Let Wall Street Hold a Bake Sale

I think this would be a really great time to demonstrate that a capital market, free from bureaucratic  government meddling, will self-correct and bob to the surface like a buoyant, radiantly healthy champagne cork.

While that's self-correcting, the government ought to rescue the working class, by which I mean all people who work for wages, and many who work for commissions or fees.

• Unfair mortgages must be re-negotiated, so that people can pay them off and keep their homes.
• Commercial banks and investment banks must be kept apart, as they were before Bushy neocons trashed the Glass Steagall Act.
• And the FDIC maximum insured amount must be raised to about $250,000, as Senator Obama recommends.

In the unlikely event that the capital market proves unable to heal itself, and asks for help from the government, perhaps a loan could be arranged.  The terms should be liberal, but businesslike.  The government should be seen in a fiduciary relationship to the tax payer.  Alternatively, the government might purchase preferred stock in ailing firms, at current market value, and sell them at a later date, when their value has appreciated.

Finally, Republican marriage must be banned, all Republicans must be made to wear a yellow dunce cap, and be prohibited from fishing from municipal wharves.

The Morons Are Coming! The Morons Are Coming!

"As Putin rears his head and comes into the air space of The United States of America, where do they go?  It's Alaska." – Sarah Palin

Katie Couric's face should be on the ten dollar bill, or at least the Forever Stamp.  What did Paul Revere do that she didn't?  

Honest John McSame went to Washington

There was a bi-partisan deal and then Honest John McSame went to Washington and kicked over some tables and then there was no deal?

Hey! Nice work John! Thanks for queering that shitty deal, but what did you say to those house Republicans in the glass walled subway cars deep in the bowels of the capitol?

I saw you.

What were you thinking as you sat, strong-silently in the Whitey House, perfectly symmetrically separated from BO, by Lame Ducky? What did you have up your sleeve when you rode out of town at sunset, not sayin’ whether you was headed South fer Mississippi or out West, to clean up some other town?

And just how does Mr. Rove intend to turn your trained seagull act to your political advantage? Well, I’m going to open a beer fast and turn on the TV fast, because it’s time for the deba . . .

The breadcrumb trail passes through a SECRET POWER PLACE

Everybody who knows about the Office of the Comptroller of Currency raise your hand.

In January 2004, a previously obscure and little-noticed, presidential appointee, the Comptroller of Currency, unilaterally revoked the right of states to enforce consumer protection laws in situations where a national bank or its subsidiary is the alleged violator. This neocon, Bush Administration lawyer just usurped power by edict. A state could no longer prosecute, or even investigate preditory lenders.

The Attorneys General of all 50 states objected. An entire layer of legal protection had been pulled out from under homeowners with a mortgage; the working poor, who resort to payday loans; and other vulnerable credit customers.  Suddenly their only avenue of appeal and redress was an agency in Washington. An agency that had been the spearhead of deregulation and reduced supervision.

The New York State Superintendent of Banks, Diana L. Taylor testified before Congress on January 28, 2004 saying:

“As you know, the Comptroller of the Currency has recently issued sweeping regulations that seek to preempt almost all state laws that apply to national banks and their subsidiaries. This regulation also tries to shield all national banks - and their subsidiaries - from oversight, inspection and enforcement actions by any state authority, including the state attorneys general.

The Comptroller has said that these new regulations are merely the next natural step in that agency's interpretation of . . . Gramm-Leach-Bliley. The Comptroller has also said that these changes are incremental in nature and unlikely to have major effects on the banking industry or on consumers' experiences with financial institutions.

Chairwoman Kelly, members of the Committee, these claims are not true. These regulations are not minor or incremental changes. Their scope is nearly unlimited, and their implications are potentially enormous. These regulations exceed the OCC's statutory authority and disregard Congressional intent. The OCC adopted these regulations over the strong objections of CSBS, the National Governors Association, the National Conference of State Legislatures and all fifty state attorneys general. In adopting the regulations, the OCC ignored your own request for extra time to consider their implications. Instead, the OCC issued a set of regulations that may affect millions of consumers across the country without a public hearing and without meaningful consultation with the parties these regulations would affect.”

The Office of the Comptroller of Currency is a secret power place. The Comptroller, or Director of the OCC is ex-officio a Director of FIDC, the insurer of bank deposits that is the last line of economic defense for most Americans, and on top of that s/he is a director of the Federal Financial Institutions Examination Council.

Whozat?   They’re the ones who decide what information and in what form banks and financial service companies have to report to the federal government.

DAMN! That’s a powerful little office.

Hey, this McCain guy has been involved in two other crashes before this one.

If you want to understand who is behind the current financial/economic whatchamacallit, go to the Daily Kos and read "Three Times is Enemy Action" by Devilstower. You'll learn about the Regan era Garn-St. Germain Depository Institutions Act, which was officially described as, "An act to revitalize the housing industry by strengthening the financial stability of home mortgage lending institutions and ensuring the availability of home mortgage loans." It was the act that led to the savings and loan collapse in the late 1980s. Remember that?

If you don't, you'll learn about John McCain's efforts (as a member of the infamous "Keating Five") to keep his buddy Charles Keating's S&L afloat for two years, by arranging for it to be exempted from government regulation. It wasn't an easy thing to do. Senator McCain found the job so exhausting that he had to take multiple vacations at Keating's private Caribian property, via Keating's private jet, with his whole family and the baby-sitter too. On Keating's nickel, of course. But alas, despite Honest John's efforts, Lincoln Savings and Loan collapsed. Twenty-one thousand, mostly elderly, Americans lost their life savings when it did. But hey! McCain got $112,000 in campaign contributions out of it.

And doggone it, you know whose name keeps popping up through all this? Phil Gramm's: McCain's favorite economic adviser.

Another thing you'll learn is that the size of the credit default swap market last year was $45 trillion. That's three times bigger than the entire US GDP. Except that the credit default swap market is so NOT transparent, that it may have been as big as $70 trilion. That's about $5 trillion more than the GDP of the entire world.
What that means, as nearly as I can figure, is that there isn't enough wealth on the planet to cover the bad debts that these Masters of the Universe were trading.

So get the hell out of here! Go to the Daily Kos and read "Three Times is Enemy Action."

Back to 1929 with John McSame and The Greedheads

So it sounds like what caused the economic shitstorm that’s banging on our collective head now – what are we supposed to call it? “meltdown?” “crash?” – is the same thing – what was that thing called? – that caused the Stock Market Crash of 1929, triggering the Great Depression. That’s what it sounds like to me.

It’s mostly about two acts of Congress – “laws,” they call them. The first one was enacted under Franklin Delano Roosevelt (D) , the President who was elected to get us out of the Great Depression that his predecessor, Herbert Hoover (R) had led us into. FDR wanted to make it impossible for the insatiable greed of the financial and banking industries to wreck the lives of millions of Americans ever again. So in 1933 he signed the Glass-Steagall Act, which (among other things) made it illegal for a single institution to be both a bank and a financial services provider (i.e. deal in insurance, stocks, or other investments).

The second Act of Congress – again read, “law” – trashed the 1933 Glass-Steagall Act, stripping away the safeguards that FDR’s progressive administration had put in place. In the 1980s, after 50 years of a reasonably well regulated financial system, the greed-heads were complaining that American businesses couldn’t compete in the world market because their hands were tied by bureaucratic regulations. Those were the Regan years, but memories of The Depression were still so vivid that even The Great Communicator and his voodoo economists couldn’t engineer the gutting of Glass-Steagall. Not yet.

Fast forward to 1999, when Republicans control both houses of Congress. They hook up with a goodly number of (what were called “neo-liberal”) Democrats, ram through the Gramm-Leach-Bliley Act with a VETO PROOF two-thirds majority, and the blow-dry Prez from Arkansas is obliged by law to sign it.

And POOF! We’re back in 1929, and guess what kids – the sky is falling.

PS: The “Gramm” of the Gramm-Leach-Bliley Act is John McCain’s senior economic adviser, who had to resign when he called Americans, “A nation of whiners” and the current catastrophe, “a mental recession.”

And John McSame? He says he’s always been a deregulator; no shit, he says so himself.