THE GOP'S STOOGE-LIKE CULTURE OF DECEPTION

Over a year ago I wrote an op-ed piece describing what Republicans believed were the causes behind the 2008 market collapse. I wrote how the GOP members of the Financial Crisis Inquiry Commission (FCIC) issued a "primer" that deliberately left out the words "Wall Street," "deregulation," "shadow banking," and "interconnection."

I then asked "can you imagine getting handed a welfare fraud case then deciding not to use the words 'welfare' or 'fraud' during the investigation"? This kind of thinking is a blueprint for disaster ...

What we learned from the GOP sponsored report is that republican FCIC commission members - which included Bakersfield's own Bill Thomas - are more interested in establishing a political narrative than finding the truth. Their report went out of its way to blame the government for the reckless gambling and greed pursued by private investors and Wall Street.

Simply put, the Republican report on the 2008 market collapse was a stooge-like hack job that was deliberately designed to mislead and confuse the public.

And the GOP members of the FCIC were more than happy to drive America into it's little cul-de-sac of ignorance.

Well, brace yourselves. We have it's functional equivalent; only this time it deals with the health care legislation passed by the Obama administration. And it involves another GOP attempt to deliberately confuse the issue.

In this case a Mr. Charles Blahous was appointed to serve as one of the Republican trustees of the Medicare and Social Security programs. As a board member of Medicare Mr. Blahous recently issued a report that said President Obama's health care program would cost more money than the CBO originally estimated. His report was published through the Mercatus Center (yes, another conservative Koch-funded center). Blahous claimed:

President Obama’s landmark health-care initiative, long touted as a means to control costs, will actually add more than $340 billion to the nation’s budget. 

Stop the presses ... heady stuff, don't you think? Think again.

Blahous achieves his smoke & mirrors report by using a simple accounting trick. Without getting into the details (it's quite confusing) the logic is akin to you leaving a job that pays $25,000 a year to go to college, then having your neighbor ignore the new better paying job you have lined up to say, "Look at how much money you lost out on by going to school ... going to college actually cost your money. You're a loser for throwing all that money away."

Yeah, the story is a bit more complicated, but the logic is really that silly.

But it doesn't matter. Blahous' report made the papers, which included the Washington Post. Mission accomplished. Time for a toast ...

At the end of the day, we all need to recognize that many policymakers on the right have had serious trouble with math, the truth, simple facts, understanding budgets, and even following the law. It's almost as if the laws of logic and math don't apply in their universe.

Then again, what do you expect from a political party that actually produced a budget with no numbers ...




- Mark

UPDATE: I received a comment on the health care claims of the Obama administration. In a few words, the commentator cites a conservative blog to make the claim that the Obama administration is double-counting. This explains why their savings projections over the long haul look so strong. Ergo, everyone deceives, including Obama. Two wrongs make a right (wrong?), so nobody wins. Yay. Obama lies.

However, there's a problem. The double counting argument is an old one and has been debunked on numerous occastions.

Perhaps the best way to explain how the math is done, and why someone might think they can make a double counting charge is that they don't understand that "when a baseball player hits a home run: it adds to his team's score and also improves his batting average. Neither situation involves double-counting."

Put another way, there's no sea legs to the double counting whale of a story used by the GOP and conservative pundits. It only has a shelf life because conservative blogs, the far right noise machine, and the GOP need ammo - true or false - to make sure President Obama is a failure and liar in the eyes of their audience and constituents.

Anyways, I'm not publishing the comment from the writer because the guy who wrote is actually a nice guy, and friend from another life. But here's my response to him.

... I could post your comments, but it has several problems. First, the CBO report you cite is from a 2009 conservative blog post. It's primary message says that a CBO memo, which is cited by the Chamber of Commerce, does not buy into President Obama's accounting methods. If you go to the link [on the blog you cite] the Chamber post is no longer available. Not good. But this isn't the real issue. One of the problems with relying on these blogs is that they don't tell you that what you're stating about the accounting is not - and has not been - unusual. Dems and Republicans have used these accounting methods for years, which the CBO has signed off on, and confirms. If you had a CBO report saying otherwise this would make a difference. Instead, you cite a blog that cites another blog, which no longer has the link to the 2009 Chamber of Commerce post (and link) it cites. If you want me to post your comments anyways, I'll do so.

FOX NEWS A JOKE ... STILL

Fox News is at it again (actually, they don't ever stop). They're busy trying to give the economy that President Bush left to President Obama a makeover. Put another way, they're lying.

Media Matters has the story, and links, here. I especially like this reference to unemployment rates under Bush (which I blogged about here and here):

In addition to blurring the timeline, media conservatives inflated Bush's economic performance. In August, Limbaugh claimed that Obama inherited "an unemployment rate of 5.7 percent." A few days later, Hannity claimed Obama inherited an unemployment rate of 5.6 percent. Fox's Brian Kilmeade hearkened back to a time when things were "a lot better" under Bush, when unemployment was 5 percent. All of these figures are "flat out lies." Obama inherited an unemployment rate of 7.8 percent.

Long story short? Fox News lies, but their viewers don't seem to give a damn. Sigh ...

- Mark

TRAILER PARK ECONOMICS

So, I'm thinking, How do I make this somewhat complicated post easier to understand? In the post I explained how Wall Street and the nation's biggest banks profited after making stupid business decisions. Specifically, I wrote how Wall Street was able to get the federal government American taxpayer to underwrite their stupidity with government taxpayer backed loans after they lost a bundle gambling on reckless derivative investments, and then wrecked the economy. Here's a short - and a bit more humorous - take on the events surrounding our market collapse and bailout.

* * * * * * * * * * * * * * * * * * * *

Imagine that you owned a trailer park development project and went to Las Vegas. You borrowed against your assets and then gambled away all your money. You now have to file for bankruptcy. This is how market justice is supposed to work.

Then, out of the blue, your bank covers your losses in Las Vegas. Then they open the loan spigot for you. The bank also tells you that you can continue doing what you were doing before you lost everything (in this case gambling). Seeing all this the Vegas casinos jump in and say, "Come to our gambling dens (again) ... we're even going to comp your suites." 

The best part (for you) is that the banks are going to charge you virtually zero percent on the money they're lending you. All you have to do is give the bank title to your "trailers with a view" development project as collateral. 

But wait. It gets even better. The banks are going to loan you money based on the value of your trailer park development BEFORE the market crashed. It doesn't matter that you over inflated the value of your $100,000 project by $1 million. You still get your million dollar loan because neat accounting tricks make the value of your crappy assets look good. You can walk away with the borrowed money any time too.

At the end of the day, you know you're going to walk away because the American taxpayer banks are going to be left with your trailer park assets. Sweet (for you).

Incredibly, things get even better for you because, with new money to backstop your stupidity, you can now start kicking out renters that you never liked. With your trailer park investment project effectively paid off, you can become arrogant and vindictive. And you're bringing a new landlord.

Can you imagine this happening? Of course not. This level of reckless support only happens if you're one of the big financial players making stupid bets in America.

While I've oversimplified all of this, conceptually the logic applies. Our financial mandarins, who like to think they're rugged individualsts, are really wards of the state. And you and I get to pay for it all.

- Mark

BORROWING $1 TRILLION IN ONE DAY ... WHY IT MATTERS (and where the hell is the Tea Party on this?)

Exactly three years ago today, at the height of the market crash, I pointed out on my blog (and my radio program) that the biggest banks in America were granted well over $1 trillion in ultra-low interest rate loans by the Federal Reserve. These loans were granted so the biggest banks would have money to stuff the financial holes that their trillion dollar (derivative) bets had created. They also helped purify toxic crap and kept the banks out of court.

Best of all, the loans were backed by the government American taxpayer.

Thinking how bad things were - and so people could see for themselves - I explained (very slowly) how to find the more than $1 trillion in loans in the Federal Reserve's December 11, 2008 "Flow of Funds Accounts" release.

Things were so bad at the end of 2008 that the banks borrowed $1.2 trillion on December 5, 2008. Let's repeat that ... the banks had to borrow $1.2 trillion on one day.

Worse, much of the collateral the banks put up to secure the loans was either inflated, or simply toxic crap. These toxic instruments are the stuff you and I will get stuck paying for over the next few decades.

Putting it All in Perspective
To put $1.2 trillion in perspective, think about this little nugget: $1.2. trillion is much more than what President Bush spent on the TARP bailout ($750 billion), and far more than what President Obama asked for in the Stimulus Program ($825 billion, of which $275 billion were tax cuts). And it's also far more than the $907 billion we owed as a nation in 1980.

As you can imagine, the Federal Reserve and the big banks fought to keep $1.2 trillion in bailout loans a secret. To do otherwise would have alerted America to how much trouble the banks were really in back in 2008 (they're still in trouble). It was the largest loan-bailout in U.S. history, after all.

Fortunately for America's biggest financial institutions most Americans didn't catch on to what was happening. This includes the vast majority of our incredibly hypocritical "We Just Found Financial Jesus" Tea Party movement. Most them still don't have a clue. Nor do they seem to understand how the banks used more than $1 trillion in low interest loans to profit off of the U.S. taxpayer.

How the Banks Profited ...
Thanks to Bloomberg News we can see exactly who profited from the barely above zero interest loans made to Wall Street's biggest banks. One thing's for sure. It wasn't the American taxpayer. Here's the details.

Simply put, the banks made about $13 billion in taxpayer funded profits (play with the interactive here). How did they do it, you ask? Simple. They borrowed the money at rock bottom interest rates from the Federal Reserve, then "walked down the street" (as it were) to purchase Treasury Bonds from the federal government that paid almost 3% interest. A classic case of robbing Peter (the American taxpayer) to pay Paul (themselves).

But wait, it gets better (or is that 'worser'?).

Flush with cheap taxpayer-backed loans America's bankers began lobbying Washington to stop the movement for more regulations. Their argument? Since they were so healthy - and weren't bankrupt - they didn't need pesky regulations. Regulations and oversight distracted them from making money.

That's right. While America's biggest bankers were on government life support - and had one hand in the taxpayer's pockets - they were also pretending they had done nothing wrong. Ergo, they didn't need to be regulated.

While TARP and taxpayer backed loans enabled banks and Wall Street to dodge bankruptcy, America's biggest banks began turning away and punishing customers who lost their jobs and homes as a result of the 2008 market collapse. Bankrupt citizens facing tough times as a result of the market collapse had to be punished.

Long story short? In spite of collapsing the economy, and asking the American taxpayer to underwrite their market stupidity, the banks demanded market-like discipline be imposed on the American public. It didn't matter that the American taxpayer had helped turn their toxic investments and stupid bets into market gold.

Aren't double standards beautiful?

The Chutzpah Behind the "Self-Esteem" Loans ...
Let's make this real simple. If the banks had not received government loans, or had been forced into bankruptcy or receivership, the lobbying efforts of the banks would have been comical (they still are in my book, but that's another story).

But stuffed with TARP bailout money, and with emergency loans from the Federal Reserve (who created brand new loan "facilities" for troubled banks), America's biggest failed banks were able to escape market justice and pretend things were just fine. Congress played along ... as they continue to do today. But here's the kicker.

In a classic WTF moment, the banks argued that they were simply borrowing from the Fed (again, at least $1.2 trillion in one day) so other banks wouldn't feel "stigmatized" by having to take loans from the Federal Reserve. Huh? Are you kidding me? How clueless are these people? They didn't want other banks to feel shame for making stupid decisions, so banks had to borrow money from the Federal Reserve? Unbelievable.

At the end of the day, the thinking behind our banker bailout programs is akin to the logic behind toddler leagues. You know, the leagues where parents don't keep score so they don't hurt little "Johnny's" feelings. Incredible. Apparently bankers and Wall Street need self-esteem programs too.

Keep this in mind the next time your friend wants to discuss corporations and rugged individualism in America.

The End ...
This, my friends, is just one reason why it's difficult to take the status quo "happy talk" about profits, falling unemployment, and Wall Street success stories seriously. It's all backstopped with trillion dollar federal loans and taxpayer furnished bailout money.

The happy talk about Wall Street means little for jobless and foreclosed upon Main Street. Monopoly Man's successes mean nothing to Joe Six-Pack. This is especially the case since it's all backstopped with taxpayer money, still overly complex loan structures, lax regulatory oversight, and record debt loads.

So - again - my question is Where's the Tea Party outrage on all of this?

- Mark

SO, WHERE'S THE TEA PARTY ON THIS ONE?

Via Think Progress we learn that thirty big corporations in America actually spent more money lobbying Congress between 2008 and 2010 than they paid in taxes (hat tip to Tom for the link).

What has all that lobbying gotten corporate America over the long-term? In a few words corporate profits have soared (money once set aside for taxes suddenly becomes "revenue"). Just as importantly, corporations now pay a smaller share of taxes into our economy (as a percentage of GDP) than they did in the past. Check it out ...

All of this helps explain why middle America's income tax (what you earn) and payroll tax (social security, medicare, etc.) payments have remained relatively stable or grown (payroll). Middle America is told that they need to keep paying their share of the bills, while America's richest Americans have convinced most Americans that their tax load has to go down ... for the good of the nation. Trickle down, you know.

Long story short? Our debt problem is largely A REVENUE PROBLEM. And it's caused by a group of people who think shifting the responsibility of maintaining our great nation on to others (the middle class) is a good idea (and it is, for them).

Think about it. As I explained (or tried to explain) to Republican Mark Abernathy during one of our KGET 17 sparring matches, spending as a percentage of GDP has remained relatively stable over the years, and only started to surge under President Reagan's trickle down policies.

At the end of the day, by reducing their tax burden, while maintaining (or raising) the tax load on ordinary Americans, what we're seeing is one of the greatest wealth transfers in human history. Seriously.

Not only do the top 1% and those at the top of corporate America's food chain get to keep more, but someone's going to have to pay for the $14 trillion that's been added to our national debt since 1980 (when it was only $907 Billion). And you can bet your life that the top 1% don't think it should be them.

So, my question is, where's the Tea Party on this one?

- Mark

WALL STREET'S GET OUT OF JAIL FREE CARD ... "INTENT"

If you ever wanted to know why no one from the financial sector and Wall Street is behind bars look no further than this 60 Minutes piece on mortgage fraud and Countrywide. Simply put, committing fraud isn't enough to get you prosecuted. You have to show that fraud was also intended (can you imagine a criminal defendant saying, "I didn't mean to kill him, he just happened to be in the way of my bullets"?).

Also, in the FYI category, none of this was confined simply to Countrywide either. It was prevalent and encouraged throughout the industry (and by Wall Street), and is indicative of corporate entitlements and protections that you and I don't get.

I've said it before, and I'll say it again, we can fix a lot of this if we understood Bill Black's "control fraud" better, and used RICO statutes to go after our financial institutions as criminal enterprises ...

- Mark

FOX NEWS (misinformation)

Apparently you're better off watching nothing than watching Fox News ... Check this out.



- Mark

THE "BIG LIE" CONTINUES

Early last week I posted on the GOP presidential field and their penchant for blaming the housing mess - and subsequent 2008 market collapse - on government policies. Long story short? Calling on my inner Paul O'Neil, I commented that the candidates in the GOP field are acting like blind men in a room full of deaf people. I posted links to earlier posts and op-eds I've written on the topic to provide substance and background.

Today I ran into this Washington Post discussion on the market collapse by Barry Ritholtz. It's titled "What caused the financial crisis? The Big Lie goes viral."

In a few words, Ritholtz makes the same points that I do, and argues persuasively that - rather than admit error - there is an emerging industry out there bent on creating a new narrative. Not only is this new narrative full of lies but, unfortunately, it's also winning the day.

 
Challenged on his op-ed points, Ritholtz responded with this piece in the Washington Post. It's excellent. I encourage you to read both his Nov. 5 and Nov. 19th columns. Both have inspired a great deal of ill-informed push back.

According to Ritholtz, the "push back continues from the usual sources." He lumps the Know Nothing sources into "3 distinct categories" that tell us much about a larger "disturbing trend" in America:

1) The Cognitive Dissidents (my term for a those politically dissenting from reality); their brains simply will not allow them to see what disagrees with their ideology. This is a very real and unfortunate part of human nature;

2) The Political Manipulators, who cynically know what they peddle is nonsense, but nonetheless push the stuff because it is effective. These folks are more committed to their ideology than the good of the nation, and as such earn my disdain.

3) The Innumerates, the people who truly disrespect a legitimate process of looking at the data and making intelligent assessments. These innumerates — mathematical illiterates — seem to revel in their own ignorance; it is embarrassing.

Ritholtz adds, "denying of reality has been an issue, from Galileo to Columbus to modern times. Reality always triumphs eventually, but there are very real costs to it occurring later versus sooner . . ."

I couldn't agree more.

- Mark

WHY IS THIS STILL NEWS?

- Mark

I'LL TAKE SOCIAL SECURITY ANY DAY ...

From Senior Annuity Alert. Underline and italics are mine. This is classic ...

__________________________________________

The purpose of an annuity
... The purpose of an annuity is always income, whether you need money now or, in the future ... The added security is that it gives you a way to get the income you need knowing it will never run out ...

__________________________________________

So far so good, right? OK, now for the fine print at the bottom ...

___________________________________________

NOT FDIC INSURED. NOT BANK GUARANTEE. MAY LOSE VALUE, INCLUDING LOSS OF PRINCIPAL. NOT INSURED BY ANY STATE OR FEDERAL AGENCY.

_____________________________________

Take away all the bailouts, Fed money dumps, and other favorable legislation that subsidize our markets and, really, what do you have left? I'll take all comers that want to compare annuities to Social Security.

- Mark 

BILL O'REILLY: THIS WEEKS VILLAGE IDIOT

While defending Wall Street and the big banks, Fox's Bill O'Reilly asked why there haven't been any investigations into Wall Street criminality if what they did was so bad. In an exchange with Cornell West and Tavis Smiley, O'Reilly argued that there is "no evidence" of wrongdoing because "they didn't violate any laws!"

What an idiot.

We haven't had big investigations - let alone convictions - after the 2008 market collapse because we dumped trillions in taxpayer funded bailouts and other guarantees into the financial sector. In the process we effectively removed the threat of receivership, bankruptcy, disgrace, or the full force of our legal system from Wall Street's horizon. This is the way our legal and political system works for white collar executives with money.

So, it's not that there wasn't illegality and theft in the lead up to 2008. It's just that the rules of the game prevents our financial mandarins from having to account for their actions. And, yes, this undermines the integrity of our market system.

Specifically, O'Reilly needs to take a look at:


Purified Toxic Crap ...
Bailouts essentially turned straw into gold by using taxpayer funded cash, to purchase toxic "legacy assets" for example. To date, well over $5 trillion in watered stock, bad assets, and toxic securities have been pretty much cleaned up (forcibly) by the U.S. government taxpayer. If the worst is cleaned up, what do you go after?

Information Blackouts ...
One of the cornerstones of any market economy - and any democracy - is transparency. Without it you can't get good information. Guess what? Bailout payout information was deliberately withheld from the public on orders from current Secretary of Treasury Tim Geithner. With an information blackout the most toxic and ethically challenged market instruments have been able to fly under the radar (and then get cleaned up).

Out of Court Legal Settlements ...
Instead of entering into court battles - which are critical for building precedent and case law - financial firms like Goldman Sachs routinely pay fines into the hundreds of millions of dollars. This is chump change when you look at the trillions the financial industry has hauled in (and the trillions more we're on the hook for). It's hard to get convictions when you can pay a taxpayer subsidized fine and walk away.

Right to Sue is Waived ...
At the center of all the toxic payouts in 2008 was A.I.G. In exchange for getting bailout cash, A.I.G. was forced to give up it's right to sue Wall Street firms in court. In a few words, A.I.G. was given an offer they couldn't refuse: Take the money and shut up, or you don't get any help at all (and you might even get caught up in a legal dragnet too). But it gets better (or is that worse?). At one point during the height of the market crisis in 2008 the Federal Reserve demanded unusual national security procedures before it would share or supply critical A.I.G. bailout related documents.

For whatever reason, none of this adds up for Bill O'Reilly.

So, to simplify, you can't be sued or convicted if the problem is purified with a pile of taxpayer backed cash ... information is deliberately withheld or distorted ... you pay record fines to avoid court trials ... and if the initial keystone bailout institution is told they can't sue as a condition for receiving taxpayer money.

Let me repeat the point. You can't get investigations - let alone sued - if the state intervenes to help you bury the financial bodies. It's that simple.

If you understand this you know why Bill O'Reilly is this weeks Village Idiot.

- Mark

Addendum: As you can imagine, things haven't gotten any better over the years. Corporate America is busy playing Blame Games, and are suing one another for selling toxic crap to one another. Similarly, we're learning about the usual political stonewalling and massive lobbying of state attorney generals, which prevents or undermines larger investigations. All of this is critical for understanding why there haven't been any investigations because of how the FBI acknowledged that "mortgage fraud was substantial" as early as January 2008.

UPDATE: Here's Robert Reich with more examples of Wall Street seeking and getting legislative and legal cover from Washington.

OCCUPY WALL STREET & FOX NEWS

Check out this interview story, which Fox News decided not to air after the interviewee was told that he had an open mic to “put any message you want out there,” without manipulation ...

The story went viral after The New York Observer (not Fox News) gave the interview some media legs.

So after a news editor admitted "infiltrating" D.C. protests in order to undermine it, and GOP congressman Peter King (a Fox News darling) stated we can't allow more coverage of Occupy Wall Street, a narrative seems to be emerging. Unless it's a Tea Party protest - which defends tax cuts and reckless deregulation (i.e. more of the same) - the Right, and Fox News, want nothing to do with demonstrations on the street that question financial subsidies for corporate America and Wall Street's taxpayer subsidized gains.

One would presume that this is the rationale for the crowd chanting "Fox News Lies!" and forcing Geraldo Rivera to flee an Occupy Wall Street event.

- Mark

THIS SHOULDN'T BE A SURPRISE TO ANYONE (but I'm sure it is)

Bank of America is being accused of cooking the books to hide potential losses of at least $10 billion. Yawn ...

If you've followed this blog, and read about Bank of America's faux paybacks ... or the wonderful world of book cooking Structured Investment Vehicles here and here ... or corporate America's evolving legal blame game ... Bank of America hiding $10 billion in losses shouldn't be a surprise to anyone. But I'm sure it is.

The only question now is how they explain and then bury the problem with some more creative book keeping.

And you wonder why market-to-market is so important for the banks ...

- Mark  

GOP, STILL GOING TO SAY "NO"

___________________________________________________

With President Obama gearing up to present a jobs and growth agenda next week, expect the Republicans to fight him tooth and nail on it. How do I know they'll do this? Because they have a long history of doing this. In fact, a little over 2 1/2 years ago I wrote that the GOP would refuse to work with President Obama because laying President Bush's economic mess at President Obama's doorstep would work politically for the the GOP in 2010 and 2012. As a reminder of when the GOP's obstructionism with President Obama began I'm re-posting my January 29, 2009 post below (with pictures this time).

___________________________________________________

Thursday, January 29, 2009

A NATION OF MORONS

A nation of morons . . . This is what Republicans think of America.

The House Republican’s party-line “thumbs down” to President Obama’s economic stimulus program, and their rejection of Obama’s pre-vote olive branch, represents one thing and one thing only: their first step toward regaining power

According to Republicans, if they leave President Obama and the Democrats to deal with President Bush’s economic mess, they believe their rejection of the stimulus package will allow them to cast blame and gain some seats in 2010, with the goal of regaining power in 2012.

Unfortunately, this line of thinking is not so far-fetched.

Republicans understand very well that the economic catastrophe facing this country is real. Record deficits, stagnant wages, record personal debt, and an exploding national debt will not disappear any time soon. Still, they don’t want to help President Obama because they also understand that if Obama’s vision (making government work) and policy initiatives (directed toward social justice) help Americans see light at the end of the tunnel he will be rewarded. So will the Democratic Party.

Simply put, Republicans see FDR’s spirit in Barack Obama’s initiatives, and it scares the hell out of them. Obama has become a political Ghost Whisperer of sorts.

So the Republican strategy today is to put some distance between Bush’s record, and their blind support for Bush’s programs. They believe America will forget that they handed President Bush the matches he used to light our national house on fire. Worse, they think this will happen if they say "No" to everything President Obama proposes and wait for the underlying economic tsunami that is poised to wash up on our political shores (the numbers surrounding bank positions on derivatives are truly scary).

They are banking on additional meltdowns and bailout fatigue. Like political vultures, they are waiting for system rot and the smell of death. Hence the non-cooperation.

Obstructionism and a lack of cooperation worked for Republicans at the national level in 1994 (led by Gingrich), and in 2003 with California Governor Gray Davis (led, in part, by current minority Deputy Whip Kevin McCarthy). The goal is not to govern, but to obtain power. It makes no difference to Republicans that the ideas they offer today – more tax cuts and deregulation – are the exact same ideas that ran this country into the ground under Bush.

You’re probably scratching your head, and asking yourself, “Are they really thinking like this? ... Do they really think America will forget?" The short answer to these questions is YES.

Like I said, Republicans think America is inhabited by a nation of morons.
___________________________________________________

OK, back to the present ...

Pretending to stand on principle (where were these guys when Reagan tripled and Bush II doubled our nation's debt?), the GOP's "just say no" program was noticed by the NY Times in October of 2009, but it really began during the health care debate under Newt Gingrich in 1993, as Adam Clymer documents here.

Now, think back over the past 2 1/2 years and ask yourself if the GOP has tried to work with President Obama to correct the mess that President Bush left behind.

* Repeal President Bush's budget busting tax cuts, which cost $300 billion per year? No.

* Repeal of President Bush's Medicare Part D, which costs $40-70 billion per year? No.

* Bringing the troops home from Iraq and Afghanistan, which costs $250 billion per year? No.

* A jobs or stimulus program to deal with the $250 billion a year hit we're taking because of the 2008 meltdown? No.

* Reining in the bailout gravy train (and pursuing the crooks on Wall Street), which costs at least $250 billion per year? No.

* Asking our nation's wealthy and upper middle class to cut back on some of their tax deductions, which cost us about $1.2 trillion per year? No.

They won't even consider cutting back on oil subsidies though the industry is making record profits. Simply put, the GOP isn't serious about the debt, or helping President Obama fix the economy unless it's done their way.

My new prediction? The GOP's going to do what they can to kill anything of substance that President Obama proposes on jobs. And if they do offer to help they won't touch tax cuts for the rich, or their tax deductions. Instead, their help will come with the poison pill of more cuts on insurance and other programs that help America's middle class and the poor. Then they'll propose more of President Bush-style tax cuts and deregulation programs.

What a mess.
___________________________________________________

- Mark

BEN'S SPEECH WON'T FIX ANYTHING ... OUR MARKETS JUST AIN'T RIGHT

Do you want proof that our markets are out of whack? Check out the following chart, which comes to us via Barry Ritholtz' The Big Picture.  Make of this what you will, then follow me below ... 

My thoughts? We just experienced a market collapse, and are poised to enter a second recession. Yet, the stock market is still above the point at which Alan Greenspan thought we might be entering a period of "irrational exuberance" in 1996.

As I've written about before, I think what you see in the chart above can be attributed to several factors.


1. The Fed's seemingly never ending money dumps (started after Reagan fired Paul Volcker), which are designed to boost markets when they stumble (a.k.a. the Greenspan Put).

2. Financialization run amok (due, in part, to the rise of the symbolic economy and deregulation).

3. The market's herd mentality (made possible, in part, by centralized modeling and market zombies).

4. Accounting gimmicks & fraud (a market staple that acts like Ritalin).

5. All of the above ...


Take your pick. You can make a case for any one of the choices here.

For my money - as those of you who read regularly have probably guessed by now - it's #5 ... "all of the above." This why I think Fed Chair, Ben Bernanke, will let the world know tomorrow, in Greenspan-like fashion, that the money's still going to be cheap, and/or that another money dump is on the way (though it will probably be clouded in murky Fed-Speak).

Whatever it is, our markets ain't right. And Bernanke's speech tomorrow won't do much to fix it either.

- Mark

UPDATE: It's déjà vu all over again. It was February 2007. Market were in a tizzy over stocks went crazy on February 27. Ben Bernanke came out and said that "markets were working well" and that he expected the U.S. economy to pick up. Then we have his other gaffes (including 5% unemployment through 2011). Fast forward 4 1/2 years to August 2011. Markets are worked up over recent roller coaster rides on Wall Street and what appears to be an imminent recession. Today Federal Reserve Chairman Ben Bernanke said the U.S. is on track for long-term economic growth and announced no new economic stimulus measures during his speech at a conference in Jackson Hole, Wyo. But he did leave open the possibility of more action by the Fed if another recession looks likely. If we look at Bernanke's track record, and translate from the Fed-speak, this is what we get: We're in trouble. Expect another money dump.

FALSE EQUIVALENCY AND THE GOP's CULTURE OF LIES

"The great enemy of the truth is very often
not the lie, deliberate, contrived, and dishonest,
but the myth, persistent, persuasive, and unrealistic."

- John F. Kennedy

Have you ever wondered how Fox News, Rush Limbaugh, and other conservatives have been able to convince so many Americans to turn against President Obama, or to work against their own interests? It's tied to disinformation and a culture of lies, and can be traced to something we call false equivalency. Here's how it works.

False equivalency occurs when someone falsely compares what one person did (or does) against a "similar" action without taking into account context, wide differences, and facts that make the comparison ridiculous. It's a technique designed to distract and dilute the facts, which is crucial if you want to muddy the political waters, or provide cover for failure.

It can be as simple as someone staying up all night with a sick baby and then saying, "I'm tired, I didn't sleep at all last night because I stayed up caring for the baby," only to be met with, "Yeah, I'm tired too, I stayed up past my bedtime watching Jay Leno." Another example of a false equivalency (FE) might go something like this claim, which I dealt with yesterday on the Jaz Mckay radio show.

I came to this country as a Canadian, but I assimilated and eventually became a U.S. citizen legally. All Mexicans should be able to assimilate, and become a legal citizen like me, as well.

The reality here - which I incorporated into my reply (after I asked a few questions) - is that assimilation is much easier if you have a law degree (the caller did), if you already speak English, if you're fair skinned, and if you arrive in the U.S. from an Anglo-Saxon country, like Canada. These factors are far different than if you are a poor, uneducated, Spanish-speaking Mexican.

The Canadian-Mexican comparison is not the same. It is a false equivalency comparison designed to ignore or hide very real contrasts.

So, why am I bringing this up? Because of an evolving story that's starting to gain traction in conservative circles. The story began with President Bush in 2008 (and perhaps as early as 2000, as we'll see).

As he was preparing to leave the White House President Bush, with the economy collapsing, President Bush falsely claimed that things weren't so bad because he entered the White House with a recession, and was leaving with a recession. Specifically, he said during his final press conference as president:

"In terms of the economy, look, I inherited a recession, I am ending on a recession."

Nothing to see here. I'm leaving things exactly as I got them. Right ...

Look, at the end of the day the economic situation that President Bush inherited was in no way comparable to the economic disaster that he left President Obama. To make the claim that President Clinton left a recession is delusional. But wait, it gets better. It's also a lie.

According to the National Bureau of Economic Research a recession is officially declared when you have two consecutive quarters (six months) of GDP decline. This never happened under President Clinton. Growth slowed during one quarter, but not two. But the deception doesn't end there.

President Bush conveniently ignored that President Clinton left him hundreds of billions in budget surpluses. The CBO projected that these surpluses would grow and generate about $5.8 trillion by 2011. President Bush blew through all of this, then left President Obama with annual trillion dollar deficits.

But this didn't prevent President Bush and his team from lying about the "Clinton's recession" (that never was) so that they could falsely draw parallels to the "Bush recession." And it worked. By 2004 the false equivalency "Bush Recession = Clinton recession" claim had at least 62% of Americans believing the falsehood that an economic recession "began during Bill Clinton's administration, before George W. Bush took office."

Along the way Team Bush and the GOP were aided by Fox News, Rush Limbaugh, and other conservative mouthpieces. This is important to understand today because two of the biggest mouthpieces of the right - Rush Limbaugh and Sean Hannity - are now planting the utterly false idea that when President Bush left office the unemployment rate was around 5.6% . Huh?

Check out this chart on unemployment rates from the Bureau of Labor Statistics ...

No matter how you slice it, when President Bush left office at the beginning of 2009 the unemployment rate was right around 7.5%, and climbing. Proving that stupidity and mendacity are contagious among like minds, on Monday Sean Hannity claimed that President Obama "inherited unemployment at 5.6 percent."

Both Limbaugh and Hannity lied by deducting two percentage points from Bush's unemployment figures simply because they want to attack President Obama, and then get America to abandon him. If the economy and the nation go down in flames in the process, too bad. 

What's happening here is that the far right is in the process of trying to rewrite history, not so much because what they say is true, but because they understand that false equivalencies that involve lies actually work. Suggesting that what President Bush left President Obama is equivalent to what Bush inherited from President Clinton is patently false, and part of an evolving narrative of lies.

If the GOP can wrap these lies up into another false equivalency story about unemployment and the economy, even better. The question is whether the American public will fall for it, again.

- Mark

WHY CAN'T THE GOP DO THE MATH?

Recently I wrote a couple of op-eds for our local paper, the Bakersfield Californian. There were several responses from community members, one of which said President Bush's annual budgets only added a little over $2 trillion to our national debt. Huh?

Hey, I have an idea. Let's do the math.

     5.6 trillion          (our national debt, December, 2000)

+    ???????            (big mystery ...)

= 10.6 trillion          (our national debt, December, 2008)

Now, try as hard as I can, I can't seem to see how our national debt grows to $10.6 trillion in 2008 by adding only 2 trillion to what we owed in 2000. Can you? This is a real puzzler. So, let's make it even simpler. Does 5 + 2 = 10?  Hmmmm ... I know, tough one.

 

Time to call Stephen Hawking or John Nash ...

All kidding aside, a simple Google search of the Treasury Department, or even Wikipedia, would have showed my friend that President Bush's annual budget deficits added much more than $2 trillion to our national debt.

My guess is that my friend was playing with the rhetoric. He did write that "Bush's annual budget deficits (added to the national debt) totaled $2.006 trillion." This might give him leeway (in his mind) to argue "If you look at President Bush's annual budget proposals you'll see ...". Cute.

Unless you're a professional psychologist, it really serves no purpose to try and understand or explain the logic behind this kind of thinking. So I won't. But as a student of politics, and as an American who doesn't want to see our country driven off a financial cliff, I also understand we can't solve our budget problems by sticking our head in the sand, or being cute with the math.

The real problem with being cute with the numbers, and the subsequent factual disconnect in the GOP, is that it's been going on for some time now.

For the better part of two decades the GOP has conveniently forgotten that President Reagan raised taxes 11 times, raised the debt ceiling 17 times, and effectively tripled our national debt from $950 billion in 1981 to $2.7 trillion at the end of his presidency. Yet, the GOP persists in the idol worship of Reagan, calling him a tax cutting fiscal conservative!

The math isn't very difficult here (who can't count to 11, 17, or 3?), so why the disconnect?

More recently, I had a friend (who's a conservative republican) argue - as do many other republicans -  that the Clinton surpluses weren't real. I know that this mind-set is a way for the GOP to ignore that the Bush administration blew through $5.6 trillion in projected budget surpluses after 2001. Still - and although I'm nobodies idea of an accountant - I decided to explain the math behind the Clinton surpluses. I took my time and explained on my blog (very slowly) why my friend might not believe Clinton's surpluses were real. Then I explained (very slowly) why the Clinton surpluses were real (the key is distinguishing between annual revenue and total debt).

It didn't make a dent. Sigh.

Like Galileo's colleagues (and the Church), who refused to look through his telescope for fear of what it might do to their narrow-minded world views (they were afraid of learning that the earth moves), many in the GOP are afraid of what looking at the facts will do to their world.

So, they play games, and refuse to do the math.

This explains why, in spite of evidence to the contrary, many in the GOP can say with a straight face that President Obama created our trillion dollar deficits. They don't do the math, which allows them to ignore what unfunded wars ($300 billion), unfunded insurance giveaways ($70 billion), unfunded bailouts ($350 billion), unfunded tax cuts ($300 billion), and the unfunded costs associated with financial losses from the market collapse ($250 billion) have done to our budget numbers since 2008.

Worse, like the petulant kid in the back of the room, the GOP blames the guy next to him for the problems they caused.

At the end of the day, President Reagan effectively tripled our national debt. Then President Bush II doubled it (and he started with annual budget surpluses!), and left a mess for President Obama to clean up. The GOP ignores these inconvenient truths, and then fail to do the math because it's politically convenient not to. 

Our problem now is that it's threatening the financial stability of our republic. Whatever happened to America First?

- Mark

GOP STILL PEDDLING BUDGET MYTHS

You can find my most recent article on GOP budget myths - "GOP still peddling budget myths" - in the Bakersfield Californian here.

I'll post the entire piece, with pictures, at a later date.

- Mark