Changing Places

Remember…

Been there, done that…. scattered my parents’ ashes off Kauai four years ago….

ABC News’ Sunlen Miller reports: On his last day of vacation, Senator Barack Obama paid tribute to his mother, who passed away in 1995 from ovarian cancer.

Along the scenic overlook on the South Shore of Oahu – Obama visited the exact spot where he scattered his mother’s ashes after her death.

Obama stood quietly for a moment, then sprinkled the flowers from a lei a few times into the ocean, as some rough surf crashed up to where he was standing. The Senator was accompanied by his childhood friend, Bobby Titcomb who he grew up with on the island.

Obama has said that his most cherished possession is a photograph of the spot where her ashes were scattered.

On his week long vacation to the island – Obama also visited his grandfather’s grave in Punchbowl Cemetery – a WW II veteran who fought in Patton’s Army. Obama brought his wife, Michelle and his two daughters Malia and Sasha to lay a flower lei at his grave.

One summer day when Carl Jung was a 12 year old schoolboy in Basel, Switzerland, he fell to admiring the cathedral in the town square. In his autobiography called “Memories, Dreams, Reflections” he recalls his train of thought:

The sky was gloriously blue, the day one of radiant sunshine. The roof of the cathedral glittered, the sun sparkling from the new, brightly glazed tiles. I was overwhelmed by the beauty of the sight, and thought: “the world is beautiful and the church is beautiful, and God made all this and sits above it far away in the blue sky on a golden throne and …” Here came a great hole in my thoughts, and a choking sensation. I felt numbed, and knew only: “Don’t go on thinking now! Something terrible is coming…”

He was completely panicked and dared not finish the thought. He agonized over it for days, having trouble sleeping and feeling tormented, trying so hard to not finish the thought. In the middle of the night of the third day, he finally decided that “It must be thought out before hand.” So he went through a long process of thinking why he should not think “that thought”. His rationalized reasoning went on for three pages! Now remember, this is a 12 year old boy. Carl finally decided it would be okay with God for him to finish, saying “Obviously, God also desires me to show courage. If that is so and I go through with it, then He will give me His grace and illumination.”

Jung continues, “I gathered all my courage as though I were about to leap forthwith into hell-fire, and let the thought come. I saw before me the cathedral, the blue sky, God sits on His golden throne, high above the world — and from under the throne an enormous turd falls upon the sparkling new roof, shatters it, and breaks the walls of the cathedral asunder.”

Even as a boy, Jung found the scatalogical image redemptive. “I felt an enormous, indescribable relief. Instead of the expected damnation, grace had come upon me… I wept for happiness and gratitude.”

From the start, Jung understood this newfound connection to the deity to be different in kind from anything he’d been offered by his own church. Jung’s father was a Protestant minister but one, we gather from Jung, for whom the church had become lifeless. As a child he thought his father was reliable but powerless, and after his epiphany, he says, “a great many things I had not understood became clear to me. That was what my father had not understood, I thought; he had failed to experience the will of God, had opposed it for the best reasons and out of the deepest faith. And that is why he had never experienced the miracle of grace.”

– Lewis Hyde, Trickster Makes This World with some adaptations from Starstuff’s Journal

Hyde also points out in this chapter that “dirt is always a by-product of order”. My take is that if our gods are too clean, too orderly, they cannot lend us any creative energy, and our lives become too sterile, too orderly. By placing the gods high above us, not allowing them access into our lives or us access into theirs, we limit our own creativity. You have to get a little dirty and messy to truly feel the divine. Make your rituals too sterile, too structured, and they bring no spirituality into your life. Make your home too sterile, too orderly, and it becomes a place where you can’t relax and enjoy life itself. If you’re afraid to get messy, it’s hard to really make interesting art. If you’re afraid of your life getting messy, it’s hard to care about other people and be willing to get involved in their problems.

How sad to see Obama attacked by the effete intellectual snobs of the media….

You know, I’m not a rural voter, but I’m bitter. About 80% of America is pretty bitter about politicians right now. Why should anyone deny it? And why should anyone deny that the Republicans have run on God, guns and gays for the last however many years, scaring them into voting against their best interests on a continuing basis over things that nobody is actually threatening them about? Nobody is going to take away their guns, or ruin their marriage in any way they can’t do themselves, or tell them not to worship whatever God they choose. These are non-issues. Get over it already.

Obama wants to talk about the issues that matter to people. Instead Clinton and McCain and the media turn this into yet ANOTHER attack. Voters are “bitter” because we never hear about what matters, these asshats just keep going after each other about stupid things they say. C’mon, cut us all a break and let’s talk about how to un-screw-up our country already. Honestly, without the idiocy.

More from Robert Reich:

I was born in Scranton, Pennsylvania, 61 years ago. My father sold $1.98 cotton blouses to blue-collar women and women whose husbands worked in factories. Years later, I was secretary of labor of the United States, and I tried the best I could – which wasn’t nearly good enough – to help reverse one of the most troublesome trends America has faced: The stagnation of middle-class wages and the expansion of povety. Male hourly wages began to drop in the early 1970s, adjusted for inflation. The average man in his 30s is earning less than his father did thirty years ago. Yet America is far richer. Where did the money go? To the top.

Are Americans who have been left behind frustrated? Of course. And their frustrations, their anger and, yes, sometimes their bitterness, have been used since then — by demagogues, by nationalists and xenophobes, by radical conservatives, by political nuts and fanatical fruitcakes – to blame immigrants and foreign traders, to blame blacks and the poor, to blame “liberal elites,” to blame anyone and anything.

Rather than counter all this, the American media have wallowed in it. Some, like Fox News and talk radio, have given the haters and blamers their very own megaphones. The rest have merely “reported on” it. Instead of focusing on how to get Americans good jobs again; instead of admitting too many of our schools are failing and our kids are falling behind their contemporaries in Europe, Japan, and even China; instead of showing why we need a more progressive tax system to finance better schools and access to health care, and green technologies that might create new manufacturing jobs, our national discussion has been mired in the old politics.

And from Mark Thoma at Economist’s View:

The working class has been largely ignored by this administration, save a few tokens when elections are near, and that’s what the questions ought to be about. What do each of the candidates plan to do to change the conditions that led to Americans being “more pessimistic about their situation than they have been for more than a quarter century”? How many times has McCain flip-flopped on economic policy? Does he have any plans at all to address these problems (beyond wishful thinking), or will he follow in this administration’s footsteps on (the lack of) domestic policy? But no, instead, we get this drivel. The public has not been well served by a press that seems, as I watch CNN, to spend more time picking out their clothes than they do preparing to talk about issues, and they aren’t even the worst offenders. I shouldn’t be surprised, it happens every four years, but I hoped for better. I’m afraid old politics still works.

They keep forever and sell well in the unemployment and free coffee and wifi lines at Starbucks….

But seriously, getting out of debt is a good idea.

Oh, and don’t buy stuff you can’t afford.

Bernanke: economic woes nothing like Depression | Reuters

The current economic slowdown is nothing like the Great Depression of the 1930s, in part because the U.S. Federal Reserve is far more proactive, Chairman Ben Bernanke said on Thursday.

Bernanke, whose academic studies have focused on the Great Depression, said during that era the central bank allowed banks to fail, prices to fall and the money supply to contract, which contributed to the protracted slump.

“We now know the lessons from that,” Bernanke told the World Affairs Council. “We are certainly going to make sure that the financial system remains in good functioning order.”

My husband and I were talking about this, and noting that during the depression, three generations typically already lived together in one home, and usually only one or two of the men were working outside the home, or everyone worked the farm.

Today, we have typically three houses between three generations, and both husbands and wives working. Or we did. The collapse into one house has started — my husband’s parents already live with his sister, for health reasons and economic reasons. My good friend in L.A. is about to be forced to move back in with family if he cannot find a job soon.

In my own family, by the time I was 22 I had graduated college and had my own apartment, and worked all the way through college as well. Now, My 22 year old son is in community college, as is my 18 year old son, and only the 18 year old works, at a job with a friend of mine, at minimum wage. It is difficult for them to find jobs that mesh well with their school schedules, which are limited by class availability. Plus, there are seniors working minimum wage jobs to have health benefits, which limits job availability for the youngest in the work force. Right now we have the lowest level of teen employment since — you guessed it, the great depression.

As families collapse back into a single home, it won’t be like the great depression, but it certainly won’t be like the good times of the 90s, either. Most families now are making slightly less in terms of real dollars than they were in the 70s — and that’s with both parents working.

When I was 26, my husband and I bought our home, our “starter” home, which we still live in. Today, most of our 20 something friends and son’s friends can’t afford a home, and many of our 30 something friends still rent rather than own a home. We chose to stay in our home as we got older, since it is way more affordable than buying a larger home. Today, the Senate is choosing to bail out homeowners who bought more house than they could afford, and the home builders who built too many homes with a large tax break. And we wonder why people haven’t been more fiscally responsible, after years of cheap interest rates and “teaser” rate loans. We watch the big banks and CEOs get their bailouts, and wonder if we were stupid to actually only buy what we could afford.

So Ben, you might not think things are so bad, and comparatively, they are not — my parents’ families both had kids farmed out during the summers during the depression, quite literally, to work the farms and so they would be fed. We aren’t there and will probably not get to that point. But the economic costs of the mistakes of the last seven years are being felt by most Americans. I only hope this time they are smart enough not to be taken in by those who serve the rich and well off, and elect leaders who will truly support the well being of all Americans.

You think you are being responsible in your actions Ben, but you’re not. You’re just taking us further down the rabbit hole of the lack of personal, corporate and governmental responsibility. We need to end this socialism for the rich, and get back to taking care of ALL Americans.

We can’t afford to do less.

In other words: we were conned.

FT.com | Willem Buiter’s Maverecon | The Greenspan Fed: a tragedy of errors

During his years as Chairman of the Federal Reserve Board, Alan Greenspan’s statements reflected a partial (in every sense of the world) understanding of how free competitive markets based on private ownership work. This partial understanding also guided his actions as monetary policy maker and financial regulator.

Mr Greenspan consistently saw but half the picture when it came to what makes competitive market capitalism work. He recognised the central roles of greed, self-interest and competition. He failed to appreciate the complementary roles of non-strategic/non-opportunistic forms of altruism, solidarity and cooperation. Both competition and cooperation must be monitored and regulated, lest they become predation and collusion respectively.

Chairman Greenspan emphasized self-regulation, spontaneous order and the disciplining effect of reputation. He failed to appreciate the essential role external or third-party (i.e. state) enforcement of laws, rules and regulations. He did not understand the weakness of reputational concerns as an enforcement or self-discipline mechanism ensuring good behaviour, when credible commitment is limited at best in a world with short horizons and easy exits.

He failed to appreciate the essential role external/third-party (i.e. state) enforcement of laws, rules and regulations, and the indispensability of collective action when faced with the threat of the breakdown of trust and confidence.

Alan Greenspan’s period as Chairman of the Board of Governors of the Federal Reserve System represents to me the nadir of central banking in advanced economic-financial systems during modern times. While monetary policy was only mildly incompetent, the regulatory failures were horrendous. The US and the world economy will pay the price for Mr Greenspan’s misjudgements and errors for years, perhaps decades, to come.

By overselling, at home and all over the world, the virtues of American-style transactions-based financial capitalism and light-touch regulation, Mr. Greenspan has done more to harm the cause of decentralised, competitive market-based financial systems based on private ownership, than even Charles Ponzi.

The spectacular failures, first in 1997/98 and then in 2007/08, of the global tests of Mr Greenspan’s theory that global financial markets do not require global regulators and that even national regulators should use only the lightest of touches, did more to discredit financial globalisation and competitive market systems based on private ownership generally than any event since the 1930s.

Or, as my kids would say, “The cake is a LIE!”

Let them eat cake. | The Agonist

Iraq is the attempt to use the capital advantage of the US military to acquire the bottleneck resource of oil. It is bottleneck resources, those things which it is more expensive to shift the supply curve downward, than others. The capital advantage is not essentially American, but is the result of the leaving to the US the monopoly of global super power status. As such, it is an asset which is intrinsically linked to the position of the dollar.

The economic theory of the Bush was that the US would sell mortgage backed paper, and acquire the oil to expand the supply of this mortgage backed paper by invading Iraq and keeping the supply of oil at the point where expansion of mortgage backed paper, an exportable form of capital, was sufficient to pay the continuing trade deficit. It was not a good idea, but it was the best idea that stupid people could execute on. The coalition of the stupid was just large enough to dominate government, and since they knew that they would not do well in a smart economy, they were willing to break any law, destroy any principle, and make others pay any cost to make the Dumbconomy going. The linkage between cheap money, cheap oil and cheap land, on one hand, and invasion of Iraq on the other hand cannot be clearer. The invasion allowed both a huge spigot of government money to be poured into very specific sectors, and allowed setting interest rates far below what they could have been. These combined to prop up demand for sprawling outwards.

However, stupid people die stupid deaths. Iraq has been run by very stupid people. While not at the level of World War I bad generalship, an essential economic reality eluded them. That reality is that since the fight was over oil, the cost of that oil in military conflict would rise, inevitably, to the cost of buying the oil in the first place. Instead of seeking real military victory, the coalition sought a fake one, and used bribes to present a better face on the progress of occupation of Iraq than was the case. As we have seen from the recent Basra uprising, the shia militias understand that their acceptance of the current state of affairs is a very valuable thing, and they can, and will, at any time those bribes ebb in value, be able to attack critical points of the government. The United States, has, in effect, surrendered to the rebel forces, and pays them tribute to keep the situation in Iraq politically viable here at home - billions for tribute, but not one cent for victory. Since the children of the people who made Vietnam a disaster are now in charge of the US government, for however long it lasts, they are willing to do whatever it takes to remain in denial about their own catastrophic incompetence. Since it is more important for the current opposition party to be able to eat small greasy hors d’œvres than to govern the country - the believe if they back into power they can do less for everyone and have more freedom to just hand money to their friends - this current status will not be challenged. A few hundred dead soldiers, two hundred billion dollars of direct expenses and half a trillion in bail out costs are all to be paid by someone else.

The failure of Iraq was inevitable then, because it was a no brainer theory, and that meant it had to be run by people without brains. And so it was.

And not just water lines. All our infrastructure is starting to crumble around us. For what the stupid war is costing, we could fix our infrastructure AND fund alternative energy programs, and reboot our economy at the same time.

But no, we have idiots still in charge of the country…. sigh.

US Water Pipelines Are Breaking - New York Times

Two hours north of New York City, a mile-long stream and a marsh the size of a football field have mysteriously formed along a country road. They are such a marvel that people come from miles around to drink the crystal-clear water, believing it is bubbling up from a hidden natural spring.

The truth is far less romantic: The water is coming from a cracked 70-year-old tunnel hundreds of feet below ground, scientists say.

The tunnel is leaking up to 36 million gallons a day as it carries drinking water from a reservoir to the big city. It is a powerful warning sign of a larger problem around the country: The infrastructure that delivers water to the nation’s cities is badly aging and in need of repairs.

The Environmental Protection Agency says utilities will need to invest more than $277 billion over the next two decades on repairs and improvements to drinking water systems. Water industry engineers put the figure drastically higher, at about $480 billion.

Water utilities, largely managed by city governments, have never faced improvements of this magnitude before. And customers will have to bear the majority of the cost through rate increases, according to the American Water Works Association, an industry group.

Engineers say this is a crucial era for the nation’s water systems, especially in older cities like New York, where some pipes and tunnels were built in the 1800s and are now nearing the end of their life expectancies.

”Our generation hasn’t experienced anything like this. We weren’t around when the infrastructure was being built,” said Greg Kail, spokesman for the water industry group. ”We didn’t pay for the pipes to be put in the ground, but we sure benefited from the improvements to public health that came from it.”

He said the situation has not reached crisis stage, but without a serious investment, ”it can become a crisis. Each year the problem is put on the back burner, the price tag is going to go up.”

From my good friend John Pierce:

So, Fed Reserve Board Chair Ben Bernanke calmly
reassures the Joint Congressional folks yesterday and
the Senate today that there’s only a weak possibility
we could suffer a recession here in a couple of
months, but we’re not in such now…

Uh-huh. Here’s an idea, Benny. Both you and Treasury
Secretary Henry Paulson get your lardy rumps laid off,
right frickin’ now, and instead of receiving any
severance you both have to find brand new jobs. Then,
we’ll see just how rosy your vision is, and how brave
you are. And maybe we could lay off our fabled Decider
and his Shotgun, too.

I’ve said it tiresomely. We’ve been in a recession
since at least JULY 2007. I’m living proof of this
economic slump.

Resilient economy my desperate for work ass!

Johnny

Best hopes for a new, wonderful job for you very, very soon, my friend…..

Dear City of Poway,

Since I’ve customized my home to my own personal needs and added many features other people might not enjoy, I think my home is just as functionally obsolete as Larry Ellison’s. Please reduce my property taxes immediately!

Thanks,

Donna

Good grief, what a tard this man is.

$3 million tax cut on Larry Ellison’s estate

Larry Ellison, ranked 12th on the Forbes 500 list with a net worth of $25 billion, has bagged a $3 million tax break after arguing that his flamboyant Japanese-style estate in Woodside is functionally obsolete.
The chief executive officer of software giant Oracle Corp. will be paid from San Mateo County property taxes collected this year, which otherwise would have gone to schools, the county general fund and cities, among other things, Deputy Controller Kanchan Charan said. The hit to schools alone will be nearly $1.4 million.
Ellison’s Octopus Holdings LP acquired the 23-acre site in May 1995 for $12 million and spent nine years constructing the lavish property, modeled on a Japanese emperor’s 16th century country residence, according to the San Mateo assessment appeals board.
It consists of a nearly 8,000-square-foot main house with two wings, a guest home, three cottages and a gymnasium as well as a 5-acre man-made lake, two waterfalls and two bridges. Hundreds of mature cherry, maple and other trees were planted among nearly 1,000 redwoods, pines and oaks.

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Don’t forget many employers will match charity donations, too. You could triple your gift!

Stirling states the economic case for regime change….

Party Like It’s 1926 | The Agonist

Bernanke has now allowed brokers to borrow directly from the Federal Reserve, and created a series of instruments which, in effect, allow the creation of money based on speculatively held money. Bernanke’s moves in the last few days have, in effect, created a new basis for the US currency. It is one that has been building for some time. That basis is the value of stocks held. This was visible by the “Poor Pound” thesis: that priced in independently generated currencies, the American stock market has been remarkably flat.

This change was inevitable, and predictable. Sooner or later the American Dollar must be based, in a global economy, on the global evaluation of our production. However, the question, as with every previous monetary order, is whether the pieces fit together. Presently, they do not.

The reason they don’t is because there is no narrow channel which keeps the powers that be from leaning too far in one direction. There is no consequence for those temporarily in power from simply spewing dollars in every direction, and letting those that they do not like pay the costs. That is what is happening now, the coalition of farmers and oil men that held Bush in power, are doing very well. The defense contractors have made out very well, and those that loan money to the government are doing well. Those that are being bailed out have seen their share of national wealth and income skyrocket.

The key is not re-regulation, but a Nash equilibrium, a state where no group can unilaterally improve its position at the expense of others. This state is the challenge for the next administration. It will require a fundamentally different political order, as the great overturns of monetary basis in the past have been based on different constitutional orders to both create, and navigate, the narrow channel which their monetary system rests upon.

The pieces must interlock to the regulation of the financial system, and they must end the disequilibrium where the wealthy can dump risk on others, and take the profits for themselves.

Talking Points Memo | Unfit for Duty

Josh Marshall:

The idea that fighting jihadists in Iraq or policing the country’s sectarian and ethnic disputes is the calling of this century is one that is belied in virtually everything we see in flux in today’s world and which seems certain to affect us through the rest of our lifetimes and our children’s.

It is very difficult to draw practical lessons from history. But one of the closest things to a law is that military power is almost always built on economic might. And the former seldom long outlasts the latter. Indeed, countries with sound finances have routinely been able to punch over their weight — great Britain and the Netherlands during different periods are key examples. So fiscal soundness even over the medium term is much more important than any particular weapon system or basing right.

Then you step back and see the huge number of dollars we’re pouring into Iraq, the vast mountains of capital being piled up in China, the oil-fueled resurgence of Russia, the weakness of the dollar (not only in exchange rate but in its future as a reserve currency), the rising tide of anti-Americanism around the world. I don’t think I’ve ever heard anything from John McCain that suggests he’s given serious consideration to any of these issues, except as possible near term military challenges — i.e., is China building a blue water navy to challenge the US, Russian weapons systems, etc.

Candidly, I do not think I’ve heard sufficient discussions or solutions to these challenges from my preferred candidates. But neither has the myopia that McCain has about Iraq. Or the willingness to spend — how else to put it — like a drunken sailor in that country at the expense of everything else now going on in the world.

Hillary Clinton has stipulated to McCain’s qualifications as Commander-in-Chief; and Obama, implicitly, does the same. But his record actually shows he’s one of the most dangerous people we could have in the Oval Office in coming years — not just because he’s a hothead in using the military, but more because he seems genuinely clueless about the real challenges and dangers the country is facing. He’s too busy living in the fantasy world where our future as a great power and our very safety are all bound up in Iraq.

And the rich are still not paying for this war. Our young men and women in the services are paying their all for it, though.

Lies and more lies, almost 4000 young American lives gone, tens of thousands of young Americans injured, hundreds of thousands of Iraqis dead and injured, millions of Iraqis who have fled their homes. And Bush calls this “worth it”. Worth what? The neocon dream of empire, the ridiculous oil profits, the billions to war contractors? Worth it. To whom, Mr. Bush — not to the American people or the Iraqi public, that’s for sure.

Economics Blog : The Double Dissent: Dallas’s Fisher and Philadelphia’s Plosser

It seems if your a business you just drive up to the FED ATM without a card and take your money - no problem. If you have a home and ask for 60 days to try and come up with a solution to save it, they want three hundred pages of information and then tell you no way. I’m an Iraq veteran whose unit was activated 4 times for there and keeping a regular job was not an option as my employers wouldn’t tolerate the abscences despite laws to the contrary. I have a number of medals for bravery but no home for my family, Ironically JP Morgan Chase has it now and they are just agents for Deutsche Bank. Now, it looks like I may be called up again to go to Iraq. Before all this I was as stable as iron. Not anymore, health problems and homelessness is my reality, with a family on the streets. and a projected return to Iraq. I guess I fought for nothing! America’s not my dream anymore, it’s someone else’s and I just don’t understand it. I’ve done everything by the book with honor and yet it’s been a diaster. I’m pretty well done at 21.
Comment by Fred Martinez - March 18, 2008 at 7:20 pm

The Two Economies | The Economic Populist

Guess what? Now there are two economies, one for the investors, super elites and the real one for the rest of us. We should not pay attention to the paper economy according to financial advisers, it’s just the place where the super elites create investment vehicles, derivatives, hedge funds, bonds…and all of that stuff which is simply the trading of paper. Nope, the real economy is just fine. The trouble is this paper economy.

I’d say so. Corporations get $200B. Americans, of which over 2 million homeowners are facing foreclosure, get…$600 dollars.

Corporations trading bad debt to the point of insolvency and guaranteed bankruptcy get bought out with Fed intervention….Americans get their jobs offshore outsourced and bankruptcy bills that don’t allow them to get out of their debt despite being dirt poor.

Even worse, it seems there is an entire economy just for the super rich that consists of new investment vehicles which when discovered to be pure fiction, get a bail out.

(sssh! you’re not supposed to call it all a bail out!)

Finally, don’t forget for the small investor, those financial journalists must be prudent, after all they cannot accurately report on this other economy because after all, that might cause a run on the banks….

Neo-conservative thought has been shown to be a failure at everything else it has attempted - now it is destroying our financial system. Long, hard ride down is ahead, people. The market is now into a dangerous game of Liar’s Poker.

Rattling Apart: Captain Carnage and the Bear | The Agonist

In 2001, as soon as he was made the economic advisor to Bush, I stated repeatedly that Ben Bernanke would be made the Federal Reserve Chairman after Greenspan, and that he would be a disaster. This was based on a reading of his academic work, which was, essentially, a series of attempts to prove that such a neo-conservative system could avoid the collapse that lead to the Great Depression. No Great Depression, no FDR. No FDR, no situation where the rich would have to accept regulation and restriction in return for bailing out. In essence the first problem is the “Great Contraction.” The United States and other nations, to attempt to re-impose the Gold Standard after allowing it to lapse for the First World War, had to at a certain point accept prices at the new levels, or had to dramatically reduce the money supply. They chose the later, creating a massive contraction of the money supply. This was done in the face of a downturn, because it was feared that a downturn would lead to easy money, and this to hyper-inflation of the kind witnessed in Germany, or very high inflation, as seen after the First World War. For them, coming after a two generation period where deflation was the norm during the classical gold standard and the consolidation of the first Conservative Era, globally, inflation was a horror.

Bernanke and others, argued that the Great Depression was not in any way a structural event, but strictly a macroeconomic monetary event. That strictly macroëconomic policy measures could have been used to effect the bailout. There were two major intellectual problems. One of them is the point where monetary policy is “pushing on a string.” Or what Bernanke called “the zero point”. The “bold” steps turn out to be the same sort of maneuvers used in the first decade of this century: finding deep pockets and hiding the losses.

Bernanke’s failures begin as economic advisor to the President and continue in his time on the Federal Reserve. The culminate with his failure to either deal with the liquidity crisis, or to face inflation head on. By allowing the housing bubble, and the financial bubble built on it, to explode he set up the very circumstances. By dragging his feet on raising interest rates, and then by ignoring the expanding monetary crisis, Bernanke has set the stage where neither he, nor anyone else, is in a position to act. With a President who is content to give imaginary orders to imaginary armies, there is no center of power that can move. It also indicates that the opposition party has made a series of gross miscalculations about the situation, believing the rhetoric that things were going well, and that they were getting the best deal they could. They were facing people who were bluffing all the way, and are now realizing that there is no rush to give way on anything.

The “slow” rate raising campaign was a double disaster, it neither headed off inflation nor did it keep credit easy enough. This is because the problem was not the level of interest rates, per se, but what we were spending the money on. As many, many, many commentators, many, many times have pointed out, the US was consuming too much, and exporting too little. The Neo-Conservative happy monsters said that this could go on for ever, giving other people our paper for their oil and goods.

While it is possible that we will emerge from this functional, the likelihood is that we are going to see a continued fall for the next 9 months, as the crisis deepens, a die hard illegitimate executive burns his last brands on our skin, and a feckless opposition folds its cards over and over and over again, allowing ordinary people to bear the brunt of the continued contraction.

We are riding this bucket down a ways farther, because there is nothing to right the equilibrium, and without the stimulus from war spending, on which we are so dependent, there will be no pick up in business activity soon. There will be some increased exports, but not sufficient to take the place of the cratering of housing.

What needs to be done? Re-regulation is obvious. Making the Fed serve elected policy makers is a no brainer. Restating numbers to prevent the white washing of bubbles is essential, a public sense of ownership of the financial system as part of the “high ground of the economy” seems essential. Firing Ben Bernanke is a pink do this to day post it note.

But most essentially there needs to be a change in the basis of money, simply because the obvious stability of real estate assets in the United States will no longer be enough.

Over the Hedge

In case you’re looking for a safer investment considering the state of the financial market right now….

So, Republicans can’t even handle their own money, and taxpayers are supposed to trust them with their money?

I don’t think so.

Not even a second sign-off. I’ve NEVER worked for an organization that didn’t require at least two signatures to transfer money. Ever. This is not just fraud - it’s organizational stupidity.

NRCC Treasurer Accused of Campaign Fraud

The former treasurer for the National Republican Congressional Committee transferred as much as $1 million in committee funds into his personal and business accounts, officials announced today, describing a scheme that could prove to be one of the largest campaign frauds in recent history.

For at least four years, Christopher J. Ward, who is under investigation by the FBI, used wire transfers to funnel money out of the NRCC and into other political committees he controlled, then shifted the funds into his own personal accounts, the committee said.

“The evidence we have today indicated we have been deceived and betrayed for a number of years by a highly respected and trusted individual,” said Rep. Tom Cole (R-Okla.), NRCC chairman.

The committee also announced that it had submitted to banks five years of audits and financial documents allegedly forged by Ward, some of which were used to secure multimillion-dollar loans. It is a violation of federal bank fraud laws to obtain loans through false statements; such crimes are punishable by up to $1 million in fines and 30 years in prison.

Prior to today, the committee had not acknowledged that any money was missing. It announced Feb. 1 that it had discovered “irregularities” and had called in federal investigators to pursue a fraud case.

Robert K. Kelner, a lawyer with Covington & Burling, which has been hired by the committee to oversee a forensic audit, told reporters that at this point he could say for certain only that Ward had diverted “several hundred thousand dollars” in unauthorized payments dating to 2004. However, he said that the year-end report filed with the Federal Election Commission in 2006 overstated the NRCC’s actual cash on hand by $990,000.

That might be the upper level of how much money Ward allegedly skimmed from NRCC coffers, but Kelner said forensic auditors need to keep “drilling down” to determine how much was inappropriately taken and how much might have been the result of sloppy bookkeeping.

Kelner said that Ward had the sole power at the NRCC to use wire transfers to shift money into any accounts he wanted. “He was able to get a wire transfer without getting a second sign-off,” Kelner said.

My good friend John in L.A. is getting a mite desperate to pay his rent - if you know of any graphic design jobs in L.A., please let me know. Or hey, just send him some good wishes.

Of course, Arnie is busy shutting down teachers’ jobs and cutting college and university school budgets here in CA - I wonder what he expects all our 20-something kids, who will have no jobs in a recession, to do if they can’t get the classes they need?

UPDATE:
From an email from a teacher friend at UC San Marcos this afternoon:

! i just got some good news about my job today - i dodged a bullet - out of the 10 people who were in the conference room today - 5 walked out without jobs…

But hey, we can bail out all of the “too big to fail” banks. I say sure, right after we repossess all of THEIR houses and cars and yachts, and take away the lovely California yacht loophole, or the sloophole, as they call it.

No money for schools, but heaven forbid the rich lose their tax break for yachts. And we wonder what is wrong with our society. The problem is the rich only like socialism when it benefits THEM!

Well, this is ironic.

And sad, in a way.

But I feel a lot more for all the families that will end up losing their homes that don’t have rich daddies.

Florida Taking Its Toll (Brothers) On Daughter’s Condo - Realty Check with Diana Olick - CNBC.com

You just can’t make this stuff up. Apparently even a big builder’s daughter can’t seem to keep faith in the Florida housing market. According to an SEC filing, Wendy Topkis, daughter of Toll Brothers co-founder and Vice-Chairman Bruce Toll, is walking away from a Florida condo, just like everyone else. A Toll Bros. condo!! The Palm Beach Post says it best: Et Tu Wendy?

According to the home builder’s proxy statement:

Prior to fiscal 2007, the Company entered into an agreement of sale to build and sell a condominium to Wendy Topkis, Bruce E. Toll’s daughter, and her husband for a purchase price of $2,468,075. In January 2008, the buyers informed the Company that they did not intend to make settlement on the condominium. The Company intends to pursue its rights under the agreement of sale.

Does that mean they’ll sue darling daughter? The company’s general counsel says they are pursuing normal procedures.

Daddy is quoted as saying she just changed her mind because she had another child and the place would be too small, but I’m guessing the 13 percent drop in Florida prices was screaming at her a little louder than the baby. So Wendy just adds to the company’s 61 percent cancellation rate in the Sunshine State.

Now, if Wendy was required to put down the same 7 percent deposit on the new home as everybody else, then she could be out $172,765. Of course, daddy owns almost five percent of the company (market cap around $3.5 billion) so maybe he could help out, or perhaps he wants her to learn about fiscal responsibility the hard way. None of my business of course; just family business…or lack thereof.