Vacation Piece

While I'm away at a get-together with friends from the comments at eschaton, I thought it would be a good time to re-publish some things that I rely on. Today I am putting up the testimony from Alan Greenspan wherein he admitted that he was wrong not to use the powers congress gave him to regulate the financial industry.

“You had the authority to prevent irresponsible lending practices that led to the subprime mortgage crisis. You were advised to do so by many others,” said Representative Henry A. Waxman of California, chairman of the committee. “Do you feel that your ideology pushed you to make decisions that you wish you had not made?”

Mr. Greenspan conceded: “Yes, I’ve found a flaw. I don’t know how significant or permanent it is. But I’ve been very distressed by that fact.”

On a day that brought more bad news about rising home foreclosures and slumping employment, Mr. Greenspan refused to accept blame for the crisis but acknowledged that his belief in deregulation had been shaken.

He noted that the immense and largely unregulated business of spreading financial risk widely, through the use of exotic financial instruments called derivatives, had gotten out of control and had added to the havoc of today’s crisis. As far back as 1994, Mr. Greenspan staunchly and successfully opposed tougher regulation on derivatives.

But on Thursday, he agreed that the multitrillion-dollar market for credit default swaps, instruments originally created to insure bond investors against the risk of default, needed to be restrained.

“This modern risk-management paradigm held sway for decades,” he said. “The whole intellectual edifice, however, collapsed in the summer of last year.”

Mr. Waxman noted that the Fed chairman had been one of the nation’s leading voices for deregulation, displaying past statements in which Mr. Greenspan had argued that government regulators were no better than markets at imposing discipline.

“Were you wrong?” Mr. Waxman asked.

“Partially,” the former Fed chairman reluctantly answered, before trying to parse his concession as thinly as possible.

The market isn't self-regulating. The concept on which free markets is based is wrong, and so are free markets. When the economy is unregulated, thieves will rule.

We are in an economic disaster because of deregulation.

Deregulation Betrays Consumers

In his op-ed today, Dr. Paul Krugman points out that without regulation, the insurance industry has done to health care what the Wall Street jugglers have done to the financial sector. It is counter-intuitive that when an industry works so hard against regulations, its' intentions are obvious. The insurers, like the money jugglers, want to steal more than they can make by honest business.

The past years, beginning with the Reagan destruction of functional government, have seen even the working community sold on the concept that business is self-regulating and will go overseas if it has to obey the laws. That threat was converted into reality, but not by the strain on business of conforming to laws. By eliminating laws in the public interest, corporations served themselves, and sent jobs overseas because they had gotten laws that rewarded them for doing just that.

Insurance interests are trying to wriggle into the writing of regulations for the very same reason. If they write the laws, the public will suffer and the insurance industry will be free to abuse its powers. As Dr. Krugman points out, the insurance industry insists it knows best how to keep the public healthy, though to date it's done nothing to that effect. Just as the bankers insist they will turn a new face and keep our economy viable, they're trying to get in on the ground floor when protections are written.

Be warned, however. The insurance industry will do everything it can to avoid being held accountable.

At first the insurance lobby’s foot soldiers in Congress tried to shout down the public option with the old slogans: private enterprise good, government bad.

At this point, however, they’re trying to kill the public option in more subtle ways. The most recent ruse is the proposal for a “trigger” — the public option will only become available if private insurers fail to meet certain performance criteria. The idea, of course, is to choose those criteria to ensure that the trigger is never pulled.

And here’s the thing. Without an effective public option, the Obama health care reform will be simply a national version of the health care reform in Massachusetts: a system that is a lot better than nothing but has done little to address the fundamental problem of a fragmented system, and as a result has done little to control rising health care costs.

Right now the health insurers are promising to deliver major cost savings. But history shows that such promises can’t be trusted. As President Obama said in his letter, we need a serious, real public option to keep the insurance companies honest.

Without regulations, health costs have grown into a mammoth problem, with now 60% of all bankruptcies caused by out of control charges for health care.

The public, long burdened by the right wingers with taking on industry without protections, will have to assert its rights or be enslaved. This is the time, and we can't be diverted with the usual horse and pony show the insurers will put on.

Harry and Louise were hired to sell you downriver, so turn them off. The public will not get health care if it doesn't demand it, loudly, now.

Business Needs Consumer Protection

This morning's news, that the president is considering adding consumer protections to financial oversight, is welcome if a bit ironic. In a consumer economy, it is vital to have consumers. Only ideological blindness could ever have persuaded any member of the business community that preventing regulations - that protect their consumer from being flushed down the toilet - are against their own interests.

In her role overseeing the bailout, Dr. Elizabeth Warren has encountered the underlying causes of our economic crisis, and this has produced an excellent concept for protecting our future. Without protections for the public, we have recreated the Great Depression, and will take some time to recover from those damages.

Dr. Warren has provided insight to a public-oriented president, who has seen that we need a body to oversee, not promote, the financial segment. The lack of real vision has turned present regulatory bodies into part of the industry it was supposed to preside over. The concern of profit for financial companies became its object, rather than the interests of the economy as a whole.

The Obama administration is actively discussing the creation of a regulatory commission that would have broad authority to protect consumers who use financial products as varied as mortgages, credit cards and mutual funds, according to several sources familiar with the matter.

The proposed commission would be one of the administration's most significant steps yet to overhaul the financial regulatory system. It would also be one of its first proposals to address causes of the financial crisis such as predatory mortgage lending.

Plans for a new body remain fluid, but it could be granted broad powers to make sure the terms and marketing of a wide range of loans and other financial products are in the interests of ordinary consumers, sources said.

Sources, who spoke on condition of anonymity because discussions are ongoing, said talks have begun with industry officials, lawmakers and other financial experts about the proposal, which would require legislation. Last night, senior policymakers, including Treasury Secretary Timothy F. Geithner and National Economic Council Director Lawrence H. Summers, were to discuss the idea at a dinner held at the Treasury Department.


Responsibility for regulation of consumer financial products is currently distributed among a patchwork of federal agencies. Some of these regulators regard consumer protection as a low priority.
(snip)
The leading proponent of such a commission is Elizabeth Warren, a Harvard University law professor who now chairs the Congressional Oversight Panel for the government's financial rescue initiative. Her plan is the kernel of the idea the White House is now considering, sources said.

Warren wrote in a 2007 article in the journal Democracy that the government had failed to protect American consumers in their relationships with financial companies.

"It is impossible to buy a toaster that has a one-in-five chance of bursting into flames and burning down your house. But it is possible to refinance an existing home with a mortgage that has the same one-in-five chance of putting the family out on the street," Warren wrote. "Why are consumers safe when they purchase tangible consumer products with cash, but when they sign up for routine financial products like mortgages and credit cards they are left at the mercy of their creditors?"

Warren proposed creating a new commission modeled on the Consumer Product Safety Commission, which protects buyers of products such as bicycles and baby cribs...."The Federal Reserve was supposed to do this, but they were asleep at the switch," Schumer said. (Emphasis added.)

While the new regulatory body would no doubt challenge the primacy of the financial insustry in regulating itself, legislators will have no excuse for further protecting the very interests that have led to financial disaster. The expected resistance has already been allowed to overrule common sense once. The results are the present disaster the world's economy is experiencing. There is no longer any reason for believing in former Fed Chief Alan Greenspan's now rejected dogma: it is in their own interests, so the financial community could be expected to regulate itself.

Protection of individual rights from rapacity is a pretty obvious basic function of our government. Only years of unrealistic insistence on the business segment's role of creating employment, something that it definitively has failed to do, ever has obscured the government's role in protecting its citizens. Employment has gone offshore, wages have been reduced, and the whole economy has sunken into impoverishment as a result.

The business leaders who have swallowed and parroted the failed credos are responsible for a great deal of damage. Those that have seen their businesses fail or suffer huge economic blows are learning; the consumer is part and parcel of their plan, and their greatest necessity. Business managers unable to grasp the basic concept of supply and demand, that without demand they can fold their tents and slink away, deserve to fail.

A body of consumer protection advocates would revitalize what is now a failing economy. By keeping the public from being defrauded, it would go a long way to save the distressed consumer economy that we all rely on. A new reality-based regulatory commission would protect an entire economy from the greed of sheer monopolists, those who have destroyed it.

Lawlessness, a.k.a. deregulation, profits the criminals, but it undermines the protection society needs from its government. The administration is on the right track.

Another Border Issue

Most of you probably don't know that under the late unlamented maladministration trucks not licensed in the U.S. were allowed to operate here over the Mexican border. The Owner-Operator Independent Drivers' Association made a lot of trouble over that, for several reasons, and of course not the least of those was its own business.

The Sierra Club and Public Citizen, along with the Teamsters, raised objections about safety and environmental standards, but were of course driven over by a White House that thought the public interest was interference with its absolute power. However, these were issues that concerned all of us, as Mexico does not require a lot of the safety measures that have developed in the U.S. Another issue was raised here about language ability and training. Last month Congress ended that experiment in unsafety at any speed.

Rescinding that measure, whose legality was always questionable, has created a stir with Mexico that has resulted in their placing tariffs on items like grapes from California. That was a direct slap back at Speaker Nancy Pelosi who was instrumental in ending the measure. Other growers affected by the tariffs have been outspoken in asking to return the commerce at any cost.

The long-simmering dispute over allowing Mexican trucks onto U.S. highways is escalating into a trade war that could cost Washington state agricultural interests millions of dollars in lost sales and present the Obama administration and the Democratic-controlled Congress with an early test of their trade policies.

Washington's pear, cherry, apricot and Christmas tree growers find themselves in the middle of a trade clash not of their own making and facing 20 percent tariffs on their exports to Mexico.

The biggest impact, however, could be on the state's potato growers and processors. Mexico buys $83 million worth of frozen potato products annually, the bulk of them from Washington state, where 10 plants employing 20,000 people produce frozen French fries, hash browns and Tater Tots.

On the other side, organized labor, led by the International Brotherhood of Teamsters, and consumer groups continue to insist Mexican trucks and their drivers present a major road hazard to U.S. motorists. They also charge that Mexico illegally imposed the tariffs without living up to its obligations under the North American Free Trade Agreement.
(snip)
The dispute dates to 1995, when the United States refused to allow Mexican trucks across the border as required under NAFTA. The trade agreement, which also includes Canada, allowed for cross-border truck traffic, but U.S. officials said Mexican trucks and their drivers were unsafe.

Rather than allowing Mexican trucks free access to U.S. roads and highways, a pilot program was launched that allowed a limited number of trucks into the United States while safety issues were resolved.

Earlier this month, in approving a $410 billion spending bill, Congress killed the pilot program. Within days, Mexico retaliated by imposing tariffs on nearly 90 U.S.-produced goods worth about $2.4 billion.

The tariffs covered such products as cherries, pears, apricots, frozen potato products, Christmas trees, strawberries, onions, fresh grapes, pet food, books, shampoo, pet food, toothpaste and dishwashers.

Mexican Economic Minister Gerardo Ruiz Mateos said Congress' decision to eliminate the pilot program was "wrong, protectionist and clearly in violation of the treaty."

Teamsters President James Hoffa said Mexican trucks and drivers still don't meet U.S. safety standards and records on Mexican driving violations are often incomplete and inaccurate, records of how many hours Mexican drivers have driven can't be found and there were questions about certified testing facilities to detect alcohol and drugs in drivers.

"Mexico has had 15 years to meet safety standards set by Congress and until they are met, the American public doesn't want these unsafe trucks on our highways," Hoffa said in an e-mail statement.

The NAFTA agreements have never looked like a plus to the U.S. anyway, but safety standards are a real issue in Texas, where most of the traffic would occur. The last eight years gave us a feel for what total lack of public interest spending and regulation would be like. We can do better than let poorly maintained vehicles with overworked drivers loose on our roads.

Another issue raised locally has been the increasing refusal of U.S. drivers to go south of the border because of the mayhem there. Without traffic from the U.S. going south, it is reasonable to assume truck business would increase for the Mexican trucks.

Trade wars may be a burden to growers in other states, but safety should be a big consideration in Transportation Secretary LaHood's agenda. Having driven in traffic that was largely huge trucks to get to various places, I really would want to know that the trucks at least had met basic safety standards. I'll buy the grapes from California myself, thank you.

There's No Pony

Today as we all know the Fed is doing its number, and is expected to lower that 'key rate target' to an alltime low of .5 percent. Hopefully by now we all realize that the actual rate mechanism has essentially been abandoned, and it is operating presently at .3%. To get anyone to take a chance on the present market, loan takers and lenders are having to decorate loans with enhancements. There is more than a problem with this though. What is going on in real time for our enjoyment and press attention is delusional. This song and dance is diversionary, and trying to keep the whole mess from falling about their ears while the very regulators - who persisted in avoiding using the laws to protect the public - get out of town.

What we and the world now know is that ratings of AAA were being given out to cover the basic 'trash' nature of investments. The trash was then being used as assets by those who bought. The little old lady's pension fund was holding worthless trash and depending on it. Yeh, that would be you and me if we were, say, retired teachers in some states that bought these AAA rated bonds.

Now we are waiting for the Federal Reserve to act in some way. The problem is, these regulators perpetrated the crime, and they want to leave it to the next administration to solve. Or to paraphrase Rep. Barney Frank, any administration, since this one seems either paralyzed or waiting for the getaway car.

European financial concerns are very concerned, because they are well aware that regulation needs to be imposed so that investors will return to U.S. Treasury bonds. As it stands, the Fed has allowed 'fails to deliver' to be the result of investment buys, in an increasing amount. What this basically means is that when a purchase is made, the bond is expected to arrive, but it hasn't been arriving. That is something like the old horsetrader trick, you advertise something for sale, take the money, and yes, 'fail to deliver'. In horsetrading, you had made the pony up. In international financial terms, the Fed is printing money, or making it up. In October, 20% of daily trading had become those fails.

"As yet, the U.S. Treasury has merely asked market participants to sort it out themselves." That is taken from the article I linked above, entitled 'U.S.Treasuries Reach Breaking Point'. It explains that the 'settlement system and lack of regulation led to this risk of market failure' - and concludes that the Federal Reserve should end its 'patience' and call in the financial institutions that are allowing this to make them stop it. I consider the author is being too kind. The perpetrators of this monumental theft have included members of the Fed.

We are in the clutches of criminals. As we discussed this a.m. at Eschaton, the consumer economy is depending on you to buy, while it is cheating you out of the fruits of your labor. You are not guaranteed the laws that protected you, rather we have an executive branch that has unanimously turned against the public and served the interests of business. The occupied White House has said it was protecting and defending the Constitution while in reality fighting against the Rule of Law that was the reason this country became the leading nation in the financial world. The American public was bewildered, and the world is joining us. There's no pony, folks.

The dog and pony show the Fed will put on today is the parade of the Emperor who has no clothes on. Anyone ready to throw their shoes?

When the history of the disgrace that has allowed criminals to control the executive branch is written, please let it be written that the left blogs didn't accept the lies, and fought them with truths.

NADA

So I thought it was pretty funny that the National Auto Dealer's Association acronym is the Spanish word for nothing. I suspect that the members of NADA aren't all that amused. I understand it is pressure from that very troubled group putting a lot of pressure on their congressmen to send help before the auto industry self-destructs. My opinion on the role of the automaker CEOs' instrumentality in their troubles has already been expressed. Briefly, they wore blinders as the rest of the world pared down on pollution, built up on durability, and made wise choices in vehicles for our world. Consumers voted with their pocketbooks, and American automakers' consumer base diminished, yet those CEO's continued over the cliff of big, bigger and biggest dinosaur products.

The auto industry is the latest cliffdweller in our downward economic spiral. That industry, like the other suffering industries, relies on consumers to exist. Where the consumers went is into the hole of our financial disaster. I found out that a family member has watched his retirement funds dwindle until they only just cover monthly mortgage payments. Living expenses are requiring that he and his wife work for a living, post retirement. At least they can find a way, but for many who are watching their retirement or other funds disappear it is not so easy.

The atmosphere of frustration and desperation that economic catastrophe has produced is not an easy one into which to announce, as Treasury Secretary Paulson did yesterday, that our taxpayer dollars are actually not going to be used as had previously been announced. Buying up those toxic loan packages just wasn't working out, he insisted, mostly because congress wasn't doling them out quickly enough.

Do you buy that? I don't and I think that Paulson was bluffing to begin with. Those toxic bundles are not yet finding a real value, and his announcing that $700 BN was going to be spent to buy them smells to me like incentive to financial industry giants to quickly start buying them up ahead of the U.S. To my eyes, he was hoping to inspire confidence enough that the bundles were saleable that it would create a market for them. It didn't work. Like housing values, toxic mortgage packages are still falling in value. No one wants to own them.

The formerly AAA rated packages are out there waiting for the financial community to conclude that they can't go any lower. They were at one point being snapped up everywhere, until it became apparent that our laws had been ignored, and those AAA ratings were a farce. Yesterday, our Cretin in Chief announced that our financial system is sound, no matter how bad it looks. Don't hold your breath waiting for him to announce that his trampling on the Rule of Law was the source of our problems, and that the world is not ever going to trust anything he does or says, not ever. When President Obama is in charge, there will be a return of this country to a position of trust, after he revives our constitution and its protections.

What I hadn't thought about showed up in this post that I saw at Eschaton this morning.

So we've been hearing it's the fault of greedy home buyers who ran out and purchased homes they couldn't afford. Or, conversely, maybe it was the fault of predatory lenders who made bad loans. Round and round the blame seemed to go. So I was completely baffled by Henry Paulson's announcement yesterday that it wouldn't help to buy up the toxic mortgages as promised in the bailout.

At least, it baffled me until I read this article. And that's when it occurred to me--he can't buy up the toxic mortgages to stave off the meltdown because a vast majority of these loans don't exist.

Here's the money quote from this long but startling article by Michael Lewis in Portfolio.com:

That’s when Eisman finally got it. Here he’d been making these side bets with Goldman Sachs and Deutsche Bank on the fate of the BBB tranche without fully understanding why those firms were so eager to make the bets. Now he saw. There weren’t enough Americans with shitty credit taking out loans to satisfy investors’ appetite for the end product. The firms used Eisman’s bet to synthesize more of them. Here, then, was the difference between fantasy finance and fantasy football: When a fantasy player drafts Peyton Manning, he doesn’t create a second Peyton Manning to inflate the league’s stats. But when Eisman bought a credit-default swap, he enabled Deutsche Bank to create another bond identical in every respect but one to the original. The only difference was that there was no actual homebuyer or borrower. The only assets backing the bonds were the side bets Eisman and others made with firms like Goldman Sachs. Eisman, in effect, was paying to Goldman the interest on a subprime mortgage. In fact, there was no mortgage at all. "They weren’t satisfied getting lots of unqualified borrowers to borrow money to buy a house they couldn’t afford," Eisman says. "They were creating them out of whole cloth. One hundred times over! That’s why the losses are so much greater than the loans. But that’s when I realized they needed us to keep the machine running. I was like, This is allowed?"

Of course, printing their own money works until they have to produce it. As the diarist at Kos goes on to say, these people should be tarred and feathered. We should begin with Alan Greenspan, though, because he saw the troubles brewing and did nothing. He was convinced that the effects would be dispersed, and the whole picture was too large for it all to be affected. He was charged with executing the laws, and he did not do it. Like the criminal in the White House, Greenspan considered the laws to be negligible tools, and that the market governed better than those laws. Libertarians all, our executive branch denizens believed their own rhetoric, and ignored the laws meant to protect this whole world from what their crimes brought on.

NADA will be working to shore up one corner of a crumbling economic universe. Actually, they have better credentials than our financial industry does for doing a good job of saving their part of the economy.

High Time; The Future Is Here

Friday is for Bill Moyers' Journal as well as catblogging, and last night's guest, James Galbraith, was a great choice. He and Moyers talked about the disaster the right wing has visited on this country, and what we will need to do to recover. It is in no way easy, but there are some paths that will need to be taken. Men like these will be coming back into government, which is one of the best pieces of news I know.

We are going to hear a great deal in the next few weeks about the need for a stimulus package. And a lot of people will be talking about how they will be conceding that the government should get involved short term.

But what needs to be stressed is that we've seen a breakdown of an entire system. The consequence of the failure of regulation, of supervision of the banking system over the past eight years, has been to cause a collapse of trust, a poisoning of the well.

BILL MOYERS: Trust?

JAMES GALBRAITH: Of trust, yes. Banks -

BILL MOYERS: Between?

JAMES GALBRAITH: Banks no longer trust each other because they no longer know whether their counterparties are solvent. Customers no longer trust the banking system. Banks no longer trust the people who would like to borrow from them for commercial purposes. This is a poisoned well. It is going to take a fair amount of time for it to be cleaned up.

BILL MOYERS: Fair amount of time? What do you mean?

JAMES GALBRAITH: My feeling is, if it is done correctly, aggressively, effectively, we could begin to work out of it in three years. But it is not a problem that's going to be solved with a six-month program.

BILL MOYERS: What scares you most right now?

JAMES GALBRAITH: Well, a week ago or two weeks ago I would have said the possibility that Phil Gramm might become Secretary of the Treasury.

BILL MOYERS: Your former Texas soul mate, right?

JAMES GALBRAITH: Yes, exactly. Yeah. We have a contest between a philosophy of deregulation, of de-supervision, a philosophy of anything goes. Gramm himself was the architect, a deep architect of the speculative markets that have just collapsed. And an alternative which says that there really has to be a pragmatic approach to these problems. And that's a choice the American public obviously is going to be making in a few days.
(snip)
BILL MOYERS: You call your book THE PREDATOR STATE, what do you mean predator?

JAMES GALBRAITH: What I mean is the people who took over the government were not interested in reducing the government and having a small government, the conservative principle. They were interested in using these great institutions for private benefit, to place them in the control of their friends and to put them to the use of their clients. They wanted to privatize Social Security. They created a Medicare drug benefit in such a way as to create the maximum profit for pharmaceutical companies.

They used trade agreements to extend patent protections for various interests or to promote the expansion of the corporate agriculture's markets in the third world. A whole range of things that were basically political and clientelistic. That's the predator state.

BILL MOYERS: You call it a corporate republic.

JAMES GALBRAITH: It is a corporate republic.

BILL MOYERS: Which means that the purpose of government is to divert funds from the public sector to the private sector?

JAMES GALBRAITH: I think it's very clear. They also turned over the regulatory apparatus to the regulated industries. They turned over the henhouse to the foxes in every single case. And that is the source of the decline in, the abandonment of environmental responsibility, the source of the collapse of consumer protection, and the source of the collapse of the financial system, all trace back to a common root, which is the failure to maintain a public sector that works in the public interest, that provides discipline and standards, a framework within which the private sector can operate and compete. That's been abandoned.

The hard work has begun, pulling this country out of the worst hole its ever been in. The government's work being done by committed and honest men will soon be returned.

There has been a time when the country was in danger, and it has shown voters what we on the left have known for some time. The war criminals know what they are offering to do is really bad for this country. They will tell any lie to get power, and use that power to squeeze every last drop out of the country, even the lives of its citizens, for personal gain for themselves.

We have learned the hard way, and the path back goes uphill. As long as we have great minds and character in our leaders again, we can get back.

(202)244-3121

That's the number for the House switchboard. You can also send emails. Mine read "Please do not give any more of my hard earned money to the crooks in the White House. Thank you."

Please call the members of Congress who represent you. Tell them NO. What has been so pathetically mismanaged will not be managed better if the war criminals in office get more money. That is all.

High Office and Criminal Conduct

When this maladministration showed its true colors, by refusing to acknowledge authority of the International Criminal Court to prosecute offenders in this country, maybe I was not the only one to see we were in trouble. Now I have company in recognizing that bad character is affecting this country in its most basic operations, and its well-being. Stealing from the public has become a way of life to deregulated industry, and those funds are not being put back into our economy.

Unfortunately, she describes moral underpinning as the old "Protestant ethics" (white men is understood in this sentence) and deplores diversity - ignoring the rapacity with which the western world has treated the rest of the world. Her main point, that greed without the rule of law has deprived our formerly prosperous society of its operational system, however, has validity.

No more are there wise men at the top, who take pride in running an honorable financial world that makes the world safe for everyone. Those who took their place, as the moral principles of the country also fell, were the new wise guys, often up from nothing and replacing the idea of public service with greed and ignorance. Analysts say that we have had more corporate scandals in the last five years than during the entire 20th century.

The new book The World Is Curved: Hidden Dangers to the Global Economy , by longtime investment counselor and wise man David Smick, has intellectually taken apart this distraught era. His title, of course, plays upon Thomas L. Friedman's well-known book praising globalization, The World Is Flat. But Mr. Smick takes issue with this. To him, the world is curved, uncertain, with no one really knowing what is ahead unless we rethink our principles.

He finds that "our leadership must reform today's dangerously flawed financial architecture." It is, he says, "a tale of greed, hypocrisy and sheer folly," in which the young brokers and investment bankers created their own private markets. As the banks repackaged individual loans and mortgages for the global market, banks moved further and further away from the borrower "or any need to worry about whether he or she would repay a loan." In short, the money-crazed wise guys of the new world cared only for themselves, and in the end, of course, lost themselves, as well as everything else.

The elements of its own destruction are evident in this wistful classic punditry op-ed, which insists that some of the creators of systemic injustice were noble and we need to have their kind back in power. There is much to be gained by plowing under the elites that simply kept out of power those who didn't look like them. A true test of the disempowerment of working classes has been the past almost eight years. We have failure on every front.

High standards of behavior, which the Geyer mantra assumes belong to the very rich, are what we have had wiped out to our great loss in the current occupied White House. She is correct that criminal conduct has hurt even the criminals.

Voluntary Deaths

In its determination to eliminate government regulation, the administration can count 17 new deaths in N.TX. Those Vietnamese Americans who were killed in an accident here would have traveled safely - if there had been real enforcement of safety regulations for passenger buses. The bus they had rented should not have been on the road.

[UPDATE: Bus crash in NV, at least 20 hurt: Police found tire tread on the roadway and are looking into the possibility that tire failure may have caused the wreck."]

The Federal Motor Carrier Safety Administration ordered Iguala BusMex and Angel Tours Inc. to cease commercial operations. The agency issued a second order finding that the activities of Angel De La Torre, owner and president of the bus companies, "in connection with motor carrier operations pose an 'imminent hazard' to the public."

Authorities also announced that an Iguala BusMex bus was pulled out of service at the religious festival in Carthage, Mo., because it was unauthorized to operate.

The voicemail service for Angel Tours' remained full late Sunday.

Bus driver Barrett Wayne Broussard, 52, remained in critical condition at a Sherman hospital. No one answered the phone at his Houston home.

Broussard's driving record includes citations for driving while intoxicated in 2001 and for speeding in May 2004 and March 2007. His license was suspended for two months in 2001 because of the DWI conviction in Harris County, said Debbie Hersman, a spokeswoman for the National Transportation Safety Board.

Broussard failed roadside inspections twice last year, Hersman said. Inspectors pulled his bus out of service both times.

Robert Accetta, the NTSB member leading the investigation, said an investigator will travel to Houston to learn more about the two bus companies.

Iguala BusMex applied in June for a federal license to operate as a charter but was still awaiting approval, according to online records. Angel Tours was forced by federal regulators to take its vehicles out of interstate service June 23 after an unsatisfactory review.

Inspectors are also looking at the mechanics of the wrecked bus and examining its interior damage, Accetta said.

Authorities said the vehicle's right front tire, which blew out, had been retreaded in violation of safety standards. The bus skidded about 130 feet before striking a guardrail. It then traveled nearly 120 feet before coming to rest down an embankment near a creek.(Emphasis added.)

The bus did not belong on the road, and shouldn't have been carrying passengers. No mechanism exists besides the voluntary cooperation of the owner. That voluntary cooperation did not happen, in this instance and in so many others. The pretense that standards are in force for the public good has turned our protections into a dismal farce.

In its reckless elimination of the government it sees as inconvenient, the occupied White House has increased the dangers U.S. citizens face in countless ways. The shameful record grows daily, of the deaths the war criminals have caused.

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

Conversation this a.m. with montag, at Eschaton, in comments:

Umm, I don't think so. Even though the motor carrier aspect of ICC is gone (as of 1995, I think), the superseding agency is the FMCSA (Federal Motor Carrier Safety Administration), so, someone with interstate routes can still operate under ICC registration, if that was issued when the ICC was active, or with FMCSA registration, if registered after 1995.

There is a category known as Registered Exempt Carriers, which is part of the SSRS system, which allows carriers to apply for USDOT exemption, providing they are licensed in the state in which they principally operate.

One way or another, there should be either state or federal oversight for any commercial passenger carrier operating on public roads, as regards safety matters.

Regulations for interstate passenger carrier maintenance can be found in 49 CFR, Part 396, FMVSS requirements in Part 571, and minimum inspection requirements in Appendix G of 49 CFR.
montag | Homepage | 08.11.08 - 7:17 am | #

[and then my response-

montag, if the regulations on the books were really being imposed on the carriers, it would be a good thing.]

Ah, now you're getting to my point--it's not that safety regulation has disappeared. Rather, it's not being enforced, which is an entirely different matter.

One of my favorite stories as illustration of the problem happened during the Reagan years. Illegal mines in Kentucky were (and continue to be) extremely common. Pre-Reagan, there were 50 mining inspectors in KY. After Reagan came to office, he couldn't get the mine safety office to change the regulations, so, they simply cut funding for 48 of those inspectors. There was one for eastern KY, and one for western KY. Way too much territory for one person to cover, so mining deaths went up.

A lot of agencies with oversight responsibility still haven't recovered from the cuts of the Reagan years.
montag | Homepage | 08.11.08 - 7:30 am | #

Shrunken Government

Eric Lotke has a very perceptive op-ed piece in today's Los Angeles Times. In it he correctly points to the natural outcome of reducing government: no government service at all.

Last week, consumers were worried about salmonella in their fresh tomatoes. Before that, it was E. coli in their spinach. Something is wrong. Eating a salad is not supposed to be a high-risk activity

But the problem isn't so much farmers. It's ideology. Historian Rick Perlstein, author of "Nixonland," calls it "E. coli conservatism" -- government shrinks and shrinks until people get sick.

"Government is not the solution to our problem," President Reagan famously declared in his inaugural address in 1981. "Government is the problem."

Many conservatives have gone far beyond that. Their traditional embrace of small government has been replaced with outright disdain for it. Grover Norquist, president of Americans for Tax Reform, doesn't just want to shrink government. To use his words, he wants government "down to the size where we can drown it in the bathtub."

Once in power, E. coli conservatives shrink government by hamstringing it. They weaken rules that protect people, slash the budgets of consumer agencies and appoint industry friends to oversight commissions. The result: Some government regulatory agencies that we trust to protect us have shrunk to insignificance or serve private industry rather than consumers. [Emphasis added]

And it's not just the FDA's failure or inability to properly inspect produce, Mr. Lotke points out. In a global economy run by mega-corps, all sorts of problems crop up. In just the last few years we've seen how deregulation has given us pet food with melamine in it, rolling blackouts in California as Enron tilted the field, lead in children's toys, a mortgage crisis that keeps on growing, and surging commodities markets. This is what bath-tub-sized government leads to.

Enough. Instead of talking about the size of government, we should be debating how to make our government more effective. How many more people have to get sick before the government reclaims its mission to serve the people?

I don't know how many more people, Mr. Lotke, but I can tell you that it will take at least another 184 days.