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    • What May’s Brexit Deal Tells Us About The EU and Britain’s Future
      So, May has a Brexit deal. It’s a terrible deal, which makes the UK subject to many EU laws, and which doesn’t allow Britain to withdraw from the deal if the EU doesn’t want it to. This has caused ministerial resignations, and Corbyn has come out against it. But the interesting part is what the […]
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Read the latest Matt Taibbi article on the bailout

Secret and Lies of the Bailout

It’s got two very colorful opening paragraphs:

To listen to the bankers and their allies in Washington tell it, you’d think the bailout was the best thing to hit the American economy since the invention of the assembly line. Not only did it prevent another Great Depression, we’ve been told, but the money has all been paid back, and the government even made a profit. No harm, no foul – right?

Wrong.

It was all a lie – one of the biggest and most elaborate falsehoods ever sold to the American people. We were told that the taxpayer was stepping in – only temporarily, mind you – to prop up the economy and save the world from financial catastrophe. What we actually ended up doing was the exact opposite: committing American taxpayers to permanent, blind support of an ungovernable, unregulatable, hyperconcentrated new financial system that exacerbates the greed and inequality that caused the crash, and forces Wall Street banks like Goldman Sachs and Citigroup to increase risk rather than reduce it. The result is one of those deals where one wrong decision early on blossoms into a lush nightmare of unintended consequences. We thought we were just letting a friend crash at the house for a few days; we ended up with a family of hillbillies who moved in forever, sleeping nine to a bed and building a meth lab on the front lawn.

I haven’t read the whole thing yet but if Taibbi is consistent with Sheila Bair, Ron Suskind and Neil Barofsky, Tim Geithner is going to look pretty bad.  There was a point in Barofsky’s book when I finally realized the magnitude of the scam that just made my jaw drop and made me want to join the Doomsday Preppers.  It really is that bad.

There will be a quiz.

More…

This part is good.  I mean bad:

To guarantee their soundness, all major banks are required to keep a certain amount of reserve cash at the Fed. In years past, that money didn’t earn interest, for the logical reason that banks shouldn’t get paid to stay solvent. But in 2006 – arguing that banks were losing profits on cash parked at the Fed – regulators agreed to make small interest payments on the money. The move wasn’t set to go into effect until 2011, but when the crash hit, a section was written into TARP that launched the interest payments in October 2008.

In theory, there should never be much money in such reserve accounts, because any halfway-competent bank could make far more money lending the cash out than parking it at the Fed, where it earns a measly quarter of a percent. In August 2008, before the bailout began, there were just $2 billion in excess reserves at the Fed. But by that October, the number had ballooned to $267 billion – and by January 2009, it had grown to $843 billion. That means there was suddenly more money sitting uselessly in Fed accounts than Congress had approved for either the TARP bailout or the much-loathed Obama stimulus. Instead of lending their new cash to struggling homeowners and small businesses, as Summers had promised, the banks were literally sitting on it.

Today, excess reserves at the Fed total an astonishing $1.4 trillion.”The money is just doing nothing,” says Nomi Prins, a former Goldman executive who has spent years monitoring the distribution of bailout money.

Nothing, that is, except earning a few crumbs of risk-free interest for the banks. Prins estimates that the annual haul in interest­ on Fed reserves is about $3.6 billion – a relatively tiny subsidy in the scheme of things, but one that, ironically, just about matches the total amount of bailout money spent on aid to homeowners. Put another way, banks are getting paid about as much every year for not lending money as 1 million Americans received for mortgage modifications and other housing aid in the whole of the past four years.

It’s like the guys who made up these rules on the bailout never had to deal with children or adolescents.  I guess that kinda makes sense, given that they are all guys who probably have wives and nannies to do that stuff.

 

Business and Industry hold Americans hostage over future tax increases

So saith the NYTimes:

A rising number of manufacturers are canceling new investments and putting off new hires because they fear paralysis in Washington will force hundreds of billions in tax increases and budget cuts in January, undermining economic growth in the coming months.

Executives at companies making everything from electrical components and power systems to automotive parts say the fiscal stalemate is prompting them to pull back now, rather than wait for a possible resolution to the deadlock on Capitol Hill.

Democrats and Republicans are far apart on how to extend the Bush-era tax breaks beyond January — the same month automatic spending reductions are set to take effect — unless there is a deal to trim the deficit. The combination of tax increases and spending cuts is creating an economic threat called “the fiscal cliff” by Ben S. Bernanke, chairman of the Federal Reserve.

This is the biggest bullshit excuse I have ever heard.  It’s just applying the screws with more torque.  If business doesn’t get its way, they’re just going to lay off more people, have I got that right?  If rich and powerful people, especially people in the finance and defense industry, are asked to sacrifice even one teensy tiny piece of their enormous share of the pie, they will pull the plug on any economic recovery.

This is the equivalent of domestic economic terrorism, in my humble opinion.  It’s a test of Obama’s and the Democrat’s fortitude.  When are they going to get tough on these bastards and the Republicans?  It’s time to stop pretending there is any compromise possible with these assholes.  Some of them need to be thrown in jail for threatening to send the economy into another destructive recession.  These industrialists and their finance industry allies are enemies of the people.

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

BTW, there’s a rumor going around that we are going to ban people who want to vote for Romney.  The person who is starting this rumor knows better.  We hardly ever ban people.  We *do* moderate them however.

If you want to vote for a party that is totally into crazy, loves kissing the whip and secretly reads 50 Shades of Gray under the covers, go right ahead.  Apparently, there is no amount of greed, hard hearted, mean, selfishness, judgmentalism, ignorance or just plain stupid that will embarrass you.  Your inability to remember the past will condemn you.

Not my problem.  It’s the Democrats’ problem and if they don’t know how to deal with it, maybe it’s time they make like a dinosaur and meet with a meteor.  I’m of the opinion that the rest of us reasonable, FDR style Democrats have to form our own club and begin the long hard slog back to relevancy.

But if YOU want to hate the party that fucked you over in 2008 (and it did, noooo doubt about it) by voting for the most looney and dangerous bunch of pseudo- religious conmen since the Ku Klux Klan discovered the whitening power of bleach, knock yourself out.  I personally think that any person not making $500+K per year and is still voting Republican should have their head examined but we don’t lock people up for their own safety anymore.

In other words, the left might have been right about some of you guys in 2008.  You are dumber than a box of rocks.

Be careful what you wish for.

In any case, my blog, my rules.  No party propaganda, from either party, is going to get a free ride here.  If I find you are looking for converts, you will be moderated.

Saturday: Things that make you go “hmmm”, episode 2

I used to be an NPR junkie, that is, until TalkingPointsMemo became my gateway drug to blogging about 5 years ago.  I used to wake up to Bob Edwards and drive home to Robert Segal.  Then they started to all sound like my neighbors, moderately Republican and pro-business.  Gone were the days of Maria Hinajosa telling us about “Nine year old Ruiz sits outside the flimsy clapboard house on the outskirts of this west Texas border town.  He draws his name in the dust with rock.  It’s the only word he knows how to spell because he can’t walk to school and there is no bus provided to this bare enclave of maquilladoros and their families who live without running water or electricity.  Ruiz says he wants to be a surgeon and his greatest wish is to go to school…”  Well, you get the idea.  There I am with Ruiz, sobbing into my Cheerios over his lost childhood dreams.  During the Bush Administration, the bleeding heart liberals took a frickin’ hike and we got stuck with Juan, Cokie and Steve.  Um, no thank you.

What to do to fill up the empty space between commutes?  I listened to music for awhile, then audiobooks, but they tended to lack the immediacy of the moment that news provides.  Then I discovered podcasts and started to load up on the suckers.  My new iPhone gives me the luxury of accessing the iTunes podcast store directly and since most podcasts are free, I indulge greedily.  Yesterday, my faves didn’t have any new material to listen to and I needed to pick something in a hurry.  So, I picked the PopSci (Popular Science) podcast “Who protects the internet?”

So, there I am, driving along, listening to fascinating facts about cables and warehouses and termination points in Miami and NY from across the ocean.  There’s stuff I never new before like, did you know that there is a fleet of ships on the world’s oceans, just floating aimlessly until they get a call about a broken cable?  Then they rush to the site of the break, pull up the cable and repair it.   Those of you who are looking for new careers and don’t get seasick might want to look into this.

Then the PopSci guys start talking about how many lines crisscross the world’s oceans and how much redundancy is built into the system.  The answer is, there is redundancy but not enough to make all transmissions worry free.  Occasionally, the breaks can take whole countries offline for a couple of days.  There are several commercial lines and a government line for secure defense transactions and stuff and the finance industry put in its own internet cable just for their own business…

???

The finance industry has its own internet?

Am I the last person in America to know about this?  The finance industry has its own separate internet cable system.  It’s a parallel internet system.  What kind of access does the US government have to the finance industry’s internet?  Can the NSA tap into this cable system and record all of the transactions like it can on the regular commercial lines?  And what do they use it for, besides high speed transmissions of trades? Anyone got any info on this?  Speculation?  Tin foily hat theories about how it can be used?

In other news:

  • Ruh-Roh, Krugman has read Geithner’s detailed plan to bailout the banks and it doesn’t look good.  He writes about it in Despair over financial policy.  Let this be a lesson to you, Paul.  Never take your shrillness on vacation to Yurp and leave the Obots to their own devices.  It sounds like the finance industry is going to get everything it wants, sort of like economic terrorists who threaten to bring the world to its knees if we don’t fork over the cash.  Now, what kind of ace would they have to have up their sleeves to pull such a thing off?
  • It’s spring!  Break out the cleaning buckets.  Today is the day I purge the garage and pick up the clutter.  Let us know in the comments about your cleaning plans and what your favorite new cleaning gadget is.  I just ordered a steamer cleaner.  It should arrive on Monday, which is too late for today’s marathon but should be perfect for next week.  Also, if you have kids, what’s your trick for getting them to help out?
  • One of my pet peeves is too much sugar in just about everything from spaghetti sauce to crackers to coffee.  I love Starbucks coffee (Oh, yes I do.  So sue me.).  And I love a good vanilla latte but if you get the regular recipe vanilla latte, the damn thing makes your teeth hurt, it’s so sweet.  But if you ask for half the sugar, you also get half of the vanilla strength.  I like the vanilla taste, just not all the sweet.  I actually had an argument with the last barista.  She said, “Well, you could get the sugar free sweetener instead.”  No, I just want the vanilla not the sugar. “The sugar-free has all of the sweet taste, just none of the sugar.”.  I *know* it does.  BUT I DON’T WANT THE *SWEET* TASTE!!!.  “Well, you sound sure.” {{sniff}}”  Grumble.  If Starbucks cared as much about sugar as it does about how fat your milk is, it would cut the sugar in the syrups in half and leave the damn sugar packets out for people who just can’t start their day without a sugar buzz.  But noooooo, it looks like the sugar problem is only going to get worse.  The NYTimes reports that manufacturers are replacing high fructose corn syrup with real sugar now.  Isn’t that special?
  • Gawd, he is such an amateur.  Can someone please tell Obama that he has a well-respected, well-liked, intelligent Secretary of State to handle relations between the US and Iran.  This video was so badly handled Obama is starting to make bags of hammers look brilliant. (H/T fif)

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