Daily Show: Clusterf#@k to the Poor House

FDR Fireside Chat: Backing up the Banking System

Sarah Vowell (during her appearance on the Daily Show a few nights ago,) mentioned that she listens to FDR's fireside speeches on YouTube when she wants reassurance amidst this banking crisis. That seems like a pretty good idea.

"Together, we cannot fail." - FDR

Unlike our grandparents' generation, we are going through this financial crisis in a leadership vacuum; we're bailing out the Titanic after Wall Street CEOs have run off with the lifeboats, food, water and life jackets.

Where is our captain?



"We do not want, and will not have, another epidemic of bank failure." - FDR

Chicago Sheriff: No foreclosure evictions on my watch

Wow.

From the AP:

CHICAGO (AP) — The sheriff here said Wednesday that he's ordering his deputies to stop evicting people from foreclosed properties because many people his office has helped throw out on the street are renters who did nothing wrong.

"We will no longer be a party to something that's so unjust," a visibly angry Cook County Sheriff Tom Dart said at a news conference.

"We have to be sure that when we are doing this — and we are destroying some people's lives — we better be darned sure we're talking about the right people," Dart said.

From CNN:

CHICAGO, Illinois (CNN) -- Sheriff Thomas J. Dart said Wednesday he is suspending foreclosure evictions in Cook County, which had been on track to reach a record number of evictions, many because of mortgage foreclosures.

He said many of the evictions involve renters who are paying their rent on time but are being thrown out because the landlord has fallen behind on mortgage payments.

Mortgage companies are supposed to identify a building's occupants before asking for an eviction, but sheriff's deputies routinely find that the mortgage companies have not done so, he said.

"These mortgage companies only see pieces of paper, not people, and don't care who's in the building," Dart said. "They simply want their money and don't care who gets hurt along the way.

"On top of it all, they want taxpayers to fund their investigative work for them. We're not going to do their jobs for them anymore. We're just not going to evict innocent tenants. It stops today."

Of course the banks don't give a damn about the growing number of people being tossed out on the street - after paying their rent to landlords who have defaulted on loans:

The Illinois Bankers Association opposed the plan, saying that Dart "was elected to uphold the law and to fulfill the legal duties of his office, which include serving eviction notices."

The association said Dart could be found in contempt of court for ignoring court eviction orders.

"The reality is that by ignoring the law and his legal responsibilities, he is carrying out 'vigilantism' at the highest level of an elected official," it said. "The Illinois banking industry is working hard to help troubled homeowners in many ways, but Sheriff Dart's declaration of 'marshal law' should not be tolerated."

Sheriff Dart explains the reason for his heroic stand against the banks:

October 9, 2008

BY COOK COUNTY SHERIFF TOM DART

As Cook County sheriff, I am responsible for running a 10,000-inmate jail, providing patrols to unincorporated areas and securing the courts.

But perhaps no part of our job is as difficult as the work done by our eviction units. On any given day, our deputies could be asked to throw a family out of their home, with all of their possessions left on a curb -- sometimes pilfered through by those living nearby.

Where mortgage firms see pieces of paper, my deputies see people.

Yet no matter how difficult they are, evictions are part of our job.

What isn't part of our job, however, is to carry out work on behalf of the multi-billion-dollar banks and mortgage industries.

Too many times, our deputies arrive at a home to carry out a mortgage foreclosure eviction, only to find a tenant -- dutifully paying their rent each month -- who is unaware their landlord stopped using that rent money to pay the mortgage. They had no fair warning that they were about to be thrown out of their home.

That's because, in many cases, the banks have done nothing to determine, in advance, who's living in the building -- even though it's required by state law. Instead, those banks expect taxpayers to pay for that investigative work for them.

That stops today.

We won't be doing the banks' work for them anymore.

We won't surprise tenants with an eviction order intended for their landlord.

I may be held in contempt of court over this. If that's the case, I'm willing to accept it though I believe most judges in Cook County share my desire to find a solution for this mess.

This is what I call real patriotism...



These banks are completely heartless:

Last year, Dart pushed a bill before the Legislature that would have required mortgage companies to identify any children or senior citizens living in a unit before requesting an eviction. Dart hoped to link those vulnerable residents with social service agencies, but banking and real estate industry lobbyists killed the bill.

I read the news today - oh boy (ongoing...)

McClatchy:

WASHINGTON — For the second consecutive day, the Federal Reserve took bold action Wednesday in hopes of staving off a global financial collapse. And again U.S. financial markets failed to calm, extending losses for a sixth straight day while shrugging off a Fed-led, globally coordinated half-point cut in interest rates.

Crashing market, failing banks, loss of homes and jobs, climate change... are you ready?

We've been here before. Our grandparents lived through this; many of our parents grew up in the Great Depression. How did we fail to learn it's lessons? How did this lesson fail to be passed down to later generations?

"Waste not, want not."

They say if you don't study history, you are doomed to repeat it. Perhaps this time the lesson will stick.

AIG parties on the taxpayer tab

From CNN:

Days after it got a federal bailout, American International Group Inc. spent $440,000 on a posh California retreat for its executives, complete with spa treatments, banquets and golf outings, according to lawmakers investigating the company's meltdown.

AIG sent its executives to the coastal St. Regis resort south of Los Angeles, California, even as the company tapped into an $85 billion loan from the government it needed to stave off bankruptcy.

The resort tab included $23,380 worth of spa treatments for AIG employees, according to invoices the resort turned over to the House Oversight and Government Reform Committee.

I'm guessing that the majority of American citizens aren't the slightest bit surprised. You just took our tax money to bail out these creeps - against our will - and you express surprise that they behave in exactly the same fashion that they've always behaved?

Kucinich: Taxation without Representation

Apparently I am not the only voter now disenfranchised by Obama after this epic 'giveaway' to Wall Street. I am also not the only one who has noticed that the Democrats are now marching in closer lockstep to Bush than many Republicans. We live in interesting times.

In an excellent essay, Chris Hedges takes Obama to task for pushing the bailout bill and offering no alternatives - after promoting himself as a candidate who will not bow to lobbyist demands. Given the choices - Obama or McCain - many of us feel we will have to choose the lesser risk (Obama,) but he has greatly hurt his credibility with this promotion of bankers over home owners.

That said, the best quotes in this essay were from Kucinich:

"This was the largest single act of class warfare in the modern history of this country," Rep. Dennis Kucinich, D-Ohio, who led the fight in the House against the bailout, told me by phone from Cleveland. "It is a direct attack on the American people's ability to be able to stabilize their homes and their neighborhoods. This single vote will define the careers of everyone. We are back to taxation without representation, to markets that are openly rigged."

"We buried the New Deal," he said of the vote. "Instead of Democrats going back to classic New Deal economics where we prime the pump of the economy and start money circulating among the population through saving homes, creating jobs and building a new infrastructure, our leaders chose to accelerate the wealth of the nation upwards. They did so in a way that was destructive of free-market principles. They ripped away all the familiar moorings. We are in an uncharted sea where the traditional roles of the political parties are being switched. The Democrats have unfortunately become so enamored and beholden to Wall Street that we are not functioning to defend the economic interest of the broad base of the American people. It was up to the Republicans to protect not just a so-called free market but the American taxpayer and attempt to block this. This is an outrage. This was democracy's Black Friday."

In his phone interview with Hedges, Kucinich went on to say:

"Some of the most powerful speeches against this were given by members of the Republican Party who are on the political right," Kucinich said. "They did a superb job in poking holes in the underlying assumptions of the bailout. They say what they believe. Give me somebody who says what they believe and I can figure out how to get them to a new place. When people say one thing and do another it is very hard to be able to move a debate."

"We had two take-it-or-leave-it propositions and the second one was worse than the first," Kucinich said, referring to the plan that came loaded with pages of tax cuts. "Tax cuts are antithetical to a bailout. We never solved the problem. There were never any hearings on the bill. This premise, that we could prop up the stock market with a $700-billion investment and create some liquidity, was flawed. The problem is that banks do not want to loan to each other. It is not a liquidity problem. Banks are afraid they are going to collapse in short selling. There is a war going on between security firms and banks. Banks are under assault. They are not loaning. The dynamic is driven by the Accounting Standards Board, the Securities and Exchange Commission and the Fed."

"We face a perfect financial storm," Kucinich warned. "The elements are the deficit spending for the war of 3 to 4 trillion dollars, the trillion and more tax cuts, the war itself and the lack of serious investment in the country. We are being hollowed out. We are going to see more unemployment and more people losing their homes. With $700 billion we could have made a real investment in the country, in jobs, in infrastructure and in homes. Instead, we got robbed."

Yes, definitely.

And this obviously has done nothing to calm the growing economic storm. We may as well all step out of our houses (those of us who still have houses,) and toss our life savings into the wind, as to throw $700 billion of borrowed money at Wall Street hoping that the hurricane will move back out to sea.

This bill was all about bailing out corporate donors. You know it. I know it. Many in congress know it. And yet so many voted for it anyway. Black Friday indeed.

It is our job as voters to pay attention to which members fought it - fought for us - and to vote for them. The rest should be tossed out of government forever. I'm sure their Wall Street buddies will be happy to take them in.

As for Obama... he is obviously less economically clueless than McCain. But I have lost my faith that he is the solution, the leader we need in this time of economic calamity. He has shown that he is no Roosevelt; he has shown that he doesn't vote the talk of helping the average American.

Obama has quite a bit of answering to do for his part in epic fleecing of the American people. If elected president, I can only assume that one day he will realize the consequences of his actions. Hopefully he will one day learn to be a real Democrat, or at least a real leader of the people.

Wrong, wrong, WRONG.

From McClatchy, unbelievably.

I take serious issue with both the headline and the assumption that our 'system worked.' If the system did not represent the people - in a 'government of the people' - then the system DID NOT WORK.

Congress looked ugly on bailout bill, but system worked
David Lightman | McClatchy Newspapers

last updated: October 04, 2008 05:38:19 PM

WASHNGTON _ Everything America hates about Congress was on vivid display these last few weeks as members struggled to pass the $700 billion financial rescue plan.

Yet experts argue that in the end the system worked, as members acted rapidly to try to ease what may be the most serious economic crisis since the Great Depression.

“Democracy is messy,” explained Carl Pinkele, professor of politics and government at Ohio Wesleyan University.

But has it become too messy? How did a three-page Bush administration request balloon into a 450-page goodie bag brimming with tax breaks for NASCAR racetracks and children’s wooden arrow makers, among others? Why did 58 House members who voted against the bill Monday vote yes Friday, after those sweeteners were added?

Congress clearly has an image problem, one that drove its already tiny approval rating down to 15 percent in a CBS News poll taken Sept. 27-30, in the midst of the bailout battle.

Will the bailout bill chaos prod the system to function more smoothly?

Probably not, said Jack Pitney, professor of American politics at Claremont McKenna College in California.

Congress simply has an 'image problem?'

Surely you jest.

Congress has betrayed us. Repeatedly. They haven't done anything we sent them there to accomplish. They haven't ended the war in Iraq or held the Bush Administration accountable for any of its crimes. They didn't defend our Constitution (which they swore to uphold and defend,) or us from illegal wiretapping. They never opposed Bush at all - the most unpopular president in history. They couldn't even get Rove to appear when subpoenaed!

House Democrats even overturned a 25 year old moratorium on offshore drilling, simply because our oil man president and his oil man vice jacked up the price of oil at the pump, and Gingrich started a catchy little 'drill here, drill now' jingle.

Now there is some backbone on display.

It takes much more than an 'image problem' to warrant a %15 approval rating - don't you think? That is lower than George W. Bush's presidential approval rating; and his is the lowest of any president in history (lower than Nixon's after Watergate, back in the days when crimes had consequences.)

I see you quote the professor when he admits that the bailout 'won't even prod the system to work more smoothly.'

So why the rush? Why the rush? Why aren't you asking that question?

Why wasn't there anything in the bill for the struggling citizens of this nation - the taxpayers who will shoulder this debt? Why were only Paulson's buddies bailed out -- and after they caused this disaster in the first place?

This is hogwash. And here I thought McClatchy was free of White House talking papers.

“This is how Congress usually works, and whenever people have the opportunity to watch it, they think less of the institution,” he said.

I watch Congress all the time; its broken, and anyone who watches knows that it has been broken ever since lobbyists invaded Washington D.C. to the tune of a 3000-1 ratio (lobbyists to representatives.)

Adding to the ugliness was a Republican schism that’s been building for years.

This writer is seriously confused, and obviously doesn't grasp what is really going on, either in our government or in the Republican party.

This 'Republican schism' is our best hope for continued Democracy. These Republicans are rebelling against the fascist Neocon stranglehold on their party. How can this be 'ugly?'

These Republicans actually represented us. The Democrats, for the most part, rolled over. Again. And that... was ugly.

Rep. Mac Thornberry, R-Texas, also said he was “uncomfortable with the degree of government intrusion,” but he voted yes partly because of the improved Federal Deposit Insurance Corp. protection on consumer bank deposits.

“A former minister in home church used to say that. ‘Sometimes you have to put aside your principles and do what’s right,'" Thornberry said. “I believe at this extraordinary time passing this flawed bill is the right thing to do.”

What??

"Sometimes you have to put aside your principles and do what's right?" That makes absolutely no sense at all -- no wonder these boneheads couldn't craft a better bill. The only way putting aside one's principles to do what is right makes any sense, is in a context where someone has no principles in the first place. In that case voting for what is right would definitely be against one's principles. (Logic. So hard to find these days.)

And this in no way addresses the fact that this bill was NOT RIGHT if the taxpayers were against it. Period. Congress was elected by us, to represent us... not fat cat bankers and lobbyists.

“Everyone knew something had to be done, but they didn’t want to be hit if everything blew up,” said Dennis Goldford, professor of politics at Drake University in Des Moines, Iowa. “They all knew how terribly unpopular this was.”

And it never occurred to these elected boneheads - these failed representatives - that it was their job to stay in Washington and craft a bill that represented their constituents?

If the bill is terribly unpopular among your voting constituents - the people who sent you to Washington - then you vote against it! THAT is how the system is supposed to work.

So enacting a historic bailout bill in a matter of weeks is almost a demonstration that an unruly system can be tamed. The drama probably won’t boost Congress’ approval numbers, but that’s democracy, Capitol Hill-style.

It was enacted in one week - literally shoved down the throat of Congress and the taxpayers who voiced loud opposition in an election year - and the voters were ignored in favor of lobbyists and bankers. Tell me again how the system 'worked?' What a bunch of conceited, ignorant BS.

McClatchy - please - don't sink to this level. You can do better than this.

The arrow to nowhere

A few of the Senate's (pork) additions to the Wall Street bailout legislation are hilarious. Or they would be... if the nation weren't on the brink of economic collapse.

These senators couldn't save our houses... but they took a special interest in reducing the tax on wooden practice arrows?

You can't make this stuff up.

Excise Tax Exemption for Wooden Practice Arrows Used by Children -- Cost: $2 million over 10 years

Current law imposes an excise tax of 39 cents, adjusted for inflation, on the first sale by the manufacturer, producer, or importer of any shaft of a type used to produce certain types of arrows. This proposal would exempt from the excise tax any shaft consisting of all natural wood with no laminations or artificial means to enhance the spine of the shaft used in the manufacture of an arrow that measures 5/16 of an inch or less and is unsuited for use with a bow with a peak draw weight of 30 pounds or more.

Praise the Lord! Our children can practice for the next Stone Age!

Dean Baker: Bush sought to provoke financial panic

This excellent essay by Dean Baker accuses Bush of deliberately creating financial panic to push through legislation. Naomi Klein calls this 'Shock Doctrine.' Whatever you call it, Congress fell for it once again. Then the rats all fled the sinking ship.

Perhaps the day will come when Americans are too poor to even pay taxes. There are so many of us... what if the economy goes belly up and the dollar collapses? I wonder what our dear representative government will do to collect on this enormous debt they have assigned to us against our will? Put us all in debter's prison? Assign us all jobs in a massive national work house?

This will likely go down as one of the greatest - if not the greatest - betrayal in our nation's history. I had the impression that my congressman grasped that fact (and thus refused to vote for it, along with most of the other Hoosier congressmen.)

Somehow our aging Senator Lugar - a nice man - missed the historical significance. Perhaps he was simply afraid. It is unfortunately that history will damn him along with the rest of the millionaire's club. Our children's children won't know anything about him other than that he signed this bill -- and it will stick to his name and reputation like the stink of a skunk.

Dean Baker's essay assigns the biggest blame to Bush. Is this the legacy Bush plans to leave -- bankrupting an entire nation? He says that he truly believes history will vindicate him. Is he actually hoping that there won't be anyone left to read it?

If Lincoln's ghost really does haunt the White House, I have a theory about why Bush spends so much time on vacation, away from the place. If I were Lincoln, I'd be howling "TRAITOR!" over W's bed, every single night.

Statement on Congressional Approval of Bailout

by: Dean Baker, The Center for Economic and Policy Research

Friday 03 October 2008

This is the first time in the history of the United States that the president has sought to provoke a financial panic to get legislation through Congress. While this has proven to be a successful political strategy, it marks yet another low point in American politics.

It was incredibly irresponsible for President Bush to tell the American people on national television that the country could be facing another Great Depression. By contrast, when we actually were in the Great Depression, President Roosevelt said that, "we have nothing to fear, but fear itself."

It was even more irresponsible for him to seize on the decline in the stock market five days later as evidence that his bailout was needed for the economy. President Bush must surely understand, as all economists know, that the daily swings in the stock market are driven by mass psychology and have almost nothing to do with the underlying strength in the economy.

The scare tactics of President Bush, Secretary Paulson and Federal Reserve Board Chairman Bernanke created sufficient panic, so that by the time of the vote, much of the public believed that the defeat of the bailout may actually have had serious consequences for the economy. Millions of people have changed their behavior because of this fear, with many pulling money out of bank and money market accounts, and in other ways adjusting their financial plans.

This effort to promote panic is especially striking since the country's dire economic situation is almost entirely the result of the Bush Administration's policy failures. First and foremost, the decision of Secretary Paulson and Chairman Bernanke (and previously Alan Greenspan) to ignore the housing bubble, allowed for the growth of an $8 trillion bubble, which is now collapsing.

It is the collapse of this bubble, which has already destroyed more than $4 trillion in housing wealth, and is likely to destroy another $4 trillion over the next year, that is at the root of the economy's problems. While competent economists were warning of the bubble and the dire consequences of its collapse, the top officials in the Bush administration were celebrating the rise in homeownership rates.

The Bush administration made the crisis even worse by deregulating Wall Street. This led to the huge over-leveraging of financial institutions, which has vastly complicated the country's economic policies. It is especially disturbing that Secretary Paulson personally profited from these policies, earning hundreds of millions in compensation from Goldman Sachs during his years there as its CEO.

The collapse of the housing bubble, while falling short of the magnitude of the Great Depression, is likely to lead to the worst recession since World War II. Repairing the damage caused by this bubble will be a long and difficult process. Cleaning up the damage to the political system from President Bush's unprecedented fear campaign may prove to be even more difficult.

Difficult or impossible.

Likely the next guy to take office will remember how well fear worked - and how unwilling congress was to stand up to it - and ram all sorts of horrors down our throats. McCain certainly will. Obama is still a mystery.

Obama voted for it; but perhaps naively believes he can undo it. I honestly have no idea. I wonder if he still wants to be president of this imploding empire?

Lou Dobbs: Earmarks with bailout

Lou Dobbs, on the war path

Lou will be fun tonight. (I guess 'fun' isn't quite right; 'madder than a wet hen' might be a better description.)

Here is the email alert about tonight's show:

Lou Dobbs Tonight
Friday, October 3, 2008

Tonight, it’s official: Both houses of Congress have passed the $850 billion Wall Street bailout that rewards massive banks and corporations for their deceptive lending practices, shady accounting and reckless, greedy transactions.

Now it’s on its way to the president for a slam dunk signature. It’s another big win for the ultra-wealthy and another insult to the ordinary men and women who make up this country. We’ll have complete coverage.

Plus:

* House members are the latest to have to explain their votes on the mega-bank mega-bailout. They love to talk about ending pork, but this bill was loaded with it.

* California’s budget crisis is worsening. Gov. Arnold Schwarzenegger sent a letter to Treasury Secretary Henry Paulson saying his state may need an emergency loan up to $7
billion. California is not the only state struggling for funding during this credit crunch. New Mexico and Massachusetts are considering cancelling large infrastructure projects.

* Congress is rushing through meaningless legislation ahead of its latest vacation, rather than addressing the major issues that matter to Americans. Congress didn’t pass appropriations bills, but instead lumped spending measures into a continuing
resolution. On the critical legislation like e-verify, lawmakers simply passed a temporary extension. And, Congress will break without passing real foreclosure relief for struggling families.

* Manufacturers, unions, and farmers groups are outraged at the way this country’s faith-based free trade policies created the current economic crisis. Today, the Coalition to Fix America's Economy will announced a proposal to revive our manufacturing sector and to make manufacturing and farming part of the economic dialogue for our presidential candidates.

(Lou - seriously - can we 'revive' a manufacturing sector that was shipped overseas to China?)

Whether you agree with his stance on immigration or not, you have to admit he's relentless when it comes to Congress, Wall Street and lobbyists.

Pin the tale on the donkey... and the elephant

These capitalists generally act harmoniously and in concert, to fleece the people.

- Abraham Lincoln

While the media trumpets the passing of this 'historic legislation -- and the taxpaying public, their children, and their grandchildren are left to pay the bill -- here is a little background that McClatchy was kind enough to print:

Lax oversight? Maybe $64 million for D.C. pols explains it

The Wall Street financiers and firms whose problems have prompted a $700 billion federal bailout are no strangers to Capitol Hill or to politics.

Since 2001, eight of the most troubled firms have donated $64.2 million to congressional candidates, presidential candidates and the Republican and Democratic parties, according to data from the nonpartisan Center for Responsive Politics.

The donors include investment bankers Bear Stearns, Goldman Sachs, Lehman Brothers, Merrill Lynch, Morgan Stanley, insurer American International Group and mortgage giants Fannie Mae and Freddie Mac. Since March, with the exception of Goldman Sachs and Morgan Stanley, all of these companies have been bailed out by the government, sold to other companies at deeply discounted prices or simply failed.

Both political parties have become beholden to Wall Street.

Legislators failed in several instances to conduct oversight hearings or to raise concerns as the Bush administration adopted rules that fed the mortgage frenzy and set Wall Street on the route to disaster.

For instance, in 2004 when the Securities and Exchange Commission adopted a major rule change that freed investment banks to plunge tens of billions of dollars in borrowed money into subprime mortgages and other risky plays, congressional banking committees held no oversight hearings.

Congressional inaction also allowed mortgage agents to earn high fees for peddling loans to unqualified homebuyers and prevented states from toughening regulations on predatory lending practices.

Democratic Sen. Christopher Dodd of Connecticut, the chairman of the Senate Banking Committee who ran unsuccessfully for his party's 2008 presidential nomination, has received nearly $1.3 million from employees of the eight troubled firms since 2001.

Dodd didn't respond to repeated requests for comment. His office said he's unaffected by campaign contributions and stressed that he was the first to "sound the alarm about the subprime crisis," shortly after assuming the chairmanship in 2007.

In the House of Representatives, Massachusetts Democrat Barney Frank, has collected about $78,000. Frank, the chairman of the House Financial Services Committee, has taken the least cash of the four House and Senate banking chairmen of recent years.

He said that's probably because he "fought like hell'' against administration limits on state predatory lending laws, but had limited influence until Democrats won the House majority and he became chairman in 2007. He said he'd just become the panel's ranking Democrat in 2004 when the SEC rule was adopted, and "I don't remember that issue coming before us."

Former Ohio Rep. Michael Oxley, who was the Republican chairman of the financial services committee in 2004, when the SEC rule was adopted, received more than $260,000 from the eight banks before he left Congress in 2007. Oxley last year was named vice chairman of the tech-heavy Nasdaq stock exchange. He couldn't be reached for comment.

Sen. Richard Shelby, the Alabama Republican who was the banking committee chairman when the SEC rule was adopted, received more than $152,000 in donations. Jonathan Graffeo, a spokesman for Shelby, said that campaign donations "are not a factor in Sen. Shelby's decision-making."

Shelby said that Democrats blocked his attempts to rein in the roles of mortgage giants Fannie Mae and Freddie Mac and his push for a closer review of the SEC's regulation of investment banks. He said the SEC rule left a staff of fewer than 20 overseeing trillions of dollars in assets.

The Democratic and Republican presidential candidates, Sens. Barack Obama and John McCain, have received a combined total of $3.1 million. A small portion went to their Senate campaigns.

Indeed, it's impossible to say what, if anything, Wall Street bought with its $64 million. Politicians and political parties take money from a wide variety of sources, many of them with competing interests and opinions, but experts interviewed by McClatchy said that inaction by the Congress helped set the stage for the current crisis.

Some state regulators, recognizing early signs of trouble in housing markets, sought help from Congress when the Bush administration adopted rules barring states from enforcing tough laws targeting predatory lending — the practices that were enabling unqualified applicants to obtain subprime mortgages.

With Wall Street serving a key role in buying, bundling and reselling subprime mortgages, state officials couldn't get Congress to intervene, said John Ryan, the executive vice president of the Conference of State Bank Supervisors.

Read the rest...

'Campaign donations' are not a factor in decision-making... please. I see that line over and over in the above story. What a joke. I'm sure the banks always make donations out of kindness and respect, with no strings attached. Perhaps they simply like you guys, shucks.

We've been sold out.

Even the Wall Street Journal - and you have to admit the irony there - ran with the following story:

Bank Lobbyists Regained Clout After Vote in House

WASHINGTON -- After defeat of the financial rescue bill in the House this week, Washington sought advice and ideas from lobbyists of the same industries blamed for creating the mess.

In White House meetings and phone calls Thursday, President George W. Bush and top advisers pleaded with industry groups to help save the $700 billion financial bailout plan, following its defeat Monday in the House of Representatives.

Members of Congress also opened their doors after largely shutting out industry lobbyists earlier.

Read the rest...

I have nothing else to say. Sadly, this was predictable. So is the coming crash of the economy and subsequent collapse of the dollar.

"B Day" in the House of Representatives

Question of the day... will our allies in the House cave to pressure from the Senate 'Millionaire's Club,' or will they take the time to do this right?

Our future depends on this answer, and we don't have long to wait.

I'm sure most of us weren't terribly surprised when the Senate voted 74-25 vote to bail out Wall Street with only a few superficial changes (supposedly to pacify angry American taxpayers.) The Senate is stuffed with millionaires; most of them painfully out of touch with the struggles of mainstream America.

It frightens me to see that both of our presidential candidates voted in favor. This leads me to believe that nothing will really change after this election - not unless we get this right... and get it right before the election. This is probably our only chance to participate in our government, which is our right as American citizens. Somewhere out there, our forefathers are watching us.

Today the bailout mess falls back on the House of Representatives, where we still have some influence (all members of the House are up for re-election in November.)

From all accounts, corporate lobbyists are working around the clock to switch 13 votes from 'No' to 'Yes.' They have apparently been successful in changing 7: Jim Ramstad (R-MN), John Shadegg (R-AZ), Zach Wamp (R-TN), Ileana Ros-Lehtinen (R-FL), Shelley Berkley (D-NV), Emanuel Cleaver (D-MO) and John Lewis (D-GA) will probably now vote in favor of this bill.

Other possible switches include Pat Tiberi (R-OH), Pete Hoekstra (R-MI), John Yarmouth (D-KY), Brian Bilbray (R-CA), Steve Rothman (D-NJ), Lee Terry (R-NE), Jim Gerlach (R-PA), Tim Murphy (R-PA), Jason Altmire (D-PA), and Gabrielle Giffords (D-AZ). I don't see any changes from my representatives in Indiana; and I'm proud of them for demanding other options.

While some representatives are switching their vote and will now favor the Senate bill, still others may actually change their vote from Yes to No; including Ed Markey (D-MA), Charlie Melancon (D-LA), and Spencer Bachus (R-AL).

Bush's first Treasury Secretary, Paul O'Neill, called Paulson's plan "crazy" and "lunacy" with potentially "awful" consequences for the world's largest economy. Strong words... from someone who should know. Many of our nation's best economists agree with O'Neill.

Paulson's strongest supporters admit that it will not raise stock prices or boost the economy as we sink further into a recession. Why should we rush through a bailout plan - one that everyone agrees will be ineffective - that gives $700 - $850 billion of our tax dollars to Wall Street?

I found it interesting that Joe Lieberman mentioned on FOX that this government bailout will be "good for John McCain." No mention of what is best for America; best for generations of American citizens who will inherit this debt. But then again... we're talking about Joe Lieberman, so this can't really come as much of a shock.

Our entire financial future - as a nation - is hanging in the balance. Congress should stay in session for as long as necessary to craft a better and cheaper plan; because there are definitely other options. One alternative, called the 'No Bailouts Plan' has already been proposed by Pete DeFazio (D-OR). The DeFazio bill is designed to fix the banking system by providing insolvency relief instead of a bailout.

Another bill currently in the works by Rep. David Scott and Rep. Doggett - with the aid of economist James K. Galbraith - plans to help ordinary people by creating a modern version of the Home Owner's Loan Corporation (HOLC). This will address the mortgage crisis on Mainstreet by taking over mortgages and keeping people in their homes with reasonable serviceable mortgages.

Taking pieces from each of these bills and crafting something that works for all of America is the job facing the House today.

They can fold their tent and walk away, leaving this disastrous government bailout intact; or they can craft something much better. Each of these alternative bills fails to address all of the issues facing our economy. Patched together by a determined and responsible congress, they could form the foundation of a sound and humane solution to financial and economic meltdown facing our entire economy -- not simply Wall Street.

Congress undoubtedly wants to go home so Friday; passing the existing Senate plan would be the easy way out. It is up to us to demand otherwise and stop this $850 billion disaster in its tracks.

Warren Buffett on Charlie Rose

Interesting... Buffett actually wants to pay higher taxes (or so he said.)

Perspective: Two great essays

Here are two excellent essays that place our current economic tug of war - Wall Street vs. The American Taxpayer - into an interesting, pre-historical perspective.

Always on the lookout for a glimpse of what historians might one day say about us, I find each of these stories interesting in different ways, for different reasons.

The first essay places our anger and defiance into a historical perspective before it has (likely) even reached its peak. The second discusses the 'why' behind the fact that Clinton seemed so strangely like each of his Republican predecessors; and perhaps explains why Democrats have completely forgotten their traditional party platform.

From Talking Points Memo: Robert Reich discusses angry populism:

The Almost-Done Deal, and the Era of Angry Populism, by Robert Reich:

Angry populism has always been a potent force in American politics. And now, with wages dropping, jobs insecure, fuel and food and health-insurance costs soaring, and millions of homes in jeopardy -- and what's perceived to be a massive tax-payer bailout of some of the richest people in the land -- angry populism is about to explode. McCain has already tried to cast himself as an angry populist, even though he still wants to give the very rich a bigger tax cut than George W. gave them, and cut taxes on big corporations (oil companies alone would reap $1.2 billion a year under McCain's plan). Barack Obama, whose plans for middle-class tax relief and affordable health care will genuinely help America's middle and working classes, has been expressing more indignation lately on behalf of them. But anger doesn't come as easily to Obama as it does to McCain -- even though McCain seems quite ready to aim his anger anywhere and everywhere.

Democrats should be angry populists, given their traditional role of protecting and championing the underdogs in American politics, and especially considering the absurdly wide gap that's opened up between the rich and everyone else. But in recent years Democrats have ceded the mantle to Republicans, who now mimic the faux populism of Sean Hannity and other right-wing talk show demagogues. (The recent maneuvering in the House over the bailout bill is really over this. House Democrats are getting the same angry mail that House Republicans are receiving, and don't want to be seen as lending their support to this ugly bill without Republicans signing on.)

Continued...

And in this excellent commentary in McClatchy News, by Michael D. MacDonald, we are introduced the 'Neoliberal Era;' just in time to watch it crash and burn:

Commentary: Government by Goldman Sachs comes to end

WILLIAMSTOWN, Mass. — As we watch market values plummet and politicians debate — at last — the proper relationship between government and finance, an era in American history is ending. It wasn't understood as an era during its time, and it never had a name. Its name, though, was on the tip of our tongues: It was the Neoliberal Era.

Neoliberalism began with Ronald Reagan and continued for 27 years through George H.W. Bush and Bill Clinton to George W. Bush, and it rested on one fundamental principle: Financial markets, which are knowing, efficient and flexible, should have more power to decide public policy than democratic governments do.

Neoliberals disagree with one another on numerous issues. They even differ on the particulars of the role that government should play in making public policy. But they agree on the primacy of financial power over government.

Continued...

Finally, an economist

This posted on Democracy Now!:

Nobel Laureate Joseph Stiglitz: Bail Out Wall Street Now, Change Terms Later

The Senate has endorsed a revised version of the $700 billion Wall Street bailout plan. The legislation was easily approved last night on a 74-to-25 vote with a majority of Democrats and Republicans voting in favor—among them, presidential nominees Barack Obama and John McCain. Nobel Prize-winning economist Joseph Stiglitz says the measure, although flawed, should be supported now and revisited after the November elections.

Since no one is listening to us (now) anyway... OK.

But Mr Stiglitz... you realize this will never be revisited - not even a chance - unless Obama is elected.

McCain - always against regulation of any kind - has gone totally over to the Neocon.

So if this passes congress... we are staking the entire future of our dollar and the economic wellbeing of generations of Americans on the outcome of one election.

Just sayin.

Feingold, Cantwell, Sanders opposed Bailout

Senator Russ Feingold of Wisconsin was one of 25 senators (see below) who voted against the government bailout package. Maria Cantwell of Washington State also voted Nay, and made an attempt to improve the existing plan (she was apparently ignored.)

By coincidence (or not,) Feingold used to be described as the 'poorest' man in the Senate - the one who won't accept lobbyist gifts, isn't a billionaire - or even a millionaire - and who won't even allow friends to buy him dinner. Feingold can't be bought. Imagine if we had a senate full of men of his caliber.

Of the freshmen senators, Tester and Independent Bernie Sanders (both voted against the bailout,) are probably the most economically in sync with angry taxpayers... and perhaps more in touch with the pain out here.

From a Forbes article "Meet Senator Millionaire":

Not all the freshmen senators have struck gold, however. Jon Tester, the flat-topped senator-elect from Montana, is as humble as his man-of-the-people image suggests.

He told The New York Times that he has earned barely $20,000 a year farming in the last decade. Aside from his ranch, which is valued at $600,000 to $1 million, he owns shares in just one stock, American Electric Power, and a stake in a bond fund. His securities portfolio is worth no more than $30,000 and as little as $2,000.

Rep. Bernie Sanders, a self-described democratic socialist who trounced millionaire Rich Tarrant in Vermont's Senate race, seems to live a spartan life, in accordance with his political beliefs. Aside from a Burlington condominium valued at $100,000 to $250,000, he had just $31,000 to $115,000 stashed in a credit union and a retirement account.

Twenty-five senators voted against the government bailout. How did yours vote? How much are they worth?

My Indiana senators - one Democrat, one Republican (both rich) voted in favor. And with this vote - as I promised when I wrote to them - they have lost any and all support from this Independent voter. I will not forget. And I will be the first to remind them of their votes when the dollar eventually collapses.

And of course... they will neither listen nor will they care. I don't belong to the club.

Senator Russ Feingold said the following:

"I will oppose the Wall Street bailout plan because though well intentioned, and certainly much improved over the administration’s original proposal, it remains deeply flawed. It fails to offset the cost of the plan, leaving taxpayers to bear the burden of serious lapses of judgment by private financial institutions, their regulators, and the enablers in Washington who paved the way for this catastrophe by removing the safeguards that had protected consumers and the economy since the great depression. The bailout legislation also fails to reform the flawed regulatory structure that permitted this crisis to arise in the first place. And it doesn’t do enough to address the root cause of the credit market collapse, namely the housing crisis. Taxpayers deserve a plan that puts their concerns ahead of those who got us into this mess."

-Senator Russ Feingold, October 1, 2008

Here is the Senate roll call from the government bailout bill:

Democrats who voted Yes

Akaka, Hawaii; Baucus, Mont.; Bayh, Ind.; Biden, Del.; Bingaman, N.M.; Boxer, Calif.; Brown, Ohio; Byrd, W.Va.; Cardin, Md.; Carper, Del.; Casey, Pa.; Clinton, N.Y.; Conrad, N.D.; Dodd, Conn.; Durbin, Ill.; Feinstein, Calif.; Harkin, Iowa; Inouye, Hawaii; Kerry, Mass.; Klobuchar, Minn.; Kohl, Wis.; Lautenberg, N.J.; Leahy, Vt.; Levin, Mich.; Lincoln, Ark.; McCaskill, Mo.; Menendez, N.J.; Mikulski, Md.; Murray, Wash.; Nelson, Neb.; Obama, Ill.; Pryor, Ark.; Reed, R.I.; Reid, Nev.; Rockefeller, W.Va.; Salazar, Colo.; Schumer, N.Y.; Webb, Va.; Whitehouse, R.I.

Democrats who voted No

Cantwell, Wash.; Dorgan, N.D.; Feingold, Wis.; Johnson, S.D.; Landrieu, La.; Nelson, Fla.; Stabenow, Mich.; Tester, Mont.; Wyden, Ore.

Democrats Not Voting

Kennedy, Mass.

Republicans voting Yes

Alexander, Tenn.; Bennett, Utah; Bond, Mo.; Burr, N.C.; Chambliss, Ga.; Coburn, Okla.; Coleman, Minn.; Collins, Maine; Corker, Tenn.; Cornyn, Texas; Craig, Idaho; Domenici, N.M.; Ensign, Nev.; Graham, S.C.; Grassley, Iowa; Gregg, N.H.; Hagel, Neb.; Hatch, Utah; Hutchison, Texas; Isakson, Ga.; Kyl, Ariz.; Lugar, Ind.; Martinez, Fla.; McCain, Ariz.; McConnell, Ky.; Murkowski, Alaska; Smith, Ore.; Snowe, Maine; Specter, Pa.; Stevens, Alaska; Sununu, N.H.; Thune, S.D.; Voinovich, Ohio; Warner, Va.

Republicans voting No

Allard, Colo.; Barrasso, Wyo.; Brownback, Kan.; Bunning, Ky.; Cochran, Miss.; Crapo, Idaho; DeMint, S.C.; Dole, N.C.; Enzi, Wyo.; Inhofe, Okla.; Roberts, Kan.; Sessions, Ala.; Shelby, Ala.; Vitter, La.; Wicker, Miss.

Others (Independent) voting Yes

Lieberman, Conn.

Others (Independent) voting No

Sanders, Vt.

Senate passes bailout; both candidates support it

Ron Paul... are you still running for president?

According to most reports, an overwhelming majority of Americans are staunchly against this bailout, and do not trust that it will be handled responsibly. Some reports have indicated that incoming calls to the congressional switchboard were 100-1 against.

And yet it passed the Senate. And both candidates voted for it. Amazing.

See what a third party option would do for this nation? We obviously need a party for the 95% of us that aren't wealthy. (Like our senators.)

He said, We said:

President Bush, following the Senate vote, said the bill was central to the "financial security" of the nation. "The American people expect - and our economy demands - that the House pass this good bill this week and send it to my desk."

Snapshot of tonight's CNN poll, and what the American people really expect:

Should the Senate pass the $700 billion bailout package for the U.S. financial system?

Yes	28%	100829
No	51%	183300
Don't have enough info to decide	21%	75910
Total Votes: 360039

Open letter to my Representatives

To my senators and representative:

As a constituent - a socially progressive/fiscally conservative Independent (if you can wrap your mind around that -- we're the ones who fall through the cracks;) I have taken my share of personal hits during the Bush administration.

We're struggling through these tough financial times and have been for some time. There are few of us left these days who aren't struggling. People are losing their houses and their jobs. Its a mess out here.

After Katrina, I started really paying attention. I saw what happened to New Orleans, the lies that led us into the Iraq war fiasco (and who benefited from it, financially.) I saw that contractors in Iraq where making millions of dollars, as were the oil companies... while billions of our treasury dollars were vanishing into thin air. The government - executive and congress - that took this nation to war obviously wasn't funding body armor for our troops, and it wasn't paying to take care of them when they returned home injured. But there was more than enough cash lying around (and disappearing) to create an entire boom industry of war profiteers.

Yes, I started paying attention... and frankly am amazed that congress ever let this looting party go on for 8 years without any intervention. Are they simply asleep at the wheel? Or serving lobbyist interests over the interests of the nation as a whole?

I have now seen enough. Our government is in the hands of robber barons holding a gun in our face and emptying our wallets. Unless you plan to do something for the taxpayers this time instead of simply bowing to lobbyist interests, I literally won't vote for you. I know when I'm being represented... and when I'm being thrown to the dogs.

There is a reason that congress polls lower even than Bush; and his poll numbers are the lowest in history. We expected you to do something about these wild excesses and overreaches of power. Most of you stood by and did nothing. Worse than that, you collaborated. Pelosi is the poster child for collaboration and betrayal. Betrayal upon betrayal.

I laugh when I see the surprise among pundits and the media, when confronted with the rage out here. Until an election year, no one was paying attention. We've been on 'ignore' for a long, long time.

Eight years ago there was a surplus and a balanced budget. Now everything is falling apart; nationally and locally (and don't even get me started about climate change -- I saw neighboring towns entirely under water this summer! Even conservative Hoosiers know something is drastically wrong with the weather.)

We're fed up. What you are seeing is the tipping point... Democrat and Republican alike, fed up. Masses of us have left our previous (but unrecognizable) parties and have become angry Independents.

I am thus writing to request that you vote NO to a Wall Street bailout and support a fair deal for Main Street - and that includes actually protecting us from these robbers, not handing over whatever they want and then asking us to foot the bill. This disaster happened because of their recklessness and rampant greed. A band-aid isn't going to fix that.

Economists all seem to agree that this bailout will be disastrous for our economy in the long run... and those of us who live in this country will have to live in that 'long run.' We don't have our money safely ensconced in Dubai.

The legislation should include these five points:

1. Reform Bankruptcy Laws - fix it for everyone! We can't consume if we're homeless and jobless. The leading cause of bankruptcy in this country is health care costs. FIX IT. Fix the root cause for a change. Isn't that why you're there?

2. Provide a Stimulus for Main Street –Aid to the Real Economy, because that trickle down thing isn't happening. Instead we're seeing a 'trickle out of the country' effect. The elite of this country don't want wealth 'trickling down' to us. They want absolute power - and power is consolidated wealth. That is now obvious to nearly everyone; thus the rage.

3. Make Wall Street Speculators Pay for the Bailout – no more debt dumped on the taxpayers. Our nation is in hoc to China for this stupid Iraq war... and speculators made a killing on that one financially, did they not? Halliburton... now headquartered in Dubai. It was all a giant money laundering operation.

4. Shut down the Casino: Rein in the Unregulated Financial Sector. Yes regulation. Obviously they can't and won't regulate themselves... it goes against human nature, even if it looks great on paper. These people are too greedy to regulate themselves and they're destroying our country in their rampage.

5. Provide Limits on CEO Pay and Prohibitions on Profiteering from the Bailout -- because you know Paulson won't do it. These are his friends.

Should the bailout, or "rescue plan" fail to embrace these points, vote “NO” on the bailout legislation until it is fixed. This is supposed to be a representative government. Prove that you remember that.

The House stood up to the pressure in the first round... stand firm! We can't afford any caving now; not until this is hashed out so that everyone is represented and the dollar is protected. Surely this is important enough that you can take the time to do it right!

I am very angry about any potential free ride for greedy bankers. I am also very worried that any bailout - and this would lead to many bailouts, not just one - will cause the dollar to collapse. This is a very real danger, expressed by the brightest economists in our country. I am sure Bush has his cash safely banked offshore, perhaps in yen... but we don't, and generations of Americans will pay for whatever you do today, and whatever effect your actions have on our struggling economy.

Haste is the enemy. Fear (the favorite tactic of the Bush administration) is getting old and bitter. That wolf has been cried so many times now we're just not afraid anymore. We're done with this.

Someone has to fight for our country and if you won't do it, this country will fall into a depression to dwarf the Great Depression of the 1930s. Have we no leaders left in this country? Leaders that put nation first?

The anger out here is very, very real; and it is growing. It is also increasingly bipartisan, in spite of the corporate media. We've realized that we're all suffering together. And that is the kind of real common ground that eclipses outdated party mantras.

I will express my response in the ballot box should the bailout for Wall Street pass without a fair deal for taxpayers footing the bill. And believe me... you have no idea how many Independents like myself view this as the final and ultimate betrayal by a government that has completely forgotten about the people of this country.

Thank you.

To those of you in the House, from Indiana... I was very proud. Please don't cave.

I am counting on Republicans to remember what it once meant to be Republican: let the market work as intended. I am also counting on the Democrats to remember the needs of the masses -- people... not just corporations.

Relevant

"History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling the money and its issuance." - James Madison

"It is well enough that the people of this nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning." - Henry Ford

"You have to choose between trusting to the natural stability of gold and the natural stability of the honesty and intelligence of the members of the government. And, with due respect to these gentlemen, I advise you to vote for gold." - George Bernard Shaw

"I sincerely believe... that banking establishments are more dangerous than standing armies, and that the principle of spending money to be paid by posterity under the name of funding is but swindling futurity on a large scale." - Thomas Jefferson to John Taylor, 1816.