Bailouts Through American History

Bailing out failing sectors of the American economy isn't unique, and there is a handy chart now available at propublica.org. The chart has converted the financial exposure into 2008 dollar terms, so that it is comparing apples with apples.

The first bailout was of the Penn Central Railroad, which eventually brought us Amtrak, and in cost terms totaled $3.2 billion. That was during the Nixon administration. OK, socialization of the railroads occurred during a Republican administration.

Actually looking down the list, all of the bailouts, have occurred during Republican administrations! Lockheed, Franklin National Trust, Chrysler, New York City, the Savings & Loan debacle, the airlines after 911, and now this financial mess.

Should that be telling us something about how Republicans govern or more accurately, fail to govern, with their free market deregulation and the resulting greed factor when left to self-regulation?

Last night on Bill Maher, Andrew Sullivan , the conservative writer who hates Bush claimed that this current financial crisis was brought on by the stupidity of American people who bought homes they couldn't afford with mortgages that they couldn't afford. He laid everything on individual irresponsibility. Naomi Klein, the author of "The Shock Doctrine" countered that the crisis is the result of the "ownership society" tauted by the Bush administration that resulted in massive profits for the same companies that are now verging on bankruptcy. The bailout might mean the loss of social programs, perhaps even the privitization of Social Security, if the wrong people get elected in November.

Without counting in the cost of any upcoming legislation that might shore up the banking industry, so far in the last few months, the Bear Stearns, Fannie and Freddie, and AIG bailouts have cost $315 billion.

In 2005, Congress, at the behest of the credit card industry, passed a new bankruptcy law, that makes it harder for consumers to file for bankruptcy, and to insist on credit counseling before one might file. See this comprehensive and accessible article on the new law.

Under the new restrictions, consumers have to pass a means pre-filing test to determine whether they can discharge all of their debt, including credit card debt, or be forced into an onerous pay-back schedule. In addition, a consumer's net worth has a higher valuation formula, there is more paperwork and consequently, higher attorney's fees to file.

So, let's get this right: deregulation allowed mortgage companies to engage in knowing fraud when they sold consumers mortgages based on unverified income and facially unaffordable rates, often in neighborhoods that had previously been red-lined. The mortgage brokers were paid commissions based on percentages over risk assessment. Money, money, money. These mortgages were bundled and resold as highly rated secure investments, rather than dangerously unsecured ones, to financial institutions around the world. Money, money, money. Once the housing bubble burst, the government is bailing out the same financial institutions that profited from their greed and complicit fraud. But now the consumers, the ones who can't afford to live in their homes anymore, have a rough trail to hike in order to file for bankruptcy.

This is why Congress has to make sure that any upcoming legislation includes consumer relief. Otherwise, ordinary people will have no recourse and no hope of ever getting out of debt. Unfortunately, too many people borrowed money from their credit cards to pay monthly mortgage bills, and those trailing balances, as we know, are charged usurious interest rates. I've heard of trailing balances getting hit with 30% interest charges!

This is probably why there has been an increase in support once again for Obama.

A Subversive Contribution in Honor of Sarah Palin

Here's a great way to get off the complaining track about Sarah Palin and do something smart and good. The idea was developed by someone on the email trail. Everyone contribute to Planned Parenthood, in honor of the abstinence only, infanticide-attempting mother and soon to be grandmother. The idea is to make a contribution and have the acknowledgment sent to McCain Headquarters.

So, here is the link to Planned Parenthood's donation website. And then ask that the note telling Sarah that you have honored her so be sent to:

McCain for President
1235 S. Clark Street, 1st Floor
Arlington , VA 22202

It's subversive, it's a great cause, and it makes me laugh after an incredibly difficult, anxious week.

The Bubble is Burst

All of the hysteria about Sarah Palin appears to have been diffused by some fact checking. I somehow feel that the reason why McCain's numbers went down this week is not the result of good journalism, but the fact that The Daily Show with Jon Stewart returned to the air. Let's face it: the "blink" comparison between Sarah Palin's interview with Charles Gibson and all of the George W. videos of him saying "blink" pretty much sent the message that the same handlers are handling two inexperienced and incompetent candidates. The difference, of course, is that George got elected, and we have the opportunity to prevent Palin from doing damage outside of Anchorage.

A great place to watch the figures on the upcoming election is a site called fivethirtyeight.com. Nate Silver is the founder, and he appeared on WNYC's On the Media on September 5, 2008. The transcript is fascinating. He uses a different algorithim to predict election results, and he has been better at it than many other pollsters. Take a look at his website and notice that once again Obama is ahead. The popular vote is scarily close. Now Nate is pushing numbers to see if a tie is feasible.

If there is a tie, the election gets thrown into the House of Representatives after a 41 day cooling off period where people try to convince the electors of the Electoral College to switch their votes. Imagine what that would be like! Then each state, no matter its size, gets one vote. The state representatives vote for the one vote. A majority of states votes in the next president. No one has to pay any attention to the popular vote at that point.

It's only happened once: 1824. It could be just the straw that breaks any remaining trust in the system after 2000 and 2004. Read this NPR article from 2004 for details.

Constitutional Government, Where Did It Go?

Everything about this administration is improvised, reactive, secretive, and unauthorized. Since when does the Treasury Secretary have the legitimate power to loan a private insurance company $85 billion taxpayer dollars without collaborating with Congress? Now, let me see if I remember: all appropriations are supposed to initiate in the House of Representatives. Check your handy copy of the constitution, or click here, if you don't believe me.

No one knows what they are doing, you realize that, don't you? People are making decisions that will affect our lives for generations to come without going through any legitimate process. This is not the way to run a complex government. This is certainly not the way to control a free market economy. Oh, right, when the free market economy goes haywire from greed and racism, then we can have government regulation to protect investors, but not the people who are being forced out of the houses they couldn't afford to buy.

President, oops, I mean Vice President Cheney, according to all reports, improvised everything that happened post 911, without regard to the Constitution, the Congress, the Geneva Conventions, and protocols of government. He dodged the professionals and grabbed all of the power for the Executive Branch, through the artful legal maneuvers of his shadowy attorney, David Addington, except when he was claiming, because his only Constitutional role is to break a tie in the Senate, that he isn't really a part of the Executive Branch, but must be in the Legislative side.

And now reports from Alaska reveal that Sarah Palin and her husband Todd, also ignore law, truth, and the Alaskan Constitution in how she (they) has (have) governed.

Perhaps the next president of the United States should know the Constitution. Oh, right, Barack Obama taught Constitutional Law at University of Chicago Law School for over ten years. He might know a thing about the limitations on the power of the executive branch.

Incompetence as a Strategy to Dismantle Government

It isn't just incompetence, although certainly the Bush administration is incompetent. This administration uses incompetence as a strategy for discrediting government. Dismantle government by appointing not the "best and the brightest" but the crony or the evangelical instead. Discredit government so that we can get rid of it.

Remember Michael Brown as the head of FEMA?

Remember Monica Goodling at the Department of Justice and her hiring based on religious beliefs and a degree from that bastion of excellence Regent University School of Law?

Last night I was speaking with a financial adviser who looked like she aged ten years in just the last few days. "I hope Paulson and the Federal Reserve know what they are doing," she confessed. She didn't exude confidence.

Looking at Sarah Palin, she appears to use the same strategy of governing: loyalty tests and cronism. It appears that she has appointed anyone to state office in Alaska who is still a friend from high school. Didn't Andrew Jackson try to end these practices when he created the civil service?

Yet since Bush took office many career professionals have evacuated the Department of Justice, State Department, Department of Education, Environmental Protection Agency, to name a few. The Voting Rights Section of the Justice Department used to be the place for the smartest young attorneys to post. Their responsibility was enforcement of the Voting Rights Act of 1965, probably the single most effective piece of federal civil rights legislation ever enacted. However, after two presidential elections where caging and voter ID requirements have succeeded in disenfranchising thousands of potential Democratic voters--mostly African American, poor, new voters, and older ones-- clearly the Voting Rights Section has gone the way of the rest of the Bush administration: cronism and incompetence.

It's all strategic, and that is the shame.

The US Commission on Civil Rights, one would believe from the name, would be dedicated to monitoring and confronting the historic discrimination against African Americans. Instead, the Bush administration manipulated the appointment process and stacked the Commission with right wing ideologues who oppose all methods of correcting racial inequity. The current Commission is obsessed with ending all forms of race conscious admissions to colleges and professional schools even though the US Supreme Court permits such considerations. Now the Commission has hired Hans von Spakovsky as a consultant to oversee the upcoming presidential elections although von Spakovsky was not confirmed as a member of the Federal Election Commission because of his radical beliefs.

It's all strategic, and that is the shame.

The Race in the Race for the Presidency

My friend Leslie told me this story about her last visit to the hairdresser: a white woman in her late seventies stated without apology or hesitation that she would never vote for a black man. Period. End of story.

With Obama and McCain in a dead heat, see CNN polling from today, and now even New York women favoring the Republican ticket because of Palin, I have only one explanation: racism.

According to the New York Times, in 2004, nine million more women voted than men. 67.3 million women voted. This election like the last will turn on the women's vote. So the choice of Sarah Palin as Republican VP candidate appears to have reignited the anger and disappointment that many women feel about Hillary's defeat. And to have claimed a new definition of strong woman. At least that is the way this is being portrayed in the media.

But it is predominantly white women voters who are allegedly charmed by Palin.

The question I'm asking is this: has McCain shrewdly given these white women voters an out, a way to avoid feeling racist, by offering them a choice of voting for a woman as VP?

How else can we explain the excitement over an inexperienced, infanticide-attempting, fundamentalist, no-nothing other than she isn't an intellectual black man?

I believe Sarah Palin's candidacy is a cover for America's unexamined and shameful racism. What about you?

Denial and Distraction

Last week I went to a seminar where one of the big analysts from Wachovia Securities assured the group that Lehman Brothers would never go the way of Bear Stearns. We all woke up Monday morning with the news that Lehman was filing for bankruptcy, the largest in American history, and that Bank of America was purchasing the venerable investment house Merrill Lynch at bargain prices. The stock market fell 500 points and most of us over the age of fifty added another two-five years before we would be able to retire.

John McCain that morning said the "fundamentals of our economy are strong." By the afternoon as the blood flowed from the New York Stock Exchange, he changed his story to sound like a born-again populist: "the economy is in crisis."

This is the same man who admitted during the primaries that he didn't know much about domestic economics.

This is the same man who cynically chose a woman as his vice presidential candidate whose gun-toting rhetoric inspires late-night bathroom fantasies for American men, but does not inspire any confidence that she knows anything about governing, foreign policy, or even how the constitution operates. Do you trust these people with your future?

The American media, remember, is controlled by conglomerates and corporations. We cannot rely on newspapers, television, even "the nightly news" as a reputable source of real news. It's just fabricated news. Instead we have to find our sources and then spread them. Hence the blogs, hence the informal networks that Malcolm Gladwell described in "The Tipping Point." We have to spread our own campaigns, and we have to create talking points so that each of us who wants this country to move back towards its democratic potential can speak one-to-one with everyone, not just among our circle of friends, to speak with calm.

Are we ready to heal?