War as City-State: We Force-feed it, We Pay

This great post from Tomdispatch offers some mind-boggling numbers for materiel involved in the War in Iraq whose "drawdown" is described thusly:

the American drawdown will be the "equivalent, in personnel terms alone, of relocating the entire population of Buffalo, New York."

Now there's a thought. It's as if the whole war were a city-state in itself, complete with food, shelter, weapons, infrastructure - and of course, a nice big population.

Whether it’s 3.1 million items of equipment, or 3 million, 2.8 million, or 1.5 million, whether 341 “facilities” (not including perhaps ten mega-bases which will still be operating in 2011 with tens of thousands of American soldiers, civilians, and private contractors working and living on them), or more than 350 forward operating facilities, or 290 bases are to be shut down, the numbers from Iraq are simply out of this world.

The conduct of the wars in Iraq and Afghanistan is unprecented, and yet Americans are mostly oblivious, unaware that we are creating little islands in about the least compatible environments imaginable. What does this mean to the Iraqis and Afghans, to see not only war, but an entire set of city-states forcibly planted in their own beautiful and unrelated culture, shocking them without their participation in it.

In this way, our troops carry not just packs on their backs, but a total, transplantable society right down to the PXs, massage parlors, food courts, and miniature golf courses. At Kandahar Air Base in Afghanistan, there was until recently a “boardwalk” that typically included a “Burger King, a Subway sandwich shop, three cafes, several general stores, a Cold Mountain Creamery, [and an] Oakley sunglasses outlet.”

And of course, there's the staggering cost. The cost in lives, American, but far more Iraqis and Afghanis, is something we'll have to live down. And our children will have to live down. And our future generations, if we have any, will have to live down.

This is the second bubble, courtesy of Republican war strategy. "Down with Government, Up with War". As if war was waged by individuals, not a government. As if war led to freedom. As if war liberated people, instead of enslaving them to its consequences. The aftermath, the bloody, destructive aftermath of war is always littered with lies, claims of victory, claims of power, claims of valor.

But as the second bubble, the bubble of war, is already bursting, its inevitable failure becoming clearer even to a propaganda-numbed, not-very-free-minded (Texas schoolbooks, anyone?) American public, as this becomes then another collapse like the economic collapse, the collapse of the war machine will likewise have worldwide implications. That's because it's ultimately another economic collapse.

It's one thing to wage war. Bad enough. But to conduct war by imposing little city-states within sovereign nations is like forcing a rejected transplant without medication. It's unsustainable. Let's hope this drawdown is for real, and that we seriously draw down on ALL fronts, without leaving our unsustainable "islands" behind.

And by the way, thanks to a load of idiots on both the right and left, there's not much chance of that. Look for Collapse II. Doubt it'll be pretty.

GOP: The Party of Fear, Loathing, and Mongering

For a few magnificent moments, America seemed awash in good vibes, sunlit vistas, brotherly-sisterly love, dreams being fulfilledk ancient rivalries turning to handshakes, other cheeks being turned, kisses and hugs being given, earth looking forward to peace and change, and peace on a well-balanced albeit agonizingly slow fall towards earth. It was the Obama Moment. The greatest ushering-in of any Presidential Era in living, maybe even historical, memory. But now...

They're back. The Republicans, that is. And with them, fear, fear-mongering, loathing, loathing-mongering, orneriness, orneriness-mongering, backtracking and backtrack-mongering. They stand as one, united, to be something, anything, as long as it represents the Opposers, The Id, Defiance, Rebellion, The Contrarian, and in this case, just saying "NO!" to bailing out an economy they and their cohorts, Bushies all, trashed. They trashed the economy with their voodoo Reaganomics on megalying speed, and now that it's tanking, they say, to the last man and woman, "No Safety Net!"

Why? Because the Republicans have adopted the oxymoronic slogan "Country First, Government Last." Reagan succeeded to instill the Republican Collective Consciousness with this idea that Government=Evil, aka Big Government=Big Evil. Which makes one wonder why Republicans would ever elect one of their own to such a cabal as "Government" in order to actually run it? If it is evil, what does that say about Reagan? He was a part of what? A fishing expedition?

Ah, no, good Republicans enter government in order to supposedly "minimize" it or get rid of it. At least that's the line. The reality is the diametrical opposite. Under Republican leadership, the government has grown so big neither we, nor the combined wealth of the planet, can afford it. Of course, we're not talking about social programs. We're talking about that giant sitting Holy Bear called the Pentagon. And don't forget Homeland Security. IN other words, government has been slowly replaced by military and police functions, which are invading every aspect of life - under Republican leadership, of course. So bailing out an economy that tanked over lies and wars and more lies and more wars and more Ponzi schemes and more lies to coverup the Ponzi schemes that benefit the rich and trash the non-rich --- correcting their mistakes and rehabilitating America from the robbery, waste and con job pulled by Republican leadership and Republican government, that's not on their job description.

In short, Republicans don't do repairs. They only do destruction. So there they are, saying "no" to Obama's gigantic stimulus plan at a time when everyone who knows anything says we must take action fast, and quibbling about minutiae while ignoring their own man-eating Pentagon Bear that we can no longer afford to feed but he's devouring everything in sight anyway. There they are, representing their constituents by guaranteeing they won't find jobs any time soon in the civilian sector. There they are, counting on the Pentagon to do some hiring. Problem is, the Pentagon requires one thing they don't like to talk about - GARGANTUAN, HUGE GOVERNMENT SPENDING. And another thing: WAR. Without war, what's the point? So they want wars to get government spending to keep jobs to do what? What economy?

It seems the whole purpose of the Republican Party is to make government collapse so the people can have what they really want, a choice between anarchy (Individual Choice!) and a police state (Keep America Safe!). They do this by undercutting and deriding the whole purpose of government and the Constitution they are supposedly sworn on Bibles to uphold.

Their modus operandi is twofold:

1. Convince the public that they must be always afraid and "vigilant".

2. Show real or imagined enemies that we've got balls by acting as kickass mean and nasty as possible. At least by refusing things. Especially things that sound good. Things that sound compassionate (bleeding heart! ick!) should be refused. Things that sound peaceful (surrender!) should be refused. Things that sound helpful (liberal wimps!) should be refused. Things that relate to education or health care (socialism!) should be refused.

The GOP is the party of refusal. Why should anyone expect anything else? Let's just hope there's a post-mortem on this. Maybe some real Conservatives will come out of the GOP's well-deserved demise and do something to actually conserve things - like fiscal conservatives trying to rein in the excesses of the rich, like environmental conservatives trying to rein in excesses of the polluters, or even pro-life conservatives trying to rein in excesses of the killing machines let loose by neocons. Now that's a conservatism we can work with. Together, for a long time, and a genuine future. But where is it? Where are the conservatives? Locked up in the lies and betrayals of the GOP.

Time to say to the GOP, RIP.

Taxpayers Alert: Meet the Madoff Pentagon, A Money-Burning Machine

Think of the Pentagon, and you think of security, right? Think again. The Pentagon may just be the U.S. taxpayers' Bernie Madoff. It's the biggest drag on the economy, and the reason is not because we need what it burns money on. The reason is not that the "world is a dangerous place" and we need "protection", and protection costs what it costs. We need what the Pentagon is paying our lifeblood and treasure on less than we need a huge Ponzi scheme to keep our economy from totally tanking. Chalmers Johnson at Tomdispatch really turned the world inside-out on this one.

Worried about pork-barrel spending? Maybe you should worry about the defense budget.

Given our economic crisis, the estimated trillion dollars we spend each year on the military and its weaponry is simply unsustainable. Even if present fiscal constraints no longer existed, we would still have misspent too much of our tax revenues on too few, overly expensive, overly complex weapons systems that leave us ill-prepared to defend the country in a real military emergency. We face a double crisis at the Pentagon: we can no longer afford the pretense of being the Earth's sole superpower, and we cannot afford to perpetuate a system in which the military-industrial complex makes its fortune off inferior, poorly designed weapons.

A trillion a year? On what? Oh, those wonderful, wonderful wars and their flying machines.

It is hard to imagine any sector of the American economy more driven by ideology, delusion, and propaganda than the armed services. Many people believe that our military is the largest, best equipped, and most invincible among the world's armed forces. None of these things is true, but our military is, without a doubt, the most expensive to maintain. Each year, we Americans account for nearly half of all global military spending, an amount larger than the next 45 nations together spend on their militaries annually.

Equally striking, the military seems increasingly ill-adapted to the types of wars that Pentagon strategists agree the United States is most likely to fight in the future, and is, in fact, already fighting in Afghanistan -- insurgencies led by non-state actors. While the Department of Defense produces weaponry meant for such wars, it is also squandering staggering levels of defense appropriations on aircraft, ships, and futuristic weapons systems that fascinate generals and admirals, and are beloved by military contractors mainly because their complexity runs up their cost to astronomical levels.

That most of these will actually prove irrelevant to the world in which we live matters not a whit to their makers or purchasers. Thought of another way, the stressed out American taxpayer, already supporting two disastrous wars and the weapons systems that go with them, is also paying good money for weapons that are meant for fantasy wars, for wars that will only be fought in the battlescapes and war-gaming imaginations of Defense Department "planners."

So we've got an economy about to go over a cliff, and yet we spend billions on weapons systems that we will never use, to satisfy the fantasies of admirals and generals and other military-related beneficiaries? Well...yes.

So when we talk about "stimulating" the economy, maybe we should talk about cutting spending and cutting pork. Not birth control-type nickel-&-dime pork. Big, lousy, wasteful, useless, dead-weight, sink-the-national-treasury Pentagon pork.

It has nothing to do with security, but everything to do with procurement and the good ol' boy system. Oh, and PR. Lots of lies and PR. Is that really "conservative"? Sounds very very liberal to me - as in "use liberally".

What do people struggling to make ends meet need with a 6.2-billion dollar aircraft carrier designed to fight the Cold War? It was probably commissioned, like the one named in 2009 for Bush I, to pat some old political hack/warrior on the back with his outdated dream. And we put people in prison for not paying a few thousand in self-employment taxes (which are required for anyone with over $400 in income - like he can afford to pay taxes on $400! - talk about preference for the big corporation!).

It's time to think twice about those "guaranteed" Pentagon budgets, to think twice when you think that paying for anything labeled "military" means you'll be more secure. The opposite is true. By paying for way overpriced, outdated equipment, we are sinking the whole country ... and none of those fancy flying machines, etc., will be able to lift one square mile of us out of that sinkhole.

Taxpayers, unite! Screw the Pentagon, and tell your Congresspeople they'll have to think before they spend.

Naomi Klein: Economic Crisis Part of Shock Doctrine

Although this was a long time comin', Klein's point is that the sudden, extreme, shocking, and Totally Now Emergency way the bailout went down is part of the Shock Doctrine she speaks about in her book.

When Is Money Not Money? When It Is a Ponzi Scheme

So you think you understand finance? Do you think anybody understands finance? Does the Secretary of the Treasury understand finance? Well...according to this website:

Our money system is not what we have been led to believe. The creation of money has been "privatized," or taken over by a private money cartel. Except for coins, all of our money is now created as loans advanced by private banking institutions — including the private Federal Reserve. Banks create the principal but not the interest to service their loans. To find the interest, new loans must continually be taken out, expanding the money supply, inflating prices — and robbing you of the value of your money.

Could this be what's behind the whole economic collapse we're now trying to dig ourselves out of by selling bad debts to China? And would that then rob the Chinese of the value of their money?

Not only is virtually the entire money supply created privately by banks, but a mere handful of very big banks is responsible for a massive investment scheme known as "derivatives," which now tallies in at hundreds of trillions of dollars. The banking system has been contrived so that these big banks always get bailed out by the taxpayers from their risky ventures, but the scheme has reached its mathematical limits. There isn't enough money in the entire global economy to bail out the banks from a massive derivatives default today. When the investors realize that the "insurance" against catastrophe that they have purchased in the form of derivatives is worthless, they are liable to jump ship and bring the whole shaky edifice crashing down.

But Fareed Zakaria says China CAN bail out this system. If not, what exactly does "the whole shaky edifice crashing down" look like?

This article suggests that what has happened is nothing less than "The Collapse of a 300 Year Ponzi Scheme".

All the king’s men cannot put the private banking system together again, for the simple reason that it is a Ponzi scheme that has reached its mathematical limits. A Ponzi scheme is a form of pyramid scheme in which new investors must continually be sucked in at the bottom to support the investors at the top. In this case, new borrowers must continually be sucked in to support the creditors at the top. The Wall Street Ponzi scheme is built on "fractional reserve" lending, which allows banks to create "credit" (or "debt") with accounting entries. Banks are now allowed to lend from 10 to 30 times their "reserves," essentially counterfeiting the money they lend. Over 97 percent of the U.S. money supply (M3) has been created by banks in this way. The problem is that banks create only the principal and not the interest necessary to pay back their loans. Since bank lending is essentially the only source of new money in the system, someone somewhere must continually be taking out new loans just to create enough "money" (or "credit") to service the old loans composing the money supply. This spiraling interest problem and the need to find new debtors has gone on for over 300 years -- ever since the founding of the Bank of England in 1694 – until the whole world has now become mired in debt to the bankers’ private money monopoly.

And what happens when this long-standing house of cards falls? And what will finally call their bluff? Apparently, their bluff will be called by none other than the earth itself.

As British financial analyst Chris Cook observes:

"Exponential economic growth required by the mathematics of compound interest on a money supply based on money as debt must always run up eventually against the finite nature of Earth’s resources."

So what is the solution - if any?

The parasite has finally run out of its food source. But the crisis is not in the economy itself, which is fundamentally sound – or would be with a proper credit system to oil the wheels of production. The crisis is in the banking system, which can no longer cover up the shell game it has played for three centuries with other people’s money. Fortunately, we don’t need the credit of private banks. A sovereign government can create its own.

And how can we "grow our own" banking system without becoming essentially government-run, which sounds like - thunderstorm sound effects with Halloween music, please - "socialist"?

Ask Ron Paul, maybe? Or is the Government By the People not such a horrible thing after all? At least, not as horrible as a Ponzi-Scheming Banking Cartel Not By the People.

Toxic & Nonexistent Mortgages Crawl Out from Dead Fantasy Wall Street Bull

According to this report,

So we've been hearing it's the fault of greedy home buyers who ran out and purchased homes they couldn't afford. Or, conversely, maybe it was the fault of predatory lenders who made bad loans. Round and round the blame seemed to go. So I was completely baffled by Henry Paulson's announcement yesterday that it wouldn't help to buy up the toxic mortgages as promised in the bailout.
At least, it baffled me until I read this article. And that's when it occurred to me--he can't buy up the toxic mortgages to stave off the meltdown because a vast majority of these loans don't exist.

So let's get this straight...first there are toxic mortgages that were used as a kind of legal scam to get folks to buy houses they couldn't afford, and when the "grace" period ran out, SURPRISE! ...the borrowers defaulted on the loan and then the homes' values plummeted, leaving creditors with worthless paper.

Then there's the NONEXISTENT mortgages where this scam-generated paper wealth wasn't enough to satisfy the greed of lenders, so they just basically MADE UP some loans, something like "matching funds" except instead of funds, they were just more papers, with in this case, not only the collateral, but the buyer removed.

But this has been a long time comin'. It's the greed mixed with total lack of accountability in the financial sector that should have shocked us along the way, but instead was greeted with open arms.

I had been waiting for the end of Wall Street. The outrageous bonuses, the slender returns to shareholders, the never-ending scandals, the bursting of the internet bubble, the crisis following the collapse of Long-Term Capital Management: Over and over again, the big Wall Street investment banks would be, in some narrow way, discredited. Yet they just kept on growing, along with the sums of money that they doled out to 26-year-olds to perform tasks of no obvious social utility. The rebellion by American youth against the money culture never happened. Why bother to overturn your parents’ world when you can buy it, slice it up into tranches, and sell off the pieces?

And the results?

If you want to know what these Wall Street firms are really worth, take a hard look at the crappy assets they bought with huge sums of ­borrowed money, and imagine what they’d fetch in a fire sale. The vast assemblages of highly paid people inside the firms were essentially worth nothing.

People like Meredith Whitney, an analyst of financial firms for Oppenheimer Securities who, on October 31, 2007, was one of the first to sound the alarms of Wall Street's collapse, and Steve Eisman, a colleague who also worked as an analyst at Oppenheimer, warned the wheelers-n-dealers of Wall Street that this was a house of cards. But no one wanted to listen.

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

In other words, these were "cloned", but not in the "real" sense of making another CDS out of "reality", but rather in the "fantasy" sense - code named "synthetic" - to make another risky, weirdo CDS out of ... nothing! Not even "thin air"! It's money-for-fantasy, the Ultimate Money Swap!

In short, the economy was bloated chock-full of fake "loan packages" by a world of unscrupulous, convoluted, almost unfathomable trade.

In 2000, there had been $130 billion in subprime mortgage lending, with $55 billion of that repackaged as mortgage bonds. But in 2005, there was $625 billion in subprime mortgage loans, $507 billion of which found its way into mortgage bonds. Eisman couldn’t understand who was making all these loans or why.

When he found out, it was a revelation of the huge scam with many names - like "shorts" for example - not familiar to "main street" but which would ultimately come down crashing over their heads.

The juiciest shorts—the bonds ultimately backed by the mortgages most likely to default—had several characteristics. They’d be in what Wall Street people were now calling the sand states: Arizona, California, Florida, Nevada. The loans would have been made by one of the more dubious mortgage lenders; Long Beach Financial, wholly owned by Washington Mutual, was a great example. Long Beach Financial was moving money out the door as fast as it could, few questions asked, in loans built to self-destruct. It specialized in asking home­owners with bad credit and no proof of income to put no money down and defer interest payments for as long as possible. In Bakersfield, California, a Mexican strawberry picker with an income of $14,000 and no English was lent every penny he needed to buy a house for $720,000.

But it gets worse, as the number of such cases skyrockets.

Eisman knew subprime lenders could be scumbags. What he underestimated was the total unabashed complicity of the upper class of American capitalism. For instance, he knew that the big Wall Street investment banks took huge piles of loans that in and of themselves might be rated BBB, threw them into a trust, carved the trust into tranches, and wound up with 60 percent of the new total being rated AAA.

Which led to a huge house of cards.

“You have to understand this,” he says. “This was the engine of doom.” Then he draws a picture of several towers of debt. The first tower is made of the original subprime loans that had been piled together. At the top of this tower is the AAA tranche, just below it the AA tranche, and so on down to the riskiest, the BBB tranche—the bonds Eisman had shorted. But Wall Street had used these BBB tranches—the worst of the worst—to build yet another tower of bonds: a “particularly egregious” C.D.O. The reason they did this was that the rating agencies, presented with the pile of bonds backed by dubious loans, would pronounce most of them AAA. These bonds could then be sold to investors—pension funds, insurance companies—who were allowed to invest only in highly rated securities. “I cannot fucking believe this is allowed—I must have said that a thousand times in the past two years,” Eisman says.

And for those who wonder what's a "BBB tranche"...

as Eisman puts it, “the equivalent of three levels of dog shit lower than the original bonds.”

So if they're that bad, why do people invest in them? And what could be worse? Worse? What's worse are the toxic mortgages that don't even exist! That never existed in the first place. That, when asked "When did you live?" respond "NEVER!" The demon packages, demon loans. That's what brought the house of cards down...

There weren’t enough Americans with shitty credit taking out loans to satisfy investors’ appetite for the end product. The firms used Eisman’s bet to synthesize more of them. Here, then, was the difference between fantasy finance and fantasy football: When a fantasy player drafts Peyton Manning, he doesn’t create a second Peyton Manning to inflate the league’s stats. But when Eisman bought a credit-default swap, he enabled Deutsche Bank to create another bond identical in every respect but one to the original. The only difference was that there was no actual homebuyer or borrower. The only assets backing the bonds were the side bets Eisman and others made with firms like Goldman Sachs. Eisman, in effect, was paying to Goldman the interest on a subprime mortgage. In fact, there was no mortgage at all. “They weren’t satisfied getting lots of unqualified borrowers to borrow money to buy a house they couldn’t afford,” Eisman says. “They were creating them out of whole cloth. One hundred times over! That’s why the losses are so much greater than the loans. But that’s when I realized they needed us to keep the machine running. I was like, This is allowed?”

Who are "us"? Investors buying the toxic mortgages. The market was so delusional and drunk with greed that they actually made up fantasy/false mortgages to satiate it.

And here we are now, our economy on life-support. And we, the people, and the taxpayers, are footing the bill. How do you like that?

Where's Ben Bernanke's Missing 2 Trillion?

So the sky is falling, the economy collapsing, and what does the Bush Administration have to say? Or what do they actually know?? Is their answer like the immortal words of Cheney, when told that many Americans believed the Iraq War wasn't worth it:

So?

Kay in Maine reports that

Ben Bernanke has given out 2 trillion dollars in emergency loans, but doesn't know who got the money...

Or, according to this article at firedoglake,

Apparently Bernanke, that wonderful bipartisan soul who is so competent and wonderful that everyone in the village thinks Obama should leave him in charge is refusing to identify who got almost 2 trillion dollars of Fed cash. Bloomberg News is suing to find out. Personally I really, really, really want to know. What exactly is Bernanke hiding?

Is it that he doesn't know? Or doesn't want us to know? Or doesn't know if it would be a good or bad idea for us to know?

After all, the whole idea of these loans is pretty shaky, but necessary.

This is money that was loaned in exchange for "collateral", by which we mean "trash no one else but the Fed would buy for anything but cents on the dollar".

"Collateral" otherwise known as those infamous Credit Default Swaps, perhaps? Those toxic assets that have poisoned every business they touch?

More to the point, that 2 trillion is taxpayer money, and taxpayers have a right to know what sweetheart deals Bernanke's been giving out, and who's been getting what. This whole "this information is too scary for citizens to know" schtick is so Bush regime. I thought we were moving into a new era of openness? Perhaps Barney should get with the program?

Now that President-elect Obama is hitting the ground running - including plans to close Gitmo and more bailouts for the economy, not to mention undoing some of those Bush signing statements - we should let him know it's time to replace Bernanke with someone more capable, more up-front, and less Bushco-oriented. Of course, with Alan
Greenspan as a precedent, Bernanke could be hoping for a longer-term stay at the Fed.

Does this mean the bailout is planned as a sort of "black budget" like certain sectors of the military budget? Or is it more like the "budget" of Iraq? Let's hope Bloomberg News gets some traction on their FOIA lawsuit so bring Bernanke & Treasury Secretary Henry Paulson to make good on their "transparency" promise back in September, so we don't have to look at our taxpayer-dollar expenditures on blacked-out pages.

Dems, Do Like Obama: Ignore Palin Entirely

The moment Sarah Palin walked into the presidential race, everything went haywire. That's precisely her purpose: to confuse, distract, rile up, titillate, and exasperate the American public to the point that they might just, in one mindless moment at the polls, vote for John McCain/Sarah Palin. All we need, right? in a political campaign is more pitbulls - described loosely as animals bred to fight to the death, mindlessly, on "guts" alone. Killer instinct. They may be nice on one side, but don't press them...they don't need minds, they need revenge. Sarah Palin's not all that, but she tries real, real hard, which is in some ways worse.

John McCain's actual message is a repeat of George Bush's message. Insofar as he is a "Maverick", it's really only an image thing, not a substance thing. At best, it means he'll gamble more often. As in "...Maverick is his name...luck is his companion, gambling is his game..." And if that's "best" in times like this with the economy melting down like a terminated cyborg, what's worst?

So with a message - "tax breaks for the rich, tough breaks for the rest" - that doesn't resonate, and with a delivery style that resembles that of a depressed person, he needs someone so manic, so mindless, that all messages, all issues get sucked into some crazy vortex.

That's Sarah Palin.

Unless we ignore her. Completely. Not a single damn word. No comment. Let her rant, rave, be cutesy, folksy, show off her incontrovertible ignorance and incompetence for the job she's trying to be a shaky heartbeat from. She makes that point.

I believe there are enough intelligent people who understand she's not going to help the economy, the war in Iraq, the bloated Pentagon, the healthcare system, or even, for that matter, Joe the Plumber. She's only going to help poll numbers for John McCain if enough white guys like her legs. And that has nothing to do with helping women, most of whom are for Obama on issues. I agree with John Cusack who said,

McCain won't just be more of the same -- it will be worse than Bush-Cheney -- using the disasters of the past eight years and the actual crises we face to double down on the American Enterprise/Heritage Foundation vision of government that desires, as Grover Norquist said, to shrink government until "we can drown it in a bathtub."

I would recommend a return visit to the groundbreaking Shock Doctrine by Naomi Klein.

McCain, who said he knows nothing about economics, will surely hand over the reins to the Friedmanites and neoconservatives who have sent the country on a path to ruin. Anyone looking at his team could tell you that. Palin and the interests she represents are even further to the right.

Now, no one in their right mind -- including reasonable independents and Republicans -- wants to double down on neocon ideology, but here comes the "maverick" and his economic advisers to use the crises we face to implement more "change" and "reform" to the system by privatizing everything in sight. Is this what the American people want? When they are aware of it, the answer is always no. It's the same bullshit re-branded.

Great point, Kusack! McCain is a neocon in fake "Maverick" clothing, and needs to be exposed. Palin is being used as a sexy "libertarian" draw, but in reality doesn't have the slightest idea what's going on, let alone what she would do about it.

Ruin the government you are purporting to run and turn it over to privatization frenzy, creating a shadow government of private corporate rule. That's the whole idea.

So let's brand bust this maverick gibberish but understand the coded language that belies their true mission... we should take them at the true meaning of their words.

Not just more of the same -- worse than the same. Times of crisis are great opportunities to implement the radical agendas we usually reject.

Even conservatives, true conservatives, don't wish death to America. By "less government", do we mean the Department of Homeland Security or surveillance of regular Americans? Or being "served" by Blackwater? Let's gut taxes so we don't "spend" in fixing crumbling infrastructure or health care or education or even alternative energy? So where's the money for the Republicans' beloved war supposed to come from, if most of the budget is tanked in bailing out the robber barons you didn't want to "spend" a dime regulating or at least holding accountable for their actions? Is that the Republican "take" on, say, the morals of the ten commandments?

Obama is no extremist or even particularly "liberal", as painted falsely by the lying McCain/Palin team. But McCain and Palin ARE extremist, right-wing extremist, and America can't endure another year of this trash, let alone four. So let's all ignore the much-hyped story of Palintology and vote by conscience ... for the children who'll have to live with our decision.

Economic Indicator on Main Street: Gas, Electric Cut-Offs Soar

It's not Wall Street, stupid. It's main street. Check this out:

Shut-offs have been running 17 percent higher than last year among customers of New York state's major utilities, and 22 percent higher in economically hard-hit Michigan. They are up in all or part of dozens of other states, including Pennsylvania, Florida and California, according to an Associated Press check of regulators and energy companies.
Despite stepped-up efforts by state and federal governments, utilities and private groups to help people avoid shut-offs this winter, some worry the problem will only get worse in the coming months, particularly with the downturn on Wall Street.
Read more...

Greenspan-Gramm's $45 trillion Fantasy Scam Becomes Self-Aware

Devilstower's great dkos diary tells the history, and intentions, behind the Wall Street/Financial debacle that has Bushco wants YOU to BAIL OUT NOW for 700 Billion Dollars, putting America in 11.7 Trillion Dollars Debt.

It's best to read the article, but just to get a sense of what's at the heartless heart of it, meet Phil Gramm and "Maestro" Alan Greenspan's financial cyborg: the name's credit default swaps.

As if bent on terminating America and its prosperity and riches altogether, Republican anti-regulationists decided to make greed the ultimate moral determinator: Greed = The American Dream. It is "Our Dream" to "Get Rich, or Die Tryin'", or better yet, let someone else die while the elite don't die, and get rich with a minimum of work (aka, "tryin'"). And John McCain's economic idol, Phil Gramm, helped author this anarchist, regulation-free debacle.

It all started with GOP icon Reagan and his voodoo economics, where the rich bilking the rest of us was supposed to result in some sort of drip-drip-drip down to... the rest of us. They de-regulated - i.e., put out into the Wild West with no laws - the Savings and Loan industry, which more or less exploded with greed and collapsed.

Then, after that debacle, Gramm & friends - notably, Alan Greenspan, American Financial Idol - worked very hard to build a totally lawless world of ever-expanding Finance, where Monsters eat Dogs, and Dogs eat Pipsqueaks, and Pipsqueaks pay taxes. And Monsters eat each other in Carnival Cannibalia, where no monster is too big to become bigger and, of course, bigger means better, right?

And in the middle of this greed, law-bashing fest was good ol' John McCain, basking in Republican elitism: grab the money, say we're defending America and the Individual. While in fact they are doing the exact opposite.

Gramm-Leach-Bliley reversed those rules, allowing not only more bank mergers, but for banks to become directly involved in the stock market, bonds, and insurance. Remember the bit about how S&Ls failed because they didn't have the regulations that protected banks? After Gramm-Leach-Bliley, banks didn't have that protection either.

Gramm wasn't done. The next year he was back with the Commodity Futures Modernization Act, which was slipped into a "must pass" spending bill on the last day of the 106th Congress. This Act greatly expanded the scope of futures trading, created new vehicles for speculation, and sheltered several investments from regulation.

As with both Gramm-Leach-Bliley and Garn-St. Germain, large parts of this bill were written by industry lobbyists. This famously included the "Enron Loophole" that exempted energy trading from regulation and was written by (big suprise) Enron Lobbyists working with Gramm. Not coincidentally, Senator Gramm, the second largest recipient of campaign contributions from Enron, was also key to legislating the deregulation of California's energy commodity trading.

Thanks to this fortunate trifecta of Gramm-crafted legislation, Enron was able to create "EnronOnline" and trade electricity in California with absolutely no oversight or transparency. They quickly worked out how to game the system. Previously, there had been only one Stage 3 rolling blackout in the history of California. Within months, the system had been manipulated by traders to generate 38 such blackouts and wholesale electrical prices had gone up more than 3000%. Despite production capacity equal to four times the demand during winter, energy traders even engineered a blackout in mid-January.

The Enron debacle, the S & L collapse, and now the meltdown of virtually everything on Wall Street - right after Republicans have changed the system to put retirement money for "ordinary Americans" - i.e., non-elite Americans - in Wall Street, all of this was engineered by Republicans Gramm and his senatorial supporters, including John McCain.

Notice that it's always propaganda selling Americans the false and misleading line: the Government is BAD because it wants to REGULATE us free & individualistic all-American Americans and we want America First!

Is that drivel or insanity? Then why do people buy this crap? Did anybody notice that all the meltdowns and disasters occurred from LACK OF REGULATION. They want to OVERREGULATE and SURVEILL YOU, the American People, while they, in their Big Elitist Superrich Protected Corporations and Agencies, go free unregulated, not subject to laws or scrutiny. They peer into your emails and underwear, while they want to fly "under the radar" while screwing you and this whole country for their own personal profit, power and fantasy ideologies.

Of these, the worst are the Credit Default Swaps.

Among those instruments which the CFMA sheltered from regulatory scrutiny was something called the "credit default swap." A kind of insurance one bank could exchange with another, credit default swaps supposedly made it safe for banks to take on ever riskier forms of debt. The Act didn't invent these swaps, though they were relatively new. Instead, by placing them in a state where they were not only unregulated but almost perfectly opaque, credit default swaps were turned into the perfect vehicle to fuel a Wall Street revolution. No one had any idea what these things were actually worth, they were traded "over the counter" without being administered by any exchange, and even the SEC could monitor their existence only indirectly.

So how did the Credit Default Swaps become self-aware???

A secondary market for trading swaps exploded into existence, and swaps were traded with absolutely no consideration for the nature or quality of the underlying investment. Swaps changed hands a dozen or more times, growing in "value" as they went. Worse still, no one regulated who could buy a swap, so it was (and is) perfectly possible for a company to acquire swaps that theoretically cover billions of dollars in loans, even if that company doesn't have a red cent on hand to cover those swaps should the loans default.

How big did this market become? Here's business correspondent Bob Moon and host Kai Ryssdal on American Public Media's Marketplace from back in the spring.

BOB MOON: OK, I'm about to unload some numbers on you here, so I'll speak slowly so you can follow this.

The value of the entire U.S. Treasuries market: $4.5 trillion.

The value of the entire mortgage market: $7 trillion.

The size of the U.S. stock market: $22 trillion.

OK, you ready?

The size of the credit default swap market last year: $45 trillion.
KAI RYSSDAL: That's a lot of money, Bob.

As in three times the whole US gross domestic product, Bob. And the truth is that Moon probably underestimated. The unregulated and poorly reported credit default swaps may have actually passed $70 trillion last year, or about $5 trillion more than the GDP of the entire world.

Look at what, of all people, Ben Stein said:

The crisis occurred (to greatly oversimplify) because the financial system allowed entities to place bets on whether or not those mortgages would ever be paid. You didn't have to own a mortgage to make the bets. These bets, called Credit Default Swaps, are complex. But in a nutshell, they allow someone to profit immensely - staggeringly - if large numbers of subprime mortgages are not paid off and go into default.

The profit can be wildly out of proportion to the real amount of defaults, because speculators can push down the price of instruments tied to the subprime mortgages far beyond what the real rates of loss have been. As I said, the profits here can be beyond imagining. (In fact, they can be so large that one might well wonder if the whole subprime fiasco was not set up just to allow speculators to profit wildly on its collapse...)

These Credit Default Swaps have been written (as insurance is written) as private contracts. There is nil government regulation of them. Who writes these policies? Banks. Investment banks. Insurance companies. They now owe the buyers of these Credit Default Swaps on junk mortgage debt trillions of dollars. It is this liability that is the bottomless pit of liability for the financial institutions of America.

Did you see that???
This is a mainstream financial analyst, Ben Stein.
So what if the whole subprime fiasco was "set up just to allow speculators to profit wildly on its collapse"?

So the Swaps themselves became real. Somebody has to pay. They got the US government in a back room, and gave them an ultimatum. Pay up, boys, or we take over.
Wonder why the entire government is jittery, paying up $700 Billion and more?
The Credit Default Swaps have become self-aware.
God help us.

Best Wrapup of Financial Meltdown Goes to...

Best brief on the financial meltdown of last week by bonddad at dkos, puts it all out in an orderly, easily understood way,

Last week was historic. It is a week that financial and economic people will study for generations. It also marked the end of certain elements of the Republican Party's ideology. Below are statements the Republican party can no longer claim as part of their core ideology.

We are the party of small government
Actually, this week simply added to the the end of this claim. Under Bush II, discretionary spending has increased from $640 billion to $1.040 trillion dollars. Also remember that Bush had a Republican controlled congress for 6 of those years. However, Paulson will send a package to Congress which totals $800 billion. The Treasury will create a new agency to buy bad debt (which the WSJ's Marketbeat blog has called the Treasury Garbage Machine). In short, when the Republicans control all branches of government they spend like drunken sailors.

They are also not the party of fiscal responsibility,

when the going gets tough, the Republicans become socialists:

or the party of free markets or personal responsibility either.
Obama, are you listening?
Read the rest, it's well worth it.

GOP Legacy: Financial Meltdown, Not Trickle Down

Years ago I wandered into a Georgia grocery store run by two twin men in their 70's with a fondness for milk - and wisdom. Bush I was president then, and we got to talking politics. He told me that throughout his life, he noticed a clear repeated pattern: whenever the Republicans were in power, they ruined the economy and started wars. Any wars, even little wars (like Reagan's invasion of Grenada), but they had to start wars. He said that's basically what the Republicans were all about.

Now we have the Republican agenda taken to its logical extreme: war without end Amen (the GWOT with its "fronts" in Iraq, Afghanistan, Somalia, and elsewhere), and Total Economic Meltdown.

Not only have some of the biggest banks gone bad, oil prices become an issue, and the housing market gone bad, but the stock market made its worst decline in years, and most analysts are saying this is the worst thing to happen since the Great Depression.

Not just "internet rumors", no...everybody who knows. Take Bloomberg, for example:

In the biggest reshaping of the financial industry since the Great Depression, two of Wall Street's most storied firms, Merrill Lynch & Co. and Lehman Brothers Holdings Inc., headed toward extinction.

But to most people, what is a "reshaping of the financial industry"? What does it mean that

``The tectonic plates beneath the world financial system are shifting, and there is going to be a new financial world order that will be born of this,'' said Peter Kenny, managing director at Knight Capital Group Inc., the Jersey City, New Jersey-based brokerage that handles about $1 trillion worth of stock transactions a quarter. ``It's an ugly and painful process.''

?????

What is this "new financial world order"? Ugly and painful to whom?

Lehman, which employed 25,935 people at the end of August in 61 offices around the world, had a balance sheet totaling $786 billion as recently as February.

What will happen to those 25,935 people? And $786 billion can't just evaporate. Can it?

But where does the pain spread beyond Wall Street hotshots? Main street and the middle class are now in this boat since the Republicans' touted mixing of speculative stock market investments with retirement funds, pictured as a "free-market" bonanza a la Reaganomics gone futuristic, made 401K's a form of universal retirement security. It was the GOP dream of replacing the government with big corporations and Big Business. And it is a total disaster. Witness, oh world, the debacle.

The GOP attacks the US economy on multiple fronts: attempting to gut their sole source of adequate revenue, taxes, from their largest source, the rich and powerful including corporations; spending uncounted - and I mean black budgeted - treasure on wars and war equipment to the point of bankrupting the government; and rampant deregulation, trusting businesses to regulate themselves, pushing it with the glorification of greed and the denigration of compassion.

In short, the GOP
- Guts revenue from the wealthy, called "cutting taxes" (but only for the rich)
- Spends heavily on wars without accountability
- Deregulates all sectors of business and industry, leading to abuse
- Privatizes what should be accountable public services

Note the features of these policies:
- Lack of accountability, especially for the rich/powerful
- Faith-based "belief" in the moral authority of greed and self-serving
- War on compassion as somehow morally objectionable, a "free lunch"

The net result of these policies for the economy?
- Unregulated businesses can't make the hard realistic choices
- The big swallow the small - even in the bailout and aftermath of the debacle
- Smaller investors, small business owners, employees are crushed
- There's a culture of continual increase without balance or realism
- Without balance, there's collapse

The results are in:

The industry convulsions that started last year have already eliminated Bear Stearns Cos., forced into a cut-price sale to JPMorgan Chase & Co. with government support in March. A week ago, the U.S. Treasury placed mortgage companies Fannie Mae and Freddie Mac into conservatorship, guaranteeing their widely held debt securities while all but erasing their equity value.

American International Group Inc., once the world's largest insurer, is struggling to raise cash to avoid a credit-rating downgrade that could cripple its business. AIG shares fell as much as 52 percent in New York Stock Exchange composite trading today and were down $5.49, or 45 percent, to $6.65 at 10:50 a.m.

The five New York-based securities firms that dominated Wall Street have been reduced to two: Goldman Sachs Group Inc. and Morgan Stanley. While both firms are scheduled to report a drop in third-quarter earnings this year, their business has remained profitable throughout 2008 -- unlike Lehman and Merrill. As concerns swirled about their futures, Goldman's stock dropped as much as 7.9 percent and Morgan Stanley's fell as much as 13 percent in New York Stock Exchange composite trading today.

That's the problem with the "free market", and even more so with greed. Values can't just keep rising indefinitely. If this is the ABC of logic, why didn't anyone act on it? Because this is GOP-driven faith-based investing. Housing will always go up, they say. Based on what? That real estate is Jesus. It will wash away our sins.

``I've been on Wall Street for many years, and I've never seen a weekend like this one,'' said Michael Holland, 64, chairman and founder of New York-based Holland & Co. ``We are unwinding what has been years of silliness in the financial markets, and the silliness is being vaporized as we speak, unfortunately with the stock price of a number of companies involved in it.''

But is it just "silliness" being vaporized, or billions of dollars? And whose money is this? Whose property? Am I living in one piece of this debacle? Probably, yes.

In fact, this AP report indicates that the repercussions are much greater than anyone can really grasp:

Banks are not the only ones struggling in the growing financial crisis. The fund established to insure their deposits is also feeling the pinch, and the taxpayer may be the lender of last resort.

The Federal Deposit Insurance Corp., whose insurance fund has slipped below the minimum target level set by Congress, could be forced to tap tax dollars through a Treasury Department loan if Washington Mutual Inc., the nation's largest thrift, or another struggling rival fails, economists and industry analysts said Tuesday.

Treasury has already come to the rescue of several corporate victims of the housing and credit crunches. The government took over mortgage finance companies Fannie Mae and Freddie Mac, and helped finance the sale of investment bank Bear Stearns to J.P. Morgan Chase & Co.

Eleven federally insured banks and thrifts have failed this year, including Pasadena, Calif.-based IndyMac Bank, by far the largest shut down by regulators.

Additional failures of large banks or savings and loans companies seem likely, and that could overwhelm the FDIC's insurance fund, said Brian Bethune, U.S. economist at consulting firm Global Insight.

"We've got a ... retail bank run forming in this country," said Christopher Whalen, senior vice president and managing director of Institutional Risk Analytics.

Now hold on a second. What does that mean? It means the banks are making a run on the federal government and on the FDIC itself. Yes, it's not people making a run on banks. It's the banks making a run on their sole guarantor, the FDIC. What would America be without the FDIC?

A Washington Mutual failure would dwarf the largest bank collapse in U.S. history — Continental Illinois National Bank in 1984, with $33.6 billion in assets.

By comparison, WaMu and its subsidiaries had assets of $309.73 billion as of June 30 and IndyMac had $32 billion when it shut down.

And where does WaMu go when their assets are deemed "junk"? The Fed.

Arthur Murton, director of the FDIC's insurance and research division, said that when large institutions have failed in recent years, the hit to the fund has been about 5 to 10 percent of the company's assets.

Or, failing that, Daddy Warbucks... I mean, the Department of Treasury.

If the FDIC doesn't have enough cash to cover the initial costs of a bank or thrift failure, one option would be short-term loans from the Treasury. That last happened in 1991-92, during the last part of the savings and loan crisis, when the FDIC borrowed $15.1 billion from the Treasury and repaid it with interest about a year later.

But nobody asks, what if Daddy Warbucks is actually Daddy WarSpender? What if the Treasury Department can't take all the pressure?

Think about it for a second. Greed. Deregulation. The rich get richer. The poor get poorer. Then the "Supply Side" itself starts to collapse. Who's going to shore them up? The People?? They're the first to go. We always say, "Don't worry. The FDIC guarantees all." It's faith-based Republican economics. The FDIC is now Jesus. The FDIC will save us. But what if the FDIC itself can't save us?

Then we turn, at long last, to the Grandaddy of them all, the GOP's Great Satan: The Federal Government. But the businesses whose taxes were gutted to make way for their greed and profit have no more profits. Without profits, their tax revenues will be even less. And without revenues, the Federal Government will go bankrupt. And if the Federal Government goes bankrupt, we face the following:

We lose the war in Iraq and head home, 'cause we can't afford to be there.
We lose the war in Afghanistan, 'cause we can't afford to be there either.
We lose the war on terror, because we haven't yet figured out what the hell it is, let alone afford it.
We lose our status in the world, because we will have major problems with all the countries financially entangled with our affairs.

Oh, and on the home front? Our "homeland" will have a lot more crime, thanks to poverty, a lot less justice, thanks to "Homeland Security", and a lot more homelessness, thanks to ... "trickle down" housing crisis.

All those things hyped by the GOP will be lost. Because the Great Satan is not government corruption, but corruption itself is the Great Satan, and no corporation or powerful entity or nation, for that matter, is immune. Corruption starts with immunity to compassion. It holds nothing sacred but self-interest. And self-interest, as we are beginning, hopefully, to see, is blind, and ultimately self-defeating.

Or was it only the GOP? The Clinton years saw a lot of the same policies and deregulation. Some say,

This is not about Republican or Democratic policies, but systemic bipartisan deregulation. Only a quick bout of sweeping and decisive regulation can fix what's broken.

The New Deal's Glass-Steagall Act essentially put federal regulation in control of greed, by "saying" to the banking industry:

"If you want to raise capital through speculative investors at home or overseas -- fine. But as an investment bank, you don't get our backing and you don't get to mix it up with citizens' lives or use their capital to fund your trading activities."

McCain is still pandering to the disastrous notion of tax cuts being a panacea for all financial ills. It never worked before, and it will only make things worse. At least Barack Obama is using his mind. And note that the New Deal was a Democratic idea. It basically saved America from the brink. Now we are again on the brink. Why doesn't anybody feel it? Or maybe they will...

And if they don't, and put the GOP back at the helm, it will give a chance for the rest of the world to "inherit the earth." The ultimate GOP legacy seems to be the destruction of all their stated goals.

Buyers Beware: Taxpayer-Funded US Govt Now Owns Fannie & Freddie

Think about it, folks. We just re-hired, just 4 years ago, a couple of guys to run the "World Superpower" we call home (but they call "Homeland", which is totally different, as we've found out) after they effectively gutted the economy, started War Without End Amen based on patent lies - covering up by betraying the cover of one of their own government's CIA operatives - and institutionalized torture, the abuse of power and human rights, and bled the country's treasury by supersizing the Pentagon while simultaneously outsourcing half of its business to private industry and starting to outsource basic services the same way. All this while these 2 hacks profited big on the misery of the general population in every way imaginable. Oh, I mean them and their cronies.

Now, after allowing some of those cronies to get rich quick by bloating up on houses as if the housing market was based on Perpetual Motion (and in case that was wrong, they stocked up the Plan B Solution Warehouse with snake oil), we are being told - I repeat, just being told (as in "read only memory" - you can only receive, not input) that your government has just decided to suddenly "buy", and in effect, "be", Fannie Mae and Freddie Mac, both of whom have become wildly bankrupt and in hopeless debt.

Where is Lyndon Larouche, Jr., now that we need him?

Right on cue, out of the mouths of ... conspiracy theorists.. sometimes come words to think about:

The government has already spent trillions of dollars in the attempt to save the banks, in schemes ranging from the economic stimulus program to the ongoing and accelerating loan programs to the banks from the Fed. None of this has worked, but rather than realize the folly of their ways, the idiots in Washington and Wall Street are cranking the spigots wide open.

Some estimate that the bailout will cost $20-$30 billion, but these estimates are meaningless, since the government is effectively committing itself to an unlimited bailout. Essentially, the government is bailing out the debt by doubling it, creating a even bigger pile of debt that will have to be bailed out, doubling again in a geometric progression. Since there isn't enough money in the world to make this scheme work, it cannot succeed, and the attempt to do it will trigger a hyperinflationary explosion reminiscent of Weimar Germany, such that the very value of the dollar itself will vaporize.

His solution, however, was unclearly described as "the American system" and I couldn't in my economic ignorance figure out how he determined that "essentially, the government is bailing out the debt by doubling it". However, there's not doubt that something terrible has just happened and nobody really quite grasps what will come of it.

One opinion:

There are voices of reason out there in the what would seem to be a forest of insanity. Jim Rogers argues that we don’t need to bail out Fannie Mae Freddie Mac. I agree with Jim Rogers on this. Let the courts handle it and let the taxpayers move on. This isn’t the end of the world, and if we allow these people to get away with it by bailing them out then we we have learned nothing. It is about time we face the truth and move on, not throw good money after bad.

Again, how would "the courts handle it"?? How does he know for sure that "this isn't the end of the world"? Or at least, the world as we know it?

Besides, the issue may be worse than we think. How come the actual, not simply the promissory, bailout occurred immediately after discovering that the books were cooked?

This is no joke: the NYT headline reads "Mortgage Giant Overstated the Size of Its Capital Base" ...

The government’s planned takeover of Fannie Mae and Freddie Mac, expected to be announced as early as this weekend, came together hurriedly after advisers poring over the companies’ books for the Treasury Department concluded that Freddie’s accounting methods had overstated its capital cushion, according to regulatory officials briefed on the matter.

This is journalistic, safe prose for "cooking the books", fudging the finances, lying, playing with the accounting to look better than reality.

The details of the deal have not fully emerged, but it appears that investors who own the companies’ common stock will be virtually wiped out; preferred shareholders, who have priority over other shareholders, may also wind up with little. Holders of debt, including many foreign central banks, are expected to receive government backing. Top executives at both companies will be pushed out, according to those briefed on the plan.

Taxpayer alert: You're paying to save "many foreign central banks". Does this mean we were holding the purse-strings for unknown Other Countries in our little home-owning dream? The network of the global economy gets weirder by the moment. Now we are the financiers for who knows who? We now are paying to "back" those "many foreign central banks" and we don't even yet know who they are.

While it is not yet possible to calculate the cost of the government’s intervention, it could rise into tens of billions of dollars and will probably be among the most expensive rescues ever financed by taxpayers. The takeover comes on the heels of a rescue of the investment bank Bear Stearns, which was sold to JPMorgan in a deal backed by taxpayer dollars. Already, the housing crisis has cost investors hundreds of billions of dollars.

Will somebody tell us who is being saved and at the expense of whom? Why don't we just send all those foreign banks to court, as suggested above? Well, I don't know what court... maybe ... a military tribunal? After all, aren't we all interrelated? Well, maybe not that interrelated, not just yet...

But would you have thought buying out a companies that are essentially dishonest to be a good idea for the government?

Accusations of improper accounting are not new for either company. Earlier this decade, both companies paid large fines and ousted their top executives after accounting scandals.

One of the odd accounting blips was using "deferred tax assets" as credits, a sort of theoretical asset based on past "successes", to offset present and future losses.

One analyst estimates the companies, in the future, would have to collect roughly double the profits of the past five years for the credits to become usable. Most financial institutions are not allowed to count such credits as assets in the manner used by Fannie and Freddie.

Maybe that's where Mr. Larouche got his "double the debt" thing. And it certainly doesn't seem a good idea for such a gigantic pair of lenders to be allowed to do voodoo accounting while other businesses have to be held accountable for actual profit and loss, the old-fashioned, non-theoretical way.

Whatever the facts are, one fact remains irrefutable. The housing market is plummeting, the greedy have triumphed, the honest are getting screwed, and the taxpayer is paying. So much for Repuglicanomics. So much for taxpayers' rights from the GOP. They've gutted the economy, cleaned up profits at the people's expense, and are draining us in a war based on lies, draped in flags and flag pins, and are on the verge of turning what's left of America into a third world dumpsite.

For all his faults (he supports the bailout), Barack Obama would at least give us a chance to be free of Republican authoritarianism and supply-side unregulated economic catastrophe. To vote for anyone else would give it back to the GOP to finish the job.

Facts Blast Gulf Oil Myth: Hey Guys, It Just Ain't There

We should have seen it coming: the economy overrun with speculators and middlemen, consumers bingeing on carbon-spewing SUV's and coal-fired electricity, unregulated corporations and oil companies staking out territory based the primacy of fossil fuels, and then the price of oil goes up, consumers slow down that feverish pace of more-more-more-burn-burn, and suddenly, BAM! You've got politicians on their knees, promising to make everything like it was again, promising to bring back our beloved cheap oil, we'll drill the gulf and never import again starting NOW! And we all know it's a cheap, snivelling, skanky lie, but we don't know JUST HOW BIG A LIE it is...

We know it'll take time. But there's a sense of desperation. We know it might not work and will cost a lot of money. But isn't it better than nothing?

Why do people still trust the GOP? Politicians know nothing about oil in the Gulf of Mexico. Yet they feed us this new mythology: WE MUST DRILL NOW OR DIE a slow, carbon-starved, dollar-shriveling death because LIBERALS DON'T CARE and want us to be RUN BY OIL SHEIKHS and DEPENDENT ON ARAB ISLAMIC AND HUGO CHAVEZ IMPORTED OIL. It's not that anyone trusts the GOP. It's that they're easily made AFRAID of the environmentalist-codepink-hippie-gay-unamerican-womenslib-quotapushing-softoncrime-peacenik-unpatriotic - some wavy, horror-move music, please - Democrats.

But what people don't know is that THE OIL JUST ISN'T THERE. The Gulf of Mexico has oil, yes, but not the save-us-from-the-foreigners kind of oil. Ask a geologist.

Yes, why not ask the experts, the petroleum geologists, the people in the field who actually do the exploration and know the potential that exists in the Gulf of Mexico before hyperventilating over it? One expert, for example, is Klaus H. Gohrbandt, who holds a doctorate degree in geology and is an independent, certified petroleum geologist and who says that

while there is oil and natural gas still to be found in the eastern Gulf of Mexico, it is not sufficient to solve our energy problems.

The Gulf is his area of expertise in the field, and he has no agenda for or against oil exploration there. His input is simply practical, scientific, and factual. Something we could use more of in the hoopla-driven era where every dilettante politician - and aren't all politicians in some way necessarily dilettantes? - wants to gain votes for his side this election season by assuaging the electorate's fear and anger about oil prices?

Drilling in the Gulf appears to be an easy fix. But the truth is: it's not. Not at all.

First, it would be too expensive and take too long. According to Time magazine,

...even if tomorrow we opened up every square mile of the outer continental shelf to offshore rigs, even if we drilled the entire state of Alaska and pulled new refineries out of thin air, the impact on gas prices would be minimal and delayed at best. A 2004 study by the government's Energy Information Administration (EIA) found that drilling in ANWR would trim the price of gas by 3.5 cents a gallon by 2027.

So much for the immediate savings. But it wouldn't even do that.

"Right now the price of oil is set on the global market," says Kevin Lindemer, executive managing director of the energy markets group for the research firm Global Insight. President Bush's move "would not have an impact."

And that's presuming there's any appreciable amount of oil. But is there? Mr. Gohrbandt weighs in on this:

The bottom line is that discovery of huge amounts of oil or natural gas in currently unexplored areas of the central and northern Gulf is very unlikely, because the geology doesn't support it.

There might be significant amounts of oil off South Florida, but it is heavy oil that is very difficult to clean up if a spill occurs.

He discusses each area dispassionately, some having potential, others having been explored with only minimal success (such as the "Destin Dome" where only 4 attempts out of 15 drills discovered any oil at all), and yet others off limits for political or environmental reasons, such as the areas off South Florida where such drilling would basically decimate the fragile coastal areas such as that of the Florida Keys. He concludes:

Unfortunately, our political elite exhibits ignorance of the petroleum setting in the region, and makes related unqualified statements and decisions.

Yet his assessment is not simply that doing so would "destroy the planet", as many argue - an argument that never seems to matter to Republicans - but that it won't be enough to make any difference. Time's article would agree, asserting that such drilling would do no good:

The reason is simple: the U.S. has an estimated 3% of global petroleum reserves but consumes 24% of the world's oil. Offshore territories and public lands like ANWR that don't allow drilling may contain up to 75 billion barrels of oil, according to the EIA. That may sound like a lot, but it's not enough to make a significant difference in a world where global oil demand is expected to rise 30% by 2030, to nearly 120 million barrels a day. At best, greatly expanding domestic drilling might eventually lower the proportion of oil the U.S. imports — currently about 60% of its total supply — but petroleum is a global commodity, and the world market would soak up any additional American production. "This is a drop in the bucket," says Gernot Wagner, an economist with the Environmental Defense Fund.

Way back in 2006,before the price of oil went way up, even in an overhyped optimistic NYT piece, the assessment held a cautionary tale:

Even after hitting pay dirt, it will take another decade and billions of dollars to transform oil from these ultra-deep reserves into gasoline. Some of the technology to pump the sludge from these depths, at these pressures and temperatures, has not yet been developed; only about a dozen ships can drill wells that deep, and no one knows for sure how much oil is down there.

While most people regard affordable and abundant supplies as an essential element of the nation’s prosperity, few realize how complex and costly the quest has become, even in the nation’s own backyard. At the same time, some experts argue that the industry is nearing the limits of what it can do to maintain a growing supply of fossil fuels.

And yet here we are in 2008, with Republicans making their Last Carbon Stand to Save America - as if America means carbon dependency. After all, the issue is no longer foreign dependency. Our world is already irreversably globally interdependent. (Think China allies separately with the United Sales of WalMart.) The issue now is carbon dependency. Obama, stick to your original guns. Pelosi, don't be a pushover. Both of you have better minds than that. People, tell your congress to think beyond the election and stop belittling the minds of Americans by assuming they only love outright pandering. We the People need more leadership out of the carbon hole we're drilling for ourselves. Stop lying to get lucrative contracts to your corporate/industry donors. Tell the truth. There ain't no cure-all, no economic snake-oil, in the Gulf of Mexico.

While Americans Starve, Burn Furniture, the Pentagon Trashes the Treasury

This incredible article by Matt Taibbi at Rolling Stone exposes what's really happened to the economy: the fallout of Republicanomics, of robbing the poor to feed the rich and their military-expansionist fantasies.

It started with a stark description of individuals' lives as described by Middle Class Vermonters to their Senator Bernie Sanders who asked his constituents how the economic "downturn" was affecting them. Expecting a few letters, he was swamped with over 700, telling of such harrowing experiences as burning furniture to stay warm and property taxes (thanks to RepubliBush Federal Tax Cuts to the Rich) are eating into their food money, not to mention education. Health care and dental care, of course, already are out of question. Welcome to Third World America.

Sanders got letters from working people who have been reduced to eating "cereal and toast" for dinner, from a 71-year-old man who has been forced to go back to work to pay for heating oil and property taxes, from a worker in an oncology department of a hospital who reports that clinically ill patients are foregoing cancer treatments because the cost of gas makes it too expensive to reach the hospital. The recurring theme is that employment, even dual employment, is no longer any kind of barrier against poverty. Not economic discomfort, mind you, but actual poverty. Meaning, having less than you need to eat and live in heated shelter -- forgetting entirely about health care and dentistry, which has long ceased to be considered an automatic component of American middle-class life.

Don't ask me, though, ask a U.S. Senator.

"The middle class is disappearing," says Sanders. "In real ways we're becoming more like a third-world country."

Wow! the Republicans' drained our Treasury, from which they removed their largest contributor, the Superrich, by the most profligate adventurism imaginable in Iraq. Funding for the Pentagon has gutted the American people's public fund into which their lifeblood has been drained via IRS-enforced taxes.

We've all seen the stats -- median income has declined by almost $2,500 over the past seven years, we have a zero personal savings rate in America for the first time since the Great Depression, and 5 million people have slipped below the poverty level since the beginning of the decade.

We have a government that is spending two and a half billion dollars a day in Iraq, essentially subsidizing new swimming pools for the contracting class in northern Virginia, at a time when heating oil and personal transportation are about to join health insurance on the list of middle-class luxuries. Home heating and car ownership are slipping away from the middle class thanks to exploding energy prices -- the hidden cost of the national borrowing policy we call dependency on foreign oil, "foreign" representing those nations, Arab and Chinese, that lend us the money to pay for our wars.

Oh, so now we're a debtor nation. Some "Superpower". We're throwing away democracy and prosperity at home so we can "export democracy" to Iraq and Afghanistan. What a great way to take revenge against the terrorists who caused 9/11! Kill off the American Middle Class! Send their sons to war to get killed or, more likely, maimed for life, and ruin their livelihood and starve their parents! That'll serve those terrorists! And set up a military dictatorship that looks for all the world like a democracy, except that it really isn't!

Security.

And while we've all heard stories about how much waste and inefficiency there is in our military spending, this is always portrayed as either "corruption" or simple inefficiency, and not what it really is -- a profound expression of our national priorities, a means of taking money from ordinary, struggling people and redistributing it not downward but upward, to connected insiders, who turn your tax money into pure profit.

Ooops! I mean, the "Security Industry." Take a look:

You want an example? Sanders has a great one for you. The Senator claims that he has been trying for years to increase funding for the Federally Qualified Health Care (FQHC) program, which finances community health centers across the country that give primary health care access to about 16 million Americans a year. He's seeking an additional $798 million for the program this year, which would bring the total appropriation to $2.9 billion, or about what we spend every two days in Iraq.

"But for five billion a year," Sanders insists, "we could provide basic primary health care for every American. That?s how much it would cost, five billion."

As it is, though, Sanders has struggled to get any additional funding. He managed to get $250 million added to the program in last year's Labor, Health and Human Services bill, but Bush vetoed the legislation, "and we ended up getting a lot less."

Okay, now, hold that thought. While we're unable to find $5 billion for this simple program, and Sanders had to fight and claw to get even $250 million that was eventually slashed, here's something else that's going on. According to a recent report by the GAO, the Department of Defense has already "marked for disposal" hundreds of millions of dollars worth of spare parts -- and not old spare parts, but new ones that are still on order! In fact, the GAO report claims that over half of the spare parts currently on order for the Air Force -- some $235 million worth, or about the same amount Sanders unsuccessfully tried to get for the community health care program last year -- are already marked for disposal! Our government is buying hundreds of millions of dollars worth of Defense Department crap just to throw it away!

Yes, that's where all those IRS payments are going, and aren't you feeling more and more secure??

We are in the midst of a political movement to concentrate private wealth into fewer and fewer hands while at the same time placing more and more of the burden for public expenditures on working people. If that sounds like half-baked Marxian analysis... well, shit, what can I say? That's what's happening. Repealing the estate tax (the proposal to phase it out by the year 2010 would save the Walton family alone $30 billion) and targeting "entitlement" programs for cuts while continually funneling an ever-expanding treasure trove of military appropriations down the befouled anus of pointless war profiteering, government waste and North Virginia McMansions -- this is all part of a conversation we should be having about who gets what share of the national pie. But we're not going to have that conversation, because we're going to spend this fall mesmerized by the typical media-generated distractions, yammering about whether or not Michelle Obama's voice is too annoying, about flag lapel pins, about Jeremiah Wright and other such idiotic bullshit.

So, let's see, our journalists are whores for the status quo, our people are going belly-up, our businesses and banks are clenching their fiscal teeth, and the war is going to keep going, according to Mr. In-Touch John McCain, for another 100 years.

Right. Democracy. Let's just solve it all and wave some flags, kids! And wave some guns, too - for security, kids, for security. So you can starve securely in a depleted uranium planet.

US Plans to Occupy Iraq, Grab Its Resources

In Maya Schenwar's article, "Managing Iraq's Econoccupation", she discusses how negotiations between the Bush administration and the US-backed Maliki government have forged ahead relentlessly to basically "occupy" Iraq economically, especially to maintain that all-important stranglehold on Iraq's impressive oil supply.

On the one hand, Iraq is being torn apart by violence, largely inspired by the US invasion and occupation of that country. On the other hand, the real "message" of that invasion and occupation, the oil-grab and strategic base-grab is being strongarmed into place by aggressive "diplomatic" talks. Talks, of course, that are made forceful by that megaladon US military presence. According to Ms. Schenwar's article in truthout:

In a House Foreign Affairs Committee hearing last month, State Department
Iraq Coordinator David Satterfield revealed the Declaration of Principles
proposals have now been divided into a binding Status of Forces Agreement (on
military involvement) and a nonbinding Strategic Framework Agreement (on
economic and diplomatic relations). Neither would be submitted for the consent
of Congress.

Some of the details being worked out in the Strategic Framework Agreement are detailed here:

Thanks to Bremer's alterations of Iraqi law during the first year of the US
occupation, American companies are now allowed to buy out 100 percent of Iraqi businesses, instead of partnering with them. Bremer's orders also eliminated Iraq's high taxes on corporations, exchanging them for a 15 percent "flat tax." They abolished the practice of giving preference to Iraqi companies - in contracting out reconstruction work, for example - and erased a requirement to hire Iraqi workers.
Previously, Iraqi banks were closed to foreign ownership. Now, not only can foreign banks operate in Iraq, they can take over private Iraqi banks as well.
Bremer reworked Iraq's trademark and copyright laws, eliminated trade barriers and afforded foreign businesses the option of circumventing Iraq's legal system and taking any disputes to international tribunals.

This is your blueprint for occupation. Iraq will cease to have any effective sovereignty, the U.S. having essentially "taken over" the country and its resources. So much for the blatant lies and propaganda fed to US protoplasm, calling it a "liberation". What a callous, calculated con job! In a very telling example of the propaganda lie vs. the on-the-ground truth:

The November version of the Bush-Maliki agreement suggested a commitment to
"facilitating and encouraging the flow of foreign investments to Iraq,
especially American investments, to contribute to the reconstruction and
rebuilding of Iraq."
According to James A. Paul, executive director of the Global Policy Forum, the "flow of foreign investments to Iraq" wouldn't manifest as generously as it sounds: The deal would primarily translate into "US/UK oil company control."
Last week's assault on Basra was "part of an effort to defeat the 'nationalists' in Iraq and consolidate a pro-US political regime that will go ahead with the oil deals," Paul told Truthout.

Just before fighting erupted in Basra, the Iraqi presidential council approved the "provincial law," which clears the way for elections - potentially allowing nationalist leaders who oppose US oil interests to come to power. Maliki's Basra attack, says Paul, represents a failed attempt to quash that possibility..

Wow... this means that our soldiers are fighting to keep Iraq as a US "possession", not a sovereign nation. Our enemies are no longer called "terrorists". Now that the deed is done, or almost done, we can call them what they really are: "nationalists". We are fighting to keep control of Iraq, especially its oil. And according to the article, this is not the idea of Big Oil corporations, but Bush/Cheney's idea. Of course, Big Oil stands to profit, but Bush's idea was to keep America richer, on oil, maintain the status quo.

The Iraqis, however, have quite a different agenda, and with what little rudiments of democracy they have now in place, they are fighting the US oil-grab with all they've got.

According to James A. Paul, executive director of the Global Policy Forum,

"The Parliament has remained steadfastly opposed and, in spite of periodic
predictions that parliamentary agreement is 'near,' they have not acted," he
said. "There have even been rumors that the companies have offered $5 million to
each parliamentarian who votes 'yes,' a rumor that seems to me to be probably
based in reality, yet even with such blandishments the Parliament has not
acted."

And a recent poll shows 63 percent of the Iraqi people want Iraqi companies to keep control of their country's oil.

Antonia Juhasz, a fellow at Oil Change International, isn't convinced that US policy will change with the November elections either.

"I hope things would change under a Democratic administration. But the
fact that neither Clinton nor Obama has put forward an immediate withdrawal plan
is worrisome. It doesn't give me confidence that they would abandon the oil
policies the Bush administration has pursued."

Obama's going to have to address the hard stuff: either we're for democracy, and have to listen to the will of the Iraqi people, or we're for aggression and empire, and have to listen to the warmongers, oil interests, and neocons.

Government's "Fed" Overhaul a Huge Con Job

The Federal Reserve sounds like a solid branch of the "Federal" government, doesn't it? So putting the banks, the markets, the economy in the hands of the "objective, fair" U.S. government of which the Presidentially-appointed Alan Greenspan was appointed Chairman for decades, ah, this should put things in order, right? Most Americans think the "Feds" are Federal as in Federal government. No. They are "Federal" as in "Federal Express." It's a private corporation. Welcome to government by the "New Corporate People".

Here's one take from Ellen Hodges Brown on the huge and significant Bush/Cheney plan to "consolidate" the sectors of our economy:

The Federal Reserve, which has been credited with creating the current housing
bubble and bust just as it created the credit bubble of the Roaring Twenties and
the bust of 1929, is now to be given vast new powers to oversee regulation of
the banking industry and promote "financial market stability."

Worse, there will be even less regulation than before, according to the Wall Street Journal:

Many of the [Treasury's] proposals, like those that would consolidate
regulatory agencies, have nothing to do with the turmoil in financial
markets. And some of the proposals could actually reduce regulation. ...
The blueprint also suggests several areas where the S.E.C. should take a
lighter approach to its oversight. Among them are allowing stock exchanges
greater leeway to regulate themselves and streamlining the approval of new products, even allowing automatic approval of securities products that are
being traded in foreign markets. ...
While the plan could expose Wall Street investment banks and hedge funds to
greater scrutiny, it carefully avoids a call for tighter regulation. The plan
would not rein in practices that have been linked to the housing and mortgage crisis, like packaging risky subprime mortgages into securities carrying the highest ratings. . . .
And the plan does not recommend tighter rules over the vast and largely
unregulated markets for risk sharing and hedging, like credit default swaps,
which are supposed to insure lenders against loss but became a speculative
instrument themselves and gave many institutions a false sense of security.

So it is not designed to fix or even help the economy, the one that's heading into a recession or worse, but rather to allow banks greater leeway in order to be "more competitive" in the "global market". Somehow, devaluation of US currency and a downward economic spiral don't sound like good ways to be "competitive" in any market. It sounds like a snake-oil scheme designed to serve old, white, rich men in self-deluded power and wealth that doesn't really exist.

As Ms. Brown so eloquently summarizes:

And as the falling debris of the American economy still piles up around us,
the very agency that enabled disaster is now seeking to consolidate ultimate
authority and accountability to itself, and through centralization and
arrogation of power, eliminate all those pesky little Constitutional and State
regulations and agencies, recalcitrant governors and the last few whistle
blowers, so that the further abuse of power can be streamlined through one
agency only. That agency is to consist of an alliance of the banking powers and the executive branch, a perfect formula for the institutionalization of continual abuse.

Meanwhile, the cost of basic necessities like wheat, oil, corn, milk, meat, and everything else, spikes so fast people are reeling. And as usual, the poor get poorer, the hungry get hungrier, the rich get more disconnected from reality, and the military gets more wars to eat. Is it too late to turn this thing back?