September 19, 2008 archive

For the past two days, Don Siegelman been working in DC and meeting with Members of Congress, trying to build support to get the Karl Rove contempt citation up for a vote and trying to count votes for final passage.

1. Words fail me. We the People are getting the short end of the stick here.

   The NY Times reports the U.S. acts to shore up money funds and temporarily limits short selling.

   America’s Gang of Four Federal Reserve Chairman Ben Bernanke, George Wanker Bush, Treasury Secretary Henry Paulson, and Securities and Exchange Commission Chairman Christopher Cox.

   Realizing that its case-by-case approach was not sufficient, the federal government has started to put in place a sweeping plan to restore confidence in the financial markets…

   The actions began to unfold Thursday with discussions between the Treasury, Federal Reserve and Congressional leaders on what could become the biggest bailout in United States history, a plan likely to authorize the government to buy distressed mortgages at deep discounts from banks and other institutions…

   In a move against traders who have sought to profit from the financial crisis by betting against bank shares, the Securities and Exchange Commission issued a temporary ban on short sales of 799 financial stocks, following similar action in Britain on Thursday.

   And the Treasury, moving to restore confidence in another financial bedrock, said that it would guarantee, at least temporarily, money market funds up to an amount of $50 billion in order to ensure their solvency, a startling intervention into an area that had been considered among the safest investments.

   Meanwhile, the Washington Post reports Bush Urges Congress to Enact Rescue Package

   President Bush, warning that urgent steps are needed to “to preserve America’s financial system,” asked Congress today to put aside partisan differences and enact a historic rescue package now being finalized by his administration…

   Bush also shot back at growing criticism of the administration’s role in the meltdown from Capitol Hill and both major presidential campaigns.

   “There will be ample time to debate the origins of this problem,” Bush said…

   Bush, who portrays himself as a conservative free-market advocate, also defended steps that have put billions of taxpayer dollars at risk. “Government intervention is not only warranted; it is essential,” he said.

   No accountability for the bankers and politicians responsible for this capitalist meltdown and the workers are left holding a big bag of bad debt.

Four at Four continues with news of food shortages in Afghanistan, the Pentagon’s pollution war, and a Mozart discovery.

Look at all the happy people on CNBC!  Don’t they look relieved?

Yeah.  So, here’s the thing.  The US Government does not have unlimited ability to backstop the financial markets.  And it just kinda did – essentially, the US Government just guaranteed about one trillion dollars of debt (while also banning shorting, which seems to me to be a decent way of ruining hedge funds to no recognizable purpose, unless the government has decided to ruin hedge funds).

But, as we all know, the US Government already has quite a bit of debt.  And this addition to its debt burden makes it five times the total annual federal revenues, from taxes and other sundries.

What this essentially means is that the AAA credit rating of the US government is now considerably imperiled.  The stock market might go up, and banks may stop failing every week.  But if the credit rating goes, then, well, the shit will really hit the fan.  The dollar will drop like a stone against other currencies.  Worse still, the interest rate of the Federal government’s debt, which already makes up over 9% of annual government expenditures, will skyrocket.

Unscientific poll time: will the US lose its AAA rating?  If so, how long before it is downgraded?

Just when you thought things could not get worse, we face the specter of the rise of National Socialism in the United States. Because moneyed interests now control the US government, they intend to use the US Treasury as an insurance fund for their financial losses. This will be done to “protect” taxpayers, but it is basically the last stage of the looting of the American economy.

We now face the worst of both ugly worlds: the greed of a rapacious plutocracy coupled with the inefficiency and unaccountability of faceless government bureacracy. Politicians and propagandists will be quick to explain why the princes of commerce need to continue to be paid their astronomical salaries, while the taxpayers make good their losses.

This ridiculous denoument to our decaying society will end when foreign lenders effectively take control of our economy and restore rationality to our business affairs. What a sad end to a once great nation.

I saw this this morning on CNN and found it very interesting. I have been trying to put my finger on just what it is about Obama that has such broad appeal and why we need to stop telling him how to run his campaign. Follow me below the fold for the study proving Obama is a freaking genius.

Original article, an editorial subheaded The neoliberal dogmas that have dominated for more than 25 years are discredited, but they need to be replaced by more than proposals for re-regulating the banks, via socialisworker.org:

THE WORLD financial system is in the grip of the most severe crisis since the Great Depression of the 1930s–and there’s worse to come, not only for the banks and speculators of Wall Street, but far beyond, in every part of the U.S., and around the globe.

In June 2008, a derelict parking lot at the corner of N. Williams and Fargo here in Portland was de-paved to make way for what will soon be a public park of fruit trees and native plants.  This project especially stands out to me not only because I pass it every day on my bus ride into work, and the fact that it’s also only 3 blocks from our building…but also because of the neighborhood the site is located in.  One block up from a very recent makeshift memorial to a slain neighborhood resident, and two blocks down the other way from an abandoned industrial building with multiple bullet holes in the street-facing windows.  

This is one of the few neighborhoods in Portland I’d say qualifies as a food desert, and probably the only one in our inner city core that would qualify as same.  The only food stores within walking distance are two corner markets which sell almost exclusively snacks, soda and beer…and a gas station c-store 6 blocks over on MLK which sells the same.  The largest food retailer in the area?  The “Hostess / Wonder Bread Factory Warehouse Store” on N. Vancouver, one block up and over from the Fargo Garden site.  And of course, the sole reason for that place’s existence is to sell nutritionally bankrupt ‘food’ items like white bread and Twinkies.  Would it surprise you to also find out that this neighborhood has historically been one of Portland’s very few majority African-American neighborhoods?

Below the fold, more words and a look at other successful examples of reworking cities to the advantage of people over machines…