In The Land Of The Delusional

Posted: March 2, 2012 | Author: | Filed under: 2012 presidential campaign, Austerity, double-speak, Economy, income inequality, Mitt Romney, religious extremists, Republican presidential politics, the GOP, U.S. Economy, War on Women, Women's Healthcare | 16 Comments

In the Land of the Delusional the Koch brothers are principled citizens who merely disagree with Democratic policy stands and are aghast at the vindictive slurs leveled against them and all other sincere, freedom-loving Republicans.  In the Land of the Delusional, the hate and rage on review is a product of pink-bellied Lefties, Alinski acolytes, looking to take down American virtue and reduce the country’s might and glory.  In the Land of the Delusional bankrupt ideas, economic mayhem and privateering can be obscured by attacks on woman, gays and the down and outers.

March is living up to its reputation—coming in like snarling Lion.  Rush Limbaugh exposed a full Monty of misogyny, his comments on Sandra Fluke provoking even House Speaker Boehner to suggest the diatribe was ‘inappropriate.’  What inspired the outburst?  Several weeks of desperate frontal attacks on women’s healthcare issues, thinly veiled and wrapped beneath ‘religious liberty’ arguments.

Let’s not kid ourselves!  This is little more than shifting the conversation from discussion over economic issues, for which the Republican party has no credible position.  The US Budget Watch has reported that Republican plans to slash taxes on corporations and high-income earners would explode the national debt up to $3 trillion. And for all the ballyhoo by the Norquist group the Washington Post reported [as well as many other sources] that the country’s revenue-collection has eroded to a 60-year low.

From the WP report:

Polls show that a large majority of Americans blame wasteful or unnecessary federal programs for the nation’s budget problems. But routine increases in defense and domestic spending account for only about 15 percent of the financial deterioration, according to a new analysis of CBO data.

The biggest culprit, by far, has been an erosion of tax revenue triggered largely by two recessions and multiple rounds of tax cuts. Together, the economy and the tax bills enacted under former president George W. Bush, and to a lesser extent by President Obama, wiped out $6.3 trillion in anticipated revenue. That’s nearly half of the $12.7 trillion swing from projected surpluses to real debt. Federal tax collections now stand at their lowest level as a percentage of the economy in 60 years.

Trickle Down Economics in Nature

But why let facts stand in the way.  Paul Ryan, the Republican’s designated ‘serious thinker’ certainly doesn’t.

Ryan also complimented Romney’s economic plan. The congressman’s stamp of approval has been important for Republicans since he earned praise last year for his ambitious budget — which would dramatically change Medicare— from strong conservatives.

“Very credible. They are talking about entitlement reform. They are putting specifics on the table on Medicare and Social Security reform. The president, knowing that these are the big drivers of our debt, is ducking it,” Ryan said of Romney’s proposals.

Ah, yes.  The ideologically blind leading those blinded by ambition.  That certainly gives me confidence.

But as Paul Krugman suggested a mere 10 ten days ago, Mitt Romney let slip a truism in the swirl of Michigan campaigning when he said:

“If you just cut, if all you’re thinking about doing is cutting spending, as you cut spending you’ll slow down the economy.”

Over which the ideological purists set the dogs loose.  The Club for Growth immediately denounced the Romney slip, insisting that it was a clear indication that Mitt was an imposter, not a ‘true’ limited government conservative [translation: not willing to drown all government in that Norquist bathtub].

What’s a candidate to do?  Retreat, of course, in the same way Romney flipped on the Blunt Amendment, breaking all records, I would guess. In less than an hour, Candidate Romney twisted from ‘not going to go there’ to ‘of course, I support it.’  Enough to make your head spin.  This is a political party in the death throes.

So, what’s the best way to distract?

Let’s pillory the women, start calling them sluts or suggest they film sexual exploits for the sake of some overweight, mean-spirited shock jock.  Or let’s pretend that the perceived decline of the Nation rests squarely on the shoulders of the Gay Community and their screechy insistence that they too expect and deserve [can you believe the gall of these people] basic civil rights.  And don’t forget the statistics on the ever-expanding numbers of Americans slipping into poverty.  We tried calling them losers and moochers.  How about we deny they exist, the way a North Carolina legislator recently announced.  Yes sir, that’s the ticket!

In the Land of the Delusional schizophrenics rule the day, magical thinking replaces reason and bare-foot and pregnant is a very good thing.  In the Land of the Delusional all things are possible.

Except the truth.

Why Austerity is Necessary: short version

Posted: February 15, 2012 | Author: | Filed under: U.S. Economy, U.S. Politics | Tags: , , | 15 Comments

US White House state dining room during Bush PresidencyDoes anyone honestly think austerity is important to the restoration of fiscal balance because discipline and frugality lead to wealth? The people promoting austerity are invited to dinner in places like the room to the right. They’re doing well and not practicing austerity, so the answer must lie elsewhere.

And, really, it’s not that hard to figure out if you remember not to listen to a word they say.

  • 1) For whatever reason (the crash in this case) there’s not enough money to go around.
    • 1a) It is necessary to get the money from somewhere.

  • 2) You could get it from rich people.
    • 2a) If you do this by making them take the loss (= no taxpayer-funded bailout), they will threaten to take their ball and go home. (For instance, “I won’t buy your treasury bonds. I’ll buy somebody else’s.” Government goes into cold sweat worrying about finding money and has a crisis of confidence. This is the real “confidence fairy.”)
    • 2b) Assuming you must bail out the rich, the government could cover the cost by taxing the rich. But the wealthy own the media, plus they can defund re-election campaigns, so the actual people in government would be out of a job. This, too, leads to cold sweat, but it does not yet have a catchy name. (The “keep-my-job fairy”?)

  • 3) You could get it from everybody else.
    • 3a) Everybody else objects because they didn’t cause the problem, so why should they pay for it?

Because austerity! It sounds so much better than,

“You pay for it. I don’t want to.” And way better than,

“I don’t need you for anything, Bub. Pay up.”

Full disclosure: I am (obviously) not an economist.

Crossposted from Acid Test

Just Exactly What Qualifies Mitt Romney to be POTUS?

Posted: February 3, 2012 | Author: | Filed under: 2012 presidential campaign, 2012 primaries, U.S. Economy, U.S. Military, U.S. Politics | Tags: , , , , , , , , , , , , , | 22 Comments

"The purple mountain majesties" of Great Basin National Park

Via Think Progress, yesterday Mitt Romney sat for an interview with the editorial board of the Reno Gazette-Journal. Today, the conservative newspaper endorsed Romney for the Republican nomination in advance of the Nevada caucuses tomorrow.

During the interview, Romney was asked whether, if elected, he would consider permitting the state of Nevada to buy back public lands that are currently held by the Federal government. Here’s his response:

I don’t know the reason that the federal government owns such a large share of Nevada. And when I was in Utah at the Olympics there I heard a similar refrain there. What they were concerned about was that the government would step in and say, “We’re taking this” — which by the way has extraordinary coal reserves — “and we’re not going to let you develop these coal reserves.” I mean, it drove the people nuts. Unless there’s a valid, and legitimate, and compelling governmental purpose, I don’t know why the government owns so much of this land.

So I haven’t studied it, what the purpose is of the land, so I don’t want to say, “Oh, I’m about to hand it over.” But where government ownership of land is designed to satisfy, let’s say, the most extreme environmentalists, from keeping a population from developing their coal, their gold, their other resources for the benefit of the state, I would find that to be unacceptable.

Think Progress:

Public lands in Nevada – and other western states—actually provide an enormous economic boost and sustain hundreds of thousands of jobs. Indeed, recent Interior Department statistics show that federally managed public lands in Nevada provided over $1 billion in economic impacts and supported 13,311 jobs in 2010 (and this statistic doesn’t even include the economic impacts of Forest Service lands, managed by the Department of Agriculture). Recreation, energy and minerals, and grazing and timber all play a part in the economic effects that public lands provide to Nevada. Activities like skiing at Lake Tahoe, boating at Lake Mead, and hiking at Great Basin National Park all take place on public lands.

Do you suppose Romney has even heard of Teddy Roosevelt? Or was the conservationist President insufficiently “conservative” for today’s Republican Party? Today “conservatives” don’t seem to care about conserving the beauty of nature for all Americans. It sounds like Romney is more interested in milking public lands for coal, gold, and oil than preserving their beauty so that in the future children can learn “to fall in love with America” as he was able to do? (h/t Think Progress).

A couple of days ago in, Romney sang “America the Beautiful” at a campaign appearance at a retirement community in Florida.

But what will Romney’s policies do to the beauty of our country? The folks at Think Progress made a video about it.

What else hasn’t Mitt Romney “studied” about our country? Well, he doesn’t seem to be aware that America’s social safety net is pretty weak and that his economic policies will completely shred what’s left of social programs like food stamps, Medicaid, Medicare, and Social Security.

Romney doesn’t seem to be aware that the number of Americans living in “deep poverty” is the highest it’s been in 35 years.

More than 20 million Americans live in a household with income of less than half the federal poverty rate, the level social scientists often use as a category for the very poor, according to census data for 2010. Last year that meant an annual income below $11,057 for a family of four.

The portion of the population in that category was the highest in at least 35 years and has almost doubled since 1975, from 3.7 percent then to 6.7 percent in 2010.

Romney told CNN on Feb. 1 that “I’m not concerned about the very poor” because they have many programs to help them. He later clarified his remarks, telling reporters on his campaign plane that low-income people have an “ample safety net,” including Medicaid, housing vouchers, food stamps and the Earned Income Tax Credit.

I wonder if Romney knows that one in five American children lives in deep poverty? Frankly, I doubt it. And just think of all those fetuses who don’t get proper nutrition and health care because their pregnant mothers are poverty-stricken. Mitt probably hasn’t “studied” that yet, because he really just doesn’t care.

Now Romney is claiming he “misspoke” when he told CNN’s Soledad O’Brien–twice!–that he’s not concerned about the very poor, because they have an “ample safety net.” But O’Brien doesn’t buy it. And, as NPR points out Romney even made the same remark about the poor to the press corps on his campaign plane after the CNN interview.

So what has Romney “studied?” And if he hasn’t familiarized himself with two of the most important issues facing Americans today–the environment and poverty–why on earth does he want to be president anyway? Is it because he’s an expert on foreign policy? Well, no. Not really.

So why does this man want to be President of the United States? He’s repeatedly told us that he knows how to create jobs and manage an economy. But then, why didn’t he do that when he was governor of Massachusetts?

Numbers are important in evaluating Mitt Romney, but the focus should not be on the $250 million estimated fortune he amassed at Bain Capital, or the $374,00 in speaking fees he took in last year, or even on the roughly 15 federal percent tax rate he paid.
The most important number is 47 — Massachusetts’s rank in job creation when he was governor. This is the number that most calls into question Romney’s own current job application.

No job is comparable to the presidency, but the closest thing to it is governor of a large state — an executive position in public office, where the welfare of millions of people is the charge. Unlike a corporate executive, whose overriding goal is to make profits for investors, the president and governors have the same central goal — improving the well-being of the entire population. The first priority, usually, is the overall economy.
Indeed, Romney won office in 2002, after shouldering aside Acting Governor Jane Swift, with a pledge to use his business experience and connections to bring jobs to Massachusetts. He failed, dreadfully.

The 47 figure is one Romney cannot escape. During his four years in office, Massachusetts ranked 47th in overall job growth — only 0.9 percent compared with 5.3 percent nationally. Romney has countered that the unemployment went down appreciably — from 5.6 percent to 4.7 percent during his term.

How could so few new jobs translate into a healthy-looking decline in unemployment? The answer is simple — and not so healthy: Working-age adults were packing up and moving out. Many were replaced, fortunately, by immigrants. But overall, Massachusetts was one of only two states to have no growth in its resident labor force during Romney’s term.

So what exactly qualifies Mitt Romney to be President of the U.S.? And why does he want the job? Perhaps it has something to do with the folks that are funding his campaign?

Goldman Sachs $496,430
JPMorgan Chase & Co $317,400
Morgan Stanley $277,850
Credit Suisse Group $276,250
Citigroup Inc $267,050
Bank of America $211,650
Barclays $203,650
Kirkland & Ellis $201,701
HIG Capital $188,500
PriceWaterhouseCoopers $179,300
Blackstone Group $170,550
Bain Capital $144,000
EMC Corp $127,800
Wells Fargo $126,200
UBS AG $123,900
Elliott Management $121,000
Citadel Investment Group $118,625
Bain & Co $116,050
The Villages $98,300
Sullivan & Cromwell $97,150

Or maybe the moguls who are funding his super pac “Restore Our Future,” 10 of whom gave $1 million or more?

What will become of “America the Beautiful” if Romney and his multimillion-dollar backers achieve their goals?

William Black Goes Ballistic

Posted: February 1, 2012 | Author: | Filed under: 2012 elections, Bailout Blues, Banksters, corruption, Crime, Democratic Politics, double-speak, financial institutions, investment banking, The Great Recession, U.S. Economy, We are so F'd | Tags: , , , , | 6 Comments

I’ve been reading William Black’s essays and posts, watching his video interviews and You Tube presentations, ever since I saw him on Bill Moyers Journal speaking frankly, no holds barred, about how the financial industry had brought the country to its knees and gotten away with it.  He spoke frankly again during his Congressional testimony last year when he came right out and called the mortgage debacle that nearly finished the US economy . . . fraud.  Yes he used the ‘f’ word!  This was unlike other ‘experts’ who insisted there was no inkling of trouble on the horizon, that the financial meltdown was ‘an act of the economic gods,’ a huge surprise, the product of overly optimistic financial predictions.

No, Black said.  It was fraud.  It was criminal.  In case you missed that testimony, you can watch below.  It’s worth a second go-around.

Too bad Black’s comments were basically ignored, caught up in the razzle-dazzle of excuses, half-truths and political posturing that’s become all too familiar to anyone paying attention.  Business as usual is still the acceptable mantra.  In case, you’ve forgotten [time flies when we’re having so much fun], William Black headed Poppy Bush’s forensic audit team during the S&L scandal, which ultimately led to 1000 elite felony convictions.

Black’s investigative team wasn’t kidding around.

William Black came out yesterday morning with his own take on President Obama’s SOTU announcement of a Task Force [The Let’s Try It Again Task Force], quoting POTUS:

And tonight, I am asking my Attorney General to create a special unit of federal prosecutors and leading state attorneys general to expand our investigations into the abusive lending and packaging of risky mortgages that led to the housing crisis. This new unit will hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans.

Black suggests we look at the wording, the avoidance of using the ‘f’ or ‘c’ word.  That would be fraud and criminal.  His response to this and Eric Holder’s follow up memorandum:

The working group will not “investigate … abusive lending” and it will not “hold accountable those who broke the law … [by defrauding] homeowners.” It will not “speed assistance to homeowners.” It will not “turn the page on an era of recklessness” – and fraud, not “recklessness” is what prosecutors should prosecute. The name of the working group makes its crippling limitations clear: the Residential Mortgage-Backed Securities Working Group. Attorney General Holder’s  memorandum about the working group makes clear that the name is not misleading. The working group will deal only with mortgage-backed securities (MBS) – not the fraudulent mortgage origination that drove the crisis (the only exception is federally insured mortgages).

Clearly, he’s not impressed.  No, instead he’s disgusted and enraged.  In fact, the essay nearly jumps off the page with genuine anger.  He goes on to say:

The working group is a symbolic political gesture designed to neutralize criticism of the administration’s continuing failure to hold accountable the elite frauds that drove the crisis. Neither the Bush nor the Obama administration has convicted a single elite fraud that drove the crisis. This is a national disgrace and represents the triumph of crony capitalism. Remember that the FBI warned in September 2004 that there was an “epidemic” of mortgage fraud and predicted that it would cause a financial “crisis.” There are no valid excuses for the Bush and Obama administrations’ failures. The media have begun to pummel the Obama administration for its failure to prosecute. The administration could not answer this criticism with substance because it has nothing substantive to offer in prosecuting elite mortgage origination frauds. The ugly truth is that we are three full years into his presidency and Holder could not find a single indictment to bring that Obama could brag about in his SOTU address. Who doubts that Holder and Obama would have done so if they had anything in the prosecutorial pipeline? Why do Holder and Obama have nothing in the pipeline?

One of the other things that deeply disturbs Black is President Obama’s willingness to play politics in this matter, float the gambit of the Task Force /Working Group and the reputation of Eric Schneiderman to create the appearance of a genuine hands-on effort.  But this move is not genuine as far as Black is concerned and contradicts the very essence of President Obama’s SOTU address, conjuring up the Seal Team that took out Osama Bin Laden—a team effort, concentrating on the mission.

This is no more than vulgar propaganda, Black claims.

He also refers to a disclosure made by Scot Paltrow for Rueters 10 days ago, revealing that US Attorney General Eric Holder and Lanny Breuer, heading the DOJs criminal division [also a co-chair of the ‘Let’s Try It Again Task Force], had been partners at Covington and Burling, a well-established and well-heeled law firm that represented many of the largest banks, providing cover for their clients through key arguments on the MERS debacle.

Conflict of interest anyone?

The state Attorney Generals?  They were lobbyied, leaned on, even offered [as was the case of AG Kamala Harris, CA] $8 billion to assist damaged California homeowners in a bid to agree to the original deal, which would have offered the big banks immunity from liability.  All so the President could announce ‘a deal’ in his State of the Union address, even though homeowners would be left out to dry and bank executives, who led deliberate “accounting control frauds,” could continue their conduct with absolute impunity.

This is ugly, made all the uglier in that it was sanctioned through and by the White House.  Black suggests that Eric Schneiderman recognized the leverage he had, agreed to join the Task Force as a co-chair with the stipulation that the original deal be modified, specifically concerning civil liability in mortgage origination fraud.

This might explain Jamie Dimon’s whine last Friday, pouting and claiming bankers are the objects of unfair discrimination.  Really?  Here’s the average American’s response:

Of course, you would think that this mess would be a window of opportunity for Republicans in an election year.  What an incredible club to use on President Obama to win the WH, maybe the House and the Senate by gargantuan majorities.

No fear there because for every compromised Democrat there is an equally compromised Republican.  Both the Democrats and Republicans rely heavily on campaign contributions from the financial sector.  Neither side is willing to cut their bankers [crooked or not] off at the knees.

What to do?  What better reason to support any and all actions to get money out of the political arena.  Until we do?  The world belongs to the highest bidder.

Falling Out of Love with . . . Eric Schneiderman

Posted: January 29, 2012 | Author: | Filed under: investment banking, U.S. Economy, U.S. Politics | Tags: , , , , | 28 Comments

When I first heard about NY State Attorney General Eric Schneiderman standing up and pushing back against DC’s rush to settle with Wall St bankers and mortgage servicers over the foreclosure debacle, I cheered.  In fact, I did more than cheer.  I wrote to Schneiderman and thanked him for having the courage and integrity to stand with American homeowners, those who had been abused by unfair [and illegal] business practices, and then further compromised by mortgage modifications and refinancing schemes that turned into a giant con game.

The stories were always the same, particularly with the mod and refi angle.  Homeowners called their lending representatives.  They were encouraged to fill out mountains of paperwork, pay a particular monthly amount, and then [months later] once they fulfilled their obligation?  They were told they did not qualify, would be required to pay ‘x’ amount of dollars upfront or the local sheriff would be knocking at the door.  And not for a friendly ‘hello.’

The bait and switch games have been cruel, destructive and predatory.  The idea that these same financial institutions–unable to produce proper and legal paperwork on many of these properties, the whole robosigning/MERS debacle—were being offered a sweetheart deal including immunity from civil and criminal prosecution was nothing short of outrageous.

Schneiderman stood up first and said, ‘No.’  He was later joined by five additional state attorney generals: Beau Biden [DE], Martha Coakley [MA], Catherine Cortez Masto [NV], Kamala Harris [CA] and Lisa Madigan [IL]. Each has pledged to independently investigate the malfeasance and fraud in the mortgage industry and seek prosecution where warranted.

However, during his State of the Union Address, President Obama announced the creation of a Federal Mortgage Fraud Task Force. To my dismay and that of many others, it was subsequently announced the aggressively independent Schneiderman was joining the DC team.

The immediate question [and I’m glad I’m not alone in this]: Will Eric Scneiderman be sucked into the Washington Borg, be used for window dressing by the Administration or remain staunchly on the side of ordinary Americans, who have been abused and sucker-punched enough.

Though I’m generally an optimist, I have to admit—it does not look good.

As an article at Yves Smith’s site pointed out, the very fact that negotiations with the TBTFs proceed uninterrupted sends up a red flag.  Why proceed with negotiations, offering the banks a back door exit, if you’re running an investigation into fraud?  The composition of the Task Force is also troubling, composed as it is with people from the original Task Force that has done very little.  Consider Eric Holder, for instance—not exactly the poster child of a justice fighter.

Additionally, indications are that a miniscule fraction of FBI agents [10] have been assigned to the Task Force in comparison to William Black’s forensic team [1000] to tackle the S&L scandal.  Matt Stoller stated that the current investigation is on the order of 40x the magnitude and complexity although I actually heard Bill Black say the magnitude was in the 70-80x range.

In the same article, Stoller quotes Eric Holder, who seems to truly believe [or at least wants everyone else to believe] that the Administration and the DOJ have been dedicated to rooting out corruption:

On Tuesday night, the President referenced this initiative, asking us to, “hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans.”

That is precisely what we intend to do.  And the good news is that we aren’t starting from scratch.

Over the past three years, we have been aggressively investigating the causes of the financial crisis.  And we have learned that much of the conduct that led to the crisis was – as the President has said – unethical, and, in many instances, extremely reckless.  We also have learned that behavior that is unethical or reckless may not necessarily be criminal.  When we find evidence of criminal wrongdoing, we bring criminal prosecutions.  When we don’t, we endeavor to use other tools available to us – such as civil sanctions – to seek justice.  My number one to commitment to the American people is that we will continue to devote significant resources to combating financial fraud and be as aggressive and creative as we can be in holding accountable those who, in violating the law, contributed to the financial crisis.

For example, in just the last six months, the Department has achieved prison sentences of 60, 45, 30, and 20 years in a variety of financial fraud cases charging securities fraud, bank fraud, and investment fraud.   And, just last month, I announced the largest fair lending settlement in history, resolving allegations that Countrywide Financial Corporation and its subsidiaries engaged in a widespread pattern or practice of discrimination against minority borrowers from 2004 through 2008.

Either the Administration and DOJ have done a very poor job of keeping the public abreast of their multiple investigations/prosecutions or the average layperson would refer to this claim as: Don’t trust your lying eyes.

Schneiderman has reportedly stated that if the investigation is not on the up and up, he will publicly step away. He has insisted that the investigative work will be rigorous and unrelenting.

I hope he means it.  I hope the queasy sense I have in my gut is wrong because false champions have become the disheartening rule.

Though I’m more likely to see the glass half full than half empty, I and many others have witnessed the same repetitive pattern:  promising, good-intentioned men and women go to DC, only to be chewed up in the machine.  Or irreparably compromised. And though I’ve always believed Barack Obama inept in leadership qualities, he does have an uncanny ability to disable and defang his opponents. David Dayen wrote a convincing essay to the same effect.

I want to be wrong about this.  I hope the naysayers are wrong, too.

Breaking up is hard to do.

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