Harold Meyerson looks George W. Bush in the eye and calls him what he is.... Herbert Hoover.
In "Bush's Final Fiasco" Meyerson compares the Bush administration's handling of our downward-spiraling economy to the actions of the 1930's Great Depression president .... "Herbert Hoover, we should recall, had a program for dealing with the Depression. It consisted of lending to banks but opposing fiscal stimulus or direct aid to individuals. Which is why Hank Paulson's frenzied endeavors to prop up the banking sector and Bush's dogged resistance to assisting anybody else amount to pure neo-Hooverism.
"As the 1930s began, Hoover believed that the coordinated actions of the private sector could save the beleaguered economy. It soon became apparent that the only action that private-sector businesses could agree upon was closing down factories and offices and throwing people out of work. Under immense pressure to do something, in late 1931 Hoover asked Congress to establish the Reconstruction Finance Corporation, to provide funds to banks it deemed creditworthy.
"Having done his bit to bail out the banks, however, Hoover rested. He opposed provisions that would have enabled homeowners to hang on to their homes."
Sound familiar?
As Meyerson points out, "The Bush administration's approach to today's meltdown is to direct all its energies and largess to lending institutions. There is, as yet, no program to help floundering homeowners renegotiate the terms of their mortgages. The president is opposed to further stimulus programs, even though private-sector investment in the United States has all but ceased."
Meyerson asks, where's the outrage? He suspects that the answer "is that you can only irreversibly give up on a president once. Further catastrophic failures on the president's part elicit only diminishing returns. Buchanan did nothing while the South seceded: That was it for him. Hoover did nothing as farmers, workers and middle-class America got wiped out: With that, he was beyond rehabilitation. Nixon had Watergate: Enough said. One mega-strike and you're out."
And when it comes to mega-strike outs, Bush has swung and missed over and over. Meyerson counts three biggies.... "He misled us into a nearly endless war of choice to disarm a threat that never really existed. He let a great American city drown. And now he stands by while the economic security of tens of millions of Americans is vanishing.
"Yet in the hearts of his countrymen, Bush's place is already fixed. Even before the financial collapse, he was in the ninth circle of presidential hell, with Buchanan and Hoover. At his own party's national convention this summer, his was the name that no one dared speak.
"And so, though his mishandling of the economy is criminally inept, he is being spared one more outbreak of public rage by two countervailing public sentiments: Americans' relief that he soon will be gone and their kind reluctance to kick a corpse."
Bush justifies his record by saying he kept us safe for eight years (he myopically doesn't count 9/11 or the myriad of victims of his ill-conceived policies).
That's kind of like saying that despite his rampaging through our domestic and foreign landscape like a bull in a china shop one tea cup survived..... but President Decider, that tea cup was made in China.
Showing posts with label Henry Paulson. Show all posts
Showing posts with label Henry Paulson. Show all posts
Wednesday, December 03, 2008
Tuesday, November 25, 2008
It's Fear Itself....
From Bear Stearns to Citi Group our deer-caught-in-the-headlights Treasury Secretary Henry Paulson has been the Bush administration's frantic bailout fireman.... hosing down failing financial institutions before they burst into flames.... they hope.
Fireman Paulson answered the four-alarm only after Wall Street and financial institutions had partied during the Bush administration's unregulated anything-goes trickle-down orgy like Shriners at a Vegas convention.... and the whole country is suffering the hangover.
OK... that's the problem. So far, throwing money at the problem hasn't helped in any noticeable way. People are still losing their homes and jobs, the markets are still on life support and credit lines are still constipated.
What to do? Robert Samuelson opines today in "A 'Wealth Effect' In Reverse." (WaPo) "The 'wealth effect' refers to the tendency of people to adjust their spending as their wealth... concentrated heavily in housing and stocks... changes."
Samuelson points out, "... now the wealth effect is reversing. As stock and home values drop, Americans are scrambling to increase savings and curb spending. The plausible math is daunting. Since September 2007, Americans' personal wealth has dropped about $9 trillion, says economist Nigel Gault of IHS Global Insight."
The reversal in fortunes has fostered more than long-overdue consumer prudence, it has fueled fear.... and fear is the sand in the cogs of the battered economy as it grinds to a near halt.
Overcoming fear is vital if we are to reverse this self-perpetuating plummet.... fear keeps consumers and investors immobilized in the meltdown headlights, unable.... or unwilling.... to take the steps necessary to avoid the collision.
As Samuelson says, "Americans are less upset by hardships they've experienced than by those they imagine."
It'll take more than bailout money to re-energize the economy.... in the coming months it will take nerves of steel and leaders who can instill confidence faster than a speeding bullet.
Fireman Paulson answered the four-alarm only after Wall Street and financial institutions had partied during the Bush administration's unregulated anything-goes trickle-down orgy like Shriners at a Vegas convention.... and the whole country is suffering the hangover.
OK... that's the problem. So far, throwing money at the problem hasn't helped in any noticeable way. People are still losing their homes and jobs, the markets are still on life support and credit lines are still constipated.
What to do? Robert Samuelson opines today in "A 'Wealth Effect' In Reverse." (WaPo) "The 'wealth effect' refers to the tendency of people to adjust their spending as their wealth... concentrated heavily in housing and stocks... changes."
Samuelson points out, "... now the wealth effect is reversing. As stock and home values drop, Americans are scrambling to increase savings and curb spending. The plausible math is daunting. Since September 2007, Americans' personal wealth has dropped about $9 trillion, says economist Nigel Gault of IHS Global Insight."
The reversal in fortunes has fostered more than long-overdue consumer prudence, it has fueled fear.... and fear is the sand in the cogs of the battered economy as it grinds to a near halt.
Overcoming fear is vital if we are to reverse this self-perpetuating plummet.... fear keeps consumers and investors immobilized in the meltdown headlights, unable.... or unwilling.... to take the steps necessary to avoid the collision.
As Samuelson says, "Americans are less upset by hardships they've experienced than by those they imagine."
It'll take more than bailout money to re-energize the economy.... in the coming months it will take nerves of steel and leaders who can instill confidence faster than a speeding bullet.
Thursday, November 13, 2008
Bailing Out the Bailout
Congress gave the Bush administration the power to go to war in Iraq if all else failed.... with a misleading MWD scare. The Bush neocons snatched up that power and ran with it, right into a mismanaged wall.
That was the first "big time" Bush White House policy disaster.
Fast forward to September 2008 and the second "big time" disaster.... the collapse of the U.S. financial and housing markets.
Congress once again trusted the Bush administration with $700 billion plus to "manage" the collapse. The Bush Treasury snatched up that money and ran with it, right into a mismanaged wall.
The headline says it all... "Bailout Lacks Oversight Despite Billions Pledged - Watchdog Panel Is Empty; Report Is Unfinished" (WaPo)
The alarming news is that "In the six weeks since lawmakers approved the Treasury's massive bailout of financial firms, the government has poured money into the country's largest banks, recruited smaller banks into the program and repeatedly widened its scope to cover yet other types of businesses, from insurers to consumer lenders.
"Along the way, the Bush administration has committed $290 billion of the $700 billion rescue package.
"Yet for all this activity, no formal action has been taken to fill the independent oversight posts established by Congress when it approved the bailout to prevent corruption and government waste. Nor has the first monitoring report required by lawmakers been completed, though the initial deadline has passed."
What happened? "In approving the rescue package, lawmakers trumpeted provisions in the legislation that established layers of independent scrutiny, including a special inspector general to be nominated by the White House and a congressional oversight panel to be named by lawmakers themselves."
This rudderless bailout of taxpayer gold is drifting toward the shoals without a captain, or a crew.
Will it help that the bailout legislation provided for a Financial Stability Oversight Board "whose five members include Paulson and Federal Reserve Chairman Ben S. Bernanke?" Hardly, "it has no staff of its own, and few expect that policymakers can conduct oversight of themselves. 'It's sort of a joke in terms of oversight,' a congressional aide said.
So, where are we? Yesterday a panicky Treasury Secretary Paulson addressed the nation.... "Treasury Redefines Its Rescue Program - Plan to Buy Distressed Assets Is Abandoned In Favor of Aid to Loosen Consumer Credit" (WaPo)
Paulson announced a series of moves that redefine the federal government's $700 billion rescue plan for the financial industry "in order to tackle what he called a dire situation in the consumer credit markets.
"In recasting the program, the Treasury no longer plans to buy troubled assets from financial firms, the idea initially presented to the country, but instead will offer aid to banks and other firms that issue student, auto and credit card loans in part by jump-starting the market that provides financing for these companies."
This latest reversal of Congressional intent evidently took The Hill by surprise.... it's stunning that they still trust, that they can still be surprised by The Decider's maladministration. It's clear that Bush has already mentally moved on to his Texas rocking chair, Paulson is the poster boy for the Peter Principle, and the Obama calvary is charging ahead but they're still in transition limbo-land.
The tourniquet needed to stop the financial hemorrhaging is public confidence in government and jobs. The administration's entire unaccountable bungling approach has made the situation worse.... consumer confidence is in the dumper.
Now it's a race to see if the economy can be kept on life support until it reaches the Obama emergency room on January 20.
That was the first "big time" Bush White House policy disaster.
Fast forward to September 2008 and the second "big time" disaster.... the collapse of the U.S. financial and housing markets.
Congress once again trusted the Bush administration with $700 billion plus to "manage" the collapse. The Bush Treasury snatched up that money and ran with it, right into a mismanaged wall.
The headline says it all... "Bailout Lacks Oversight Despite Billions Pledged - Watchdog Panel Is Empty; Report Is Unfinished" (WaPo)
The alarming news is that "In the six weeks since lawmakers approved the Treasury's massive bailout of financial firms, the government has poured money into the country's largest banks, recruited smaller banks into the program and repeatedly widened its scope to cover yet other types of businesses, from insurers to consumer lenders.
"Along the way, the Bush administration has committed $290 billion of the $700 billion rescue package.
"Yet for all this activity, no formal action has been taken to fill the independent oversight posts established by Congress when it approved the bailout to prevent corruption and government waste. Nor has the first monitoring report required by lawmakers been completed, though the initial deadline has passed."
What happened? "In approving the rescue package, lawmakers trumpeted provisions in the legislation that established layers of independent scrutiny, including a special inspector general to be nominated by the White House and a congressional oversight panel to be named by lawmakers themselves."
This rudderless bailout of taxpayer gold is drifting toward the shoals without a captain, or a crew.
Will it help that the bailout legislation provided for a Financial Stability Oversight Board "whose five members include Paulson and Federal Reserve Chairman Ben S. Bernanke?" Hardly, "it has no staff of its own, and few expect that policymakers can conduct oversight of themselves. 'It's sort of a joke in terms of oversight,' a congressional aide said.
So, where are we? Yesterday a panicky Treasury Secretary Paulson addressed the nation.... "Treasury Redefines Its Rescue Program - Plan to Buy Distressed Assets Is Abandoned In Favor of Aid to Loosen Consumer Credit" (WaPo)
Paulson announced a series of moves that redefine the federal government's $700 billion rescue plan for the financial industry "in order to tackle what he called a dire situation in the consumer credit markets.
"In recasting the program, the Treasury no longer plans to buy troubled assets from financial firms, the idea initially presented to the country, but instead will offer aid to banks and other firms that issue student, auto and credit card loans in part by jump-starting the market that provides financing for these companies."
This latest reversal of Congressional intent evidently took The Hill by surprise.... it's stunning that they still trust, that they can still be surprised by The Decider's maladministration. It's clear that Bush has already mentally moved on to his Texas rocking chair, Paulson is the poster boy for the Peter Principle, and the Obama calvary is charging ahead but they're still in transition limbo-land.
The tourniquet needed to stop the financial hemorrhaging is public confidence in government and jobs. The administration's entire unaccountable bungling approach has made the situation worse.... consumer confidence is in the dumper.
Now it's a race to see if the economy can be kept on life support until it reaches the Obama emergency room on January 20.
Monday, October 13, 2008
Gordon is "Nobel" Krugman's Man
Congratulations to American economist Paul Krugman whose credentials were already formidable.... professor at Princeton University, columnist for The New York Times... who today was awarded the Nobel Prize for Economics.
And today Krugman has also written an op-ed, "Gordon Does Good" (NYTimes) in which he asks, "Has Gordon Brown, the British prime minister, saved the world financial system?"
Not George Bush. Not Henry Paulson. Not Ben Bernanke. But our long-suffering staunch ally, Britain's Gordon in concert with his chancellor of the Exchequer Alistair Darling, by thinking clearly and acting quickly.
Krugman explains, "On Wednesday, Mr. Brown’s officials announced a plan for major equity injections into British banks, backed up by guarantees on bank debt that should get lending among banks, a crucial part of the financial mechanism, running again. And the first major commitment of funds will come on Monday — five days after the plan’s announcement."
"And," Krugman continues, "whaddya know, Mr. Paulson — after arguably wasting several precious weeks — has also reversed course, and now plans to buy equity stakes rather than bad mortgage securities (although he still seems to be moving with painful slowness)."
For anyone who has watched the painful politicalization of our government by The Decider, even of the office of Attorney General, it'll come as no surprise that Krugman believes that... "It’s hard to avoid the sense that Mr. Paulson’s initial response was distorted by ideology. Remember, he works for an administration whose philosophy of government can be summed up as 'private good, public bad,' which must have made it hard to face up to the need for partial government ownership of the financial sector."
Hopefully Krugman is on Barack Obama's short list for Treasury secretary. In the meantime, on a day when Krugman is receiving bouquets for his prestigious Nobel prize, he is also throwing bouquets of his own.... "Luckily for the world economy, however, Gordon Brown and his officials are making sense. And they may have shown us the way through this crisis.
If we can all just keep a stiff upper lip.
And today Krugman has also written an op-ed, "Gordon Does Good" (NYTimes) in which he asks, "Has Gordon Brown, the British prime minister, saved the world financial system?"
Not George Bush. Not Henry Paulson. Not Ben Bernanke. But our long-suffering staunch ally, Britain's Gordon in concert with his chancellor of the Exchequer Alistair Darling, by thinking clearly and acting quickly.
Krugman explains, "On Wednesday, Mr. Brown’s officials announced a plan for major equity injections into British banks, backed up by guarantees on bank debt that should get lending among banks, a crucial part of the financial mechanism, running again. And the first major commitment of funds will come on Monday — five days after the plan’s announcement."
"And," Krugman continues, "whaddya know, Mr. Paulson — after arguably wasting several precious weeks — has also reversed course, and now plans to buy equity stakes rather than bad mortgage securities (although he still seems to be moving with painful slowness)."
For anyone who has watched the painful politicalization of our government by The Decider, even of the office of Attorney General, it'll come as no surprise that Krugman believes that... "It’s hard to avoid the sense that Mr. Paulson’s initial response was distorted by ideology. Remember, he works for an administration whose philosophy of government can be summed up as 'private good, public bad,' which must have made it hard to face up to the need for partial government ownership of the financial sector."
Hopefully Krugman is on Barack Obama's short list for Treasury secretary. In the meantime, on a day when Krugman is receiving bouquets for his prestigious Nobel prize, he is also throwing bouquets of his own.... "Luckily for the world economy, however, Gordon Brown and his officials are making sense. And they may have shown us the way through this crisis.
If we can all just keep a stiff upper lip.
Friday, October 03, 2008
McBush's Fundamentals Weren't Strong
Listening to the debate going on in the House right now on the $700+ bailout bill, the refrain (excuse) repeated over and over is.... it would be a better bill if only we had more time.
It's true, time has run out on dithering. Credit, the grease that keeps the economy moving, has dried up.
But, no one is acknowledging the elephant in the room.... there would have been more time to keep our economy off of the shoals if The Decider and John McCain hadn't kept assuring the country that "the fundamentals of our economy are strong."
Even though the country was drowning in debt, the middle-class was losing jobs, wages were declining, and housing bankruptcies reached historic proportions.
Just hours before Treasury Secretary Paulson crashed the corporate profiteering party with his emergency proposal, McSame was still mindlessly parroting the administration's talking point.... the "fundamentals of our economy are strong."
The reason this is a lousy bill is because the country has lousy, manipulating leadership who wouldn't acknowledge that their "trickle down" Reaganomics didn't work for anyone but bloated, and now bailed-out, corporations and what trickles down is pain to the middle class.
Never again.
November 4.
It's true, time has run out on dithering. Credit, the grease that keeps the economy moving, has dried up.
But, no one is acknowledging the elephant in the room.... there would have been more time to keep our economy off of the shoals if The Decider and John McCain hadn't kept assuring the country that "the fundamentals of our economy are strong."
Even though the country was drowning in debt, the middle-class was losing jobs, wages were declining, and housing bankruptcies reached historic proportions.
Just hours before Treasury Secretary Paulson crashed the corporate profiteering party with his emergency proposal, McSame was still mindlessly parroting the administration's talking point.... the "fundamentals of our economy are strong."
The reason this is a lousy bill is because the country has lousy, manipulating leadership who wouldn't acknowledge that their "trickle down" Reaganomics didn't work for anyone but bloated, and now bailed-out, corporations and what trickles down is pain to the middle class.
Never again.
November 4.
Tuesday, September 30, 2008
The Decider is Denied
It turns out The Decider can't after all.... decide, that is.
The reason is glaringly clear, to everyone except those so blindly partisan they still think "trickle down" Reaganomics works.
In the face of a tanking dollar; monstrous and growing debt; historic loss of jobs; increase in poverty; trade deficits to the moon; obscene increases in entitlements and bureaucracy; corporate deregulation and tax benefits; and binge spending by a 6-year-GOP-majority Congress in the grip of corrupting lobbyists .... two men who both finished near the bottom of their class, The Decider and his sidekick McGoo McCain kept parroting their talking point. "The fundamentals of our economy are strong."
And, they kept saying it as bankruptcies and home foreclosures grew into the tsunami that finally engulfed Wall Street and threatened to drown the entire U.S. economy as credit dried up and large investment firms, banks and credit-reliant companies rolled over and sank.
Then, like the spoiled brat he is, Bush stamped his foot and demanded to be bailed out of his misjudgements.
He presented a 2-1/2 page bill to Congress, for 700 billion dollars. To be administered at the sole discretion, without oversight or accountability, by his appointed Secretary of the Treasury, Henry Paulson.... a former CEO of investment firm Goldman Sachs who finally understood the financial danger when it hit his street. Wall Street.
What followed was a balky negotiating process brought to a halt by McCain who thought he saw a chance for taking rescue credit.... rushing to D.C. to interject presidential politics, and the process ran into a wall.
No one in Congress wanted their fingerprints on this legislation to bail out the greedy raiders and failed policies. But the problem was presented as a choice between financial Armageddon and the possibility of a lifeline back from the edge of the abyss. After long negotiation, arm-twisting and compromise, legislation was finally presented to the House.... and failed.
There is a lot of finger pointing from all sides on why it failed... but the buck stops with The Decider. The Vote Underscores Bush's Loss of Influence. (WaPo)
"The plan had gone down to a stinging defeat in the House, in large part the result of opposition from more than 100 members of Bush's Republican Party.
"The vote marked the biggest legislative defeat of Bush's tenure and underscored the vanishing influence of a president who could once bend a pliant Congress to his will on wars, taxes, surveillance and a host of other high-profile initiatives.
"The defeat also brought into focus some of the key characteristics of Bush's troubled second term, including his weakened hold on his party, his tendency to delegate major responsibilities to aides and his continued reliance on alarmist rhetoric in an effort to get his way. Bush left much of the sales job for the rescue plan to Treasury Secretary Paulson., and his last-minute warnings that 'our entire economy is in danger' appeared to have little impact on the debate."
This entire mess is nothing short of a massive failure of Reaganomics. By voting for this gigantic economic-socialization bailout package, GOP conservatives would be admitting this.
And, many Democrats feel the very perpetrators of the crisis, the greedy Wall Street financiers and Bush administration enablers, would benefit more than the victimized taxpayers and resist the bailout.
So we're in the financial doldrums, drifting on the currents of panic. The ship of state is in uncharted territory without a captain.... just The Decider, thrown into the hold by his mutinous crew.
McGoo and his Fatuous First Mate are on deck, campaigning to take the helm to continue The Decider's destructive course....
November 4!
The reason is glaringly clear, to everyone except those so blindly partisan they still think "trickle down" Reaganomics works.
In the face of a tanking dollar; monstrous and growing debt; historic loss of jobs; increase in poverty; trade deficits to the moon; obscene increases in entitlements and bureaucracy; corporate deregulation and tax benefits; and binge spending by a 6-year-GOP-majority Congress in the grip of corrupting lobbyists .... two men who both finished near the bottom of their class, The Decider and his sidekick McGoo McCain kept parroting their talking point. "The fundamentals of our economy are strong."
And, they kept saying it as bankruptcies and home foreclosures grew into the tsunami that finally engulfed Wall Street and threatened to drown the entire U.S. economy as credit dried up and large investment firms, banks and credit-reliant companies rolled over and sank.
Then, like the spoiled brat he is, Bush stamped his foot and demanded to be bailed out of his misjudgements.
He presented a 2-1/2 page bill to Congress, for 700 billion dollars. To be administered at the sole discretion, without oversight or accountability, by his appointed Secretary of the Treasury, Henry Paulson.... a former CEO of investment firm Goldman Sachs who finally understood the financial danger when it hit his street. Wall Street.
What followed was a balky negotiating process brought to a halt by McCain who thought he saw a chance for taking rescue credit.... rushing to D.C. to interject presidential politics, and the process ran into a wall.
No one in Congress wanted their fingerprints on this legislation to bail out the greedy raiders and failed policies. But the problem was presented as a choice between financial Armageddon and the possibility of a lifeline back from the edge of the abyss. After long negotiation, arm-twisting and compromise, legislation was finally presented to the House.... and failed.
There is a lot of finger pointing from all sides on why it failed... but the buck stops with The Decider. The Vote Underscores Bush's Loss of Influence. (WaPo)
"The plan had gone down to a stinging defeat in the House, in large part the result of opposition from more than 100 members of Bush's Republican Party.
"The vote marked the biggest legislative defeat of Bush's tenure and underscored the vanishing influence of a president who could once bend a pliant Congress to his will on wars, taxes, surveillance and a host of other high-profile initiatives.
"The defeat also brought into focus some of the key characteristics of Bush's troubled second term, including his weakened hold on his party, his tendency to delegate major responsibilities to aides and his continued reliance on alarmist rhetoric in an effort to get his way. Bush left much of the sales job for the rescue plan to Treasury Secretary Paulson., and his last-minute warnings that 'our entire economy is in danger' appeared to have little impact on the debate."
This entire mess is nothing short of a massive failure of Reaganomics. By voting for this gigantic economic-socialization bailout package, GOP conservatives would be admitting this.
And, many Democrats feel the very perpetrators of the crisis, the greedy Wall Street financiers and Bush administration enablers, would benefit more than the victimized taxpayers and resist the bailout.
So we're in the financial doldrums, drifting on the currents of panic. The ship of state is in uncharted territory without a captain.... just The Decider, thrown into the hold by his mutinous crew.
McGoo and his Fatuous First Mate are on deck, campaigning to take the helm to continue The Decider's destructive course....
November 4!
Friday, September 26, 2008
McCain Stops Progress
Over a week ago the financial health of the country went Code Blue. Emergency measures were needed.
George Bush's administration proposed a $700 billion bailout. The Senate and House held immediate hearings with Treasury Secretary Paulson and Federal Reserve Chairman Bernanke. The chairman of the Senate Banking Committee Christopher Dodd worked almost around the clock with the ranking Republicans on his committee to forge a framework for going forward, as did the chairman of the House Financial Services Committee Barney Frank who worked tirelessly with Republicans on his committee to forge a compromise. A consensus was being hammered out, things were going forward until.....
John McCain, sensing a stage-center moment, said he was going to swoop into D.C. and save the day. Suspend his campaign. Call off Friday's debate. All of this while the last big test of his judgment, Sarah Palin, continued her take-your-daughter-to-work UN photo-ops and tour of New York City complete with ditsy "U.S. Has Achieved 'Victory' in Iraq" (WaPo) interviews CBS's Katie Couric.
Even though McCain said only ten days ago that the fundamentals of our economy are strong.... even though he has allowed that he doesn't know much about the economy.... even though he admitted to WKYC-TV in Ohio just this Tuesday that "I have not had a chance to see [the Bush administration bailout proposal] in writing. I have to examine it.".... and, even though when ranking GOP Senate Banking Committee member Richard Shelby was asked this morning on MSNBC's "Morning Joe" if McCain had called him before arriving in D.C..... Shelby had to admit he had not heard from McCain but did "spend a couple of minutes with him yesterday."
So far what has McCain accomplished by his grandstand play? He didn't have much to say in the White House meeting of leaders of both parties yesterday, he has no role in negotiations today. But, he stopped progress and created a climate where bipartisan agreement is even more difficult.
Good job, Johnnie.
November.
George Bush's administration proposed a $700 billion bailout. The Senate and House held immediate hearings with Treasury Secretary Paulson and Federal Reserve Chairman Bernanke. The chairman of the Senate Banking Committee Christopher Dodd worked almost around the clock with the ranking Republicans on his committee to forge a framework for going forward, as did the chairman of the House Financial Services Committee Barney Frank who worked tirelessly with Republicans on his committee to forge a compromise. A consensus was being hammered out, things were going forward until.....
John McCain, sensing a stage-center moment, said he was going to swoop into D.C. and save the day. Suspend his campaign. Call off Friday's debate. All of this while the last big test of his judgment, Sarah Palin, continued her take-your-daughter-to-work UN photo-ops and tour of New York City complete with ditsy "U.S. Has Achieved 'Victory' in Iraq" (WaPo) interviews CBS's Katie Couric.
Even though McCain said only ten days ago that the fundamentals of our economy are strong.... even though he has allowed that he doesn't know much about the economy.... even though he admitted to WKYC-TV in Ohio just this Tuesday that "I have not had a chance to see [the Bush administration bailout proposal] in writing. I have to examine it.".... and, even though when ranking GOP Senate Banking Committee member Richard Shelby was asked this morning on MSNBC's "Morning Joe" if McCain had called him before arriving in D.C..... Shelby had to admit he had not heard from McCain but did "spend a couple of minutes with him yesterday."
So far what has McCain accomplished by his grandstand play? He didn't have much to say in the White House meeting of leaders of both parties yesterday, he has no role in negotiations today. But, he stopped progress and created a climate where bipartisan agreement is even more difficult.
Good job, Johnnie.
November.
Monday, September 22, 2008
Slow Down the $700 Billion Railroad
It's hard to get ones mind around $700+ billion, the size of the latest proposed bailout of Wall Street investment bankers who recklessly and deliberately ravaged the economy for personal gain.... without government intervention and oversight.
Now that same government, the Bush administration, wants to make their Treasury Secretary, Henry Paulson, Tsar of the Economic Universe.
Paulson is demanding a taxpayer-financed bailout with no strings attached.... with nothing required of those being bailed out.... and dictatorial authority.
The Decider and The Dictator want Congress to decide now.
Hurry, hurry.... the financial-collapse train is bearing down on us. Give the totally inept Bush administration unfettered power and trust Rumsfel.... umm.... Paulson to do the right thing. Sound familiar? Isn't this how we got into the other big Bush mess, Iraq.
As Paul Krugman points out in his New York Times op-ed today, Cash for Trash, Paulson "is a smart guy, but what, exactly, in the experience of the past year and a half — a period during which Mr. Paulson repeatedly declared the financial crisis 'contained,' and then offered a series of unsuccessful fixes — justifies the belief that he knows what he’s doing?"
And, in line with the closed-door, secretive, subpoena-ignoring, won't-be-sworn-to-tell-the-truth Bush administration's modus operandi, mindbogglingly, Paulson is demanding also immunity from review “by any court of law or any administrative agency.”
This is unacceptable.
Has Congress.... the taxpayers elected representatives who are supposed to look out for the interests of Main Street, not Wall Street.... learned it's lesson?
Or, will they once again be railroaded without insisting on prudent safeguards, curbs on power, and that blatantly discarded concept.... ACCOUNTABILITY!
Now that same government, the Bush administration, wants to make their Treasury Secretary, Henry Paulson, Tsar of the Economic Universe.
Paulson is demanding a taxpayer-financed bailout with no strings attached.... with nothing required of those being bailed out.... and dictatorial authority.
The Decider and The Dictator want Congress to decide now.
Hurry, hurry.... the financial-collapse train is bearing down on us. Give the totally inept Bush administration unfettered power and trust Rumsfel.... umm.... Paulson to do the right thing. Sound familiar? Isn't this how we got into the other big Bush mess, Iraq.
As Paul Krugman points out in his New York Times op-ed today, Cash for Trash, Paulson "is a smart guy, but what, exactly, in the experience of the past year and a half — a period during which Mr. Paulson repeatedly declared the financial crisis 'contained,' and then offered a series of unsuccessful fixes — justifies the belief that he knows what he’s doing?"
And, in line with the closed-door, secretive, subpoena-ignoring, won't-be-sworn-to-tell-the-truth Bush administration's modus operandi, mindbogglingly, Paulson is demanding also immunity from review “by any court of law or any administrative agency.”
This is unacceptable.
Has Congress.... the taxpayers elected representatives who are supposed to look out for the interests of Main Street, not Wall Street.... learned it's lesson?
Or, will they once again be railroaded without insisting on prudent safeguards, curbs on power, and that blatantly discarded concept.... ACCOUNTABILITY!
Monday, March 17, 2008
"Ant" Morgan Bails "Grasshopper" Bear
Here's what the rescue of fifth-largest investment bank Bear Stearns amounts to.... a whistling-past-the-graveyard way of getting around banking regulations in order to receive emergency funding backed by the federal government without admitting that Bush's mindless, optimistic mantra about "the fundamentals of our economy".... are actually at Great Depression levels.
After all, The Decider asserted just today.... "The economy is going to be fine," as the dollar plunges, oil prices gush to all-time highs and financial markets teeter on the edge of the precipice.
Whistling.... singing, dancing..... Softshoe Georgie doesn't want the appearance of 1930s-type of last-hope moves to mar his trickle-down-fair-tale legacy. The next guy can clean up the mess.
Here's the deal, Bear was "sold" to commercial banking firm J.P. Morgan Chase at a jaw-dropping bargain of $270 million, which includes Bear's soaring Madison Avenue headquarters, which amounts to $2 per share.... Bear was at $170 a share just a year ago.
The Federal Reserve is providing the financing including "loans" of up to $30 billion or so to Morgan for Bear's "less-liquid assets".... thus allowing Bear access to the cash for an initial period of 28 days as Morgan borrows money from the Fed and relends to Bear.
You see, the Feds lend directly through its "discount window," usually only to commercial banks.... not investment firms. The Feds can work with commercial banks because they are subject to extensive federal supervision unlike investment firms.
However, a law passed in 1932 allows the Federal Reserve to lend outside of commercial banking during Great Depression-type emergencies. Such a move would signal we're on the verge of financial panic and that's the appearance the White House wants to avoid....
So.... the Feds are using commercial bank Morgan as a conduit to bailout Bear because Morgan has access to the Fed's discount window.... and technically the Feds still haven't lent directly to an investment bank and avoids the appearance of a financial earthquake.
A discount window loan to Bear.... which they don't have access to.... would have had to be secured by the highest-quality collateral and Bear's subprime mortgage problems along with the collapse last July of two of their mortgage-related hedge funds left them on the brink of immediate bankruptcy.
Morgan's CEO, Jamie Dimon, has over the last few years been focused intensely on cutting costs, improving technology and preparing the company for an economic downturn.... they emerged relatively unscathed from the subprime crisis.
Bear, on the other hand, liked to live on the edge....
"A throwback to a bygone era, Bear Stearns still operated as a cigar-chomping, suspender-wearing culture where taking risks was rewarded.... "Ace" Greenberg, Bear Stearn's chairman for more than 20 years and a championship bridge player, still regaled its partners over lengthy lunches about gambling with the firm's money in its wood-paneled dining room." (NYTimes)
So where does this leave investors?
The DOW opened down today, and "investors are taking a grim view of the prospects for other investment banks like Lehman Brothers and Merrill Lynch.... Managers of hedge funds and mutual funds say the problems at Bear confirmed their worst fears about the brokerages, that they have relied too much on leverage and have done a poor job managing the risks they took on during the boom." (NYTimes)
Yesterday, Morgan's senior management actually told the finance community that Bear Stearns will continue to live up to its business obligations, as its trading obligations will carry "the full faith and credit of J. P. Morgan." (NYTimes)
Feels like the twilight zone. Didn't that used to be the motto for the U. S. Treasury? Oh, that's right.... it is the U.S. Treasury (taxpayer money) guaranteeing the whole shebang.
Anyway you cut it.... regardless of our forked-tongue Treasure secretary Henry Paulson still saying the administration won't use taxpayer money to help resolve the crisis.... we're in taxpayer bailout country.... Bush-voodoo economics land.
But, the Bear resolution won't be the model for the Big Bailout to come. There aren't enough J.P. Morgans to go around.
After all, The Decider asserted just today.... "The economy is going to be fine," as the dollar plunges, oil prices gush to all-time highs and financial markets teeter on the edge of the precipice.
Whistling.... singing, dancing..... Softshoe Georgie doesn't want the appearance of 1930s-type of last-hope moves to mar his trickle-down-fair-tale legacy. The next guy can clean up the mess.
Here's the deal, Bear was "sold" to commercial banking firm J.P. Morgan Chase at a jaw-dropping bargain of $270 million, which includes Bear's soaring Madison Avenue headquarters, which amounts to $2 per share.... Bear was at $170 a share just a year ago.
The Federal Reserve is providing the financing including "loans" of up to $30 billion or so to Morgan for Bear's "less-liquid assets".... thus allowing Bear access to the cash for an initial period of 28 days as Morgan borrows money from the Fed and relends to Bear.
You see, the Feds lend directly through its "discount window," usually only to commercial banks.... not investment firms. The Feds can work with commercial banks because they are subject to extensive federal supervision unlike investment firms.
However, a law passed in 1932 allows the Federal Reserve to lend outside of commercial banking during Great Depression-type emergencies. Such a move would signal we're on the verge of financial panic and that's the appearance the White House wants to avoid....
So.... the Feds are using commercial bank Morgan as a conduit to bailout Bear because Morgan has access to the Fed's discount window.... and technically the Feds still haven't lent directly to an investment bank and avoids the appearance of a financial earthquake.
A discount window loan to Bear.... which they don't have access to.... would have had to be secured by the highest-quality collateral and Bear's subprime mortgage problems along with the collapse last July of two of their mortgage-related hedge funds left them on the brink of immediate bankruptcy.
Morgan's CEO, Jamie Dimon, has over the last few years been focused intensely on cutting costs, improving technology and preparing the company for an economic downturn.... they emerged relatively unscathed from the subprime crisis.
Bear, on the other hand, liked to live on the edge....
"A throwback to a bygone era, Bear Stearns still operated as a cigar-chomping, suspender-wearing culture where taking risks was rewarded.... "Ace" Greenberg, Bear Stearn's chairman for more than 20 years and a championship bridge player, still regaled its partners over lengthy lunches about gambling with the firm's money in its wood-paneled dining room." (NYTimes)
So where does this leave investors?
The DOW opened down today, and "investors are taking a grim view of the prospects for other investment banks like Lehman Brothers and Merrill Lynch.... Managers of hedge funds and mutual funds say the problems at Bear confirmed their worst fears about the brokerages, that they have relied too much on leverage and have done a poor job managing the risks they took on during the boom." (NYTimes)
Yesterday, Morgan's senior management actually told the finance community that Bear Stearns will continue to live up to its business obligations, as its trading obligations will carry "the full faith and credit of J. P. Morgan." (NYTimes)
Feels like the twilight zone. Didn't that used to be the motto for the U. S. Treasury? Oh, that's right.... it is the U.S. Treasury (taxpayer money) guaranteeing the whole shebang.
Anyway you cut it.... regardless of our forked-tongue Treasure secretary Henry Paulson still saying the administration won't use taxpayer money to help resolve the crisis.... we're in taxpayer bailout country.... Bush-voodoo economics land.
But, the Bear resolution won't be the model for the Big Bailout to come. There aren't enough J.P. Morgans to go around.
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