It's a lot easier to bluff, because the odds are that mistakes won't be caught.
And if they are, you can just ignore the corrections or tell the critic he "misunderstands."
A journalist friend who spends way more time on politics than I do suggests that if the Democrats cave and include a capital gains tax, it will probably pass--but puts the odds of the Democrats caving at slim to none, since they can now blame any resulting crash on the Republicans.
I didn't think it was possible to be more disgusted with politicians than I usually am, but I find it impossible to express the seething contempt that I feel at this kind of opportunism. I don't mind when they screw with the normal operation of the economy for venal personal gain. But risking a recession in order to get a cut in the capital gains tax? Letting it tank because you can always blame it on the Republicans?
The champagne bottle corks were popping as Treasury Secretary Henry Paulson announced his trillion-dollar bailout for the banks, buying up their toxic mortgages. To a skeptic, Paulson's proposal looks like another of those shell games that Wall Street has honed to a fine art. Wall Street has always made money by slicing, dicing and recombining risk. This "cure" is another one of these rearrangements: somehow, by stripping out the bad assets from the banks and paying fair market value for them, the value of the banks will soar.
There is, however, an alternative explanation for Wall Street's celebration: the banks realized that they were about to get a free ride at taxpayers' expense. No private firm was willing to buy these toxic mortgages at what the seller thought was a reasonable price; they finally had found a sucker who would take them off their hands--called the American taxpayer.
This isn't too hard people. If you're going to do this you should set a few basic guidelines. One -- those who made really stupid decisions in buying this paper without analyzing it should not be able to dump it at an above market rate. Letting them do so subsidizing that mistake on the backs of taxpayers.
What it can do is provide a one-time transfer of wealth to insiders who already have been playing the debt-credit system and siphoning off its predatory financial proceeds to themselves. The Wall Street bankers, brokers and fund managers to whom I’ve been speaking for many decades all know this. That is why they pay themselves such large annual bonuses and large salaries each year. The idea is to take as much as you can. As the saying goes: “You only have to make a fortune once in a lifetime.” They have been salting away their fortunes year after year, mainly in hard assets: real estate (free of mortgages), fine furniture, boats and trophy art. One last $700 billion heist and they can make their getaway.
What Gingrich's wish list tells us is that the dumping of private debt into the public coffers is only stage one of the current shock. The second comes when the debt crisis currently being created by this bailout becomes the excuse to privatize social security, lower corporate taxes and cut spending on the poor. A President McCain would embrace these policies willingly. A President Obama would come under huge pressure from the think tanks and the corporate media to abandon his campaign promises and embrace austerity and "free-market stimulus."
We have seen this many times before, in this country and around the world. But here's the thing: these opportunistic tactics can only work if we let them. They work when we respond to crisis by regressing, wanting to believe in "strong leaders" - even if they are the same strong leaders who used the September 11 attacks to push through the Patriot Act and launch the illegal war in Iraq.
So let's be absolutely clear: there are no saviors who are going to look out for us in this crisis. Certainly not Henry Paulson, former CEO of Goldman Sachs, one of the companies that will benefit most from his proposed bailout (which is actually a stick up). The only hope of preventing another dose of shock politics is loud, organized grassroots pressure on all political parties: they have to know right now that after seven years of Bush, Americans are becoming shock resistant.
Since this announcement, my offices have received thousands of comments
from Californians like you concerned about how this action will affect them.
Yet, I believe prudent action must be taken. The bill should include the
following principles: a phase-in of funding; oversight, accountability and
transparency; a mechanism allowing the Secretary of the Treasury to modify
mortgages to prevent additional foreclosures; and a precise cap on executive
The current credit crisis affects all Americans. If action is not taken to
stem the crisis, Americans risk losing their homes, jobs, personal savings, life
insurance and more. Banks will cease to lend to businesses and homeowners, and
credit will be increasingly difficult to come by for average Americans. I
strongly believe that the consequences of failing to act now would be greater
than not acting at all.
Seeing an older male paired with a much younger female sets off red flags
in the heads of many women, so that for McCain and Palin to appear side-by-side
may be problematic.
Favor from Readers
The paperback is coming in the spring and in addition
to a new post-election chapter I need to provide the publisher with a list of
fixes for typographical and other discrete errors. I can't do wholesale
revisions. But if I got a date wrong, misspelled a name, etc. I can make those
sorts of fixes. I have a few. But if you can recall others, please send them
along to me with the subject header "revision." Thanks!
Why not food stamps?
1) The poor don't need more food. Obesity is a problem for the poor in
America; except for people who are too screwed up to get food stamps (because
they don't have an address), food insufficiency is not.
2) Food stamps only imperfectly translate into increased cash income, meaning that the poor will spend . . . more money on food.
3) If the increase in food stamps takes the
form of expanded eligibility, rather than larger grants, the administrative
issues and public outreach will delay your stimulus until well after it is no
4) The limits on the type of goods available to food stamp
consumers, and the growing season, mean that some (it's hard to say how much) of
the food stamp spending will simply draw down perishable stocks rather than
generating new economic activity. Eventually this will probably generate more
economic activity, but probably well after your stimulus is needed.
5) The economy doesn't need a food sector more distorted by daft government programs than it already is. If you want to give money to the poor, give it to them. Even if they spend it all on drugs, it will hardly be much worse than spending it all
on increasing their already astronomical obesity rates.
That's a pretty wide variety of foodstuffs. Considering all the food issues Megan has (she is constantly discussing what she will and will not eat and how giving up food is morally superior), I have a feeling Megan, a former Catholic, does not look at food as nutrition. Instead it's a way to reward and punish people, and an indication of worthiness.
Foods for the household to eat, such as:
breads and cereals;
fruits and vegetables;
meats, fish and poultry;
and dairy products.
Seeds and plants which produce food for the household to eat.
She has to make mealy-mouthed caveats because she can't bring herself to have an opinion that might harm her financial prospects.
I don't know how willing I am to ratify the scientific assumption that the
supernatural is never a possible explanation. I am a radical skeptic;
I think that the supernatural is generally a very unlikely explanation, but
I can evince no proof that the laws of physics as generally observed operate always
Nor do I think that even Young Earth creationism can be ruled out by science, if you are willing to posit the possibility of a creator; God might have created the world looking old for His own inscrutable reasons.
But I don't think that the world would have been a happier place if Greenspan had
kept the lid on the punchbowl in 1998 and 2002. We haven't had a really bad,
deep recession in 26 years, and it seems reasonable to think that the Fed's
willingness to control inflation, while releasing liquidity as necessary, are
very much responsible for that change. Had Greenspan not opened the taps when
times got tough and markets were unhappy, we might well have had some really
How is the outsider doing? Throughout the campaign, Sarah Palin has
remained poised and articulate. As far as I am aware, she has committed not a
single gaffe. Speaking with Charles Gibson of ABC during the first of the two
major interviews she has so far given, she sometimes appeared tense. Even then,
she made no mistakes. (Her much-discussed reply to Gibson when he asked if she
agreed with the Bush doctrine--"In what respect, Charlie?"--proved perfectly
legitimate. The Bush doctrine can be defined a half-dozen ways.) Speaking with
Sean Hannity of Fox News six days later, in her second major interview, Palin
proved completely at ease. In just under a week, she had mastered the interview
But without the Republicans, the plans costs are certain to go up
considerably, including, probably, giving bankruptcy judges the power to rewrite
mortgages. This sounds wonderful--until you realize that this means
mortgage rates will go up for everyone, probably quite a bit. And that
this will further strain an already weak industry. Why use jinglemail, or
struggle to meet your payments, if you can pay a lawyer $1,000 and magically
transform your mortgage into a prime loan?
How much money are we willing to pay to maintain our sense of
Like the Bush Administration?
Isn't it marvelous how the financial crisis has been caused entirely by
things that you were opposed to before the crisis happened?
I watched Katie with Sarah last night. And I found the whole thing jarring.
The CBS Evening News is sitting on an interview through Monday? At a moment like
this? When everyone's complaining Palin isn't talking about the press? All
substance of the part of the interview she deemed to show us last night was
trumped by what a bad programming decision I thought not showing it all is.
I think the whole interview may be online — I think Couric said it is. I
haven't made it there to find yet. If I, who live on the Internet, did not watch
it yet, I don't think most Americans will be.
"Ironically, the intervention could even trigger additional failures of
large institutions, because some institutions may be carrying troubled assets on
their books at inflated values," Orszag said in his testimony. "Establishing
clearer prices might reveal those institutions to be insolvent."
In an interview later yesterday, Orszag explained using the following example: Suppose a company has Asset X, whose value is recorded on the books as $100. Because of the current economic decline, Asset X's real value has dropped to $50. If the company takes part in the government bailout and sells Asset X for $50, the
company has to report a $50 loss on its books. On a scale of millions of dollars, such write-downs could ruin a company. Such companies "look solvent today only because it's kind of hidden," Orszag said. "They actually are insolvent" already, he said. And yet, he says there is no choice, and the bailout must take place.
In the end, he said, Congress must pass some sort of relief, if only
because Wall Street is expecting it. "If we did nothing, there is a significant
risk of another collapse of confidence in the financial markets," he said.
But Sarah Palin's performance in the tiny vignettes of unscripted dialogue
in which we've been allowed to see her has been nothing short of frightening --
really, as I said, pity-inducing. And I say that as someone who has thought from
the start that the criticisms of her abilities -- as opposed to her ideology --
were much too extreme. One of two things is absolutely clear at this point: she
is either (a) completely ignorant about the most basic political issues -- a
vacant, ill-informed, incurious know-nothing, or (b) aggressively concealing her
actual beliefs about these matters because she's petrified of deviating from the
simple-minded campaign talking points she's been fed and/or because her actual
beliefs are so politically unpalatable, even when taking into account the
right-wing extremism that is permitted, even rewarded, in our mainstream.
McCain made several perhaps fatal mistakes on his Long March. He allowed
Sarah Palin to be interviewed on television again, this time by Katie Couric. It
is therefore McCain's fault that Palin was permitted to respond to a question of whether the US faces a second Great Depression, "Unfortunately, that is the road that America may find itself on."
Q I'm just trying to reconcile two points here. On the one hand, you said
that there are a lot of members who rightly have questions and acknowledge that
this is obviously a huge package, but on the other hand, you've emphasized
several times that it's critical that it be done quickly this week and that it
be done clean. You know, for lawmakers who are -- I guess I'm asking, isn't
there something to be said for being careful beyond the urgency and the haste?
Is there a concern here that maybe the administration is being heavy-handed?
MR. FRATTO: No, well, look, I think I would reconcile it this way: This
is -- this was not a program that was conceived of or put together hastily.
There was an enormous amount of analysis and debate and discussion before we
came forward with this program. I think we have anticipated a lot of the
questions that members of Congress would naturally have about taking this step,
but we have had -- some of the policy staff have had months to think about what
a program like this would be like and how it would work. Others have had at
least weeks to think about it. Members of Congress have had days to think about
it. And it's very, very complex and takes time to think through all of the
implications of it and why some alternative ideas might not work as well as this
So I think that's really the issue here. We have thought through a lot
of the concerns that some members have in advance, and I think we can address
them on a member-to-member basis, on a committee-to-committee basis. I think
Secretary Paulson and Chairman Bernanke will be able to help in that effort
today. I think when people see their extensive discussion of the details and the
implications and the consequences, I think more people will understand why this
is the appropriate way to address this problem.
Q Well, I guess that's exactly my point, real quickly, is that you're
saying the administration and its staff has had months to think about this and
lawmakers have only had days. I mean, doesn't Congress get its turn? Doesn't it
have its own right?
MR. FRATTO: And they are, and we're taking this time. I mean, I don't
-- I'll concede that it is a lot of information to take in in a relatively short
period of time, but I think they can -- I think it's enough time. At any rate,
there is an urgent need here to get it done and I think members recognize that
also -- the overwhelming number of members of Congress recognize that.
The pathetic truth is that most people fear genuine independence more than
they fear death itself. So desperate are they for "acceptance" and so fearful of
being thought "peculiar," they will deny the evidence of their own eyes and
mindlessly repeat the lies and ignorance of others. When it comes to a subject
like economics or foreign policy, they think: "Oh, that's so hard! I can't
understand that. I'll just listen to what the 'experts' say. They know
If events of the last seven years have demonstrated nothing else at all,
they should have made absolutely clear that "experts" are often the very last
people you should look to for guidance. The experts are precisely those people
most likely to repeat "conventional wisdom," that is, the views accepted by the
ruling class -- because, by virtue of the fact that they are regarded as
experts, they are part of the ruling class.
[skip] Every crisis gets compared to the Great Depression. This very
There are strains on the left and the right that are kind of okay with this
The right wing version says "Let them fail! Fractional reserve banking is
inherently unstable, and we've been living on borrowed money. We need to
cut back to our natural, credit-free level of output and consumption."
The left wing version says "Let them fail! Capitalism is inherently
unstable; greed is no way to run an economy. We need to force banks to
stop doing all of these dangerous things and regulate them so heavily they can't
make a mistake. Also, as a general rule, rich people should suffer for
their mistakes, and ordinary people shouldn't. This is a great opportunity
to repeat FDR's awesome victories!"
The New York City public school system, on the other hand, mostly has to
get butts in seats, because that's how they get their money. It's not that
the teachers don't want to teach kids; it's that they don't have to. And
as anyone who's ever tried to write a novel in their spare time knows, anything
onerous that you don't have to do generally runs afoul of other priorities.
One of the more interesting results of current neuropsychological research
is that some scientists think that, at least for hot-button issues, we reason
backwards: we decide what we believe based on our emotional needs, and
then figure out a reason that we should believe it.
Economics of Contempt makes the obvious, common sense argument
for why liberal media bias almost has to exist: (long quote).
Levi Johnston's mother said her 18-year-old son left Alaska on Tuesday
morning to join the Palin family at the convention where Sen. John McCain will
officially receive the Republican nomination for president. The boy's mother,
Sherry Johnston, said there had been no pressure put on her son to marry
17-year-old Bristol Palin and the two teens had made plans to wed before it was
known she was pregnant.
"This is just a bonus," Johnston said.
Like her husband, who has been known to talk about the importance of
fatherhood, Michelle doesn’t go far enough. I presume that’s because even if she
wanted to, she couldn’t: The party wouldn’t let her. It’s the reason, I assume,
that Barack Obama can’t bring himself to do a full-on Bill Cosby and challenge
men — and black men specifically, who need to hear it, because he can — to be
responsible fathers. He could talk passionately, opening up about what it was
like to grow up without one.
The Obamas do know what works — good, solid, traditional families with a
mom and dad. They also are in the rare position of actually being able to say
that. But they won’t.
While some women whine that they won’t see one of their own become
president next year, they should really be challenging the Obamas to tell the
honest truth about family values.
Of all the rocks upon which we build our lives, we are reminded today that
family is the most important. And we are called to recognize and honor how
critical every father is to that foundation. They are teachers and coaches. They
are mentors and role models. They are examples of success and the men who
constantly push us toward it.
But if we are honest with ourselves, we'll admit that what too many
fathers also are is missing - missing from too many lives and too many homes.
They have abandoned their responsibilities, acting like boys instead of men. And
the foundations of our families are weaker because of it.
You and I know how true this is in the African-American community. We
know that more than half of all black children live in single-parent households,
a number that has doubled - doubled - since we were children. We know the
statistics - that children who grow up without a father are five times more
likely to live in poverty and commit crime; nine times more likely to drop out
of schools and twenty times more likely to end up in prison. They are more
likely to have behavioral problems, or run away from home, or become teenage
parents themselves. And the foundations of our community are weaker because of
How many times in the last year has this city lost a child at the hands
of another child? How many times have our hearts stopped in the middle of the
night with the sound of a gunshot or a siren? How many teenagers have we seen
hanging around on street corners when they should be sitting in a classroom? How
many are sitting in prison when they should be working, or at least looking for
a job? How many in this generation are we willing to lose to poverty or violence
or addiction? How many?
Obama, as the first major black presidential candidate in recent history,
has an unprecedented opportunity: To lead a fatherhood revolution. And he knows
it. Speaking at Christ Universal Temple in Chicago on Father’s Day 2005, he
preached the Word and channeled Bill Cosby, known these days less for his comedy
than for his lectures to black men about taking responsibility as fathers and
husbands. Obama said, “There are a lot of folks, a lot of brothers, walking
around, and they look like men. And they’re tall, and they’ve got whiskers —
might even have sired a child. But it’s not clear to me that they’re full-grown
It’s not shocking that Obama would latch onto such a message — and
leadership role. Now that he’s launched a presidential exploratory committee he
knows it’s smart politics. But it’s also a natural for him. In recent weeks the
press spent a few days talking about Obama’s “coke problem.” In his 1995 book,
Dreams from My Father, he wrote, as if preparing an opponent’s attack ad:
“Junkie. Pothead. That’s where I’d been headed.” That part was heavily quoted in
the media. But he added a less-quoted part: “the final, fatal role of the young
would-be black man.”Read on. In that book and in his recent bestseller, The
Audacity of Hope, you will learn about his father, whom young Obama knew only
from mothball-covered photos, stories, and letters from Kenya, his father’s
native land. (His parents divorced when he was two.)
Without complaining, Obama relays that “as I got older I came to recognize
how hard it had been for my mother and grandmother to raise us without a strong
male presence in the house. I felt as well the mark that a father’s absence can
leave on a child. I determined that my father’s irresponsibility toward his
children, my stepfather’s remoteness, and my grandfather’s failures would all
become object lessons for me, and that my own children would have a father they
can count on.
”Now the father of two daughters, Obama’s focusing on more than his
familial responsibilities. Sounding more like a social conservative than a
liberal Democrat — he lauds welfare reform, teen-pregnancy prevention, and just
stops short of speaking the right-wing language of personal responsibility and
abstinence. (“I want to encourage young people to show more reverence toward sex
and intimacy, and I applaud parents, congregations, and community programs that
transmit that message,” he writes.) He says that “policies that strengthen
marriage for those who choose it and that discourage unintended births outside
of marriage are sensible goals to pursue.”