Perks and Boards

As Enron wound down in the early 21st Century, eight years of maladministration began, and the Enron Board of Directors slipped away into the memory hole. Although there had been noises about prosecuting the Board for failures of its fiduciary duties, those were forgotten by a Department of Justice that was directed to political advancement of the Gang of Nope.

The meaning of director has been lost in a sea of perks, in my experience. Working with a member of several Boards of Directors, I encountered the service on the board as a matter of attending meetings occasionally, taking a yearly excursion at a high dollar resort, getting paid well for service on the board, and leaving the work to company managers. Occasionally the Board member got Minutes, a Resolution, an Affidavit or some such paper to sign off on.

As a result of this kind of service, one board my associate served on got entangled in a mess regarding backdating stock options. The board had simply signed the usual papers, and found out that the CEO and a few others in the firm had gotten stock options cashed at rates of a previous, lower cost, date. In other words, the company executives cheated stockholders because they paid less for stocks than those stocks cost at that time - so the amount they should have paid did not accrue to the company's total assets. Board members had not registered that papers they were sent to sign, something they executed regularly, this time involved a shady transaction.

Service on Boards of Directors has been a matter of fulfilling a symbolic function for good returns for some time, throughout our business sector. As regulations became a dirty word, the actual functions of Board members grew to be a farce.

There have been a few rumblings about failures to direct by those Boards - on Wall Street and financial industry firms now melting down the world's economy with their financial 'instruments'. What were they doing while the company ran amuck? Seems like old times.

Why haven't we learned that it is the boards who are responsible for the massive failures of strategy and risk management at these companies? Regulators, journalists, securities analysts and investors routinely ignore the most obvious indicators of investment risk that are presented by bad boards of directors.

This is particularly obvious in the case of AIG, which has been a serial offender in corporate governance, especially in executive compensation.

Those of us who remember former CEO Hank Greenberg's departure from AIG in 2005, after a corporate governance meltdown that included excessive compensation, appreciate the irony of his comment to ABC News that the retention bonuses were "mind-boggling." Mr. Kettle, Pot is on line 1.

Compensation committees are not responsible for individual pay packages below the CEO, but they are responsible for determining their overall structure -- and for making sure that the CEO's job includes effective management on compensation issues.

Retention of employees may be a legitimate goal of a compensation program, but it can be accomplished in a way that is both effective and credible by being tied to performance goals and by delaying vesting until after the bailout funds are returned to taxpayers.

The Corporate Library released a report in February about the boards of the bailout companies, many of which were outliers in their governance and compensation practices. Some of these were clear indicators of investment and liability risk. In several cases, we found individuals who not only sat on more than four corporate boards but also sat on more than one of these particularly troubled boards during this period.

Several other directors from these troubled boards also sat on either five or six boards altogether. We call the phenomenon of directors who serve on four or more corporate boards "overboarding."

Overboarding can limit the time and attention a director has for each board. It can also be an indicator of -- or a contributor to -- so many relationships and connections that it makes it more difficult to provide the respectful skepticism necessary for independent oversight.

In all, 11 of the 27 companies we identified as "troubled" had at least one overboarded director. Six had more than one; at Merrill Lynch, there were five. By comparison, fewer than 30 percent of S&P 500 companies have even a single overboarded director, and fewer than 5 percent have more than one.
(snip)
Badly designed compensation is an indicator of poor corporate governance, and poor corporate governance is an indicator of investment risk. Instead of trying to tax the bonuses at AIG, the government and the shareholders should insist on new directors.....insanity is allowing the same people to continue to serve on the board after massive failure and expecting them to produce a different result.

The slippage of regulations over the eight years of war criminal conduct of the White House and executive branch removed any obstacles there may ever have been to malfeasance by companies' executives and their boards. The failures of public protections has meant disaster to the world's economy.

Just as the regulatory agencies such as FDIC and SEC have been perverted into industry shills, the boards have joined executives in carving out a return for themselves from earnings they were supposed to insure to the company and its stockholders. The times were great for theft.

The end is here for malfeasance in corporate offices. If companies are to return to honest functioning, regulation and law must be foremost; the routine robbery by executives cannot be tolerated any longer.

People Power

Welcome to the first week of Ooopsies. The public has been politicized, something that really happened when suddenly Barack Obama the candidate kept winning despite the pundits' dismissal. Coming into office with the push of insistent public approval, President Obama has been taking the reins of an out-of-control fire engine on the way to a fire.

Lots of mess has ensued, but its the kind of mess that the public could deal with, knowing that eight years of robbing them had led up to it. This week, the tolerance shut down when even the president took a passive approach to dealing with more blatant robbery than ever - corporate CEO's who took down a lot of the financial world giving themselves hefty rewards.

I admit I'm as usual disappointed that finding out this country was using torture as a standard operating procedure didn't prove the final straw. Instead, CEO's who have destroyed our economy insisting they needed more gold toilet seats did the trick.

The maxim of business that made America prosper was that executives worked to make the firm strong, to direct it into a functioning producer of wealth for the long term. As I have pointed out here previously, when business was turned into a money machine for the executives instead of the firm's investors and workers, the American economy turned self-destructive.

Far and wide, pundittoes are declaiming the same thing, that we wuz robbed. They're a bit behind in taking up this theme, because in almost every American family there are examples of this victimization by unregulated, rampant, theft. It isn't even the first time this has happened to most families, because many of them still have memories of, or tales from, the 20's when the same thing occurred, that our laws were supposed to protect us from.

Frank Rich does a long diatribe about the Wall Street frenzy. He points up quite a number of the problems Americans are not stepping away from any longer, and gives a nice handy list of what's brought on the crucible.

What made Jon Stewart’s takedown of Jim Cramer resonate was less his specific brief against CNBC’s cheerleading for bad stocks than his larger indictment of the gaping economic inequality that defined the bubble. As Stewart said, there were “two markets” — the long-term market that Americans earnestly thought would sustain their 401(k)’s, and the fast-moving, short-term “real market” in the back room where high-rolling insiders wagered “giant piles of money” and brought down everyone with them.

No one is more commanding on this subject than our president. In his town-hall meeting in Costa Mesa, Calif., on Wednesday, he described the A.I.G. bonuses as merely a symptom of “a culture where people made enormous sums of money taking irresponsible risks that have now put the entire economy at risk.” But rhetoric won’t tamp down the anger out there, and neither will calculated displays of presidential “outrage.” We must have governance to match the message.

To get ahead of the anger, Obama must do what he has repeatedly promised but not always done: make everything about his economic policies transparent and hold every player accountable. His administration must start actually answering the questions that officials like Geithner and Summers routinely duck.

Inquiring Americans have the right to know why it took six months for us to learn (some of) what A.I.G. did with our money. We need to understand why some of that money was used to bail out foreign banks. And why Goldman, which declared that its potential losses with A.I.G. were “immaterial,” nonetheless got the largest-known A.I.G. handout of taxpayers’ cash ($12.9 billion) while also receiving a TARP bailout. We need to be told why retention bonuses went to some 50 bankers who not only were in the toxic A.I.G. unit but who left despite the “retention” jackpots. We must be told why taxpayers have so little control of the bailed-out financial institutions that we now own some or most of. And where are the M.R.I.’s from those “stress tests” the Treasury Department is giving those banks?
(snip)
As the nation’s anger rose last week, the president took responsibility for what’s happening on his watch — more than he needed to, given the disaster he inherited. But in the credit mess, action must match words. To fall short would be to deliver us into the catastrophic hands of a Republican opposition whose only known economic program is to reject job-creating stimulus spending and root for Obama and, by extension, the country to fail.

Of course, the spectacle of an aroused populace has suddenly turned the suckup party into born-again populists. While those of us who have opposed their thieving for most of our lives think it's all too obvious that it's the Party of Nope that's engineered and cheered on this economic disaster, we've learned not to expect that being obvious means that this travesty will be perceived by the general public.

There were still about 25% who believed in the departed cretin in chief even as the world's economy collapsed around us, reassurance that our country didn't torture was disproved in all directions, wars that were adventures at best (business opportunities at worst) raged on unabated, and the executive department as a whole continuously betrayed the public interest at any opportunity. This is fertile ground for the charade we're seeing from the ringleaders of the Gang of Nope.

While I can't give the president all the answers, I do see him trying to do the right thing. It isn't easy, not for him and not for me, to get through this time. It's going to take a lot more than saying 'I told you so' - for all of us.

Like FDR, President Obama is trying to do a lot of things. Some are failures, some are successes. I will look for the failures to be abandoned, the successes to be strengthened and improved upon. If I can help, I will. This post is one attempt on my part.

I'm going to expect those of good will to forge to the front, and let the gangsters eat our dust.

Election 2008 Happy Endings

I had the great good fortune to watch Sen. John McAyn rant on the floor of congress about the appropriations bill he guided into its present form. Sen. McAyn introduced a Continuing Resolution, that would substitute for increased spending the same rate of expenditure as the previous year.

The failed presidential candidate took issue with our President of two months for his support for appropriations representing real support of failing economy.

This reminded me of a few years ago, when the Party of Nope was in control and brought its appropriations bill to the floor of congress late at night, thousands of pages long, and the same Sen. McAyn declared that never again would he allow that to happen - most especially since a provision that allowed anyone to access individuals' IRA records with the permission of the Chairman or representative of the Chairman of the Appropriations Committee was almost passed over in the rush.

None of this was mentioned, of course, in yesterday's tirade, not even that the same thing occurred the next year despite the Senator's promise that he would never allow it again.

McAyn of the present day at no point acknowledged a basic fact, that the funded projects entail jobs. Rather, he was determinedly inveighing against things he styled as whimsical.

"If it sounds like I'm angry," the senator from Arizona explained, "it's because I am."

This disclosure hardly seemed necessary. For while McCain's topic was familiar -- he was protesting the inclusion of earmarks in a spending bill -- the source of his ire was less notable than its intensity. His pair of speeches on the Senate floor, delivered within minutes of each other, resembled a public experiment in primal-scream therapy.

McCain went after President Obama. "I just went through a campaign, Mr. President, where both candidates promised change in Washington, promised change from the wasteful, disgraceful, corrupting practice of earmark, pork-barrel spending," he said. Pounding the papers on his desk, he went on: "So what are we doing here? Not only business as usual; but an outrageous insult to the American people."

He went after Daniel Inouye (D-Hawaii), the 84-year-old chairman of the Senate Appropriations Committee. "We're going to spend $2 million for the promotion of astronomy in Hawaii," McCain said with disgust, glancing at Inouye. "I ask the senator from Hawaii: Why do we need $2 million to promote astronomy in Hawaii when unemployment is going up and the stock market is tanking?"

He went after White House Chief of Staff Rahm Emanuel, calling his explanation for the existence of earmarks in an omnibus spending bill "disingenuous on its face."

He went after budget director Peter Orszag, ridiculing his call to "move on" from the earmark dispute. McCain's shouts echoed in the chamber: "Nine thousand earmarks, billions and billions of dollars of unneeded and wasteful spending, and the president's budget person says, 'This is last year's business. We want to just move on.' That's insulting to the American people. . . . Does that mean that last year's president will sign this pork-barrel bill?"

Of course, he mentioned particularly offensive items such as termite research in New Orleans and honeybee research in Weslaco, TX. Right, most of us listen to the news and are aware that termites are a huge problem in the LA area, and the city's construction includes a lot of wooden structures that are being destroyed. We also know many growers are having a huge problem with the mysterious disappearance of bees that serve to pollinate their crops.

Then there was the 'pig odor' provision; that one includes research into many areas of improved production methods in pig farming, one of which is odor. Gang warfare in L.A. includes a program that erases gang tatoos which would otherwise alienate reformed gang members for life from other areas of society; to McAyn that was all tattoo removal with the prettification nature implied.

Despite having observed his paucity of rational qualities over the course of the campaign, I don't think the Senator is ignorant to the extent he pretended in yesterday's speech. On the other hand, he did prove that he is determined to appeal to those as ignorant as his speech assumed listeners are. The right wing should be on notice. Sen. McAyn wants you back.

The speech we heard yesterday was most likely a milestone. Sen. McAyn is impinging on Sarah Palin/Rush Limbaugh territory. He wants a place at the trough when it comes to the party's base, and he will use the primal scream technique to make that clear.

From comments to the article on McAyn's rant:

washpost18 wrote:
"$1.7M for pig odor research".

In reality, from http://www.ars.usda.gov/Main/site_main.htm?modecode=36-25-15-20 :

"The mission of the Swine Odor and Manure Management Research Unit is to conduct basic and applied research to solve problems in the livestock industry that impact production efficiency and environmental quality. Multidisciplinary research teams generate and integrate knowledge for evaluation and development of new management practices that minimize nutrient excretion, malodorous emissions, and the release of pathogens into the environment as well as have a positive impact on animal health."

McCain(itworse) sounds like just another Pube who's afraid of science.
3/3/2009 2:18:28 AM
Recommended (20)

and another;

dandrbelf wrote:
Let's see. I just added up those earmarks and they amount to 0.0000000014% of a trillion-dollar budget. Not to defend so-called wasteful spending, but doesn't this demonstrate that McCain doesn't get, and never did get, the big picture? What would he be doing in the face of an economic meltdown? Reduce government spending at a time when private demand is in a freefall? McCain once criticised the Bush tax cuts for the wealthy; why doesn't he now praise Obama for wanting to roll them back? Now, those amounted to $1.0 trillion. So I would recommend that McCain do what I did: get out his calculator, realize how penny-ante this stuff is, take a deep breath, lower his blood pressure and shut up.
3/3/2009 8:31:56 AM
Recommend (7)

and I kept it simple this time:

jocabel wrote:
McAyn fails to realize that the programs he is inveighing against provide jobs. And the appropriations are overdue. But then when did he ever show an iota of good sense?
3/3/2009 4:25:15 AM
Recommended (7)

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No, I don't read her blog, but ran across this at CNN:

One more thing: When liberals sit there and accuse the GOP convention of looking like “Nazi Germany,” you might not want to sit there, nodding your head, and respond, “I agree.”

Update: With a hat tip to John Hawkins, I re-listened to the exchange. It’s even worse than I noted. After Hughley rants about “Nazi Germany,” Steele says…”You’re right.”

Too much honesty even for the GoPervs, Michael Steele is history, I betcha.

Who Pays?

There were several questions about who is paying for our mounting buyouts, and of course the answer is you and me. As tax revenues decline, of course, the returns to use up are diminishing. Like U.S. families, the government is losing buying power as income declines along with the value of the dollar, and prices rise.

One interesting suggestion is the extension of insurance categories to include losses due to business malpractice.

As venerable American financial institutions topple, the concept of "too big to fail" is being sorely tested. Bear Stearns gets help. Lehman Brothers does not. The Federal Reserve and the Treasury Department are acting like insurance-claims adjusters, selectively providing assistance when a company's failure seems too much for the financial markets to withstand.

Why not make investment banks and other companies pay premiums for this catastrophic-risk insurance? The government already provides flood, bank and crop insurance. Unlike participants in those programs, however, the companies that qualify for "too big to fail" insurance do not pay for the privilege.

Designing this too-big-to-fail insurance would be tricky but feasible. The potential economic impact of financial companies' failure and the risk in their portfolios would have to be evaluated to determine which companies would be required to obtain this protection, and to calibrate premiums.

The goal should be to limit the contagion of failure, rather than to prevent failure itself.

The squeal of businesses desperate to avoid any expense while suckling on the public teat can well be anticipated. From 20% of revenues in 2000 the share of tax revenues that business contributes to our national till has declined, but no longer is the actual figure given out. Like all public interests, the business contribution has been severely crimped by right winger government.

The disembowelled public interest has become a casualty that the country can't do without. Without a consumer, there are no sales, a concept so simplistic only the determined ignorance now in power could have refused to acknowledge it. Now sales figures show the effects. Unemployment insurance was devised to set aside some of earnings to insure against the kind of loss that has been visited on workers by sending their jobs abroad.

Simultaneously, our plummeting financial system shows what happens when consumers haven't got the means to supply their basic needs; value is made into no more than a mindgame. There can be insurance against this kind of loss as well.

Businesses cannot afford to ignore the effects of their malfeasance, and should be required to insure against it just as are the workers. It is their own source of income that they are destroying, and the institutions should be guarding against the decimation of wealth that they are creating.

Constitution Day Losses

Today we celebrate Constitution Day, when our nation was established. Under the Constitution, the executive branch was empowered with the role of carrying out the laws. This is a very dismal day, that sees huge losses in our financial system because the occupied White House abdicated its role, though it did not leave office. Instead, the nation has been subjected to loss upon loss because the Constitution has been violated, rather than protected and defended. Today's great losses are financial, but they are much, much deeper than that. Trust of every kind has been betrayed.

This talk about burying the dollars in a can in the backyard, except that you don't have a backyard any more, isn't the big giggle that it was even just last week. I admit I do have an account at Chase Bank (Morgan Stanley offshoot) and am just as glad it is not that big an account. I do have a backyard, though for many of us that is no longer true. The debacle around us is growing, and it is shocking.

Underlining all the good news (an impressive quarter of earnings) lies the same issue Goldman Sachs (NYSE: GS) is going to have to acknowledge in the coming months and years: The future of the investment banking world is bound to look absolutely nothing like it does today.

For Morgan Stanley and Goldman, that could mean one of a few things. Either they end up merging with a retail bank like Wells Fargo (NYSE: WFC) or Washington Mutual (NYSE: WM) to gain access to deposits that provide a stable source of capital, or they're going to get regulated into the floor by a government that's been caught asleep at the wheel. Former independent investment bank Merrill Lynch (NYSE: MER), which executed an emergency sale to Bank of America (NYSE: BAC) over the weekend, took the first approach, which may have been its only option after the land mines left by Lehman.


Please don't wait until it's too late
Both Morgan Stanley and Goldman expressed their reluctance to give up their current independent structures. For both firms' shareholders, that's probably not the best of news. If the prevailing thought that the current investment banking system is broken turns out to be correct, holding onto the past and not addressing problems until the last second is a recipe for shareholder destruction. Every financial collapse this year -- Bear Stearns, Lehman, Mac 'n Mae, and AIG -- came extremely suddenly and with little warning. After a wretched week of financial failures, let's just hope the remaining survivors won't bury their heads in the sand.

The reluctance is understandable, these are responsibly managed banks that are caught up in the massive collapse of a system that was betrayed by unprincipled investment purveyors using worthless paper to create an illusion of wealth where there was no value. Mortgages given to obviously uncreditworthy buyers were a vitiation of credit underpinnings, and has made all credit precarious. Your money is declining in value too.

The investment banks are tumbling down, but the real crooks are those regulators who took the opportunity of this lawless maladministration to do away with the regulations created to protect the banks, the investors, and the public. We are only protected if the laws are kept, and they have not been observed or administered.

If the Constitution had been respected and followed, your dollar would not be worth less today than it was in 2000.

Funny, I was out taking pictures of New Mexican ghost towns this past week, below is one of Grand Quivira. Reminds me of what Lehmann must feel like now, and maybe next week Chase Bank.

Fathers Getting the Shaft

Happy fathers' day, and you know as well as I do that the ability to take care of your family is going byebye. I have been watching this happen, and it isn't a surprise. The robber barons are in control, and we have to end that. Friday night Bill Moyers' Journal did a great job, showing what is happening to us all.

HOLLY SKLAR: Our wages now adjusting for inflation, average wages are lower than they were in the 1970s. Our minimum wage, adjusting for inflation, is lower than it was in the 1950s, and why is it? One of the things going on is that income and wealth inequality have gone back to the 1920s. We are back at levels that we saw right before the Great Depression.

BILL MOYERS: But, during this time, the economy's been growing. Why aren't workers sharing in the prosperity that they've helped create?

HOLLY SKLAR: Well, that's exactly the problem. It used to be that when productivity went up, wages went up. Worker--

BILL MOYERS: You work harder, you got more of the results.

HOLLY SKLAR: You got the fair day's pay for the fair day's work, you got more results. You shared in the rise and work of productivity. Now, almost all the rise and work of productivity is going not just to the upper class, but to the very top of the upper class. So, we have had a great redistribution of income and wealth in this country in the last three decades. The problem is that redistribution of wealth and income has been going up to the very top. And most people have even been treading water, or going behind. And often working for many, many longer hours to keep up with the living standards.

BILL MOYERS: Is it true that about 80 percent of our workforce in this country make their living from hourly wages?

HOLLY SKLAR: They do. And that's when we refer to average workers, that's usually what we mean. We mean people who are, you know, in production non-supervisory workers and they're, when I say average workers are making less, in real terms-in what they can buy, than they were able to in the 1970s. It's just shocking. And we are told often that we have to do this in order to make our country more competitive in the global economy. You know-

BILL MOYERS: We need to be leaner-

HOLLY SKLAR: Yeah, exactly-

BILL MOYERS: Yeah, leaner and meaner--

HOLLY SKLAR: Leaner and meaner, but we will all be better off in the long-run, we're gonna get more educated and so on. Well, here's the problem. We haven't been making our country more competitive. We've been actually driving it into the ground. Essentially, people at the top have essentially been you know, like they're corporate raiders, essentially raiding the whole country, milking it like a cash cow, is what's been going on and driving the economy into the ground. We have unprecedented debt to other countries.

You know, we have an infrastructure that was built by the tax dollars of prior generations, basically, that is now crumbling. We're not even paying to modernize for the global economy, we don't have a world class infrastructure anymore.

We have research and development that we're spending less on, proportionately. We have an education system that's lagging further and further behind. So the idea that we're getting more competitive for the global economy is ridiculous, that's a myth.
(snip)
HOLLY SKLAR: Well, we need a few things. One is, raise the minimum wage. Raise the floor. Set a green light in a different direction, and the green light is, raise wages, fair wages. The other is universal health care. Get to universal healthcare.

BILL MOYERS: Because?

HOLLY SKLAR: Because one, because something like 18,000 people die from lack of health insurance every year. Two, it's really destroying a lot of small businesses in the sense that they know they want to give health care to their workers but they are in a situation where they just are paying. I mean, it's just become astronomical. It's like a giant shift from, you know, from one person and from one business to another.

BILL MOYERS: It's encouraging that your organization has a lot of small business people, and others working for what is your mission? What are you trying to do?

HOLLY SKLAR: The mission is to say that we can change direction. In other words, that what's really good for business, what's really good for business is also what's good for workers, and good for communities, and good for the country. That instead of this kind of low-road path we've been on, which is low wages for workers, low taxes, lower taxes for the wealthy, reckless deregulation, irresponsible disinvestment in our infrastructure and so on, instead of that we can go to a higher road, where we're shoring up the economy from below, and we're doing long-term sustainable developments, smart development, that we need for long-term success. (Emphasis added.)

It's something I feel like I'm saying too much, but without living wages, our economy is shot. If you want to sell something, you want some one who can afford to buy it.

We are being robbed,and the robbers aren't even smart enough to go to the good neighborhoods to find real riches. We are being robbed of our ability to take care of ourselves.

You Snooze, You Lose, in This Election

Never suspect there's a lot at stake in the March 4th primary here, would you? There is a lot at stake here in Texas, and particularly in the 4th District, where a change in the House of Representatives seat could help immensely to combat global warming. An overview of the oil companies scurrying about is educational, in more ways than one.

The representatives of Big Oil were out in force in Congress in an attempt to head off energy legislation which actually climbed over them into rational legislation. Rep. Ralph Hall pulled no punches, threatening congressional colleagues with the spectre of more wars for oil should they pass a bill to develop new sources of energy. Today Rep. Joe Barton is op-editorializing in the Dallas Morning News about losing our 'quality of life', should we leave the throes of dinosaur fuels.

In case you think rational thought has crept into Texas, the Barton rant begins: It is dogma in Democratic circles that the specter of global warming is so manifest and terrifying that facts matter less than action, and the party has begun to insist that Congress must attack carbon dioxide and save the planet in time for the November election.

In another development, the oil consortium
Representatives Hall and Barton share, for developing/drilling new oil fields, has been in some trouble. The $37.5 million it receives for oil development research in Sugar Land has evidently become too much of a target for attacks on irresponsible waste of taxpayer dollars, now that Jeb Bush is in the ethanol field.

Democratic candidate for the District 4, TX, seat in the House of Representatives, Dr. Glenn Melancon, was taking a look at the recidivism of battling against developing new energy resources, in a conversation we had yesterday.

It's insane to give away tax payer dollars to big oil at a time of record profits. We're having to pay for our gas twice -- once at the pump and once at the IRS. I'd rather see our money invested in American universities and research facilities. Our scientists and young scholars will find a way to break the monopoly of big oil once and for all. Our future as a nation depends upon alternative energy and conservation technologies. We need to look forward, not backward.

I am supporting Dr. Melancon for a lot of reasons and am looking for a lot of N. Texans to cast their votes for our future, as well. We haven't been hit as hard yet as the rest of the country, so the loss of wages and of jobs hasn't been felt so hard as it has in Illinois and California. Recession effects are seeping in, companies are beginning to cut workforces and output, but will the voters see what has happened and how we need to elect forward-looking responsible representatives in time? I am hopeful that an energetic campaign by frontrunners Sens. Clinton and Obama will bring some of the publicity we need for badly needed sound energy and economic policies.

The coming election is important to those of us who aren't desperately trying to keep our country from saving itself from the worst administration in our history.

In Austin, as this blog has been exhibiting for the past few days, publicity helped end a hoax by TxDoT that was refusing to build roads while claiming inadequate funds, while spending exorbitant amounts on propagandizing for a huge toll road boondoggle.

In the occupied White House, the big oil interests are hard at work giving out public money to the interests they support, creating real stress for the Hall/Barton consortia. As the Dallas Morning News snarks this a.m., When Illinois wins, the government abruptly cancels the project. Why? It must be all those Republican roughnecks from Texas, including their oil-patch president.

The subject of this speculation is a bouncing energy project, FutureGen, that has been used to block demands that the oil interests in the White House make some move toward countering global warming, even after they finally were forced to admit that it isn't a hoax invented by Al Gore. It was proposed for Rep. Barton's home town, Jewett, TX, incidentally.

It would be a good idea for anyone, in Texas, in Illinois and elsewhere, to keep in mind that you are paying for bad government in more ways, and more dollars, than you and your kids can ever afford. In the 4th Congressional District in Texas, there's lots of oil company interest, and you need to watch out for those interests too.

We need new hands at helms in many places. The 4th District, Texas, is a good place to start. The White House is good too, and even more direly needed.

Total Failure -The Budget Priority

Having spent all he can on his cronies and contributors, the cretin in chief has thrown a phantasmagorical budget at us that is good for laughs at best. He doesn't count in his wars, and is nudging medicaid onto the states.

...the fact remains that the purported surplus on which Mr. Bush based his tax-cutting agenda was always something of a mirage, and the president has never been willing to adjust his agenda to the grim new fiscal reality. Yesterday's promise of a small surplus by 2012 is once again premised on omitting likely costs (zero is budgeted for operations in Iraq and Afghanistan) and by assuming cuts to domestic spending that are unachievable politically and, in large part, unwise as a matter of policy.

As always, Mr. Bush pledges to press ahead with his tax-cutting agenda: another $2.4 trillion over the next decade, $3.7 trillion if relief from the alternative minimum tax is included. The president argues that failing to extend his previous tax cuts would result in an average tax increase of $1,800. But Mr. Bush neglects to point out that the overwhelming share of the tax cuts go to the wealthiest Americans. The top 1 percent of households -- those with incomes of more than $450,000 -- would get 31 percent of the benefits, with tax cuts averaging $67,000 by 2012. And Mr. Bush does not even propose fully paying for these cuts: The budget he submitted yesterday envisions another $397 billion in deficit spending over the next five years because it would devote more money to tax cuts than it would cut in spending.

Mr. Bush inherited a potential windfall -- and squandered it. The next president will inherit his mess.

In Texas, the realization that taxes are not just being raised on all of us, but also on the states, is a hard blow.

President Bush rolled out a $3.1 trillion budget Monday that boosts funding for the military while cutting projected spending for Medicare and Medicaid, proposals that would have a noticeable impact in Texas.
(snip)
Mr. Bush proposed eliminating all or part of 151 federal programs, some of which provide assistance to state and local governments, saving $18 billion in 2009. They include funding to house noncitizens in state prisons, which provides about $26 million for Texas, and grants for undergraduate students, which provide about $22 million to Texans, according to the Center for Public Policy Priorities in Austin.

Overall, federal grants to Texas would total almost $27 billion in 2009, about 2.3 percent more than in 2008.

But the state would see reduced funding from federal grants for highway planning and construction, foster care, anti-poverty programs and subsidized housing. The administration proposes to eliminate the social-services block grant, which would take away $38 million in 2009. Texas uses the money to pay for long-term care and adult protective services.

The state's allotment of community development block grants, a prized source of aid for nonprofits and local governments, would drop from $250 million in 2008 to $190 million in 2009.

Grants for programs such as child protection, child care and children's health care would remain at 2008 levels. Texas' share of funding for some social services, including subsidized school lunch and breakfast programs, would increase.

On Medicare, which provides care to the elderly, projected savings would come from freezing increases in reimbursement rates to hospitals, nursing homes and other health care providers. Those reimbursements are typically adjusted for inflation.
(snip)
"The president writes only in red ink, having never submitted to Congress a balanced budget," said Rep. Lloyd Doggett of Austin, a member of the House Budget Committee. "He piles on more debt to fund his misguided foreign policy while neglecting so many needs at home."

In his usual reverse Robin Hood fashion, the war criminal at our helm will take away working, worthwhile programs from the needy and give more of the nation's wealth from its citizens to the leeches that work for profits instead of worth.

I am joining Diane, the criminality is leaving me speechless. Rep. Doggett says it better than I ever could.
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In an encouraging development, the Navy has been held answerable to law, and will need to let sea life off of California live.

A federal judge in California on Monday reinstated a series of provisions meant to protect whales from high-powered sonar during military exercises in the Pacific Ocean.

The decision was a rebuke to an effort by the Bush administration to exempt the Navy from those rules and from federal law.

The decision, by Judge Florence-Marie Cooper of Federal District Court, found that the administration’s Council on Environmental Quality had overreached on Jan. 15 when it cited “urgent national security reasons” to approve weaker rules for the exercises.

My best regard goes to the judge for enforcing law that all of us should follow.

You Lose

In case you were an investor during the past few years, I think this is worth your paying attention.

Sometimes it appears that the bankers at Goldman Sachs (NYSE: GS) are much smarter than their counterparts elsewhere. Now, there is some fresh evidence that that is true. The firm bet that securities backed by risky home loans would drop in value. According to The Wall Street Journal, taking that position "generated nearly $4 billion of profits during the year ended Nov. 30." The paper says that a small number of bankers in a very small division of the bank made most of the investment that lead to the gain.

Clearly, the group did not share the information with many of the firm's clients, who gambled in the opposite direction and lost.

Investors have to wonder whether the people at Goldman drink different water or breathe different air. The investment bank is the only company in it peer group to have a stock that is up for the year. It has never been in any danger. One of its hedge funds, Global Alpha, did poorly and lost a great deal of money, but the rest of the firm was not affected.

As I have been working in the financial community, I was very aware that the housing boom was going to burst, and have been very conservative. I am interested to know, did you know too that the subprime mortgages were coming to the fore, and did you act accordingly?

As many of my posts were about this, I am also interested to know; did you get any warnings of those I posted?

Theft or Recoup of Profits From Resources?

Operating worldwide from a position of strength, the largest oil companies historically worked with governments that bled the people to enrich themselves, and hammered out agreements that were advantageous to the oil companies rather than to the countries they operated in. The past is coming back to haunt the big oil companies in many areas. j

A tide of populism has been rising in South America, bringing into power leaders who are turning around centuries of banana republics that fought public interest, and bringing into power those who are directing profits toward the working people.

In Correa's Ecuador, a big pinch is being taken out of profits, and it is aimed directly into the pocketbooks of the populace.

When Ecuador's left-wing President Rafael Correa drastically increased the state's share of oil revenues in October, and oil minister Galo Chiriboga also announced that contracts with foreign oil companies had to change, industry analysts said the country had gone too far.

After all, foreign firms currently account for about half of Ecuador's total crude production of more than 500,000 barrels a day (bpd).

And while Petroecuador, the state oil corporation, accounts for the rest, it continues to be plagued by mismanagement and debt, analysts say.

The proposed increase in the government's share of windfall oil profits - those obtained whenever world oil prices exceed those established in existing contracts - was also huge.

The tax went up from 50% of windfall oil profits to 99%.

That would net the government $830m a year more in revenues, assuming world oil prices stay at current levels.
(snip)
Mr Correa's repudiation of the current oil contracts is not just about foreign oil companies, but also the previous Ecuadorean governments, run by conservative political elites, that agreed to them.

"The contracts have not benefited Ecuador. The problem is also the previous governments. This is widely recognised, " Mr Pachano says.

Mr Correa is an ally of Venezuela's President Hugo Chavez - and, like him, is not shy about using colourful rhetoric on occasions.

He maintains justice is on his side. Most of the existing oil contracts were agreed when international oil prices averaged $24 a barrel, before they started rising in 2003.

But, said Mr Correa at a press conference during a state visit to China in November, Ecuador was still receiving just $3 to $4 in taxes from oil sales, even though the price of crude has risen to about $90 a barrel.

Confiscation of properties from foreign investor groups has long been a problem for those investors in Central and South American countries, and other poor areas, when governments turn over. While those extremes are pretty much a thing of the past, the past is being remedied by voters in the "third world".

Voters in the U.S. have for the most part been convinced that this is theft, but the theft that preceded it is not so much frowned upon because historically it benefitted us. As large corporations, especially big oil, become less inclined to benefit the U.S., where most of them originated, the voters here are becoming less critical of policies that take back from the corporations the boon they have received from our government.

A balance of powers is in the reckoning, and not just in Ecuador. In the recent Energy bill that the occupied White House is intent of vetoing, the oil company benefit - from permitting them nonpayment of taxes on their use of our natural resources - was proposed to be revoked. Our own banana republic in D.C. was not about to let the people profit from the use of their own resources. The criminal element may have killed the energy bill for this year, but it will be back.

An election should make big differences in the present pickpocket policies. Other means may be necessary as well. As 'Yo-There' points out at ptarmigannest.net" Believe it or not, the US government signed the American Servicemembers’ Protection Act (ASPA) introduced by Jesse Helms in 2002 that OK-ed the invasion of my country should an American soldier be held prisoner here for the international court and several countries were arm-pushed into a bilateral non-extradition to the international court." The criminals have much to fear from the international court, and, as Diane pointed out, already face charges in Canada.

Impeachment would move the badly needed changes up considerably, and cut our losses. Confiscation of ill-gotten gains would help as well. Things are due for a change in the favor of the U.S. public.

Potemkin Plan from Occupied White House

Today we will get that credit crunch "Plan" the occupied white house has been trumpeting about, that will give relief to only those home buyers who can meet and have been meeting scheduled payments on their sub-prime loans, and has been bought into by mortgage financers.

The administration is finally forced to act because it is threatened with actual solutions to the overall problems being offered in Congress. This patch on a bursting industry is being pressured out of an industry that knows it has taken the whole country into highly dangerous territory by its greed and mammoth malfunctions. The small number of loans affected will help to boost that new Gold Standard, 'consumer confidence'. That may save the country from disaster, but as I reported in my post earlier this week, most industry insiders are dubious.

Shareholder suits are the threat the mortgage industry chooses to cite, but precedent is perhaps more important to them. This acquiescent administration has let them get by with misfeasance to the peril of our entire economy. Being successful in acting now, might the cretin in chief get the idea that he might gain more legacy points? Oh, horrors, act against the corporate world in order to preserve the public from further harm? I wouldn't worry much if I were they. This corporate servant has no taste for public interest, in fact disdain seems to be its motivation in that realm.

Proposed congressional remedies would include a provision that would give irresponsible lenders no say over workouts - meaning their beloved authority over whether to allow time to homeowners threatened with foreclosure would be lost. Of course, foreclosure gives them other fees, off which they make their beloved profits, so they much prefer foreclosure. Insurance required of subprime borrowers won't pay the mortgage firms in the case of a workout, but only in the case of foreclosure.

The possibilities of a particular bill have been pointed out by responsible financial analysts. Senator Durbin has proposed that bill, and hearings on it were held yesterday that provided real Oversight of the executive branch. His proposal would remove the optional/voluntary nature of financiers' working with the abused loan recipients. It would provide curative solutions to the credit crunch, rather than try to ensure financiers' survival, the emphasis of the executive branch's efforts.

Of all the economists offering their opinions on the mortgage meltdown, few have offered a more bleak picture over the last week than Mark Zandi of Moody's Economy.com, although today, in testimony in the Senate, Zandi said passing one particular piece of legislation would help ease the coming economic pain.

In testimony before the Senate Judiciary Committee, Zandi offered praise for a bill introduced by Illinois Senator Richard Durbin. Among other things, that bill would allow judges to modify mortgages in bankruptcy proceedings in order to help homeowners stretch out their payments and keep their homes.

Zandi said today that this change would 'significantly reduce the number of foreclosures,' and said about 570,000 homeowners would likely benefit from this change in the coming years.

Without the change, Zandi argued today, the US runs a greater risk of a recession caused by escalating foreclosures.

'The odds of a full-blown recession are very high,' he said. 'There is no more efficacious way to short-circuit this developing cycle and forestall a recession than passing this legislation.'

Some bankruptcy judges and university professors argued today that Congress should move cautiously, and that a bill allowing bankruptcy judges to modify mortgages could have a host of unintended consequences, including higher credit costs and more uncertainty in the financial markets.

Pepperdine University (Ken Starr haven) representative Mark Scarberry argued vehemently at hearings yesterday about the "cram down" aspect that would give the mortgage financiers no power over negotiations about loan payments. The threat of interest rate increases were thrown out, but were countered by the facts that auto and farm loans - that had had the same proviso thrown at them - had not had such interest rate advances, and that the homeowners concerned do not comprise a very large proportion of the loanholders in toto. A further remark about the bankruptcy courts' being overwhelmed was roundly reputed by bankruptcy court representatives at the hearing.

The counter arguments appeared to be mainly the usual corporate tactic of fighting against any remedy that allows the public's money to escape its grasp. In this case, even the corporate world itself is greatly threatened, but it will still fight to the death - even if it is its own.

(Thank you, Supreme Commander Thor, for referring to the Potemkin Village of the Great Leader, which gave me the Potemkin part of my title.)

Public Attention Is Dangerous to Occupied White House; Do Not Be Fooled

I took the opportunity yesterday of watching seven hours of the Office of Thrift supervision forum on home funding, with four panels and several speakers.

Secretary of the Treasury Paulson scooped all the real news by announcing his vague plans to get the mortgage servicing industry to commit to freeze rates and bail out the industry.

((Mortgage servicers put together lenders with sources of funds. It's this group that came up with 'bundled' securities that got good ratings and attracted investors, although they are made up of questionable items like subprime mortgages along with other good investments. Other proposed sources of funds include "viaticals" which for awhile have been allowed and now are under intense scrutiny, whereby a life insurance policy is sold to produce funds needed now.))

Paulson's tactic presented a 'plan' which financial writers had to go back to the office and write up, thereby keeping them from reporting the actual state of the economy. The real news of the forum of course would not have been easy for the occupied White House to face, so it was very Rovian tactics to send financial reporters back to their offices to write up the bone throw to them.

An admission came from a group of financial advisers led by Ron Insana that the next 12 months will be grim, with housing prices falling throughout the country in addition to the huge losses by mortgage firms and investors who took their securities' ratings as true - and will then come more ARM mortgage rate hikes. The word recession was used several times, but still as a possibility rather than as a certainty.

Insana admitted the Federal Reserve failed to stop the housing bubble because Alan Greenspan maintained that the diversity and width of the coming bust would allay its effects. The usual line that "no one could have imagined" that the housing pricing dive would be universal was linked to the use of many financial devices that investors for the most part don't actually understand, that in the past eight years regulators have allowed the mortgage servicers to bring over from corporate finance.

An unidentified questioner brought out that 'financial servicers' were maintaining that they could not take a loss or would be prosecuted for a failure of fiduciary duty, so couldn't lower mortgage rates/costs to homeowners looking at foreclosure. This would mean that Paulson's announcement was merely a diversion to keep the media from getting at the real situation. Also the questioner pointed out that the "servicers" would prefer the extra funds they'd collect by going on to foreclosure, rather than lower or maintain present mortgage rates even temporarily, as fees are the main source of income and additional fees accrued in the event of actual foreclosure. The panel did not disagree, and later I believe he was identified when Office of Thift Management head used the line he'd begun with, that everyone was being awfully polite, and associated that line with a John Montgomery, as I understood him. I did not find any reference to a financial person by that name, so am not sure, but the questioner was known to and not refuted by the Insana panel.

Insana did praise the firms that failed to lower investment grade ratings for beginning to realize how few of the 'triple AAA' rated securities were holding up their value, and at last began to lower the ratings, but panelists suspected that when that happened investors realized the bath they were about to take, and began bailing out. At present, huge financial firms and individual investors, teachers' retirement funds and small community banks, foreign and U.S., among others, are holding securities that no one will buy.

Insana had asked for a rating from one unidentified investor of the securities held by another, and was given a good sounding rating. When he inquired if they would pay that amount quoted for the securities, the response was panicky refusal.

The media report that I could find that included findings from the all-day forum on one of the biggest threats we face contained a few nuggets.

Washington Mutual Chief Executive Kerry Killinger said problems are starting to show up in home loans made to borrowers with strong credit records because real estate prices continue to slide.

The CEO of Seattle-based WaMu — the country's biggest thrift and a major mortgage lender — said he supports additional interest-rate cuts by the Federal Reserve, as well as temporary extensions of Fannie Mae and Freddie Mac's funding capacity.
(snip)
Mark Zandi, chief economist at Moody's Economy.com, predicted that, if the economy were to slip into a recession or if efforts to modify loans don't pick up substantially, the housing market downturn could last through the end of the decade.

"This is the most serious housing downturn since the Great Depression," Zandi said.

Many analysts say next year is likely to be worse.

Another report gave other interesting and dismal news.

How an obscure lender to midsized German firms lost big in America's housing bust is a tale of globalized risk-taking run amok. It also hints at a larger challenge: Despite decades of regulatory reforms, the world's financial system is as vulnerable as ever to serious crises, some experts say.

"There may be more risk in the system today than a century ago," says Robert Bruner, dean of the business school at the University of Virginia in Charlottesville. "We have more complexity today because of the sheer size of the capital markets and the presence of new and unpredictable players."

This environment teems with financial opportunities as well as threats. But it's the dangers that loom large now for consumers and businesses in the U.S. and beyond.

Losses from complicated investments in risky U.S. mortgages have rippled outward, affecting other channels of lending, not just mortgages for the weakest borrowers. This tightening of credit, in turn, has increased the risk of a U.S. recession. Already:

• Many U.S. homebuyers, even high-income ones, are having a tougher time getting home loans.

• Because of mortgage-related losses, banks have less money to lend in general, not just for housing. The worry that a credit crunch could pinch U.S. economic growth is one factor behind the recent drop in U.S. stock prices.

• Even some of the safest investments — money-market mutual funds — have recently faced questions of soundness because of mortgage-linked investments.

• The problems extend beyond U.S. shores. The drying up of money flows to mortgage markets, although triggered by events in the U.S., caused depositors to stage the first run on a British bank in a century. A government bailout of the bank, Northern Rock, may now pave the way for a buyout by media mogul Sir Richard Branson.

All these factors put a tangible face on the threat of recession. Some economists now think that tighter credit, coupled with declining home values and high oil prices, is pushing the U.S. into a slump.

Others think that risk can be still averted. The Federal Reserve, for one, has recently begun to lower short-term interest rates to stimulate the economy.

While several of the mortgage industry representatives in yesterday's panels said 'consumer confidence' may pull out our economic planners from the disaster that they've produced, and that the Paulson plan might have the desired effect, for the most part that was admitted to be rather unlikely.

The deregulation of this executive disaster has shown itself for what it is in many ways. Poisoning the public by deregulating food safety wasn't enough. The economic imbroglio produced here may be with us into the next administration, leaving another Democratic administration to pull the U.S. out of the inevitable mire that deregulation produces.

The only good result looks like a lesson plan for why the party of GoPervs is not qualified for high office.

Technology Myth

Funny thing, the other day I picked up a book last published in 1983,(I can't find it now, but it took off from Alan Toffler's Future Shock), and I was amused that the author confidently announced that the American technological business community would mean huge dominance throughout the world, employment of American workers everywhere, a world characterized by that dominance. There seemed no concept that conversely, the attention in other countries to education, development of high capacity for technological business, and social conscience, instead of corporate greed, in other countries would take those jobs out of this country, and our business community would come to be dominated by other countries that put their resources into training and education, and development, of their workforces/citizens.

Today WaPo announced that outmoded myth as truth yet again.

Nor did NAFTA cost the United States any jobs, on net, though it might have created a couple of hundred thousand. The agreement contributed marginally to the shifting of workers from some less competitive sectors to others. As for wages, a gap between higher- and lower-paid workers has indeed developed in the NAFTA years, but the main culprit is technology, which increases demand for highly educated and trained workers.

That its time to wake up and smell the declining dollar, or at least listen to that sucking sound Ross Perot anticipated would not occur to a strong advocate of NAFTA, would it?

This country needs to stop throwing its treasure into no-bid contracts with executives' friends and start salvaging its educational system along with all the other neglected areas our government is cutting out so we can have a very rich privileged set.

The Smokescreen Spewed at the Public Doesn't Fool Them

Once upon a time was there a responsible head of state? Yes. I remember when keeping the country safe wasn't a political slogan. I remember when there were measures congress and the executive fought out with each other, but public interests were served and crimes against the public were prosecuted.

Nostalgia time? In light of the Cretin in Chief's speech yesterday in Arkansas, yeh. That's about all we've got except the expectation that in October 2008 we can turn out a vote to start winning back all that's been thrown out in the six+ years of one-party theft.

Bush used an appearance here Monday to chastise Democratic leaders for failing to send him even one of the 12 annual spending bills more than two weeks into the new fiscal year, and he eagerly vowed to veto what he deems excessive spending.

Democrats fired back by highlighting the one veto Bush has exercised: the rejection of a dramatic expansion of a popular children's health insurance program.

The backdrop for this confrontation belies its intensity. Just last week, the Office of Management and Budget reported that the deficit in the 2007 fiscal year, which ended Sept. 30, fell to $163 billion, barely half of what it was two years ago and the lowest in five years. While still a hefty chunk of money, the deficit now represents just 1.2 percent of the overall economy, lower than the average rate over the past four decades.

Yet Bush has gotten no credit for that with the public, prompting the White House to look for opportunities to fight Congress over spending and reinforce his credentials with a disaffected Republican base. The latest Washington Post-ABC News poll found that just 27 percent of Americans approve of Bush's handling of the deficit, matching his all-time low on the issue, compared with 64 percent who disapprove.

Little wonder, then, that the White House staff made sure to hang two giant banners that said "Fiscal Responsibility" behind the president for his talk with local business leaders here. "We're beginning to get control of that deficit," Bush said. "And the reason why is that a growing economy yields additional tax revenues. And then when you work with Congress to set priorities . . . you can reduce your deficit without raising taxes."

As the federal government operates on a stopgap spending appropriation, Bush accused Democrats of wanting to add an extra $200 billion in spending over the next five years and dared them to send him spending bills he could reject.

"You're fixing to see what they call a fiscal showdown in Washington," he said. "The Congress gets to propose, and if it doesn't meet needs as far as I'm concerned, I get to veto. And that's precisely what I intend to do."

Stanley Collender, managing director of Qorvis Communications and a federal budget specialist, said the debate is disconnected from the improving deficit numbers. "It's purely a power play by the White House," he said. "If these spending bills were coming from a Republican-controlled Congress, the president would be signing them and applauding the House and Senate for their fiscal responsibility."

Forget that the borrowing from Social Security masks the full damage of war funding on the budget.

This display of self aggrandisement has become the standard for presidential posing, so it is pretty heartening to read the comment section and find almost no support. The public has seen enough of the effects of his moronic conduct of the country's business to wipe out the smirk on any faces other than the president's.

Although the level of writing in comments was not anywhere as good as that at the editorial section, I think you should see what support the c-i-c's threats, lies and other drivel got.

The support:

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nychap44 wrote:
Prediction: When Clinton shut down nonessential government operations by not approving the budget the "main stream" press backed him and placed the blame on the congress. If Bush does the same this year the headlines will blame Bush for shutting down the government and congress will get a pass.

This will prove once and for all that the press reporting is completely biased against the Republicans.

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sque1 wrote:
Like it or not Bush will have the upper hand in these spending bills because even though you can get votes in the Senate to override a veto I believe Bush thinks he has enough GOP members in the house to uphold anything he decides to veto. What would make more sense if dems weren't playing games all the time, they would work with the WH and show voters that they can lead. You are all the time telling us how low Bush is in the polls, but he rates higher than congress.

Bush is not on the ticket in 08, congress is. The fact that the GOP in congress is going to uphold the SCHIP veto tells me that the majority of voters are not paying that much attention and moveon.org spent a lot of money for nothing.

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HUDAHAR wrote:
SCHIP...Just another give-away to illegals.

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Yep, that's all folks!

It's hardly worth putting up the opposition here, we can pretty uniformly see through this smokescreen of misstatements, falsifications and outright lies. But I will put up one pretty thoroughly researched comment, just to give the color of what thought looks like.

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FredEvil wrote:
The most frightening part of all of this, is that 30% of the country, despite all evidence before them, are still of the opinion that Bush and the GOP have the faintest clue what 'Fiscal Responsibility' is.

Federal Budget
1992 - 1.6 Trillion Dollars
2000 - 1.8 Trillion Dollars

That is an increase of 200 Billion dollars over EIGHT years under Clinton.

Bush's first budget?
2001 - 2.0 Trillion dollars (an increase of 200 Billion in ONE year, it took Clinton EIGHT YEARS to increase the budget that much!)
2007 - 2.9 TRILLION dollars

That's right, the annual budget increased 1.1 TRILLION dollars annually, over less time than Clinton's increase of 200 Billion.

Who is it that's for small government and fiscal responsibility again?

nychapp, how is the 'media' supposed to be biased against an individual who never met a Republican Bill he didn't like(regardless of it's pork content), yet refuses to pass virtually anything that comes out of a Democratic Congress, including a moderate increase in spending for disadvantaged children's healthcare (which would cover 8 million children for 7 billion a year) yet demands nearly THIRTY times that much money for the debacle in Iraq, that is entirely his fault to begin with?!

It's as though he doesn't understand what a 'Compassionate Conservative' is supposed to be. Come to think of it, I don' think I do either.
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It makes us all proud to be on the side of the facts. The DFH's have tried to keep the country from a disaster once again, and once again they're pulling it back from the edge. If we can keep 2009the criminals from attacking Iran, we should make it through to 2009.

This time, the perpetrators should not have the option of slithering away to what Molly Ivins, this a.m. in Eschaton comments, calls Snake Island, to regroup and begin again to whittle away at the foundations of our nation. We have seen that disgrace doesn't bother them, they're out for the money. This time it needs to be prison sentences and confiscation.

Hold your nose, it's time to take another dive

In this booming economy which is so full of promise that we can hardly keep U.S. consumers from beating down the doors at the malls to buy the Holy Stuff ... more great news.

The service sector, where the burger flippers who used to sell you sub-prime mortgages or manufacture your American cars or something silly like that, took a dive. Can you imagine, those U.S. workers who are trying to make the payments they took on while working a real job now can't buy the kids burgers and still keep the house, or the car or pay for insurance - silly me, I forgot you had to drop the insurance policy that now costs $1200 a month, hope those kids wash their hands and stay inside the house for you. Those consumers whose incomes go offshore can't get a massage now. They can't pay to have flowers delivered. They can't pay for the car wash 'n wax. Your service sector isn't making its way because the geniuses at the head of the corporations are saving money on labor. Funny thing, how they expect the wage deprived to continue buying at the same level as before.

This isn't funny, actually.

The U.S. service economy, feeling the drag of the slumping housing market, expanded at a slower pace in September than in August, a trade group said Wednesday.
The Institute for Supply Management's index gauging the health of non-manufacturing industries registered at 54.8 in September, down from 55.8 in August and below the 12-month high of 60.7 reached in June.

The index, now at its lowest point since March, was in line with economists' estimates. A reading above 50 indicates economic expansion in the service sector, while one below 50 indicates contraction.

The service sector makes up 80 percent of U.S. economic activity, and on Monday the ISM also reported weakening growth in the manufacturing sector.

With both of these portions of the economy losing steam, the Federal Reserve may feel more inclined to lower interest rates further.

These are the jobs that don't require education and training, it's that anxious looking older person who helps you take the groceries out - if you can still afford groceries. This service sector person may give your mom her drive downtown in the van that runs the elderly to the library or the dialysis. Your church flowers get delivered, by guess who? the service sector.

This is about 50% of the economy that's left since all the good jobs went byebye.

We're not in good economic health, you see. I was just giving the GoPerv line a little runby, to let you practice for the big lies they are going to have to tell you about the crisis they're going to have to run on, come 2008.

The Big One

Another big meltdown in the U.K. comes when the value of the bonds they're holding appears to be nil. Just don't forget that we're supposed to be the bailout source here.

If you still believe that we're going to bail out the little guys who bought under false pretenses, instead of the bigtime crooks who convinced them it was going to be safe, the home market would always go up, history no longer applies - look at this nice bridge I'm selling at a big loss.

A number of big investment banks have admitted major losses caused by bad investments centred on the crisis-hit US sub-prime mortgage market.
Worst hit was Swiss bank UBS which was write down losses of 4bn Swiss francs ($3.4bn; £1.67bn) as a result.

The group said it would now planned to cut 1,500 jobs and make extensive management changes.

Later, US giant Citigroup revealed its sub-prime losses would total $1.3bn, as well as $2.6bn in extra credit costs.
(snip)
US bank Citigroup will also make a profit in its third quarter, but this will be a third of what it was last year - largely as a result of a $1.3bn write down sparked by US mortgage woes.

But it also confirmed a pre-tax loss of $1.4bn on loans to private equity firms, which have until now been snapping up businesses with ever more expensive price tags at a phenomenal rate.

"This is cringe-making for Citi's chief executive, Chuck Prince," said Mr Peston.

"In July, he told the FT that his bank was 'still dancing' in the private equity market, long after it was obvious that the private-equity bubble had been pricked and was deflating at an alarming rate."
(snip)
.....few had forecast the magnitude of the write downs.

"Today's UBS news is certainly bad news," said Claudia Meier, an analyst at Vontobel.

But she argued: "On the other side, it finally gives some more visibility to the sub-prime fears and we expect the market to like this."

You gotta love those financial news creators who think it's boom times for pawn brokers.

While I have seen a friend have to take her daughters out of college for a year until the local S&L was bailed out in MD, these glib financial propagandists think we'll all be better off now. After all, they've socked their ill-gotten gains away in something solid. Probably Euros.

Not Your Father's Auto Industry Job

It was over before most of us even noticed, the GM workers didn't get the kind of wage increase and benefits that used to be associated with the skilled jobs of the GM of the past. They got a bit of a shell game. Their trust for health care in the future, to the tune of $50 million, was set up at the cost of existing commitments. You probably are saying 'Whoa, that can't be right.'

Sadly, the insistence on making cars Americans didn't trust and wouldn't buy has been passed on to the workers.

Two decades ago, a national auto industry strike likely would have continued for weeks or months. This time, the General Motors walkout was over almost before it got rolling, thus little more than the union's symbolic last gasp at influence. In the end, contract talks came down to deciding to live together or to perish together, and both union and management picked life.

Health care promises that once seemed manageable are these days unbearable financial anchors on old-line U.S. manufacturers such as GM. Skyrocketing health costs equal higher prices and, over time, fewer jobs.

Had the union demanded – and the automaker agreed to – benefits that any actuary would deem nearly impossible to fulfill, the downward spiral would only continue.
Yesterday's agreement, if ratified, would create a health care trust to remove more than $50 billion owed to union retirees for health care from the books.

Workers and retirees would receive their current coverage until the trust is put in place. GM would use stock, cash and other assets to fund the trust.

Equally significant, the union also dropped its push for job security, which would have greatly complicated the automaker's plan to eliminate 30,000 jobs and close many plants.

The story extends to a lot of families whose long years of work have been suddenly ended with a 'wham, bam, thankyou ma'am'.

If auto industry leaders show any of that wisdom supposedly earned by their boards by the monster salaries, they will start putting together dependable autos that use a different kind of fuel than the old Middle Eastern variety. Will they do it? The suspense is killing a lot of their employees.

Tossing 'Bodies' Overboard Loses American Hearts and Minds

Not so long ago, our local Rep. Ralph Hall was on the House floor attacking Marianas sex slaves for willingly participating in human trafficking. So nothing surprises us locals when we see our industrial overlords behaving like Orcs.

Today a nice little article about joint electrical production and use between the Texas and Mexico power generation industries was the frame for some remarks that reflect that continuing battle against the public waged by our business community. Of course, looser environmental standards and lower paid workers are very attractive to the Orcs.

Mexico remains a regulated utility monopoly, and building a plant involves heavy dealings with unions, said George Baker, research director for Houston consultancy Energia.com.

"They've got a very aggressive and powerful union that really costs them a lot," he said. "So if you import electricity, one of the things you get from that is that you don't have to hire a new body.(Emphasis added.)"

Isn't that attractive? it's a selling point to generate in Texas (deregulated, and a right-to-work state) because you can pitch those bodies out there to starve. Unions are an enemy, giving wages and decent working conditions to faceless bodies.

To me this characterizes the entire rationale of the GoPerv Party, that the employee is just a body; a disposable unit. We're not a consumer, such as are supposed now to go shopping to bring out economy back out of the pit created by corporate indifference. We're not an occupant of the society the Orcs participate in. We're a body that can be thrown to whatever lions of the moment are entertaining the hoarders of wealth.

Most encouragingly, though, the bodies that our business community are blithely tossing aside have votes. The great unwashed are showing they aren't such disposable nonentities in poll after poll. Today they are not accepting the 'Go Shopping' theme, they are not taken in.

One in three Americans expects a U.S. recession in the next year, and less than a quarter think home prices will rise, according to a Reuters/Zogby poll released on Wednesday.

Hispanics and African-Americans were more likely than whites to predict a recession, reflecting a deeper sense of job and economic anxiety among minorities, who represent a disproportionately large share of lower-income groups.

"There has been much, much, much more talk about a recession in the last 30 days than there had been before," pollster John Zogby said, noting that the key factors behind the latest downturn worries were issues that literally hit home for the general public -- housing and jobs.

Starving people are revolutionaries. It looks like time for the GoPervs to start following the jobs abroad, or get to work fixing the mess they've made here. I don't expect the kind of mentality that blithely tosses 'bodies' aside has the mental acuity to make that change.

Discontent has been thoroughly ignored by the businesses behind our present worker-unfriendly environment. Workers are not content to be 'bodies' that are tossed out with the Kyoto protocols. Look! we've stopped buying swill.

I believe the polls are some early rumblings of return to respect for human beings, and return to human rights.

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Below (as promised): Woody hugs a tree in the Bandelier National Monument.

Stiff Upper Lip Quivers

Your GoPerverts are hard at work and aren't they cute? running around madly trying to plug up the holes they dug in the topsoil of financial stability while making Just Do It the loan industry mantra.

Not understanding this concept "value" has so many problems attached.

The BBC muses about it, as over there an actual run on a bank is taking place reminiscent of the asset freezes in the '80s.

The US central bank, the Federal Reserve, is about to decide the future direction of US interest rates.

Amid growing turmoil in financial markets, the decision will be closely watched around the world.

Why does the Fed decision matter?

Many experts believe that only a substantial cut in interest rates by the Fed will calm the turbulence in the world's financial markets.

The decision would send a strong signal that the US authorities are prepared to intervene to stabilise the markets and to prevent the US economy sliding into recession.

And it would reassure banks and governments around the world that the US was prepared to take a lead in tackling the current crisis.
(snip)
If the US does slid (sic) into a recession, it will have a big effect on the rest of the world, as US consumers will buy less goods from abroad.

And that makes it more likely that other central banks, like the Bank of England, may have to cut rates sooner rather than later in order to stem the growing panic among individuals and institutions. (Emphasis added.)

Stiff upper lips are aquiver. If the Fed doesn't stop the collapse, that role passes on to the rest of the world. Of course, if the Fed does step in, it will be for the purpose of restoring calm only if the buying public is convinced that it will work, and stops selling off stocks, etc.

Your confidence is at stake, which is why economic news in your local fishwrap is so determinedly upbeat even when it's obvious that the actual economic climate is icy cold.

When headlines read "Boom Times for Pawn Business" - the fan blades are hacking their way through the fecal matter. At the present time, that the Fed is poised to give up crying 'Inflation Imminent, Head for the Heils', is pretty strong stuff.

The Fed only quails in its pursuit of convincing you DFHs that good pay for workers is the real threat to the economy when it's up against actual threats like collapse of a market.

It's that bad.

Confidence Games at High Levels

Confidence games are based on creating an image of respectable or dependable repute that inveigle the victim to give you what you want, usually a matter of theft by deception. This last six+ years has been the ultimate con. While knowing their words were hollow the cretin in chief and his accomplices have lied inconscionably in order to gain their ends, which have been without exception injurious to the safety and wellbeing of the American public.

Listening to the injunctions of the financial 'authorities' being trotted out on one weekend talk show after another, I did hear one voice that I found believable, former Secretary of the Treasury Lawrence Summers, who recommended that no bailout occur of the investing entities, but that regulation of lending to individuals be tightened, and that Fannie Mae and Freddie Mac be given much greater leeway to offer loans with much more clarity of language (now known as transparency).

For the most part, the administration sent out defenders of the financial institutions who refused to restrain lending on beyond flimsy bases, and to insist that "injecting liquidity" (newspeak for giving massive amounts of public funds to the offending lenders) would keep the market up. This next week, Secretary Summers warned, any still existing weaknesses will turn up - involving financial institutions unable to make payments on their own loans because their portfolios are worthless.

In the runup to the Great Depression, this kind of confidence game was used to manipulate prices for gain. One example was the Fisk/Gould ruse which is described below.

In August 1869, Gould and Fisk began to buy gold in an attempt to corner the market, hoping that the increase in the price of gold would increase the price of wheat such that western farmers would sell, causing a great amount of shipping of bread stuffs eastward, increasing freight business for the Erie railroad. During this time, Gould used contacts with President Ulysses S. Grant's brother-in-law, Abel Corbin, to try to influence the president and his Secretary General Horace Porter. These speculations in gold culminated in the panic of Black Friday, on September 24, 1869, when the premium over face value on a gold Double Eagle fell from 62% to 35%. Gould made a nominal profit from this operation, but lost it in the subsequent lawsuits. The affair also cost him his reputation.

Though I couldn't find them in the limited amount of time I had for research, there have been rumors of the leading investors in the country colluding to keep bidding up stocks in those wild days, and by pre-arrangement bailing out at its height. Of course, buying up the instantly depreciated stocks was the intention, not the total disaster that was caused. Or so the story goes. I see something of this nature in the collusion of this dishonest executive branch with corporations, and their insistence on false information intended to keep individuals buying up questionably valued stocks.

We are the victims, this is a confidence game. We don't have any reason to believe any lines we are being fed. I suspect there will be a large number of investors who are not fooled, and will not bite.