran long and I missed my return flight, meaning I was going to have to stay overnight at Hartford's airport, Bradley International, which is Windsor Locks, CT - and spend half a day there, too, waiting for a 2:35 pm flight.

Bradley Airport might as well be in middle of Kansas. Or maybe the middle of the moon. There is nothing in Windsor Locks but a bowling alley, the usual cheap and unhealthy restaurants and hotels who charge a hell of a lot for being in the middle of nowhere. (I guess these hotels want you to believe you are somewhere when you are in the hotel, even though the hotel itself is nowhere. Anyone who believes that deserves what he gets.)The airport itself is more of the same. It is not a place you want to spend more than twenty minutes. On top of that, CNBC owns the news shop, so when you walk in there you have to listen to two boobs discussing - not arguing, since they agree - whether or not unions will drive up wages and thus create unemployment. (I guess I understand why people hate unions. What I don't understand is why they don't equally hate Chambers of Commerce, since they're at least as corrupt as unions and are designed for the same purpose. Oh, but COC people are so clean.)

However, the airport (and even Motel 6) provided pretty quick wifi and a ton of electric outlets. They know that only a computer will keep you sane while you wait for anything at Bradley (this presuming no one reads books anymore. Actually, I have noticed on airplanes lately that there is a genre of people who do read books, the youngest of which seem to be thin women with very short hair, cheap clothes and red faces who are in their middle 50s and must have grown up somewhere between Pawtucket and Hyannis.

It must be the weather that makes the crowd so unattractive. Anyway, why would you even try to look good? Who's gonna see you that you give a shit about?

PLANS

For Obama's plan - or any plan - to work, the public must believe it can and will work. A stimulus plan only works if its spending and job creation is taken over relatively quickly by the consumer and the corporation. Recovery cannot be created by fiat. It takes cooperation.

Which is why current Republican tactics are so dangerous. They do not approach the plan as something which, from their perspective, is flawed but can be fixed. They oppose the whole idea of spending (except for that part which comes into their districts). They are not only entirely rejectionist of the plan - in fact, of all of Obama's plans - but of the people who are proposing them. Not only do they reject, but they attack and condemn on a personal level. And they do not come up with their own plan, because the truth is they want nothing done. They believe the free market has to deal with this situation, and should not be interfered with. The opposition is as basic as it can get. Theory vs. theory. They must win this fight - meaning Obama must fail - because liberalism cannot be allowed to gain a solid foothold. I'll have to leave it to later to discuss why liberalism and conservatism can't be allowed to co-exist, and why liberalism has to be crushed into the dirt under your feet.

What makes it worse is that the media are giving so much time to this opposition. Despite the fact that the coverage does not deal with facts - since there are none - but with opinion, or, otherwise put, propaganda. So the public learns nothing meaningful from this coverage - only that there are people who want the stimulus to fail. And who believe it will fail - basically because it's the spawn of the economic and political Devil.

Despite the fact that Obama has said, over and over, that the stimulus will take time to work, as matters get worse public patience will wear thin and the Republican line - which has no legs right now - will begin to take hold. So, just when it is necessary for the public to help, the public will begin to believe it shouldn't help.

I'm tempted to think that Obama might have tempered the opposition by not attempting to pull so many liberal bunnies out of his hat at one time. But the war is on such basic principle that I don't believe it matters whether or not Obama wants to help unions right now.

I don't remember the history that well, but I'm sure Roosevelt had the same opposition from Republicans.* What I don't know is whether media had the same sort of reach as it now does, and whether opposition opinion was given as much play.

The Republicans have turned this over to Rush Limbaugh because they know it's a propaganda war, a war of ideas. The goal is to stop a movement, not to fix anything. And since he's so good at it, I think they've done the right thing.


*The Republican Party is believed to have originated as a party favoring universal human freedom. It didn't. Emancipation was a ploy to win the Civil War. The Republican Party has never freed anyone out of principle. Anything done for the common good is circumstantial and tactical. The Republican Party has always been the party of cash. At first it was strictly Northern cash. That's where it was at the time of the Civil War, when the north sought to overthrow southern dominance of the Union which had existed almost unbroken since George Washington. It was still there in the 30s. There was no southern cash back then. But in the 60s two things happened: the poor became a focus of the Democratic Party, and money began to flow into the south. From that point, the Republicans were the party of northern and southern money. They still are, although the northern money is keeping quiet about it and letting the loud-mouth hyperpatriotic, aggressive and religious south present itself as running the party - or maybe "letting" is not the right word, since I think at this point the northern money is simply being indulged in the party. So - the Republican party has never stood for anything but wealth - or for those who believe that wealth should be left alone to do whatever it wants to (which includes plenty of folks who are not and never will be wealthy).

WHAT WILL DO IT

I now know what event will signal a bottom and get people spending again. It's the most meaningless thing in the panoply of possibilities: a sustained turnaround in the Dow. In other words , the item least in Obama's control.

You would think that other good developments would turn the Dow positive. But if the market ever worked that way, it hasn't in years. Some unknown psychology makes the market move, and it is not set in motion by good or bad events; probably rather as the expression of the secret desires of the people whose money can move the market. Improvemens in the job picture are far less arcane. The same is true of the spending picture. The psychology there is much more behavioral; they improve when confidence improves. And, this time at least, it's the Dow that will create the confidence.

Which means that if major investors want Obama to fail, he will fail. So I wouldn't get all excited about the prospects for liberalism. Maybe Limbaugh knows more than he'd ever say.

NEVER HAPPEN

The plot of Obama's federal lending program is to loan money cheaply to investors who will then buy up bad loans from banks at very reduced prices which will then have the capital to make loans to businesses and consumers. This sounds like a nursery rhyme to me, or Chad Gadya, and makes about as much sense as privatizing Social Security.

Why not just make the loans directly to the businesses and consumers? And while you're at it, keep your interest rates reasonable - say 4%? If the banks etc. want to stay in business, they'll have to cut their rates - particularly on credit cards - to stay competitive, and find their own way to unload toxic assets. Meantime, the credit crunch is over, overnight. Any bank which can't straighten up its house at consumer-friendly rates goes under and is replaced by a new bank which doesn't have those problems. If you want to keep those first-step private investors in the loop, have them create the new banks, and regulate their interest rates.

This makes so much sense to me I know it will never happen.

DENIAL

I think I understand why Iranians deny the Holocaust. They perceive that Israel has used the Shoah to insulate itself from the consequences that any other nation would face if it did some of the things that Israel does.

So Holocaust denial is a delusional way of wishing that immunity away, as a means, as Iranians see it, of leveling the playing field or of advantaging Iran. Delusions have historically been rife in the Middle East, so this is nothing new. But Iranians ought to be smart enough to see that denial isn't going to work and stands as a pointless obstacle to Iran's success. Probably they will once Ahmedinajad goes.

TWO QUESTIONS

1) Are the Republicans trying to reduce the Obama administration to a minstrel show?

2) Are they going to run Rush Limbaugh in 2012?

WHY THE MIDDLEMAN?

The Federal Reserve on Tuesday rolled out a much-awaited program aimed at boosting the availability of credit to consumers and small businesses. The Fed will lend up to $200 billion to spur consumer lending — for autos, education, credit cards and other things. The bold program, dubbed the Term Asset-Backed Securities Loan Facility, was first announced late last year and originally scheduled to start in February. Participants — companies and investors that pledge eligible collateral to back the loan — must request the new government loans by March 17. The Fed will provide the three-year loans on March 25.

But why the middleman? Why not direct loans to consumers and small businesses? What guarantees does the government have that this money will actually be loaned out? I haven't seen anything about that.

OUR ONLY CHANCE

When George Bush told us, after 9/11, that our patriotic duty was to go shopping, he was very right in the short term - and very wrong in the long term.

The American economy is based 70% on consumer spending. God knows what the percentage worldwide is, but the health of plenty of countries depends on the same spending. And the financial industry pondscum floats on the top of, profits from and facilitates this sort of economy.

But when everything they own is losing value, Americans learn very quickly what they really want and what they really need. They will not spend on anything else. The American savings rate is skyrocketing right now. That's supposed to be healthy - but at the moment it's anything but.

The retention of savings means more money available for productive investment. When Americans are urged to consume to excess, that source of funding dries up. That means that the average American does not participate in or profit from American economic growth.

In recent years, that funding has been replaced by money from China - which is really American money spent on consumer goods so that Chinese, not Americans, get the benefits of investment. Or it came from the wealthy who benefited from the consumption and all the speculation that went along with it.

Now, that money stays in American hands, and will ultimately be available to fund investments. The question is how far is the economy going to fall, or what is going to put an end to that fall, before Americans will let that money out of their hands.

I think it's going to be a good long fall for a good long time.

All those companies which make things or sell things Americans have decided they don't need are going to fail. All the jobs associated with those things are going to disappear. That means long term disruption, as we have a mass of people the economy does not need. Including a lot of financiers.

What's going to happen to them? If they ever figure out there's no hope for them, we could see violent revolution. How long will it take with things continuing as they are for them to realize there's no hope?

Do we go back to the consumer economy? I hope not. That's what got us in this mess in the first place. Housing and finance are simply a part of overall consumerism. That's why fixing the banks and housing is not going to help. In fact, I think things have gone way too far for anything the government is trying to do to have any effect. Sure, rebuilding roads will put some people back to work. But my Granny who used to hawk cosmetics at Dillard's is not going to be able to dig a ditch. What the hell is she supposed to do for income? But you bet she knows how to use that Colt Gold Cup .45.

There are things that can be done which in the long run will help. Direct government investment in new technologies and new products which everyone is going to want to have will grow GNP and employ lots of people - at all levels, assuming there are restrictions placed so that government investment does not produce outsourced jobs. This needs to continue until all that private capital gets loose.

But this growth may never be enough to employ all of those who are currently losing their jobs. The only thing that will do that is Americans deciding they need a lot of junk they know, at the moment, that they don't.

And it will take a long time for those investments to be productive. Far too long to count on as a way of stopping this slide.

The last hope for an immediate turnaround is a return to rampant consumerism. What will make that happen is beyond me. Some unknown event, or speech, will ultimately stop the slide. But it won't be consumer spending, because that won't return until after that event has occurred - if ever.

One thing the government can do to promote consumer spending is to stop the banks from raping us with credit card interest rates as a way to recoup their losses - incidentally proving that they have no regard for the interests of the average Americans. This is entirely counterproductive if the short term goal is to get people consuming again. They are running out of money, and who's going to use credit when it costs you 29.99% a year? It is also stupid, because the result will be more defaults and more banking collapse.

But I don't like the whole idea. It just puts us back where we were. I'm afraid to make things really good is going to take longer than I'm going to live.

I am not an economist, but all of this seems perfectly clear to me. I may have it wrong, or what I say may not be clear to you. But I'm certainly doing at least as well as people in the finance business. Because the only thing they think about is their short term profits, and their immediate cash in the bank. And short term thinking is the last thing we need right now.

Obama has stocked his administration with many people who are far too used to thinking short term and profiting from it. Much of what they are doing is more of the same. Sorry to have to say this, but it won't work.

I'm no fan of Tom Friedman, but when he writes that government should seed venture capital to develop new industries, he is pretty close to right. I would take it one step further and cut out the middle man; government should seed new industries with direct capital infusions.

They'll say this is socialism. What a crock. Most of the technology we benefit from today came as a result of some direct government investment in both r&d and ultimate production. Much of it in the Defense Department and NASA. Lately the DOD has forgotten about this, and seeds only tactical military capabilities. Why don't we look for really good opportunities and help them get themselves off the ground? If seasoned venture capitalists are needed to make that happen, by God let's use 'em. And lets pay them well. They may be our only chance for survival these days.

OH YEAH, YOU GOT THAT RIGHT

Read.
This, too.

SPEAK UP!

Since we seem to be in the process of correcting injustices, why is so little attention being paid to the fact that banks pay you 2% on a CD and charge you 30% on a credit card - and that's on money you originally borrowed at 3.5%? Isn't that my money they're lending out? How come I don't get a cut of the vig?

Banks right now are the moral equivalent of the Cosa Nostra.

Where's the outrage? SPEAK UP!!

Here's one guy who is.

OY!

Read.

READ MY NOVELS FOR FREE!

For those who have not bought and read my novels Marwan and The Tenth Cow, I am now serializing them online. Here are the links:

Marwan
The Tenth Cow

ENOUGH TO DO

You don't like Islamic fundamentalism? What are you going to do about it?

It is spreading, and it is likely to continue to spread for a while. The American rejection of the Christian right in the 2008 election is not likely to find a parallel in the Islamic world. What Islamists are looking for now is world respect for themselves and for their religion - and no doubt that includes real world power. Anyway, the American rejection of the Christian right cannot be seen as permanent. They will return to power, one of these days. Why? Because they're determined, and they're not going to go away any time soon. The same can be said for the Islamists.

But they are not necessarily a threat to us. It's possible that they will restore their caliphate one day. At least the Arabs could unite under one government - although they've tried it, and it hasn't worked, because they're still essentially tribal and they don't like members of the other tribes any more than L A street gangs like members of rival gangs. And I think it very unlikely that non-Arab Muslims would submit themselves to an Arab caliphate. But I think they would be willing to work together to an extent to advance particularly Islamic causes. So what?

They're focused on reviving their religion. And since historically the state and the religion are one in Islam, that means putting an end to secular Muslim states. But not many of them are interested in going after the Crusaders. Fareed Zakaria wisely points out in a recent Newsweek article that even the Taliban, though they hosted al Qaeda, have never themselves been involved in attacks on non-Muslim targets. It's likely that in the medium term, until they have accomplished internally what they want to see, Islamists will only target non-Muslims who have targeted them.

What about Iran, you say? Okay, what about 'em? They hate the Great Satan? Only because America kept the Shah in power and kept Iran secular. Who have they warred against? Iraq. In part because of the historical enmity between Persians and Arabs, and in part because Iraq was secular. They have interfered in Lebanon, again a secular state. And they support the fight against Israel, again for two reasons: firstly, Israel holds down Palestinians(Muslims), and secondly because Israel is Iran's rival for Mideast power.

What about the nukes? Again, what about 'em? Iran wants to be a dominant state, and these days dominant states have nukes. That does not mean Iran wants to attack the U.S. It does not even mean, despite what it says, that Iran necessarily wants to destroy Israel. If the Palestinian mess was settled, I would bet that Iran would have no more designs on Israel than any state has against its neighbor, its primary concern being to be able to live its own life.

Actually, Iran may be the state which puts an end to Islamism. Its population has lived under Islamism, and plenty of them don't like it. If Iran overthrew its mullahs, that would put some brakes on the advance of Islamism. So it makes sense not to attack Iran, but to leave it alone until its seculars have the power to make needed changes.

Of course, any Islamist state could be a haven for terrorists who are focused on attacking nations outside the faith. But such a state can be dealt with in many ways by a US government sophisticated enough to understand how to manipulate and play the state's fault lines.

My advice? We can't fight them all, and there's really no reason to. It will be a sad thing if Islamists repress women or cut off their domestic market for US entertainment. But that doesn't have to be, and shouldn't be, any of our business. We've already got enough to do.