The Economic Crisis and the "Formula For Fraud"

Understanding how deregulation of banks helped caused the present economic calamity.
[Edited 4/18/12]
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During the current economic crisis, millions of homeowners have lost their homes through foreclosure, over 1.9 million in 2009 and 2010 alone. Almost everyone knows someone who has lost their home or who is currently at risk. The banks who made and encouraged the bad loans, and who sold them off as triple A rated, but nearly worthless, bundled, complex securities, and who are arguably most responsible for the economic collapse, have been bailed out. Little has been done to help those foreclosed upon, or homeowners in distress.

Back in 2010-2011, Dean Baker at the Center for Economic and Policy Research, (Right-to-Rent Would Ease Foreclosure Mess ) suggested the following:

"There is a simple alternative that involves no government money and no new bureaucracy. We could temporarily change the rules on foreclosure to allow homeowners the right to stay in their home as renters for a substantial period of time (e.g., 5 years) following a foreclosure.

During this period, they would pay the market rent as determined by an independent appraiser. They would have the same rights and responsibilities as other tenants, with the exception that they could not be evicted without cause. The lender would own the property and would be free to sell it, although the former homeowner would still have the right to remain as a tenant even if the home is sold.

This policy accomplishes several important goals. First and foremost it provides housing security for homeowners who got caught up in the middle of the bubble. These people can be blamed for having made a mistake by buying homes at bubble-inflated prices. But this mistake is small compared with the mistakes made by the banks that made hundreds of billions of dollars of bad and often deceptive loans.

We were willing to give these banks trillions of dollars of loans at below market rates. Allowing foreclosed homeowners to stay in their homes as renters seems a rather small concession in comparison. This right-to-rent provision can also be narrowly structured so that it only applies to owner-occupied homes of less than the median value that were bought during the bubble years. This will ensure that it is not exploited by wealthy homeowners or investors."

The banks and Congress didn't listen to Dean Baker, CEPR, and other economists who felt similarly.

So now, unfortunately, NPR reported on April 16, 2012, that instead, banks are selling thousands of seized homes to "big-time investors" so that they can rent them out at what ever price the market will bear, to, in many cases, the people who have been turned out of their homes.

Another article by NPR, City Rents Rise As Buyers Wait Out Housing Bust
by JIM ZARROLI

notes that:

"There's very little supply, there's lots of demand," he says. "People have been staying in the rental market longer 'cause they're not comfortable jumping into the sales market or they don't have the necessary down payments, so all of those things have been factored into a very tight and successful rental market."

That pattern is being repeated in many other parts of the country. Chris Herbert, research director of Harvard's Joint Center for Housing Studies, says rents rose more than 5 percent last year in Seattle, Chicago, Minneapolis, Boston, Pittsburgh and other cities. Herbert says the increases reflect growing demand for rental properties."

"In 2011, there was growth of a million renter households across the country, while homeowner households fell by 350,000," Herbert says. "So in one year to have growth of a million renters, that's a number we haven't seen in a long time."

A million renter mystery?

But wait, where did a million renters come from? Dean Baker in the article mentioned above, notes that:

"We are virtually certain to see at least a million foreclosures in 2011 and comparable numbers in 2012 and 2013. Many more homeowners will lose their homes through distressed sales."

If homeowner households only fell by 350,000 in 2011, what about the million or so who were put out of their homes in 2011 alone by foreclosures? (Not to mention the few million in previous years of the current recession.) Did NPR count them? Are they homeless, living with parents or friends, or are they, like the millions before them, seeking rentals? NPR doesn't bother to make a connection between rising rents and a few million foreclosures. That's par for NPR's uninformative, mind-easing course, which is; every thing's fine: "People have been staying in the rental market longer 'cause they're not comfortable jumping into the sales market or they don't have the necessary down payments, so all of those things have been factored into a very tight and successful rental market."

At least the Huffington Post notes that:

"The practice of turning foreclosed homes into rentals is becoming so popular that the Federal Reserve issued guidelines earlier this month for banks to use when they're flipping foreclosures into rentals. But the practice also faces criticism: Namely, some are concerned that the very banks and agencies responsible for the housing crisis in the first place will now benefit from their own questionable practices."

See also:
Rentals Continue to Outshine Purchase Market, Home Values Still Plagued By Foreclosures
Foreclosure re-sales challenge previous peak in February, According to February Zillow Real Estate Market Reports

"The rental market remains a bright spot in the housing market, where many markets, especially hard hit ones, are experiencing significant annual rent appreciation and drawing the attention of investors. Converting distressed and vacant properties into rental units will reduce the oversupply of homes and speed up the recovery process."

Not to mention making rich people wealthier. Recovery? Recovery for who? Certainly not for the millions tossed out of their homes. Sounds like recovery for the 1 or 2%.

When you consider the reasonable alternative promoted by Dean Baker, i.e., to allow people to stay in their homes as renters, and the current reality that people's homes are being auctioned off at fire-sale prices to wealthy investors who charge increasing rents, that really says all you need to know about who the government cares about and who they are responsive to.

So why are all these people being foreclosed upon and how did the economic crisis come about in the first place?

William Black, "Formula for Fraud":

I’m going to quote from George Akerlof and Paul Romer’s famous article, or, at least, an article that should be famous where the title says it all: 'Looting: The Economic Underworld of Bankruptcy for Profit.' So, the bank fails or, in the modern era, is 'bailed' out, but the CEO walks away wealthy. And this is what Akerlof and Romer wrote about 20 years ago:

"Neither the public, nor economists foresaw that savings and loan deregulation was bound to produce looting, nor, unaware of the concept, could they have known how serious it would be. Thus, the regulators in the field who understood what was happening from the beginning found lukewarm support, at best, for their cause. Now, we know better. If we learn from experience, history need not repeat itself.'

(c. 8:22) “George Akerlof was awarded the Nobel Prize in Economics in 2001. So, you might think economists would pay attention. You might think, since this article was written nearly 20 years ago, that the textbooks would mention fraud and looting. They don’t just ignore everyone here. They ignore Nobel Prize winners in Economics.

“So, what, again, was this lesson? It was the regulators in the field, the little people, not the fancy people, who understood from the beginning that deregulation would lead to massive looting. And it was the economists that ignored them. And after we had proven that it was fraud, after we had sent over a thousand elite bankers and their cronies to prison, after a Nobel Prize winner warned about it, after all those things, they ignored it and produced crisis after crisis, including the one we experience now.

(c. 9:59) “So, what did we know out of that savings and loan crisis, that was widely described at the time as the worst financial scandal in U.S. history? And we have a history rich in scandal. Here is what the national commission that investigated the causes of the crisis reported:

"'The typical large failure [grew] at an extremely rapid rate, achieving high concentrations of assets in risky ventures... [E]very accounting trick available was used... Evidence of fraud was invariably present, as was the ability of the operators to 'milk' the organisation.'

(c. 11:04) "That means to loot the organisation. But, speaking of milk, [Applause] the frauds I’m describing are in no way limited to the Unites States; they exist in every country. And they are common enough to explain; and they are old enough to explain what Balzac was saying because many of the wealthy become rich through precisely the scandals, the fraud, I will describe.

“In criminology, we call them financial super predators when we’re being lyrical. When we’re writing journals, we call them ‘control frauds,’ which is boring. Control fraud occurs when the person who controls a seemingly legitimate entity, like Parmalat, uses it as a weapon to defraud. And they can often use this weapon with impunity. In finance, accounting is the weapon of choice.  And these accounting frauds cause greater losses than all other property crimes combined, yet economics, again, never talks about it.  Worse, when many of these frauds occur in the same area, they hyperinflate financial bubbles, which is what causes financial crises and mass unemployment.  It makes the CEOs wealthy, produces Balzac scandals, and destroys democracy."

"William Black is Associate Professor of Law and Economics at the University of Missouri, Kansas City.  He is a lawyer, academic, and former bank regulator and the author of The Best Way to Rob a Bank is to Own One: How Corporate Executives and Politicians Looted the S&L Industry."

The speech is highly recommended for those who still believe, after all the economic collapses we have repeatedly been experiencing, that deregulation is the answer.

Guns and Butter
"Formula For Fraud" with William K. Black from the first Italian economic Summit on Modern Money Theory in Rimini, Italy. How to become a billionaire - the four necessary ingredients in the recipe for fraud; the three sure consequences of banking control fraud; gutting of the underwriting process; Gresham's Law; The Business Roundtable; hyperinflation of a bubble.

Guns and Butter - April 4, 2012 at 1:00pm

Click to listen (or download)

Transcript Here

Today’s show has been ‘Formula for Fraud.’  William Black is Associate Professor of Law and Economics at the University of Missouri, Kansas City.  He is a lawyer, academic, and former bank regulator and the author of The Best Way to Rob a Bank is to Own One: How Corporate Executives and Politicians Looted the S&L Industry.  

“Please visit the University of Missouri, Kansas City New Economic Perspectives blog at www.NewEconomicPerspectives.org.  Visit the website for the first Italian Summit on Modern Money Theory at www.DemocraziaMMT.info.
Transcript by Felipe Messina for Media Roots and Guns and Butter

[Here is an outline of the recipe for bank fraud, by William K. Black, so please click this link if you are looking for an outline of the transcript of the speech. It is digestible if you have a general knowledge of the players and "economics" (god forbid!) and read it while listening to the speech, but the speech transcript is an easier read.]

The Rich Steal With Impunity, The Poor Go To Jail; Plus Wolves Of Another Sort

In This Edition:

- Why Isn't Wall Street in Jail?

- Wolf News
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When I began to read the following article about Wall Street crimes, I was taken back, once again, to my memory of a black teenager being hauled off in a police car from a Von's (now Safeway) parking lot in San Diego County, some 20 or 30 years ago. She had stolen a bottle of wine, having been put up to it by an older male who was still sitting in his car in the parking lot. I thought of the poor and sometimes desperate folks in Baker City who are hauled off to jail on a daily basis for various, sometimes minor, crimes. I thought of Phil Ochs' words sung by Joan Baez in the song "There but for fortune."

In the in-depth article that follows, Matt Taibbi, one of the best investigative reporters in our world, vividly elucidates the crimes that have been committed by the Wall Street scamsters, and the stark differences between our treatment of the crimes of rich and poor. God it is long! But perhaps that is the price of understanding.

He describes how Wall Street scamsters brought our country to its knees while raking in millions of dollars--Crimes that went unpunished by a complicit government.

Here are the final paragraphs (but please read the entire article if you get some time):

Why Isn't Wall Street in Jail?
Financial crooks brought down the world's economy — but the feds are doing more to protect them than to prosecute them
By Matt Taibbi
FEBRUARY 16, 2011 9:00 AM ET
. . . .

". . . .the system is skewed by the irrepressible pull of riches and power. If talent rises in the SEC or the Justice Department, it sooner or later jumps ship for those fat NBA contracts [big money on Wall Street, or as consultants or whatever]. Or, conversely, graduates of the big corporate firms take sabbaticals from their rich lifestyles to slum it in government service for a year or two. Many of those appointments are inevitably hand-picked by lifelong stooges for Wall Street like Chuck Schumer, who has accepted $14.6 million in campaign contributions from Goldman Sachs, Morgan Stanley and other major players in the finance industry, along with their corporate lawyers.

As for President Obama, what is there to be said? Goldman Sachs was his number-one private campaign contributor. He put a Citigroup executive in charge of his economic transition team, and he just named an executive of JP Morgan Chase, the proud owner of $7.7 million in Chase stock, his new chief of staff. "The betrayal that this represents by Obama to everybody is just — we're not ready to believe it," says Budde, a classmate of the president from their Columbia days. "He's really fucking us over like that? Really? That's really a JP Morgan guy, really?"

Which is not to say that the Obama era has meant an end to law enforcement. On the contrary: In the past few years, the administration has allocated massive amounts of federal resources to catching wrongdoers — of a certain type. Last year, the government deported 393,000 people, at a cost of $5 billion. Since 2007, felony immigration prosecutions along the Mexican border have surged 77 percent; nonfelony prosecutions by 259 percent. In Ohio last month, a single mother was caught lying about where she lived to put her kids into a better school district; the judge in the case tried to sentence her to 10 days in jail for fraud, declaring that letting her go free would "demean the seriousness" of the offenses. [My preference would be to seriously fine those that hire illegals.]

So there you have it. Illegal immigrants: 393,000. Lying moms: one. Bankers: zero. The math makes sense only because the politics are so obvious. You want to win elections, you bang on the jailable class. You build prisons and fill them with people for selling dime bags and stealing CD players. But for stealing a billion dollars? For fraud that puts a million people into foreclosure? Pass. It's not a crime. Prison is too harsh. Get them to say they're sorry, and move on. Oh, wait — let's not even make them say they're sorry. That's too mean; let's just give them a piece of paper with a government stamp on it, officially clearing them of the need to apologize, and make them pay a fine instead. But don't make them pay it out of their own pockets, and don't ask them to give back the money they stole. In fact, let them profit from their collective crimes, to the tune of a record $135 billion in pay and benefits last year. What's next? Taxpayer-funded massages for every Wall Street executive guilty of fraud?

The mental stumbling block, for most Americans, is that financial crimes don't feel real; you don't see the culprits waving guns in liquor stores or dragging coeds into bushes. But these frauds are worse than common robberies. They're crimes of intellectual choice, made by people who are already rich and who have every conceivable social advantage, acting on a simple, cynical calculation: Let's steal whatever we can, then dare the victims to find the juice to reclaim their money through a captive bureaucracy. They're attacking the very definition of property — which, after all, depends in part on a legal system that defends everyone's claims of ownership equally. When that definition becomes tenuous or conditional — when the state simply gives up on the notion of justice — this whole American Dream thing recedes even further from reality."

[Emphasis added, not that it was needed]
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Wolf News

This first one is slightly dated, but adds a little context.

Do ranchers have a right to predator free landscape?
By George Wuerthner, 11-22-10
. . . .
One of the unquestioned and unspoken assumptions heard across the West is that ranchers have a right to a predator free environment. Even environmental groups like Defenders of Wildlife more or less legitimize this perspective by supporting unqualified compensation for livestock losses to bears and wolves.  And many state agency wolf management plans specifically call for compensation to livestock producers—but without any requirements that livestock husbandry practices be in place to reduce or eliminate predation opportunity.

In a sense, ranchers have externalized one of their costs of business, namely practicing animal husbandry that eliminates or significantly reduces predator losses. Most of these proven techniques involve more time and expense than ranchers have traditionally had to pay, in part, because they have been successful in making the rest of us believe it was a public responsibility to eliminate predators and not a private business cost.
. . . .
See link above for rest
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The Information Below is from Wally Sykes of Northeast Oregon Ecosystems:

[The first story may or may not be true. Wolf hysteria is easily whipped up by sloppy confirmations of wolf kills by federal investigators and then reported by news outlets, only to be overturned by more thorough ODFW investigations. ODFW has not been involved in these investigations, and while they could be true, there is plenty of room for skepticism.

The billboard, below, featured on previous blogs, was taken down yesterday due to objections from the landowner. It will hopefully be reposted in an alternative location before long. Doesn't the fact that the property owner felt compelled to remove the message speak for itself?]


Wolves kill two cows in Wallowa County
Wallowa County Chieftain
February 16, 2011

Also covered on OPB blog:

Washington Livestock group files suit over wolves
February 16, 2011
KOZE
Group sues USFWS to force a review of federal wolf protections

Wolf Awareness Week Poster Image Entries Wanted
Ashland Current
February 16, 2011
The theme for the 2011 posters is “Why Wolves? Wolves’ Role in a Healthy Ecosystem.”

Wolf de-listing bill on fast track in DC
February 15, 2011
Spokesman Review

From Ralph Maughan:
Cuts to Wildlife Services proposed by Obama. His budget will not become law due to the giant faceoff between Rs and Ds, but many of the specific cuts could survive.

Elsewhere in the West:

Dangerous Threats:
New York Times
February 15, 2011
NYT Editorial blasts Representative Rehberg’s veiled threat against a federal judge as well as his effort to undermine that judges decisions.

AP News Break – Montana won’t wait to kill wolves
Idaho Statesman
February 16, 2011
Defying federal authority over gray wolves, Montana Gov. Brian Schweitzer on Wednesday encouraged ranchers to kill wolves that prey on their livestock - even in areas where that is not currently allowed - and said the state will start shooting packs that hurt elk herds.

The Story in:
USA Today
Helena Independent Record
GOP Bill Would Lift Wolf Protections
Associated Press
February 16, 2011

Idaho wolves in lawmakers’ sights
Idaho Mountain Express
February 16, 2011
Idaho wolves are in the crosshairs as efforts to control and delist the predators escalate on the federal and state levels. The U.S. Fish and Wildlife Service was the first to take aim last week, publishing a draft environmental impact statement on Thursday that proposed allowing Idaho to reduce the Lolo wolf population—in north-central Idaho—by more than half.

Styler on Wolves
February16, 2011
Salt Lake Tribune
2 LTE responses to DNR Director's outrageous wolf claims
http://www.sltrib.com/sltrib/opinion/51229201-82/assertions-wolf-director-grazing.html.csp
http://www.sltrib.com/sltrib/opinion/51229255-82/utah-natural-park-reintroduction.html.csp

Elsewhere in the country

Study of wolf population underway in Michigan
Suite 101
February 15, 2011
The Michigan Department of Natural Resources and Environment needs help in the northern portion of Lower Michigan to find signs the gray wolf has returned.

Cry Wolf
Express Milwaukee
February 16, 2011
Someone very close to me worries a lot about wolves. She doesn’t worry about being attacked by packs of wolves. Nor is she afraid that when she goes through the woods to grandmother’s house, a wolf will be in granny’s bed wearing a frilly bonnet. She worries that Wisconsin can hardly wait to wipe out all the wolves again.
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Some Views on Wolves in NE Oregon, Obama, Threats to Social Security

In This Issue:

- News & Views on Wolves in NE Oregon (4 Pups Out and About)

---- ODFW: Four pups for Imnaha wolf pack
---- Oregonian Editorial: Wolves in Oregon: Don't be so quick on the trigger (Comments)
---- Herald Editorial: Wolves and trust (Comments)
---- Oregon Natural Desert Association: Wolves in Oregon – More Bark Than Bite?

- What's With Obama's Top Political & Economic Advisor"s? (Simon Johnson at Baseline Scenario)

---- David Axelrod’s Talking Points
---- Wall Street Prostitute & Financial/Intellectual Scammer, Tim Geithner Fights Regualtory Reform From Within

- Social Security Threats

[In process-editing]
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News & Views on Wolves in NE Oregon
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Four pups for Imnaha wolf pack

Four pups from the Imnaha wolf pack. (ODFW Photo)

For immediate release
July 14, 2010

Four pups for Imnaha wolf pack

The Imnaha wolf pack has at least four new pups this year, images captured on a motion-triggered trail camera show.

An image taken July 3 (attached) marks the first visual observation of new pups this year. The pack may have more pups than these four.

Wolf pups are born in mid-April and litters average four to six pups. Pups generally become active outside their pack’s den in June.

Six adult wolves were also seen in the images captured by the trail camera, including the alpha female. Past evidence, including a video taken November 2009, indicate at least 10 wolves made up the Imnaha pack before the pups were born this year. The alpha male, whose GPS collar has not been detected since May 31, was not seen in the images.

For more images of the Imnaha pack taken by a trail camera set up by ODFW in an area of pack activity, visit the website below (see first five photos). Note the alpha female is not pictured in these images.
http://www.dfw.state.or.us/news/images/photo_gallery/wolves_in_the_news/index.html

Michelle Dennehy
Wildlife Programs Communications Coordinator
Oregon Department of Fish and Wildlife
3406 Cherry Avenue NE
Salem, OR 97303
http://www.dfw.state.or.us/
tel. 503 947 6022
cell 503 931 2748
email: Michelle.N.Dennehy@state.or.us

Adult wolf from the Imnaha pack (ODFW Photo)

Four adults from Imnaha wolf pack (ODFW Photo)

The two in the foreground of the photo are similar to the two I saw near Sheep Creek on the 39 rd, Wallowa-Whitman National Forest, back in August (9 I think) of '07. It all happened so quickly that I couldn't get a photo. If I'd had my wits about me I would have stopped and looked to take photographs of the tracks. Also photographed what appear to be wolf tracks (4 inches or so) on the East Eagle Creek bridge at the wilderness boundary maybe the following spring (That one may not be with us any more.). - Chris
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Wolves in Oregon: Don't be so quick on the trigger

Published: Sunday, July 11, 2010, 10:36 AM Updated: Sunday, July 11, 2010, 5:30 PM
The Oregonian Editorial Board

Throughout Western history, it has always been easier to shoot wolves than to live with them. Now, just as the first small packs of gray wolves are getting a toehold in Oregon, it is vital that this state not go back to the old way, the easy way, every time there is a conflict with wolves.

There's just such a conflict now. The Oregon Department of Fish and Wildlife responded to several documented cases of wolf depredation on Wallowa County livestock by ordering the killing of two suspected wolves in early June. Conservation groups filed a federal suit in Portland challenging the kill permits, and a judge blocked the shooting of the wolves at least until July 31.

We understand that Oregon cattle and sheep ranchers operate on terribly thin margins and face a long list of threats to their stock, including harsh weather, disease, coyotes, mountain lions and domestic dogs. It's too much to expect them to welcome another predator. Furthermore, it isn't fair that a small number of ranchers must shoulder virtually all of the costs, all of the burden, of returning wolves to Oregon's wild country.

We are not against killing wolves that develop a taste for cattle, sheep and other livestock. Two such wolves, identified by their radio collars, were tracked down and killed not long ago, reducing Oregon's wolf population from 16 to 14. Those killings were justified.

Moreover, we strongly believe that Oregon ought to have a tax-supported compensation fund so that all the Oregonians -- more than 70 percent by one poll -- who support the recovery of wolves in this state do their own small part to pay for the costs of bringing them back.

But in the current case, Oregon seems too quick on the trigger and too willing to sidestep the sensible rules in its own recovery plan for gray wolves. Those rules generally require wildlife officials to document several wolf incidents on one or more adjacent ranches and clearly identify the targeted animals before issuing kill permits. That wasn't done in this case; about all that's known of the suspected wolves is that both are gray in color and neither one is wearing a radio collar. There are, of course, a lot of wolves that meet that description.

While Idaho, Montana and Wyoming have spent years grappling with wolf issues, this is still relatively new territory for Oregon. Our state had the advantage of watching wolves re-establish themselves and saw how they have affected elk and deer herds and domestic livestock. Ranchers have learned in most cases to live with wolves and take common-sense precautions, such as burying animals that die of disease and other causes to avoid inadvertently baiting wolves onto their lands. Problem wolves have been killed by wildlife authorities. Ranchers elsewhere generally have been compensated for losses.

After the first gray wolves swam the Snake River into Oregon beginning in 1999, a panel of ranchers, wildlife experts, hunters, Native Americans and others wrote a plan for how Oregon would respond to the arrival of wolves. It's not a perfect plan -- as we noted, it lacks a compensation fund for ranchers -- but it's a reasonably good one. And wherever and whenever one of Oregon's precious few wolves creates a problem, Oregon wildlife officials should adhere to that plan, rather than take the old way, the easy way, out.

© 2010 OregonLive.com. All rights reserved.

Click on title link above to find comments, including my own, but here is my recent version:

I guess my job is to make the mainstream environmental movement and Editorial Board look reasonable. ;-)

I agree on some points and disagree on others. I agree that shooting more wolves should have been blocked, and that they should not change the plan in a way that expands the area from that which documents "several wolf incidents on one or more adjacent ranches" and requires clear identification of "the targeted animals before issuing kill permits."

I find some of the Editorial Board's conclusions more problematic. They say that "Those killings were justified" in reference to the Baker County wolves. Maybe so. But they should have also indicated that in that case, the ranch or ranches had also buried a carcass or carcasses too close to home ranch operations, and that besides poorly designed and pitifully inadequate protective fencing at the sheep operation in question, the state had removed usually effective defensive measures many weeks prior to the final attacks that initiated the kill order. Given the poor defensive measures (pathetic in some instances, and lack of actual onsite herding, care taking, or proper carcass burial practice in the more recent Wallowa County instances), it was preordained that serious attacks would occur. The wolves were "baited," inadvertently, or otherwise. It is, after all, in the rancher's interest to create hysteria about another predator that threatens their economic interest.

As pointed out by the Hells Canyon Preservation Council, and the other groups, "In May and early June, six cattle deaths were confirmed as wolf depredations. For comparison, in 2005 — the year the wolf plan was created — domestic dogs killed 700 sheep and cows in Oregon, according to the National Agricultural Statistics Service. No new wolf depredations on livestock have occurred since June 4."

The "tax-supported compensation fund" is just another subsidy to already highly subsidized ranchers (subsidies paid for by federal and state tax dollars that should be going to a higher public benefit, i.e., that which benefits more, hopefully the majority, of citizens.) Ranchers and others ventured into wolf country and shot all the wolves [see:Wolves Again. . . .] so they could utilize (and ultimately seriously damage) public ecosystems for private profit with their private enterprise grazing and browsing. The people have changed the priorities towards the health of their public ecosystems and the retrieval and restoration of native species. Just as I have to non-lethally protect my chickens, pets and plants from native and non-native predators (foxes, coyotes, domestic dogs, etc) and herbivores (deer) here in Baker City, so should ranchers in a restored wolf country be required to do the same.

The plan, at a minimum, needs to maintain current protections, while requiring increased non-lethal protective measures by ranchers. There shouldn't be a double standard as to the burden for protection of one's property and animals from wild, and not so wild, life; i.e., one standard for ranchers, and one for the rest of us.

Chris (in Baker City)

_____

Wolves and trust

Written by Baker City Herald Editorial Board July 09, 2010 10:56 am

Despite evidence to the contrary, in the form of dead sheep in Baker County last year and dead cattle this year in Wallowa County, we believe wolves and livestock can both thrive in Northeastern Oregon.

But achieving that goal will require compromise.

And not between wolves and their domestic prey.

We’re talking about the relationship between the state and federal agencies responsible for managing wolves, and the coalition of groups that celebrate the return of wolves to Oregon after an absence of more than half a century.

What happened last year in Baker County, when a pair of wolves killed more than two dozen livestock in Keating Valley, proves that that relationship can work.

Although we’ll concede that that situation was more straightforward than what’s taken place this year in Wallowa County.

In Baker County there was ample evidence, including photographs, linking the two wolves to the livestock kills.

When those wolves, after being gone for most of the summer, returned to a ranch in Keating Valley and resumed their attacks on livestock, the Oregon Department of Fish and Wildlife (ODFW) authorized officials from the federal Wildlife Services to kill the two wolves.

Federal workers did so in early September.

None of the pro-wolf groups filed a lawsuit to block the federal hunters.

This year in Wallowa County, wolves killed at least six cattle (some ranchers contend the tally is higher) in May and early June.

There hasn’t been a confirmed wolf attack on livestock there since June 4.

ODFW issued permits to Wildlife Services to kill two wolves. The permits are effective through Aug. 31.

Although no wolves have been killed, a quartet of conservation groups on July 1 sued Wildlife Services, accusing the agency of not fully studying the effects of killing two wolves.

Wildlife Services responded the next day by voluntarily agreeing to not kill any wolves until Aug. 1 at the soonest.

And that’s where the tenuous ceasefire stands.

The plaintiffs posed a valid question: Would killing two wolves now, this month, save any livestock in Wallowa County?

It makes no sense to kill wolves if doing so is not necessary to protect domestic animals. However, absent permission from ODFW, federal hunters can’t deal with the Wallowa wolves should they suddenly regain their taste for beef. That, too, is unacceptable.

The key issue in this situation, ultimately, is trust.

Specifically, whether wolf advocates trust that ODFW, even accounting for its decision to issue wolf-kill permits, is committed to enabling wolves to re-establish a healthy, sustainable population in Oregon.

Based on the recent lawsuit, it seems that trust is lacking.

But what we’ve seen leads us to believe that ODFW truly intends to seek a balance not only between wolves and livestock, but also between wolves and game animals such as elk.

The return of wolves to Oregon was never going to be harmonious. But consensus is possible, as last year’s events in Baker County proved.

Such consensus will prove elusive, though, if wolf advocates file lawsuits when the only animals that have been killed are livestock.

__

As to the conclusions of the Baker City Herald Editorial Board, I offer the following:

The Herald says that they think "wolves and livestock can both thrive in Northeastern Oregon."

Let's hope so. But then they say:

But achieving that goal will require compromise.
And not between wolves and their domestic prey.

OK. Their are several interested parties from whence compromise might come if warranted. These include, the ranchers, the enviros and wolf supporters like myself (In another article below, Bruce Fenty, ONDA Exec. Director, points out that Oregon polls show "70% of people are in favor of wolves returning to Oregon" and I might add, millions of others across the nation.), hunting interests (mostly within the state of Oregon), as well as the federal and state agencies that manage wolves and their suitable habitat.

But the Herald says:

"We’re talking about the relationship between the state and federal agencies responsible for managing wolves, and the coalition of groups that celebrate the return of wolves to Oregon after an absence of more than half a century."

(Emphasis added)

Notably absent from the Herald's "compromise" are the ranchers, who absent any interest in increasing their own investment in non-lethally protecting their own livestock, stand to suffer personal losses and increased expense if wolves are successfully reintroduced. Is this realistic? How can the Herald reach the conclusion that such a major player and obstacle to successful reintroduction should be excused from any "compromise?" They, after all, were the motivation and major players in the original extirpation of wolves from Oregon.

Getting rid of the wolves helped them create an environment where they could turn their livestock (except for sheep, who are normally herded) out in the spring, sans supervision, and collect them in the fall, without losses due to wolves. Something will obviously have to change with the reintroduction of wolves to their rightful place and their necessary ecological role as an apex predator. That something is that ranchers are going to have to start looking after their livestock with active herding and the implementation of non-lethal controls and other non-lethal measures. That is the the part of the compromise that is mysteriously missing from the Herald's equation.

The Herald continues:

"In Baker County there was ample evidence, including photographs, linking the two wolves to the livestock kills.

When those wolves, after being gone for most of the summer, returned to a ranch in Keating Valley and resumed their attacks on livestock, the Oregon Department of Fish and Wildlife (ODFW) authorized officials from the federal Wildlife Services to kill the two wolves."

What the Herald leaves out is that they returned to the pitifully unprotected sheep operation several weeks after the quite often effective non-lethal measures had been removed. Why would the Herald leave that fact out?

They also state, much to my chagrin:

"None of the pro-wolf groups filed a lawsuit to block the federal hunters."

So . . .(bleep) what? Are we supposed to conclude that because regional "pro-wolf" groups didn't file suit concerning the first two killings of young wolves in Baker County, that the killings of set-up young wolves by the Feds were OK or that the "pro-wolf" groups don't care? One could easily conclude something quite different, but due to the lack of other relevant information or logic, it would be just as meaningless. Any conclusion based on that the single fact that they didn't file suit, such as they didn't file suit because they are chronic compromisers, or politically weak, or inept strategists, or underfunded, underpaid, overwhelmed, and otherwise broke, would be just as baseless without additional information.

They also state:

"It makes no sense to kill wolves if doing so is not necessary to protect domestic animals. However, absent permission from ODFW, federal hunters can’t deal with the Wallowa wolves should they suddenly regain their taste for beef. That, too, is unacceptable.

The key issue in this situation, ultimately, is trust.

Specifically, whether wolf advocates trust that ODFW, even accounting for its decision to issue wolf-kill permits, is committed to enabling wolves to re-establish a healthy, sustainable population in Oregon.

Based on the recent lawsuit, it seems that trust is lacking."

Trust? Well . . ., of course it's lacking--that's why the groups filed suit. When the agencies quit working for the ranchers with taxpayer money so as to help the ranchers evade responsibility, there will be a chance to develop trust. As for the part about killing wolves to protect domestic animals, that just ignores a core portion of the problem. The reason they want taxpayer funded agencies to kill wolves, is because they refuse to shoulder the responsibility and expense of protecting their livestock with non-lethal measures (as the rest of us are required to do).

If I had the time I would respond to some of the other interesting opinions in the piece, but the last portion of the editorial must get a response. The Herald says:

". . . consensus will prove elusive, though, if wolf advocates file lawsuits when the only animals that have been killed are livestock."

Here the Herald misrepresents the purpose of the lawsuit and ignores the fact that two young wolves were needlessly killed in the area north of Keating in Baker County after they did what they naturally do when finding inadequately protected livestock where no effective non-lethal measures were in place. Two more had been placed under imminent threat of death. Again, the purpose of the lawsuit as stated by the environmental groups:

"Four conservation groups sued the U.S. Department of Agriculture’s predator control branch, Wildlife Services, today for its role in killing wolves at the behest of the Oregon Department of Fish and Wildlife (ODFW). The state has issued, and now extended to Aug. 31, a permit to the federal agency to hunt, track and kill two wolves across a 70-square-mile area in eastern Oregon. According to the conservation groups’ lawsuit, Wildlife Services never conducted the environmental analysis required to disclose the impacts of killing a substantial portion of Oregon’s wolves. Cascadia Wildlands, Hells Canyon Preservation Council, Oregon Wild and the national Center for Biological Diversity brought the suit, and are also strongly considering suing the state for its role in authorizing the kill permits."

While the Herald's editorial seem like a case of fuzzy thinking, what is clear to me is that they can't go wrong in Baker County sheep & cow country when they excuse ranchers from compromise and place the blame on environmentalists and the agencies for problems in achieving so-called 'compromise" & "consensus."
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Wolves in Oregon – More Bark Than Bite?

By Brent Fenty
ONDA Executive Director

"Oregon’s Wolf Management Plan is currently under a 5-year review to determine the future of wolf populations. Over the past century, the gray wolf (Canis lupus) has borne the brunt of man’s attempt to dominate the wild west. For example, wolves were extirpated in Oregon in 1946 after decades of over-hunting fueled by State-paid bounties for every wolf hide.

Over the past several decades, Americans have grown to understand that the recovery of wolves is essential to ecosystem health and to restoring our wildlands. As Aldo Leopold once commented, “Harmony with the land is like harmony with a friend. You cannot cherish his right hand and chop off his left. That is to say you cannot have game and hate predators. The land is one organism.” As such, the gray wolf was put on the federal Endangered Species List in 1974, and since then efforts to re-establish wolf populations have led to wolves now being found in Montana, Wyoming, Washington, Idaho and, recently, Oregon.

As you may recall, the first known gray wolf to return to Oregon was a female that migrated from Idaho in 1999 but she was quickly returned to Idaho by the Oregon Department of Wildlife (ODFW). In 2002, ONDA successfully petitioned the ODFW to comply with State law and create a state Wolf Management Plan. This plan was completed in 2005, and set a goal of 5– 7 breeding pairs in the State before the has only two documented breeding pairs which are located in the northeast corner of the State.

While polls in Oregon have shown that 70% of people are in favor of wolves returning to Oregon, there is a vocal minority objecting to the re-establishment of viable wolf populations. The Oregon Cattlemen’s Association has all but declared war on wolves in Oregon, recently stating that “wolves are terrorizing eastern Oregon.” The underlying argument is that wolf populations will threaten livestock. However, Oregon produces 1.5 million head of cattle annually and so far there have been only six cattle deaths from wolf predation. In response to these conflicts, ODFW recently issued kill permits for an area spanning nearly 40 square miles; such action bears an unfortunate and uncanny resemblance to Oregon’s unsavory past efforts which led to the extermination of wolves.

Some conflicts between livestock grazing and native wildlife such as wolves are unavoidable particularly given the fact that the vast majority of our public lands are grazed by livestock. Conservation groups have worked to find ways to address such conflicts with wolves. For example, Defenders of Wildlife set up a fund to reimburse ranchers for livestock lost to wolf depredation, and since the establishment of this fund it has paid out $3,900 to Oregon ranchers. Another option would be to permanently or temporarily retire grazing permits on public lands where conflicts between wolves and livestock exist.
Regardless, ranchers, as outlined in the Wolf Management Plan, must take responsibility for the safety of their livestock by improving inventory, fencing and employing fladry lines or other non-lethal hazing tactics to scare wolves away from livestock. Ultimately, wolves need to be treated as native wildlife – not as unwanted predators.

A draft of the revised plan should be available by September and we have joined Hells Canyon Preservation Council in commenting on proposed revisions. A public meeting will be held in Bend on October 1st and ODFW will be making its recommendations for the Wolf Management Plan. I encourage you to attend this meeting and become involved in the protection of wolf populations in Oregon. In the meanwhile, keep an eye on your inbox for email updates on the Wolf Management Plan and please don’t hesitate to contact staff for more details on how to support wolf recovery."

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See Also (The last post listed is perhaps instructive):

THURSDAY, JULY 1, 2010
Max Simpson's Advice & Oregon Wolves
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MONDAY, APRIL 5, 2010
Wolves and Other Predators
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SATURDAY, MAY 29, 2010
ODFW's Double Standards: Wolves, Ranchers, and Non-lethal Measures
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MONDAY, MAY 31, 2010
Native Wolves in Wallowa--Human variety in the Middle East

MONDAY, MAY 11, 2009
Wolves Again. . . .
This is a in part a re-post of a blog from December 6, 2007 about wolves and the persecution of predators.

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What's With Obama's Top Political & Economic Advisor's?

The Baseline Scenario
David Axelrod’s Talking Points
Posted: 14 Jul 2010 09:47 AM PDT
By Simon Johnson

David Axelrod was on the Diane Rehm show this morning – a great opportunity to connect with listeners who will actually stop what they are going and pay attention, at least for a short while. He was awful.

He had even the most basic facts wrong – it’s not “8 million people have lost their jobs” but rather “more than 8 million jobs have been lost” since December 2007. He rambled – it was hard to see his point, particularly in the introduction. But most of all, there was no narrative – why exactly did we have a recession, why has it been so bad, and why aren’t the jobs coming back?

Without a narrative, how can anyone make sense of the past 18 months?

Axelrod can choose his narrative – and obviously doesn’t need to agree, for example, with the view that the financial system became dangerous and now needs to be reined in - but he has to say something coherent. You can’t just make isolated points like “the fiscal stimulus helped” or (even more confusing) “we’ll now address the budget deficit.”

There was really no explanation for why the economy has become such a difficult place for so many people. How did we go from apparent prosperity in 2007 to the deepest recession of the past 50 years? And how are we going to get the jobs back?

Blaming things on the Republicans in some vague sense (e.g., tax cuts) also doesn’t make sense to people. If you want to get partisan, you have to connect the dots in a convincing manner – otherwise people will (rightly) tune out.

Does the problem here lie with the economic briefing that Axelrod received before going on air? If so, changing those responsible would be an obvious first step.

But the issue may be deeper – or higher up the administration. It is entirely possible, based on what we are seeing and hearing now, that even Axelrod and other members of the political wing of the White House don’t really understand what happened (the big banks blew themselves up) – and why they are now so powerless to do anything about it (after being rescued, the banks fought hard to block effective change). The credit system remains fundamentally damaged and unfixed; this undermines expectations for the future in many ways and slows the recovery of jobs. [Emphasis added]

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Wall Street Prostitute & Financial/Intellectual Scammer, Tim Geithner Fights Regualtory Reform From Within

Tim Geithner’s Ninth Political Life

Posted: 15 Jul 2010 05:59 PM PDT
By Simon Johnson

In modern American life, Treasury Secretary Tim Geithner stands out as amazingly resilient and remarkably lucky – despite presiding over or being deeply involved in a series of political debacles, he has gone from strength to strength. After at least eight improbably bounce backs, he might seem unassailable. But his latest mistake – blocking Elizabeth Warren from the heading the new Consumer Financial Protection Bureau – may well prove politically fatal.

Geithner was a junior but key member of the US Treasury team that badly mishandled the early days of the Asian financial crisis in 1997 and received widespread criticism (Life #1). He was promoted as a result and thereafter enjoyed a meteoric rise.

As President of the New York Federal Reserve from 2003, and de facto head of the government’s financial intelligence service, he completely failed to spot the problems developing in and around the country’s financial markets; nothing about this embarrassing track record has since stood in his way (Life #2). He subsequently became Hank Paulson’s Wall Street point person for one of the most comprehensively bungled bailouts of all time – the Troubled Asset Relief Program, TARP, which in fall 2008 first appalled Congress with its intentions and then wasn’t used at all as advertized (Life #3).

TARP and related Bush-Paulson-Geithner efforts were so completely and clearly unsuccessful in October/November 2009 that the crisis worsened and Geithner was offered the job of Treasury Secretary by President-elect Obama; the incoming team felt there was no substitute for “experience”. Nevertheless, he almost failed in the confirmation process due to issues related to his taxes (Life #4) and then stumbled badly with his initial public repositioning of the TARP (Life #5), which was going to buy toxic assets again but in a more complicated way (perhaps his most complete and obviously personal political disaster to date).

His next Great Escape was the stress tests in spring 2009 – it turned out, supposedly, that there was really no financial crisis. Most of the big banks really did have enough capital; all that had been missing was the government’s endorsement of this fact (this is the story, honest). If this seems too good to be true, look at the mass unemployment still around you and tell me if the financial sector really looks healthy (Life #6).

Life #7 was expended concurrent with the forceful arrival on the financial reform scene of Paul Volcker. The Geithner-Summers “financial reform” package from summer 2009 was weak to start with and weakened further as it was discussed in the House; the entire effort was rudderless. Volcker’s new proposals helped rescue the reform and restore momentum – but instead of (appropriately) discrediting the Geithner approach in the eyes of the White House, it actually helped the Treasury Secretary climb new pinnacles of influence. Go figure.

Life #8 is the blatant failure of the Geithner strategy to “just raise capital requirements” as the way to deal with distorted incentives and the tendency to take irresponsible risks at the heart of our financial system. Treasury insisted on “capital first and foremost” throughout the Senate debate this year – combined with their argument that these requirements must be set by regulators through international negotiation, i.e., not by legislation. But the big banks are chipping away at this entire philosophy daily through their effective lobbying within the opaque Basel process – as one would expect. The latest indications are that capital requirements will barely be raised in any meaningful sense.

Secretary Geithner likes to say, “Plan beats no plan” and in some positive interpretations this is the secret of his success. But it turns out that he had no plan really – the stress tests were a grand improvisation (ultimately implying scary sized government implicit guarantees), the initial financial reform proposals fizzled (the Volcker rescue was against Geithner’s wishes), and the much vaunted tightening of capital standards is completely illusory (doesn’t anyone in the White House read the newspapers?).

On top of all this, it now appears that Secretary Geithner will oppose Elizabeth Warren becoming the new chief regulator responsible for protecting consumers from defective financial products – despite the fact that she has led the way for this issue, on both intellectual and political fronts, over the past decade. The financial sector has abused many of its customers badly over the past decades. This simply needs to stop.

Throughout the Senate debate on financial reform, Treasury insisted that complex details regarding consumer protected need to be left to regulators – and thus the Geithner team pushed back against many sensible legislative proposals that would have tightened the rules. Treasury also promised – although in a nonbinding way – that the new generation of regulators would be an order of magnitude more effective that those who eviscerated whatever was left of our oversight system during the Bush years.

With his track record of survival, Geithner and his team apparently feel they can push hard against Elizabeth Warren and give the new consumer protection job to someone closer to their philosophy – which is much more sympathetic to the banking industry.

This would be a bad mistake – trying the patience of already exasperated Congressional Democrats. If the Obama administration can’t even complete the deal they implicitly agreed with Senators over the past months, this will set of a firestorm of protest within the party (and with anyone else who is paying attention).

Financial “reform” is already very weak. If Secretary Geithner gets his way on consumers protection, pretty much all of the Democrats efforts vis-à-vis the financial sector’s treatment of customers have been for naught.

Tim Geithner is sometimes compared to Talleyrand, the French statesman who served the Revolution, Napoleon, and the restored Bourbons – opportunistic and distrusted, but often useful and a great survivor with a brilliant personal career. In the end, of course, no one – including Talleyrand – proves indispensible. And everyone of this sort eventually pushes their luck too far.

If the Democratic leadership really wants to win in the November elections, they should think very hard about the further consequences of Mr. Geithner.
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Social Security Threats


The Impact of Social Security Cuts on Retiree Income

July 2010, Dean Baker and David Rosnick

There has been a serious push in policy circles to cut Social Security benefits for near- and/or current retirees. The argument for such cuts has been based on the deficits in the federal budget; the finances of the Social Security program have been at most a secondary consideration. However, the finances of the current or near-retirees who would be affected by these cuts have also largely been ignored in this discussion. This is striking because this group has been hardest hit by the collapse of the housing bubble and the resulting plunge in stock prices. These workers had accumulated some wealth – mostly in the form of home equity – which they stood to lose as a result of the crisis. Since they are at or near retirement age, they will have little opportunity to replace their lost wealth.

This paper assesses the cuts implied by three common proposals for reducing Social Security benefits:

- Adopting a “progressive price” indexation (PPI) formula for the basic benefit structure,
- Accelerating and extending the increase in the normal retirement age, and
- Reducing the annual cost-of-living adjustment. It calculates the implied cut in benefits and projected income for various age groups and income quintiles of retirees and near-retirees.

From the Executive Summary:

"Since the vast majority of near-retirees will rely on Social Security for the vast majority of their income in retirement, cuts in Social Security imply large cuts in income for a population that is already not especially wealthy. (Median household income for people over age 65 is less than $30,000.) Ironically, the drive for these cuts is being driven by budget problems resulting from the collapse of the housing bubble. This is a disaster for which older workers were the primary victims, since they lost the most equity in their homes."

CEPR Paper can be found here:

The Impact of Social Security Cuts on Retiree Income
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The ONION:

Collecting Social Security At 70?

Who's To Blame? Here Are a Few

I've had my fingers in the dirt of my garden recently, so still no time for spring birds. Here is some dirt of a different kind, the sort that has affected you, and the ones you love personally, unless you happen to be a lucky Wall Street gambler.

The second article concerns grazing management by the Wallowa-Whitman National Forest, and their plans for expanding grazing damage on the forest..
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America's Ten Most Corrupt Capitalists
By Zach Carter, AlterNet
Posted on May 13, 2010, Printed on May 16, 2010
http://www.alternet.org/story/146819/

The financial crisis has unveiled a new set of public villains—corrupt corporate capitalists who leveraged their connections in government for their own personal profit. During the Clinton and Bush administrations, many of these schemers were worshiped as geniuses, heroes or icons of American progress. But today we know these opportunists for what they are: Deregulatory hacks hellbent on making a profit at any cost. Without further ado, here are the 10 most corrupt capitalists in the U.S. economy.

1. Robert Rubin

Where to start with a man like Robert Rubin? A Goldman Sachs chairman who wormed his way into the Treasury Secretary post under President Bill Clinton, Rubin presided over one of the most radical deregulatory eras in the history of finance. Rubin's influence within the Democratic Party marked the final stage in the Democrats' transformation from the concerned citizens who fought Wall Street and won during the 1930s to a coalition of Republican-lite financial elites.

Rubin's most stunning deregulatory accomplishment in office was also his greatest act of corruption. Rubin helped repeal Glass-Steagall, the Depression-era law that banned economically essential banks from gambling with taxpayer money in the securities markets. In 1998, Citibank inked a merger with the Travelers Insurance group. The deal was illegal under Glass-Steagall, but with Rubin's help, the law was repealed in 1999, and the Citi-Travelers merger approved, creating too-big-to-fail behemoth Citigroup.

That same year, Rubin left the government to work for Citi, where he made $120 million as the company piled up risk after crazy risk. In 2008, the company collapsed spectacularly, necessitating a $45 billion direct government bailout, and hundreds of billions more in other government guarantees. Rubin is now attempting to rebuild his disgraced public image by warning about the dangers of government spending and Social Security. Bob, if you're worried about the deficit, the problem isn't old people trying to get by, it's corrupt bankers running amok.

2. Alan Greenspan

The officially apolitical, independent Federal Reserve chairman backed all of Rubin's favorite deregulatory plans, and helped crush an effort by Brooksley Born to regulate derivatives in 1998, after the hedge fund Long-Term Capital Management went bust. By the time Greenspan left office in 2006, the derivatives market had ballooned into a multi-trillion dollar casino, and Greenspan wanted his cut. He took a job with bond kings PIMCO and then with the hedge fund Paulson & Co.—yeah, that Paulson and Co., the one that colluded with Goldman Sachs to sabotage the company's own clients with unregulated derivatives.

Incidentally, this isn't the first time Greenspan has been a close associate of alleged fraudsters. Back in the 1980s, Greenspan went to bat for politically connected Savings & Loan titan Charles Keating, urging regulators to exempt his bank from a key rule. Keating later went to jail for fraud, after, among other things, putting out a hit on regulator William Black. ("Get Black – kill him dead.") Nice friends you've got, Alan.

3. Larry Summers

During the 1990s, Larry Summers was a top Treasury official tasked with overseeing the economic rehabilitation of Russia after the fall of the Soviet Union. This project, was, of course, a complete disaster that resulted in decades of horrific poverty. But that didn't stop top advisers to the program, notably Harvard economist Andrei Shleifer, from getting massively rich by investing his own money in Russian projects while advising both the Treasury and the Russian government. This is called "fraud," and a federal judge slapped both Shleifer and Harvard itself with hefty fines for their looting of the Russian economy. But somehow, after defrauding two governments while working for Summers, Shleifer managed to keep his job at Harvard, even after courts ruled against him.

That's because after the Clinton administration, Summers became president of Harvard, where he protected Shleifer. This wasn't the only crazy thing Summers did at Harvard—he also ran the school like a giant hedge fund, which went very well until markets crashed in 2008. By then, of course, Summers had left Harvard for a real hedge fund, D.E. Shaw, where he raked in $5.2 million working part-time. The next year, he joined the the Obama administration as the president's top economic adviser. Interestingly, the Wall Street reform bill currently circulating through Congress essentially leaves hedge funds untouched.

4. Phil and Wendy Gramm

Summers, Rubin and Greenspan weren't the only people who thought it was a good idea to let banks gamble in the derivatives casinos. In 2000, Republican Senator from Texas Phil Gramm pushed through the Commodity Futures Modernization Act, which not only banned federal regulation of these toxic poker chips, it also banned states from enforcing anti-gambling laws against derivatives trading. The bill was lobbied for heavily by energy/finance hybrid Enron, which would later implode under fraudulent derivatives trades. In 2000, when Phil Gramm pushed the bill through, his wife Wendy Gramm was serving on Enron's board of directors, where she made millions before the company went belly-up.

When Phil Gramm left the Senate, he took a job peddling political influence at Swiss banking giant UBS as vice chairman. Since Gramm's arrival, UBS has been embroiled in just about every scandal you can think of, from securities fraud to tax fraud to diamond smuggling. Interestingly, both UBS shareholders and their executives have gotten off rather lightly for these acts. The only person jailed thus far has been the tax fraud whistleblower. Looks like Phil's earning his keep.

5. Jamie Dimon

J.P. Morgan Chase CEO Jamie Dimon has done a lot of scummy things as head of one of the world's most powerful banks, but his most grotesque act of corruption actually took place at the Federal Reserve. At each of the Fed's 12 regional offices, the board of directors is staffed by officials from the region's top banks. So while it's certainly galling that the CEO of J.P. Morgan would be on the board of the New York Fed, one of J.P. Morgan's regulators, it's not all that uncommon.

But it is quite uncommon for a banker to be negotiating a bailout package for his bank with the New York Fed, while simultaneously serving on the New York Fed board. That's what happened in March 2008, when J.P. Morgan agreed to buy up Bear Stearns, on the condition that the Fed kick in $29 billion to cushion the company from any losses. Dimon-- CEO of J.P. Morgan and board member of the New York Fed-- was negotiating with Timothy Geithner, who was president of the New York Fed-- about how much money the New York Fed was going to give J.P. Morgan. On Wall Street, that's called being a savvy businessman. Everywhere else, it's called a conflict of interest.

6. Stephen Friedman

The New York Fed is just full of corruption. Consider the case of Stephen Friedman (expertly presented by Greg Kaufmann for the Nation). As the financial crisis exploded in the fall of 2008, Friedman was serving both as chairman of the New York Fed and on the board of directors at Goldman Sachs. The Fed stepped in to prevent AIG from collapsing in September 2008, and by November, the New York Fed had decided to pay all of AIG's counterparties 100 cents on the dollar for AIG's bets—even though these companies would have taken dramatic losses in bankruptcy. The public wouldn't learn which banks received this money until March 2009, but Friedman bought 52,600 shares of Goldman stock in December 2008 and January 2009, more than doubling his holdings.

As it turns out, Goldman was the top beneficiary of the AIG bailout, to the tune of $12.9 billion. Friedman made millions on the Goldman stock purchase, and is yet to disclose what he knew about where the AIG money was going, or when he knew it. Either way, it's pretty bad—if he knew Goldman benefited from the bailout, then he belongs in jail. If he didn't know, then what exactly was he doing as chairman of the New York Fed, or on Goldman's board?

7. Robert Steel

Like better-known corruptocrats Robert Rubin and Henry Paulson, Steel joined the Treasury after spending several years as a top executive with Goldman Sachs. Steel joined the Treasury in 2006 as Under Secretary for Domestic Finance, and proceeded to do, well, nothing much until financial markets went into free-fall in 2008. When Wachovia ousted CEO Ken Thompson, the company named Steel as its new CEO. Steel promptly bought one million Wachovia shares to demonstrate his commitment to the firm, but by September, Wachovia was in dire straits. The FDIC wanted to put the company through receivership—shutting it down and wiping out its shareholders.

But Steel's buddies at Treasury and the Fed intervened, and instead of closing Wachovia, they arranged a merger with Wells Fargo at $7 a share—saving Steel himself $7 million. He now serves on Wells Fargo's board of directors.

8. Henry Paulson

His time at Goldman Sachs made Henry Paulson one of the richest men in the world. Under Paulson's leadership, Goldman transformed from a private company ruled by client relationships into a public company operating as a giant global casino. As Treasury Secretary during the height of the financial crisis, Paulson personally approved a direct $10 billion capital injection into his former firm.

But even before that bailout, Paulson had been playing fast and loose with ethics rules. In June 2008, Paulson held a secret meeting in Moscow with Goldman's board of directors, where they discussed economic prognostications, market conditions and Treasury rescue plans. Not okay, Hank.

9. Warren Buffett

Warren Buffett used to be a reasonable guy, blasting the rich for waging "class warfare" against the rest of us and deriding derivatives as "financial weapons of mass destruction." These days, he's just another financier crony, lobbying Congress against Wall Street reform, and demanding a light touch on—get this—derivatives! Buffet even went so far as to buy the support of Sen. Ben Nelson, D-Nebraska, for a filibuster on reform. Buffett has also been an outspoken defender of Goldman Sachs against the recent SEC fraud allegations, allegations that stem from fancy products called "synthetic collateralized debt obligations"—the financial weapons of mass destruction Buffett once criticized.

See, it just so happens that both Buffet's reputation and his bottom line are tied to an investment he made in Goldman Sachs in 2008, when he put $10 billion of his money into the bank. Buffett has acknowledged that he only made the deal because he believed Goldman would be bailed out by the U.S. government. Which, in fact, turned out to be the case, multiple times. When the government rescued AIG, the $12.9 billion it funneled to Goldman was to cover derivatives bets Goldman had placed with the mega-insurer. Buffett was right about derivatives—they are WMD so far as the real economy is concerned. But they've enabled Warren Buffett to get even richer with taxpayer help, and now he's fighting to make sure we don't shut down his own casino.

10. Goldman Sachs

No company exemplifies the revolving door between Wall Street and Washington more than Goldman Sachs. The four people on this list are some of the worst offenders, but Goldman's D.C. army has includes many other top officials in this administration and the last.

White House:

Joshua Bolton, chief of staff for George W. Bush, was a Goldman man

Regulators:

Current New York Fed President William Dudley is a Goldman man

Current Commodity Futures Trading Commission Chairman Gary Gensler has been a responsible regulator under Obama, but he was a deregulatory hawk during the Clinton years, and worked at Goldman for nearly two decades before that.

A top aide to Timothy Geithner, Gene Sperling, is a Goldman man

Current Treasury Undersecretary Robert Hormats is a Goldman man

Current Treasury Chief of Staff Mark Patterson is a former Goldman lobbyist

Former SEC Chairman Arthur Levitt is now a Goldman adviser

Neel Kashkari, Henry Paulson's deputy on TARP, was a Goldman man

COO of the SEC Enforcement Division Adam Storch is a Goldman man

Congress:

Former Sen. John Corzine, D-N.J., was Goldman's CEO before Henry Paulson

Rep. Jim Himes, D-Conn., was a Goldman Vice President before he ran for Congress

Former House Minority Leader Dick Gephardt, D-Mo., now lobbies for Goldman

And the list goes on.

Zach Carter is an economics editor at AlterNet and a fellow at Campaign for America's Future. He writes a weekly blog on the economy for the Media Consortium and his work has appeared in the Nation, Mother Jones, the American Prospect and Salon.
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Here's another interesting article about how the Forest Service "manages" your public lands. HCPC Blog: From the Canyons BTW, Jennifer Schwartz is a friend of mine.

TUESDAY, APRIL 27, 2010
In Response to Comments re: Forest Service Aims to Reward Bad Behavior (posted 4/12/10)

The Banks: "Too Big To Fail" Must Become "Small Enough To Fail."

In the following article, Simon Johnson explains why "Too Big To Fail" must become "Small Enough To Fail."

The Baseline Scenario
What happened to the global economy and what we can do about it
What Would Really End “Too Big To Fail”?
with 47 comments

By Simon Johnson, co-author of 13 Bankers: The Wall Street Takeover and The Next Financial Meltdown

As we move closer to a Senate – and presumably national – debate on financial reform, the central technical and political question is: What would prevent any bank or similar institution from being regarded – ultimately by the government – as so big that it would not be allowed to fail. If you are “too big to fail” (TBTF), credit markets see you as lower risk and as more attractive investment – enabling you to obtain more funding on cheaper terms, and thus become even larger.

Everyone agrees, in principle, this is a bad arrangement. It’s an unfair distortion of markets – giving huge banks the opportunity to grow bigger, because they have implicit government guarantees. It is also manifestly unsafe, because it encourages reckless risk-taking: If things go well, the TBTF bank gets the upside; if there is mismanagement of risk, or just bad luck, the downside falls to the taxpayer and to society more broadly. These costs can be huge: 8 million jobs lost since December 2007.

But there remains sharp disagreement on what exactly would end too big to fail. The main views fall primarily into three camps.
. . . .

Make our largest banks small enough to fail. There is simply no other way to really end the problem of Too Big To Fail.

See What Would Really End “Too Big To Fail”? for full article, including Johnson's lucid arguments and associated links.

The Elephant in the Climate Change Living Room Revisited

Think Out Loud from OPB really outdid themselves on Monday & Tuesday of this week, tackling two very contentious issues: Wyden's introduction of the Oregon Eastside Forests Restoration, Old Growth Protection, and Jobs Act of 2009, and the perhaps even more controversial population elephant in the climate change living room (Population control called key to deal http://bakercountyblog.blogspot.com/2009/12/hell-on-earth.html.

The first is found at http://www.opb.org/thinkoutloud/shows/forest-agreement/, and the second, "The "P" Word and Climate Change" from this morning, at http://www.opb.org/thinkoutloud/shows/p-word-and-climate-change/. Both episodes include many useful and informative links, along with the usual voicing of opinions from those confident enough to speak up.

I recommend checking out both programs and getting the podcasts if you can. If you have an application like iTunes, you can subscribe using the link http://www.opb.org/programs/podcast.php?tol by clicking on the "Advanced" tab in your toll bar, clicking on "Subscribe to podcast," and pasting in http://www.opb.org/programs/podcast.php?tol .Or, more simply, just go to the link and download what you want.

In the first, environmental consultant, spokesperson, and thinker, Andy Kerr (who left Joseph, Oregon several years ago in a moment of preservational sanity), does a good job of explaining both the bill and his move towards collaboration with any semi-rational folks from the timber industry that he could find.

There are also interesting comments to be mined in an Oregonian article, "Wyden bill aims to end eastern Oregon timber
disputes" at: http://www.oregonlive.com/environment/index.ssf/2009/12/wyden_bill_aims_to_end_eastern.html.

The second is found at http://www.opb.org/thinkoutloud/shows/p-word-and-climate-change/. It is an expansion, or at least a different version of the ideas found in the Population control called key to deal article from my Dec. 15 blog.

Some years ago, I was active in the "Zero Population Growth" organization, but I left when they changed their name to "Population Connection" (http://www.populationconnection.org/site/PageServer), at which time they began to soft-pedal the importance of mass immigration to US population growth. Immigration (immigrants and children of immigrants) now accounts for over 75% of our under-developed nation style population growth. We had achieved essentially zero population growth in the mid-1970's, but once the effects of the 1965 immigration bill and all future amnesties got rolling, we were on the hopeless track of unsustainable poplulation growth once again. The result of ignoring mass immigration is essentially that instead of plateauing out at about 260 million people, the US started on an unmanageable, unsustainable and crash producing population trajectory that has left us with over 300 million people and no end in sight. Call me crazy, but if I wanted to live in the conditions found in Mexico City (scrounging for existence on dumps), Mumbai (Bombay, Population density (/km²) of 23,088 people), or Delhi, India (Population density (/km²) of 28,438 people: http://en.wikipedia.org/wiki/List_of_cities_proper_by_population), I could move there. Interestingly, immigration's contribution to US population growth was (mysteriously) absent for today's "Think Out Loud" commentary. But hey, you can't be too politically correct these days.

Anyway, a coherent explanation of one of the important ideas discussed today, i.e., individual reproduction's contribution to carbon emissions, water use, etc., can be found in the Oregon State press release for Murtaugh and Schlax's paper on the issue, "Reproduction and the carbon legacies of individuals" at http://oregonstate.edu/ua/ncs/archives/2009/jul/family-planning-major-environmental-emphasis.

The research paper they produced is at: http://blog.oregonlive.com/environment_impact/2009/07/carbon%20legacy.pdf

It is important stuff for understanding the effects of population growth and a reproducing individual's contribution to consumption and pollution, especially at the rates Americans consume and pollute. It is a powerful argument for having fewer children and for greatly reducing the rate of immigration into America of those who value large families.

Other links from the show and elsewhere:
Albertideation: http://albertideation.com/2009/10/20/worldpopulationvideo/

Numbers USA
http://www.numbersusa.com/content/

http://www.youtube.com/watch?v=b4O7c7MXDq8


See also:
http://www.youtube.com/user/NumbersUSA

Over the years, some special interest "liberals" and ethnically and racially oriented groups have tried to paint Roy Beck as a right wing xenophobe, but this is not true. I met him in the late nineties, and he is simply a decent and concerned person, like Garrett Hardin was (Humanist of the Year), who is concerned about population growth and its consequences. Please don't buy into the smears, and just consider the evidence and the numbers.
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Representative Bentz Responds on Local Stimulus Jobs

In the Sunday, November 1st blog http://bakercountyblog.blogspot.com/2009/11/obama-stimulus-and-anybody-seen-rep.html, I posted a letter to Representative Cliff Bentz that outlined the concerns of a friend in the neighborhood (as well as some my own observations) concerning local stimulus jobs going to people who didn't live in Baker County or even in adjoining counties. The briefest drift of the issues raised was "We thought the stimulus money was supposed to help stimulate the economy and put people to work in the areas where the projects were taking place--not people from cities several hundred miles away or people in neighboring states. To the best of our knowledge, the people just referenced don't shop much in Baker County.

Do you think these projects should be putting more local people to work? Would it be possible for your staff to look into this?"

Mr. Bentz has responded, and he is in fact looking into the matter to see if he can get some changes made. He asks that if people have other examples that they get those concerns to him soon. You can send them to Representative Bentz at the address and e-mail at the bottom of his letter, or you may e-mail them to me at refugee2000@gmail.com, or phone 541-523-2376.

Here is his response:

Dear Mr. Christie,

I raised the issue of ODOT's contracting and hiring practices with ODOT Director Matt Garrett yesterday during my radio show here in Ontario. He was my guest. He indicated that ODOT was making an effort to "unbundle" the project so that local contractors would be hired. I also asked him if ODOT was aware of the approach Idaho and Washington were using (in other words, are Idaho and Washington discriminating against Oregon contractors). He indicated he had heard nothing like this. I have, and I will be following up with him in this regard also.

I have also spoken with the local ODOT personnel regarding the hiring of more local people.

I will be traveling to Salem for the Legislative Transportation Committee meeting on Thursday, Nov. 19, 2009. I will raise the issues that you have shared with me once again at that meeting.

If you have any other suggestions (or examples that I could share) could you please get them to me sometime next week so that I can use them in my conversations with ODOT.

Thank you very much for your help.


Very Truly Yours,

Representative Cliff Bentz
District 60

Eastern Oregon Office:
258 S. Oregon St., Ontario, OR 97914
Mailing Address:
P.O. Box 1027, Ontario, OR 97914
Phone/Fax:
541-889-8866
E-mail:
rep.cliffbentz@state.or.us
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Befuddlement, Bailout Bubbles, and BBQ Squirrel (on a stick)

IN THIS ISSUE:

- Think Globally; Eat Locally
~~ BBQ Squirrel
~~ Marinated, Deep-fried Sparrow
~~ Bailouts for Bankers, Not a Cent for Autoworkers

- Befuddlement & Bailout Bubbles
~~ 7.4 Trillion Dollars And Counting
~~ Federal Reserve, Treasury Announce $800 Billion Plan to Support Consumer Lending
~~ You Ain't Seen Nothing Yet

- The More Things “Change” . . .
(Reality Check--Part Three)
~~ DN! Klein, Kuttner and Hudson Dissect Obama’s New Economic Team & Stimulus Plan
~~ Noam Chomsky: "What Next? The Elections, the Economy, and the World"
~~ Scheer - Change We Can Bank On [The Woman Obama Didn't Choose]
~~ Nader - Democrats Owe Jimmy Carter an Apology
~~ Petras - Bring on the Victims! Condemn the Fighters!

 [The Evils of "Lesser Evil" politics]
~~ Nader/Greider - The hypocrisy of liberals

Quote to ponder:
"The problems we face today cannot be solved by the minds that created them" -Albert Einstein

Think Globally; Eat Locally
It really is darn near impossible to keep up with the money our government has been giving away to Wall Street in recent days. Like buying a new computer, just about every article concerning bailout news is out of date before the consumer gets to it.

I thought we’d get to the important stuff first, if that’s OK.

It really is hard to get your mind around figures like 8.5 trillion dollars, which is about the amount our corporate controlled government has pledged to primarily the FIRE (Finance, Insurance and Real Estate) sector of the economy in recent bailout packages. No one really has a clue as to where that kind of money will come from, besides the printing press, or you and me, especially when our nation is nearly bankrupt and as we all know, you can't get blood out of taxpayers who have morphed into turnips. I don’t know if it has anything to do with the money these coorporations contribute to political campaigns, like the 53 million plus dollars the FIRE sector gave to McCain and Obama (Obama: $27,866,622, McCain, $25,177,854 (see OpenSecrets.org). We do know money from well-heeled special interest groups carries more weight than the contributions from the vast majority of citizens who pony up less than 200 dollars each for the same purpose.

According to OpenSecrets.org, $7,977.04 is the "Average contribution that donating [Obama] transition team members gave to all federal candidates, parties and committees this election cycle. Any individual could give up to $108,200 this election cycle. The percentage of Americans who give even $200 to federal politics is less than one-half of 1 percent." (Isn’t it past time for REAL campaign finance reform???)

As the economic situation continues to deteriorate, we look for solutions to our powerlessness over the financial magicians and corrupt politicians who allowed it to happen. About the only practical solution I have at the moment, besides restructuring social systems by eliminating the insidious control over our lives by Wall Street, other corporate interests, and bought off politicians, is looking to the availability of (non-native) squirrels and birds, of which there is no shortage. Americans in the east and southeast have delighted in the subtle flavors of squirrels since before the founding our national experiment, and not to diminish multi-cultural contributions, some of our Asian compatriots have a talent for wringing tasteful nutrition from sparrows and other animals. As we have an excess of both (not to mention uncontrolled semi-domesticated deer in the backyard—another real opportunity there), I thought my best contribution might be to offer a few recipes. Other opportunities may come to mind, but respecting local mores, they are not listed here.

BBQ Squirrel

Thanks to Todd Smith for sending in this recipe.
From http://www.backwoodsbound.com/zsquir14.html with a few suggestions of my own:

~ 4 squirrels, quartered
~ 3 tbsp salt
~ 2 tsp pepper
~ 1 tsp garlic powder
~ 1 tsp onion powder
~ your favorite dry rub
~ 15 charcoal briquets
~ 3 handfuls hickory chips
~ your favorite bbq sauce

In a large pot, boil the squirrel in water seasoned with the salt, pepper, garlic powder and onion powder for 1 hour or until tender.

In the meantime, soak the hickory chips in water. Light the charcoal and let them get white hot. Place them to one side of your grill.

Remove the squirrel from the water and pat dry. Coat with your favorite dry rub.

Add one handful of wood chips to the hot coals.

Place squirrel on grill across from the hot coals. (I would prefer skewering the squirrel on an available stick, and roasting it like a hot dog) Cover and smoke for 1 hour. Add a handful of wood chips every half hour.

Add last of the wood chips and baste squirrel with bbq sauce. Smoke for another half hour basting another 3 - 4 times.

Serve with mashed potatoes, sweet corn and buttermilk bisquits. (You can grow the potatoes and corn in your garden or glean the spuds from local fields.)

Enjoy!!!

Other squirrel recipes are available from http://www.backwoodsbound.com/zsquir14.html

Marinated, Deep-fried Sparrow

Given their numbers, English sparrows (or starlings) are another overlooked delicacy here in Baker City. I’m really surprised Mad Matildas’ has ignored this treat as a possible money-maker to place along side of their Gelato creamy confections. Whatever happened to creative economic development anyway??? For inventive and enterprising entrepreneurs, it is not just about compromising the Democrats and local interest groups, other scavenging political opportunists, and networking anymore!

Exact recipes are hard to come by, but after you get the little rascals plucked, the general idea for gourmet culinary approaches to non-native sparrow (and even starlings) can be found at:

http://www.spicelines.com/2008/05/andrea_nguyen_talks_vietnamese.htm

“In Vietnam, we learn, “birds the size of sparrows” were boiled and fried by itinerant, somewhat secretive Chinese cooks, and then eaten “bones and all.” Using her mother’s memory of this delicacy as a springboard, Nguyen has developed a tasty recipe that can be recreated in Western kitchens. She substitutes quail for the unnamed, sparrow-like birds, and, instead of boiling, steams them to preserve the flavors of the ginger-rice wine marinade before coating them with honey and soy sauce and deep frying them. The flavors and crispy skin are true to the original, even if the methods have changed.”

For other ideas and photographs of sparrow on the fork, see:
Andrew enjoying sparrow
http://dinersjournal.blogs.nytimes.com/2007/04/04/with-so-much-to-choose-from-why-such-a-limited-menu/?apage=2
http://www.nytimes.com/2006/05/12/books/12food.html?pagewanted=1&_r=1
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Befuddlement & Bailout Bubbles

As the financial crisis/collapse is quickly unfolding, events and articles soon become outdated. Offered below are a few selected fairly recent articles that give perspectives you may not have encountered.

"The problems we face today cannot be solved by the minds that created them"
Albert Einstein

What’s a Billion Here, a Trillion there….

The following article was written yesterday, prior to the new $800 billion bailout package announced today. The total is now in the neighborhood of $8.2 Trillion (see a later article.).

7.4 Trillion Dollars And Counting

The Cost Of "Rescuing" The US Financial System

By Hamilton Nolan
http://www.informationclearinghouse.info/article21311.htm

November 24, 2008 "Gawker"

-- Hey, the government has agreed to bail out Citigroup. Surely we'll now be saved from worldwide insolvency! Right? Or is this a profligate waste of money? We have to level with you: this whole bailout thing has now exceeded the media's ability to critically analyze it. You've heard everyone throw around figures like $750 billion for the earlier bailout costs. This Citigroup thing includes a guarantee of $306 billion in assets. But think about this: according to Bloomberg, the US government has now pledged more than $7.4 trillion to rescue the financial system in the past 15 months. How much is 7.4 trillion?

It is "half the value of everything produced in the nation last year," according to Bloomberg.
It's enough to cut a check for almost $25,000 to every single citizen of the USA!
If you had 7.4 trillion pennies, you would have $74,000,000,000. That's enough money to buy the New York Times Co. 86 times over. If we say that 100 pennies stack up 4 inches high, 7.4 trillion pennies would stack up 4,671,717 miles high. That's enough to go to the moon and back ten times.

Fun with math! If you think the US media is equipped to evaluate numbers like this precisely, you're out of your mind. Even the media outlets that are most qualified to report on money matters have a hard time putting $1 trillion into perspective (try this: "It would take almost three decades to spend a trillion dollars at $1,000 per second), much less $7.4 trillion.

If it makes you feel better though: this financial crisis has actually erased $23 trillion in corporate value. So 7.4 tril isn't too bad! [Bloomberg]

For the whole sad story in detail, please read Bloomberg’s article:
U.S. Pledges Top $7.7 Trillion to Ease Frozen Credit (Update2) Mark Pittman and Bob Ivry
November 25, 2008

THE US Government is prepared to lend more than $US7.4 trillion ($A11.8 trillion) on behalf of American taxpayers, or half the value of everything produced in the nation last year, to rescue the financial system since the credit markets seized up 15 months ago.

The unprecedented pledge of funds includes $US2.8 trillion already tapped by financial institutions in the biggest response to an economic emergency since the New Deal of the 1930s, according to data compiled by Bloomberg. The commitment dwarfs the only plan approved by legislators, the Treasury Department's $US700 billion Troubled Asset Relief Program. Federal Reserve lending last week was 1900 times the weekly average for the three years before the crisis.
When Congress approved the TARP on October 3, Federal Reserve chairman Ben Bernanke and Treasury Secretary Henry Paulson acknowledged the need for transparency and oversight. Now, as regulators commit far more money while refusing to disclose loan recipients or reveal the collateral they are taking in return, some Congress members are calling for the Fed to be reined in.

The Government committed $US29 billion to help engineer the takeover in March of Bear Stearns by JPMorgan Chase & Co. and $US122.8 billion in addition to TARP allocations to bail out American International Group, once the world's largest insurer. Now Citigroup, as recently as last month the biggest US bank by assets, may need to be saved too.

The worst financial crisis in two generations has erased $US 23 trillion, or 38 per cent, of the value of the world's companies and brought down three of the biggest Wall Street companies.

Most of the spending programs are run out of the New York Fed, whose president, Timothy Geithner, is said to be President-elect Barack Obama's choice to be Treasury secretary.

The money that's been pledged is equivalent to $US 24,000 for every man, woman and child in the country. It's nine times what the US has spent so far on wars in Iraq and Afghanistan, according to Congressional Budget Office figures. It could pay off more than half the country's mortgages.

Congress and the Treasury have ponied up $US892 billion in TARP and other funding, or 12 per cent.

The Federal Housing Administration, overseen by Department of Housing and Urban Development Secretary Steven Preston, was given the authority to guarantee $US300 billion of mortgages, or about 4 per cent, of the total commitment, with its Hope for Homeowners program, designed to keep distressed borrowers from foreclosure.

Most of the federal guarantees reduce interest rates on loans to banks and securities companies, which would create a subsidy of at least $US6.6 billion annually for the financial industry, according to data compiled by Bloomberg comparing rates charged by the Fed against market interest paid by banks.

Not included in the calculation of pledged funds is an FDIC proposal to prevent foreclosures by guaranteeing modifications on $US444 billion in mortgages at an expected cost of $US24.4 billion to be paid from the TARP, according to FDIC spokesman David Barr. The Treasury Department hasnt approved the program.

Dr Bernanke and Mr Paulson have also promised as much as $US200 billion to shore up nationalised mortgage finance companies Fannie Mae and Freddie Mac. The FDIC arranged for $US139 billion in loan guarantees for General Electric's finance unit.

The tally doesnt include money to General Motors, Ford and Chrysler. Mr Obama has said he favours financial help to keep them from collapse.

Mr Paulson told the House Financial Services Committee on November 18 that the $US250 billion already allocated to banks through the TARP was an investment, not an expenditure.

"I think it would be extraordinarily unusual if the Government did not get that money back and more," Mr Paulson said.
Article was At: http://bloomberg.com/apps/news?pid=20601109&sid=arEE1iClqDrk&refer=home /news?pid=20601109&sid=arEE1iClqDrk&refer=home
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TUESDAY, NOVEMBER 25, 2008
Federal Reserve, Treasury Announce $800 Billion Plan to Support Consumer Lending
From NAKED CAPITALISM

Let's see, Bloomberg said yesterday that the Federal government had committed $7.4 trillion to lending facilities and guarantees. The total is now $8.2 trillion thanks to new programs announced today to aid borrowing by consumers, small businesses, and homeowners.

Stocks have rallied, and the 30 year bond is also up three points, due to a GDP report that revised third quarter growth from positive 0.3% to negative 0.5%. We had been skeptical of the GDP release figures at the time. Note that October was worse than September, but retailers have said there is a slight improvement in the last couple of weeks from the sales levels they had seen earlier.

From the Fed's press release:
Purchases of up to $100 billion in GSE direct obligations under the program will be conducted with the Federal Reserve's primary dealers through a series of competitive auctions and will begin next week. Purchases of up to $500 billion in MBS will be conducted by asset managers selected via a competitive process with a goal of beginning these purchases before year-end. Purchases of both direct obligations and MBS are expected to take place over several quarters. Further information regarding the operational details of this program will be provided after consultation with market participants.

From a separate press release:
The Federal Reserve Board on Tuesday announced the creation of the Term Asset-Backed Securities Loan Facility (TALF), a facility that will help market participants meet the credit needs of households and small businesses by supporting the issuance of asset-backed securities (ABS) collateralized by student loans, auto loans, credit card loans, and loans guaranteed by the Small Business Administration (SBA).

Under the TALF, the Federal Reserve Bank of New York (FRBNY) will lend up to $200 billion on a non-recourse basis to holders of certain AAA-rated ABS backed by newly and recently originated consumer and small business loans. The FRBNY will lend an amount equal to the market value of the ABS less a haircut and will be secured at all times by the ABS. The U.S. Treasury Department--under the Troubled Assets Relief Program (TARP) of the Emergency Economic Stabilization Act of 2008--will provide $20 billion of credit protection to the FRBNY in connection with the TALF.

Some fine print from an attachment:
Eligible collateral will include U.S. dollar-denominated cash (that is, not synthetic)
ABS that have a long-term credit rating in the highest investment-grade rating category (for example, AAA) from two or more major nationally recognized statistical rating organizations (NRSROs) and do not have a long-term credit rating of below the highest investment-grade rating category from a major NRSRO.

All or substantially all of the credit exposures underlying eligible ABS must be newly or recently originated exposures to U.S.-domiciled obligors. The underlying credit exposures of eligible ABS initially must be auto loans, student loans, credit card loans, or small business loans guaranteed by the U.S. Small Business Administration. The set of permissible underlying credit exposures of eligible ABS may be expanded later to include commercial mortgage-backed securities, non-Agency residential mortgage backed securities, or other asset classes. The underlying credit exposures must not include exposures that are themselves cash or synthetic ABS.

Originators of the credit exposures underlying eligible ABS (or, in the case of SBA guaranteed loans, the ABS sponsor) must have agreed to comply with, or already be subject to, the executive compensation requirements in section 111(b) of the Emergency Economic Stabilization Act of 2008.

As we said in a post last evening on this program:
There are a few problems with this approach:

1. The banks have already been given support right, left and center. They are still not lending,

2. Some of the stinginess is warranted. Um, a credit bubble means a lot of people got loans who shouldn't have. Do we want banks again to make unsound loans? I should hope not, but I could be wrong here. A fair bit of consumer credit ought to contract. And even if a lot of good customers also have their credit lines cut, do you really think the banks are going to turn around and reverse these decisions on a meaningful scale. Ain't happening.

3. Consumers are scared about employment and the loss of their home equity piggybank. They also know they borrowed too much. They want to lower debt levels. So as a reader put it, "Even if you throw the horse in the lake, you can't make him drink."

4. Banks are so desperate to restore profits that they are jacking up prices on existing consumer credit, even as the Fed and Treasury have been provided lots of low-cost support. Citibank and American Express are raising interest rates on existing loan balances for a a significant proportion of customers, and they no doubt have company. If consumers face higher charges on their outstanding debt. it considerably reduces the odds that they can or will take on more debt.

And a separate issue: consumer debt and consumer spending were at unsustainable levels. They need to fall. Trying to shore up consumers is a wrongheaded way to stimulate the economy. Fiscal expenditures, including a broadening of safety nets, is a much better way to go.

Persisting in a failed course of action is not a sign of intelligence.

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Bailouts for Bankers, Not a Cent for Autoworkers
posted by JOHN NICHOLS on 11/24/2008 @ 3:25pm
http://www.thenation.com/blogs/thebeat/385915

This is the part of our nation's surreal economic crisis that seems particularly surreal:
The US auto industry, which employs 3 million Americans in auto plants, parts and supplier networks and dealerships nationwide is broadly understood as being essential to maintaining America as an industrial force. It's financial collapse, which even critics of moves to bailout the industry suggest is imminent, would devastate workers, retirees and communities in every state of the nation. Despite the grumbling from anti-union zealots, the auto giants have radically retooled in a manner that makes the cost of producing a vehicle at a unionized plant of General Motors, Ford or Chrysler roughly equivalent to the cost of running a car off the line at a non-union plant. And to top it all off: Auto plants actually produce something that most Americans consider to be useful.

Yet, proposals to provide what now seems to be a very small bailout -- $25 billion -- are currently stalled.

At the same time, the whole of the federal government is scrambling to buy as much as $50 billion in "toxic assets" -- bad loans and other products of irresponsible financial practices that are of dubious value -- from Citigroup, a global banking concern that makes money by charging working families exorbitant interest rates for credit.

According to the Wall Street Journal, "[The move to protect the banking concern] would mean taxpayers could be on the hook if Citicorp's massive portfolios of mortgage, credit cards, commercial real-estate and big corporate loans continue to sour."
Perhaps, in some wild calculation of American interest, Citicorp is worthy of a bailout.
But what mad calculus would make Citigroup more worthy than the auto industry?

And why the urgency with regard to Citigroup and the casual disengagement with regard to the industrial giants that, for all their flaws and perils, remain what Barack Obama correctly described as "the backbone of American manufacturing"?

Something is fundamentally wrong with a federal government that offers bankers a bailout and autoworkers as cold shoulder.
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So you might say "if they didn't show us a plan, why should we give them the money?" OK, good question. But why aren't we asking the commercial banks and Wall Street the same questions? Why are Congress and the press embarrassing auto-execs while they treat multimillionaire banksters with such reverence, when the banksters don't seem to have a plan either? [Chris]

Here's what Robert Kuttner has to say about that on DN!:

AMY GOODMAN: Bob Kuttner, why are the banks not ask the same questions that auto industry is asked. You have Nancy Pelosi and that others are saying when you bring us the plan, maybe we’ll talk about giving you money. Do the banks have any plans with the money they’re getting?

ROBERT KUTTNER: No, and of course that’s what we should be doing. I think rather than throwing money at them we ought to probably nationalize one or two banks. That with the money taxpayers are putting into the bank’s does what money usually does, producing. The amount of money taxpayers are putting into banks at this point is more than the total value of the stocks of these banks as valued by Wall Street.

Well if you’re putting in a majority share of the money, you should get a majority share of the ownership. If banks are too traumatized to resume lending, even with public money then if we had a publicly owned bank or two, we could show them how to do it. We could also have a complete look at their books, which we don’t now have. One question being asked about Tim Geithner is that if the Federal Reserve is the agency charged with examining bank holding companies and it was the strategy of Citigroup as a bank holding company, as shown in Sunday’s Time investigative piece, the strategy of the holding company was to do all of these exotic speculative investments.

Where was Tim Geithner at the Federal Reserve of New York which has the examiners that are supposed to be examining the bank at the holding company level. Why didn’t they get a look at the book? If we do not have tools to allow examiners to get inside to dig deep inside the plumbing and understand what dangerous risks bank speculators are taking, we need to do two things. We need to change the laws so the agency’s can have adequate supervisory power. The agencies need to use that adequate supervisory power. and in the meantime, we need to take this money and just nationalize a couple of banks outright. I completely agree with you that there is a double standard vis-a-vi the banks and vis-a-vi Detroit.

See:
http://www.democracynow.org/2008/11/25/naomi_klein_robert_kuttner_and_michael
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You Ain't Seen Nothing Yet

By Mike Whitney
http://www.informationclearinghouse.info/article21313.htm

"The problems we face today cannot be solved by the minds that created them"
Albert Einstein

November 24, 2008 "Information Clearinghouse"

-- Obama hasn't even been sworn in yet, and already the Wall Street cheerleaders are celebrating his first great triumph. According the pundits, the stock market staged a surprise 494 point rally on Friday because--get this--it was announced that Timothy Geithner would be appointed Obama's Treasury Secretary. 

Timothy who?

What nonsense. The sudden turn-around in stocks had a lot more to do with short-covering than anything else, but don't let that get in the way of a good story. Even so, the last minute surge on the NYSE couldn't stop another week-long bloodbath that ended with the Dow and S&P 500 tumbling another 5 percent. That's not to say that Geithner is not bright and talented guy. He is; and so is his White House counterpart, Lawrence Summers. But the media hype is way overdone. Geithner doesn't drive the markets and he isn't "change you can believe in". In fact, he's a protege of Henry Kissinger, a member of the Council on Foreign Relations, and has the same political pedigree as his predecessor, Henry Paulson. They're both part of the ruling fraternity and their views of the world are nearly identical. There's no doubt that Geithner will be more competent and effective than Paulson but, then again, who wouldn't be? Paulson may be the biggest flop at Treasury since Andrew Mellon steered the country onto the reef during the Great Depression. The recent flap over the Troubled Assets Relief Program (TARP) just proves the point. After convincing Congress to pass a $700 billion bailout plan--by invoking the specter of economic Armageddon and martial law--the former G-Sax chairman proceeded to set up a program for buying back mortgage-backed securities (MBS) and other junk paper from his banking buddies. Paulson argued that removing the crappy loans would help the banks get back on their feet and start lending again. Of course, no one could really figure out how the process was going to be executed, but maybe that's just nit-picking. Fortunately, Paulson never got a chance carry out his plan. He was torpedoed by the stock market which plunged seven days in a row losing nearly 20 percent of its value until Paulson threw in the towel and did what 200 economists had suggested from the very beginning---buy preferred shares in the banks so they could rev-up their credit engines again. 

Will Geithner be that stubborn? Not likely. And Paulson is a hard-nosed class warrior, too. Notice how every dime of the bailout has gone to banksters while all the efforts to provide relief to autoworkers, consumers or struggling homeowners have been blocked. Anyone who isn't in the upper 1 percent income bracket can forget about getting a helping hand. ....
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The More Things “Change” . . .
(Reality Check--Part Three)
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Naomi Klein, Robert Kuttner and Michael Hudson Dissect Obama’s New Economic Team & Stimulus Plan
http://www.democracynow.org/2008/11/25/naomi_klein_robert_kuttner_and_michael

AMY GOODMAN: . . . .William Greider had an interesting piece in The Nation.
“On Monday, Geithner was busy executing the government’s massive rescue of Citicorp--the very banking behemoth that Geithner and Summers helped to create back in the Clinton years, along with Federal Reserve chairman Alan Greenspan and Robert Rubin, Clinton’s economics guru. Now Rubin is himself a Citicorp executive and his bank is now being saved by his old protégé (Geithner) with the taxpayers’ money. Geithner has been a central player in the deal-making, from Bear Stearns to AIG to Citi. The strategy has not only failed, it has arguably made things worse as savvy market players saw through the contradictions and rushed out to dump more bank stocks.”

“Ultimately,” Mark Ames also in The Nation writes “Summers was one of the key architects of our financial crisis. Hiring him to fix the economy makes as much sense as appointing Paul Wolfowitz to oversee the Iraq withdrawal.”
. . . .

AMY GOODMAN: We begin with Naomi Klein. Your response to these appointments, and what they signify. If you could begin with Larry Summers, the former Clinton Treasury Secretary.

NAOMI KLEIN: It is good to be with you. I have to say it is a profound disappointment. It really does represent a very safe choice, but let’s remember Barack Obama won this election saying that taking the status quo, staying with the same policies that have been governing the country for the recent past, was actually a very dangerous course. I think in many ways we are paying the price of the intellectual dishonesty of the progressive liberals left during the bush years. Because Obama said again and again during the campaign that the crisis on Wall Street represented the culmination of an ideology of deregulation and laisse-faire trickle-down economics that had guided the country for the past eight years.

The truth is, it was not just eight years, they guided them under Reagan and also under Clinton. 
That is where Larry Summers comes in because he was the last treasury secretary under Clinton. He along with Alan Greenspan and Robert Rubin were the key architects of the policies of deregulation that created the crisis that we’re living now. And those key policies are the killing of Glass-Spiegel that allowed a series of very large but mergers that created these institutions that are too big and too intermingled to fail we’re told again and again. 
The deliberate decision to keep the derivatives out of the reach of financial regulators- that was also a Summer’s decision. And also allowing the banks to carry these extraordinary levels of debt. 33 to 1 in the case of Bear Sterns.

Now, in my book the Shock Doctrine I started chapter with a quote from Larry Summers in the context in which he says it was 1992 and it was when he was making World Bank economic policy as it related to Russia, in the midst of a financial crisis. What he said and this is why I quoted him because it really shows the extent to which he is truly an ideologue and a follower of the very ideology- not just a follower but a propagator of the very ideology that Obama ran his campaign against. And here’s the qoute. This is Larry Summers in 1992: “Spread the truth. The laws of economics are like the loss of engineering. One set of laws works everywhere.” And then he laid out those laws a little bit later. 
He referred to the three “ations”, and those were privatization, stabilization, and liberalization. So he has been preaching the doctrine. He is by no means an innocent bystander. He is a dyed-in-the-wool privatizer, free trader. And he along with Tim Geithner, his deputy play key roles during the economic crises.—along with Timothy Geithner . They preached more deregulation, more privatization and economic austerity to disastrous results. I think this is really troubling. One thing that Obama said is that Larry Summers set the terms of the debate for this financial crisis and that once again is very worrying. Because if Barack Obama thinks that these are the only terms, the parameters of the debate, then there’s very very narrow…

Much more at URL above
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Noam Chomsky: "What Next? The Elections, the Economy, and the World"

http://www.democracynow.org/2008/11/24/noam_chomsky_what_next_the_elections

“Actually what happened here is understood by elite elements. The public relations industry which runs elections here-quadrennial extravaganzas essentially- makes sure to keep issues in the margins and focus on personalities and character and so on–and-so forth. They do that for good reasons. They know- they look at public opinion studies and they know perfectly well that on a host of major issues both parties are well to the right of the population. That’s one good reason to keep issues off the table. And they recognize the success.



So, every year, the advertising industry gives a prize to, you know, to the best marketing campaign of the year. This year, Obama won the prize. Beat out Apple company. The best marketing campaign of 2008. Which is correct, it is essentially what happened. Now that’s quite different from what happens in a functioning democracy like say Bolivia or Haiti, except for the fact that it was crushed. And in the South, it’s not all that uncommon. Notice that each of these cases, there’s a much more extraordinary display of democracy in action than what we’ve seen–important as it was-here. And so the rhetoric, especially in Europe is correct if we maintain our own narrow racist perspective and say yeah, what happened was in the South didn’t happen or doesn’t matter. The only matters is what we do and by our standards, it was extraordinary miracle, but not by the standards of functioning democracy. In fact, there’s a distinction in democratic theory, which does separate say the United States from Bolivia or Haiti.



Question is what is a democracy supposed to be? That’s exactly a debate that goes back to the constitutional convention. But in recent years in the 20th century, it’s been pretty well articulated by important figures. So at the liberal end the progressive end, the leading public intellectual of the 20th century was Walter Lippman. A Wilson, Roosevelt, Kennedy progressive. And a lot of his work was on a democratic theory and he was pretty frank about it. If you took a position not all that different from James Madison’s. He said that in a democracy, the population has a function. Its function is to be spectators, not participants. He didn’t call it the population. He called it the ignorant and meddlesome outsiders. The ignorant and meddlesome outsiders have a function and namely to watch what’s going on. And to push a lever every once in a while and then go home. But, the participants are us, us privileged, smart guys. Well that’s one conception of democracy. And you know essentially we’ve seen an episode of it. The population very often doesn’t accept this. As I mentioned, just very recent polls, people overwhelmingly oppose it. But they’re atomized, separated. Many of them feel hopeless, unorganized, and don’t feel they can do anything about it. So they dislike it. But that’s where it ends.

In a functioning democracy like say Bolivia or the United States in earlier stages, they did something about it. That’s why we have the New Deal measures, the Great Society measures. In fact just about any step, you know, women’s rights, end of slavery, go back as far as you like, it doesn’t happen as a gift. And it’s not going to happen in the future. The commentators are pretty well aware of this. They don’t put it the way I’m going to, but if you read the press, it does come out. So take our local newspaper at the liberal end of the spectrum, “Boston Globe,” you probably saw right after the election, a front page story, the lead front page story was on how Obama developed this wonderful grassroots army but he doesn’t have any debts. Which supposed to be a good thing. So he’s free to do what he likes. Because he has no debts, the normal democratic constituency, labor, women, minorities and so on, they didn’t bring him into office. So he owes them nothing
….

The goal of advertising is to create uninformed consumers who will make irrational choices. Those of you who suffered through an economics course know that markets are supposed to be based on informed consumers making rational choices. But industry spends hundreds of millions of dollars a year to undermine markets and to ensure, you know, to get uninformed consumers making irrational choices.

And when they turn to selling a candidate they do the same thing. They want uninformed consumers, you know, uninformed voters to make irrational choices based on the success of illusion, slander, and effective body language or whatever else is supposed to be significant. So you undermine democracy pretty much the same way you undermine markets. Well, that’s the nature of an election when it’s run by the business world, and you’d expect it to be like that. There should be no surprise there. And it should also turn out the elected candidate didn’t have any debts. So you can follow Brand Obama can be whatever they decide it to be, not what the population decides that it should be, as in the south, let’s say. I’m going to say on the side, this may be an actual instance of a familiar and unusually vacuous slogan about the clash of civilization. Maybe there really is one, but not the kind that’s usually touted.



So let’s go back to the evidence that we have, rhetoric and actions. Rhetoric we know, but what are the actions? So far the major actions are selections, in fact the only action, of personnel to implement Brand Obama. The first choice was the Vice President, Joe Biden, one of the strongest supporters of the war in Iraq in the Senate, a long time Washington insider rarely deviates from the party vote. In cases where he does deviate they’re not very uplifting. He did break from the party and voting for a Senate resolution that prevented people from getting rid of their debts by, individuals, that is, from getting rid of their debts by going into bankruptcy. It’s a blow against poor people who’ve caught in this immense debt that’s a large part of the basis for the economy these days. But usually, he’s a, kind of, straight party-liner with the democrats on the sort of ultra naturalist side. The choice of Biden was a, must have been a conscious attempt to show contempt for the base of people who were voting for Obama, or organizing for him as an anti-war candidate.



Well, the first post-election appointment was for Chief of Staff, which is a crucial appointment; determines a large part of the president’s agenda. That was Rahm Emanuel, one of the strongest supporters of the war in Iraq in the House. In fact, he was the only member of the Illinois delegation who voted for Bush’s effective declaration of war. And, again, a longtime Washington insider. Also, one of the leading recipients in congress of funding from the financial institutions hedge funds and so on. He himself was an investment banker. That’s his background. So, that’s the Chief of Staff.



The next group of appointments were the main problem, the primary issue that the governments’ going to have to face is what to do about the financial crisis. Obama’s choices to more or less run this were Robert Rubin and Larry Summers from the Clinton--Secretaries of Treasury under Clinton. They are among the people who are substantially responsible for the crisis. One leading economist, one of the few economists who has been right all along in predicting what’s happening, Dean Baker, pointed out that selecting them is like selecting Osama Bin Laden to run the war on terror.

[laughter]



Yeah, I’ll finish. This saves me the problem of what’s coming next, so I’ll finish with the elections. Let me make one final comment on this. There was meeting on November 7, I think of a group of couple, of a dozen advisers to deal with the financial crisis. Their careers were, records were reviewed in the business press, and Bloomberg News had an article reviewing their records and concluded that these people, most of these people shouldn’t be giving advice about the economy. They should be given subpoenas.

[applause]

Because most of them were involved in one or other form of financial fraud, that includes Rahm Emanuel, for example. What reason is there to think that the people who brought this crisis about are some how going to fix it? Well, that’s a good indication of what’s likely to come next, at least if we look at actions. . . . .”

Much more at URL above
______________________________________________

Change We Can Bank On [The Woman Obama Didn't Choose]
by ROBERT SCHEER
November 19, 2008
Robert Scheer is the editor of Truthdig (http://www.truthdig.com/), where this article originally appeared. http://www.thenation.com/doc/20081201/scheer?rel=hp_currently

This is not change we can believe in. Not if Robert Rubin or his protégé, Lawrence Summers, get to call the shots on the economy in President-elect Barack Obama's incoming administration. Both Clinton-era treasury secretaries deserve a great deal of the blame for the radical deregulation of the financial industry that has derailed the world economy. They both should, along with former Federal Reserve chief Alan Greenspan, perform rites of contrition and be kept at a safe distance from the leadership of our nation.

Yet Rubin and Summers are highly visible in the Obama transition team, with Summers widely touted as Obama's pick for secretary of the treasury. New York Federal Reserve President Timothy Geithner, who also worked in the treasury department under Rubin and Summers, is the other leading candidate. But it was Summers who most vehemently pushed for congressional passage of that drastic deregulation measure, the Financial Services Modernization Act, which eliminated the New Deal barriers against mergers of commercial and investment banks as well as insurance companies and stock brokers. Standing at his side as President Bill Clinton signed the legislation, Summers heralded it as "a major step forward to the twenty-first century"--and what a wonderful century it's proving to be.

It was also Summers who worked in cahoots with Enron and banking lobbyists, and who backed Republican Sen. Phil Gramm's Commodity Futures Modernization Act, which banned any effective government regulation of the newly unleashed derivatives market. The result was not only a temporary boon to Enron, which soon collapsed under its unbridled greed, but also to the entire Wall Street financial community.

The only opposition from within the Clinton administration came from Brooksley E. Born who, as head of the Commodity Futures Trading Commission, dared defy Summers and Rubin, as well as Greenspan. In frequent appearances before Congress, she warned that the burgeoning derivatives trading "threatens our economy without any federal agency knowing about it." In reward for her prescience, Born, a highly regarded legal expert on derivatives, was treated to scornful attacks from the old boys' network, led (again) by Rubin, Greenspan and Summers, who questioned her competence and insisted it was she who threatened the stability of the market.

That sexism, as well as stupidity and greed, might have played a role in the dismissal of Born's concerns has been raised by some of Summers's critics, who were still smarting even after his subsequent forced departure from Harvard University after disparaging women's innate ability to grasp mathematics and science. "It was Larry Summers who called her up and screamed at her," Amy Siskind, co-founder of the New Agenda, a women's rights group that grew out of the Hilary Rodham Clinton presidential campaign, told the Boston Globe to support her view that Summers is a "known misogynist."
Whatever the motives, Born was painfully right in her warnings and Summers was totally wrong in overseeing the passage of legislation that summarily prevented any government regulation of the debt instruments that have proved so disastrous. I don't know if Born, now retired at 68, would be interested in the treasury secretary position, but she is certainly far more qualified than the other candidates under consideration.

Barring that possibility, why not go with Sheila Bair, the chair of the Federal Deposit Insurance Corporation (FDIC), who has distinguished herself by proposing a sterling alternative example of how to deal with the banking collapse? It is Bair who has most forcefully advanced the goal, advocated by Obama in his recent 60 Minutes interview, of putting homeowners before banks. Under her leadership, the FDIC has made sure that the insured banks, which it supervises and occasionally takes over, act to prevent foreclosures rather than using government handouts to finance new bank mergers.
On Tuesday, House Democrats led by Rep. Barney Frank of Massachusetts, accused Paulson of betraying Congressional language authorizing the $700 billion bailout that specifically called for "mortgage foreclosure diminution." Rep. Carolyn Maloney, D-NY, charged, "We're basically funding mergers and acquisitions, not lending." On Friday, Bair introduced a proposal to allocate $24.4 billion of the bailout specifically to modify loans to prevent 1.5 million foreclosures, but was opposed by Treasury Secretary Henry Paulson.

Because Geithner and Summers support Paulson's approach, Obama should reject them and pick Bair to give us the kind of change he's been promising.
_____________________________________________

November 25, 2008
The Democrats Owe Jimmy Carter an Apology
Don't Suppress Carter (or the Opportunities for Middle East Peace)
By RALPH NADER
http://www.counterpunch.org/nader11252008.html

Now that the season of electoral expediency is over, Barack Obama owes Jimmy Carter an apology.
At the Democratic National Convention in Denver, the Party denied Jimmy Carter the traditional invitation to speak that is accorded its former presidents.

According to The Jewish Daily Forward, “Carter's controversial views on Israel cost him a place on the podium at the Democratic Party convention in late August, senior Democratic operatives acknowledged to the Forward.”
Silencing Carter, who negotiated the Israeli-Egyptian peace agreement, involved behind the scenes tensions between supporters of the hard-line AIPAC lobby and those Democrats who argued both respect and free speech to let Carter join Bill Clinton on the stage and address a nationwide audience.

First, there was a compromise offer to let Carter speak but only on domestic policy subjects. This would have kept him from mentioning his views on securing peace between the Israelis and Palestinians through a two-state solution essentially back to the 1967 borders. He previously elaborated his analysis and recommendations in his 2006 bestseller titled Palestine: Peace Not Apartheid..

Even this astonishing restriction on the former president was unacceptable to the dictatorial censors. They wanted nothing from the deliberate, candid Georgian short of complete exclusion.
More See: http://www.counterpunch.org/nader11252008.html
__________________________________________________

Western Progressive Opinion: 

Bring on the Victims! Condemn the Fighters!



By James Petras


November 23, 2008 "Information Clearinghouse"

 We know in some detail of the willing and gratuitous support, which tens of millions of American citizens have bestowed on the White House and Congressional perpetrators of crimes against humanity. The Clinton Administration was freely re-elected in 1996 after deliberately imposing a starvation embargo on Iraq and mounting a relentless, unopposed bombing campaign on that devastated country for four straight years, leading to the documented deaths of over 500,000 children and countless more vulnerable adults. The majority of US citizens re-elected Bush after he launched wars which caused the deaths of over a million Iraqi civilians, scores of thousands of Afghanis, thousands of Pakistanis, and after he gave full support to Israel’s murderous attacks on Palestinian civilians and the blockade of vital food, water and fuel to the occupied territories, not to mention the frequent bombing of Lebanon and Syria, which culminated, during Bush’s second term, in the horrific Israeli bombing campaign of Lebanese cities and villages killing thousands of civilians. We know this brutality received the unconditional support of the Presidents of the 52 Major American Jewish Organizations and their thousands of affiliated community groups (totaling over one million members). We know that for each and every Israeli assassination of a Palestinian, each dispossession of Palestinians from their land and homes and the uprooting of their orchards, vineyards and the poisoning of their wells, there is a systematic campaign here to obliterate our democratic freedom of speech and assembly – especially our right to publicly condemn Israel and expose its agents operating among US power brokers. 

Through hard experience the majority of the American public has come to recognize the pitfalls of militarism and is slowly coming to realize the profound threats posed by the entrenched Zionist Power Configuration to our ‘four freedoms’.



 That is all to the good. However, these advances in public opinion have been far from sufficient. The American public has just elected a new president who promises to escalate the imperialist military presence in Afghanistan and fill key posts in his regime with known militarists and Zionists from the previous regime of President ‘Bill’ Clinton. 

What has escaped public notice is the almost complete disappearance of the peace movement and its absorption into the pro-war Democratic Party electoral machine of President-Elect Barack Obama. Likewise, the vast majority of US ‘progressive’ opinion-makers embraced, with occasional mild reservations, the Obama candidacy and, in effect, became part of the ‘broad coalition’ joining hands with billionaire Zionist zealots and Wall Street financial swindlers, Clintonite ‘humanitarian’ militarists, impotent millionaire trade union bureaucrats and various and sundry upwardly mobile ‘minority’ politicians and vote hustlers. Whether progressives were intoxicated by the empty presidential campaign rhetoric of ‘change’, they willingly sacrificed their most elementary principles at the service of evil (presumably, they would say, to serve the ‘lesser evil’), but no doubt the evils of new imperial wars, complicity with Israel’s colonial savagery and the deepening immiseration of the American people. 

The US progressive intellectuals show no such (im)moral scruples when it comes to the anti-imperial resistance movements in Asian (especially in the Middle East), Africa and Latin America.



 US Progressives and Third World Resistance Movements

Among the most prominent progressive intellectuals (PPIs) in the US and Europe, writers, bloggers and academics, there is nary a single one who exhibits the same ‘pragmatism’, which they practice in choosing ‘lesser evil’ politicians in the US or Europe, with regard to political choices in highly conflicted countries. Can we find a single PPI who will argue that they support the democratically elected Hamas in Palestine or Hezbollah in Lebanon, or the popularly supported nationalist Muqtada al-Sadr in Iraq, the anti-occupation Taliban in Afghanistan or even the right, recognized under international law, of the Iranian people to the peaceful development of nuclear energy – because, whatever their defects – these are the ‘lesser evil’.



 Let us consider the issue in greater detail. PPIs justified their support for Obama on the basis of his campaign rhetoric in favor of peace and justice, even as he voted for Bush’s war budgets and foreign aid programs funding the murder of hundreds of thousands of Iraqis, Afghanis, Palestinians, Colombians, Somalis and Pakistanis and the dispossessing and displacement of at least 10 million people from their towns, farms and homes. The very same PPI reject and refuse to apply the ‘lesser evil’ criteria in support of Hamas, the democratically elected Palestinian administration in the Gaza, which is in the forefront of the struggle against the brutal Israeli colonial occupation – because it is ‘violent’ (which means it ‘retaliates against almost daily Israeli armed assaults), seeks a ‘theocratic state’ (similar to the theologically defined ‘Jewish’ state of Israel), represses dissidents (in the form of occasional crackdowns on CIA-funded Fatah functionaries and militias). At best the PPIs take an interest only in the Palestinian victims of Israel’s genocidal embargo of food, water, fuel and medicine; it protests against overt racist assaults by Israel’s colonial Judeo-fascist settlers when they assault school girls on their way to school or elderly farmers in their orchards; they protest the arbitrary and deliberate delays at Israeli military checkpoints, which cause the deaths of acutely ill Palestinians, cancer victims, women in labor, men with heart attacks and people in need of kidney dialysis by preventing them from reaching medical facilities. In other words the PPI support the Palestinians as victims but condemn them as fighters who challenge their executioners. The PPI’s support for victims is a cost-free posture, providing credibility to the ‘progressive’ label; opposition to the fighters assures the establishment that the PPI’s criticism will not adversely affect the US empire-building and its Israeli allies.



 The most outspoken, self-proclaimed progressive ‘libertarians’ and ‘democrats’ in the Western world claim to support national self-determination and oppose imperial conquests, yet they unfailingly reject the real-existing mass popular movements demanding self-determination and leading the struggle against imperial conquest and foreign occupation. Almost without exception they denounce national resistance movements for not fitting their preconceived notions of perfect justice, peaceful tolerance and secular, democratic principles, which their idea of a resistance movement should embody. Yet the PPI do not impose such criteria in advocating support for candidates in their own countries. Hezbollah is flatly rejected as too ‘clerical’ by the PPIs, but British progressives supported Tony Blair, the leader of the Labor Party and his role as bloody accomplice to Clinton, Bush, Sharon and a whole host of servile puppet regimes in Iraq, Afghanistan, Somalia and elsewhere. 



 In terms of military aggression – and deaths, loss of limbs and homes – the ‘lesser evil’ Democrats and European Social Democrats and Center-Left politicians have a far worse record that the Taliban, Hezbollah, Hamas and Sadrist forces. More to the point, the living conditions and safety of the vast majority of the people in Iraq, Afghanistan, Lebanon and Somalia – by any standard – were vastly better under the independent if authoritarian rule of Saddam Hussain, the clerical Taliban in Afghanistan, the Islamic Councils in Somalia than under the US-EU military occupations and client regimes. Some of the PPIs avoid the real and difficult choices by pretending that there are ‘third choices’ just on the horizon in countries currently under imperial and colonial conquest and occupation: They reject the imperial armies and the anti-imperial resistance in the name of abstract progressive libertarian principles. The shameless cant and hypocrisy of their position is clear when the same issue is posed in terms of political choices within the imperial mother country. Here the PPIs have a thousand and one arguments to back one (Obama) of the two major imperial war party presidential candidates; here ‘realism’ and ‘lesser evil’ arguments come to the fore. And what ‘choices’ are made! The same libertarians and democrats who condemn the Taliban for its destruction of ancient religious monuments support Democratic candidates, like Obama, who propose to escalate the US military occupation in Afghanistan and intensify the killing fields in South Asia. 


 There are profound moral and political dilemmas in making political choices in a world in which destructive imperial wars are led by liberal electoral politicians and vigorously resisted by clerical and secular authoritarian movements and leaders. But the historical record of the past three hundred years is clear: Western parliamentarian imperialism and its contemporary legacy has destroyed and undermined far more lives and livelihoods in far more countries over a greater time span than even the worst of the post colonial regimes. Moreover, the colonial wars, pursued by ‘lesser evil’ electoral regimes and politicians, have had a profoundly destructive impact on the very ‘democratic values’ in the Western countries, which the PPIs profess to defend.


 Conclusion


 The PPI, by choosing the ‘lesser evil’ – in the most recent instance, supporting Barack Obama – have condemned themselves to political impotence in the making of Washington’s policies and political irrelevance to the struggles for national liberation. Consequential supporters of the millions of victims of Western and Israeli butchery do not live off foundation handouts; they make the difficult (and costly) choice to throw in their lot via solidarity with the resistance fighters. The ‘cost’ to progressive intellectuals in the US, of course, is a drying up of invitations to speak at universities with offers of five-figure honorariums; the ‘benefit’ is self-respect and the dignity that comes from being part of an international anti-imperialist movement.
_____________________________________

The hypocrisy of liberals

. . . ."The hypocrisy of liberals, which may in some ways be unconscious, is empowering the forces that are destroying our nation," Nader asserted in an even-tempered voice. "The left in this country has been successfully cowed by the Democratic Party," he continued. "The votes of progressives are taken for granted by Democrats.... By allowing ourselves to be manipulated, we have demonstrated that we have no moral substance. We have no line that can be never be crossed, no stance so sacred and important that we are willing to stand up and fight back."
So long as progressives are willing to settle for the "least worst" alternative, they will remain ignored and excluded from power, he suggested.

This kind of talk from Nader drives some people to rage against him. He returns the favor by discussing "the rage that many in our nation feel towards liberals." Barack Obama, he insists, does not intend to alter anything fundamental about the causes. "This rage is a legitimate expression of very real betrayal," Nader explained. "The working class, most of whom do not vote, watch Democratic candidate after Democratic candidate run for office promising to support labor and protect jobs and then, once elected, trot off to Washington to pass the corporate-friendly legislation drawn up by the 35,000 lobbyists who work for our shadow government."

In Nader's Stubborn Idealism

by WILLIAM GREIDER
http://www.thenation.com/doc/20081110/greider
Posted by Christopher Christie at 9:51 PM 1 comments