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The Great Wall Street Bailout - End of Capitalism?

So much for capitalism on Wall Street. Like any other group of businesses, there is strong resistance to any government regulation, but considerably less resistance to a bail out when it's inevitable that the CEOs have blundered and endangered the entire economy.

According to those who amass such statistics, the American public opposed a bail out of Wall Street by 99 to 1. After the president, the Fed. chief and the Secretary of the Treasury explained to the public the severity of the situation, those opposed dropped from 99 to 90. One California congressman said that his e-mails and phone calls were running 300 to 2 in opposition. This is because there is probably no other group in our economy that would be likely to be on the receiving end of such a huge bail out except the financial sector.

Forget the fact that the cause of this problem is attributed to several factors:

A. The lax standards for mortgages – no doc. loans, ARMS with no right of pre- payment, 125% loan to market ratios, etc.
B. Arcane and complicated instruments surrounding these mortgages.
C. Exceptionally low interest rates for a long period of time.
D. The repeal of Glass-Steagall. (The Banking Act of 1933)
E. Mark to market accounting.
F. Exceptional leveraging by many institutions, and more.


The American public knows little about these factors. They do know, however, that this mess was caused primarily by greed and avarice, coupled with a great deal of incompetence on the part of the executives involved. They also know that these executives are not held responsible for their actions, but are, instead, handsomely rewarded by contracts they negotiated with very friendly Boards of Directors.

Carl Icahn (the ultimate raider) likens the bail out to a laboratory run by mad scientists who concoct a batch of chemicals, which when united, blow up the building. After the dust settles and the debris is hauled away, the laboratory is back in business with the same mad scientists in charge.

If one likens it to an addict, there are even those on Wall Street who think that we should keep feeding the addict (Wall Street) more uppers. But, allowing the addicted ones to withdraw with all the necessary pain could be a better course to follow.

The smart people who set our fiscal and monetary policy may be making a huge mistake by not letting the market forces take hold and run their course. There is much debate that the constant tinkering and intervention during the Great Depression, in fact, only served to prolong the Depression making it last for 12 long years (See The Great Depression in the United States from a Neoclassical Perspective - Cole and Ohanian).

The Immigration Debate

Immigration - a term which evokes emotions from bitter resentment to compassion. But any controversial subject has several myths associated with it. In this case, we will start with three, two of which are mythical in a least certain parts of the country.

The first is that illegal immigrants are taking jobs away from American citizens. This may be true in certain parts of the country, but not in the Mid-Atlantic states. For example, John Livingston, a business developer for the Beltsville, Md.-based Manganaro MidAtlantic, a concrete and masonry company where immigrants comprise up to 75 percent of the work force said his firm has not been able to fill its staffing needs without immigrants for more than a decade. There is also evidence of this in Colorado, a state which has one if the toughest immigration laws in the country. There is such a shortage of labor there that there is talk of using prisoners to fill the gap

The second is that they sell their labor cheap. Once again, this is not true, at least in the Mid-Atlantic states.

The third myth has to do with drivers' licenses for illegal immigrants. Ex-Governor Elliott Spitzer of New York reasoned that these people, if not employed, would become a burden on the city, county and state in which they lived. Depriving them of a driver's license would, in most cases, make it impossible for them to support themselves and pay the taxes they should. The myth is that a driver's license would allow them to board airplanes in the United States. On the contrary, Governor Spitzer had the approval of the Office of Homeland Security, because it is a restricted license which clearly states the words "not for federal identification purposes."

"If illegal immigration came to a standstill, it would disrupt the economy," said Mark Zandi, chief economist at Moody's Economy.com. "It would lead to higher prices for many goods and services, and some things literally would not get done. It would be a major adjustment for our economy, for sure."


Of course, the alternative to all of this is mass deportation of all the 12-14 million of them. This would suit the likes of Lou Dobbs and Pat Buchanan, who seem to favor mass deportation, but not before they were all given 15 lashes for their transgression.

Tim Russert Dies at 58

Tim Russert simplifying the 2000 Presidential election

We were saddend to hear about the passing of Tim Russert, moderator of Meet the Press for 17 years and NBC Bureau Chief on Friday, June 13, 2008. Tim was 58 years old. In this day of commentary and editorializing, Tim exemplified unbiased reporting in broadcast journalism. We extend our deepest sympathy to his family, his NBC family, friends and viewers.

Fist Bump, Pound, DAP, Knucks, LIST - DOs and DON'Ts

We found this great list about the "fist bump heard 'round the world" (here credited to Mr. Wonka & Tasty Booze Team on Breaking Media Network and posted on digg):

1. If sports are involved, fist bumping is always acceptable.

2. If you are wearing a suit, you may only fist bump if you are drunk. (we take issue with this one. The stuffed shirts and empty suits have been doing this for awhile and it has humanized them to the degree they can be humanized so we say bump away if you're in a suit) Or if you have just wrapped part of your suit around your forehead.

3. You may not fist bump under any circumstances, in a hospital. Unless Rule #1 (or Rule #2) applies.

4. Do not fist bump someone else’s misfortune, even if it helps you. Just look down, furrow your brow, and nod sternly.

5. No fist bumping between the hours of 7am and 10am. And if you’re watching sports at this time, it’s probably soccer or NASCAR, and then you should really not be fist bumping. High fives will suffice for both.

6. Do not fist bump in a meeting. Even if you are drunk.

7. Do not fist bump your children. Unless you’re drunk, then it’s OK.

8. Girls can fist bump anytime they want. And yes, guys think it’s cute.

9. Do not refuse a fist bump. If you, as a bumpee, believe the bumper is violating a rule, speak to him afterwards. Refusing his bump is not going to help anything.

10. Do not fist bump yourself.

With all the controversy surrounding this casual friendly greeting that has been in the main steam for a number of years now, come on people, get a grip! Give it a try and and do follow the DAPiquette as outlined above.

Booboisie via VIVA CHUCK TODD

Now you can access us through the world famous site, VIVA CHUCK TODD! How cool!

On Majority Rule

Many people assert that America is a country of majority rules. We are in agreement with Senator James A. Reed from Missouri when he spoke in 1926. The following are excerpts from that speech:

“I am getting a little tired of hearing about the sacred rights of the majority; that this is a country ruled by the majority; and that the majority has the right to have its way. This is not a country ruled by the majority. This is not a country of majority rule. The Constitution of the United States was written, in large part, to prevent majority rule. The Declaration of Independence was an announcement that there are limitations upon majority rule.

The fact that a majority of 1 or 10 vote for a bill in the Senate is not a certification that the action is right. The majority has been wrong oftener than it has been right in all the course of time. The majority crucified Jesus Christ. The majority burned the Christians at the stake. The majority drove the Jews into exile and the ghetto. The majority established slavery. The majority set up innumerable gibbets. The majority chained to stakes and surrounded with circles of flame martyrs through all the ages of the world's history. The majority in China believe in a doctrine and follow a code of ethics different from ours. Either they are wrong or we are wrong. The majority in India follow a different code of ethics and have a different set of ideas than we, and they far out number us. Either they are wrong or we are wrong.

Majority rule without any limitation or curb upon the particular set of fools who happen to be placed for the moment in charge of the machinery of a government! The majority grinned and jeered when Columbus said the world was round. The majority threw him into a dungeon for having discovered a new world. The majority said that Galileo must recant or that Galileo must go to prison. The majority cut off the ears of John Pym because he dared advocate the liberty of the press. The majority to the South of the Mason and Dixon line established the horrible thing called slavery, and the majority north of it did likewise, and only turned reformer when slavery ceased to be profitable to them.

Notes on James Alexander Reed:
James Alexander Reed (1861 - 1944), was born in Ohio; but after a brief sojourn in Iowa, settled in Kansas City, Missouri in the 1880s. At the turn of the Century, he was the Prosecuting Attorney in Kansas City, where he obtained 285 convictions in the 287 cases that he tried. From 1911 until his retirement in 1929, he served as a Democratic Senator from Missouri.

Furthermore, James Madison wrote in Federalist Paper 51: "It is of great importance in a republic not only to guard the society against the oppression of its rulers but to guard one part of the society against the injustice of the other part. If a majority be united by a common interest, the rights of the minority will be insecure."

It has often been debated that we should do away with the Electoral College and, most recently in our election, that debate has surfaced again. Mr. Rick Garlikov writes in his essay The Need for Formal and Informal Mechanisms to Prevent "Tyranny of the Majority" in Any Democratic Government, “The Electoral College, though different now from the way it was originally established, still operates intentionally in opposition to majority rule in this same way. In a system of electing the President by mere simple majority, a candidate or party could win by appealing to 51% of the voters united by some particular characteristic. And while Madison was correct that it is not easy in a free society to find 51% with an overriding affiliation to some philosophy or set of ideological policies that affect favorably all the various aspects of their lives, still it can happen. It happens, so far in America as of this writing, with some regard to race, with some regard to religious affiliation, and with some regard to gender. It happens also, though in alternating cycles, with regard to what are currently deemed generally "conservative" versus "liberal" values. It also can happen with regard to demographics along age lines or along urban/rural lines. By requiring a candidate to get at least some widespread support across a set of divergent groups, and not just simple majority support, the electoral college serves as a partial safeguard against those who might be able to find and win over a majority group based on some simple or single characteristic. It is not foolproof as a safeguard in this way, but it is important, and sometimes formidable.

When my younger daughter was in sixth grade, she attended a new middle school that opened its first year with just two of the three grades it would subsequently have. It began with sixth and seventh grades and would from then on, have sixth, seventh, and eighth grades. They held a student council officer election in the spring of the school year for student government positions the following year. For some reason, there were far more seventh graders than sixth graders that year, and because they voted for "their own", the seventh graders won all the officer positions. The sixth graders felt that was unfair but were told that was just how democracy worked. Well, it is not how American "democracy" (or at least American government) works, nor how it is supposed to work, regardless of the misconception. Had there been a mechanism, something like the electoral college system, whereby sixth and seventh grades were represented in a more equal way to make up for their unequal population numbers -- a way that required the assent of some implicit coalition of both groups -- either there would have been some sixth graders elected to the student council offices or at least some seventh graders might have been elected who were more acceptable to the sixth grade class. Potential seventh grade officers would at least have had to court some part of the sixth grade vote instead of being able to ignore it altogether. That is the purpose, or at least a feature, of devices such as a bicameral legislature or an electoral college.

Mr. Garlikov goes on to say:


Effective, heeded representation will happen naturally in those bodies comprised of sensitive, compassionate, and honorable members with discerning judgment who care about the needs of all people. There are not likely to be such bodies. Therefore mechanisms are necessary to prevent 51% of people from controlling 100% of the decisions in a democracy simply by having majority rule that allows them to win every vote without having ever to take into account the needs of the 49%. When those needs are intolerably and unreasonably ignored and thwarted, there is a tyranny of the majority. (used by permission of Rick Garlikov when we wrote our Letter to the Editor,The Evening Sun, Hanover, PA with sincere thanks to Mr. Garlikov)

We must get away from this idea that the majority rules. America was never intended to be a country of rule by the majority and many obstacles were put in place to prevent majority rule. We must protect the individual, the minority. It is what our great country is all about.

Alan Greenspan ~ Icon of Wall Street

The icon of Wall Street, and of global corporations, Alan Greenspan, has finally shown the world the results of his gross incompetence. He thought as long as he satisfied Wall Street and the global corporations that he was safe. Wall Street loves low interest rates and American exporters are totally in love with the cheap dollar. Low interest rates, along with an increased money supply, sustained for a year, finally had the effect of the real estate bubble and the cheap dollar. The cheap dollar is relevant to the price of gasoline but nobody seems to be able to tell us how much the cheap dollar is contributing to these high gas prices.

It's hard to think of Alan Greenspan having the imagination to engineer the forced sale of Bear Stearns to J.P. Morgan-Chase, which was orchestrated by Secretary of the Treasury Paulson and Federal Reserve Chairman Bernanke. This is commonly termed a bailout but it is certainly not a bailout in the shareholders' (those who own the company) view - just ask Joseph Lewis, the UK tycoon who lost $1,000,000,000 in this so-called bailout. The stock that once traded at over $100 a share was reduced to just $10.00 in this workout. It's equally difficult to imagine that Alan Greenspan would have the courage of Paul Volcker (Fed chairman from the late 1970's through most of the 1980's), who chose, not by interest rate targets but by reducing the supply of money, to let the market find interest rate levels. Because of this he was able to wring the runaway inflation rate of 12% out of the economy.

Related: Scroll to the bottom of the page to see the Charlie Rose interview with Paul Volcker.

Alan Greenspan Bio ~ the first part of our series

We begin our series on Alan Greenspan with a short bio.

Greenspan was born in 1926 to a Hungarian Jewish family in the Washington Heights area of New York City. He attended The Juilliard School from 1943 to 1944. He then attended New York University (NYU), and received a B.S. in Economics (summa cum laude) in 1948, and a M.A in Economics in 1950. Greenspan went on to Columbia University but subsequently dropped out. At Columbia, Greenspan studied economics under the mentorship of former Fed chairman Arthur Burns (who constantly warned of the dangers of inflation). Many years later, in 1977, NYU awarded him a Ph.D. in Economics. There is some dispute as to whether he wrote a dissertation, normally required for that degree (it appears that he did not). On December 14, 2005, he was awarded an honorary Doctor of Commercial Science from NYU, his fourth degree from that institution.

From 1948 to 1953, Greenspan worked as an economic analyst at The Conference Board, a business and industry oriented think-tank in New York City. From 1955 to 1987, Greenspan was Chairman and President of Townsend-Greenspan & Co., Inc., an economic consulting firm in New York City. He had a brief interruption from 1974 to 1977 by his service as Chairman of the Council of Economic Advisers under President Gerald Ford. In 1968, Richard Nixon asked Greenspan to serve as his coordinator on domestic policy in the nomination campaign and Greenspan agreed. Greenspan also has served as a corporate director for Aluminum Company of America (Alcoa); Automatic Data Processing, Inc.; Capital Cities/ABC, Inc.; General Foods, Inc.; J.P. Morgan & Co., Inc.; Morgan Guaranty Trust Company of New York; Mobil Corporation; and The Pittston Company. He also served as a member of the influential Washington-based financial advisory body, the Group of Thirty in 1984. In 1987 he was appointed as Chairman of the Federal Reserve.

Alan Greenspan has been married twice. His first marriage was to Joan Mitchell in 1952; the marriage ended in divorce one year later in 1953. In 1984, Greenspan began dating journalist Andrea Mitchell. In 1997, they were married by Supreme Court Justice Ruth Bader Ginsburg.

Source: Wikipedia

Senator Bill Nelson - No Eagle Scout

When one envisions an Eagle Scout, United States Senator Bill Nelson (D., Fla) embodies that vision. If one thinks of an Eagle Scout as smart and truthful, Senator Nelson belies that notion. Currently he has a bill before the Florida senate to do away with the Electoral College. Also, as an avid Hillary Clinton supporter he argues that the voters in the Florida Democratic primary were disenfranchised and need to be recognized since this goes against the founding fathers' idea of one man, one vote. This doesn't make any sense since the founders did not advocate one man, one vote as evidenced by the formation of Electors. Further evidence that the founders did not want one man one vote is seen by the fact that they disenfranchised black men and every woman when it came to the vote. In addition, the original Constitution called for the state legislatures to select all U. S. senators.






Senator Nelson further argues that the Florida delegation should be seated since Florida was forced into it's current situation (where the DNC punished Florida for moving it's primary forward by taking away their delegation to the convention) by a Republican legislature and signed into law by a Republican governor. Again, this does not jive with the facts. The fact is that House Bill 537 in Florida passed unanimously in the House and passed by a vote of 37 - 2 in the Senate. The Democrats certainly were not forced into this as evidenced by the fact that out of 157 voters in the House and Senate, there were only 2 dissenters to this bill. The main thrust of the bill was to do away with touch screen voting machines and to ensure that Florida had a paper trail for the voters. The Democrats were warned by the DNC that there would be sanctions if they moved their primary forward so once changes to the primary process were lumped into this bill, the Democrats could very well have made an issue of this before the vote was taken where even the Booboisie in Florida would have understood.

The inability to put facts together is just plain stupidity. The refusal to put facts together is outright lying. Senator Bill Nelson - stupid or liar? At any rate, no Eagle Scout!



Updated June 2

VIVA CHUCK TODD

We recently came across a great blog, VIVA CHUCK TODD, dedicated to the inimitable msnbc political analyst Chuck Todd. The post, The Chuck Todd Experience by Amy Martin, had us laughing and nodding the entire way through. Here is an excerpt:

"When the talking heads are yelling and screaming at each other (memo to Chris Matthews and Pat Buchanan–we can hear you, so dial it down a notch, okay?) and I’m about at the point of yelling and screaming at them, my head on the verge of exploding from trying to process all the useless back and forth and my jaw clenched tightly enough to wear down my fillings, someone suddenly says “Let’s turn it over to Chuck Todd for a check of the delegate count.”

And I exhale, the boiling blood draining from my face at the sight of Chuck Todd standing in front of what looks like the world’s most complicated overhead projector, dry erase marker in hand, ready to hurt you with the sweet, sweet pain of incontrovertible math."

In this political season, Chuck Todd indeed is like the "majestic Golden Retriever" and VIVA Chuck Todd has hit just the right note.

This is a MUST-READ and if you love Chuck Todd then their VIVA CHUCK t-shirt is a MUST-HAVE.

Navigating the political scene right now, just watching Chuck Todd and reading VIVA CHUCK TODD will lower your blood pressure, calm your shattered nerves and make you want to wade through all the rest just to hear someone say, "Let's turn it over to Chuck Todd for a check of the delegate count."

Thanks to VIVA CHUCK TODD for bringing Chuck into the limelight where he so belongs!

Coming Soon

Coming Soon - our series on Alan Greenspan

Fair Share Tax

First, what is meant by Fair Share? We hear it bandied about all the time, mostly by politicians, and it usually refers to taxing the wealthy corporations - the ones with those huge profits - so that they will pay their fair share. But think for a moment. Do corporations really just absorb that tax and let us off the hook? Of course not! This is a politcian's trick. Economics 101 teaches us that companies can't bear taxes, only people can. The companies, in effect, collect taxes for the government by passing that tax on to all of us - customers, employees and stockholders. The costs of our goods and services and the prices we pay for those goods and services just go up. See what we mean?

© Mark Poprocki - Fotolia.com

If you can understand this simple argument then pat yourself on the back. You are one step closer to getting out of the Booboisie!

Scott McClellan - Unwitting Dupe?

Scott McClellan, former White House Press Secretary has released his new book, WHAT HAPPENED: Inside the Bush White House and What’s Wrong With Washington in a few Washington bookstores this week. It is scheduled for universal release on June 2, 2008.



McClellan came with Bush from Texas and first served in the White House as Deputy Communications Director under Ari Fleischer, White House Press Secretary.



White House Biography:

Scott McClellan -- White House
Assistant to the President and White House Press Secretary
Most recently, Scott McClellan served as Deputy Assistant to the President and Principal Deputy Press Secretary.

Before joining the White House staff, he was the traveling press secretary for the Bush-Cheney 2000 presidential campaign. Scott began working for Governor Bush in early 1999 as deputy communications director. Prior to joining the Governor's office, he served as chief of staff to a Texas state senator, worked on grassroots outreach for lawsuit reform in Texas and managed three successful statewide campaigns.

Scott is a graduate of the University of Texas at Austin.



From the washingtonpost.com:

The book, coming from a man who was a tight-lipped defender of administration aides and policy, is certain to give fuel to critics of the administration, and McClellan has harsh words for many of his past colleagues. He accuses former White House adviser Karl Rove of misleading him about his role in the CIA case. He describes Secretary of State Condoleezza Rice as being deft at deflecting blame, and he calls Vice President Cheney "the magic man" who steered policy behind the scenes while leaving no fingerprints.

McClellan stops short of saying that Bush purposely lied about his reasons for invading Iraq, writing that he and his subordinates were not "employing out-and-out deception" to make their case for war in 2002.

But in a chapter titled "Selling the War," he alleges that the administration repeatedly shaded the truth and that Bush "managed the crisis in a way that almost guaranteed that the use of force would become the only feasible option."

"Over that summer of 2002," he writes, "top Bush aides had outlined a strategy for carefully orchestrating the coming campaign to aggressively sell the war. . . . In the permanent campaign era, it was all about manipulating sources of public opinion to the president's advantage."

McClellan, once a staunch defender of the war from the podium, comes to a stark conclusion, writing, "What I do know is that war should only be waged when necessary, and the Iraq war was not necessary."

McClellan resigned from the White House on April 19, 2006, after nearly three years as Bush's press secretary. The departure was part of a shake-up engineered by new Chief of Staff Joshua B. Bolten that also resulted in Rove surrendering his policy-management duties.

Time and time again, Scott McClellan stepped to the podium to spout the White House line. Did he have misgivings at some point but just kept giving us what the White House wanted to give out: did he know at some point that what he was spouting was a pack of lies; did he blindly spout the White House line and become an unwitting dupe?

Whatever the case, the ranks have been broken big time and we will have to see what the impact of this book will have on us, the people.

Hillary Clinton's gaffe? RFK Assassination

Friday afternoon, Hillary Clinton told the editorial board of the Sioux Falls, South Dakota, Argus Leader that "My husband did not wrap up the nomination in 1992 until he won the California primary somewhere in the middle of June, right? We all remember Bobby Kennedy was assassinated in June in California. I don't understand it," she said.

Be sure to have your volume turned on

What did she mean exactly? Did she simply misspeak? (DO the Clintons misspeak?) Was the stress on June and did she mean that many times the Democratic nomination isn't wrapped up until June? By all accounts, her husband actually had the nomination wrapped up in late March 1992. Additionally, the Democratic primary in 1968 had only begun in March so by June, there had not been a protracted race. Was there a more sinister meaning to her assassination reference? We really don't know what she meant but we would love to hear your take on this controversial incident.

Senator Ted Kennedy Hospitalized

It has been awhile since we have posted but today we received the sad news the Senator Ted Kennedy has a brain tumor. Whatever your politics, we hope you will join us in sending our prayers and good wishes to Senator Kennedy and his family.

On the Campaign Trail

Photos of Senator Ted Kennedy in Gettysburg, Pennsylvania

On the Democratic campaign trail yesterday we saw Ted Kennedy and we wanted to share some pics with you.

Coming Soon

New topics such as Did the founders really want one man, one vote, the immigration "problem," and more are coming soon.