Lies, Lies, Lies.

Tom Coburn is a lying sack of shit.

As Republican lies on health care go, this one's pretty despicable.
For one thing, Coburn doesn't understand what the Preventive Services Task Force said -- the mammogram recommendation had to do with research-based standards, not cost.

More important, though, the legislation's provision on a 5% tax on elective cosmetic surgery clearly excludes procedures for those with congenital abnormalities, disfiguring diseases, or traumatic injuries. Anyone requiring reconstructive surgery resulting from accidents or diseases would be exempt.

There is no "5% tax on the breast reconstruction surgery after they had a mastectomy." Coburn's making it up, hoping no one notices how offensive his lying really is.

There is no depth to which the Republican party will not stoop in defense of their corporate brethren in the parasitic health insurance industry.

Cover Of The Day

Goes to "Jailhouse Rock" as covered by the Jeff Beck Group on 1969's Beck-Ola. With the ever talented (but for decades since, musically useless) Rod Stewart growling and howling his way through the lyrics, the song is transformed into something truly dangerous. Beck's guitar wails, screams and roars all over the mix, often in the background, but no less spectacular for it. The sound and playing are incredible and almost out of control. At times I'm convinced the whole track is going to simply explode, taking my speakers with it.

Elvis covers are a dime a dozen, but this is one of the few that stands out for originality, performance, and sheer wildness.


Best played with the volume at 11.

Dilbert Spam

Well, this is new. I received a spam email from "Rick" sent through the Dilbert.com domain, replete with a cute Dilbert cartoon at the bottom of the page.

The text is the usual 419 phishing crap:

Your friend Rich wanted us to send you this from Dilbert.com.

Message from Rich:

From Richard
Dear one,

Permit me to inform you of my desire of going into business relationship with you, I got your contact from your country directory, please i need a trust-worthy person that will help me to transfer this money.

I am richard sanko, the only Son of late Mr and Mrs johnson Sanko My father was a very wealthy Gold Merchant in sierra leon the Capital of republic of sierra leon.

my father was poisoned by his business associates while my mother died when i am little and my father took me so special because I am his only son.

Before the death of my father on 14th Setember 2007 in a hospital in Cote D'ivoire, he secretly called me and told me that he has the sum of(USD $8 MILLION U.S DOLLARS )which he deposited in a bank Abroad.

He also made me understand that it was because of this money he was poisoned by his business associates while on a business trip with them and he instructed me to look for a foreign partner who will help me transfer this money out of Cote Divoire and invest it for me, my purpose of contacting you is for you to help transfer this money to your country before this people who kill my father will kill me too.

I'm now hiding in a local place and I will compensate you with 20% of this money if you help me to transfer the money to your account l hope you will not betray the trust i have on you because this money is my only hope in this life and you will also help me to come over to your country to continue my education while you will invest my own share of the money for me.

I can assure you there is No Risk involve the money is an inheritance from my late father.


If you are interested please furnish me with your.
1) Real Names
2) Phone/Fax numbers
3) Occupation
4) Residence address

I am waiting to hear from you,
thank you.
Richard Sanko

There is no doubt this was actually routed via the Dilbert.com domain, which means either someone is cutting and pasting this spiel and sending it to random or bought email addresses, or Dilbert has been hacked. I don't quite know enough about it to render a judgment. I did send the Dilbert.com administrator an email through their web site, and got an automated response. We'll see what happens.

Abominable Snowbunny Resigns

I've watched the entire 18+ minutes of her resignation announcement, and I have to say that it was off the charts weird, even for Sarah Palin. Jittery, nervous, nonsensical, the speech, if you can characterize it as such, rambled all over the map, in the end, failing to do what it was intended - give some sort of coherent rationale for leaving the governor's office well before her term ended. I read the first transcript before it was pulled from the Alaska government web site, and it was full of air quotes, fully capitalized words, and lots of exclamation marks, often bunched all together to keep warm.

My personal feeling is this was prompted by several things - boredom with her job, harsh criticism of her job performance and from the presidential campaign, a desire to cash in on her name, and likely a way of minimizing some sort of incoming ethics scandal, presumably one rather serious as she has been wildly successful at utilizing the organs of the state of Alaska to exonerate herself from wrongdoing in all previous complaints against her. That last may prove the killing blow, but we'll have to wait and see.

And the presidency? Never rule it out. Rachel asked me after I told her Palin was resigning if I thought she could still run and win in 2012 against an incumbent Obama. And I paused, because my gut answer - "shit no!" - isn't all that clear. The country is in deep shit, and so far, despite the talk of "green shoots" there are no concrete signs of recovery. Imagine things are this bad when Republican primaries get set to jump off, and she could conceivably not only become the nominee, but win if conditions remain poor or get worse.

Know-nothing populism can be a very powerful force to people caught in the midst of a gigantic shit storm apparently without an end in sight. The electorate would eventually regret handing someone so clearly unfit for high office that much power, but the damage she could wreak while she held the reigns is almost unimaginable. Her gleeful, prideful ignorance is awesomely dangerous when hitched to the power of the presidency.

In the short term, expect to see her on the Wingnut Welfare circuit, giving talks for 10-20k a pop, getting her book published, making all sorts of appearances as a way to position herself for 2012, even if she ultimately decides not to run.

She is addicted to exposure, fame, and the idea of power.

So What's The Punishment?

If abortion is to be illegal, what sort of punishment for women who obtain illegal abortions should there be?

To my astonishment, anti-abortion movement members who will take their cause to the streets haven't even thought about it. This is a fascinating video (embedding was turned off, so follow the link):

Video

Context

In a comment following a post by hilzoy, aimai casts the murder of Dr. Tiller in a stark light:

Lets get real here. There is one and only one doctor left in this country to whom a desperate woman and her family can resort if they require a late term abortion. One. That isn't an accident and its not a bug. Its a feature of a right wing campaign of violent harassment.

I've been pregnant, twice, and was lucky enough not to need an abortion. But I asked my ob-gyn, the woman I was trusting with my life and health and with that of my unborn child, whether if I ended up needing an abortion or, say, currettage if the fetus died in the womb, I could continue to rely on her care. She said, bluntly, "no." And that I would have to find myself some kind of "clinic" to care for me.

This is not some abstract problem for naughty women. Its a problem for *families*, for men and women, for fathers and mothers, and siblings and children. Because the "choice" that women are faced with in late term abortions is between death for themselves or death for themselves and the fetus.

In killing this compassionate man the right wing--yes, all of the hysterics and the anti choicers and the nice people who get squicked out by abortion but who don't get squicked out by the gunning down of an elderly doctor--have put adult women's lives at risk. And for what? The fetuses that are terminated in late abortions are almost uniformly fetuses that will not survive outside the womb.

The anti abortion movement turned poor Dr. Tiller and his patients into a caricature and into targets in order to intimidate other doctors and women from gaining access to lawful medical care. What they could not gain politically, or legally in a court of law, they chose to try to gain through out and out terrorism and int intimidation. There is simply no question about that.

Whether individual posters like x, or y, support that level of intimidation, or why they prefer violent and non violent intimidation over (say) rational discourse and polite political action, is not for me to say. I don't even really care. They have said they see nothing wrong with stalking and harassing medical professionals, and they have refused to condemn the murder. That says enough about them as people and there's nothing any of the other posters need say.

Well Said

Lacking anything coherent or useful to say at the moment about the murder of Dr. Tiller and the disingenuous response of the anti-abortion zealots, I'll let someone not similarly blocked take it away:

For eight fucking years anybody to the left of Pinochet had to kick back and watch while sensible centrists and the Coalition of the Involuntarily Committable got together and raped the country and fucked up the whole world. For eight fucking years we were told that marching in the streets with giant puppets was the most horrific form of treason imaginable, was demoralizing our troops and hurting the debate and making the baby Pope Benedict cry. Not once did I ever in that time hear Megan McArdle or any of her other sensible friends discuss how maybe, just maybe, President Bush and his administration had PUSHED us to the edge, where we HAD to make those puppets because we felt the political process was closed to us.

No, back then it was "elections have consequences" and "you lost" and "look upon my works, ye mighty, and fuck off," and anytime anybody had the temerity to say, "erm, dude, if you don't mind I'll be over here with this sign on a stick" they might as well have been plotting to shoe-bomb Air Force One the way the whiners in the nuttersphere howled and shrieked. There was none of this, "you just don't know how hard it is to be on the losing end of everything including your soul" back then. Just them, partying with Free Republic on the White House lawn, waving their big foam fingers in our faces going "nyah nyah nyah."

Now that they're out of power, natch, what choice do they have but to go shoot up church lobbies in the hopes of bagging abortion doctors for their trophy wall of American apostates? Really, what else could they do? It's not like they could vote, or convince other people to listen to them, or organize, or do any of the damn things I feel like we've been doing since before there was dirt in order to get a not-entirely-crazy in-another-life-he'd-be-a-moderate-Republican dude finally elected so a third of the country could act like Satan just put his feet up on their mother's white-clothed dinner table. It's not like they could do anything else, right? They had to start shooting.

Right?

Comment Of The Week

Been rather distracted of late, with good reason. Some day maybe I'll go into it in detail.

Until then, a rather straightforward comment on a post by John Cole at Balloon Juice about bondholders and the looming GM bankruptcy:

Not to be to obtuse about this, but this is the bargain you make buying bonds. You get paid higher than the risk free rate in returns because you assume the risk that issuer could default. Bonds carry risk and if you buy bonds in a shitty company, you get paid higher than average returns because you assume a higher than average risk that the shitty company could default. I think it has been pretty evident to anyone paying even a little bit of attention over the last 10 years that GM’s position was unsustainable.

Investing is not a game where everyone wins all of the time. You make a bad bet and you lose. That’s the price you pay for an extra 5% on your money. The problem is that for the last 20 years, nobody has explained this to most Americans.

No shit.

Just don't tell anyone, in case we decide to slit our own throats and privatize Social Security sometime down the road...

Dual Translation?

So I'm listening to an interview with Idris Elba, the British actor who so brilliantly played Stringer Bell on The Wire. A few minutes into it, as I listen to him speak in his native accent (which I'd never heard before), I'm prompted to reflect that there are a lot of British actors who make a good living playing Americans in TV and film, but are there any Americans playing Brit roles appearing consistently in film and TV across the pond?

None come immediately to mind...

More On Haircuts

John Nichols in the Nation has a good post about the recent government firing of GM CEO Wagoner.

Wagoner needed to go. He thought the only way to repair an industry he and his compatriots broke was to break unions, cut wages and shutter plants.

Despite the fact that the United Auto Workers union called more than 30 years ago for a retooling the industry to produce smaller, more fuel-efficient vehicles, despite the fact that union members have accepted deeper cuts in pay and benefits than their foreign counterparts, Wagoner kept trying to balance his books by discharging his most skilled employees and devastating communities in Wisconsin, Ohio, Michigan and other states.

As such, he was a lousy, visionless CEO.

If it took a shove from the Obama administrion to make Wagoner leap with his golden parachute, then more power to the president.

But when will this administration get as tough with Wall Street as it has with Main Street? Didn't they screw up in far more dramatic, and damaging, ways than did Rick Wagoner?

Will this president ever tell brokers and bankers that they are going to feel more pain than just the paper cuts from opening envelopes containing their bailout checks and bonuses?

This is the rub. It is fair to say that bailing out the banks is crucial lest the entire economy basically implode under the pressure from all of those ginormous gambling debts Wall Street racked up. That doesn't preclude the necessity of making those responsible for said gambling debts feel the financial and professional repercussions of their actions.

Here we go:

A senior administration official, briefing reporters late Sunday night on the condition of anonymity in order to speak freely, said Obama will call for more sacrifice from carmakers, their investors and automotive unions.

Fascinating. Unions, which have made incredible concessions already in an effort to help GM and Chrysler stay in business, are being ordered by the federal government to concede even more. Yet the dickheads who obscenely profited from wrecking the world financial system remain in their offices, forced only by public shame to forgo bonuses they haven't earned. The same federal government treated these high criminals with kid gloves, saying publicly they feared being sued by the likes of AIG if they attempted to force repayment of unearned bonuses or prevent future ones being paid out.

Recap: Those who work and make something real and useful in order to earn their pay will be further punished by the very same government that has coddled those who play with paper and imaginary numbers and reap unparalleled financial reward for their "toil". The latter are on the hook for many multiples the amounts of the loans the auto industry is seeking, and have given up almost nothing in exchange for, in many cases, essentially free cash.

This is so utterly fucked. It is also the clearest indicator yet that nothing will substantively change in the financial services sector, rendering real the possibility this will all happen again, and the perpetrators will get away with it.

The Revolution Will Not Be Televised

Getting lost in the details of the financial meltdown can have the perverse effect of diffusing righteous anger directed toward those who set this entire destructive wave in motion.

Matt Taibbi delves back into those details and reminds us why we should be "mad as hell" and not take this lying down.

People are pissed off about this financial crisis, and about this bailout, but they're not pissed off enough. The reality is that the worldwide economic meltdown and the bailout that followed were together a kind of revolution, a coup d'état. They cemented and formalized a political trend that has been snowballing for decades: the gradual takeover of the government by a small class of connected insiders, who used money to control elections, buy influence and systematically weaken financial regulations.

The crisis was the coup de grâce: Given virtually free rein over the economy, these same insiders first wrecked the financial world, then cunningly granted themselves nearly unlimited emergency powers to clean up their own mess. And so the gambling-addict leaders of companies like AIG end up not penniless and in jail, but with an Alien-style death grip on the Treasury and the Federal Reserve — "our partners in the government," as Liddy put it with a shockingly casual matter-of-factness after the most recent bailout.

The mistake most people make in looking at the financial crisis is thinking of it in terms of money, a habit that might lead you to look at the unfolding mess as a huge bonus-killing downer for the Wall Street class. But if you look at it in purely Machiavellian terms, what you see is a colossal power grab that threatens to turn the federal government into a kind of giant Enron — a huge, impenetrable black box filled with self-dealing insiders whose scheme is the securing of individual profits at the expense of an ocean of unwitting involuntary shareholders, previously known as taxpayers.

The conservative fantasy that everyone in the financial services sector, or anyone in the entire corporate world, for that matter, are rational actors who behave reasonably and cautiously has, at last, been utterly exposed as a grand lie. The only correct solution is to break the backs of these oversize, overly powerful giants and regulate the living shit out of them in future. Banks, brokerages, and insurance companies all made handsome profits prior to the frantic deregulation fetish of the late 1990s. Given how destructive their greed can be for the rest of us, strict regulation is the only rational response.

Paper Pitchforks

Class warfare is traditionally a top down affair. The recent outrage over the AIG bonuses has been pretty amusing - millionaire congresscritters bleating about how awful it is that masters of the universe at AIG's financial products division want to pay themselves fat gobs of cash after wrecking the world economy. Left out of their faux-populism is the fact they are complicit in the looting that has been conducted by the wealthy in our country for thirty years, and which was virulently accelerated in the 1990s.

And as much as I take perverse pleasure in watching CEOs squirm a bit, this "tax the bonuses back" is just stupid policy. Paul Krugman is on the case:

I’ll leave to others the question of who knew or should have known that the bonus firestorm was coming; but it’s part of a pattern. At every stage, Geithner et al have made it clear that they still have faith in the people who created the financial crisis — that they believe that all we have is a liquidity crisis that can be undone with a bit of financial engineering, that “governments do a bad job of running banks” (as opposed, presumably, to the wonderful job the private bankers have done), that financial bailouts and guarantees should come with no strings attached.

Better dead than...unionized?

Quite probably.

Behold Matthew Yglesias:

I’m probably not breaking any news if I tell you that American business really hates unions and, thus, really hates the Employee Free Choice Act. Thus, even though John Boehner is trying to destroy the American economy, the U.S. Chamber of Commerce is squarely focusing its fire on pro-EFCA Democrats. Your typical business executive would rather let the world burn, or see his children fed to a pack of wild boars, then see a union form at his firm. And it makes a certain amount of sense—businessmen appreciate the value of class solidarity. If you run your company into the ground, you get a nice severance package and another job at another company. But if you let your company be unionized, you’d be dead to your brethren. An attack on one is an attack on all, and they all stand together on this point.

Bear this in mind as you watch the fight against EFCA play out in the coming weeks/months. The battle over stimulus wasn't even a warm up by comparison to the scorched earth tactics now being deployed. And it will get much worse.

More On Citi Shenanigans

From Jane Hamsher:

Citi held a private conference call on Wednesday, hosted by a lobbyist for the US Chamber of Commerce, to "build opposition to the Employee Free Choice Act" according to the Huffington Post's Sam Stein. During the call, Weinswig cited dubious research funded by an astroturf front group for the Chamber to make the claim that the bill's passage would increase the following year's unemployment rate by 1%. (In 2006 the OCED did an exhaustive analysis and concluded that there was no correlation between unionization and unemployment rates.)

Citi Uses Your Money To Wage War On...You!

Citicorp, on the heels of downgrading Walmart because EFCA might pass (though Walmart has remained profitable during the economic disaster, in which, btw, Citi has a central role), is using taxpayer bailout funds not only to stay afloat, but to run an aggressive and dishonest campaign against EFCA. The same analyst who performed the downgrade on Walmart stock leads the conference call.

Matt Yglesias tells the tale:

This, it seems, is capitalism. First you manage your business so catastrophically badly that your company not only becomes worthless, but that it threatens to destroy the livelihoods of billions of people around the planet. Second, you get the taxpayer to keep you in business. And third, you turn around and warn that higher wages for workers might destroy the world economy! As I’ve said before I don’t think we want congress meddling with the details of business decisions at major companies, even companies that are receiving taxpayer support. But there’s a fairly clear case to be made that firms on the public dole shouldn’t be engaged in lobbying or political activities.

These fuckers ought to, as the kids say, "die in a fire". A really hot fucking gasoline-liberally-sprinkled-with-napalm fire. Nationalize them, all of them, and throw the bastards out. Let the shareholders eat it. Sell them off, bit by bit, making them small enough to fail next time around. This has to end.

Simon Johnson on Fresh Air

Great listen.

Notice his comments about the strategy Treasury has been pursuing with the financial sector (about 17:00 in). This guy knows what he is talking about.

Ezra Checks EFCA

And makes a salient point not often visible in the recklessly dishonest discussion about EFCA.

The more impressive strike came, however, earlier this morning, when Citibank downgraded Wal-Mart's stock from a "buy" to a "hold" on fears that passage of EFCA could force the company to unionize which would in turn decrease shareholder profits as more of the company's worth was distributed to employees.

There are two things worth saying on this. The first is that it's a useful moment when the interests of the stock market and the broader economy diverge. Citigroup's analyst is right to worry that shareholders would see smaller gains if Wal-Mart were unionized. Conversely, it would probably be a stimulative thing for the economy if Wal-Mart's massive low wage workforce suddenly enjoyed a quick boost in take-home pay. The interests of shareholders are not the same as the interests of workers, and the various sides in the argument would happily talk your ear off about how the interests of the broader economy align.

The second is that it's hard to recall another time when an analyst actually downgraded a stock on fears of legislation that few expect to pass. Indeed, many on the Left are arguing that this is more about generating a controlled stock market panic that will convince wavering senators to vote against EFCA than about accurately pricing Wal-Mart's stock. "When I see upgrades to the stocks of Wal-Mart's already-unionized competitors (grocery stores like Safeway who will gain back market share if easier unionization results in higher Wal-Mart labor costs) specifically pegged to the specter of EFCA, then I'll admit that Citi is engaged in good-faith prognosticating here," e-mails Josh Bivens at the Economic Policy Institute. "Otherwise, not so much."

This is going to be a fight to the death, one I expect cannot get past the Senate and those self-described Democratic "moderates", whose sole function it seems is to hamstring their party's president and enable the foaming-a- the-mouth rabid dogs of the right, as they have for decades.

Why Nationalize?

Paul Krugman gets right to it.

The benefits from nationalization come from (a) giving taxpayers a share of the upside rather than just a share of the downside, which is where we are now (b) ending the gaming of the system, even looting, that is encouraged by the current system of implicit guarantees (Simon Johnson has been very good on that) (c) making it politically and fiscally feasible to put in enough capital to revitalize the system. These advantages are there whatever you decide to do with junior bank debt.

And finally:

What’s clear, however, is that the current system, of implicit maybe-kinda guarantees on bank liabilities — call it wink-wink-nudge-nudge-say-no-more banking policy — is failing badly.

Crybabies

Jon Stewart annihilates Raick Santelli, Cramer, and all those other douchebag cheerleaders at CNBC, the propaganda arm of Wall Street.

(Embed slaughters my page, so here is the link. Do watch, its damned funny)


Epic fucking win.

Shrill?

Remember when it seemed like those on the Left most concerned with civil liberties and our constitutional rights were being shouted down as shrill fear mongers for criticizing Bushian theories of limitless executive power?

Turns out, they weren't so shrill at all:

The essence of this document was to declare that George Bush had the authority (a) to deploy the U.S. military inside the U.S., (b) directed at foreign nationals and U.S. citizens alike; (c) unconstrained by any Constitutional limits, including those of the First, Fourth and Fifth Amendments. It was nothing less than an explicit decree that, when it comes to Presidential power, the Bill of Rights was suspended, even on U.S. soil and as applied to U.S. citizens. And it wasn't only a decree that existed in theory; this secret proclamation that the Fourth Amendment was inapplicable to what the document calls "domestic military operations" was, among other things, the basis on which Bush ordered the NSA, an arm of the U.S. military, to turn inwards and begin spying -- in secret and with no oversight -- on the electronic communications (telephone calls and emails) of U.S. citizens on U.S. soil.

That the U.S. Government had suspended the Fourth Amendment itself isn't exactly news. A fleeting reference to that event (largely ignored by the media) was made in a footnote to one of Yoo's previously released torture memos (release of which was also compelled not by the U.S. Congress or the media, but by the ACLU). But reading the document that actually effectuated (in secret) that suspension -- released only yesterday -- is genuinely breathtaking.

Entire article should be read to get a start on wrapping your fragile, eggshell mind around this. Click the small photo files and read the actual verbiage - it is hair raising shit.

Dean Baker Sounds Disgusted

The bank stress tests are rigged:

Okay, unemployment will almost certainly reach 8.0 percent and possibly 8.1 percent in February. It might cross 8.5 percent in March. The worst case scenario is that it hits 8.9 percent by the rest of the year?

Remember, this is the same crew that told us that there was no housing bubble. When it became clear that there were serious problems, they assured us that they would be contained in the subprime market. After Bears Stearn collapsed they told us that they didn't see another Bear Stearns out there.

These stress tests indicate that our economic policy makers are still in a serious state of denial. Why isn't the media ridiculing them and telling the public that the folks making economic policy still don't understand the economy.

This is a disaster in the making. Policies going forward, whether or not to perform major intervention (temporary nationalization) in particular, hinge on an honest accounting of just how insolvent some of these "too big to fail" institutions really are. Using less than drastic forecasts as the metric guarantees too small a response.

The Crisis of Credit Visualized

Easily one of the coolest - and most understandable - explanations of how the house of cards was created, and how it came tumbling down on top of us all.


The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.

Let's Get Swedish On Their Ass!

Matthew Richardson and Nouriel Roubini make the case that nationalization is the only useful option left to us to rehabilitate the banking sector:

Nationalization -- call it "receivership" if that sounds more palatable -- won't be easy, but here is a set of principles for the government to go by:

First, and this is by far the toughest step, determine which banks are insolvent. Geithner's stress test would be helpful here. The government should start with the big banks that have outside debt, and it must determine which are solvent and which aren't in one fell swoop to avoid panic. Otherwise, bringing down one big bank will start an immediate run on the equity and long-term debt of the others. It will be a rough ride, but the regulators must stay strong.

Second, immediately nationalize insolvent institutions. The equity-holders will be wiped out, and long-term debt-holders will have claims only after the depositors and other short-term creditors are paid off.

Third, once an institution is taken over, separate its assets into good and bad ones. The bad assets would be valued at current (albeit depressed) values. Again, as in Geithner's plan, private capital could purchase a fraction of those bad assets. As for the good assets, they would go private again, either through an IPO or a sale to a strategic buyer.

The proceeds from both these bad and good assets would first go to depositors and then to debt-holders, with some possible sharing with the government to cover administrative costs. If the depositors are paid off in full, then the government actually breaks even.

Fourth, merge all the remaining bad assets into one enterprise. The assets could be held to maturity or eventually sold off with the gains and risks accruing to the taxpayers.

The eventual outcome would be a healthy financial system with many new banks capitalized by good assets. Insolvent, too-big-to-fail banks would be broken up into smaller pieces less likely to threaten the whole financial system. Regulatory reforms also would be instituted to reduce the chances of costly future crises.

The longer the delay, the higher the actual costs. Not to mention the entire collapse thing. Standing on some ridiculous notion of ideological purity at this late date is exactly equivalent to insanity.

Market Case For Nationalization

Hilzoy makes a market based case for the nationalization of banks that would otherwise vanish into insolvency without government intervention (entire post well worth the read):

In the case of the large banks, I assume that we do not want them to go bankrupt not because it would hurt their shareholders, but because their bankruptcy would have broader systemic effects that we find unacceptable. That's fine. But in figuring out what to do about that fact, we need to try to preserve the incentives that bankruptcy normally provides.

To my mind, this means that we should proceed as follows. First, figure out exactly what it is that makes letting these firms declare insolvency such a bad idea: what effects we are trying to avoid. Second, try to craft a policy that avoids this particular bad consequence, while leaving the other disincentives to go bankrupt (or to invest in firms that are at risk of bankruptcy) in place. Third, if we can't do that, try hard to create incentives that mimic the operation of the normal market incentives that our actions are preventing. (E.g., if we prevent banks from declaring insolvency, we need to provide some other disincentive to becoming insolvent, in order to avoid moral hazard.)

This is the main reason why I tend to favor nationalizing those banks that are insolvent, clearing up their balance sheets, recapitalizing them as needed, and sending them back into the private markets as soon as is prudent. I am not, in general, in favor of the government controlling individual banks. But in this case, if we don't want to let the large banks declare bankruptcy, we need to provide some serious disincentives to their managers, investors, and bondholders. (I exempt depositors since I think that they should be insured, given the systemic value of avoiding bank runs.)

Nationalization would accomplish that. It would wipe out the shareholders and holders of unsecured debt, which is what the market would have done if left to its own devices. It would allow us to replace the senior management at the banks, which would give them every incentive to avoid needing to be nationalized. We would need to own the banks in order to do what needs to be done, and to do it as quickly as possible. This would mimic the market by treating the government as an owner in those cases in which it is, in fact, putting up the money: anyone else who provided this sort of capital would get ownership, and making an exception for the government would make government money more attractive than private capital. This would, I think, be a bad thing.

Nationalization would, in short, accomplish what my market principles tell me we should do: specify exactly what the bad consequence is that we want to avoid, and craft a policy solution that avoids this particular bad thing while either leaving other market signals intact or (where this is impossible) mimicking them. It would also allow us to return to what I take to be the right state of affairs (in which banks are private, and privately funded, and the government regulates them) as quickly as possible. (If you don't like excessive government involvement in banking, it's not clear why you'd prefer a long, drawn-out period of heavy government involvement over a shorter period of outright nationalization.)

This isn't rocket science. Models exist which can provide a blueprint for how to proceed. The only limiting factors in all of this are political and ideological. Our current crop of politician's fear the word "nationalization" almost as much as they fear openly contested elections.

Tech Shit You Gotta Have

Very funny. Very bad language, too.


Sony Releases New Stupid Piece Of Shit That Doesn't Fucking Work

Rallying The Troops

President Obama speaks to Democratic lawmakers about the stimulus bill. Apparently leaving the teleprompter behind, he finally stops mincing words and gets to it. Refreshing, to say the least, but in the wake of the Senate Republicans voting 36 of 41 to scrap all stimulus in favor of more massive, Bush style tax cuts, methinks Obama ought to be giving this speech to the obstructionists.

In two parts:

We Don't Need No Stinkin' Stimulus

Holy crap.

7.6% unemployment.

And U6 is now at 13.6%.

In this environment Republican intransigence becomes a criminal conspiracy, even if it is born of stupid adherence to a failed ideology.

When cops become soldiers

And why it is bad to issue warrants that don't contain a no-knock provision and then have local police SWAT teams serve them as if they did. The extraordinary militarization of police forces has almost universally been a very bad trend.

The Supremes need to have another look at this sort of crap.

Just ask the Mayor of Berwyn Heights, MD.

In the mean time, protect your dogs.

In the kitchen, Georgia spun to face the sound of the splintering door. Men in black burst through the front door and into the living room.

Georgia stood trembling in front of the kitchen stove. Payton, who had been stretched out in a corner of the living room farthest from the front door, his head resting near the threshold to the kitchen "turned toward the front door when I turned," Georgia recalled. "He didn't have time to do anything else." Almost instantly, men in black ran forward and shot Payton in the face, Georgia said. "They kept shooting," she recalled. "I didn't know how many times they shot Payton because there was so much gunfire."

"Down on the ground!" Georgia recalled someone screaming at her. She was too terrified to move.

Chase, always timid even when there was nothing to fear, did what he did best -- he ran. He ran away from the men in black, zipped past Georgia at the stove, Georgia recalled. The screaming, running men followed Chase, shooting as he tried escaping into the dining room, Georgia said. She watched in horror as men in black rushed the dining room from all directions. "I could hear Chase whimpering," Georgia said. Then she heard someone shoot at Chase again, she said.

Men kept yelling at Georgia to get down, but she couldn't budge. "Somebody pushed me on the ground, and they put a gun to my head," she said. Face down on the kitchen floor, Georgia felt someone yank her hands behind her, rip the spoon away and secure her hands. When she lifted her eyes, she could just see Payton's big head resting near the kitchen threshold. He wasn't moving.

Not So Deep Thought

How is that Democrats find themselves in power, but we are having the exact same dishonest debates we've had for the last eight years? Did the recent election actually take place?

The Just Say No Crowd

The modern Republican party, be it in or out of power, has a single strength: playing the role of the obstructionist opposition. For the sake of it. In power, they hold up straw men and push though policies intended to fix problems that don't exist, while annihilating the ability of government to function effectively.

Out of power, it looks like this:

In the midst of an economic crisis, the GOP and its allies have convinced a whole lot of people that the only sensible recovery plan is a bad idea. The minority party has not only persuaded news outlets to give them airtime to spew this obviously-ridiculous nonsense, they've also convinced a lot of media figures that they're right.

I do wonder if they have any clear idea of the potential, even likely consequences of doing nothing about the imminent global economic collapse, already well in progress. If they do, then their actions are criminal. If they don't, then we are in deep deep trouble.

Boys Will Be Girls & Girls Will Be Boys

Pandagon has a post about assumptions made about women every day in restaurants and retail settings when in the company of a man.

Some years ago a friend wanted to buy a new television. I was, at the time, still in the audio/video business and recommended an establishment I once worked for, as my current employer did not sell TVs.

I am male. My friend is female, employed, makes boatloads of money, and is the primary earner in her household (husband takes care of the kids and home).

We three journeyed to the electronics store (a higher end place, where the salespeople actually know what they are selling) where I introduced my friend to the store manager, told him generally what she was looking for, and off we went. Understand that this manager was a younger man, 26 at the time (and a rank asshole to his staff but sophisticated enough to treat his customers with respect, or so I thought), so we are not dealing with some dinosaur likely to pop off about the "little lady" and whatnot. Yet, invariably, he spoke directly to the husband, or even me, though both of us made a point of standing a little further back from him than was she. It was weird. I deflected everything back to her, as did her husband, but he continued making eye contact with either of the men while ignoring her, even though she was the only one asking him questions or responding verbally to him.

When we reached the register, J. took out her wallet and began dating a check. The manager looked right past her to her husband and asked for their phone number. He looked away, and the manager's gaze finally came to rest on his wife. She gave him the number, lips pursed, expression galactically irritated. When the transaction ended, he handed the receipt to her husband, who was several feet away from the counter. The guy had to extend his arm right over her shoulder to do it.

On the ride home she was understandably livid. I was pretty embarrassed, as I had recommended this guy and that shop, and said so. While I received absolution for my unintentional sin, she never returned to that particular establishment. For my part I wrote a letter to the sales manager of the company (someone I knew personally) advising him of the incredibly sexist behavior of the current manager. Nothing happened, as far as I know.

In years since I've seen this sort of thing over and over again. I've even seen female sales staff defer to the male partner when a married couple is buying something, even if there are no overt signs that one or the other person is "taking the lead" in the purchase, so to speak. It's incredibly insulting to women, and all too common.

Beaker Boogies

Who knew?

Muppets get Farked...

Preserve, protect, and defend

Much has been written about the crimes of the Bush administration, and the emerging Washington consensus, predictably, is to let sleeping criminals lie, and move on. Given how many people who comprise that consensus are complicitly involved in some of the aforementioned crimes, it is little surprise they want the rest of us to forgive, forget, go forward.

Paul Krugman reminds us why we cannot allow that to happen.

Let’s be clear what we’re talking about here. It’s not just torture and illegal wiretapping, whose perpetrators claim, however implausibly, that they were patriots acting to defend the nation’s security. The fact is that the Bush administration’s abuses extended from environmental policy to voting rights. And most of the abuses involved using the power of government to reward political friends and punish political enemies.

Teh stoopid, it spreadz

"Academic freedom".

Heh heh.

"Teach the controversy".

HAHAHAHAHA!

Oklahoma was one of the few states that went more Republican in the latest election (McCain pulled his highest vote percentage in any state here), with the Retro-dumbass party securing both houses for, I believe (correct me Jim, if I am wrong) the first time in state history.

And right out of the gate, they fail to disappoint.

Creationism by every other name.


Living in the reality based community is fraught with difficulties. One of them is not taking the bait when legislation like that is proposed. I suppose it is my fault for believing that the entire creationism debate as it relates to public schools is settled law. It is, but apparently that doesn't matter to the forces of know-nothingism.

The anti-evolution legislative pushes are particularly annoying because they are, at heart, so profoundly dishonest. In the guise of presenting a legitimate alternate scientific theory to challenge the enormous body of work that makes up Darwinian theory we get proposed laws that would enforce a religious orthodoxy on school children. It is obviously done in the service of a wider effort to subvert public institutions in the name of a Christianist political attempt to remake our country in their likeness. Legislators who engagfe in this sort of behavior are, to my mind, wholly illegitimate.

It is cowardly. If those Christianist ideas are so valid, then come out in the open, propose legislation that really endorses those views, that this country ought to be ordered on principles conceived primarily through a ridiculously selective, literalist reading of the bible. I recall reading a Catholic writer some time ago saying, and I paraphrase, "the Bible is the Word of God, not the words of God". If a government that rigidly follows a specific reading of the bible is so right and just, then package that legislation appropriately, and let's have the discussion they want to have and do so out in the open. Advocate for theocracy, state the case, have the debate.

It would bring this nonsense to a very quick close. Which is exactly why we have this sort of clumsy, but frightening thought control legislation instead, because its proponents know they have a losing argument otherwise.

To The Gallows!

As money is that which Americans worship most fervently, why are crimes against it not eligible for the death penalty?

Failing that sort of radical, outsize (and dubious) remedy, here is Michael Lewis with a pair of fine articles detailing where the failure points are, and how to repair them:

THERE are other things the Treasury might do when a major financial firm assumed to be “too big to fail” comes knocking, asking for free money. Here’s one: Let it fail.
Not as chaotically as Lehman Brothers was allowed to fail. If a failing firm is deemed “too big” for that honor, then it should be explicitly nationalized, both to limit its effect on other firms and to protect the guts of the system. Its shareholders should be wiped out, and its management replaced. Its valuable parts should be sold off as functioning businesses to the highest bidders — perhaps to some bank that was not swept up in the credit bubble. The rest should be liquidated, in calm markets. Do this and, for everyone except the firms that invented the mess, the pain will likely subside.
This is more plausible than it may sound. Sweden, of all places, did it successfully in 1992. And remember, the Federal Reserve and the Treasury have already accepted, on behalf of the taxpayer, just about all of the downside risk of owning the bigger financial firms. The Treasury and the Federal Reserve would both no doubt argue that if you don’t prop up these banks you risk an enormous credit contraction — if they aren’t in business who will be left to lend money? But something like the reverse seems more true: propping up failed banks and extending them huge amounts of credit has made business more difficult for the people and companies that had nothing to do with creating the mess. Perfectly solvent companies are being squeezed out of business by their creditors precisely because they are not in the Treasury’s fold. With so much lending effectively federally guaranteed, lenders are fleeing anything that is not.
Rather than tackle the source of the problem, the people running the bailout desperately want to reinflate the credit bubble, prop up the stock market and head off a recession. Their efforts are clearly failing: 2008 was a historically bad year for the stock market, and we’ll be in recession for some time to come. Our leaders have framed the problem as a “crisis of confidence” but what they actually seem to mean is “please pay no attention to the problems we are failing to address.”

The entire thing is worth reading, and part two can be reached from the end of part one.