Opensecrets.org is a great site to explore, and I encourage everyone to go there and browse.
I was doing so today, and came across their list of heavy hitters: the biggest contributors to political campaigns over the last 20 years.
One clear thing is that labor unions were, as a group, by far the biggest givers, to the tune of $184,906,000. That is $184 Million.
ATT was the biggest single company at over $43 Million. Goldman Sachs managed only fourth place with over $31 Million. But they got several Secretaries of the Treasury for their trouble.
Go here and see who "owns" our politicians. Click at the bottom of the list of ten to see the whole list, and to which party the contributions were made.
Something has to change. Who will lead the revolution?
Thursday, September 10, 2009
Wednesday, September 9, 2009
The Next Financial Crisis
Its already coming. And, if the trends remain the same, it will be even worse than this one has been.
There is an excellent article in The New Republic with this title, written by Peter Boone and Simon Johnson.
The past crisis was certainly mitigated by the actions of the Federal Reserve and the Treasury, but what they did sowed the seeds of the next crisis. And what they continue to do will make it worse.
This has happened many times before:
" We have seen this spectacle--the Fed saving us from one crisis only to instigate another--many times before. And, over the past few decades, the problem has become significantly more dire. The fault, to be sure, doesn’t lie entirely with the Fed. Bernanke is a prisoner of a financial system with serious built-in flaws. The decisions he made during the recent crisis weren’t necessarily the wrong decisions; indeed, they were, in many respects, the decisions he had to make. But these decisions, however necessary in the moment, are almost guaranteed to hurt our economy in the long run--which, in turn, means that more necessary but harmful measures will be needed in the future. It is a debilitating, vicious cycle. And at the center of this cycle is the Fed."
Back in the "old days" before the Federal Reserve was created, if you ran a bank and lost your depositors' money, the bankers' personal assets and income could be taken to help cover the losses.
"In the United States, there was great experimentation with banking during the 1800s, but those involved in the enterprise typically made a substantial commitment of their own capital. For example, there was a well-established tradition of “double liability,” in which stockholders were responsible for twice the original value of their shares in a bank. This encouraged stockholders to carefully monitor bank executives and employees. And, in turn, it placed a lot of pressure on those who managed banks. If they fared poorly, they typically faced personal and professional ruin. The idea that a bank executive would retain wealth and social status in the event of a self-induced calamity would have struck everyone--including bank executives themselves--as ludicrous."
In 1913 the Federal Reserve was created, and it went to work using liquidity loans and low interest rates to cushion banks in difficulty by reducing their costs.
"But, by insulating banks from the terrible consequences of their own blunders, these measures would also encourage them to keep taking unwise risks, and thereby lay the groundwork for future crises."
The Fed has made many errors with this. In the summer of 1927 it lowered interest rates, fueling the boom that crashed in the fall of 1929. It had belatedly raised rates in 1928, but that did not stop the frenzy. After the crash, it then kept interest too high into 1933, causing many banks to fail.
During the Great Depression, banking came under increasing regulation, and the rules were tightened so that risk taking was more difficult.
But:
"....eventually, banks would learn how to play the new game. They would spend serious money lobbying to keep regulations lax, hiring lawyers and accountants to find methods to minimize or avoid regulations, and incentivizing employees to hide risk from regulators. While the banking sector became more risky, creditors to banks (such as depositors and lenders) knew they could count on the Fed to engineer bailouts via lower interest rates and access to credit if times got tough--so banks had no trouble raising funding from creditors, and our financial system grew rapidly."
As time went on, the Fed continued to protect the banks. In the 1980s, Volcker lowered interest rates during the Latin American debt crisis [and simply ignored it when some banks were technically insolvent]. That caused a real estate boom that resulted in the S&L debacle of 1987. So interest rates were lowered again creating problems in real estate again, and then in the Asian markets. They crashed, then the Long Term Capital Management hedge fund created a "systemic risk" and rates were lowered again, fueling the Hi-tech bubble, also treated with low interest rates. which created the current burst bubble. You get the idea.
Saving the big banks from themselves is getting far more expensive than it used to be:
"Based on what we have seen over the past two decades, the cost of the next collapse will invariably be steep. Since the early 1980s, the Fed has gone back to its origins as the bailout machine for the financial sector. The only difference is that this sector has become much larger since 1907 or 1913. Back then, it accounted for around one percent of GDP. Now it is closer to 8 percent. The cost of bailouts--the current one and those to come--has skyrocketed as a result."
So, what do the big banks get from all of this? Its very simple:
"Consider the lessons learned in the past twelve months by our major banks. If they again get into serious financial trouble, the Fed can be counted on to lend them essentially unlimited amounts at effectively zero interest rates. What would you do with free money? You’d pay off all your old debts, then you’d find something to invest in that would yield a decent return. But then you’d reckon--why not take more risk? After all, if things go badly, you’ll get more free money."
They propose some solutions that might work, but may not be tough enough.
First, banks should have more capital to cover loan losses than is now permitted. Now, it is about 8%, which is ridiculously low.
Second, they propose that banks and their officers, directors and shareholders be at least partly responsible financially when their banks go broke [I would make them fully responsible].
Third, they say we should stop the merry-go-round from the banks to the government and back to the banks. My thought is that right now, because of this, we have the actual perpetrators of the crisis involved in bailing out their former companies. This is simply atrocious.
Last, they say the Fed should take more of a leadership role in regulation the system. My thought is that we should at least consider doing away with the Fed, or curtailing its powers to prevent this continual boom and bust cycle.
At least we should audit the Fed on a frequent basis. There is far too much secrecy there.
They conclude that if the Fed doesn't take the lead in better regulation, it will continue to be the "handmaiden to repeated bailouts." And that the peril to our system becomes even worse with each one.
This is a great article. I somewhat disagree with them in that they treat the Federal Reserve as something different from the banks. The Federal Reserve is owned by its member banks, and with the exception of the Chairman, now Mr. Bernanke, the banks elect the members. We therefore have the foxes guarding the hen house.
I highly recommend you go read the whole article here.
In addition, the two authors blog at The Baseline Scenario.
There is an excellent article in The New Republic with this title, written by Peter Boone and Simon Johnson.
The past crisis was certainly mitigated by the actions of the Federal Reserve and the Treasury, but what they did sowed the seeds of the next crisis. And what they continue to do will make it worse.
This has happened many times before:
" We have seen this spectacle--the Fed saving us from one crisis only to instigate another--many times before. And, over the past few decades, the problem has become significantly more dire. The fault, to be sure, doesn’t lie entirely with the Fed. Bernanke is a prisoner of a financial system with serious built-in flaws. The decisions he made during the recent crisis weren’t necessarily the wrong decisions; indeed, they were, in many respects, the decisions he had to make. But these decisions, however necessary in the moment, are almost guaranteed to hurt our economy in the long run--which, in turn, means that more necessary but harmful measures will be needed in the future. It is a debilitating, vicious cycle. And at the center of this cycle is the Fed."
Back in the "old days" before the Federal Reserve was created, if you ran a bank and lost your depositors' money, the bankers' personal assets and income could be taken to help cover the losses.
"In the United States, there was great experimentation with banking during the 1800s, but those involved in the enterprise typically made a substantial commitment of their own capital. For example, there was a well-established tradition of “double liability,” in which stockholders were responsible for twice the original value of their shares in a bank. This encouraged stockholders to carefully monitor bank executives and employees. And, in turn, it placed a lot of pressure on those who managed banks. If they fared poorly, they typically faced personal and professional ruin. The idea that a bank executive would retain wealth and social status in the event of a self-induced calamity would have struck everyone--including bank executives themselves--as ludicrous."
In 1913 the Federal Reserve was created, and it went to work using liquidity loans and low interest rates to cushion banks in difficulty by reducing their costs.
"But, by insulating banks from the terrible consequences of their own blunders, these measures would also encourage them to keep taking unwise risks, and thereby lay the groundwork for future crises."
The Fed has made many errors with this. In the summer of 1927 it lowered interest rates, fueling the boom that crashed in the fall of 1929. It had belatedly raised rates in 1928, but that did not stop the frenzy. After the crash, it then kept interest too high into 1933, causing many banks to fail.
During the Great Depression, banking came under increasing regulation, and the rules were tightened so that risk taking was more difficult.
But:
"....eventually, banks would learn how to play the new game. They would spend serious money lobbying to keep regulations lax, hiring lawyers and accountants to find methods to minimize or avoid regulations, and incentivizing employees to hide risk from regulators. While the banking sector became more risky, creditors to banks (such as depositors and lenders) knew they could count on the Fed to engineer bailouts via lower interest rates and access to credit if times got tough--so banks had no trouble raising funding from creditors, and our financial system grew rapidly."
As time went on, the Fed continued to protect the banks. In the 1980s, Volcker lowered interest rates during the Latin American debt crisis [and simply ignored it when some banks were technically insolvent]. That caused a real estate boom that resulted in the S&L debacle of 1987. So interest rates were lowered again creating problems in real estate again, and then in the Asian markets. They crashed, then the Long Term Capital Management hedge fund created a "systemic risk" and rates were lowered again, fueling the Hi-tech bubble, also treated with low interest rates. which created the current burst bubble. You get the idea.
Saving the big banks from themselves is getting far more expensive than it used to be:
"Based on what we have seen over the past two decades, the cost of the next collapse will invariably be steep. Since the early 1980s, the Fed has gone back to its origins as the bailout machine for the financial sector. The only difference is that this sector has become much larger since 1907 or 1913. Back then, it accounted for around one percent of GDP. Now it is closer to 8 percent. The cost of bailouts--the current one and those to come--has skyrocketed as a result."
So, what do the big banks get from all of this? Its very simple:
"Consider the lessons learned in the past twelve months by our major banks. If they again get into serious financial trouble, the Fed can be counted on to lend them essentially unlimited amounts at effectively zero interest rates. What would you do with free money? You’d pay off all your old debts, then you’d find something to invest in that would yield a decent return. But then you’d reckon--why not take more risk? After all, if things go badly, you’ll get more free money."
They propose some solutions that might work, but may not be tough enough.
First, banks should have more capital to cover loan losses than is now permitted. Now, it is about 8%, which is ridiculously low.
Second, they propose that banks and their officers, directors and shareholders be at least partly responsible financially when their banks go broke [I would make them fully responsible].
Third, they say we should stop the merry-go-round from the banks to the government and back to the banks. My thought is that right now, because of this, we have the actual perpetrators of the crisis involved in bailing out their former companies. This is simply atrocious.
Last, they say the Fed should take more of a leadership role in regulation the system. My thought is that we should at least consider doing away with the Fed, or curtailing its powers to prevent this continual boom and bust cycle.
At least we should audit the Fed on a frequent basis. There is far too much secrecy there.
They conclude that if the Fed doesn't take the lead in better regulation, it will continue to be the "handmaiden to repeated bailouts." And that the peril to our system becomes even worse with each one.
This is a great article. I somewhat disagree with them in that they treat the Federal Reserve as something different from the banks. The Federal Reserve is owned by its member banks, and with the exception of the Chairman, now Mr. Bernanke, the banks elect the members. We therefore have the foxes guarding the hen house.
I highly recommend you go read the whole article here.
In addition, the two authors blog at The Baseline Scenario.
Tuesday, September 8, 2009
Capitalism After the Crisis
This is the title of an essay in a new publication called National Affairs.
It is a new quarterly publication that perhaps is the successor to The Public Interest, which was started in 1965, but is no longer published.
In the essay, author Luigi Zingales examines the state of capitalism in the United States and the way that public attitudes may change with regard to it.
He wonders if the concentration of so much power in a few huge institutions which caused the crisis, and the bailouts of some of them, and of others, might move the US in the direction of European style corporatism and crony capitalism one sees elsewhere.
"Capitalism has long enjoyed exceptionally strong public support in the United States because America's form of capitalism has long been distinct from those found elsewhere in the world — particularly because of its uniquely open and free market system. Capitalism calls not only for freedom of enterprise, but for rules and policies that allow for freedom of entry, that facilitate access to financial resources for newcomers, and that maintain a level playing field among competitors. The United States has generally come closest to this ideal combination — which is no small feat, since economic pressures and incentives do not naturally point to such a balance of policies. While everyone benefits from a free and competitive market, no one in particular makes huge profits from keeping the system competitive and the playing field level."[My bold]
Of course, the true competitive market has no lobby. All the lobbyists are looking for a competitive edge granted to them by the government.[This is what keeps Congressional coffers full of money.]
American capitalism is special, and mainly because support for capitalism by the public is based upon the tenets that hard work, not luck, determines one's success, and is not contingent upon corruption. Many of our current billionaires made their money through hard work in competitive business with no government intervention.
Elsewhere, that is not true. Many billionaires come from countries where their government connections and concessions guaranteed their success, not initiative and enterprise.
"A healthy financial system is crucial to any working market economy. Widespread access to finance is essential to harnessing the best talents and allowing them to prosper and grow. It is crucial for drawing new entrants into the system, and for fostering competition. The system that allocates finance allocates power and rents; if that system is not fair, there is little hope that the rest of the economy can be. And the potential for unfairness or abuse in the financial system is always great."
This is why our Founding Fathers distrusted banks, and Andrew Jackson even created a severe financial crisis when he vetoed the Second National Bank Bill in 1837 because he saw the bank as an instrument of political corruption. This was because it was found to have tried to influence the election of public officials with its money and power.[Try going to http://www.opensecrets.org/ and check out the money given to political campaigns by the big banks. Jackson would be horrified.]
"The finance sector's increasing concentration and growing political muscle have undermined the traditional American understanding of the difference between free markets and big business. This means not only that the interests of finance now dominate the economic understanding of policymakers, but also — and perhaps more important — that the public's perception of the economic system's legitimacy is at risk."
And that is the problem. All the huge banks have so much influence, no matter who holds political power, that is creates a very serious problem. When we see the perpetrators of the financial calamity being placed in charge of curing it, and then granting their former companies huge benefits out of the Federal Treasury, it calls into serious question the integrity of both the Treasury and the large banks.
"We thus stand at a crossroads for American capitalism. One path would channel popular rage into political support for some genuinely pro-market reforms, even if they do not serve the interests of large financial firms. By appealing to the best of the populist tradition, we can introduce limits to the power of the financial industry — or any business, for that matter — and restore those fundamental principles that give an ethical dimension to capitalism: freedom, meritocracy, a direct link between reward and effort, and a sense of responsibility that ensures that those who reap the gains also bear the losses. This would mean abandoning the notion that any firm is too big to fail, and putting rules in place that keep large financial firms from manipulating government connections to the detriment of markets. It would mean adopting a pro-market, rather than pro-business, approach to the economy."
This is the right way to go. The concept of "too big to fail" must be abandoned, and continued bailouts of the worst perpetrators must be stopped.
Does our current government have the guts that Jackson had?
No. And neither does the opposition, the Republicans.
Go read the whole essay here.
It is a new quarterly publication that perhaps is the successor to The Public Interest, which was started in 1965, but is no longer published.
In the essay, author Luigi Zingales examines the state of capitalism in the United States and the way that public attitudes may change with regard to it.
He wonders if the concentration of so much power in a few huge institutions which caused the crisis, and the bailouts of some of them, and of others, might move the US in the direction of European style corporatism and crony capitalism one sees elsewhere.
"Capitalism has long enjoyed exceptionally strong public support in the United States because America's form of capitalism has long been distinct from those found elsewhere in the world — particularly because of its uniquely open and free market system. Capitalism calls not only for freedom of enterprise, but for rules and policies that allow for freedom of entry, that facilitate access to financial resources for newcomers, and that maintain a level playing field among competitors. The United States has generally come closest to this ideal combination — which is no small feat, since economic pressures and incentives do not naturally point to such a balance of policies. While everyone benefits from a free and competitive market, no one in particular makes huge profits from keeping the system competitive and the playing field level."[My bold]
Of course, the true competitive market has no lobby. All the lobbyists are looking for a competitive edge granted to them by the government.[This is what keeps Congressional coffers full of money.]
American capitalism is special, and mainly because support for capitalism by the public is based upon the tenets that hard work, not luck, determines one's success, and is not contingent upon corruption. Many of our current billionaires made their money through hard work in competitive business with no government intervention.
Elsewhere, that is not true. Many billionaires come from countries where their government connections and concessions guaranteed their success, not initiative and enterprise.
"A healthy financial system is crucial to any working market economy. Widespread access to finance is essential to harnessing the best talents and allowing them to prosper and grow. It is crucial for drawing new entrants into the system, and for fostering competition. The system that allocates finance allocates power and rents; if that system is not fair, there is little hope that the rest of the economy can be. And the potential for unfairness or abuse in the financial system is always great."
This is why our Founding Fathers distrusted banks, and Andrew Jackson even created a severe financial crisis when he vetoed the Second National Bank Bill in 1837 because he saw the bank as an instrument of political corruption. This was because it was found to have tried to influence the election of public officials with its money and power.[Try going to http://www.opensecrets.org/ and check out the money given to political campaigns by the big banks. Jackson would be horrified.]
"The finance sector's increasing concentration and growing political muscle have undermined the traditional American understanding of the difference between free markets and big business. This means not only that the interests of finance now dominate the economic understanding of policymakers, but also — and perhaps more important — that the public's perception of the economic system's legitimacy is at risk."
And that is the problem. All the huge banks have so much influence, no matter who holds political power, that is creates a very serious problem. When we see the perpetrators of the financial calamity being placed in charge of curing it, and then granting their former companies huge benefits out of the Federal Treasury, it calls into serious question the integrity of both the Treasury and the large banks.
"We thus stand at a crossroads for American capitalism. One path would channel popular rage into political support for some genuinely pro-market reforms, even if they do not serve the interests of large financial firms. By appealing to the best of the populist tradition, we can introduce limits to the power of the financial industry — or any business, for that matter — and restore those fundamental principles that give an ethical dimension to capitalism: freedom, meritocracy, a direct link between reward and effort, and a sense of responsibility that ensures that those who reap the gains also bear the losses. This would mean abandoning the notion that any firm is too big to fail, and putting rules in place that keep large financial firms from manipulating government connections to the detriment of markets. It would mean adopting a pro-market, rather than pro-business, approach to the economy."
This is the right way to go. The concept of "too big to fail" must be abandoned, and continued bailouts of the worst perpetrators must be stopped.
Does our current government have the guts that Jackson had?
No. And neither does the opposition, the Republicans.
Go read the whole essay here.
Obama and the Schoolchildren
When I first heard that Obama was going to address the schoolchildren and the Department of Education has sent out a "lesson plan" to be followed, my immediate response was to object. This comes mainly from my feelings of distrust toward Obama.
After some thought, I changed my mind, at least about the Obama speech (I think the "lesson plan" was a bit over the top).
Obama has every right to address schoolchildren about appropriate subjects, and it turns out that the speech he made was fine (perhaps a bit too much "I" but that happens whenever he opens his mouth). I just hope that the kids listened and took it seriously.
One of the most serious problems in our society is the high rate of school dropouts, particularly from within the poor and minority communities. We are raising generation after generation of children from those communities without sufficient education to be much of a factor in the workplace.
Someone like Obama can make a difference there, if he will. But speeches will not be enough. More is needed, and the teacher's unions seemingly refuse to take the kinds of steps needed to improve the schools. But that is another story.
Why would Obama address the kids when there is so much on his plate? Well, for the same reason that George H. W. Bush did in 1991, and George W. Bush was doing much the same when the planes hit the towers on 9/11.....politics, purely and simply.
Folks like politicians that pay attention to the children, from kissing babies all the way to making speeches to them. So politicians do that. It makes them seem human to everyone.
Why do other politicians object? Politics again. They don't want someone on the other side to gain from such a display.
That is why the Democrats had Bush, Sr.'s speech investigated by the GAO (which found it to be perfectly legal).
The point is: its fine to address the kids if you say the right things, but it is not fine to turn it into a political show. The kids need to be left out of politics. They will have to deal with them too soon anyway.
After some thought, I changed my mind, at least about the Obama speech (I think the "lesson plan" was a bit over the top).
Obama has every right to address schoolchildren about appropriate subjects, and it turns out that the speech he made was fine (perhaps a bit too much "I" but that happens whenever he opens his mouth). I just hope that the kids listened and took it seriously.
One of the most serious problems in our society is the high rate of school dropouts, particularly from within the poor and minority communities. We are raising generation after generation of children from those communities without sufficient education to be much of a factor in the workplace.
Someone like Obama can make a difference there, if he will. But speeches will not be enough. More is needed, and the teacher's unions seemingly refuse to take the kinds of steps needed to improve the schools. But that is another story.
Why would Obama address the kids when there is so much on his plate? Well, for the same reason that George H. W. Bush did in 1991, and George W. Bush was doing much the same when the planes hit the towers on 9/11.....politics, purely and simply.
Folks like politicians that pay attention to the children, from kissing babies all the way to making speeches to them. So politicians do that. It makes them seem human to everyone.
Why do other politicians object? Politics again. They don't want someone on the other side to gain from such a display.
That is why the Democrats had Bush, Sr.'s speech investigated by the GAO (which found it to be perfectly legal).
The point is: its fine to address the kids if you say the right things, but it is not fine to turn it into a political show. The kids need to be left out of politics. They will have to deal with them too soon anyway.
About "Deconstructing the 'Whup Ass'"
Those are titles of two essays among several that I missed reading while I have been tied up the last few weeks. They are written by Victor Davis Hanson.
The good professor is a favorite of mine, as many of you may know.
He is Senior Fellow in Residence in Classics and Military History at the Hoover Institution, Stanford University, and one of the best writers around about current affairs.
His writings can be found at "Works and Days" and at "Victor Davis Hanson's Private Papers." The sites are also listed to the right of this blog.
In "Decontructing," he takes on the recent situation regarding Van Jones, an admitted communist on Obama's staff who just resigned and the inevitable cries of "racism" that have accompanied his departure.
He also mentions other of Obama's friends and associates:
"What we are now seeing with Obama’s coterie is a sort of Billy Carterism—after a while what seems at first outlandish gradually becomes repugnant. Half of the country is now furious at Obama because they are starting to see that Ayers, Khalidi, Meeks, Pfleger, and Wright were representational, rather than aberrational; that is, the associates that for 30 years were the natural friends and role models of Obama proved hard to shake and appear buffoonish 24/7. And stranger still, Obama himself seems surprised that they keep reappearing, as if one so easily can throw under the bus decades of choices, attitudes, and second natures."
About Jones, he points out after cataloging some of his statements:
"... But such are the times we live in, that a Jones feels he can abuse the public discourse and insult the intelligence of the public, confident that when called on it, the refuge of “racist”! is always there."
And, Hanson finally concludes:
"Barak Obama did not transcend race as promised. Nor was there a racial backlash against him as his supporters both feared and now charge.
Rather the mood is weariness. One major reason Obama’s polls have dropped is the public resentment of this spate of allegations of racism."
And:
"Nothing is so fatal to a con as boredom. Tragically, when a Rangel, Paterson, Jones, or Obama—all enjoying privileges and successes that 300 million Americans might only dream of—start in on the now accustomed trope, the public turns the channel and sighs “Been there, done that.” And I think they really mean it this time."
There are several fine essays at the two sites. I highly recommend that you bookmark them, and return to read all of them.
The good professor is a favorite of mine, as many of you may know.
He is Senior Fellow in Residence in Classics and Military History at the Hoover Institution, Stanford University, and one of the best writers around about current affairs.
His writings can be found at "Works and Days" and at "Victor Davis Hanson's Private Papers." The sites are also listed to the right of this blog.
In "Decontructing," he takes on the recent situation regarding Van Jones, an admitted communist on Obama's staff who just resigned and the inevitable cries of "racism" that have accompanied his departure.
He also mentions other of Obama's friends and associates:
"What we are now seeing with Obama’s coterie is a sort of Billy Carterism—after a while what seems at first outlandish gradually becomes repugnant. Half of the country is now furious at Obama because they are starting to see that Ayers, Khalidi, Meeks, Pfleger, and Wright were representational, rather than aberrational; that is, the associates that for 30 years were the natural friends and role models of Obama proved hard to shake and appear buffoonish 24/7. And stranger still, Obama himself seems surprised that they keep reappearing, as if one so easily can throw under the bus decades of choices, attitudes, and second natures."
About Jones, he points out after cataloging some of his statements:
"... But such are the times we live in, that a Jones feels he can abuse the public discourse and insult the intelligence of the public, confident that when called on it, the refuge of “racist”! is always there."
And, Hanson finally concludes:
"Barak Obama did not transcend race as promised. Nor was there a racial backlash against him as his supporters both feared and now charge.
Rather the mood is weariness. One major reason Obama’s polls have dropped is the public resentment of this spate of allegations of racism."
And:
"Nothing is so fatal to a con as boredom. Tragically, when a Rangel, Paterson, Jones, or Obama—all enjoying privileges and successes that 300 million Americans might only dream of—start in on the now accustomed trope, the public turns the channel and sighs “Been there, done that.” And I think they really mean it this time."
There are several fine essays at the two sites. I highly recommend that you bookmark them, and return to read all of them.
Monday, September 7, 2009
Bailing out the crooks
The New York Times reports that not only did we bail out Fannie Mae, but the taxpayers are paying millions of dollars for lawyers for the guys that drove it into the ground.
$6.3 million so far for them. This is to defend them from shareholder suits brought because of their wrongdoing.
"With all the turmoil of the financial crisis, you may have forgotten about the book-cooking that went on at Fannie Mae. Government inquiries found that between 1998 and 2004, senior executives at Fannie manipulated its results to hit earnings targets and generate $115 million in bonus compensation. Fannie had to restate its financial results by $6.3 billion.
Almost two years later, in 2006, Fannie’s regulator concluded an investigation of the accounting with a scathing report. “The conduct of Mr. Raines, chief financial officer J. Timothy Howard, and other members of the inner circle of senior executives at Fannie Mae was inconsistent with the values of responsibility, accountability, and integrity,” it said. "
Now taxpayers are having to pay to protect them from their manipulations.
Does anybody but me see anything wrong with that?
They are all Democrats.
A tip of the hat to Ed Morrissey. See his blog post here.
$6.3 million so far for them. This is to defend them from shareholder suits brought because of their wrongdoing.
"With all the turmoil of the financial crisis, you may have forgotten about the book-cooking that went on at Fannie Mae. Government inquiries found that between 1998 and 2004, senior executives at Fannie manipulated its results to hit earnings targets and generate $115 million in bonus compensation. Fannie had to restate its financial results by $6.3 billion.
Almost two years later, in 2006, Fannie’s regulator concluded an investigation of the accounting with a scathing report. “The conduct of Mr. Raines, chief financial officer J. Timothy Howard, and other members of the inner circle of senior executives at Fannie Mae was inconsistent with the values of responsibility, accountability, and integrity,” it said. "
Now taxpayers are having to pay to protect them from their manipulations.
Does anybody but me see anything wrong with that?
They are all Democrats.
A tip of the hat to Ed Morrissey. See his blog post here.
Labor Day
The unofficial end of Summer has arrived, and with it all sorts of things.
College football got under way last week, starting my favorite time of the year. My Texas Longhorns won, while our arch-rival Oklahoma lost at home to Brigham Young. OU's Heisman quarterback was injured, but its extent is yet unknown. I wish him a speedy recovery. He is an outstanding young man.
With it comes a breath of Fall, particularly in the mornings and evenings in West Texas. Temps at night are 10-12 degrees cooler than a month ago, and there is a freshness in the breeze. Even a few leaves are beginning to drift down in the back yard
New polls shown unions to be unpopular with the folks. That is not surprising, because now that their man is President, and they own the Congress, we are all able to see what jerks most of them are. See articles here and here.
Obama had the whistle blown on one of the several outright communists in his administration. There are more, but good riddance to Van Jones. An article here. Another is here.
Take note that the large media never covered the story until he left, and than tried to paper it over. No wonder they are all going broke. Most of them are simply an adjunct to Obama's propaganda machine. Something closely akin to Lenin's "useful idiots." One simply cannot trust anything most of them say.
This Labor Day finds us with a reported 9.7% unemployment rate, with the direction still headed down. If one were to use the same measure as was used during the Great Depression, it would be closer to 17%. Very sad.
All the liberal pundits like to talk about "green shoots" in the economy, and a "recovery" about to start. My view is that there is no recovery until jobs come back. Even Obama says that won't be until well into next year.
The use of the "stimulus" bill to pay off ACORN and other large Democratic constituencies is turning into a nightmare for unemployed Americans. Will there be any accountability for this? Probably not. Maybe November, 2010. We will see.
There are other things to cover that have arisen since I last posted. More later.
College football got under way last week, starting my favorite time of the year. My Texas Longhorns won, while our arch-rival Oklahoma lost at home to Brigham Young. OU's Heisman quarterback was injured, but its extent is yet unknown. I wish him a speedy recovery. He is an outstanding young man.
With it comes a breath of Fall, particularly in the mornings and evenings in West Texas. Temps at night are 10-12 degrees cooler than a month ago, and there is a freshness in the breeze. Even a few leaves are beginning to drift down in the back yard
New polls shown unions to be unpopular with the folks. That is not surprising, because now that their man is President, and they own the Congress, we are all able to see what jerks most of them are. See articles here and here.
Obama had the whistle blown on one of the several outright communists in his administration. There are more, but good riddance to Van Jones. An article here. Another is here.
Take note that the large media never covered the story until he left, and than tried to paper it over. No wonder they are all going broke. Most of them are simply an adjunct to Obama's propaganda machine. Something closely akin to Lenin's "useful idiots." One simply cannot trust anything most of them say.
This Labor Day finds us with a reported 9.7% unemployment rate, with the direction still headed down. If one were to use the same measure as was used during the Great Depression, it would be closer to 17%. Very sad.
All the liberal pundits like to talk about "green shoots" in the economy, and a "recovery" about to start. My view is that there is no recovery until jobs come back. Even Obama says that won't be until well into next year.
The use of the "stimulus" bill to pay off ACORN and other large Democratic constituencies is turning into a nightmare for unemployed Americans. Will there be any accountability for this? Probably not. Maybe November, 2010. We will see.
There are other things to cover that have arisen since I last posted. More later.
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