This is my "attack" on Sarah Palin's family. Her family reminds me of many normal families I got to know when I was growing up. They aren't perfect. Her teenagers had some problems during adolescence, and no doubt there will be more adolescent issues with her family as the years go by. Bristol lived her life as a normal American teenager, which includes the fact that everything was not always perfect. Track lived life as a normal American teenager. I don't feel the need to get specific about any problems they may have faced. Those problems are normal, and Sarah Palin's family is normal.
I can only imagine the strong reaction such words may cause. I say these things in the spirit of peace and friendliness, however. I just want Mrs. Palin and her family to know that I have no animosity towards any of them. I hope and pray that they do not win the election in November, but I harbor no resentment towards them as people or citizens of the United States.
After the flip I present some of the important issues I have been focused on for the past few days. None of it has anything to do with Sarah Palin's family.
Section 8 of the Bailout Plan
Bailout Plan, Section 8:
"Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency."
Can anyone say elective monarchy?
Can anyone say unchecked authoritarianism?
TheBailout Plan in its entirety:
LEGISLATIVE PROPOSAL FOR TREASURY AUTHORITY TO PURCHASE MORTGAGE-RELATED ASSETS
Section 1. Short Title.
This Act may be cited as __________________.
Sec. 2. Purchases of Mortgage-Related Assets.
(a) Authority to Purchase.–The Secretary is authorized to purchase, and to make and fund commitments to purchase, on such terms and conditions as determined by the Secretary, mortgage-related assets from any financial institution having its headquarters in the United States.
(b) Necessary Actions.–The Secretary is authorized to take such actions as the Secretary deems necessary to carry out the authorities in this Act, including, without limitation:
(1) appointing such employees as may be required to carry out the authorities in this Act and defining their duties;
(2) entering into contracts, including contracts for services authorized by section 3109 of title 5, United States Code, without regard to any other provision of law regarding public contracts;
(3) designating financial institutions as financial agents of the Government, and they shall perform all such reasonable duties related to this Act as financial agents of the Government as may be required of them;
(4) establishing vehicles that are authorized, subject to supervision by the Secretary, to purchase mortgage-related assets and issue obligations; and
(5) issuing such regulations and other guidance as may be necessary or appropriate to define terms or carry out the authorities of this Act.
Sec. 3. Considerations.
In exercising the authorities granted in this Act, the Secretary shall take into consideration means for–
(1) providing stability or preventing disruption to the financial markets or banking system; and
(2) protecting the taxpayer.
Sec. 4. Reports to Congress.
Within three months of the first exercise of the authority granted in section 2(a), and semiannually thereafter, the Secretary shall report to the Committees on the Budget, Financial Services, and Ways and Means of the House of Representatives and the Committees on the Budget, Finance, and Banking, Housing, and Urban Affairs of the Senate with respect to the authorities exercised under this Act and the considerations required by section 3.
Sec. 5. Rights; Management; Sale of Mortgage-Related Assets.
(a) Exercise of Rights.–The Secretary may, at any time, exercise any rights received in connection with mortgage-related assets purchased under this Act.
(b) Management of Mortgage-Related Assets.–The Secretary shall have authority to manage mortgage-related assets purchased under this Act, including revenues and portfolio risks therefrom.
(c) Sale of Mortgage-Related Assets.–The Secretary may, at any time, upon terms and conditions and at prices determined by the Secretary, sell, or enter into securities loans, repurchase transactions or other financial transactions in regard to, any mortgage-related asset purchased under this Act.
(d) Application of Sunset to Mortgage-Related Assets.–The authority of the Secretary to hold any mortgage-related asset purchased under this Act before the termination date in section 9, or to purchase or fund the purchase of a mortgage-related asset under a commitment entered into before the termination date in section 9, is not subject to the provisions of section 9.
Sec. 6. Maximum Amount of Authorized Purchases.
The Secretary’s authority to purchase mortgage-related assets under this Act shall be limited to $700,000,000,000 outstanding at any one time
Sec. 7. Funding.
For the purpose of the authorities granted in this Act, and for the costs of administering those authorities, the Secretary may use the proceeds of the sale of any securities issued under chapter 31 of title 31, United States Code, and the purposes for which securities may be issued under chapter 31 of title 31, United States Code, are extended to include actions authorized by this Act, including the payment of administrative expenses. Any funds expended for actions authorized by this Act, including the payment of administrative expenses, shall be deemed appropriated at the time of such expenditure.
Sec. 8. Review.
Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.
Sec. 9. Termination of Authority.
The authorities under this Act, with the exception of authorities granted in sections 2(b)(5), 5 and 7, shall terminate two years from the date of enactment of this Act.
Sec. 10. Increase in Statutory Limit on the Public Debt.
Subsection (b) of section 3101 of title 31, United States Code, is amended by striking out the dollar limitation contained in such subsection and inserting in lieu thereof $11,315,000,000,000.
Sec. 11. Credit Reform.
The costs of purchases of mortgage-related assets made under section 2(a) of this Act shall be determined as provided under the Federal Credit Reform Act of 1990, as applicable.
Sec. 12. Definitions.
For purposes of this section, the following definitions shall apply:
(1) Mortgage-Related Assets.–The term "mortgage-related assets" means residential or commercial mortgages and any securities, obligations, or other instruments that are based on or related to such mortgages, that in each case was originated or issued on or before September 17, 2008.
(2) Secretary.–The term "Secretary" means the Secretary of the Treasury.
(3) United States.–The term "United States" means the States, territories, and possessions of the United States and the District of Columbia.
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Beyond Kafka's Metamorphosis
Bill Moyers interviewed Kevin Phillips Saturday night about Phillips' book Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalist. Digby found it "very interesting and slightly scary." I find it very scary, and slightly interesting.
BILL MOYERS: So who do you trust anymore? I mean, you write in your book that the most worrisome thing is the extent of official understatement and misstatement, the preference for minimizing how many problems there are and how interconnected they are.
KEVIN PHILLIPS: Well, just to give you an example of how many there are, Alan Greenspan has finally decided to admit, you know, this may be one of those once-a-century biggies. Well, what makes it fascinating is that I sometimes use the description "seven sharks." There are seven sharks in the tank with the economy.
And the first is financialization because we're so dependent on this industry that's sort of half lost its marbles. The second is that you have this huge buildup of debt, absolutely unprecedented anywhere in the world. The third is you've now got home prices collapsing. The fourth is you've got global commodity inflation building up.
The fifth is you've got flawed and deceptive government economics statistics. The sixth is that you've got what they call peak oil where the world is, to some extent, running out of oil. So it's not just commodity inflation, it's a shortage of oil. And then the last thing is the collapsing dollar. Now, whenever you get this sort of package in one decade, you got a big one. And when Greenspan says it's a once a century, I think it's another variation but on a par with the Thirties.
My grandparents told me all about the 1930's here in the United States. What we are facing right now is equally bad in different ways. The descent into depression is happening very slowly, but a lot of indicators point to a recovery being far more difficult this time around. By recovery, I mean the well being of the population as a whole. I mean the restoration of the plausibility of an American dream, the possibility of rising from nothing and becoming financially independent, at least to an extent that hardship and misery aren't part of a daily routine.
The exponentially increasing distance between the haves and the have-nots in the division of wealth in the United States indicates the American dream is all but dead in the short term, and may never become viable again. The ship bound for wealth and security has sailed, and if you weren't on it then you may be waiting a long, long, long time for it to return. I doubt that any possibility for the restoration of egalitarian economic opportunity exists in my lifetime. I long suspected that, and now my fears have been confirmed.
I'd like to take this moment to present the five stages of Democratic grief. This short article describes what so many of us have been going through since 2006. That was the year the American people elected a Democratic majority in the House of Representatives to impeach the criminals in the White house. That was the year representative democracy was demonstrably proven to be a sham. The article was written by Ellis Weiner. I have only provided the key points.
Every Day A Little Death: The Five Stages of Democratic Grief
- Acceptance: Okay, fine. Whatever. They win. It's inevitable, really. A complicated or qualified truth is never as arousing as a good hate-charged lie. It's not that you can't make people be intelligent; it's that you can't make people care about things they don't care about. And half the country consists of people who don't care about the truth.
- Depression: Who am I kidding? This is a nightmare and the one thing you can't do in a nightmare is "accept" it. What am I doing to do -- leave the country? Ridiculous. Meanwhile, greed and vanity, using lies and fear, will once again manipulate ignorance and resentment. Biden's decent-man's sense of modesty and proportion is no match for the turbo-charged ego and effortless mendacity of Palin. The worst people in our public life will win again, and they'll do it using a secret weapon that's the most obvious weapon of all: their shamelessness. A hundred rabid sociopaths are salivating in anticipation of taking Rush Limbaugh's place because that's what America has become.
- Bargaining: All right, look. Maybe it's not all either/or. Say McCain wins. We've still got Congress. Yes, they're spineless, ass-covering careerists who spend half their time selling their principles to raise money and the other half defending the system that requires them to do it -- but even they have some pride. Maybe it won't be so bad. McCain will surround himself with war mongers and thieves, but even Congress may have had enough of war and theft (and everyone will believe them if they say "we can't afford it"). So the two branches battle each other to a standstill. Nothing good happens and nothing too terribly bad happens. Then he dies, Palin steps in, and in two months our national life is a cross between Seven Days in May and The Beverly Hillbillies. Couldn't that be fun?
- Anger: No. Bullshit. There can be no accommodating these complete and total imbeciles. That mob of credulous people, the teeming throng of decent, self-satisfied, naïve dodos who actually cheered that freak show in Minneapolis, the ones who chant "U.S.A." as though rooting for a college football team, the "patriots" who think "patriotism" means voting for the guy who tells you that his opponent isn't "patriotic," the people who every day live in a fantasy world of made-up "heroes," superstitious "faith," self-contradicting "values," invented "facts," and proud, defiant obliviousness of history, human nature, science, and common sense: How stupid can people be?
- Denial: Calm down. It can't be as bad as I think. The world doesn't really work that way. There are too many intelligent, fair-minded people to allow this grotesque possibility to come to pass. Bush in 2000, Bush in 2004: an affront, a crime, yes, but it's understandable that it was close enough to steal. But this? This fumfering old moral has-been, who no longer knows what he believes, and his provincial beauty pageant runner-up who thinks gall is the same thing as intelligence? People can't, when all is said and done, be that stupid. Some, yes. But not all, and not most. And the voting machine problem, the vote caging, all that? People are aware of it and dealing with it. It'll be okay. I really believe that.
I wish I had written that, but I was too busy living through the experience over and over again. The contemporary economic and political landscape of the United States has crossed over into a surreal nightmare mindscape that would frighten even Franz Kafka, who delved deep into such grim horrors. The worst tragedy of the entire experience is that I can not stop my thought processes. There is no end to my internal contemplations of the reality that we are facing. There is no proactive solution, because none of the courses of action available to a normal American, such as myself, will stop the destruction of the ideals upon which our country was founded. Writers do not have the power they once did in the age of cable news sound bites.
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The Bailout Goes Global
As if the current disastrous bailout plan weren't bad enough, foreign banks successfully lobbied over the weekend to have the bad American debts their American units purchased be included in the Paulson plan. The United States Treasury is now being asked to bailout the entire freaking planet. Yeah, that's going to work out great for the citizens of the United States. We're going to pull the whole planet back from the brink of the depression nearly created by the failures of Republicanomics. Would anyone like to wager on where this disaster takes our nation? We won't be able to wager money, but there may be food left for a short while. After that we'll be bartering with weapons and pretty rocks.
The New York Times:
The financial crisis that began in the United States spread to many corners of the globe. Now, the American bailout looks as if it is going global, too, a move that could raise its cost and intensify scrutiny by Congress and critics.
Foreign banks, which were initially excluded from the plan, lobbied successfully over the weekend to be able to sell the toxic American mortgage debt owned by their American units to the Treasury, getting the same treatment as United States banks.
Nicole Belle at Crooks and Liars:
[...] announcement by Treasury Secretary Henry Paulson (oh hell, let’s just call him President Paulson now, because he’s effectively running the country) that the bailout would include foreign companies as well:
STEPHANOPOULOS: The original legislation we saw said that you would be buying up the mortgage-related assets from financial institutions having headquarters in the United States. Yet last night, the fact sheet put out by the Treasury seemed to expand that. It said only that the financial institutions have to have significant operations in the U.S., and that you could waive that at your discretion.
So, will foreign financial institutions be eligible to have their assets bought?
PAULSON: Yes, and they should, because as you think about this, if a financial institution has business operations in the United States, hires people in the United States, if they are clogged with illiquid assets, they have the same impact on the American people as any other institution
.
That’s a distinction without a difference to the American people. The key here is about protecting the system.[..]
But, remember, this is about protecting the American people and protecting the taxpayers. And the American people don’t care who owns the financial institution. If a financial institution in this country has problems, it’ll have the same impact...
What a giant, steaming load of bovine excrement. The LAST thing on Paulson’s mind is protecting the taxpayers...we are financing his buddies’ golden parachutes, with no oversight, no changes and no guarantees that we won’t be IN THE EXACT SAME PLACE in a couple of months. Because if Paulson gave two bits about the American people, he would be in favor of the Democratic plan to give some relief to homeowners instead of making sure that he can hand cash over to foreign companies.
Yuval Levin:
Everyone should read the actual text of the proposed bailout plan the administration is sending to Congress. It’s clearly not a final version (the part about only purchasing from financial institutions headquartered in the US has already been changed, as Kathryn notes below), but it’s the essential shape of the proposal. See if you can read through the whole of it without concluding that everyone in Washington has lost their minds.
The plan is going to be passed by a wide margin, I have been told by many respected news sources. The authoritarian takeover of every aspect of our society will be complete by the end of the week. Hope is minimal that anything else will take place. No amount of tears or wails or screams or fighting or protests will bring back the sanity we once enjoyed as a nation. This is not an overreaction, by any of the millions of people who are aghast at what is taking place right now. The United States as we knew it may very well be gone forever.
Protests may take place, but they won't change anything. The Democrats will likely succumb to the Shock Doctrine one more time, and this time it was for all the marbles. So long, free world. It was nice to know you.
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Parade of Condemnations
The accomplished scholars socio-political and economic thought have been speaking out against the "plan" the Bush administration has proposed to rescue our financial sector. Their singular voices may not amount to such a great roar as to be heard by even the most common man on the street, but together the volume of condemnation can be heard everywhere. The real crisis our nation faces comes more in the form of an executive branch that can no longer be checked, and against which there could be no balance. Here are some of the voices.
Jack Balkin via Digby:
I do not oppose emergency plans to preserve liquidity in markets and prevent a further crisis. What I do object to is plenary discretion in the executive in running the nation's financial markets, especially given the history of the past seven years, which has been a sorry parade of venality, incompetence, hubris and failure.
The modus operandi of the Bush Administration has been to use crisis to seize unreviewable power for the executive. Have we learned nothing from the last seven years? True, the face of our new Dear Leader is Mr. Paulson, and not Messrs. Bush and Cheney. But who, pray tell, do Mr. Paulson and his associates work for? If one truly credits the theory of the unitary executive so beloved by the Bush Administration, who, at the end of the day will these masters of the universe be taking orders from? And whose friends, business associates, and allies will stand to benefit from their deal making?
[...]
It is not enough, however, to revel in the irony or the hypocrisy of the Administration's current plans. Two things are central: one is solving the financial crisis, and the other is doing so in a way that preserves constitutional values of oversight, checks and balances, and accountability to the rule of law. The government must have the power to act, but only the powers it actually needs, and not those it would enjoy having for the foreseeable future. It must be able to make decisions, but not without any accountability or oversight. That is what the debate is and should be about, and even though it nominally concerns the passage of an emergency measure, it is ultimately a debate of constitutional proportions.
The Robert C. McCormack Professor of Entrepreneurship and Enterprise at the University of Chicago, Luigi
Zingales, via Marginal Revolution, had this to say (.pdf):
[...] It is much more appealing for the financial industry to be bailed out at taxpayers’ expense than to bear their share of pain. Forcing a debt-for-equity swap or a debt forgiveness would be no greater a violation of private property rights than a massive bailout, but it faces much stronger political opposition. The appeal of the Paulson solution is that it taxes the many and benefits the
few. Since the many (we, the taxpayers) are dispersed, we cannot put up a good fight in Capitol Hill; while the financial industry is well represented at all the levels. It is enough to say that for 6 of the last 13 years, the Secretary of Treasury was a Goldman Sachs alumnus. But, as financial experts, this silence is also our responsibility. Just as it is difficult to find a doctor willing to testify against another doctor in a malpractice suit, no matter how egregious the case, finance experts in both political parties are too friendly to the industry they study and work in.
The decisions that will be made this weekend matter not just to the prospects of the U.S. economy in the year to come; they will shape the type of capitalism we will live in for the next fifty years. Do we want to live in a system where profits are private, but losses are socialized? Where taxpayer money is used to prop up failed firms? Or do we want to live in a system where people are held responsible for their decisions, where imprudent behavior is penalized and prudent behavior rewarded? For somebody like me who believes strongly in the free market system, the most serious risk of the current situation is that the interest of few financiers will undermine the fundamental workings of the capitalist system. The time has come to save capitalism from the capitalists.
Underneath the huge education and complicated ideas lies Zingales thesis, that capitalism as we know it could become extinct. The United States could become a defacto socialist society economically. He doesn't focus on the political evolution that takes place simultaneously with an approval of Paulson's plan, but it's not complicated. The united States would become a nation of socialist fascists, and we're halfway there already.
Ed Paisley from the Center for American Progress describes the disastrous Paulson plan with more general terms. Like most economic discourse his words lack the passion of politics, but he draws the same conclusion that anyone in their right mind would. His conclusion:
The financial markets are but one of the economic problems we face. The last eight years brought stagnant wages and weak job creation—with the situation getting even worse over the course of this year. Restoring our economy requires a plan to address the financial crisis and the underlying weakness in our economy. We need to make job-creating, growth-producing investments in our infrastructure and transform to a low-carbon economy. The legislative package that moves rapidly through Congress to implement Paulson’s new plan should also include expanded unemployment benefits and heating assistance for low-income families, increased food stamps, and assistance for states in providing health coverage to families in need during these difficult times. The folly of Wall Street and the negligence of the Bush administration has produced today’s pain on main street. It would not be right if the rescue only rescues firms and not families.
Therein lies the outrage. If Bush and Paulson were actually demanding a package that helped the American people instead of just the wealthiest members of our society, then our objections to the proposal and the expansion of unchecked executive powers might not be so fierce. Such is not the case, and describing the hypothetical is useless. Bush has never had the interests of American working families at heart, at any time during his presidency. Only mathematical minds can separate the numbers from the political philosophy, but I suspect the sense of outrage on the part of economists is just as great.
The politically oriented among us have been thinking of this as an outrage, but without a bunch numbers mucking up the outrage. From one of the clever and talented people at FDL:
This evening, even as we speak, or blog, whatever, the Bush administration is in the process of LEAVING THE FUCKING WHITE HOUSE WITH A FUCKING SEVEN HUNDRED BILLION (BILLION!) DOLLAR BAILOUT OF ABSURDLY IRRESPONSIBLE WALL STREET FIRMS, combined with ABSOLUTELY NO FUCKING ACCOUNTABILITY OR OVERSIGHT.
That there will be less outrage over this crap than the mythical missing "W" keys indicates that ours is an utterly debased polity. Like, if you needed any more evidence for this than, say, Iraq. And, you know, the hundreds of thousands of corpses.
Right. Now, if you'll excuse me, I have a coma I need to drink myself into.
That doesn't really explain the problem in coherent terms, but that pretty much sums up the sentiment since yesterday afternoon. So here are some more very coherent economic thoughts explaining this disaster and the ensuing disastrous proposal.
Paul Krugman on Washington selling out the American people:
As I posted earlier today, it seems all too likely that a "fair price" for mortgage-related assets will still leave much of the financial sector in trouble. And there’s nothing at all in the draft that says what happens next; although I do notice that there’s nothing in the plan requiring Treasury to pay a fair market price. So is the plan to pay premium prices to the most troubled institutions? Or is the hope that restoring liquidity will magically make the problem go away?
[...]
The Treasury plan ... looks like an attempt to restore confidence in the financial system — that is, convince creditors of troubled institutions that everything’s OK — simply by buying assets off these institutions. This will only work if the prices Treasury pays are much higher than current market prices; that, in turn, can only be true either if this is mainly a liquidity problem — which seems doubtful — or if Treasury is going to be paying a huge premium, in effect throwing taxpayers’ money at the financial world.
And there’s no quid pro quo here — nothing that gives taxpayers a stake in the upside, nothing that ensures that the money is used to stabilize the system rather than reward the undeserving.
I can repeat everything all of these economists said in four words. We are so screwed. If Barack Obama fails to gather enough support to stop the Paulson plan, we are so screwed. In speaking with members of my extended family today I noticed that many of them were puzzled by how troubled this news made me. I am troubled that they do not understand. There are several explanations for my extreme mental distress over these developments, and I mean besides the evolution of our nation into a socialist fascist state.
Hypothetical: The situation resolves itself for the very best. Obama is elected and a measure of balance is restored between the three branches of our government. The conditional bailout (not the unconditional bailout) Democrats will be forced to agree to no matter what, lest we face a greater depression than in the '30's, works like a charm. The economy slowly begins to turn around and the danger to civil liberties begins to slowly subside. <span style="font-weight: bold;">There will be still be no money left to fix all of the other problems</span>.
The infrastructure of our nation is crumbling. There is a health care crisis threatening to destroy the standard of living for working class Americans, forever. But our nation will be BROKE. There will be no money to pay for any great social solutions, or messianic social programs. There will be no knight in shining armor who can lead us out of the quicksand of disintegrating values and lifestyle. Our national debt will top something like a zillion fucking dollars, and any plans to help the people as a whole will only add to it.
We are so screwed, even in the best case scenario.
In the worst case scenario we are well and truly hung out to dry.
And people are having a hard time understanding where the rationale for protests is coming from.
Our nation is on the verge of collapse... that's where it's coming from.
You're damned right I would take to the street if I thought it would help. In the worst possible scenario, there won't be anything left to protest for in no time at all.
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Mrs. Palin, I could care less about your normal family and your normal problems. The United States has greater problems facing it than Bristol's prolonged case of mononucleosis. I wish you and your kids the best.