Thursday, April 30, 2009


According to, President Obama criticized debt holders for forcing Chrysler's bankruptcy at this stage. President Obama singled out hedge funds and other financial institutions for turning down administration loan-reduction proposals. The president said the following:

I don’t stand with those who held out when everyone else is making sacrifices ... A group of investment firms and hedge funds decided to hold out for the prospect of an unjustified taxpayer-funded bailout.
In a few words, the hedge funds were banking on the fact that everyone else would make sacrifices, with several firms demanding "twice the return that other lenders were getting."

- Mark


Another take on what's happening to the republican party ...

If you can't read it click on the comic to enlarge.

- Mark

Wednesday, April 29, 2009


It looks like Republican Representative from Minnesota, Michelle Bachmann, wants to establish the House Comedic Miss Piggy Award. Check this out ...

To make a long story short, the outbreak Bachmann is referring to started in early 1976, when Republican Gerald Ford was President!

However, Rep. Bachmann's "outbreak ignorance" pales in comparison to this lesson in historical stupidity ...

This is especially painful to watch because not only do I teach about the Smoot-Hawley Tariff Act in my International Political Economy class but I mark students down considerably if they get this basic history stuff wrong (in a few words, the Smoot-Hawley Trade Act slowed international trade and cost Americans jobs).

Here's what Airhead Bachmann also ignores, or gets wrong:

1. The representatives who sponsored the anti-trade bill, Reed Smoot and Willis C. Hawley (pictured above) were both Republicans.

2. The President who signed the anti-trade measure into law in 1930 was Republican President Hoover Hoover (how can you get this wrong?).

3. FDR's administration worked to reverse the effects of "Smoot-Hawley" with the Reciprocal Trade Act of 1934 (which set the stage for one of the institutional pillars in the post-war Bretton Woods trading order, which brought trade roaring back).
No wonder Alan Specter left the Republican Party. How do you defend this level of ignorance?

The people that Bachmann represents in Minnesota should be embarrassed. But, I'm sure, they're not. They watch FOX News ... and they're republicans.

- Mark

Monday, April 27, 2009


Yeah, it's not like having a healthy population is critical for going to work, or something like that.

- Mark


Wouldn't you know it. Wall Street firms, flush with taxpayer money, and federal guarantees, are now looking to start paying their employees as much - if not more - as they were making before the economy's collapse. This story from the NY Times makes it clear that these guys still don't get it. They actually think they earned the money they're now being paid when, in fact, if it weren't for the federal government and the U.S. taxpayer, most of these guys would be walking the streets looking for a job. How do they justify this? (click on the graph to enlarge).

I find the NY Times' title for the article rather interesting too: "After Pause, Wall Street Pay is Bouncing Back" ... Look, Wall Street isn't bouncing back. Wall Street is sucking the American taxpayer dry, and laughing all the way to the bank (which might be a more appropriate title). But if we're going with the actual title it should read, "After Pause, Wall Street Pay is Bouncing Back Because of Government Bailouts, Taxpayer Money, and Government Guarantees" ...

Most of these market players don't deserve high(er) salaries. They deserve salary cuts and/or to be out of work.

- Mark


If the bailout doesn't go as planned, and people start looking at how Wall Street received such a sweet deal from the federal government, this piece from the NY Times might be the starting point for explaining the cozy relationship between Treasury Secretary Tim Geithner and Wall Street.

It's rather long, but is helpful for understanding where Tim Geithner received guidance and counseling.

- Mark

Saturday, April 25, 2009


On today's program we'll have the immediate past president of the Kern County Bar Association, and current Lt. Colonel and U.S. Marine JAG Officer, David Torres with us as guest host (Candi Easter is in Sacramento). We'll be discussing the recent torture memos and the policy demands that drove the issue during the Bush administration. As always, call-ins are welcome, (661) 631-1230.

- Mark

P.S. Want to help Dick Cheney go home? Click here to help.


Ellis Henican backs Bill O'Reilly against a wall on torture ...

- Mark


Bill Maher's description of the republican party acting like a husband who just got booted from the house is too funny, and spot on. Read it here.

- Mark

Friday, April 24, 2009


I remember the first time I took my kids bowling. I hadn’t bowled in some time and was amused to see the operators put bumpers up along the lanes. The idea is to keep the ball out of the gutters so the kids don’t get discouraged. Naturally my children bumped their way into a few strikes, for which they celebrated heartily. Of course I congratulated them on their “success.”

While reading recent headlines touting Wall Street’s rally I was reminded of my kids and bumper bowling. Specifically, I’m struck by all the happy talk surrounding the market’s response to the government’s trillion dollar bailouts and other financial sector guarantees. Incredibly, we’re expected to rejoice over “the markets” new found confidence and the fact that some financial institutions – now flush with taxpayer-funded cash – have considered returning the federal government’s bailout money.

Responses to these “market triumphs” suggest that stabilization and recovery are around the corner. Down the line, I’m sure we’ll be treated to turn-around stories, with market players compensated for long delayed bonuses for their Herculean efforts during these troubled times.

Forgive me for not sharing in the happy talk but it’s hard to celebrate “the market’s response” when bankruptcies are on the rise, unemployment is climbing, and record bank failures occur across America. The basis for the new found confidence is as empty as the bowling scores in a bumper-escorted game.

Think about it. How can we speak of “market recovery” when taxpayer money and government guarantees are acting like bumpers to prevent the American economy from careening into the gutter? What we’re really seeing is the reaction of an irresponsible group who had a ton of money dumped into their laps for no other reason than they signed up for the Drunken Bowling League – which guarantees more bumpers (and beer) the drunker they get.

Today we’re asked to celebrate as additional bumpers are erected. Apart from the bailouts and guarantees, we’re expected to cheer as our financial institutions take sham “stress tests” that use the same “exams” (i.e. risk models) that were used to gauge financial institutions and their toxic products before this mess. Worse, in case the products tested aren’t up to snuff, financial institutions are asking for yet another bumper in their drunken bowling night affair. They want their products graded on a curve.

Grading on curve is called “Mark-to-Market” and would work something like this in your world. Let’s say you’re selling your house. Prices have collapsed so you won’t get what you would’ve four years ago. But in our Drunken Bowling League economy it doesn’t matter. Mark-to-Market allows you to use the average price of your home over, say, the past four years as your sale (market) price.

Here’s the fun part. The Wall Street guys aren’t talking about applying Mark-to-Market to your house. They understand the mess it would cause because of how it regulates market prices right out of the market. They only want it applied to the collapsed and toxic instruments that that they want, or currently hold.

Is any of this something for us to cheer about?

- Mark

Thursday, April 23, 2009


According to McClatchy News the Bush administration "applied relentless pressure on interrogators" to torture detainees in part "to find evidence of cooperation between al Qaida and the late Iraqi dictator Saddam Hussein's regime." You can find the Armed Services Committee Report here.

In a few words this means the Bush administrtion did not torture simply to secure information "to keep us safe" (a lie for another day). Rather they tortured because they desparately needed to find a link between Sadaam Hussein and al Qaeda because they screwed up on the WMD claim. Think about what this means. Because the Bush administration screwed up and believed what serial liar Ahmed Chalabi and other neo-con "sources" had to say about Iraq they felt that they needed to torture to come up with quick information to justify starting a war in Iraq.

- Mark


In a nutshell this is the logic behind the bailout policies that have given us Republican Slapstick and our new Rabbit Hole Economy ...

Click on the picture if it's too small to read.


P.S. One of my former students sent me this ...


What's wrong with the republican party? Markos Moulitsas at Dailykos seems to have a sense about what's going on ...

... They think they've lost elections because they haven't shouted the crazy loud enough (more teabagging please!), or because their insults just aren't as effective anymore (let's try "fascist" now!). So they stick to their old loser policies, from their pathological defense of the ultra wealthy, to their clinging to doomed opposition to gay marriage. And as for leadership? Well, who better to defend the status quo than the status quo?

Into that breach has entered Rush Limbaugh, Glenn Beck, and Joe the Plumber to provide the philosophical underpinnings of the GOP. For the party that could once depend on the intellectual prowess of William F. Buckley, this has certainly been a downgrade. As their public face, if they could dig up Ronald Reagan and prop him up at RNC headquarters, they would. Instead, the Palins and Jindals jostle and compete for who can be the most ridiculously regressive. But for a party that predicates its philosophy on distrust of change, it looks like this leadership vacuum is best filled by old retreads -- Dick Cheney, Newt Gingrich, and Karl Rove.
For a party that thinks that they need to get back to their roots and/or that they lost their way under Bush because they weren't conservative enough, I'd have to say Markos Moulitsas is on to something here.

- Mark

Wednesday, April 22, 2009


Ed Shultz calling it like it is ...

- Mark


From Naked Capitalism ...

U.S. banks are starting to report profits that have headlines reporting that "markets are responding" well to recent developments. Don't be fooled. This is where the financial sector's profits (and money) are coming from:

1. New Revenue is coming from buying into a government-managed money markets full of low interest rates that have led to new mortgage contracts. This means new income streams.

2. New "Unimpaired" Assets are coming from acquiring the "good assets" of failed banks and other collapsed financial institutions. These assets were essentially granted with government guarantees (like the guarantee of absorbing "legacy assets" that are essentially the toxic garbage banks don't want).

3. New Money and Other Guarantees are coming from the Troubled Asset Relief Program (TARP) that currently puts the U.S. taxpayer on the hook for trillions of dollars.

4. FDIC Low-Cost Funding for acquiring firms that the government will (or already has) assume(d) losses on.
In a few words, cheap government money, new "clean" clients from failed institutions, TARP guarantees, and FDIC backing are driving the "recovery" of the financial institutions. The reality is their accounting offices are simply reporting the good news of having free money and government guarantees dumped on their laps.

Think about this the next time someone crows about how well "market are responding" to recent developments.

- Mark

Tuesday, April 21, 2009


From Economist's View, Mark Thoma (a frequent guest on our program) provides us with A Primer on the '30s' by John Steinbeck, 1960, pgs. 17-31:

Sure I remember the Nineteen Thirties, the terrible, troubled, triumphant, surging Thirties. ... I remember '29 very well ... the drugged and happy faces of people who built paper fortunes on stocks they couldn't possibly have paid for. ... In our little town bank presidents and track workers rushed to pay phones to call brokers. Everyone was a broker, more or less. At lunch hour, store clerks and stenographers munched sandwiches while they watched stock boards and calculated their pyramiding fortunes. Their eyes had the look you see around a roulette wheel ...

Then the bottom dropped out ... I remember how the Big Boys, the men in the know, were interviewed and re-interviewed. Some of them bought space to reassure the crumbling millionaires... "Don't be afraid - buy - keep on buying" Meanwhile the Big Boys sold and the market fell on its face...

The came panic, and panic changed to dull shock. ... People walked about looking as if they'd been slugged. ... Then people remembered their little bank balances, the only certainties in a treacherous world. They rushed to draw the money out. There were fights and riots and lines of policemen. Some banks failed; rumors began to fly...

What happened in the seats of power? It looked then and it still looks as though the Government got scared. The White House, roped off and surrounded by troops, was taken to indicate that the President was afraid of his own people. ... I speak of this phase at length because it was symptomatic of many positions of leadership. Business leaders panicked, banks panicked. Workers demanded factories stay open... Voices shrill with terror continued to tell people what was happening couldn't happen...

We didn't have to steal much... All over the country the WPA was working... [I]t was the fixation of businessmen that the WPA did nothing but lean on shovels. I had an uncle who was particularly irritated at shovel-leaning, When he pooh-poohed my contention that shovel-leaning was necessary, I bet him five dollars, which I didn't have, that he couldn't shovel sand for fifteen timed minutes without stopping. He ... grabbed [a] shovel. At the end of three minutes his face was red, at six he was staggering and before eight minutes were up his wife stopped him to save him from apoplexy. And he never mentioned shovel leaning again. I've always been amused at the contention that brain work is harder than manual labor. I never knew a man to leave a desk for a muck-stick if he could avoid it. ...

[I]n the Thirties when Hitler was successful, when Mussolini made the trains run on time, a spate of would-be Czars began to rise. Gerald L.K. Smith, Father Coughlin, Huey Long, Townsend - each one with plans to use the unrest and confusion and hatred as the material for personal power.

The Klan became powerful, in numbers at least... The Communists were active, forming united fronts with everyone... Except for the field of organizers of strikes, who were plenty tough ... and devoted, most of the so-called Communists I met were middle-class, middle-aged people playing a game of dreams. I remember a woman in easy circumstances saying to another even more affluent: "After the revolution we will have more, won't we dear?" ...

One night we got Madison Square Garden [on the radio], a Nazi meeting echoing with shrill hatred and the drilled litany of the brown-shirted audience. Then a dissenters voice broke through and we could hear the crunch of fists on flesh as he was beaten to the floor and flung from the stage. America First came through our speaker and it sounded to us very much like the Nazi approach. ...

Prosperity had returned, leaving behind the warm and friendly associations of the dark days. Fierce strikes and retaliations raged in Detroit, race riots in Chicago: tear gas and night sticks and jeering picket lines and overturned automobiles. The ferocity showed how frightened both sides were, for men are invariable cruel when they are scared...

The strange parade of the Thirties was drawing to its close and time seemed to speed up. Imperceptibly the American nation and its people had changed, and undergone a real revolution, and we were only partly aware of it as it was happening...

A few weeks ago, I called on a friend ... in midtown New York. On our way out to lunch, he said, "I want to show you something." And he led me into a broker's office. One whole wall was a stock exchange trading board. .. Behind an oaken rail was a tight-packed, standing audience, clerks, stenographers, small businessmen. Most of them munched sandwiches as they spent their lunch hour watching the trading. ... And their eyes had the rapt, glazed look one sees around the roulette table. ...
[full version]

- Mark

Monday, April 20, 2009


In the field of economics one of the arguments that gets thrown around rather loosely is the idea that Adam Smith, the patron saint of modern capitalism, was a big proponent of allowing individual market players do as they please. Proponents of this perspective tell us that allowing market players to operate freely in markets is what Adam Smith believed would create harmoney and the greater good. It's the keystone behind Smith's book The Wealth of Nations, so we are told.

Indeed, as Gavin Kennedy - author of Adam Smith: A Moral Philosopher and His Political Economy (Great Thinkers in Economics) - reminds us in his blog, we're usually treated to the following interpretation of Adam Smith:

Adam Smith first coined the term “The Invisible Hand” in his important book “The Wealth of Nations.” With this term he was trying to capture the idea that the marketplace would be self-regulating. The basic principle of the invisible hand is that though we may be unaware of it, an unseen hand is constantly prodding us along to act in line with what’s best for the whole economy. This means that when this invisible hand exists, when we all pursue our own interest, we end up promoting the public good ...
This interpretation of Adam Smith misses why he used the "invisible hand" to convey a message about markets, and what capitalism's intellectual godfather actually said about the negative affects of markets.

As Gavin Kennedy points out here, Adam Smith made reference to the "invisible hand" because he was trying to help those who did not understand science and philosophy interpret how markets might work if market players played by the rules (which I discuss with reference to the "laws of nature" in my book).

More to the point, in "Adam Smith and the Invisible Hand: from metaphor to myth" Kennedy makes it clear that because Smith wanted to reach the "[s]avages and heathens who did not understand the science of nature" he "relied on notions of ‘invisible beings’ with ‘invisible hands’ to explain unusual phenomena." Smith did this because we were a superstitious and religious lot back in the late 18th century, and could only understand difficult concepts with the help of spiritual or supernatural references.

Put more simply - and I find this rather interesting - by using the "invisible hand" as a metaphor Adam Smith was trying to explain a difficult concept to the unlearned. In this way, according to Kennedy, the "invisible hand" was used as an "innocuous metaphor" en passant (a chess move), and not as a broad theoretical claim about markets and market players if the state would only leave them alone.

There's a difference between metaphor and theory, and is one of the reasons I wrote my book. Check out Kennedy's piece.

- Mark


On Saturday's program we had several callers who desperately wanted me to accept that last week's Tea Parties were part of a mass movement drenched in spontaneity and genuine outrage when they were - as I pointed out - little more than Made for TV political theater. The primary culprit was FOX News and their Conservative cheerleaders/anchors, who know how to play on the passions of their viewers.

This David Carr piece from the NY Times tells us that the Tea Parties were the product of an on-going cable news ratings war. I'm not sure that this is what drove FOX News to push the event, since they are decidely biased and will never support President Obama, but there is a bit of truth to Carr's argument. You can check out the entire article here.

- Mark


The Atlantic has two interactive graphs illustrating how the fiscal stimulus program ($787 billion) is "puny" compared to what the Federal Reserve has taken on over the past 15 months. Check it out here.

- Mark

Saturday, April 18, 2009


From Naked Capitalism ...

The quality of Citigroup's $1.6 billion first quarter earnings was so lousy that even the mainstream media took notice. And the bank's stock traded down 9%.

To give the highlights:

$2.5 billion of revenues came from lower market value of its debt thanks to a fall in credit quality. That was a common pattern of last year, when quite a few investment banks, Lehman in particular, marked down their debt, showing a corresponding increase in income.

The bank posted a number of one-off gains:$704 million from the sale of a remaining stake in a Brazilian credit card processor, and $360 million in reversals of reserves (part for a litigation, the rest relating to an audit).

The bank posted negative earnings per share.
Do the math. $1.6 billion - ($2.5 billion + 1.1 billion) is not a positive number. This is especially not good since it looks like the bank stress tests are proving to be garbage.

You can read the entire post here.

- Mark

P.S. Potemkin Villages were purportedly fake settlements erected at the direction of Russian minister Grigori Aleksandrovich Potemkin to fool Empress Catherine II during her visit to Crimea in 1787.

According to this story, Potemkin, who led the Crimean military campaign, had hollow facades of villages constructed along the banks of the Dnieper River in order to impress the monarch and her travel party with the value of her new conquests, thus enhancing his standing in the empress's eyes.


One of the things I've been meaning to post on the past couple of days was the Obama administration's decision not to prosecute those in the CIA who used torture techniques during the Bush administration.

Asserting that the country needed to move beyond "a dark and painful chapter in our history" President Obama made it clear that that those who used enhanced interrogation tactics during the Bush administration are officially off the hook, and will not have to pay legal fees (or judgments) should they be pursued via other channels.

This is an interesting position because others who were wrapped up, or who got caught up in, the Bush administration's dark side of governance have not fared so well. This story about Thomas Tamm, who received the Ridenhour Prize for Truth-Telling, is illustrative. In a few words Tamm was one of the first to "drop a dime on the Cheney-Bush administration's illegal interception of phone calls and e-mails."

Tamm was a lawyer at the Department of Justice when he anonymously called The New York Times. He told Eric Lichtblau that the NSA was illegally spying on U.S. citizens. Lichtblau and Times reporter James Risen eventually won a Pulitzer for telling the story that Tamm brought to their attention. Tamm, however, hasn't fared so well.

The FBI has pursued him relentlessly for the past two and a half years. Agents have raided his house, hauled away personal possessions and grilled his wife, a teenage daughter and a grown son. More recently, they've been questioning Tamm's friends and associates about nearly every aspect of his life. Tamm has resisted pressure to plead to a felony for divulging classified information. But he is living under a pall, never sure if or when federal agents might arrest him.

Exhausted by the uncertainty clouding his life, Tamm now is telling his story publicly for the first time. "I thought this [secret program] was something the other branches of the government—and the public—ought to know about. So they could decide: do they want this massive spying program to be taking place?" ... If somebody were to say, who am I to do that? I would say, 'I had taken an oath to uphold the Constitution.' It's stunning that somebody higher up the chain of command didn't speak up."
And just who is Mr. Hamm? Meteor Blades at Dailykos tells that this was a "guy whose uncle and father were FBI agents, who led the Young Republicans when he was at Brown University and who had a stellar career at the DoJ until he decided to expose the criminal behavior of the government he served ..."

And for his patriotism Mr. Tamm has been treated like a criminal. If President Obama can forgive CIA torturers who believed they were acting to serve this nation I think we can forgive Mr. Tamm. As Joe Conason put it:

If the telecommunication companies that helped the NSA to violate the law could be immunized with Obama's vote last year, if the Obama administration is reluctant to prosecute former Bush officials for their alleged crimes, and if the president and the attorney general recognize that illegal wiretapping is an intolerable offense against the Constitution, then it is long past time to lift the burden of investigation from Thomas Tamm. Let the government acknowledge what by now is obvious. No fair-minded jury would convict him, and none ever should.
I hope he gets his life back.

- Mark

Thursday, April 16, 2009


One of the things that draws me to challenge the sincerity of our Teabagging Republicans, and their FOX News patrons, is how their Anti-Tax Jihad not only exposes our country to geo-economic blackmail but how their Teabagging Temper Tantrum fails the "Adam Smith" test.

Think about this. Our nation depends on the good will of others to fund what we do. Currently, the top six purchasers of our debt - China, Japan, Russia, "Oil Exporters", Brazil, Caribbean Banking Centers (i.e. off-shore tax havens) - hold at least $2 trillion of our securities.

Of these only Japan, and perhaps Brazil, can be considered friendly to the U.S. The others could turn on us at any time ... yes, that includes the money that comes from the tax haven Caribbean nations, which are filled with tax cheats, money launderers, and wealthy traitors seeking to escape paying their fair share here. These groups are the real Pirates of the Caribbean.

The interesting point here is that rather than having our nation's richest and most leisure class (the same group who gained the most during the Reagan/Bush Years) pay what they paid in taxes under Ronald Reagan, Republicans and their Teabagging Buddies at FOX News want our nation to continue borrowing from people and nations who aren't our friends. Yes, they want to continue exposing our nation to the threat of economic blackmail. So much for "Country First" ...

As well, the Republicans are completely clueless to the fact that their anti-tax Jihad wouldn't sit right with the founding father of capitalism, Adam Smith.

While writing The Wealth of Nations (1776) the intellectual Godather of Capitalism recommended, and even encouraged, taxing the wealthy at a higher rate than the middle class. He argued, for example, that luxury carriages should pay higher tolls than regular or commercial travelers because he believed that "the indolence and vanity of the rich" should be made to contribute to larger societal goals.

And what do our economic elites do when confronted with the prospect of helping to put our nation's economy on firm financial footing? They send their money off-shore. According to recently released reports the United States loses up to $100 billion a year in tax revenue to offshore tax havens (the cost to individual states can be seen here).

Who do you think has to make up the difference? Yes, that's right, you and me. Worse, we're forced to go to the Chinese, tax cheats, and OPEC & other oil nations to fund our debts so that we can fight wars Republicans don't want to pay for, and refuse to fight.

This, my friends, explains what the Teabaggers at FOX & Republicanlandia want to promote with their political temper tantrum.

- Mark


At the heart of the Tea Bag-fest held by FOX News and Republicans is their sudden concern for fiscal sanity. They now want America to believe that our nation's deregulation & debt inspired economic collapse, and the Obama administration's forced response, are driven by the same policy DNA. The Republicans inability to connect the dots from 'problem to answer' reminds me of this ...

Let me blunt. Like Miss South Carolina, republicans find themselves in the awkward position of tilling an empty field. They simply can't, ummm, such as, connect cause and effect. So they're left with making forced political caricatures that miss the mark. Seriously. Think about the following ...

1. TAXATION WITH REPRESENTATION?: The original tea party protested 'taxation without represenation' ... FOX News & Republicans are protesting taxes that haven't been raised (yet) on a group of people (who make $250,000 or more per year) AFTER candidate Obama (who was democratically elected) told the country that he was going to raise taxes on the rich.

2. RECKLESS SPENDING: One of the reasons we now owe more than $12 trillion is because "W" and the Republicans recklessly DOUBLED OUR NATIONAL DEBT ($5.5 trillion to $12 trillion) by squandering America's blood & treasure on war and tax cuts for the rich. This "Squander Our Wealth" show, for those of you who failed history, followed the Reagan-led deregulation and deficit spending binge that almost TRIPLED OUR NATIONAL DEBT from about about $950 billion to $2.7 trillion between 1981 and 1989.

3. TAKING THEIR BALL: Republicans now find themselves out of power in Washington. Unable to understand how we got to this point, and incapable of taking responsibility for their reckless deregulation and spending stupidity, republicans now find it politically convenient to take their ball and go home ... only to return under a FOX News orchestrated Tea Bag-fest. This is embarrassing.

Think about it. Republicans get thrown out for governing incompetence and now want to return and conflate President Obama's forced economic rescue with the results of their ineptitude. In real simple terms, Republicans want to get in front of an Outrage Parade that their policies made possible. The disconnect if palpable.

Even Frankenstein understood that he couldn't get in front of a pitch-fork led mob (that he inspired) ... and he had half a brain.

One of the great things about America is that there is absolutely nothing in the Constitution that prohibits anyone from making a fool of themselves. This is the beauty of democracy. Miss South Carolina proved this. So have the Republicans & the FOX News led Made for TV Tea Bag Temper Tantrum.

I'll have more to say about this on Saturday.

- Mark

Wednesday, April 15, 2009


The Rude Pundit has links and some interesting comments on this Tea Bag sign. It's too colorful for me to post here, but you can access his comments here.

- Mark

Tuesday, April 14, 2009


The NY Times' Bob Hebert has an interesting piece on our gun culture and our lives as Americans within that culture. Here's a snippet:

... Since Sept. 11, 2001, when the country’s attention understandably turned to terrorism, nearly 120,000 Americans have been killed in nonterror homicides, most of them committed with guns. Think about it — 120,000 dead. That’s nearly 25 times the number of Americans killed in Iraq and Afghanistan ...

... Murderous gunfire claims many more victims than those who are actually felled by the bullets. But all the expressions of horror at the violence and pity for the dead and those who loved them ring hollow in a society that is neither mature nor civilized enough to do anything about it.
While there's plenty of ancedotal evidence, it's more pensive than informational. If you get the time, it's worth the read.

- Mark

Monday, April 13, 2009


It looks like one NY law firm is offering several of their employees one-third salary to stay away from work for one year. That adds up to $80,000 for many of their emplyees. You can read about it here.

- Mark

Saturday, April 11, 2009


From Media Matters ...

Despite its repeated insistence that its coverage is "fair and balanced" and its invitation to viewers to "say 'no' to biased media," Fox News has frequently aired segments encouraging viewers to get involved with "tea party" protests across the country, which the channel has described as primarily a response to President Obama's fiscal policies. Media Matters has compiled an analysis of Fox News' promotion of these events.

Click here to see the full report.

- Mark

Friday, April 10, 2009


It looks like a "shadow inventory" of foreclosed homes is building up, which could "wreak havoc with the already battered real estate sector, industry observers say."

Many banks are sitting on foreclosed homes rather than selling or even listing them. Here's what the SF Chronicle says about the situation:

Lenders nationwide are sitting on hundreds of thousands of foreclosed homes that they have not resold or listed for sale, according to numerous data sources. And foreclosures, which banks unload at fire-sale prices, are a major factor driving home values down.
Why is this important? Because there's a mountain of adjustable rate mortgages ready to blow through our collapsed (still collapsing?) real estate market over the next few months.
In a few words, the president's $75 billion home loan rennegotiation program is/was absolutely necessary. The problem we have is with the banks. Which brings us back to what I've been advocating for some time, nationalization

- Mark

Thursday, April 9, 2009


Sean Hannity's been bloviating about his "6 Ideas to Save America" for some time now. Click here to see them. I synopsize his proposals below, thus saving you the time and agony of having to read or listen to Hannity's incredibly uninspiring (and recycled) "ideas" ...

1. ECONOMIC RECOVERY: Depends on the novel and apparently (at least in Hannity's mind) untried policy of more tax cuts. Someone call the Nobel Committee.

2. EDUCATION: This is "No Child Left Behind" on steroids and, I presume, with the same amount of money.

3. HOUSING: What Hannity proposes calls for the state to lead the way and, apparently without Sean's knowledge, is already going on under the bailout proposal.

4. ENERGY INDEPENDENCE: In a few words, this is "Drill, Baby, Drill" with nukes.

5. HEALTH CARE: Did Hannity stop taking his meds? Seriously, take a look at his privatization-led proposal.

6. ILLEGAL IMMIGRATION: "E-Verify"? How about "E's Stupid"? Hannity needs to sit in on one of my Politics of Mexico classes. The man's clueless here.

Incredibly, aside from the little that he says about immigration, there's nothing on the international or security front. And these guys wonder why they're mired in the 30% approval level (which is not good since 25% of Americans think the earth is the center of the universe, and/or believe in UFOs).

I have more commentary, but I have to get some rest for a long day tomorrow.

- Mark

Wednesday, April 8, 2009


From Dailykos ...

Here's Senator Byron Dorgan (D-ND), giving an amazingly prescient speech on the eve of the passage of Gramm-Leach-Bliley (GLB) on November 4th, 1999. In a few words Dorgan's telling Congress that GLB (also known as the Financial Services Modernization Act) will bring a financial disaster equaled only by what happened during the Great Depression. In Part II (at 3:00) Dorgan warns of the coming "too big to fail" reality to come ...

I discuss GLB, along with other deregulation efforts, in Chapter 11 ("The Deregulation Game") of my book, The Myth of the Free Market.

As an aside, I've been arguing in my nation-wide book promo radio interviews this week that dumping money into Wall Street is not enough. We need to snap back old provisions, which means repealing GLB, among others.

- Mark

Tuesday, April 7, 2009


Dailykos has spectacular photo coverage of Barack Obama in Iraq ...

- Mark


Thanks to Candi for this ...

Whenever I hear someone talk to me about the good 'ol days, and how much simpler life was back then, this is what I think about:

I'm glad my daughter doesn't have to grow up in this environment. Sign me up as someone who thinks the "counterculture" from the 1960s did this country some good.

- Mark

Monday, April 6, 2009


Wow, I thought the concept and punitive mentality that drove debtor's prisons were behind us. Not so, according to this NY Times editorial ...

Edwina Nowlin, a poor Michigan resident, was ordered to reimburse a juvenile detention center $104 a month for holding her 16-year-old son. When she explained to the court that she could not afford to pay, Ms. Nowlin was sent to prison. The American Civil Liberties Union of Michigan, which helped get her out last week after she spent 28 days behind bars, says it is seeing more people being sent to jail because they cannot make various court-ordered payments. That is both barbaric and unconstitutional.
Incredibly enough, it gets better.

In Georgia, poor people who cannot pay off fines — plus a monthly fee to the private company that collects the payments — are often sent to jail for nonpayment, according to Stephen Bright, president of the Southern Center for Human Rights. In 2006, the center sued on behalf of a woman who was locked up in Atlanta for eight months past her original sentence because she could not pay a $705 fine.
Yes, holding people in jail because they can't pay their debts is supposed to be unconstitutional (Art. I, Sec. 8: mandates "uniform Laws on the subject of Bankrupticies"). How we got to this point is a mystery to me. I know who I need to call to ask about this. I should have some informed commentary on this by Saturday.

- Mark

P.S. The painting is A Rake's Progress. Click here to see the story.


This story is from a former mortgage broker, who was in the trenches signing up some of the people who ended up creating the toxic assets that Wall Street coveted and then insured. Here's what she did ...

I ended up at a firm that targeted talk radio listeners - the kind of working class white Americans who keep Sean Hannity and Rush Limbaugh in business, people who worked hard to keep our plants running and our department stores staffed and our school children taught. We did good business charging competitive fees and getting low rates for them, even when their credit was a little slow, or their debt to income ratios were slightly out of whack, or they were a few points shy of meeting government loan guidelines ...
After discussing how some of her colleagues gamed the system, first by building crummy homes, then getting into the "rehab" business to fix the crap they built, our mortgage broker tells us how she began to see the internal rot in the system ...

The handful of truly awful loans I've done were pretty much the borrowers last resort. The highest interest rate I've ever closed a deal on was at 12% on $250,000 for a white family who were going to have to move out of the house they were leasing from a builder if they didn't get a loan - with the tax liens they had, it was amazing that anyone funded it at all. Dozens more prospective clients, practically all of them African American, walked away from low interest rate deals I put together for them because their friends were all getting cash back at closing from the guys who peddled the 2 year ARM's with the teaser rates
Put another way, the industry actively promoted and peddled "too good to be true" loans - which offered cash back - knowing full well that the people they were lending to were already on shaky financial ground. As anticipated, many of the loans failed, when adjustable rates jumped, or because people walked away from shoddy homes, or because they lost their jobs. The result has been predictable: Boarded up houses, lenders with toxic assets, nobody willing to purchase collapsing homes in bad neighborhoods, etc.

Worse is what's happening now that the federal government has stepped in with money to help stabilize the system. Bankers don't want to get some of the goods off the books because there is the possibility that the underlying contract will pay out because of the bailout. Their thinking is the following: Might as well keep the house since the price might go up.

This is how our mortgage broker sees these dynamics ...

But the bankers aren't moving [the houses]. It is as if the poison in the toxic assets are like snake venom that has slowly begun to paralyze their ability to move in the right direction. Now if it was me who knowingly stepped into a cage full of rattlesnakes, and then got bitten, when someone came running with the anti-venom to save my life, the way the Treasury Department has, I wouldn't hesitate in taking it.

But our nation's bankers have decided, now that the swelling has stopped from all the bites they've taken from their own brand of exotic mortgage derivative snakes, snakes they grew themselves, that they aren't sure they want to take the anti-venom, which in this case is participation in the TARP program that practically pays companies who actually have money to take these loans off their hands.
The end result of our taxpayer funded bailout is that bankers are dragging their feet on negotiating new terms and write-downs because they can. Now that money is in the pipeline and very few of them fear for their jobs, they can afford to sit and wait. Our mortgage broker has this to say ...

To these lily-livered son of a bitches, the loans themselves are an abstraction. To many of us, try to do our damnedest to keep a roof over our heads, they are as real as the boarded up house across the street, and the one next to it that doesn't have any windows left, eyesores that might only need a little repair work and a reasonable price tag to get families moving into them.
There's more. Read the article.

- Mark

Sunday, April 5, 2009


Former Labor Secretary, Robert Reich, thinks we are now in Depression era mode. Here's some of the evidence ...

The March employment numbers, out this morning, are bleak: 8.5 percent of Americans officially unemployed, 663,000 more jobs lost. But if you include people who are out of work and have given up trying to find a job, the real unemployment rate is 9 percent. And if you include people working part time who'd rather be working full time, it's now up to 15.6 percent. One in every six workers in America is now either unemployed or underemployed.
Check out the rest of his commments on his blog here.

- Mark


No where in the Constitution does it say that you can't make a fool of yourself. This is good for FOX News. The problem is that a good segment of America chooses to follow the ignorance. This is from Media Matters:

Hannity truncated Obama quote to claim it was an example of "blame America first"
Summary: Sean Hannity aired a clip of President Obama's speech in France and claimed Obama was "blam[ing] America first." However, at no point during the show did Hannity note that immediately after the part he aired, Obama criticized "anti-Americanism" in Europe as well as Europeans who "choose to blame America for much of what's bad."

- Mark

Friday, April 3, 2009


Scanning the news from Europe, I ran across this "Fatal Overdose" piece from Germany's Der Speigel contributor, Gabon Stiengart. First, Steingart's comments on the Bush administration's reckless deficit spending ...

No other president has ever printed money and expanded the money supply with such abandon as Bush. This new money -- and therein lies its danger -- was not backed by real value in the form of goods or services. The measure may have had the desired effect -- the world economy revived, at least initially. And US consumption kept the global economy going for years. But the growth rates generated in the process were illusionary. The US had begun to hallucinate.
From there, Steingart offers a quick panorama of what this means for America and the American consumer/taxpayer ...

The addiction to new cash injections was chronic. The US had allowed itself to sink into an abject lifestyle. It sold more and more billions in new government bonds in order to preserve the appearance of a prosperous nation. To make matters worse, private households copied the example of the state. The average American now lives from hand to mouth and has 15 credit cards. The savings rate is almost zero. At the end of the Bush era, 75 percent of global savings were flowing into the US [my emphasis].
Whose to blame? Der Spiegel's Steingart starts with one of the stars of our spending and borrowing binge, Alan Greenspan ...

The president and the head of the Federal Reserve, Alan Greenspan, knew about the problem very well. Perhaps the Americans even knew just how irresponsible their actions were -- at any rate, they did everything they could to hide them from the world. Since 2006, figures for the money supply -- in other words, the total number of dollars in circulation -- have no longer been published in the US. As a result, a statistic which is regarded by the European Central Bank as a key indicator is now treated as a state secret in the US.
What Steingart is referring to here is the Bush administration's decision to discontinue publishing the figures for M-3 (total money supply, or demands on) back in 2006. Seriously, we're not sure how many dollars, or how the claim on dollars, stacks up (I discuss this in my book; Chps. 9 & 12).

Then the Der Spiegel's Steingart turns his review on President Obama ...

But the change of government in Washington has not brought a return to self-restraint and solidity. On the contrary, it has led to further abandon. Barack Obama has continued the course towards greater and greater state debt -- and increased the pace. One-third of his budget is no longer covered by revenues. The only things which are currently running at full production in the US are the printing presses at the Treasury.

At the summit in London, delegates talked about everything -- except this issue. As a result, no attention was given to the fact that the crisis is being fought with the same instrument that caused it in the first place. The acreage for cheap dollars will now be extended once again. Only this time, the state is also acting as the dealer, so that it can personally take care of how the trillions are distributed.
I can't say that I disagree. But it really doesn't matter for the Obama administration because we're pumping so much money into the economy that markets will most likely stabilize and President Obama will win a second term. Inflation will no doubt follow, but that means the burden of our debts will slowly diminish.

We don't have a program this Saturday, but I'll be sure to discuss the pros & cons of this on our next program (April 11).

- Mark

Thursday, April 2, 2009


Glenn Beck is a psychopath, but this is too funny to ignore ...

The Colbert ReportMon - Thurs 11:30pm / 10:30c
The 10.31 Project
Colbert Report Full EpisodesPolitical HumorNASA Name Contest

You can see the video and access other articles on Colbert's piece here.

- Mark


From CBS Market Watch ...


First Iran. Then Russia. Now Europen leaders are making it clear that Obama is making a difference on a global scale. Read the article.

- Mark


I was so busy yesterday with the first day of class and other duties that I didn't have time to post on the Republican's new budget proposal. Fortunately, the proposal was so pathetic (and quite appropriate for its April Fools release) that this graph from Bob Cesca pretty much captures it ...

Seriously, Rep. Paul Ryan used 2008 budget projections from Bush's budget disaster years and attached them on to President Obama's plan (for no apparent reason other than he could). Ryan's own staff confirmed that Ryan's projections could not "be a direct analysis of the president's budget proposal" because "Obama wasn't in office" during the time frame that they drew their budget numbers. Nice.

Ryan then laid out a fairy tale budget proposal that included more tax cuts for the people on Wall Street who got us into this mess.

Fortunately for the Republicans the G-20 meetings are stealing the media spotlight, while the press is starting to ignore their increasingly embarrassing sideshow.

- Mark


This article from EIN News is useful because it explains, in very simple terms, the primary reason it's so difficult to trim budgets and why waste is tolerated.

“Taking on influential defense contractors will be tough.”
--President Barack Obama, March 24.

“Tough” hardly describes the battle that lies in wait for the President when he tries to make meaningful changes in defense contracting. More than 90% of the revenue generated by Lockheed Martin and Raytheon in 2008 came from defense contracts. For Northrop and General Dynamics, defense contracts accounted for more than 70%. Even Boeing, which dominates civilian aviation, depends on military work for half its revenue ...

When the President talks about reforming defense spending, these are the goliaths he's taking on. The entire defense contracting system is shot through with waste and abuse. Last year the GAO reported that 95 defense projects had overrun their budgets by $295 billion. The average delivery delay was nearly two years beyond what the contractor promised ...

This should be a ripe target for White House and Congressional cost cutters. Should be. But isn't. Why?Because defense contractors are adept at creating alternative political universes. Lockheed, for example, has subcontracted parts for the F-22 fighter plane to 1,150 firms in 46 states. Each one of those firms and the people in Congress who represent them is a lobbyist for building more F-22s. Last year, Defense Secretary Robert Gates decided to halt the plane's production. But that decision hasn't yet stuck.

Working through its constituent congressmen and senators, and the communities, business and labor groups that would lose money and jobs, Lockheed is waging a furious campaign to build more F-22s ... We're talking here about a plane that so far has cost taxpayers more than $65 billion and has seen no service in Iraq, Afghanistan, or any other combat. The F-22 was conceived about 30 years ago as a next generation fighter to compete with improved Russian Migs, which planners then assumed would be built as part of the continuing cold war. Then the cold war ended and the Russians cut back on military development ...
See the entire article here

- Mark