“This Town Needs An Enema”

Those words, as uttered by Jack Nicholson’s Joker in the first Batman feature film are very likely quite appropriate now for Washington D.C.

With the Wall Street Bailout, er, uh, I’m mean, Emergency Economic Stimulus Plan of 2008 now defeated in Congress, we must now look toward the horizon and a potential new plan which will gain bi-partisan support and ultimately passage.

It is no secret that only 65 Republicans voted for the plan, while over 200 voted against it.  Many news analysts are saying that this is no surprise as the Bush Presidency nears its bitter end.  Bushs’ own people – from his very own political party – have defied him, taking the American economy of a virtual rollercoaster ride at the same time.  Even John McCain’s much talked about “campaign suspension” that nearly derailed the first Presidential debate couldn’t muster the votes needed to which passage in the bi-partisan, bi-cameral why that was needed.

The response from Main Street has been overwhelmingly against any bailout of Wall Street.  Afterall it is the investment bankers, their CEOs and the stock traders who got us into this mess in the first place.  This is almost a repeat of the type of careless and underhanded actions that triggered the banking collapse of 1933.  We’re supposed to learn from history, not repeat it.

Perhaps one of the primary reasons why Main Street lashed out at Capitol Hill is that the plan was never explained in the proper way.  This is not just a bailout of Wall Street, but rather it is a rescue plan for all of America.  Our financial system does not operate in a vacuum, hence what happens on Wall Street eventually affects Main Street.  The American people need to know and understand this; the deserve it.

In creating the Emergency Economic Stimulus Plan of 2008, President Bush essentially has repudiated the last 30 years of Republican ideology where the deregulation of the fiscal markets and other industries is concerned.  Clearly letting business owners and CEOs of major corporations operate without some form of government oversight just doesn’t work.  Oh, sure, it may help keep the mechanics of our free-market economy moving along, but at some point, greed takes over and then people are driven by the pursuit of profit and nothing else.

Americans have been suffering on Main Street for a lot longer than just the last few months or even the last year leading up to the problems on Wall Street.  Gas prices spiked following Hurrican Katrina and they never really came back down; for years now, gas goes up to record highs and then settles a bit lower, but never quite as low as where it started.  While much of this could possibly be explained as “social conditioning” on the part of the oil companies to hold onto some of their increased profits, it is more likely a by-product of the rampant greed which has infiltrated our free-market society.

Republicans will try to blame Bill Clinton because the financial markets were deregulated during his watch, but the reality is that Congress and not the President makes many of those decisions.

Now House Speaker Nancy Pelosi is being accused of partisan antics which help to derail the rescue plan.  It was said that twelve Republicans, at most, pulled their support following Pelosi’s comments.  That doesn’t account for why 67% of Republicans were against the plan almost from its inception.  When a plan starts with 4 Republican supporters, and another 61 are drummed up through arm-twisting tactics, that doesn’t tell me that Pelosi’s comments had anything to do with why the plan failed to gain passage.

To put it simply and succinctly, the President has lost the support of his own party.

Now Democrats and Republicans must go back to the table and hatch a new plan; maybe they’ll do a better job at reaching consensus around what provisions should and should not be in a plan that will ultimately cost tax payers $700 billion or more.  Whatever the outcome, Congress and President need to act quickly.  There are already four million households with mortgages in arrears, and two million homeowners are facing eviction in very short order.

Senator Hillary Clinton has called for reactivation of the Home Owner’s Loan Corporation (HOLC).  The Home Owners’ Loan Corporation (HOLC) or Home Owner’s Refinancing Act, was a New Deal agency established in 1933 under President Franklin D. Roosevelt. Its purpose was to refinance homes to prevent foreclosure.

Regardless of what happens; something must.

A Fail to Bail

While most Americans likely already know that the massive $700 billion dollar “Wall Street Bailout Plan” dubbed the Emergency Economic Stimulus Plan of 2008 has failed to gain passage in Congress, many of us may not realize that partisan and bi-partisan antics may be largely to blame for the failure of Congress to pass some form of economic rescue package.

As a result of this failure, the U.S. Stock Market saw it single largest one-day decline in history.

Part of the blame, it would seem, rightfully goes to Treasury Secretary Henry Paulson and President George W. Bush, for generating much of the grim mood that has been swirling around U.S. financial markets for some time now. The message was a very dark and dire one, and following the failure to earn passage of a rescue plan, investors ran for the nearest exit adding more pressure on the financial systems of the nation at a time when such was surely not needed.

In an historic show of resistance, the American people spoke out in volumes against a plan they may not have fully understood; to be honest, I’m still trying to grasp the awesomeness of a plan that spends $700 billion in taxpayer dollars to buy up illiquid bank assets in the hopes of one day getting all of that money back.

Most Americans tune into sound bites and make their decisions from there. To be fair to the media, this is how they do what they do; you lure a viewer or listener in with a captivating soundbite and then let him or her make the decision as to whether the actual story is interesting and/or important to them. When the plan was first called a “bailout”, and in particular a “bailout of Wall Street”, one could potentially see the public backlash based on the notion that this was a plan to rescue the greedy Wall Street bankers who simply weren’t mind the store.

The reality is that since the U.S. economy doesn’t operate in a vacuum that the plan, regardless of what you call it, is intended for the good of the U.S. economy and ultimately the global economy. This isn’t a case of What Happens in Vegas, Stays in Vegas, but rather What Happens in the U.S., Happens Everywhere!

Congress must pass some type of Economic Security or Stimulus Plan, and it must do so relatively quickly. There is no drama in such a statement. Our economy will only keep going for so long before rising unemployment and declining consumer confidence grind it to a halt. The absence of free-flowing credit makes it ever more likely that at some point consumers won’t have access to the credit they need to keep the economy humming.

Regardless of what comes out of Capitol Hill next, the plan must include all the protections for consumers, oversight of financial institutions and markets, foreclosure forbearance, and a host of other items meant to prevent this type of a problem from happening again. It had been said that there was no way of knowing how many financial institutions would sign on given the conditions in the plan; I don’t think that decision should be left up to the institutions, but rather to a regulatory body that reviews the banks financial condition and makes a determination of participation based on such an assessment. If banks are able to say no, then the true impact of the plan make come off as being much less than intended and desired.

Democrats and Republicans must set aside the political theater that most-likely derailed the first plan. We have enough political showmanship going on in the presidential debates so for once set your personalities aside and make a decision that is in the best interest of the entire nation.

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Balancing America’s Checkbook

America’s bank account is overdrawn, and its overdraft protection exhausted.  The reality is that, as a nation, we’ve been living beyond our means for quite some time now.

It is ever so slightly comical that our Government puts restraints on the finances of individuals and limits ones’ ability to protect themselves from hardship via more restrictive bankruptcy laws, yet the U.S. as a whole seems to be immune to such controls; spending billions on war and tax cuts and just printed new paper money on demand.

The problem with printing new paper money is that it further dilutes the value of currency already in circulation.  As a result, the dollars loses value and the country has to contend with the strong possibility of higher inflation.  The threat of higher inflation inspires the Federal Reserve to lower interest rates, but the caution here is in not triggering a recession.  Investors seize upon the lower value of the dollar and move their investments into other stronger commodities – like oil – the price of crude rises, ultimately triggering higher fuel prices at the pump.  Either way, the public gets screwed.

For years now, we’ve had to sell our debt to foreign nations just to continue operating the country.  The wars in Afghanistan and Iraq and the Bush tax cuts are major components that have gobbled up the wealth of this nation.

We have a $12 to 14 trillion dollar economy, yet it has been brought to its proverbial knees by one failed national policy after another dating all the way back to the deregulation of the financial markets during Bill Clinton’s administration.  While deregulation is supposed to inspire free-market capitalism, it also carries the risk of averting the watchful eyes of government that should be making sure certain things don’t happen.

Those certain things would include the sub-prime loan expansion, and the repackaging of mortgage debt as mortgage-backed securities, which are now illiquid, and worth much less today than when they were originated.

Right now, China and Japan own a sizeable amount of our nation’s debt; in an instance they could trash our economy by dumping the U.S. dollar; a world-reserve currency for a very long time.  The global markets are losing faith in the U.S. currency at an alarming rate, hence the need for the Fed to act and act swiftly to avert a worsening of our economic crisis here at home.

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What does the Wall Street Bailout Plan really mean?

Legislators and Government Officials were remaining typically tight-lipped as to what the plan will ultimately mean to the American people.  Sure there has been a great deal of hype and fear-mongering in recent days, but do most of really know what to expect once this plan is signed by President Bush and the rescue effort gets underway?

As the leaders of Congress get closer to a plan which has bi-partisan support, I would really like the leaders from both parties to address the American people and tell us exactly why this plan, in its current form, is the right thing to do.  I don’t think Congress has the support of the American people and that’s a direct result of a failure to communicate with the very people who have the power to end your career.

The most troubling part of the bailout is that we must now come in and rescue the U.S. economy because powerful investment bankers, speculative investors and CEOs of huge financial corporations allowed their greed coupled with lax or non-existent government regulatory control to pull a $12 trillion dollar world economy to the brink of collapse.  Beyond the obvious, how does something of this magnitude happen in today’s interconnected “always-on” world.

At what point, did we stop “minding the store”?

With the details of the plan still under lock and key, some of the tenets of the plan have been leaked in the typical sound bite fashion.  These various sound bites usher in concern.  I am especially interested in terms like “reasonable” and “try”, when the government is reportedly said to have “reasonable” limits on the severance packages of CEOs of failed institutions, and when the government is said to “try” to renegotiate the mortgages to help homeowners remain in their homes.

Much of this might be too subjective to actually have any teeth.  How does the plan define “reasonable”, and is this the same level of reason that the American people would arrive at?  Just what does it mean that the government will “try” to renegotiate?  What happens if the lender refuses?

Lastly, is all of this just coming too late?

Congress seems to view urgency in a peculiar way.  As people are defaulting on mortgages and being served with foreclosure papers, the wheels of government continue to spin at their normal painfully slow rate.  While I understand that the language of the plan has to be ironed out before the government can act, why wasn’t there a moratorium placed on foreclosures?

The government says that this plan will keep credit flowing and allow the economy to recover.  Of course, that remains to be seen.

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The First Debate…

A lot of criticism is being tossed about following the first presidential debate of the 2008 election.  For one, I am not all that surprised or concerned that some of Lehrer’s questions weren’t answered as succinctly as the American people might have hoped.

To be fair to both candidates, with the Financial System Bailout plan still being crafted by Congress and the development of a Fiscal Year 2009 budget still too distant to reflect upon, it is not at all surprising that neither Obama nor McCain could offer anything of substance for their first debate.  To expect more, at this stage, is just foolhardy and unrealistic and it shows just how much the American people don’t understand about how government operates.

What I think was done well largely falls on the side of Barack Obama.

Senator Obama was clear, well-spoken and spoke in a way that should have engaged most of the viewers tuning in.  When asked about some of the realities of his plans for the economy Obama chose to respond in a thoughtful mindful way that told the American people what parts of his plan might need to be delayed.  He was also clear about parts of the plan that should not or could not be delayed if the country is to move into the 21st century and become a competitive world force.

McCain, on the other hand, was an annoying insulting mess, perhaps just a stones’ throw from Palin in the stupidity pool.  I quickly grew tired of McCain latching onto Obama’s coattails to say, “I also did….”, while lapsing down memory lane and presenting a great deal of anecdotal commentary about things he done in the past or things that happened when he was a POW.  While Obama did remark about “I have a braclet too”, there were fewer instances with the Illnois senator than with McCain.

I found McCain frequent assertions that “Senator Obama just doesn’t understand…” to be quite annoying.  At best, he was trying to pain the Harvard Law School graduate as someone who was just out-of-touch with how things operate in Washington.  McCain also frequently ignored the efforts of Jim Lehrer to keep the debate on time, and he also frequently cut Obama off with comments that forced Obama to defend himself as to the accuracy of the statements.

In the end, the first debate goes to Obama.

The first VP debate between Biden and Palin is up this Friday, October 3, that should be very entertaining to say the least.  And we thought Reality TV was the best thing since sliced bread.  Guess again!

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WaMu Implodes…

The biggest bank failure in U.S. history has occurred with the implosion of Washington Mutual (WaMu), as customer began a run on the bank triggering action by The Office of Thrift Supervision.  The bank was shut down and an auction was held resulting in the purchase of the failed institution by JPMorgan Chase for about $2 billion.

WaMu did a great deal of mortgage lending in California and Florida – two states where foreclosures have been very high.

Perhaps we should be asking how much of a role the media – and the hype they create – has played in inciting fear amount the American people which ultimately ushers in the runs on the banks that really should be avoided.

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How Quickly Can We Save The Economy?

From all measures, the U.S. economy is in very rough shape; some analysts were projecting that the U.S. dollar, barring any government intervention, would’ve been completely void of value in a week’s time.

Right now, Congress and the Bush Administration are trying to hammer out a bi-partisan compromise that will rescue the economy by taking $700 billion to $1 trillion in bad mortgage-backed-security debt from Wall Street firms.  The sticking point is where bi-partisanship encounters a conflict; the Dems want to include help for struggling citizens and homeowners to prevent foreclosure, while the Republicans are resisting such efforts.

The quagmire is that the longer it takes to get a rescue package to Wall Street, the more dire our economic situation becomes.  While I agree with the Democrats convictions that we must also help Main Street to offset recent increases in unemployment, home foreclosures, rising energy prices and such, it doesn’t seem to be in the best interest of the nation to delay this economic package over bi-partisan squabbles.  Now I am normally the LAST person to agree with anything that comes out of the Republican camp, but perhaps just this time we need a quick response to resolve the issues on Wall Street, and hopefully we can follow-up with a second package to help Main Street – certainly if Barack Obama becomes President, the task of getting a Main Street rescue package won’t be as arduous.

Right now, Treasury Secretary Henry “Hank” Paulson, is resisting the efforts of Democrats in Congress to add protections for Main Street into the stimulus package.  The message is clear, and it is one of a purely partisan nature; “Don’t add anything to the effort that will slow the process down“.  So while Bush and team want to appear cooperative and potentially give McCain a boost in the ratings, their actions speak otherwise.

Sure this will, in the end, be a bi-partisan effort; that’s unavoidable since both parties have worked together to craft the legislation that will save our economy, but will it fully reflect the wishes and hopes of both parties?  That’s highly doubtful given that Bush and team still are in charge.  While Congress could attach anything it wants to the bill, Bush would likely veto it and then Congress would need to override the vetos.  All of this procedural nonsense would only further delay the rescue and potentially destabilize our economy even further.

The whole world is watching us.  Some with hopes of success and other of failure.  I can only hope we make the right decisions and that we do so relatively quickly.

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Evangelist’s Silver Lining Somewhat Tarnished?

Federal authorities conducting a child-porn investigation raided the headquarters Saturday of a ministry run by a convicted tax evader once labeled by prosecutors as a polygamist who preys on… [Read More].

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Save Us From Sarah Palin!

OMG – Does Sarah Palin REALLY believe that dinosaurs existed 4,000 years ago?  When I heard this, and later watched the YouTube video of Actor Matt Damon blasting Palin for this alleged belief, I was stunned.  What? Huh? Didn’t this woman go to school?  Surely at some point from elementary school to receiving her bachelor’s degree she would have been exposed to the empirical truth that dinosaurs lived millions of years ago.  Right?

It is brain-numbing to say the least to think that one of the vice-presidential nominees – what some have characterized as an evangelical loon – could not only believe that God created the dinosaurs 4,000 years and that this was a flawed creation, but that she would be allowed to speak of this publicly.  While it’s no mystery of how there is virtually no reference to the dinosaurs in most forms of religion, how does someone of Palin’s caliber excuse the blatant disregard for everything that science has come to learn about the former inhabitants of this planet?

Where does she think the oil comes from?  Was that God’s intention all along?  Make the dinosaurs, kill them off and turn them into fuel for God’s chosen creation to use?  Very scary.

Matt Damon puts it rather succinctly when he says – “I really need to know if she believes dinosaurs existed 4,000 years ago – because she’ll have the nuke codes!”  Terrifying at best.

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Absolutely NO Question: Palin IS Nuts!

In her first interview with ABC’s Charles Gibson, Governor Sarah Palin was quoted as saying, “and said that war with Russia may be necessary…”

What? Huh?

OK, so this was only part of what she said, but even the whole sentence doesn’t change the intent of the message.  What Palin said was that if the democratic state of Georgia were to be admitted into NATO and Russia attacked it again, that the U.S. would be required to respond with the other allies – up to an included war with Russia.

So, I guess this is the best wisdom you can hope for when your entire military experience can be summed up as being the Commander of the Alaska National Guard; an organization that has fewer members than the entire town’s population.  Good goin’ Gov.

What is comical is how Palin sums up the Russian invasion of Georgia; defining it as “unacceptable”  In her words; “And we’ve got to keep an eye on Russia. For Russia to have exerted such pressure in terms of invading a smaller democratic country, unprovoked, is unacceptable,” Palin characterizes the recent invasion by the Russians.  Odd, when you consider the eerie similarity to the U.S. invasion of Iraq – under false pretenses of Saddam having WMDs.  The only difference being that Iraq was not and is not a democratic country – yet.

I’m still trying to wrap my head around how anyone can even hint at a military conflict between the U.S. and Russia; sounds to me like she’s trying to make her “end-of-world-scenario-evangelical-christian beliefs” come true.  These are dangerous, dangerous people who should never, ever, ever, see the inside of the White House.

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