Why William Ayers and Bernadine Dohrn Matter

When I was young, my mom used to tell me to choose my friends carefully, because “you are judged by the company you keep.” Barack Obama has an awful lot of troubling friends and supporters. It’s not just a distraction that he chose to spend twenty years in Jeremiah Wright’s church, or that he worked for William Ayers and announced his first campaign for the Illinois Senate at the home of William Ayers and Bernadine Dohrn.

Yesterday, Obama was interviewed by right wing talk show host Michael Smerconish, and tried out a new excuse to explain his relationship with William Ayers.

Federal Prosecutors Delay Rezko Sentencing in Hopes of Striking Deal

NOTE: In the following post, I am speaking only for myself.

Via The Real Barack Obama, On Wednesday, a judge granted a delay in sentencing for convicted influence peddler Antoin “Tony” Rezko. Rezko has been having “intense talks” with federal prosecutors for the past couple of weeks, and may be close to making a deal that could affect his sentence.

The decision to postpone the Oct. 28 sentencing barely stopped short of confirmation that Rezko is spilling his secrets to federal prosecutors. Speculation that Rezko is telling what he knows about Illinois political corruption has swept through Chicago’s federal courthouse for weeks.

“We are trying to work toward an agreement that would affect sentencing,” defense attorney Bill Ziegelmueller told reporters after the two-minute hearing before federal Judge Amy J. St. Eve. “But obviously no agreement is in place.”

Friday: Assume the position

Kiss your ass goodbye

Brace yourselves, Conflucians.  Today could be very scary.  The markets closed down sharply in the last minutes of trading last night and today is looking hairy as well.  For those of you who want to follow along at home, I recommend Planet Money from NPR and This American Life.  The correspondents are talking to the movers and shakers on a daily basis and summarize what’s going on right after the markets close. They break it down into easily digestible chunks for those of us who prefer to avoid this stuff like the plague.

So, what *is* going on?  Well, I will leave it to Dakinikat to give us the professional answer but here is how Planet Money describes it.  A lot of the same things that happened at the start of The Great Depression are happening now.  That is, during the years 1929-1932, there were similar problems with bank failures and credit freezes and loss of the commercial paper market.  And treasuries and reserves around the world did what they could to fix the problem, without much success.  After 1932, the FDR administration started making some major changes, like guaranteeing depositors’ money with the FDIC, and a number of other fixes that slowly but surely brought us back to solvency.  It took a world war to finally get us back on our feet.  We live in the internet age now though so what took four years to experience back then when the financial system was falling apart is happening now in the compressed time frame of 3 weeks.  The good news is that with the changes FDR made during the Great Depression and since then, Ben Bernanke is able to intervene in ways that were not available to the Hoover administration. Also, there are some automatic actions.  The markets themselves have a panic switch that was instituted after the collapse of 1987.  The question is will all of this intervention be enough?

The problem is the Fed is starting to run out of options.  The government is buying assets of failed institutions, it stepped in to fill the gap of the commercial paper market to get credit flowing again and now it is looking to recapitalize and take ownership of some banks.  These are all the right things to do but the problem is still somewhat intractable.  The instruments that got us into the mess are so complicated and so many players are involved that the whole world is trembling from them.

In the midst of all of this, the Planet Money people have discovered a mystery.  Last week when the Senate was debating the Paulson bailout bill, someone in the senate slipped in a provision that allowed for the recapitalization of the banks.  Now, I am no financial expert, as anyone who knows me can tell you, so I am not sure what all of it means but I think what is being done is that the US government now has the option to own portions of the banks.  The mystery is in how the provision got slipped into the bill because this is apparently the right thing to do and the banks themselves were dead set against it. The astonishing thing is that the Senate did the right thing, almost in spite of itself, and snuck this provision into the bill without the Bank lobby either knowing about it or being able to do anything about it.  It’s like one of those nasty little provisions that have happened in the past that we didn’t like much, like the one that allowed the president to fire US Attorneys at will that was slipped into  the Patriot Act.  Except that this one works in our favor.

Who did it?  No one knows.  Scratch that.  No one is taking credit for it yet.  I think we can be pretty confident that it wasn’t one of the presidential nominees because they would be strutting around to every media outlet they could find to crow about it.

Well, no matter what happened, it was the right thing to do but that doesn’t mean we’re out of the woods.  The financial system is international and so is the spreading problem.  The solution is also going to have to be international in scope.  There will be some big meetings going on in Washington this weekend and no doubt the various members of the G7 are going to want to strangle George Bush and the other players that got us into this mess.  But if there is too much tension and acrimony, they may not hammer out a deal.  So, let’s hope that everyone uses their words and not their hands, and figures out how we get out of this.

In the meantime: