Epistemic Ingemination

A very concise, good read on why we need single-payer health insurance.

Excerpt:

Currently, health care is treated as a privilege for the wealthy, those employed by the state or a large business, and for those over 65. Leaving everyone else uninsured is not just morally wrong, it is economically wrong. Over half of all bankruptcies are due to medical bills, and many of those bankrupted had insurance, but were underinsured with large deductibles or limited benefits.

I’m here to tell you that the above is a true statement.

You should watch him in action.

Really.

On a mail list I belong to, we’ve been discussing a good article at the Atlantic entitled The Deficit Blame Game. It’s a scary one, and I recommend it. But I disagree strongly that it doesn’t matter who you blame. I think that it matters a great deal, and here is what I wrote in that vein.

I’m not bothered by the blame game, and feel no compulsion to appear to be even-handed in this argument. We are where we are because of Republican politics and policies. Period.

Pause and think big-picture for a moment. If the Democratic party had been in power for the last eight years, we would *not* be in this condition. Let’s put this another way: if the Republican party had not been in power for the last eight years, we would *not* be in this condition.

Two things to keep in mind: five trillion dollars of public money were effectively transferred into private hands over the last eight years. You’ve just witnessed the largest raid on a public treasury and the largest money laundering operation in history. I know that this sounds like wild-eyed conspiracy-theory hyperbole, but it’s a rationally and factually defensible statement. Follow the money and look at who benefited. Now compare that list to the donor list of the RNC.

The second point to keep in mind is that the current deficits are virtually mandated upon the current administration, due once again to the effects of previous policies of the Republican party. Virtually every credentialed economist on the planet has advised that immediate and massive deficit spending is the only way to avoid an unprecedented global economic catastrophe. There are, of course, policy questions of where and how to do this spending that are completely fair game for disagreement (and I personally disagree with much of what’s been done so far) but we really have no choice in doing it, according to the experts.

These massive deficits and accumulated debt, when combined, are truly dangerous. I think that the correct people understand this, and happily, much of the money is being pointed at infrastructure, health care, and energy efficiency upgrades that will have basic economic benefits to all, and will assist in enabling us to dig our way out in the future. One hopes. We have to start making things again, and we’ll have to live well within our means for a long, long time.

Unfortunately, if the rest of the world stops buying our bonds, then the grand experiment is over. Kaput. Gone. And that could happen this afternoon. (One trillion dollar banknotes to buy a loaf of bread? Don’t be so sure it can’t happen….) In the end, though, I am an optimist who believes that the good guys are usually the last ones standing.

I am all for even-handedness and balance in public discourse. On the other hand, we need to learn from our mistakes, and that necessitates identifying where and how those mistakes were made.

We are where we are right now because of Republican party politics. None of this would have happened if they had not been in power. Let’s remember that.

Ryan and I went down to the Farmer’s Market at the Triangle yesterday, and bought a couple of one-pound organic grass fed ribeyes, just because. I grilled ‘em over pecan and mesquite w/ corn on the cob, and made some green beans alongside, also from the market. I’m still in afterglow; that steak was one of the three or four best I’ve ever eaten. Yum.

So, I’m off the Kerrville this weekend to do some audio work. If you have XM radio, I’ll be mixing live broadcasts on channel 15 — “The Village” — from 7:00 PM to midnight on Friday, Saturday and Sunday.

The lineup will be superb; one of my favorites, a band called “Blame Sally” is playing; it’ll be a pleasure to see them again. The Limeliters (!) are going to be there. Terri Hendrix, Bruce Robison, Trout Fishing in America, Ray Wylie… just a whole bunch of my favorites. I’m a very lucky guy to be able to get paid for doing this stuff. (Shh. Don’t tell them that I’d be willing to pay them for the privilege…)

Oh, yeah. I haven’t seen this week’s Chronicle yet, but I am pretty sure that they’ve published my letter to the editor on the new sound ordinance. It’s on their website, anyway. It’s just a cute li’l snarky thing; enjoy.

Finally, for some reason, a wonderful story popped into my head this morning. I searched the archives and found it on a twenty-year-old disk. I’ll leave you with that for now. See you on Monday.

The Fisherman and American Businessman

The American businessman was at the pier of a small coastal Mexican village when a small boat with just one fisherman docked. Inside the small boat were several large yellow fin tuna. The American complimented the Mexican on the quality of his fish and asked how long it took to catch them.

The Mexican replied only a little while.

The American then asked why didn’t he stay out longer and catch more fish?

The Mexican said he had enough to support his family’s immediate needs.

The American then asked, but what do you do with the rest of your time?

The Mexican fisherman said, “I sleep late, fish a little, play with my children, take siesta with my wife, Maria, stroll into the village each evening where I sip wine and play guitar with my amigos, I have a full and busy life, senor.”

The American scoffed, “I am a Harvard MBA and could help you. You Should spend more time fishing and with the proceeds buy a bigger boat with the proceeds from the bigger boat you could buy several boats, eventually you would have a fleet of fishing boats. Instead of selling your catch to a middleman you would sell directly to the processor, eventually opening your own cannery. You would control the product, processing and distribution. You would need to leave this small coastal fishing village and move to Mexico City, then LA and eventually NYC where you will run your expanding enterprise.”

The Mexican fisherman asked, “But senor, how long will this all take?”

To which the American replied, “15-20 years.”

“But what then, senor?”

The American laughed and said that’s the best part. When the time is right you would announce an IPO and sell your company stock to the public and become very rich, you would make millions.

“Millions, senor? Then what?”

The American said, “Then you would retire. Move to a small coastal fishing village where you would sleep late, fish a little, play with your kids, take siesta with your wife, stroll to the village in the evenings where you could sip wine and play your guitar with your amigos.”

Go out there and do something kind and unexpected for someone today, okay?

Health care legislation will happen this year. A letter was sent today:

April 20, 2009

The President
The White House
1600 Pennsylvania Avenue, NW
Washington, DC 20500

Dear Mr. President,

For nearly a year, we have been working together toward the shared goal of significant reforms to our health care system. We must act swiftly, because the cost of inaction is too high for individuals, families, businesses, state and federal governments. Comprehensive health care reform legislation will responsibly contain costs, improve quality, enhance disease prevention, and provide coverage to all Americans. We are committed to working with you, and with our colleagues in Congress, to enact legislation to achieve these long-overdue reforms without delay. We are writing to you today to let you know of the schedule for committee action that we intend to follow to meet this goal.

Since our committees share jurisdiction over health care reform legislation in the Senate, we have jointly laid out an aggressive schedule to accomplish our goal. Both committees plan to mark-up legislation in early June. Our intention is for that legislation to be very similar, and to reflect a shared approach to reform, so that the measures that our two committees report can be quickly merged into a single bill for consideration on the Senate floor.

The unprecedented level of funding devoted to health care reform in your budget this year leaves no doubt about your commitment to the goals of expanding coverage, reducing costs, and improving health and health care. We have a moral duty to ensure that every American can get quality health care. We must act to contain the growth of health care costs to ensure our economic stability; to help American businesses deal with the health care challenge; and to make sure that we are getting our money’s worth. With your continued leadership and commitment, and working together, we remain certain that our goal of enacting comprehensive health care reform can be accomplished with the urgency that the American people rightly demand.
Respectfully yours,

Senator Max Baucus
Chairman
Senate Finance Committee

Senator Edward M. Kennedy
Chairman
Senate HELP Committee

Absolutely beautiful political theater. And excellent political tactics.

You can expect immediate hysteria from the wingnuts, and mudslinging from the Republicans surpassing even “Fascist” and “Communist.” They’ll have two whole months to scream doomsday before they even see the bill, and by the time it’s released, the country will be tired of them and ignoring their sky-is-falling pronouncements. A nice bit of old-school LBJ-esque strategy there.

With a little luck, this’ll get McConnell & Boehner so worked up that they’ll have to retire for health reasons. Pun intended.

Jon Stewart interviews Jim Cramer on the Daily Show. (They’ve been going back and forth for a few days.)

It’s, to me, one of the all-time best moments of television, ever. Easily Emmy material. Easily Pulitzer material.

These are entitled “Outakes” I, II, and III. I hope that they remain up as they are for a long, long time. It’s been said many times, but it’s well to ponder the fact that our best news source and our best journalism these days is coming from a comedy show on basic cable.

Extraordinary, powerful stuff. The Daily Show is a jewel.

And he’s not afraid to say so.

An Open Letter to Rush Limbaugh, Sean Hannity, and Michelle Malkin

In a time like this, when tempers are riding high and many Americans are close to panic about their jobs and finances, you have a special responsibility to consider the accuracy of what you say and the consequences of inflammatory and erroneous statements. In the last few days, manifestly distorting my words and pulling them out of context, you have accused me of wanting to exclude white males from jobs generated by the stimulus package. Anyone who takes a moment to examine what I actually said and wrote knows this to be an absurd misrepresentation of my position (see this). My goal is and has always been to create as many opportunities for as wide a group as possible, and not exclude anyone from access. There is and has never been any ambiguity about this. The hate mail I have received since your broadcast suggests that the mischievous consequences of your demagoguery are potentially dangerous, in addition to being destructive of rational and constructive political discourse. I urge you to take responsibility for your words. Words and ideas have real world consequences, and you have demonstrated a cavalier disregard for both.

The total accumulated cost of NASA since its inception 50 years ago is $416.7 billion. You’ve given away that much in the last 60 days, to people who refuse to tell you where it’s going.

Discuss.

THE CREDIT CARD ACCOUNTABILITY RESPONSIBILITY AND DISCLOSURE ACT

Senator Dodd never got it to the floor this year. He’s reintroducing it on day one of the new session.

The short form:

Strengthens Credit Card Industry Regulation and Supervision

• Requires banking regulators to evaluate the policies and procedures of card issuers to ensure compliance with card requirements and prohibitions;

• Improves data collection related to rates, fees, and profits;

• Provides each federal financial regulator with the authority to prescribe regulations governing unfair or deceptive practices by banks and savings and loan institutions.

Prevents “any-time, any reason” Increases in Interest Rate and Terms

• Prevents credit card issuers from increasing interest rates on cardholders in good standing for reasons unrelated to the cardholder’s behavior with respect to that card (universal default ban);

• Prevents issuers from changing the terms of a credit card contract for the length of the card agreement (ban on unilateral changes to card agreements);

• Allows customers who close their accounts to pay under the terms existing at the time the account is closed;

• Requires interest rate increases to apply only to future credit card debt.

Requires Fairness in Application of Card Payments

• Requires payments to be applied first to the credit card balance with the highest rate of interest, and to minimize finance charges;

• Prohibits issuers from setting early morning deadlines for credit card payments. 

Protects the Rights of Financially Responsible Credit Card Users

• Prohibits interest charges on debt paid on time (double-cycle billing ban);

• Prohibits late fees if the card issuer delayed crediting the payment;

• Requires credit card statements to be mailed 21 days before the bill is due rather than the current 14;

• Requires that payment at local branches be credited same-day.

Prohibits Exorbitant and Unnecessary Rates and Fees

• Prohibits the charging of interest on credit card transaction fees, such as late fees and overlimit fee;

• Prohibits issuers from charging a fee to allow a credit card holder to pay a credit card debt, whether payment is by mail, telephone, electronic transfer, or otherwise;

• Prevents issuers from multiple over-limit fees for exceeding a card limit, and allows such fees only when a cardholder’s action, rather than a fee or finance charge, causes the limit to be exceeded;

• Requires issuers to offer consumers the option of operating under a fixed credit limit;

• Requires issuers to lower penalty rates that have been imposed on a cardholder after 6 months if the cardholder commits no further violations.

Provides Enhanced Disclosures of Card Terms and Conditions

• Requires cardholders to be given 45 days’ notice of any interest rate increase;

• Requires issuers to provide disclosures to consumers upon card renewal when the card terms have changed;

• Requires issuers to provide individual consumer account information and to disclose the period of time and total interest it will take to pay off the card balance if only minimum monthly payments are made;

• Requires full disclosure in billing statements of payment due dates and applicable late payment penalties. 

Ensures Adequate Safeguards for Young People

• Requires issuers soliciting to persons under the age of 21 to obtain an application that contains: the signature of a parent, guardian, or other individual who will take responsibility for the debt; proof that the applicant has an independent means of repaying any credit extended; or proof that the applicant has completed a certified financial literacy course;

• Limits prescreened offers of credit to young consumers by prohibiting consumer reporting agencies from furnishing reports in connection with firm offers of credit that are not initiated by consumers under age 21.  Allows consumers who are at least 18, but not yet 21, to choose to receive such solicitations.          

The Storm is no longer brewing. It’s here.

533,000 jobs gone in November. 422,000 additional people “exited from the workforce” — meaning they’ve given up looking. 1 in 10 homeowners with a mortgage are either over one month behind or in foreclosure.

Freshen up on how to make squirrel stew, gang.

…

[Addendum: Ryan responds: "Nation Of Hobos: Coming To You Live."]

A) When you build an entire economy based upon convincing people to buy things that people don’t really need, you run into issues when people stop buying things that they don’t really need.

B) What if most of your jobs involve servicing people buying things that they don’t really need? When people stop buying things that they don’t really need, most of those jobs are going to go away.

C) If people have been buying things that they don’t really need on credit, and then they lose their jobs servicing other people buying things that they don’t really need? That money is not going to get paid back any time soon, if at all.

D) Finally, if you’ve moved all of your manufacturing of things that people do need out of your country in the meantime? You’re going to be pretty screwed to the wall, and for a long time. Because when people buy the things that they do need, that profit leaves your country’s economy, and is unavailable to you for reinvestment.

Let’s close today’s post with an observation: One of the largest companies in the world, Google, was founded about 15 years ago. Starting from zero, it became one of the largest companies in the world in less than two decades through what avenue?

Advertising revenue. Think about it.

“Consumerism.” It makes a fine snack, but it’s an awful dinner.

Buckle up.

Starbuck’s profits plummet 97%.

More blogging soon; I’ve been enjoying a week of happy returns and letting the BloodFire seep away. Election season is hard on folks like me…

CNN is replaying the debate in about 25 minutes. Since I haven’t seen it yet, I’m going to do an experiment and blog as I watch it. If I turn out to be really lame at it, I can always delete it, and we’ll pretend you never saw this, okay? Oh – and I am going to do it in chronological order, not reverse order like everyone else who does this. Harrumph.

I will say one thing up front. I saw a few moments of the debate last night on a Hi-Def television at Threadgill’s. McCain’s makeup was not only visible, it was obvious that his eyebrows had been slightly darkened and his eyes were pretty well pancaked. I’ve read that Hi-Def is killing the retail pornography industry, which I think is hilarious. I understand why now.

9:00 – Heh. McCain really doesn’t like Obama. The handshake was as stiff as a board and the smile as false as a snake’s.

9:03: McCain: Fanny & “Freddy Mae?” McCain wants to buy bad mortgages and renegotiate ‘em. Yeh! That’s it! Let’s use the money to eliminate bad decisions. Great.

9:05: Obama’s natural cadence is kind of start-and-stop. You’re going to hear eight years of impersonators taking this to the bank…

9:07: Nice zing by Obama. “We both want to cut taxes. The difference is who we want to cut taxes for.” McCain’s answer? Obama wants to “spread the wealth around.” Socialism!

9:11: McCain: 35% business tax rates! He neglects to mention that the number of deductions brings it down to right around the average world tax rate.

9:15: At least we have two candidates who can pronounce “nuclear.” (Of course, Palin says “nukular.”)

9:17: McCain wants a line-item veto. Obama doesn’t jump on it, and should.
Obama addresses the “earmarks” bugaboo. 1/2 of one percent of the budget. Good perspective.

9:19: Oooo. John-boy gets Snippy. “I am not president Bush. If you wanted to run against Bush, you should’ve run four years ago.” This oughta be good. Obama: If I mistake your policies for George Bush, it’s because you’ve supported them.

Man. McCain is getting mad. He’s blinking two or three times a second and has a pasted on grimace that’s supposed to be a smile…

9:24: McCain still won’t tell Obama anything to his face, even when invited to do so. “We will run a truthful campaign.” Yeah, right.
Obama: (looking McCain in the eye) “100% of your ads have been negative. 100%.” Nice jujitsu. McCain has steam coming out of his ears.

9:29: What is it with Joe the plumber again? If Joe the plumber wants to buy a business, of course he’s going to be exposed to more taxes. He also gets a wheelbarrow full of deductions. Every business owner does. He also gets a chance to make a buttload of money. Let it go, for cripes sake.

9:30: Obama looks at McCain and says “People are saying ‘terrorist’ and ‘kill him’ about me at your running-mates rallies.” Very, very good. McCain completely goes off the tracks, spewing about patriotic veterans at his rallies and how they are being impugned. Obama wisely lets it lay there like the merde that it is and takes it back to issues.

9:35: Obama laughs out loud at McCain’s characterization of ACORN as “voter fraud.” Good. Points out that it is voter registration fraud perpetrated upon ACORN. McCain still pushes it. Bad move. Obama wins this one hands down. McCain: “My campaign is about getting this economy back on track.” Obama laughs again. Seems to work, even if it’s a but disrespectful.

9:42: “Why would your running mate make a better president than your opponents?” This oughta be good. Obama lists Biden’s CV quite nicely.
McCain: “Americans have gotten to know Sarah Palin: she’s a model for the women of America. A reformer through and through.” And she has a kid who has Special Needs. Puhl-eeze.

Heh. Sweet and subtle moment. Schieffer calls time on McCain, but Obama indicates that McCain should be allowed to keep talking. Let him keep on digging deeper, please Bob.

9:50: McCain: 45 New Nuclear Plants will save the country! Drill baby drill! Obama: we have 4% of the reserves and we use 25% of the oil. Gut check. McCain: Drill drill drill. Free trade with Columbia! Obama: labor leaders are being assassinated in Columbia. Let’s stop that first.

9:57: Obama: retool auto plants for fuel efficient vehicles, and help auto makers do that. McCain: Obama doesn’t want free trade with Columbia and wants to kiss Hugo Chavez and North Korea and Iran and everybody bad everywhere….

Man. Every time CNN does a split screen, looking at McCain is like looking at Ilie Năstase play tennis in the old days. You wonder when he’s going to blow. McCain is, quite simply, a schoolyard bully. I feel that I know exactly what this guy is about; that’s the only thing that I see here.

10:02: McCain: Joe the plumber again. Obama: Joe the Plumber — here’s what it costs you: Zero. Nada. Nit. McNăstase blinks at a rate of four times a second. Obama: McCain taxes your health care for the first time, ever. “This is your plan, John.”

BlinkBlinkBlinkBlinkBlinkBlink. McCain says “spread the wealth” again. Right-wing code talking for socialism, I presume. John: a hint — you’re not talking just to the wingnuts here, and ’spreading the wealth’ around looks pretty damned good to the rest of the country right about now.

10:11: Roe v Wade. Obama: personal decision, and the constitution has a right to privacy, not subject to state legislation. Ballsy, and very good. McCain: we have to change the culture of America. Another hint for ya, John-boy: No, you need to join the culture of America.

10:15: McCain: Obama voted “present” on abortion in Illinois. Not a bad little hit. Obama: There was already a law on the books, and many republicans and democrats voted against or “present” on that one. I support a ban on late term abortions, except where the mother’s life is endangered and that was the sticking point. That’s why I voted “present.” McCain: I adopted kids.

10:19: Education. Obama: invest in early education. A pennies on the dollar investment. We need an army of new math and science teachers. McCain: BlinkBlinkBlinkBlinkBlinkBlinkBlinkBlinkBlinkBlinkBlinkBlink. McCain: education is the “civil rights issue of the 21st century.” Wow. I agree 100%. Good for him. McCain: vouchers vouchers vouchers. Let ex military people teach in our schools without having to be certified. (What?!?)

10:23: Obama: “No child left behind is a start, but unfortunately they left the money behind.” Nice little zinger there. If teachers can’t hack it, get rid of ‘em. “Youth are not an interest group. They are our future.” Nice. McCain: D.C. parents want vouchers! Reform Head Start! My running mate will fund autism! Obama: McCain wants to increase vouchers in D.C. by 2000. There are fifty other states.

10:29: Closing statements. McCain: America needs a new direction. (Doesn’t he realize that this is an absurd thing to come out of his mouth?) Can you trust Obama? I’ve spent my entire life in public service.

Obama: We have to invest in the people of this country. We all have to come together to tackle this. I ask for your vote. I’ll work on your behalf.

McCain: BlinkBlinkBlinkBlinkBlinkBlinkBlinkBlinkBlinkBlinkBlinkBlinkBlinkBlink
BlinkBlinkBlinkBlinkBlinkBlinkBlinkBlinkBlinkBlinkBlinkBlinkBlinkBlink

…

This was fun; I doubt that I’ll ever do it again. I think Obama not only won; Obama mopped the floor with McCain. I think McCain proved beyond a doubt to more people than me that he does not have the temperament to be President. He is a very angry man.

…

Final thought: Anyone who is an “undecided voter” at this point is an unserious person who should be ignored as unworthy; they certainly don’t deserve any attention whatsoever from the engaged citizens of this nation.

This is an open letter to my right-wing friends.

We are now in, perhaps, the strangest and scariest time that I’ve ever seen. Like watching a train wreck in slow motion. And we haven’t even started the wreck yet. The Dow is down 39% in the last year (23% in the last month), and the really bad numbers are not even rolling in as yet. The start of the Big Panic comes when people get their 401k statements, as they are doing right now. In a few days, it’ll be time to start nationalizing banks. Literally. We’ve arrived at that point.

I’m sorry, but it’s time to point out the elephant in the room. And let’s start with a foundational observation: being affiliated with the current political right-wing ideology in this country has virtually nothing to do with conservatism. I am not addressing this to thoughtful, informed political conservatives, a group for whom I have an enormous amount of respect.

All of this — every bit of it — was predictable, was predicted, and could (and would) have been avoided. The “Decider”, your President, who has been hiding behind the flag, and patriotism, and “terrrism” for seven years — this poor excuse for a man has been revealed to be the same AWOL incompetent that he’s proven to be so many times previously over the course of his privileged lifetime. Where’s that “Strong Leadership” now? All you have left over is an impotent deer-in-the-headlights shell of a marketing image. The ultimate Peter Principle poster boy.

A couple of you have said to me that the “values” of the Republican party have been abandoned. I say to you, no. The Republican marketing plan has been abandoned, its work now done. That’s all.

You were owned (and, yes, you were sold out) the second that you decided to vote Republican, and folks much smarter and better than me have been patiently pointing this out to you for 15 years — while you listened to Newt Gingrich, and Tom Delay, and Karl Rove and Rush Limbaugh and Bill O’Reilly, and frothed at the mouth over “Liberals” just like a good little automaton. You sat in your Barcalounger, and watched Fox News, and cursed liberals, and voted Republican, and ignored any real-world information that conflicted with the world-view narrative that you were being fed. And because of this, they got what they needed from you. They got the keys to the safe.

Several multiples of the existing contents of your public treasury have been transferred to them, five trillion dollars in eight years. That money — our money, generations into the future — is gone now, and you’ve been discarded now. You don’t even get a receipt out of the deal.

And, yes: I Tried To Tell You Too, all the way through it. You sneered and called me names, said I was anti-business and a coward, a peacenik and a socialist and a person who hates America. You’re still calling me these things.

The guy that you have running for President now? In my opinion, he is a dangerously unstable septuagenarian with no discernible ethics, possessing serious clinical anger management issues — whose campaign is being run by the leftover “B” and “C” team of attack dogs. They’ve just proposed his ’solution’ to this crisis: Allow investment mortgages to be restructured during bankruptcy proceedings. So if you own 13 houses, yeah, you get help. If you own only one, you’re S.O.L. [Update: this "plan" was pulled and disavowed one day later. Did I mention "unstable?"]

And the attacks have begun in earnest now. As Digby notes:

[...]what we are really seeing is the beginning of a right wing story line about the next president of the United States — he is a drug user, a foreigner, a terrorist and a traitor. And the importance of that is that it gives permission to the right wing machine to do anything and everything to destroy him.

These guys are about a fingernail’s width away from calling Barack Obama a Nigger — and they aren’t going to help you to keep your house or protect your retirement, either. But I bet that you’ll vote for them again. Or perhaps you’ll convert into the True Blue, Red-Blooded Libertarian that you now fancy yourself to Have Always Been, come election day. Either way, you’re in the penalty box. Probably for a generation or more, and rightfully so.

I know that, as a good right-winger, you have no interest in the opinions of a guy like me, who has been speaking out against your actions and your mindset for most of my adult life. But I am going to point out two things that can help you through the coming tough times.

First, the obvious: If the Republicans hadn’t been in power, this would not have happened. Let me say this another way: if the Democrats had been in power, this would not have happened. To any of us, including you.

Second: I submit to you that you don’t have a monopoly on what is “Right” and “True.” There are as many ways to live a “Good” life as there are human souls, and you have been demonizing every one of them that is Not Like You for a quarter century now, ever since “Morning In America.” I would respectfully suggest that you find within yourself a measure of tolerance and humility, and that you find it now. Because nobody likes your attitude, and neither you nor anyone else is going to get through these coming hard times alone.

I’ve always found it interesting that you can have this hateful attitude on the one hand, while on the other hand, you worship the most influential liberal philosopher that this planet has ever seen. Jesus of Nazareth had some really good ideas. Peace. Tolerance. Charity towards all. Looking out for the greater good instead of monomaniacal self-interest. You might try taking a look with freshened eyes next Sunday; perhaps you’ll find some interesting insights to ponder. Remember: What you do to the least of us, you do to Him.

I’ve never questioned your motives or your patriotism — even while you have questioned mine repeatedly. I’ve just tried to point out to you the obvious contradictions and consequences of your ideology, and I’ve asked that you stop demonizing those who don’t share it.

I am not asking anymore. I’m now telling you, as are several hundred million other folks. This is a serious time that demands serious people, capable of making level-headed, well informed and intelligent policy decisions. Your judgment has proven to be profoundly flawed. We need people who live in the real world to fix this.

You are welcome to join us.

That, my friends, is change we can believe in.

From a protest outside of the New York Stock Exchange on Friday…

Beware the Hedge Fund action, starting tomorrow:

First, the money rushed into hedge funds. Now, some fear, it could rush out.

Even as Washington reached a tentative agreement on Sunday over what may become the largest financial bailout in American history, new worries were building inside the nearly $2 trillion world of hedge funds. After years of explosive growth, losses are mounting — and so are concerns that some investors will head for the exits.

No one expects a wholesale flight from hedge funds. But even a modest outflow could reverberate through the financial markets. To pay back investors, some funds may be forced to dump investments at a time when the markets are already shaky.

The big worry is that a spate of hurried sales could unleash a vicious circle within the hedge fund industry, with the sales leading to more losses, and those losses leading to more withdrawals, and so on. A big test will come on Tuesday, when many funds are scheduled to accept withdrawal requests for the end of the year.

Don’t be surprised if you hear the new “Conservative” talking point espousing that the current financial crisis is due to a Carter-era law called the “Community Reinvestment Act.” Translation: “They made us loan money to white trash and niggers and spics, and they took the economy down.”

Nonsense. Pure fiction at face value. The CRA worked just fine for a quarter century without creating a housing bubble or markedly increasing subprime defaults on mortgages and small business loans. It is a good program that has brought millions of economically disadvantaged people of all kinds into the middle class.

So, what changed? How about Republican free-market arch maniac wingnut Phil Gramm’s “Gramm-Leach-Bliley Act?” The law that allowed banks, securities firms and insurance companies to get into each other’s lines of business?

I’ve been following this for a while. Check here, and here, and read this from 2004.

Look, this economy has been running on borrowed money for most of the decade. Alan Greenspan kept interest rates artificially low; the Republicans assured a cash party by reducing taxes on capital gains, allowing Fannie and Freddy to have unheard of debt-to-liquid ratios, and making sure that there would be no genuine regulation by decimating regulatory agencies and installing cronies. Hell, Greenspan knew what was happening as early as 2003 — he actually Officially Recommended that people refinance their fixed rate mortgages into adjustable rate mortgages. Why? To keep the country running on credit, to keep the money churning back & forth. Greenspan wanted to be able to control and adjust the interest rate on every home in America whenever he chose to do so. But I digress.

Anyway, these newly-minted “Financial Services” companies (read: BankerRealtorInsurerBrokers) responded by loaning money like rats in heat, rolling those notes (in-house) into a new derivative called “Mortgage Backed Securities” and selling them (in-house) as investment grade paper similar to bonds.

Pretty straightforward. You put on your Realtor hat and find a buyer for some property. You then put on your banker hat and make a loan, making sure that it’s insured by Fannie or Freddy, and remembering to take out your closing cost and realtor fees. Then you put on your insurance hat and insure that property, remembering to take your underwriters fee. Then you put on your Broker’s hat and sell a piece of the expected profit on the mortgage and insurance to someone, remembering of course, to take out your brokers fee. Then, finally, you wrap the mortgage and it’s derivatives into a wholly different entity and try to sell the whole thing to someone else at a very favorable discount, noting that it’s an insured mortgage. They now own the mortgage and you have a nice little chunk of cash in hand.

Now, multiply this transaction by hundreds of millions of finances and refinances and secondary mortgages and derivative transactions. Since these were done in-house, there was absolutely no incentive to follow standard practices and due diligence. Just shovel ‘em in the front door and out the back, as fast as you can.

Nouriel Roubini, who knows more about this than just about anyone, explains it for real:

First, you take a bunch of shaky and risky subprime mortgages and
repackage them into residential mortgage backed securities (RMBS);
then you repackage these RMBS in different (equity, mezzanine, senior)
tranches of cash CDOs that receive a misleading investment grade
rating by the credit rating agencies; then you create synthetic CDOs
out of the same underlying RMBS; then you create CDOs of CDOs (or
squared CDOs) out of these CDOs; and then you create CDOs of CDOs of
CDOs (or cubed CDOs) out of the same murky securities; then you stuff
some of these RMBS and CDO tranches into SIV (structured investment
vehicles) or into ABCP (Asset Backed Commercial Paper) or into money
market funds. Then no wonder that eventually people panic and run – as
they did yesterday on an apparently safe money market fund such as
Sentinel. That toxic waste of unpriceable and uncertain junk and
zombie corpses is now emerging in the most unlikely places in the
financial markets.

Second example: today any wealthy individual can take $1 million and
go to a prime broker and leverage this amount three times; then the
resulting $4 million ($1 equity and $3 debt) can be invested in a fund
of funds that will in turn leverage these $4 millions three or four
times and invest them in a hedge fund; then the hedge fund will take
these funds and leverage them three or four times and buy some very
junior tranche of a CDO that is itself levered nine or ten times. At
the end of this credit chain, the initial $1 million of equity becomes
a $100 million investment out of which $99 million is debt (leverage)
and only $1 million is equity. So we got an overall leverage ratio of
100 to 1. Then, even a small 1% fall in the price of the final
investment (CDO) wipes out the initial capital and creates a chain of
margin calls that unravel this debt house of cards. This unraveling of
a Minskian Ponzi credit scheme is exactly what is happening right now
in financial markets.

By the time that these derivatives of derivatives of derivatives made their way into otherwise legitimate investment portfolios worldwide, the bubble started to burst. Everywhere, we began to see unprecedented default rates, which in retrospect was wholly predictable.

Paper turned into what it always had the potential to be: paper. Not only a zero return on investment, a 100% loss of everything. No value there at all to salvage. Poof. And these are going bust at a potential ratio of 100 dollars to every one dollar of the base-line of that expected profit, now nonexistent. It is that simple.

You, citizen, are now being asked to pay for a huge Ponzi scheme gone bust, after all of the money is long gone. The flim-flam man left town in the middle of the night, long ago.

But just remember: Poor li’l Jimmy Carter had nothing to do with it. And what of the one person who did the most to facilitate this catastrophe? His name is William Philip “Phil” Gramm, and he is the primary economic adviser to John McCain, the Republican nominee for President in this election.

Finally. From one of our own.

James K. Galbraith – A Bailout We Don’t Need

Overnight, the last two big investment banks turned into bank holding companies.

Where are you, all of my pseudo-libertarian free-market capitalist friends? You seem to be awfully quiet this weekend.

I’ve been listening to your Ethically Pure economic drool and spittle for decades. “Let the market determine things! Don’t hamper our brave Capitalists as they Create Wealth for All Of Us! Cutting taxes raises revenue! A rising tide lifts all boats! The only problem with our economy is over-regulation! Anything other than this leads to — dear God — socialism!!”

Where are you now, my deep-thinking brave capitalist dittoheads?

Were you cheering the market on as you watched your 401k lose 20% of its value last week? Were you proudly beaming, holding your copy of the Cliff Notes of “An Inquiry into the Nature and Causes of the Wealth of Nations” to your bosom, as the big five investment banks went to four, and then three, and then two? Do you have tears of joy and unfettered capitalist pride watching your home’s value drop below its mortgage payoff balance?

Or could it be that you’re exactly the kind of person that you’ve always accused others of being on this subject, and now we — the sane ones — are supposed to, once more, bail you out and clean up your messes?

Where’s your copy of Ayn Rand this weekend? You don’t seem to have it with you anymore.

Do you still have enough working independent brain cells to see that in your brand of “capitalism,” you have no problem with keeping your profits — but the minute that your judgement is eclipsed by your greed (as it always will be) you expect that your losses should be — dear God — socialized?

How does it feel to have the “Invisible Hand” slap you upside the head?

I have some better ideas. We can start with something called “regulation.”

Let’s see. How do I illustrate?

I presume that you would refuse to give a loaded handgun and a bottle of tequila to your teenage son along with the car keys on a Saturday night. Because of all of the damage that he could cause to both your interests and, especially, innocents.

Similar to that, but more tailored to your specific insanities.

Robert Reich has some good ideas on how to structure a bailout. I’m reproducing it here in its entirety:

The frame has been set, the dye cast. Treasury Secretary Hank Paulson, presumably representing the Bush administration but indirectly representing Wall Street, and Fed Chief Ben Bernanke, want a blank check from Congress for $700 billion or possibly a trillion dollars or more to take bad debt off Wall Street’s balance sheets. Never before in the history of American capitalism has so much been asked of so many for (at least in the first instance) so few.

Put yourself in the shoes of a member of Congress, including our two presidential candidates. The Treasury Secretary and Fed Chair have told you this is necessary to save the economy. If you don’t agree, you risk a meltdown of the entire global financial system. Your own constituents’ savings could go down with it. An election is six weeks away. Besides, in the last two days of trading, since rumors spread that the Treasury and the Fed were planning something of this sort, stock prices revived.

Now – quick — what do you do? You have no choice but to say yes.

But you might also set some conditions on Wall Street.

The public doesn’t like a blank check. They think this whole bailout idea is nuts. They see fat cats on Wall Street who have raked in zillions for years, now extorting in effect $2,000 to $5,000 from every American family to make up for their own nonfeasance, malfeasance, greed, and just plain stupidity. Wall Street’s request for a blank check comes at the same time most of the public is worried about their jobs and declining wages, and having enough money to pay for gas and food and health insurance, meet their car payments and mortgage payments, and save for their retirement and childrens’ college education. And so the public is asking: Why should Wall Street get bailed out by me when I’m getting screwed?

So if you are a member of Congress, you just might be in a position to demand from Wall Street certain conditions in return for the blank check.

My five nominees:

1. The government (i.e. taxpayers) gets an equity stake in every Wall Street financial company proportional to the amount of bad debt that company shoves onto the public. So when and if Wall Street shares rise, taxpayers are rewarded for accepting so much risk.

2. Wall Street executives and directors of Wall Street firms relinquish their current stock options and this year’s other forms of compensation, and agree to future compensation linked to a rolling five-year average of firm profitability. Why should taxpayers feather their already amply-feathered nests?

3. All Wall Street executives immediately cease making campaign contributions to any candidate for public office in this election cycle or next, all Wall Street PACs be closed, and Wall Street lobbyists curtail their activities unless specifically asked for information by policymakers. Why should taxpayers finance Wall Street’s outsized political power – especially when that power is being exercised to get favorable terms from taxpayers?

4. Wall Street firms agree to comply with new regulations over disclosure, capital requirements, conflicts of interest, and market manipulation. The regulations will emerge in ninety days from a bi-partisan working group, to be convened immediately. After all, inadequate regulation and lack of oversight got us into this mess.

5. Wall Street agrees to give bankruptcy judges the authority to modify the terms of primary mortgages, so homeowners have a fighting chance to keep their homes. Why should distressed homeowners lose their homes when Wall Streeters receive taxpayer money that helps them keep their fancy ones?

Wall Streeters may not like these conditions. Well, you should tell them that the public doesn’t like the idea of bailing out Wall Street. So if Wall Street doesn’t accept these conditions, it doesn’t get the blank check.

Okay. If we’ve learned anything over the last eight years, we’ve learned that legislation that is proposed by the Bush administration and rushed through congress as an emergency measure, is going to contain trojan horses.

So now we have the fast-track plan. Here are a few choice quotes from the article (emphasis mine):

The Bush administration on Saturday formally proposed to Congress what could become the largest financial bailout in United States history, requesting unfettered authority for the Treasury Department to buy up to $700 billion in mortgage-related assets.

The proposal, not quite three pages long, was stunning for its stark simplicity. It would raise the national debt ceiling to $11.3 trillion. And it would place no restrictions on the administration other than requiring semiannual reports to Congress, granting the Treasury secretary unprecedented power to buy and resell mortgage debt.

…

Mr. Bush also sought to portray the plan as benefiting every American. “The government needed to send a clear signal that we understood the instability could ripple throughout and affect the working people and the average family, and we weren’t going to let that happen.”

Key Democratic lawmakers have made clear that they want to include in the legislation at least some assurance that the administration would use its new role, as the owner of large amounts of mortgage debt, to move aggressively to help hundreds of thousands of troubled borrowers at risk of foreclosure.

…

Some Congressional Republicans warned Democrats not to overreach. “The administration has put forward a plan to help the American people and it is now incumbent on Congress to work together to solve this crisis,” said Representative John A. Boehner of Ohio, the Republican leader.

Mr. Boehner added: “Efforts to exploit this crisis for political leverage or partisan quid pro quo will only delay the economic stability that families, seniors, and small businesses deserve.”

Okay, there we have it.

“It’s good for the regular guy,” says Bush. “Cool. Let’s make sure that we write that into it,” says the Democrats. And the leader of the Republicans immediately says “Emergency! Emergency! You’re holding things up and endangering the economy!”

Okay, guys. All of you. Pull it on over. Let’s take a look at this thing.

Ahh. Here it is:

Sec. 8. Review.

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

These corrupt greedhead traitors want you to give the biggest blank check in the history of the known universe to Henry Paulson: Former aide to John Ehrlichman in the Nixon white house, former co-head of Investment Banking, and then, Chief Operating Officer, and then Chief Executive Officer for Goldman Sachs. And how he uses that $700 BILLION dollar blank check “may not be reviewed by any court of law or any administrative agency.”

It is beyond chutzpah; this is naked greed and power on a scale never before seen on this planet. This isn’t just letting the fox into the henhouse. This is signing over the title to the farm to the foxes with no exchange of value whatsoever.

So here we have it. The final Bush crowd end run. On a Saturday morning, out of the news cycle. The last trick. This is where they get to raid the treasury in whatever manner that they choose, give it to whomever they want, and do it without any oversight whatsoever.

Are you happy with the government you elected eight years ago?

Are you better off today than you were in 2000?

And if you voted for Bush, are you aware of how egregiously you have failed this country in your duties as a citizen?

Sunday update: I’m pleased to report that this is now being recognized for exactly what it is.

One obvious thing that I didn’t mention above should be said: this is unlike any “bailout” in history. With the S&Ls in the 80’s or banking in the 30’s, the govenment seized and closed the institutions in question to protect the taxpayers interests. Only after taxpayers were covered were any remaining assets liquidated. The institutions in question simply ceased to be, as it should be.

This one is wholly different. This is simply buying bad investments from the institutions that made those bad investments, so that they can continue to turn a profit.

I don’t recall a constitutional guarantee for a profit to corporations.

Finally, banks and other financial institutions have weighed in on this plan. They really like it a lot. But they have concerns:

“We’re opposed to adding provisions that will affect [or] undermine the deal substantively,” said Scott Talbott, senior vice president of government affairs at the Financial Services Roundtable, whose members include the nation’s largest banks, securities firms and insurers.

I sure you are, Mr Talbott.

Oooh, yeah. Game On, Gloves Off.

Earlier today:

John McCain’s new found support for regulation bears no resemblance to his scornful attitude towards oversight and enforcement. John McCain cannot be trusted to reestablish proper oversight of our financial markets for one simple reason: he has shown time and again that he does not believe in it.

…

This morning, instead of offering up concrete plans to solve these issues, Senator McCain offered up the oldest Washington stunt in the book — you pass the buck to a commission to study the problem. But here’s the thing — this isn’t 9/11. We know how we got into this mess. What we need now is leadership that gets us out. I’ll provide it, John McCain won’t, and that’s the choice for Americans in this election.

Finally! You’ll want to be watching this…

The top 1 percent of households — average income $1.5 million — will save a collective $79.5 billion on their 2008 taxes, reports Citizens for Tax Justice. That’s more than the combined budgets of the Transportation Department, Small Business Administration, Environmental Protection Agency and Consumer Product Safety Commission.

Until 2005, multimillionaires could still make the Forbes list of the 400 richest Americans. In 2006, the Forbes 400 went billionaires only. 

Ye shall know the truth, and the truth shall make you mad.

There’s a good article in the Washington Post about what happened this week in the global economy. Rough ride ahead.