Opinon-Columns.com, political and social commentary by Jim Freeman

SORTING OUT THE RHETORIC

2009-12-03T17:07:14+01:00

To even begin to progress in the political/economic arena, the populist labels are, at best, unhelpful. Do a sort of Rorschach-test for yourself in words instead of ink-blots. What do you immediately think of the following?

Liberal
Conservative
Atheist
Believer
Socialism
Communism
Capitalism
Left
Right

And that’s just the smallest segment of what divides us. Homeless, jobless and bankrupt all have entirely different meanings, depending on whether you are out of a job, on the streets or drowning in debt. They say as people get older they become more intolerant of both the mistakes and intentions of those younger than themselves, but I‘ve found it not to be the case. Experience is the word for having known, gone through and survived the ups and downs of a lived life. Wisdom sometimes, but not always, comes from that.

But we’re polarized. God knows we’re been told that often enough to believe it, even though perfectly rational conversation is still possible among our like-minded friends.

Compasses are not often wrong, but I was once dangerously lost in the mountains of Montana at night, as the thermometer plunged toward -50 degrees. An otherwise pleasurable elk-hunting trip got downright scary in a matter of hours. It turned out that the manufacturer of the compass I carried had installed the dial upside down. Easy enough to catch in daylight, had I reason to look, but confoundingly purposeless at night.

I often reflect on that.

Socialism is a case in point, not always true-north, nor is capitalism, or the over two hundred isms (an inordinate number of them religion-based) that dandy themselves about. Ism is a kind of tincture for me, a trace color that’s likely to mask a personal interpretation and I usually try to get a definition before chatting further.

Isms are not usually stand-alones, they beg for modifiers; Godless communism and reckless capitalism come to mind. Daylight and a reason to look is usually good advice.

Take Sweden, everyone’s knee-jerk response to the evils of socialism, leavened perhaps (or not) by the enormous and profitable success of IKEA and the number one Information Technology nation in the world, for the fourth consecutive year.

Forbes magazine has this to say:

The new face of Swedish socialism

By Richard Heller, Forbes

Swedish snapshot A: Shows a taxed-to-the-eyeballs welfare state where the government grabs more than 52% of the country's GDP—the highest percentage of any industrial country. A Swedish businessman who earns Euro 200,000 a year gets to keep just 49% of his paycheck. Of OECD countries, only France comes close to Sweden in taxing its most successful businesspeople (for complete tax data on 33 countries, see "The tax grab 2001," Forbes Global, Feb. 5).

Swedish snapshot B: Shows a booming economy bubbling with entrepreneurial activity. Growth is predicted to be 3.5% for 2001; inflation, 1.7%; unemployment, 4% (less than half the European average). In 1999, according to the European Information Technology Observatory, Sweden ranked first in the world in investment in information technology and telecommunications. Venture capital is pouring into Sweden, and labor productivity is rocketing: From 1990 to 1999 productivity climbed 47% in Sweden, against 39% in the U.S. and 31% (on average) in the EU. Last year, Sweden topped the global standings in R&D spending as a percentage of GDP with 3.7% (in the U.S. it was 3.1%), according to the OECD.

Will the real Sweden please step forward? Taxed to the eyeballs, yet with a booming economy. Rhetoric again, with both tax and boom in the eye of the beholder.

Uninformed, we throw generalities at one another and nothing much gets accomplished in the way of revising, upgrading, junking or bowing-down to our current economic and political (read that health-care) issues.

Would some comparisons help? Perhaps just a bit, something to put some definition to the argument:

NAME OF COMPARED RANKING	YEAR	AMERICAN RANK	OUT OF	SWEDISH RANK
CIA World Factbook – GDP per capita	2008	10	229	26
CIA World Factbook – life expectancy	2008	³⁶	223	10
World Economic Forum – Enabling Trade Index ranking	2008	¹⁴	118	3
Yale University / Columbia University - Environmental Performance Index	2008	³⁹	149	3
The Economist Intelligence Unit - e-readiness	2008	¹	70	3
The Economist Intelligence Unit - Global Peace Index	2008	⁹⁷	140	13
United States Patent and Trademark Office's list of patents by country	2007	¹	172	11
Save the Children - Mother's Index	2007	²⁷	141	1
Save the Children - Women's Index		²²	141	1
Save the Children - Children's Index	2007	³⁰	141	4
Wall Street Journal / The Heritage Foundation - Index of Economic Freedom	2007	⁵	157	27
United Nations - Human Development Index	2007	¹⁵	179	6
World Economic Forum - Global Competitiveness Report	2007	¹	177	4
World Economic Forum - The Global Gender Gap Report	2007	³¹	128	1
World Bank - Ease of Doing Business Index	2007	³	178	14
Reporters Without Borders - Worldwide Press Freedom Index	2007	⁴⁸	169	5
Transparency International - Corruption Perceptions Index	2008	²⁰	180	1
The Economist Intelligence Unit - Index of Democracy	2007	¹⁷	167	1
Privacy International - Privacy index (EU and 11 other selected countries)	2006	³⁰	36	28
New Economics Foundation – Happy Planet Index	2006	150	¹⁷⁸	119
The Economist Intelligence Unit - Quality-of-life index	2005	¹³	111	5
World Health Organization - suicide rates by country	2004	⁴⁶	100	31
NationMaster's index of civil and political liberties	2004	⁷	140	3
Save the Children – seats in the national government held by women	2004	¹⁰	141	1
NationMaster's index of asylum seekers (per capita)	2001	²²	28	4
NationMaster's index of economic aid (donor, per capita)	2001	¹⁹	24	5
NationMaster's index of technological achievement	2001	²	68	3

So, America’s kicking butt in GDP, although both nations are in the top 10%. Ditto on patents, economic freedom and ease of doing business.

But Sweden, poster-boy for that mean old socialism, leads us by a bunch in life expectancy, environmental performance, global peace, mothers, women and children indexes, gender-gap issues, press freedom, corruption perception, seats in government held by women, asylum seeker acceptance, economic donor aid, political freedom and (gasp) democracy.

Democracy was always our trump card. We owned democracy. Now, out of 167 countries, we are 17th and they are 1st. Now, the issues we own are GDP and patents; ease of doing business and political freedom (which some of us thought might be growing less in America).

Socialist Sweden lays claim to a higher tax rate (49% to 33%), but what they buy with their taxes are life enhancing benefits and the personal freedoms usually associated with our constitution.

Which does not a ball-game make.

But the next time someone demagogues you with socialist legislation and the slippery slope to socialism, you might ask just what they mean.

Socialism is often defined as “the doctrine of centralized state control of wealth and property.” But, like so many oft-stated truisms, it’s not always that way. So it may pay to take a look at the conversation about the word and determine ahead of time who means what.

The face of the rhetorical compass is not always screwed on properly and reading it wrong can give rise to a long, cold night in the mountains.

A FIRST STEP IN THE REMODELING OF INVESTIGATIVE JOURNALISM

2009-11-30T15:16:36+01:00

Tim Luckhurst, in a Guardian-UK article, Why Journalism Needs Paywalls, argues that “It's time to admit that giving away value undermines democracy.”

“Johnston Press is starting to charge for certain online content.

Johnston Press, Britain's most prolific newspaper publisher with 286 titles, will place the online content of six of its local titles behind paywalls.

“Online readers of the Worksop Guardian, Ripley and Heanor News, Whitby Gazette, Northumberland Gazette, Carrick Gazette and Southern Reporter will have to pay £5 for a three-month subscription.”

I’m not sure he makes the case that democracy is any real trouble, but newspapers surely are. They’re losing tons of money and, in an effort to staunch the blood-flow, are tossing everything toss-able overboard. The fact seems to remain that, in a world of instant on-line technology, pulling a daily print edition together, rolling the presses and sending countless trucks off to thump the bales of paper at news-stands and front porches is unprofitable—in the extreme.

Johnny Carson used to say, “If you buy the premise, you buy the bit.” My premise is that print editions of The New York Times (insert your personal favorite here) will not survive. If you buy that premise, the bit has to do with how to rescue investigative journalism from the life-boats.

One major paper after another has closed down foreign bureaus and heaved their best investigative staff into the choppy waters of early retirement. These are not lightweights and many, if not dead and buried, are still working at their place of choice:

Christiane Amanpour

James Baldwin

Carl Bernstein

Ed Bradley

Jimmy Breslin

Joel Brinkley

Walter Cronkite

Thomas Friedman

Amy Goodman

Adam Gopnik

David Halberstam

Seymour Hersh

Peter Jennings

Pauline Kael

Ted Koppel

Norman Mailer

Bill Moyers

Edward R. Murrow

Morley Safer

Diane Sawyer

Nina Totenberg

Bob Woodward

But the writing is on their wall and ours. Those who glibly pass off print media as not as New Age as blogging and the Internet, would do well to pause and reflect on where the content comes from that is so cheaply and irreverently commented upon in cyberspace. Consider the Washington Post expose, “Soldiers Face Neglect, Frustration At Army’s Top Medical Facility,” by investigative reporters Dana Priest and Anne Hull.

The blogosphere, the Congress and the American public went ballistic at this travesty of care, particularly as it occurred in the midst of a bloody and miserable war in Iraq and Afghanistan. No Dana Priest and Anne Hull . . . no story, no exposure, no cleanup of the medical care at Reed.

The Post, of course, cut its teeth on the Bob Woodward and Carl Bernstein Watergate break-in story that brought down Richard Nixon. That was a piece of investigative reporting that, if it didn’t define the term, certainly popularized it. Yet that kind of digging is expensive. A major piece may last for three or four updated editions and take months to prepare and source accurately. The reporters entrusted with that job are the cream of the crop . . . and expensive, when it comes to word-for-word costs. I have a suggestion or, perhaps, more of a template than an actual solution.

The newspaper industry has long supported the Associated Press for breaking news. The organization is a cooperative, owned by newspapers, which both contribute to and use AP material written by its staff journalists. Non-members outside the United States pay a fee. Likewise, the British-Canadian Reuters and American Bloomberg make a profit from the hustling of financial news. The need seems to be there for a similar organization in the field of investigative journalism.

Consider the advantages:

Major newspapers, as they struggle to slide out from under a cost-structure that no longer works, would be relieved of the direct overhead attributable to investigative journalists with star-power.

Journalists would be relieved of the drudgery that comes of meeting the individual editorial policies of their parent publication.

Major stories would savor the breaking-news élan of stories they bid to carry, which would then enter the public domain (after perhaps 24 hours) and require a by-line from both the source and the reporter.

Lesser events (of state or local interest) would bring lower prices or syndication. Syndication made guys like Mike Royko very wealthy (writing over 7,500 columns, ultimately syndicated in over 600 newspapers).

Considering disadvantages, I can really think of none.

Such an organization would depend upon the reputation and integrity of its contributors. But they are out there now, on smaller and smaller ice-flows; thousands of highly regarded professionals who could bring up a next generation of young reporters by the oldest method in history . . . apprenticeship.

Someone is going to do it, perhaps a Mike Bloomberg type, with lots of know-how, experience and a regard for the public sphere.

Let’s hope so, before they are lost and the print world becomes one tedious and uninformed blog, with nothing upon which to feed. Giving away value does not spell the end of democracy, but it goes a long way towards frittering away the investigative report.

Of Mice and Men, Global Warming and Hundred-Year Storms

2009-07-01T16:08:00+02:00

Letter from Prague

The best laid plans, we are told, of mice and men often go astray. That’s particularly the fact when the plans are postponed for reasons of budget, inattention, better things to do and the assurance promised in the very phrase “hundred-year storm.” I have had experience with all of the above.

As for budget, was there ever a plan that could not be reamed of its very essence by budgetary constraint? These are hard times, budgeting times, and thus infrastructure must be put off. Recent times were flush times, but other excuses sufficed as bridges in Minneapolis fell into the river. Here in Prague, the government was too busy selling state assets and running off with the dough to invest in dams and floodgates and damn floodgates.

We are (by the by) frantically building a flood wall at the moment along the scenic Prague river named Vltava. It’s been raining off and on for the past three months, more on than off. The timeless and historic watercourse that’s threaded its way under the Charles Bridge for lo these past 552 years is licking its chops for another flood, the hundred-year event arriving 93 years ahead of schedule.

As a younger man, in what seems an alternative existence, I had occasion to appear before various Chicago-area planning boards. I was the hired gun, the mercenary assuring the various raised eyebrows of skeptical commissioners that this or that planned community or corporate layout would scarcely affect the environment. Traffic? No problem. Air quality? Hey, we have the charts and expert witness to calm your fears. And yet commutes edge toward two hours and groundwater is so unsafe we opt for the bottled variety.

I wish they had found a more accurate term for what’s happening to the planet than global warming, because we have temperatures rising in some parts of the world and dropping in others. One can kayak to the North Pole while the Antarctic ice fields expand. What we have is global temperature disruption. North America is scheduled to get warmer and drier, while here in Europe we expect cooler and wetter weather patterns. Thus the Vltava lurks.

Seven years and six weeks ago, mid-August of 2002, our friendly river was twenty feet above flood stage and halfway up the second story windows of buildings familiar to tourists in the quiet side streets of the Old Town. 50,000 people had been evacuated and huge outlying areas of the country were underwater. Damage took two years to repair and the Karlin section of Prague had to be essentially rebuilt. Now Karlin is home to the brightest and most glossy new developer complexes and the Vltava lurks once again. This weather pattern is nearly identical to 2002 and the middle of August is six weeks away.

Well, Prague will survive, but the message (if there is a message) is that the world is no longer the same. Basic weather patterns such as the Atlantic Gulf Stream are shifting while we argue about whether Chicago is really all that much hotter this summer. Perhaps we’re gazing at the wrong navel.

It’s a shame to watch this fine old city gird for another assault, but that’s a tale of mice and men. The late and insightful George Carlin had it right; “The planet is not in trouble. The planet is perfectly all right and will continue to be just fine. It’s man who is in danger of extinction.”

LISTENING TO A NOBEL LAUREATE GET IT WRONG

2009-05-04T23:57:19+02:00

Falling Wage Syndrome

By PAUL KRUGMAN

Wages are falling all across America.

Some of the wage cuts, like the givebacks by Chrysler workers, are the price of federal aid. Others, like the tentative agreement on a salary cut here at The Times, are the result of discussions between employers and their union employees. Still others reflect the brute fact of a weak labor market: workers don’t dare protest when their wages are cut, because they don’t think they can find other jobs.

Whatever the specifics, however, falling wages are a symptom of a sick economy. And they’re a symptom that can make the economy even sicker.

Wrong target, Paul. Falling wages are not a symptom, they are a result. The sickness of this economy is evidenced by fraud, greed and engineered bubbles. The cure is what we are watching and, that includes falling values, lost investment and falling wages.

. . . After all, many workers are accepting pay cuts in order to save jobs. What’s wrong with that?

The answer lies in one of those paradoxes that plague our economy right now. We’re suffering from the paradox of thrift: saving is a virtue, but when everyone tries to sharply increase saving at the same time, the effect is a depressed economy. We’re suffering from the paradox of deleveraging: reducing debt and cleaning up balance sheets is good, but when everyone tries to sell off assets and pay down debt at the same time, the result is a financial crisis.

The effect is only a depressed economy if the economy is based upon, dependent upon and captive to consumption. Read my lips, Paul, "the sticky wicket in which we find ourselves is a direct result of excessive leverage." We are getting well, Paul, if the last rites of the Church of Consumerism are not called in to 'save us.'

In particular, falling wages, and hence falling incomes, worsen the problem of excessive debt: your monthly mortgage payments don’t go down with your paycheck. America came into this crisis with household debt as a percentage of income at its highest level since the 1930s. Families are trying to work that debt down by saving more than they have in a decade — but as wages fall, they’re chasing a moving target. And the rising burden of debt will put downward pressure on consumer spending, keeping the economy depressed.

Yep. Household debt came from careless loans and the mentality that encouraged market fraud and bubble economies. If you want a scapegoat, don't blame falling wages, dial up Alan Greenspan. Household debt will fall (eventually) by what the moneylenders fear most--bankruptcies and foreclosures. I hate to disabuse you of other ghosts in the closet, but it still happens that way, 80 years later.

. . . Concern about falling wages isn’t just theory. Japan — where private-sector wages fell an average of more than 1 percent a year from 1997 to 2003 — is an object lesson in how wage deflation can contribute to economic stagnation.

So what should we conclude from the growing evidence of sagging wages in America? Mainly that stabilizing the economy isn’t enough: we need a real recovery.

Big difference in the Japan example is that Japan prevented its banks from writing off bad loans--something Ben Bernanke is only trying to do. 2nd big difference, Japan fell apart while the rest of the world followed the 'Timex' example--took a lickin' and kept on tickin.' The rest of today's planet is in the toilet, along with us.

. . . To break that vicious circle, we basically need more: more stimulus, more decisive action on the banks, more job creation.

All of which only makes sense if you believe we had a strong and vibrant economy a year ago, in the good old anything goes, credit default swaps, derivative weapons of mass destruction environment. If you don't (and I happen not to) believe those were healthy economic times, you see the wreckage as a necessary deconstruction, a sort of storm before the calm.

There are more guys on your team than mine, Paul and I lack a Nobel Prize in economics . . . but that doesn't mean you're right.

THE UPS AND DOWNS OF OBAMA'S CZECH VISIT

2009-04-24T23:38:39+02:00

Reflections from Prague

President Barack Obama came to Prague, likely because the Czechs hold the current and rotating presidency of the European Union. It was a courtesy call and a chance to speak to the world on international policy. Certainly the draw was not the grim-jawed current president, Vaclav Klaus, George Bush’s political mirror-image. Nor was it to shore up the embarrassment of the Czech government having failed a vote of confidence to sustain their own government halfway through an EU presidency. Stuff happens.

But he came and began a courtship, both promising and not without its awkward moments.

The Czechs are a tough audience, courteous and at the same time watchful. Promises are rhetoric and they are not fond of rhetoric. A beer-drinking, pragmatic country, Czechs spent most of the last century paying the personal costs of Western abandonment. So, when Barack beamed, saying ‘we are all in this together,’ the applause was minor, scattered and, if you looked closely enough, the president noticed.

Not that they don’t love him, they do. He is the universally loved American president, because he’s charming and honest, enthusiastic and straight. Who wouldn’t love that in a Czech pub, in Chicago or Prague?

But there’s history here and as Tip O’Neill famously told us, “all politics is local.” At the end of the First World War, Czechoslovakia was created and flourished as a free nation until the Brits traded it away twenty years later at Munich for ‘peace in our time.’ Czechoslovaks weren’t even at the table as their country was turned over to the Nazis. Peace finally came, but it was a short celebration as the Brits and Americans once again sold out Czechoslovakia, this time to the Soviets at Potsdam. Munich brought seven years of Nazi atrocities, Potsdam, forty years of gray and relentless communism.

Then the Soviets collapsed, Czechoslovaks shook off the euphoria of sudden freedom, Bill Clinton arrived to play sax jazz at Prague’s Reduta Jazz Club and everyone’s heart skipped a beat. Next, George Bush arrived unexpectedly and announced a ‘for us or against us’ policy to the world, leading it to war and finally into a financial abyss.

Sunday Barack told the crowd we’re ‘all in this together.’ All? Excuse the Czechs if the applause was not thunderous.

They like him. They poured out to see him in record numbers, all smiles and adoration on a sunny spring day in arguably the most stunningly beautiful of European cities. Ex-pat Americans (and there are thousands of us here in Prague) were finally proud to be Americans, after eight years envying our friends with Canadian passports.

But 70% of Czechs are against the American radar installation expected to be built here. Czechs had their fill of Nazi and communist weaponry. The radar has become the national symbol of Czech government ignoring Czech citizenry. Wrong message, Barack.

“For over a thousand years, Prague has set itself apart from any other city in any other place. You have known war and peace. You have seen empires rise and fall. You have led revolutions in the arts and science, in politics and poetry. Through it all, the people of Prague have insisted on pursuing their own path, and defining their own destiny.”

Umm, except for those 500 years when the Habsburg and Austro-Hungarian Empire was running the show or, more recently, the above-mentioned Nazis and communists.

Obama finally cut to the chase nearly a thousand words into his speech and it might have improved chances for the love-affair if he’d done it a bit earlier. The Czechs are a tough audience.

“This marks the tenth year of NATO membership for the Czech Republic. I know that many times in the 20th century, decisions were made without you at the table. Great powers let you down, or determined your destiny without your voice being heard. I am here to say that the United States will never turn its back on the people of this nation. We are bound by shared values, shared history, and the enduring promise of our alliance. NATO's Article 5 states it clearly: an attack on one is an attack on all. That is a promise for our time, and for all time.”

They liked that, not so much for the promise, but the recognition that the West was not always there. Of ‘shared values and shared history’ they are not so sure. So far, their immediate evidence is a tsunami of Western capital, bringing with it an impossible housing bubble (truly shared) and a financial virus hatched in the Petri-dishes of Wall Street. A virus that’s halved the value of their currency, cut tourism by a third and pretty much destroyed exports to the West.

Another hunk of the speech with an unattended applause-line was;

“The people of the Czech Republic kept that promise after America was attacked, thousands were killed on our soil, and NATO responded. NATO's mission in Afghanistan is fundamental to the safety of people on both sides of the Atlantic. We are targeting the same al Qaeda terrorists who have struck from New York to London, and helping the Afghan people take responsibility for their future. We are demonstrating that free nations can make common cause on behalf of our common security. And I want you to know that we Americans honor the sacrifices of the Czech people in this endeavor, and mourn the loss of those you have lost.”

Czechs valued inclusion in NATO more than EU membership. NATO was finally and truly there to protect. But they understood that protection as against attack from the outside, rather than committing Czech troops to the “Bring ‘em on” pre-emptive strike policy of the United States. Who suspected that aggression would come from inside the alliance? They wonder if a bomb went off in central Prague, killing a couple thousand, if America (or indeed NATO) would follow their flag and their drum to an essentially unilateral mission of revenge.

From the 1989 ‘Velvet Revolution’ until 2003, Vaclav Havel (the poet, playwright and imprisoned dissident) was the first president of independent Czech Republic. Havel told Obama in private conversation that enormous hopes have been pinned on him, as if that pressure wasn’t already building back home. With people expecting the quick birth of a better world, disappointment might turn them against him, Vaclav warned. Obama reportedly smiled, thanked Havel and said he has begun to notice such changes himself.

But they loved him just outside the gates of Prague Castle, make no mistake. There was much to cheer in the speech and they cheered, though sometimes less than American audiences. Europe has been circumspect and cautious in their response and the Czechs are the toughest audience so far.

But Europe and the Czechs seem ready to love Americans again and that’s a major breakthrough.

WHO’S TO SAY NO? AND OTHER MYSTERIES OF TODAY’S TOO BIG TO FAIL MENTALITY

2009-03-24T17:28:52+01:00

The Federal Reserve, announced a week or so ago, is poised to inject $1.2 trillion (whatever that means) into the economy (whatever that is).

Well it’s a big number, that’s for sure. And it’s not as if we actually have it in an account somewhere, to transfer as we might from some federal savings account to checking, nor are we taxing ourselves in order to create it. God, or Heaven, or Bernanke forbid. There is no one forbidding and that’s probably just as well, because the number and the event and its eventual outcome are all fictions—works of the imagination.

I have some experience with that, as a writer of fiction. But have rather none at all of economics, but for standing up to my knees against the current of some eight decades and trying to cast the fly of my own modest life in a way that might bring security safely to the net. Security is a wary adversary these days and not quite the farmed and eager fish of recent years.

But it will not work, this dynamiting the rivers of opportunity with trillions. We chant the mantra of ‘too big to fail,’ while failure is upon us. The solutions that could work are long-term and require patience, but we’re out of patience and we’re scared and it’s getting dark and our boot is leaking. We elected Barack Obama to solve it, no matter that the engines of our financial demise have been running full-tilt for decades. Not able to solve it in this 1^st quarter of his presidency, our president’s stock may slip and his (and our) hopes for a successful IPO may fail as well.

Probably will, which is a very long way from the hopes of the Rush Limbaughs of America that it actually will fail, allowing conservatives another chance to dynamite the pond. But we’re in for a long and difficult haul. We’re not yet halfway there. The AIGs and the Bank of Americas and Goldman Sachs, who claim to have underpinned our financial security in these frenetic decades are not too big to fail. Fail they will, fail they must, to rid themselves of fraud and preserve what is worth keeping.

This online pitch comes up #2 if you Google “bank of america customer base:”

Announcing the Bank of America Preferred Real Estate Broker NetworkTM and the Bank of America Real Estate CenterTM.

Bank of America continues to reinvent the real estate partnership model by adding cutting edge technology and innovation to our suite of business building opportunities for real estate companies.

The Bank of America Real Estate Center™ enables millions of our online banking customers to connect with our Preferred Real Estate BrokersTM. Bank of America has the largest online customer base of any financial services company worldwide and is willing to leverage it to help our Preferred Real Estate Brokers grow their bottom line.

They actually wrote that and promote it online. Does that sound even remotely like the public interest is at stake? Bank of America’s boldly stated willingness to leverage is not even suggested as being in your or my interest, but instead to help our Preferred Real Estate Brokers grow their bottom line. I don’t know about you, but I have had my fill of their preferred brokers bottom-feeding to grow their bottom line. I have another suggestion for their bottoms and that is to toss them out into the street and begin prosecution.

Too big to fail is phrasing directly from the swamp of Wall Street, a non sequitur rivaling

too fat for a heart attack
too good to be true
too essential to be let go and
too old to die

The public interest is best served we are told, by hooking an already addicted investment community to a seemingly endless intravenous drip of public money. Just because these trillions do not exist does not mean they are not ours to pay off. The treachery of Wall Street got us used to the idea that the music would never stop. The continuing treason of Congress whispers in our ear that they (now) have the wisdom and character to steer beyond their own self interest.

Time out for a moment as I lightly drop this fly on the stream of gullibility and float it off in your direction: Does it make sense to you that a Senator will spend $6-8 million (expanding toward $25-30 million) to get himself/herself elected to a position that pays a $169,300 annual salary? None but the most credulous would swallow that. Bribes to Harry Reid in the past five years totaled over $12 million. Chuck Schumer, that paradigm of financial blowhardiness, sucked up more than $13 mil during the same period.

So, who’s to say no? Certainly not those with a line in the water. Apparently not the paid-off legislators, Mark Twain’ famous ‘only native American criminal class.’ Twain and a pair of Roosevelt presidents fished in these same murky and senselessly unregulated waters.

Yet here we are again

WHO WAS MADE WELL AND WHO WAS LEFT TO SWING?

2009-03-16T19:10:54+01:00

Who got de dough? Seventy-five thousand million dollars of your and my personal contribution went to "trading partners of AIG Financial Products, the small subsidiary whose exotic derivatives brought AIG to the edge of collapse."

But AIG's total exposure is 30 times that much--nearly a $trillion and a half. Which insiders, do you suppose, were best able to belly up to the bar? Read on . . .

AIG Discloses $75 Billion in Bailout Payments
Insurer Reveals List of Taxpayer Funds Doled Out to Settle Debts With Companies, Municipalities

By Brady Dennis
Washington Post Staff Writer
Monday, March 16, 2009; A01

In the six months since the government's bailout of insurance giant American International Group, a rescue that has become increasingly costly and contentious, one question has loomed above all others: Where did the money go?

The answer became a little clearer yesterday when AIG unexpectedly released the names of dozens of trading partners it has paid using billions in taxpayer dollars. The disclosure, which the company said was made after consulting the Federal Reserve, revealed that AIG paid more than $75 billion in the final months of 2008 to numerous domestic and foreign banks, as well as to various U.S. municipalities.

The funds were paid from the government's initial $85 billion emergency loan in September and included major firms such as Goldman Sachs, Societe Generale, Deutsche Bank, Merrill Lynch, Morgan Stanley, Bank of America and Barclays.

The payments were made between Sept. 16 -- the date that government assistance began -- and Dec. 31.

--read entire article--

__________________________________________________________

AIG shines a whole new light on who will serve and who will eat in this newly manufactured financial society. Unsurprisingly, Henry Paulson's old firm, Goldman Sachs sat at the head of the table, wiping its chin with other people's money. Bank of America got a plateful and (through their acquisition of Merrill Lynch) went back for a second helping.

105 days spent shucking financial oysters and the guys behind the bar must be dead tired. That's nearly a half-million dollars a minute, 24 hours a day, seven days a week. Even God got a day off, but not these shuckers.

"There are a lot of terrible things that have happened in the last 18 months, but what's happened at AIG is the most outrageous," Lawrence H. Summers, chairman of the White House National Economic Council, said yesterday during an appearance on ABC's "This Week." "What that company did, the way it was not regulated, the way no one was watching, what's proved necessary, it is outrageous."

Summers has been quoted elsewhere as saying we are a country of laws, which indeed we pride ourselves as being. But that's somewhat subjective and there are times when we as a nation rise above the law. Rising above our petty differences is a good thing. Rising above the law is not.

A staple of that law we so revere and to which we pay homage, depends upon those in the game recusing themselves from cases in which they have an interest. An interest might include being a friend of the defendant, making a buck from one or both of the litigants, having done business with either the prosecution or defense--you know the kind of thing, from jury duty or watching Boston Legal.

Yeah, Larry. The way no one is still watching, yourself included, is setting itself up as next year's outrage.

Another dozen oysters? You want hot sauce with that?

FINALLY--AS ALL ELSE FAILS--THE EXTORTION OF AMERICA

2009-03-06T12:21:08+01:00

U.S. to Invite The Wealthy To Invest in The Bailout

By David Cho
Washington Post Staff Writer
Friday, March 6, 2009; A01

The government is seeking to resuscitate the nation's crippled financial system by forging an alliance with the very outfits that most benefited from the bonanza preceding the collapse of the credit markets: hedge funds and private-equity firms.

The initiative to revive the consumer lending business, outlined by officials this week, offers these wealthy investors a new chance to make sizable profits -- but, thanks to the government, without the risk of massive losses.

The idea is to entice them to put their huge cash piles to work to stimulate the financial system. They would be invited to buy up recently issued, highly rated securities. These securities finance consumer lending, such as credit cards and student and auto loans.

The program, which could involve the government lending nearly $1 trillion to these investors, exceeds the size of every other federal effort to address the crisis so far.

--read entire article--

___________________________________________________

A trusting nation watched as this new president surrounded himself with old guard and privileged insiders. We knew there was an agenda to be served, but we trusted him to select that agenda with care and reverence to the principles he so eloquently espoused in the run-up to election. No one expected the extortion of Barack Obama.

Extortion (noun) The felonious act of extorting money (as by threats of violence)

Winston Churchill said that "America can always be depended upon to do the right thing--after exhausting all other efforts." We are, by allowing the rich who sold us out to profit again and profit from the resuscitation of their own criminal efforts, at but a mid-point of all other efforts. The shame of this bright and shiny new administration is its absolute and complete lack of guts (which would have now, to include a lack of integrity).

It pains me beyond words to admit that. As a nation, we are better than that. We are not cowards, we are mostly not idiots.

The solution to our national extraction from this current financial death-spiral is--and always has been--the establishment of a parallel and unfettered system of Federal Banks, financed by the several trillion dollars we are currently throwing down the rat-hole of failure and avarice. Such a banking system would attract capital and loan to the credit-worthy businesses and individuals who need money for purposes other than the perpetuation of consumer-spending.

Consumer-spending (among other things) got us here. We need not restart that engine. We seriously need once again to become a productive nation of industrial, agricultural and innovative activity. In a national priority aimed at our salvation, we must have the courage and integrity to build upon what is sound and let fall that which has brought us to our knees.

It's painful. It's necessary. It's a national agenda worth following; one for which we put an elegant majority of electoral trust and purpose into the hands of a new man and a new administration.

The worst possible failure of that trust and purpose is to succumb to the extortion of this vicious and unprincipled investment cabal of co-conspirators who so nearly destroyed America.

IF THE 'SHADOW BANKING' WORLD SOUNDS SHADOWY--AND SCARY--READ ON

2009-03-04T10:37:24+01:00

Financial Rescue Turns to Toxic Assets

New Funds to Vie for the Securities, Setting A Market Price So Banks Could Sell Them

By David Cho and Neil Irwin
Washington Post Staff Writers
Wednesday, March 4, 2009; D01

The Obama administration is aiming to solve one of the toughest riddles at the heart of the financial crisis -- how to value the toxic assets weighing down the books of banks -- by setting up several funds to vie for these securities, sources familiar with the plans said yesterday. By competing to buy assets, the funds could set a market price that would finally allow banks to sell them off.

. . . Federal officials in the Bush and Obama administrations have struggled for months to find a way to price these distressed assets, which are backed by troubled mortgages and other loans, that is high enough to help banks but low enough to protect the government from massive losses. Establishing several funds, run by private managers, would take that vexing problem out of the government's hands, allowing market forces to determine what these assets are worth.

A mere paragraph apart, this article tells us our government is planning to 'set' market prices and then 'allow market forces to determine what these assets are worth.' (Econ 101: Market price--the price at which buyers and sellers trade the item in an open marketplace) Anything in the above article that resembles an open marketplace is purely by sleight-of-hand.

. . . The government would give these private investors loans to help buy the securities and offer to cover some losses.

So your and my government is going to loan your and my money to private investors, helping to cover their losses, while you and I lose our homes and can't get a loan to keep our lawn-care business afloat.

What a brilliant idea.

. . . Both of these initiatives look to tap private investment funds, bond traders and some hedge funds, which are key players in what is often called the "shadow banking system" -- the financial markets beyond traditional commercial banks that provided about 70 percent of credit to borrowers before the crisis.

Let me get this straight. These shadow bankers, unregulated all, are the guys who toxified the financial market with their 70%.

. . . Government officials said lending could not return to normal without helping the shadow bankers. . . The government's terms give private firms the potential for making tremendous profits, while limiting the losses private investors could face.

Now our elected government of change is prepared to give these same dodo investment dudes the potential for making tremendous profits to de-toxify what they toxified.

"I think if the government is prepared to partner with the private sector as well as put up leverage to facilitate certain kinds of investment it could be quite interesting to a private-sector investors," Schwartzman said. He added it is very difficult today for most private investors to get such favorable opportunities.

Well, I'll just bet that would be interesting and that last line understates the situation by about 300 million to one. It is increasingly difficult today for most private citizens to survive, keep their kids in school, stay in their home, have some hope of retirement and not find themselves on the street with no job and no health insurance.

Maybe the government could put up some leverage for that.

--read entire sorry mess of an article--

______________________________________________________

That screwing sound you just heard was the public being filleted, sauteed and served up for dinner to the same people who wrecked a worldwide financial system.

Bon apetit.

FIAT (FIX IT AGAIN, TONY) AND CHRYSLER IN A MARRIAGE OF CONVENIENCE

2009-02-07T19:13:48+01:00

Chrysler CEO Bob Nardelli and I share a birthday, but there the similarity ends. We were both born under the astrological sign of Taurus and the irony is not lost that this distinction may put us closer to Ford than either Chrysler or Opinion. Those of us born under this sign are said to be dedicated, determined and disciplined, reliable, patient and tenacious. Somewhere in there is stubborn, but not to worry, that’s a trademark of the auto industry in general.

Nardelli is a tough guy, but he’s been a top gun (GE) or CEO (Home Depot) at ever weaker companies over his career, always landing on his feet after being let go with one of those cash-rich parachutes. Light bulbs, the two by fours and now cars—is there an end to all this somewhere and is it a happy ending?

Enter potential merger partner Sergio Marchionne, FIAT Group CEO and brand new 35% suitor of Chrysler. Daimler Benz couldn’t make a similar marriage work, but then they had an already large U.S. presence and not much upon which to build cross-markets. Embarrassingly, Daimler paid some $38 billion to buy Chrysler in 1998 and recently had to pay a dowry of $650 million to get a private investor group (Cerberus) to take it off their hands.

Somewhere there is a meeting in the great beyond, where Walter Chrysler and Henry Ford are both getting drunk.

For his part, astrologically, Sergio is a Gemini—adaptable and versatile, communicative and witty—how Italian of him. The dark side of his sign is nervous and tense, superficial and inconsistent, cunning and inquisitive. Can this marriage be saved? I admit to a long and tireless campaign against the stubbornness and superficiality of Detroit as the American automobile industry sank beneath the waves of one failed non-strategy after another. Detroit held fast to muscle-cars long after the muscle had left the industry.

They brought disaster upon themselves the old-fashioned way—they earned it.

All that off my chest, Chrysler has been an engineering giant in the industry and now builds a pretty damn fine (if somewhat upscale) car, supposing they can survive to see the market come back. FIAT, for its side of the bargain, has a 20% market share in Europe and none in America, which is still the world’s largest single buyer of cars. Chrysler hasn't much in the way of small, fuel-efficient cars and could use the FIAT line to bolster their dealer network. Hmmmm . . . might work.

The Washington Post reports,

The alliance of the two companies provides no cash to Chrysler, but the company's chief executive, Robert L. Nardelli, told stakeholders in a letter that he hoped the deal would bolster the automaker's case for an additional $3 billion of federal loans by strengthening its offerings. The nonbinding agreement is subject to approval by the Treasury, and Chrysler said it hoped it would be complete by April.

"You're taking two big automakers who have gaps in both their products and geographic reach, and you're filling those gaps," said David Elshoff, a Chrysler spokesman. "They fit like pieces in a puzzle."

That was perhaps an unfortunate metaphor. Being puzzled is not something you want to admit when you’re courting. Someone at the Treasury Department might just reasonably begin to ask if there are any other significant pieces missing; like perhaps unsustainable commitments to health and welfare obligations. The Italians are not likely to contribute much to that synergy.

Mercedes out almost $30 billion and now Chrysler, divorced after that short marriage, is trying to stagger to the altar with FIAT and Alfa Romeo.

“Romeo, Romeo, wherefore art thou, Romeo?”

FIAT, itself formerly and briefly married to GM, was paid some $2 billion to annul that matrimonial disaster. Automobile companies, like Elizabeth Taylor, seem somehow unfit for marriage, no matter the doggedness of their intentions.

Nardelli and Marchionne—the names sound like a couple of expensive desserts at an Italian restaurant. Yet Marchionne was the author of a remarkable turnaround at FIAT—known alternatively as Fabbrica Italiana Automobili Torino and Fix It Again Tony, the latter with a usually benign chuckle. The man booted FIAT into a 20% market share in Europe, but it’s depressing to think that the American taxpayer is supposed to come up with a $3 billion dowry to get Chrysler to the church on time.

Supposing FIAT actually has hopes for successful entry into an already crowded and declining (read that plummeting) American auto market, they could do worse than avail themselves of Chrysler’s 3,372 authorized dealers across the land. Currently faced with the very expensive and very demoralizing shutdown of huge numbers of dealers, Chrysler might find blood enough in the FIAT econo-box line to keep the patient alive until help arrives. It better arrive quick.

(WaPo again) . . . By mid-February, Chrysler must submit a restructuring plan to achieve long-term viability, international competitiveness and energy efficiency. If it doesn't show progress on that plan, by May 1 the government can call back the $4 billion loan, effectively pushing the company into bankruptcy.

That’s a week from now.

. . . A critical element to the deal is the acceptance by dealers, who would likely be asked to sell Fiats.

"This is phenomenal," said Hayden Elder, co-chair of Chrysler's national dealer council and the owner of Elder Chrysler Dodge Jeep in Athens, Tex. "We've got a partner now."

It sounds like, given the alternative, dealer acceptance is not going to be a problem. Which would be great news for a stressed industry, were it not for the fact that automobile sales (worldwide) are at the very tip of the economic spear—and that shaft is in an almost vertical downward free-fall. Which might bring a whole new meaning to the term shafted.