Issues, Politics and Everything Else
“McCain is Andy Kaufman in his Mighty Mouse costume - ‘Here I Come to Save the Day,’” Frank said as he left a Thursday morning caucus meeting with House Democrats, saying the Republican presidential candidate’s decision to enter the mix “is not helpful.”
“He hasn’t been involved,” Frank said. “He doesn’t know anything about it.”
For those of you who do not know why this is funny, click below.
h/t to wonkette
Toxic Assets is the moniker that has been given to the mortgage paper that Sec. Paulson has proposed we as taxpayers buy for 700 Billion Dollars. This week, Congress is starting to work on this monumental bail-out. Our representatives want more oversight, this is a good idea since the Bush Administration didn’t want any. Some in Congress want to limit CEO salaries and golden parachutes if Americans buy their debt, which is an another good idea. While others in Congress want to address home foreclosures that are at the root of the problem. But all these good ideas don’t help address the basic problem with the bailout plan, assessing value to something that has none.
This is why these debts are toxic. Nobody on Wall St. will buy them so they are currently worthless. So lets follow the process: Government tells investors and others who hold this debt that the government will buy them; O.K., next comes the big question, how much do we the taxpayers pay? What the companies say they are worth? What government says they are worth? Remember, we have already established that they currently have no value in the market. This is the trickiest piece of this whole scheme. If the price set for these “toxic assets” is too low, it further drives down stock prices, if it is too high, we have an unprecedented taxpayer funded give away to the very people who caused the problem. Given what we know about lobbyists, government and business, this is not a good scenario for us taxpayers.
Now comes the news that the Bush Adminstration has been sitting on this bailout plan for months. Remember this is from the same administration who claimed that the Iraq war would pay for itself through Iraq oil revenue. This whole thing is starting to smell really bad.
I have been speaking and writing about the “privatization of gain and the socialization of risk” since I first went to Congress in 1993. That was the year we had to come up with about 35 Billion dollars to bailout the Savings and Loan debacle. Banks were making bad loans and bad decisions with their depositors money. We taxpayers ended up paying off the depositors through FSLIC and taking on a bunch of office buildings and homes through the RTC I understood how we couldn’t leave depositors twisting in the wind but those bankers who profitted through the boom and made millions, just washed their collective grimy hands and walked away. People like the the G.W. Bush’s brother, Neil Bush and John McCain crony, Charles Keating were experts at making sure taxpayers got stuck with their IOU’s.
Which brings us to today. I have written before about the extrordinary efforts to “pull the refs off the financial field” (repeal of Glass-Stiegal and Phil Gramm’s amendments to defang SEC,Treasury and the FED), so now we are looking at socialized financial markets because as we hear over and over “they are too big to fail”. With the taxpayer purchase-yes purchase, of AIG and the government take-over of Fannie Mae and Freddie Mac the US is starting to look like some South American dictatorship. Only unlike South American dictatorships we aren’t taking over profitable companies, we takeover the ones with massive debt. These are not bailouts. Bear Stearns was a bailout, taxpayers loaned them 35 Billion. These others we just took. Now Secretary Paulson is saying we will underwrite money market funds and set up another RTC-like agency to take on more bad stockmarket debt. Of course Wall St. LOVES this idea. Why wouldn’t they? They have their house in the Hamptons, and a few million socked away while the poor US taxpayer, who can’t afford health care, gasoline or food is footing the bill. Even without the latest proposals, we taxpayers are on the hook for about $4,000 for every man,woman and child in the US for what we have already done to shore up the bad debts of Wall St.
So the next time I hear some Republican talk about “socialized” this and “socialized” I’m just going to laugh in their face.
In the meantime since you and I are now the proud owners of Fannie Mae, Freddie Mac and AIG, I suggest we start acting like it. Lets all go down to their HQ’s and drink their coffee and eat their pastries at break time. Lets take a nice spin in those plush desk chairs and visit their bathrooms when we are on the road. Oh, and I do expect a birthday cake from the “office gang”. It is the least they can do.
With the passing of Sally Ormsby our community has suffered a great loss. For decades Sally was at the forefront of making Fairfax and the Commonwealth a better place to live. Sally was as valiant in her fight against cancer as she was valiant in her fight for all of us. Sally was a wonderful friend and I will miss her very much. My thoughts and prayers go to her family.
For the last couple of decades, the Republican line on Social Security was that we could save the system by privatizing it. They call it “personal retirement investment accounts”. The idea is that we “bolster” Social Security by allowing people to take the money they would have put into the system and invest it in stocks and bonds. Of course, nobody could quite understand how to make the Social Security system stronger by taking money out of it but I don’t think that was the goal. What was the goal as I see it, was to let Wall St. get it’s hands on more money to invest in what is now known to be pretty shaky propositions.
And what kinds of institutions would have been issuing these accounts? Bear Stearns, Lehmans and Merrill Lynch of course!
Even today when I checked the official McCain web site, he is still pushing this idea. Phil Gramm, McCain’s former economic adviser and of “nation of whiners” fame, continues to be a big proponent. It appears although Gramm is a former adviser, his advise lingers in the McCain policy soup.
Yes, we have dodged a bullet by not following Reagan,Bush 1 and Bush 2 into this cockamaimey scheme. But we have one more bullet to dodge in November.
Here is a link to a blogger in Alaska: http://mudflats.wordpress.com/2008/09/14/alaska-women-reject-palin-rally-is-huge/ It is a first hand account of a rally that was the same day both Fox News (?) and CNN breathlessly covered Gov. Palin’s return to Alaska.
“‘Alaska Women Reject Palin’ Rally is HUGE!
Never, have I seen anything like it in my 17 and a half years living in Anchorage. The organizers had someone walk the rally with a counter, and they clicked off well over 1400 people (not including the 90 counter-demonstrators). This was the biggest political rally ever, in the history of the state. I was absolutely stunned. The second most amazing thing is how many people honked and gave the thumbs up as they drove by. And even those that didn’t honk looked wide-eyed and awe-struck at the huge crowd that was growing by the minute. This just doesn’t happen here.”
Evidently not everybody in Alaska loves her as the McCain campaign claims. I encourage you to give it a read.
Sept. 11th Hair Scrunchie
Some people will use anything to make a buck.
I have been amused and amazed at seeing the McCain Campaign turn itself into the “Ride of the Valkyrie” over charging anyone who questions his running mate as “sexist”. This must be born from a long legislative history of protecting the rights of women, right? Not so much!
He fought against raising the federal minimum wage 14 times that disproportionately effects low income women.
He has consistently fought against making sure that women earn equal pay for equal work. In the Ledbetter case this last year he said he wouldn’t support a woman’s right to sue for equal pay because it would mean more court cases. Duh!
He has fought against a woman’s right to choose so consistently that he received a zero percent vote rating from pro-choice organizations. Trust women to make their own choices without government control? Nope!
While in Congress, I saw him fight against helping families gain access to birth control.
I encourage you to do your own research on the McCain record on Women’ s Issues. Just go to: http://www.votesmart.org/voting_category.php?can_id=53270
Now the McCain Campaign has once again cried “Sexism!” when Obama used the term, “Lipstick on a pig” while describing the McCain/Palin efforts to claim the mantle of change. Oh please!. Politicians have been using this somewhat hackneyed phrase for decades. I’ve used it myself to describe the attempt to take something objectionable and dress it up to make it more palatable. When Gov. Palin, in describing her Hockey Momness, likened herself to a pit bull with with lipstick, no one cried foul, although I bet there were a few hockey moms who cringed.
Now lets see what real sexist talk looks like:
From “The Real McCain” by Cliff Schecter: In his 1992 Senate bid, McCain was joined on the campaign trail by his wife, Cindy, as well as campaign aide Doug Cole and consultant Wes Gullett. At one point, Cindy playfully twirled McCain’s hair and said, “You’re getting a little thin up there.” McCain’s face reddened, and he responded, “At least I don’t plaster on the makeup like a trollop, you c*nt.” McCain’s excuse was that it had been a long day.
When it comes to sexist talk, McCain could give lessons.
I wrote this article -posted below-last January on this blog. I think it still holds up in light of the possible $100 Billion bail-out of Fannie Mae and Freddie MAC by the Bush Administration. Nobody, Republican or Democrat is talking about how this fiasco was set in motion. In 1999, yes, under the Clinton Administration, Sen. Phil Gramm (yes, he of the “we are a nation of whiners” fame and McCain crony) introduced the repeal of a 1930’s law called Glass Steagal. This law separated the functions of investment banking and commercial banking. When it was repealed it allowed the securitization of mortgages basically turning them into bonds. These bonds gained value as long as real estate was hot. As soon as the market started to deflate, these bonds took on the status of junk bonds. Those who traded in these bonds really didn’t care if you could afford the house you were buying; what they cared about was have a steady flow of mortgage securities to sell. This is how the banks and Fannie and Freddie came undone.
Of course, Congress acted in 1933 to protect taxpayers and homeowners–What will they do in 2008?
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There is a wonderful article in the Boston Globe (1/14/08) by economist Stephen Marglin. Here is the link: http://www.commondreams.org/archive/2008/01/14/6361/
In it Mr. Marglin talks about the movie “It’s a Wonderful Life” and the hometown banker George Bailey. I won’t quote the whole thing but here is an excerpt:
“George Bailey isn’t coming to the rescue. If you are a borrower, you may send your monthly payment to Bailey’s bank, but Bailey is long since out of the picture. Shortly after originating your loan, Bailey sold it to a consolidator, very likely a government-sponsored agency such as Fannie Mae or Freddie Mac that packages individual mortgages into a mortgage-backed security. With many mortgages packaged together, or “securitized,” the law of averages is supposed to obtain, and investors without intimate knowledge of the particulars of each loan become willing to finance home ownership. The pool of money available for home mortgages grows, and the theory is that mortgage interest rates fall.
But even leaving aside various sorts of fraud and chicanery that have subverted mortgage securitization, especially in the subprime sector, the basic idea was flawed. Risks of default that were supposed to be random turned out to be anything but. What makes one borrower default turns out to affect other borrowers pretty much the same: higher interest rates when it’s time to reset the rates on adjustable mortgages, especially for those who could just get by with a low teaser rate; an end to the upward spiral of housing prices that compensated for a multitude of sins; the absence of job and wage growth.”
This article makes it very clear what has gone wrong in the mortgage industry and how our government let it happen. Read the whole article, and I hope every Virginia voter will ask all their representatives and elected officials what they intend to do about it.
