WEALTH EXTRACTION 101

Remember this? (full view here; thanks Seven)

This chart explains who owns the title to one home in America. It was put together by a securities analyst who wanted to know who held the title to his home. It took him one year to figure this out. Here's the incredible part. It's the day job of this analyst to figure this stuff out on a daily basis.

Yeah, I know. Property rights in America shouldn't be this difficult. What a mess.

Anyways, I wrote about this and the legal maze that makes our financial and real estate markets such a mess earlier (here and here). Specifically I wrote that the very notion of property rights in America may be in trouble because of how Wall Street wanted access to income streams (to create securities), but didn't want to actually produce anything for the money. So they found a way to dump the actual title (plus the administrative and legal responsibility) of a home on to an obscure mega corporate entity called Mortgage Electronic Registration Systems (MERs). Then - in a demonstration of wealth extraction at its finest - they siphoned off the house payments into another legal maze (of securities) that benefited a few Wall Street market players.

And just like that, a small group of market players were able to make claims on millions of mortgage payments (through various "security" instruments) without having any responsibility for filing, registering, and tracking who owned the note on the house. (If you're looking for a metaphor it's kind of like handing the car keys, your wallet, and a keg of beer to your unemployed cousin and telling him to have fun.)

This is where it gets real good.

Rather than deal with homeowners after the mortgage bubble collapsed - and after their mortgage payment-security scheme went bust - Wall Street and other big market players said: "We can't negotiate with homeowners because we don't have the title to the home (MERs does). And besides, the loans have already been sold several times over ... oops."

Then, while threatening that system collapse was imminent if they didn't get bailed out, Wall Street and America's biggest financial players got the federal government to provide them with trillions in taxpayer backed guarantees. Why should big banks and Wall Street have to negotiate with homeowners (and learn from market justice) when Uncle Sam can foot the bill for their greed and arrogance?

Trillions of dollars in bailout money are now being used to purify and prop up an entire industry, while filling financial holes created when the income stream (i.e. mortgage payments) behind Wall Street's (pyramid) security schemes dried up.

Again, wealth extraction at its finest (if you're wondering why Wall Street isn't in jail, me too).

Anyways, I'm writing about all of this (again) because of how this Harper's Magazine article on MERs (hat tip to Barry Ritholtz) explains how Wall Street can make claims on money without actually producing anything of value. It also helps us all understand how our nation's biggest market players have undermined our nation's market integrity, while making a mockery of property rights in America.

If you care about the Constitution (hello, Tea Party) and the future of our nation this is one of the areas where you should be directing your attention.

- 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

PRISON INC. USA

The United States has less than 5% of the world's population. Yet, we have 25% of the world's total prison population. OK, let's hear it, "We're #1, we're #1 ..."

How much does our punitive and wasteful prison culture cost America? Think about this: If California emptied its prisons today and sent every inmate to college in California we would save almost $7 billion per year. Check it out ...

Created by: Public Administration


Here are a few more numbers ...

Now, I'm not saying that we should empty our prisons, but we definitely need to have a discussion about our priorities. And, yes, the Tea Party should be all over this issue too.

- Mark

TEA PARTY FUNNIES

With all the Tea Party-driven budget threats going on, I thought it would be nice to have some fun and post a few Tea Party comics, by assorted artists, from The Week. 


Let's start with one of the dominant Tea Party stories most Americans are seeing today ...

But the real Tea Party story today - good, bad, or indifferent - is what's happened to both the Republican Party and the Democratic Party during these budget talks ...

What's interesting though is that most level headed GOP and Tea Party supporters understand what their "no tax" pledges really means in the long run ...

Still, it's the GOP who's taking the brunt of the Tea Party challenges and demands ...

As Speaker John Boehner has been learning over the past year ...

But we still need to remind ourselves - and the Tea Party supporters - that regulation and taxes on wealth have never been the issue, as Teddy Roosevelt made clear over a century ago ...

- Mark

P.S.: Oh, almost forgot this one from South Park (fair warning, language may be offensive to some) ...

T.M.I.
Tags: SOUTH
PARKEric Cartman,Principal Victoria,more...

Kudos to Rafael for the lead-in to this ;-) ...

THE TEA PARTY'S DUELING BANJO-LIKE PROPOSALS

Have you ever wondered what politics would look like if America's backwater, dueling banjo-like, politicians ever took over? Well, look no further than this Dana Milbank piece.

It details some of the backward looking initiatives coming from our Tea Party inspired politicians from across the nation. The article might be funny if it weren't for the fact that some of the proposals are quite serious (with many already made into law). Here's a snippet from the Milbank article:

Some of the proposals are ominous: South Dakota would call it justifiable homicide if a killer is trying to stop harm to an unborn child.

Some are petty: Wyoming, following Oklahoma, wants to ban sharia law, even though that state’s 200-odd Muslims couldn’t pose much of a sharia threat.

Some are mean-spirited: Iowa would allow business owners to refuse goods and services to those in gay marriages.

Some are fairly harmless: Arizona took actions to make the Colt Single Action Army Revolver the official state firearm and to create a Tea Party license plate.

And some are just silly: A Georgia bill would require only “pre-1965” silver and gold coins for payment of state debts.

While many Tea Party proponents like to claim their comments are just "jokes" taken out of context, their suggestions - like shooting immigrants from helicopters - are usually followed by comments like this one from a Kansas caucus chairman: “I was just speaking like a southeast Kansas person.”

Great defense ... "I was just saying what everyone else here is thinking." Bring out the banjos.

- Mark

ARE THESE GUYS BECOMING CARTOON-LIKE?

You know how Texas Governor Rick Perry - in an effort to look like a macho tough guy - has been pandering to the right wing extremists of the GOP? Well, after reading this, and looking at this picture ...

... for some reason all I see is this ...

To be sure, Perry was using the gun in the picture above at a racing event. But you get the point.

- Mark

"WE THE PEOPLE"? NOPE, THEY'RE EXTREMISTS ...

I've commented on this before (here, here, and here), but I'll say it again: The Tea Party movement does not reflect mainstream America. The group is really little more than disgruntled Republican Party extremists in political drag.



Here's some numbers that make it very clear what we have is really weak tea.

- Mark

P.S.: If you're wondering what happened in the last election, keep in mind that the election was not a referendum for the Republican Party, or the Tea Baggers. President Obama and the Democratic Party have done their level best to leave Independents and their Democratic base uninspired. People are still pissed off about the bailouts and how the American consumer/taxpayer/homeowner/worker are getting the shaft in all of this. Suggesting that the Tea Party movement should get credit for the 2010 electoral outcome is like claiming roosters should get credit for the sun coming up.

BEWARE OF TERRORIST MOSQUE BABIES ... AND OTHER GOP DISTRACTIONS

Do you want to know what the political strategy for the Republican Party is this November? Check this out ...

That's about it. The GOP knows they can't run on their "let's-cut-taxes-and-deficits-will-disappear" record in November. The truth behind that lie has been exposed. Their record on two failed wars is nothing to write home about either.

And forget about bringing George W. Bush back to campaign for candidates. Even die-hard republicans know that he's an embarrassment. History will show his presidency to be a train wreck of epoch proportions ...

The goal of the republican party this November is to distract and trot out false threats that have little to do with what actually confronts our country. The goal is to encourage Americans to forget about the Bush years, and to remind Americans that they need to fear what the GOP fears ... which is pretty much their own shadow.

In this case their shadows are being followed by a spooky set of foreigners, led by Terrorist Babies, Undocument Workers, and non-existent mosques being constructed in lower Manhattan. Think about it. How many times over the past month have you been told to be afraid of this guy ...

And, of course, we know many terrorists (and their babies) crossed the border from Mexico 35 years ago in order to fly airplanes into buildings. You know, the guys that looked like this  ...

You would think that after years of being lied to by George W. Bush (are we still looking for those WMDs?), and being told to be afraid "or else", that Americans would be used to hearing about false enemies built on a pack of lies. Apparently not.

Instead, we're treated to the idiocy of Newt "I'm-Working-On-Wife#4" Gingrich, and assertions that building an Islamic community center (it's not a mosque) two blocks away from ground zero is akin to the nazis building a center close to a cherished Jewish site.

Apart from the fact that not all muslims are terrorists, we need to consider what it means that republicans and conservatives want to turn the proposed community center in Manhattan into a wedge issue. To be sure, people on the left like Senator Harry Reid (D-NV) have jumped on the "let's be afraid" bandwagon. But we need to remember that Harry Reid is in the middle of tough election, where the nut jobs (i.e. the Tea Baggers) are out in force. 

The reality is that the GOP wants you to forget how their failed policies gave us the Bush Debacalypse, which we see in two failed wars, a collapsed economy, and political incompetence of the highest order. This is why the GOP wants you to stare into the political equivalent of this ...

Go ahead and stare.

And then go ahead and focus on a non-existent Manhattan mosque that will surely house undocmented terrorist babies from Mexico. But stare into the optical illusions first. At least it will challenge your senses into considering the deceptive force of optics.

But beware. Following the GOP's lead on things like terrorist babies in non-existent mosques will only lead you down a crippling mind path sure to make you crazy stupid. Oh, look, a shiny spoon.

- Mark

THIS WEEK'S VILLAGE IDIOT

Rep. Michele Bachmann (R-MN) thinks that the Republicans should spend all their time investigating the Obama administration if they win in November.

"Oh, I think that's all we should do ... I think that all we should do is issue subpoenas and have one hearing after another, and expose all the nonsense that has gone on. And it's very important when we come back that we have constitutional conservative leadership, because the American people's patience is about this big. So we have to make sure that we do what the people want us to do."

So when the Bush administration created massive deficits, ran our economy into the ground, and then ran roughshod over the Constitution, that was fine by Bachmann. Trying to clean up Bush's mess? That deserves to be investigated.

What an idiot.

- Mark

Keep in mind that Bachmann has a history of saying things that don't make sense. Here's a small snippet ...

SCORE (YET) ANOTHER ONE FOR FOX NEWS

If you're wondering what to make of the race-baiting train wreck surrounding Fox News and serial distorter Andrew Breitbart - and their current pawn, Shirley Sherrod - you can start by reading Bob Cesca's piece here. I think he's correct when he says that Fox News and their fraud machine will do this again because:

... the traditional news media and, to a certain extent, the Democrats including the president, are too easily cowed by right-wing freakouts.

But it's actually worse. As Cenk Uygur of The Young Turks points out, the Obama administration has increasingly become a team of political cowards -- desparate not to be called names by the unethical media clowns at Fox News. When it comes to staring down Fox News, Cenk Uygur points to a disturbing trend:

Van Jones, ACORN, Dawn Johnsen, Shirley Sherrod. First sign of trouble, throw someone overboard ... Do you think the bully won't take your lunch money tomorrow if you give it to him today?

I don't want to dwell on the race issue here because it's really a distraction. And besides, doing so buys into the small-minded tactics used by Fox News and the far right (though Breitbart's still trying to keep the race issue alive). We should be concerned about how they are achieving their much larger big picture strategy: Fox News and the far right don't want President Obama to govern, let alone govern effectively. They want him to fail.

Keeping President Obama off balance by muddying the policy waters, and forcing him to concentrate on obnoxious media distractions, helps them achieve this goal. And they have plenty of help.

The Party of No - who provide useful political props for Fox News programming - has forced President Obama into meekly accepting a 60-vote, filibuster proof, environment in the Senate. This is a travesty of our democracy. But Team Obama accepts it in an effort to convince Independents to vote for and work with them. Then we have the Tea Party idiots. As I've pointed out before, they're not grass-root patriots. They're disgruntled Republicans who are pissed off that their team lost in 2008. They're recycled John Birchers ... old wine in a new bottle.

Worse, Fox News has a seemingly endless Mini Me team of Andrew Breitbarts, who are ready to follow Glen Beck's lead, doing what's necessary to bring the Republican Party - and their failed ideology - back into power in 2010. To date, this is what this mafia of mediocrity has achieved:

* President Obama caved in to fears of being called a socialist when he should have nationalized our failed financial institutions, and then fired the executives who ran their companies into the ground.

* President Obama caved in to fears of being called a communist when he allowed the banksters to walk away with billions in taxpayer funded bonus payouts, without even a threat of a retroactive (clawback) tax.

* President Obama caved in to fears of being called a Nazi when he failed to push for a genuine public option in the health care bill.

* President Obama caved in to being called weak when he sent thousands of more troops into President Bush's failed war in Afghanistan.

And what did President Obama get in return for doing the status quo "centrist" thing? The far right promptly started calling him a socialist, a communist, a Nazi, and a weakling. Oh, and for good measure, he's not their president because he's not a U.S. citizen. Way to go Team Obama. You just got your ass handed to you trying to appease a media clown show headed by Fox News (Shepard Smith excluded).

There's more, but the point is this. If there's no blowback from the real media or the White House against Fox News and Andrew Breitbart we can expect more of this in the future. The lies and innuendo will continue. And we all know what happens if you repeat a lie often enough ...

If there is a silver lining in any of this it's that the Supreme Court has held that you can't yell fire in a crowded theater. We saw how this legal principle could be applied (creatively) in a larger political setting with the backlash against Father Coughlin in the 1940s. Team Obama could learn much by reviewing this history.

I hope they do. Fox News and the far right have moved beyond yelling fire in our crowded political theater. They're now starting them.

- Mark

MY TAKE ON CHRIS MATTHEWS' "THE RISE OF THE NEW RIGHT" DOCUMENTARY

I just finished watching parts of Chris Matthews' one hour documentary on The Rise of the New Right on MSNBC. While it was no doubt enlightening for those who aren't familiar with the history of far right politics, it really shed no real light on the Birthers, the Tea Party movement, the militias, the Black Helicopter crowd, etc. These people have been with us for some time now.

The only difference today is that we have a 24 hour news cable cycle to feed, and a Black man in the White House. You put both of them together with a collapsed economy, brought on by unregulated stupidity, and you can understand the news cycle's need to put some symmetry to the movement.

Let me make this clear, once and for all. These people aren't new patriots, riled up by government tyranny. They're delusional, crazy, and frustrated, people who didn't get their way the last election. Just because they play dress up commando on the weekend, or don 18th century clothing whenever Fox News blows a dog whistle, doesn't make them patriots.

Look, the problems we have today we had under George W. Bush. The problems President Obama's facing today are a direct result of a failed ideology (which we continue to follow in many ways) he didn't initiate. The only documentary the cable programs should be doing on this group are for Animal Planet, or for some deranged Hallmark Life series. Seriously, these people don't need legitimation. They need help.

Stay tuned. I'll have more to say about this at a later date.

- Mark

TEA PARTY MOVEMENT: LITTLE MORE THAN DISGRUNTLED EXTREMISTS IN POLITICAL DRAG?

Yesterday's election results are interesting because it demonstrates that the Tea Party Mojo that Republican Party members like to claim as their own might be little more than Hate Talk Radio (+ Fox News) smoke & mirrors, at best. The energy that got President Obama elected is still alive, and might be the real center of our political universe. There's two reasons why this may be the case.

First, the Republicans lost a congressional seat in a district that John McCain won to Democratic candidate Mark Critz. This means that among the four congressional special elections held since President Obama was elected, Democrats have (1) won a seat Republicans had held since the 1850s (NY-23), (2) held Kirsten Gillibrand's tough seat (NY-20, a Republican leaning district), and (3) won in the only district in the country that McCain won after Kerry had carried it in 2004 (PA-12).

This suggests that, for all their talk about fearing Obama, Pelosi, Democrats and deficits (a Bush legacy) the American public just might fear letting the Republican Party have another bite at the apple even more. This is not good for a party that's been popping off about taking over the House, or that 130 seats might be up for grabs in November.

Second, since President Obama's election, electoral events in the Senate don't necessarily bode well for the Republicans. Scott Brown's victory in Massachusetts is seen less as a harbringer of things to come for Republicans, and more as an overhyped media talking point. Brown is no dependable Republican. More importantly, yesterday's results tell us that while Democratic progressives may be disappointed in President Obama siding with Wall Street, they're still pissed off and ready to go after lukewarm Democratic incumbents who seem too cozy in Washington.

Arlen "It's-All-About-Me" Specter is out in Pennsylvania. Democratic Senator Blanche Lincoln (a serious corporate tool) is on the ropes in Arkansas. This means that progressives, liberals, and Democrats are under no illusion that simply electing President Obama is going to fix the country. He's going to need to be pushed, and he's going to need help. Democrats seem to understand this, now. 

Worse, for the Republicans, is that they now have to deal with their newest Tea Party darling, Rand Paul, in Kentucky. Check out this interview. It's stunning for what it reveals about Paul, and the Tea Party.

Visit msnbc.com for breaking news, world news, and news about the economy

In a few words Paul demonstrates that the Tea Party libertarian market views are really more in tune with a segregationist "States' Rights" platform than they are with America's historic mission. Seriously, for Paul to suggest that private commercial interests should be allowed to discriminate - while saying he's opposed to racism - is like saying you're a family values man, and then standing by and claiming it's a "family matter" when asked about your wife beating, child molesting friends (or is that more like proposing abstinence programs for teens while you're having an affair with a staffer?).

Look, if the state has no interest in preventing prejudice and hate from infiltrating society, even those owned by private parties, what's to prevent segregationists, supremacists, and outright racists from carving out entire regions of the country under the pretense of creating "free market" havens? It's been done before. Only then we called it states' rights.

As James Madison made clear, "If men were angels no government would be necessary." Guess what? We're not angels. Just because you (or your Tea Party supporters) have a Unicorn-like belief in markets will not alter this simple reality. You can't wish something true, no matter how much you believe it.

What becomes clear from the Rand Paul interview is that the Tea Party movement is slowly being exposed for what it really is: A mix of disgruntled Republicans and far right extremists in Political Drag. At the end of the day, while they get to play dress up and yell and cry like they belong in an institution, they're still nuts.

All of this is important because with Republicans stonewalling on any kind of financial reform, and weak-kneed Democrats pushing financial reform that doesn't quite do the job because of gaping loopholes, we're pretty much looking at another market meltdown. Those of you who follow this site regularly know why. Putting Tea Party candidates and their narrow-minded, Republican-on-Steroids, policies in office again would only make things worse. We can't afford another generation of misguided deregulation and tax cuts for the rich.

If there is a positive side in this environment (to the extent that there is a silver lining), we have this: If a market meltdown does occur before a strong slate of progressives are elected to office, yesterday's elections suggest that the adults of America are still at work. They aren't resting after President Obama's election. To be sure, they might be ready to pick up pitchforks and torches when the market meltdown occurs. But at least they won't add fuel to the fire, like the Tea Party libertarians seem ready to do.

If it's true that progressive and liberal groups are ready and organized enough to get real Democrats elected - and with the Tea Party being exposed every day as little more than the extreme wing of the Republican Party - we might actually get to see real some reform done over the next few years.

With that, let's keep in mind that FDR didn't create the New Deal in a year (or two). The extremists in political drag might not like it, but President Obama still has time. More work needs to be done. Stay tuned.

- Mark

EVEN REAGAN WASN'T REAGANESQUE

A great example of how out of control the far right has gone is this piece from Newsweek (hat tip to Candi). From "purity tests" to demands that political candidates comply with eight of the Republican party's 10 "Reaganite" principles, the modern GOP has demonstrated that they are highly intolerant of indepedent or creative thinking. This is an incredible demand given that their last guy almost wrecked the country trying to follow their Reagan principles.

Explaining "why every recent GOP president wasn't conservative enough for today's party" Andrew Romano walks us through some of the policies of the five most recent Republican Presidents. His conclusion? The current GOP and their Tea Party bachannalia have gone off the deep end (actually, that's my conclusion).

Below I've posted what Romano wrote about President Reagan who, by the way, scores only 4 out 10 on the Reagan scale.

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

Fiscal Policy
The RNC based its purity test on Ronald Reagan's "principles"—chief among them a belief in "smaller government, smaller national debt, lower deficits, and lower taxes." But although the Gipper slashed taxes dramatically during his first year in office, the rest of his fiscal record directly violated the very rules the RNC created in his honor. During the Reagan years, federal employment grew by more than 60,000 (in contrast, government payrolls shrunk by 373,000 during Bill Clinton's presidency). The gap between the amount of money the federal government took in and the amount it spent nearly tripled. The national debt soared from $700 billion to $3 trillion, and the U.S. transformed from the world's largest international creditor to its largest debtor. After 1981, Reagan raised taxes nearly every year: 1982, 1983, 1984, and 1986. The 1983 payroll tax hike even helped fund Medicare and Social Security—or, in terms today's Tea Partiers might recognize, "government-run health care" and "socialism."

Domestic Policy
Were it enacted, the RNC's Ronald Reagan purity test would've also put Reagan in the crosshairs for a number of his signature domestic policies. "Oppose Obama-style government run health care"? As governor of California, Reagan nurtured and eventually expanded Medi-Cal, the nation's largest Medicaid program. Support "market-based energy reforms"? In California, Reagan established the Air Resources Board to intervene in the market and fight smog; as president, he signed more wilderness-protections laws than any president before or since. "Oppose amnesty for illegal immigrants"? In 1986, Reagan passed the Immigration Reform and Control Act, which eventually granted amnesty to 2.7 million illegal immigrants, and he continued to speak out for immigration rights after leaving office. Support "the right to keep and bear arms by opposing government restrictions on gun ownership"? Actually, Reagan was a staunch backer of the Brady Bill, urging Congress in 1991 to "enact it without further delay." To win the RNC's blessing, according to the purity test, a candidate would've had to support eight of 10 so-called Reaganite principles. But Reagan himself wouldn't have come close.

Foreign Policy
Foreign policy is where Reagan seems safest, at least at first glance. But despite his Cold Warrior bona fides, the Gipper still would've had a tough time pleasing today's conservatives. For starters, he refused to send more troops to the region when Hizbullah murdered 243 U.S. servicemen in Beirut in 1983, choosing instead to immediately withdraw the Marines remaining in Lebanon. Now, that would be a violation of the RNC resolution requiring candidates to back "military-recommended troop surges" in the Middle East. And in 1981, Reagan condemned Israel's preventive strike on an Iraqi nuclear reactor, which doesn't jibe with the RNC's demand to "[support] effective action to eliminate th[e] nuclear weapons threat" in North Korea and Iran. Sure, Reagan may have ended the Cold War and all. But would it have been enough to win the Iowa caucuses?

Social Views
Reagan was born in 1911, and his social views were largely in line with midcentury norms. But compared to other conservatives—especially the evangelicals who helped elect him and still dominate the GOP base—his record on social issues while in office was remarkably undogmatic, especially for his time. In 1967, he signed a law in California that legalized millions of abortions. In 1978, he opposed California's Proposition 6 ballot initiative, which would've barred gay men and women from working in public schools, and risked what his advisers predicted would be political suicide in taking to the airwaves to denounce it. Later, Reagan would become the first president to host an openly gay couple overnight at the White House. In 1981, he defied Jerry Falwell and other evangelical leaders by nominating Sandra Day O'Connor to the Supreme Court. A moderate, she would go on, along with one of Reagan's other nominees, Anthony Kennedy, to vote to uphold Roe v. Wade. As Peter Beinart has put it, "Turns out this Reagan guy wasn't really that Reaganite after all."

- Mark

THE BIG LIE & THE GOP

Remember when Dorothy clicked her Ruby Red Shoes in The Wizard of Oz and repeated "There's no place like home"?



Repeating "There's no place like home" over and over again eventually put Dorothy back in a safe place, and told audiences across many generations that all we need to do is repeat pleasing thoughts during times of trouble and we could move the world. Of course, Dorothy is only an imaginary character in a wonderful film that depends on it's audience suspending reality. Repeating safe thoughts, or repeating anything for that matter, will not change your physical environment.

Still, the idea of repetition moving people to another world of the mind is real, and does have it's applications. Positive thinking can be useful. But repetition also has a brusque, darker, side. Without mincing words, it's called the "Big Lie" and is a very successful propaganda technique.

Popularized by Adolf Hitler in Mein Kampf (1925), the Big Lie centers around manipulating information so blatantly, or telling a lie so big, that no one would believe that - in Hitler's words - someone "could have the impudence to distort the truth so infamously." The Big Lie was taken up by Joseph Goebbels, who was Minister of Propaganda in Nazi Germany from 1933 to 1945, and taken to new heights.

In a psychological profile of Adolf Hitler the Office of Strategic Services (OSS, the forerunner to the CIA) put out a book titled A Psychological Analysis of Adolf Hitler. Here's what the OSS had to say about Hitler's rules, which his Nazi henchmen would follow diligently:

... never allow the public to cool off; never admit a fault or wrong; never concede that there may be some good in your enemy; never leave room for alternatives; never accept blame; concentrate on one enemy at a time and blame him for everything that goes wrong; people will believe a big lie sooner than a little one; and if you repeat it frequently enough people will sooner or later believe it.

I bring all of this up because a pattern is emerging from our political right: It doesn't matter what the truth is, as long as you tell a lie often enough people will eventually believe it.

Today it's Mitch McConnell and John Boehner criticizing financial reform. Proving that they are merely talking heads for Frank Luntz and his incessant Memo to GOP game plans, both are parroting Luntz's "Language of Financial Reform" talking point. Specifically, they are repeating Frank Luntz's "permanent bailout for Wall Street" language that he drew up months ago. MSNBC's Rachel Maddow does a great job of outlining how this came about here (watch the entire clip).

Visit msnbc.com for breaking news, world news, and news about the economy

The funny thing about this is that Mitch McConnells' insincerity is so blatant that his home state's largest paper called him out on it. More specifically, Kentucky's Herald-Leader referred to McConnell's pandering to Wall Street, and how he parrots the financial reform memo written by GOP mind manager Frank Luntz. Here's a snippet:

McConnell's statements are perfectly calibrated to inflame the public. He insists the bill would "allow endless taxpayer-funded bailouts for big Wall Street banks." Their resemblance to the truth is another matter.

You can read the entire piece here, which I highly recommend.

How bad has this Big Lie script gotten? Republicans have no problem promoting lies about a "Death Tax" (the estate tax), Death Panels (end of life counseling), Armageddon (fill in blank______), Obama's a socialist, Obama's a communist, Obama's a Nazi (intellectually you can't be all 3), Obama Deficits (actually inherited from Bush's disasters), and how taxes are going up (they've actually fallen for 95% of all Americans).

Then we have the little big lies from the birthers, the "he's a Muslim" crowd, the "he's not one of us" crowd, the "he makes us less safe" crowd, etc.

Look, at the end of the day we know where all of this is coming from. Republicans, Tea Partyers, and Conservatives are upset with who's in the White House and that a women from San Francisco is Speaker of the House. Throw in the fact that the top Democratic mouthpiece on financial reform (from the House of Representatives) is a homosexual, while President Obama's Chief of Staff is Jewish ... well, you can see where this is going.

Don't believe me? Take a look at the Tea Party crowds. I don't see America there. I see a fringe mob that's pissed off their team lost. They are not democracy in action. They are a sore losing mob. If I'm wrong, someone needs to explain to me why.

You will also need to explain the need for the Big Lie(s).

- Mark