Tuesday Reads: Tim Geithner in Control of Obama’s Economic Policy, and Other News

Posted: February 15, 2011 | Author: | Filed under: Bailout Blues, Barack Obama, Economic Develpment, Egypt, financial institutions, Foreign Affairs, Global Financial Crisis, Gulf Oil Spill, Iran, U.S. Economy, U.S. Politics, unemployment, Yemen | Tags: , , , , , , | 22 Comments

Good Morning!! The snow is slowly melting outside my house, and I’ve come down with Spring fever! No more snowstorms please, Mother Nature. Anyway, at least for this week, we are getting temperatures in the 40s and 50s. It is going to be chilly again tomorrow, but after that–springlike! After the frigid winter we’ve lived through, these temperatures feel amazing. Maybe this will make the bad news from DC a little more bearable. I hope so.

This morning I want to focus on an important article that comes via David Dayen at FDL. It’s a piece at The New Republic about Timothy Geithner, written by Noam Scheiber. First a little aside.

Back in November, I wrote a post about the axing of Obama’s economic team and noted that Geither was the last man standing.

In that post, I quoted Andrew Cockburn of Counterpunch:

If Barack Obama needed any help in guiding the Democratic Party over the cliff he certainly got it from Treasury Secretary Timothy Geithner. Voters have told pollsters that the state of the economy, their own in particular, was their principle concern. Though impelled by the specter of unemployment and homelessness, the image of Geithner, toady to the bankers, can only have encouraged them in their fury. A sensible president would therefore already be running out the plank prior to giving this disastrous financial overseer an encouraging shove between the shoulders. But in this case, we may not be that lucky. CounterPunch can reveal the crucial role played in these matters by a group close to the President but unknown to the outside world.

A knowledgeable insider told Cockburn that despite Larry Summers’ reputation as a corporate tool,

“Larry has some idea that there is more to the economy than just the welfare of large banks,” this official suggests. “He did push for a larger stimulus and more jobs programs, for example. Tim just cares about banks.”

I then went on to indulge in a little conspiracy theorizing based on Cockburn’s information. But that’s beside the point right now. The point is that after writing that post, I came to the conclusion that Geithner was running economic policy in the Obama administration.

Getting back to the article at TNR, Scheiber purports to explain how Geithner survived the massacre of the economists. One interesting tidbit in the lengthy article is about Geithner’s relationship with Larry Summers, who acted as Geithner’s mentor and patron early on.

In 1993, Geithner caught the attention of [a] prominent patron—Larry Summers—whom Bill Clinton had appointed as his treasury undersecretary. Summers took a personal interest in Geithner’s career and promoted him each time he rose through the Treasury ranks.

And then during the Obama administration, Geithner apparently stabbed his patron in the back, becoming President Obama’s primary economic adviser–even though Geithner isn’t an economist. (Neither is anyone else on Obama current “economic team,” as Dakinikat frequently points out.)

Geithner actually sounds a lot like Obama–he’s really good at sucking up and convincing people he’s on their side–until he slides in the knife. Regarding Geithner’s time at the IMF, Scheiber writes:

According to former co-workers, Geithner was deft at bringing skeptical colleagues on board. One technique involved homing in on possible dissidents and absorbing their suggestions into his proposals.

Sound familiar? A bit more:

Perhaps most important, Geithner was scrupulously attuned to the temperament of the boss. Like Obama, he evinced a strong aversion to blather. During meetings with the president, he would say little, and usually not until the end, when his opinion was solicited. “I thought [Geithner] got the president really well,” says a former administration official who interacted with him on nonfinancial matters. “When he was in trouble, I said to someone, ‘He just needs to hold on. He’ll be fine with Obama. Once they get to know each other, they’re like the same person.’”

Scheiber describes an epic struggle between Geithner and Summers over how to deal with the banks that had crashed the U.S. economy. Summers argued for some form of nationalization, while Geithner claimed the banks just needed more capital and they could recover.

If Geithner was right, the capital shortfall was much more manageable than Summers feared. The banks might be able to fill it with minimal government help, simply by selling shares to investors. But, if he was wrong, the banks would stumble along in a kind of vampire state, sucking credit from the economy and exacerbating the recession. In the worst case, fears of insolvency could trigger a modern-day version of Depression-era bank runs.

Hey, wait a minute. That sounds like what is happening to our economy right now. But, never mind, Geithner won the battle that counted–the battle for Obama’s favor.

Part of what Geithner convinced Obama of was “that it was ultimately better politics to risk a backlash with unemployment at 10 percent than to feed the backlash and watch the economy shrink further.” So it’s Geithner we have to thank for the new normal of high unemployment, poverty, and suffering among the middle, working, and lower classes.

Finally, what horrified David Dayen was Geithner’s out-front claim that–in Dayen’s words, “what’s good for Wall Street is good for America.” Geithner:

“I don’t have any enthusiasm for … trying to shrink the relative importance of the financial system in our economy as a test of reform, because we have to think about the fact that we operate in the broader world,” he said. “It’s the same thing for Microsoft or anything else. We want U.S. firms to benefit from that.” He continued: “Now financial firms are different because of the risk, but you can contain that through regulation.” This was the purpose of the recent financial reform, he said. In effect, Geithner was arguing that we should be as comfortable linking the fate of our economy to Wall Street as to automakers or Silicon Valley.

In response, Dayen writes:

I don’t even know what to say about this. We’re just a few years removed from the financial oligarchs destroying the global economy through their own greed and negligence. And the man put in charge of regulating them, who had a front-row seat to all this destruction and who has been given expanded powers under Dodd-Frank to see to it that never happens again, thinks that there’s a great “financial deepening” about to take place where the demand for sophisticated financial innovations will jump. Therefore, the financial sector will need to grow and become the most reliable spur of the US economy. That’s his feeling. And regulation can reduce the risk, even though the new regulations barely put a dent into Wall Street’s core business, and are being systematically defunded besides.

Financialization of the economy has led to practically nothing but pain for the average worker and risk for the taxpayer. It has turned the allocation of capital into the placing of bets at a casino, and the stock market into a particularly sophisticated video poker game. This territory was all covered before in the run-up to the Great Depression as well, and we know the precise causes and remedies involved. Geithner prefers not to address the plutocracy he’s really advancing here – where elites provide “financial deepening” services abroad and amass ridiculous profits that they wall off.

This incredibly amoral conman is partnering with our conman chief executive to sell out our country, our lives, and those of our children and grandchildren. There’s lots more of interest in the article, particularly the information about Geithner’s upbringing.

I’ll wrap this up with a few other stories, and then throw the floor open to your links and opinions. Did you hear that Stephen Baldwin is suing Kevin Costner over Costner’s oil-eating invention?

It seems Baldwin sold his shares in Costner’s company right before BP shelled out $50 million for the machines.

Jane Hamsher offers a flow-chart of the principle players in the scandal over US Chamber of Commerce’s attempts to discredit Wikileaks, Glenn Greenwald, Brad Friedman, David House, and others who have supported wikileaks and Bradley Manning. Joseph Cannon has also been covering this story.

Brad Friedman’s post especially is a must read. Get this, the Chamber paid 2 million dollars a month for dirt on Friedman, and got completely inaccurate information. And that inaccurate information came from corporations who are paid billions by our government “to target terrorists.” But Obama wants to cancel heating assistance for poor people to save money.

Mitt Romney is ahead in the latest NH poll, at 40%, for whatever that’s worth. Romney was always going to win NH. They always vote for New Englanders up there. The real test for Romney will be Iowa.

The Patriot Act extension has been passed by the House on the second try. I think the Egyptians will probably get rid of their emergency law before we get rid of ours.

There are “massive” protests in Iran, inspired by the dramatic events in Egypt. There have also been more protests in Yemen and in Bahrain. When will it happen here?

What are you reading and blogging about today?

How to Kill Home Ownership

Posted: February 11, 2011 | Author: | Filed under: commercial banking, Economic Develpment, financial institutions, Surreality, Team Obama, We are so F'd | Tags: , | 38 Comments

Levittown House and family circa 1948

Your house is about to become even harder to sell, even more unlikely to appreciate, and even more unaffordable to more people.  Be prepared to go back to the past.   All those young Obama Democrats better love their landlords.  They’re likely to be stuck with them for some time.  Every think you’d see a headline like this for a Democratic President? Here’s one from NPR Today: Obama Administration: Not Everybody Should Own A Home,

For decades, U.S. housing policy seemed to assume that more home ownership was always better.

At one point in the early ’90s, the government launched the “National Homeownership Strategy,” whose stated goal was to “attempt to help all American households become homeowners.”

So perhaps the most striking thing in today’s housing finance report from the Obama administration is the simple idea that not everybody should own a home (emphasis added):

The Administration believes that we must continue to take the necessary steps to ensure that Americans have access to an adequate range of affordable housing options. This does not mean all Americans should become homeowners. Instead, we should make sure that all Americans who have the credit history, financial capacity, and desire to own a home have the opportunity to take that step. At the same time, we should ensure that there are a range of affordable options for the 100 million Americans who rent, whether they do so by choice or necessity.

This is idea, in turn, leads to the Obama administration’s main conclusion: Fannie Mae and Freddie Mac should cease to exist.

I’ve been a critic of the way Fannie Mae and Freddie Mac were managed for about 15 years.  They were packaging up loans and paying bonuses like the worst of the Wall Street set.  This had nothing to do with their basic government franchise agreement which is to provide long term funds to back up home loans.  The packaging and wheeling and dealing were part and parcel of Fannie and Freddie trying to mimic Wall Street and privatization.  However, they both provided products with implied government guarantees.  This implies a higher level of due diligence in underwriting and packaging that they basically ignored.  It’s similar to USDA grade beef.  There was a guarantee that these loans would hold mortgage insurance and be underwritten carefully.   The root cause of the problems were not the attempts to get more qualified people into affordable mortgages, it was to feed Wall Street greed and shovel money to their executives who were frequently just political hacks. They simply did the worst of the Wall Street practices at a much higher volume with a more damaging result because of the US stamp of approval; the implicit guarantee.

Now, we have a back to the gilded age future ahead of us.  What has made these loans work as loans and the securities that back the loans work is the implied low risk with a decent rate of return.  Many, many pension funds and institutional investors  hold huge numbers of Fannie and Freddie Securities because they’ve always had high ratings.  Most of these pension funds and institutional investors are sources of long term funds.  There’s not a lot of a lenders that will lend long these days and that’s going to be a problem for most people looking for a home now more than ever.  My guess is that most home loans will now go down to terms of about 15-20 years or they’ll be completely variable rate.  That means the homeowner will have to bet on the rate to get an affordable mortgage and gamble their incomes will go up to secure the lowest rates and longest terms.   Both of these are highly risky bets.  Past data has shown that most people loose with these kinds of mortgages.

Plus, that’s if they can get the funding at all. Without something similar, I doubt that the major sources of these funds which are usually forced into safe investments will be available.  Either that, or you’re going to lock in to a fixed rate but for an intermediate term loan.  Think about your own house loan and what that would mean for you.   You either double your house payment or take the bet that the rate won’t go up enough to force you to default in the future.  Most people don’t have sophisticated enough knowledge of economics to even make an educated guess.   My guess is that if they take the loan at all, they’ll go for the short term fixed rate loan on a much cheaper house.  This is going to change the complexion of the housing market for ever if it goes through as planned.

This is a President used the gipper metaphor for himself. This is the White House that wants less Government in the Mortgage system.

The Obama administration wants to shrink the government’s role in the mortgage system — a proposal that would remake decades of federal policy aimed at getting Americans to buy homes and would probably make home loans more expensive across the board.

The Treasury Department rolled out a plan Friday to slowly dissolve Fannie Mae and Freddie Mac, the government-sponsored programs that bought up mortgages to encourage more lending and required bailouts during the 2008 financial crisis.

Exactly how far the government’s role in mortgages would be reduced was left to Congress to decide, but all three options the administration presented would create a housing finance system that relies far more on private money.

“It’s clear the administration wants the private sector to take a more prominent role in the mortgage rates, and in order for that to happen, mortgage rates have to go up,” said Thomas Lawler, a housing economist in Virginia.

Abolishing Fannie and Freddie would rewrite 70 years of federal housing policy, from Fannie’s creation as part of the New Deal to President George W. Bush’s drive for an “ownership society” in the 2000s. It would transform how homes are bought and redefine who can afford them.

Treasury Secretary Timothy Geithner said the plan would probably not happen for at least five years and would proceed “very carefully.” In the meantime, he said the companies would have the cash they need to meet their existing obligations.

There are other ways to do this.  Most would have to do with tighter governance of Fannie and Freddie and elimination of private sector practices of bonuses for volume when government guarantees are involved.  Also, a cap for the mortgages to prices more standard through out the country rather than Washington DC would help.  Fannie and Freddie should have no place in the jumbo market.  Here’s a few of the proposals that are in the White House program.

The Obama administration proposals include raising the rates Fannie and Freddie charge to banks for loan guarantees to the same levels as private banks. Private mortgages for so-called jumbo loans, which are not covered by government guarantees, currently cost between 0.5% and 0.75% more than government-backed mortgages. So, if Fannie and Freddie’s fees were to rise to the market level, mortgage rates across the U.S. might rise substantially.

The administration also proposed lowering the maximum value of a mortgage that can qualify to be federally backed from the current $729,750 to $625,500. That’s a widely suggested move that would attract the private sector to make more loans in the upper range of the market. The proposal also called for Fannie, Freddie and the FHA to set a minimum down payment requirement of 10%. Currently, the agencies are authorized to make loans with no down payments at all.

The big issue is what to do about the government guarantee that assures investors who buy Fannie and Freddie mortgage bonds that the U.S. government will pay back the bonds in the event the underlying mortgages default. Because of that guarantee, Fannie and Freddie can offer lower interest rates than the private sector. Investors, especially foreign investors, were burned by subprime bonds during the financial crisis, and now they won’t touch private mortgage bonds without a government guarantee.

There’s obvious problems with Fannie and Freddie but they mostly lie with how it was managed and how it morphed as more up income and high price assets were put into play.  Helping upper income people or expensive real estate markets weren’t originally part of the charter.  Making it more like a bank isn’t going to remove the abuses but add to them.  Bonuses for production quotas lead to reduced quality.

It would be more prudent to take Fannie and Freddie back to their roots rather than to them strip them of their ability to provide affordable mortgages to entry level home owners.  The management got caught up in production over quality of loans because they got bonuses.  That was a huge problem.  The connection to affordable housing initiatives was never the problem.  Churning out crap to feed the investment frenzy of Wall Street and peeling off bonuses for their executives led to their sloppy loan processing.  They caught the same disease that plagued the private sector at a larger volume.  Congress also did a poor job of oversight.

This move will leave a huge gap in two places.  First, it will impact investment portfolios that rely on long term, relatively safe but decent yield-bearing assets.  It will also remove one more route to the American dream for ordinary Americans.  Let’s just say we’re all taking one for the Gipper.

A Self-Examined Academic Life

Posted: February 6, 2011 | Author: | Filed under: academia, Equity Markets, financial institutions, Global Financial Crisis | Tags: , , , , | 22 Comments

Macroeconomists seemingly have adopted monastic practices of self-flagellation to explain why the tribe completely misjudged the housing bubble .  Their collective crystal balls didn’t predict an ensuing financial crisis either.  A blog entry by Finance Professor Raghu Rajan at University of Chicago has further stimulated the conversation today.  He’s written a book called Fault Lines and made remarks from the book at its official blog site. I found it at Memeorandum along with a few choice links.

I’ve written about  fresh water and salt water economics before.  Some of today’s discussion clearly involves philosophical fault lines.  Rajan is from the panultimate fresh water university and all finance academics eventually drown in the Efficient Markets Hypothesis (EMH) literature. I’ve been pretty outspoken about how much damage I think the EMH has done to economics and especially my field, financial economics.  However, it’s hard to get published in finance journals taking a contrarian view.  This is one explanation he examines, then dismisses which is why I’ve taken a good look at his argument.

I have not read his book, but judging from the video and this blog entry, Rajan spends some time on the role of EMH and EMH true believers in the crisis.   I can provide you with my own anecdotes on this.  I can also tell you I tried to avoid some seminars because I don’t want to read any more Eugene Fama who is Rajan’s colleague.  I frankly think EMH blinders or misunderstanding were a good deal–but not all–of the problem.

I was researching the subprime markets directly after Katrina and was told by my finance professors that I was following an unpublishable and boring line of research. (They used the term ‘unsexy’.)  I saw hints of problems in subprime markets as early as late 2005 in the work I did with the sensitivity of stock prices of finance companies heavily invested in subprime loans to some key macroeconomic variables. I was told that line of research was unlikely to help my marketability and ability to get tenure upon graduation.  They yawned when I presented the paper.  I turned it in for my third econometrics seminar and switched to something else.

Finance journals editors do love them some EMH so anything on market anomalies is likely to get a jaundiced set of editor eyes.   But, Rajan brings up some important points and the resulting discussion is worth viewing here.   Here’s Rajan talking directly to the EMH and why he thinks it may not be a big deal.

Perhaps the reason was ideology: we were too wedded to the idea that markets are efficient, market participants are rational, and high prices are justified by economic fundamentals. But some of this criticism of “market fundamentalism” reflects a misunderstanding. The dominant “efficient markets theory” says only that markets reflect what is publicly known, and that it is hard to make money off markets consistently – something verified by the hit that most investor portfolios took in the crisis. The theory does not say that markets cannot plummet if the news is bad, or if investors become risk-averse.

Critics argue that the fundamentals were deteriorating in plain sight, and that the market (and economists) simply ignored it. But hindsight distorts analysis. We cannot point to a lonely Cassandra like Robert Shiller of Yale University, who regularly argued that house prices were unsustainable, as proof that the truth was ignored. There are always naysayers, and they are often wrong. There were many more economists who believed that house prices, though high, were unlikely to fall across the board.

Rajan points out that this probably isn’t the sole or primary explanation even though it is one that gets a lot of ink these days.  I too think some of the problem is a misunderstanding of the various forms of EMH . So, the major philosophical debate happening in finance circles isn’t central to Rajan’s explanation. There is no conspiracy of EMH apologists to force misunderstanding of market rationality, so alright, I’ll give him that one.

Economist Tyler Cowen at Marginal Revolution likes the alternative succinct explanation Rajan provides.  (You should read the comments to that thread.)

Raghu Rajan nails it:

I would argue that three factors largely explain our collective failure: specialization, the difficulty of forecasting, and the disengagement of much of the profession from the real world.

Rajan also dismisses  another  circle of conspirators by stating this.  It’s also probably why one of those so-called progressives jumped on the dismissal earlier today.  This conspiracy meme crosses circles of folks that are more into political economy than economics itself.  This group argues the hypothesis that the “system” bribed economists to stay quiet.  I’ve gotten into it more than a few people of the Matt Stoller mindset and various Rand hanger-ons about  this improbable case.  One of the biggest memes is that the FED actively influences economists not to publish things against their interests. (Usually, this comes from Austrian School folks who can’t get published any where mainstream because they want to completely operate outside of the scientific method and ignore data.)  Matt Yglesias is one of these people making a living off this canard and he jumped to the bait immediately. His reasoning  speaks more about him than about economists.

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Gotta Love those Wikileaks

Posted: January 17, 2011 | Author: | Filed under: commercial banking, Corporate Crime, Diplomacy Nightmares, financial institutions, Foreign Affairs, investment banking, Tunisia, Wikileaks | Tags: , , , , , , , , | 14 Comments

I’m still waiting for the BOA Wikileaks data drop but the idea of a Swiss Banker from offshore banking haven, The Cayman Islands, dropping a dime on a few of those tax evading customers is almost as sweet.  I can sense the thickness of air hanging in private clubs all over the world from my little corner of the ninth ward.

Rudolf M. Elmer, the former head of the Cayman Islands office of the prominent Swiss bank Julius Baer, refused to identify any of the individuals or companies, but told reporters at a press conference that about 40 politicians and “pillars of society” worldwide are among them.

He told The Observer newspaper over the weekend that those named in the documents come from “the U.S., Britain, Germany, Austria and Asia — from all over,” and include “business people, politicians, people who have made their living in the arts and multinational conglomerates — from both sides of the Atlantic.”

Mr. Assange said that WikiLeaks would verify and release the information, including the names, in as little as two weeks. He suggested possible partnerships with financial news organizations and said he would consider turning the information over to Britain’s Serious Fraud Office, a government agency that investigates financial corruption.

That’s a wow story!   But then, there’s been a series of them coming from Assange’s organization and the entire thing is just too great for words.  Any one that really doesn’t see that Wikileaks is becoming THE way for little guys to undermine the power elites of the world is basically a tool of oppressors and autocrats.  Just as Bradley Manning witnessed tapes that revealed the incredibly war crimes and inhumanity of a few American soldiers, Rudolf Elmer has witnessed pilfering that probably includes profiteering from crimes against humanity.  However, like every one else, I want NAMES.

Check out the CIA’s list of the RICHEST countries in the world in per capita terms. I always love to quiz my students on which ones shake out at the top and they nearly always get it wrong.   The top ten countries–with the exceptions of oil rich Kuwait and Norway–are all havens of offshore banking, tax evasion, and gambling.  The USA has dropped to number 11 on the richest country list.  Undoubtedly, it still holds that position because of its Investment Bankers.  As I mentioned in the Friday Reads, it’s not because we reward our brain surgeons, 4 star generals, or great minds. I’m appalled that this might be the century that proves Karl Marx right on how ‘capitalism’ eventually falls.  I’m only afraid that it will not be replaced with any kind of utopia; worker or otherwise.

What was Rudolf Elmer’s motivation?

Mr. Elmer said he had turned to WikiLeaks to educate society about what he considers an unfair system designed to serve the rich and aid money launderers after his offers to provide the data to universities and governments were spurned and, in his opinion, the Swiss media failed to cover the substance of his allegations. “The man in the street needs to know how this system works,” he said, referring to the offshore trusts that many “high net worth individuals” across the world use to evade taxes.

This, is the beauty of the Wikileaks.  (I’m going to take some time here to wave to our junior G-guys and G-gals!)  It gives a voice to those of us that work in the trenches holding up a system that rewards our work with pink slips, loss of insurance, and raises that don’t keep up with the cost of living don’t have much power.  The information we sit on frequently has a lot of power.  Once released to the public domain, it has even more power.  These leaks expose corruption and thievery; pure and simple.

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Tuesday Reads: The Anniversary of FDR’s Second Bill of Rights

Posted: January 11, 2011 | Author: | Filed under: Anti-War, Barack Obama, Civil Liberties, Civil Rights, Equity Markets, Federal Budget, financial institutions, Global Financial Crisis, John Birch Society in Charge, New Orleans, Regulation, Social Security, Stock Market, The Great Recession, U.S. Economy, U.S. Politics | Tags: , , , , , , , , , , , , , | 125 Comments

Good Morning!!

History Reads

Ever so often, we need to be reminded of history.  I read a tweet yesterday by one of our long time news anchors down here in New Orleans.

normanrobinson1 norman robinson

Wondering if we as Americans really value what we have and whether we really care about leaving a future for the generations to follow.

This started me thinking about what future was left to me by the generations directly before me.    Of course, we’re living in a world mostly free of NAZIs and Fascists because of the greatest generation.  We’re living in a world where the Jim Crow Laws of Separate-But-Equal were torn down by the generation after that with the sacrifice of the heroic leaders of the civil rights movement.   I have the right to vote because of my grandmother’s generation and her mother’s generation and what they did for us.  I’ve also had consistent access to family planning and birth control because the first women of the baby boom generation and several generations of women before them worked hard for it.  Stonewall made a tremendous difference in the lives of GLBTs.  Then, there are programs like Social Security and institutions like the United Nations that came from the vision and leadership of  FDR and the people who served in his cabinets like Francis Perkins, Henry Wallace, Cordell Hull and many others.  They cared enough to build us quite a legacy.

Today is the 67th anniversary of a speech that was to convey that vision of a post-war America.  The Second Bill of Rights was part of a State of the Union speech.  I’m bringing this up for two reasons.  First, because it clearly provides a road map–even today–for “what Americans really value”. I say that because poll after poll shows that the majority of American’s agree with these values even though our government doesn’t seem to reflect that at the moment.   For that reason, I share with you today, the words of a leader with a vision and a gift for elocution.

From the FDR American Heritage Center Museum’s Website:

On January 11, 1944, in the midst of World War II, President Roosevelt spoke forcefully and eloquently about the greater meaning and higher purpose of American security in a post-war America. The principles and ideas conveyed by FDR’s words matter as much now as they did over sixty years ago, and the Franklin D. Roosevelt American Heritage Center is proud to reprint a selection of FDR’s vision for the security and economic liberty of the American people in war and peace.

The second reason I want to share this is that we’re coming close to President Obama’s third State of the Union Address. It is scheduled for January 25th.  My guess is that FDR’s Second Bill of Rights and the vision he elucidated will officially die on that day. I am not expecting any thing close to the utterance of ‘Necessitous men are not free men’ or “People who are hungry and out of a job are the stuff of which dictatorships are made”.

Despite the obvious parallels between right now and  the Great Depression–the high unemployment rates, the incredible number of foreclosures, and the breadth of necessitous men and women and children–I’m expectting many of the vestiges of FDR’s vision that prevent future calamities to be assaulted during Obama’s third State of the Union Address.  Look closely at the list I put up top because so much of what was handed us has been trickling away.

As Norman Robinson contemplated via tweet, do we really value what we have today? Will we witness the destruction of what was handed to us and hand our children and grandchildren broken infrastructure, no hope for upward mobility, and useless institutions drained of funds by the greedy?  Will any shell of what was envisioned for us in both the first bill of rights and the second remain? Frankly, I am expecting an ‘austerity’ speech that endorses the findings of the cat food commission. I also expect we will hear nothing of overreaching intrusion by the Patriot Act into our internet and cell phones. We are expected to diligently watch Football and bail out billionaires while everything else trickles up and away.

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