Victory for the American People

It hasn't been often in the last 7 plus years of the Bush Administration when one could truly say that the power of people defeated the people of power. When special interests took a back seat to those who really run the country, Mr. and Ms. Average. Since the bailout was originally announced, there have been numerous campaigns to stop it, academic disputes, and even the rarest of the rare, a public battle among the normally tightly disciplined Republican party. But, in the end, those who have to face up to the voters on November 4th realized that voting yes was potentially one of the biggest threats to their political careers, regardless of party. If you look at the list of how people voted in this historic vote, those on the 'yes' side will probably have a rough time of it, if not lose their seats to those who chose not to approve the still horrible re-negotiated version of the bailout proposal. In particular, I'm sure Dennis Kucinich (OH-10th) is feeling a little smug, knowing that he predicted the outcome of the vote.

On a slightly different note, I'm not sure why everyone in the world of pundits is characterizing this rejection of the bailout proposal a failure of governance. In common parlance, bills are said to have failed, but that is almost a bureaucratic term. In real terms, this bailout was an ideological battle between those who are in favor of and those who are against nationalization and similar bailouts in the United States. Moreover, this is not a vacuum of leadership in which the U.S. government is flying down a country road like a  '62 Corsair without a driver., as that has been happening for the last 7 years. 

Of course, in a vacuum, comes the punditry. Perhaps the most offensive piece I've read thus far about the political process that brought about this conclusion comes from Rupert Cornwell from the U.K.'s Independent. My favorite metaphor in the article compares the mechanisms of American democracy to Alice Through the Looking Glass. Putting that aside, though, the author clearly doesn't understand the huge popular backlash against the bailout. Sure, in the U.K. and other parliamentary democracies, the Prime Minister isn't approved by the people at large, but in the U.S. the leaders need to be especially accountable. And to say that the bill died in partisan sniveling is obviously disregarding what was essentially a bipartisan effort to keep the American people from having to shovel out $700 Billion or more on a plan that was only designed to correct the dangerous excesses of the richest segments of society. Perhaps, too, the American people have become wary of those who warn about apocalyptic disaster and offer a solution that meets a certain biased politican agenda. 

Kevin Connolly from the BBC, in looking at the reasons behind the bailouts defeat in the House of Representatives, expresses a strange sentiment, that after this bill's defeat and the sense of crisis that it engenders will offer a way out for the bailout proposal, that Main Street hasn't suffered yet. Unfortunately, the people of the United States have been suffering, which is the underlying cause for this economic crisis. With the inflationary impact of cheap money, combined with tepid job growth, primarily in the services sector since the recession of 2001, people were forced to choose between living and surviving, which meant that the mortgage had to go unpaid. Thus, in a trickle up fashion, the banks and other financial institutions, who were holders of arcane financial securities into which these poorly written mortgages were conglomerated, began to suffer the counsequences of their poor lending practices. I think Mr. Connolly underestimates the intelligence of Mr. and Ms. Average and their understanding of this situation, as Mr. or Ms. Average are probably already unemployed, underemployed, or facing the prospect of losing their job in the failing economy. 

From the campaign trail in Iowa, Sen. John McCain who, infamously, suspended his campaign to not show up in Washington for negotiations, has called upon Congress to return to the drawing board and to get back to work right away. Sen. Barack Obama, from a rally outside of Denver, called for calm, saying that things in Congress are never smooth, and instead of imploring or demanding that his colleagues work on the proposal to shore up the wealth of the financial sector, he used a baseball metaphor.  

So panic thus gripped the financial markets, and the Dow Jones suffered its worst lost ever in terms of points. But, have no fear for liquidity, because Helicopter Ben Bernanke has come to the rescue, increasing the amount of dollars in the global financial system by a whopping $630 Billion dollars. To show you a frightening graph that indicates inflation, perhaps even hyperinflation, is just around the corner, here is the Adjusted Monetary Base, courtesy of the St. Louis Federal Reserve. The highlight of a series of moves in the banking industry, Citigroup has purchased Wachovia, after the stock lost more than 80% in trading on Monday. 

The Friday Bacon

This weeks Friday Bacon is served with a side of Blasphemy.

Free The West Memphis Three

Finally some real news. Judge William R. Wilson Jr., the judge who sent Echol's appeal back to Arkansas State court has recused himself. A second article provides some details of Jason Baldwin's appeal based on the argument that his lawyer represented him poorly during the original trial. The quoted text seems like Paul Ford, Baldwin's original defense lawyer, is cooperating in a genuine attempt to get an innocent man out of prison, and is doing so without hubris.

I made you an economy but I broked it.

If any of you are regular readers you may be wondering why these last two weeks have gone without a posting on the economy. There are several reasons. First, our senior economic analyst, TheRedKap is still stuck behind the Great Firewall. Second, my political rage peaked about a year ago. After seven years of rising outrage at this administration I finally reached my limits and fizzled out somewhat.

I haven't been able to listen to Marketplace in almost a year so I have had to try and make sense of this stuff myself. Which is difficult for even economists to understand. If the voodoo priests of the dollar can't explain on whats going on, what hope does an average American have? Here is one thought I had yesterday which I hope is not so obvious that I appear foolish for taking the time to lay it out.

One economist yesterday likened the current $700 B...B...B...Billion Bailout to that scene from Blazing Saddles when Bart, played by Cleavon Little, holds a gun to his own head to keep the town from lynching him. Wall Street, here played by Henry Paulson, is holding the gun to its own head and saying they will pull the trigger if we don't save them from their own mistakes. That's pretty obvious but it's the first step. So, what caused this situation? Housing and real property values have risen astronomically bolstered by unfettered access to credit. People were given loans that they could never pay back and the sleaze bags that sold them these loans bunched them together to hide that they were bad investments and then gave them to ratings agency sleaze bags that told the whole world that this was some good shit. Then the poor people who were lied to about how much house they could afford in George Bush's "ownership society"start defaulting on their mortgages. Banks sit up and take notice and start forecasting falling profits and eventually losses and then admit that they don't know how many of these toxic mortgages are going to explode, but they have lots of em'. Opportunist investment bankers then short sell the stock of these banks. (Short selling is either complicated, or simple and commonplace depending on which economist you are talking to and their politics, but the basic explanation is investment bankers try to drive down the value of a stock in order to make a quick buck. They do this because they don't actually have jobs and don't contribute anything of value to society and can only destroy. Like little economic vampires in suspenders.)

So, you get to our current situation with overinflated housing values putting pressure on the markets because banks are so heavily invested in these things that aren't worth what they paid. Now they want the government, meaning the taxpayers, meaning you and me, to buy these worthless bundles of mortgages. They say this will set a bottom level price that they can always be sold to the government for, so that investors can never loose all the money they put into these mortgages, eliminating the mystery of whether the one they just bought will explode in their hands, thusly bolstering confidence in the market and loosening up credit so you and I can go back to buying 72" LCD TVs and leveraging our house to put a pool in our back yards. Thusly fueling the rampant over consumption that has fueled the economy.

Except maybe some of these banks should fail. Maybe an economy based on credit is inherently unstable. Maybe we shouldn't just go back to buying cheaply made garbage from overseas? Maybe these same people that have been pushing for deregulation and chanting the mantra of the free market, when suddenly faced with the terrifying face of the monster that is the free market, they let up a cry for socialism such that has not been heard since Lenin. These people who have played games with our retirement and destroyed the value of our employers and our homes want it both ways just as long as they don't have to feel the pinch. Analysts point out that CEO's of these failed banks are getting fired but mention golden parachutes to them and they begin to dissemble. It doesn't take an economics degree or an MBA to understand that if someone who made over a million dollars in income last year looses their job, they aren't going to loose their house or go hungry like the guy working down at the Ford plant in Cleveland, or the GM factory in Janesville. These guys on Wall Street are more out of touch with what middle class is then McCain. When was the last time an investment banker welded the bumper onto a car or pulled a ton of coal out of the Earth with only their sweat and muscle?

OK, I got distracted by class warfare there. Where does this $700 Bubble Burst Bailout Billion come from? It doesn't just come out of the ass of Johnny Taxpayer, it gets squeezed out of the value of the Dollar. What the markets and Paulson are asking congress to do is to transfer the overinflated value of housing and real property indirectly to the value of the dollar. Inflation. I am talking about inflation with a capital "I." The value of the dollar has been falling against other currencies over the course of this whole subprime crash and since commodities are pegged to the dollar it has fueled the rise in costs of oil and food and other basic essentials. So basically after destroying the value of our homes and companies, the Wall Street voodoo machine is going to destroy the value of our labor and the dollar. I think they are doing this because they know that their "labor" doesn't have any value.

Another Fall After a Tazering

A Boston man was standing on a fire escape and shouting at people. The cops were summoned and he swung a light bulb at the cops. This article quickly frames the issue in the usual way, that tasers are a substitute for lethal force and so save lives. The obvious question in so many of these cases is whether lethal force was even called for. We weren't there so it is unlikely we will ever know. However, so many of these cases raise the question that they lead to the assumption that these useful devices are not being used exclusively as a substitute for lethal force, or are even diminishing the use of lethal force, but instead are being used as an excuse to use violence since it is more expedient than taking the time to deal with the mentally disturbed.

9/26/8 update: Another article with more information from the victim's mother and a second cell phone video. Also, this article has some details of the guidelines for taser use by NYPD.

The Friday Bacon

Do Not Take the Red Pill!

What do Wisconsin and Ohio have in common? Emerald Ash Borer? The homes of the primary writers of the illustrious Fringe Element blog?

All of the above, but most recently, they are both the sites of dirty tricks by the McCain campaign.

In Wisconsin , the McCain campaign conduct a massive mailing to encourage absentee voting, presumably so that voters who would otherwise be unable to do so, such as the elderly and veterans, would vote for their candidate. However, all of the applications that were mailed also included the wrong addresses for the appropriate county clerk's office or addresses for the wrong county clerk's office. Both of which would render the application completely invalid as the applicant would be filing in the wrong district, and would possibly lose their right to vote in the election on November 4th.

In Ohio , the campaign similarly distributed potentially fraudulent ballots. In this case, the campaign distributed ballots that were invalid as they contained one too many boxes. This "Are you a qualified voter?" box, if left unchecked would invalidate the application, and again, disqualify the voter for the November 4th election.

The statement that the campaign made a mistake because of faulty lists is an egregious insult to voters everywhere. With direct mailing costs so high, and campaign funds so limited, these types of mistake would have been too costly to allow. So, let's evaluate the two choices of fraud and mistake. If this were a deliberate campaign of fraud, and two instances of similar fraud begin to remove the necessary layer of reasonable doubt, the question becomes whether individual state investigations are called for, or if the federal government should become involved. With the Justice Department having become a tool for Republican electoral tricks through partisan hiring practices, especially in the Civil Rights Division, and miscellaneous shenanigans, this seems very unlikely to happen, even if it were called for, and with states' budgets, particularly Wisconsin's and Ohio's in a state of distress from the ongoing economic crisis, any relief from that quarter seems equally unlikely. However, if this had been a case of a mistake made in the processing of the direct mailing, then the McCain campaign is incompetent on multiple levels. Any random sampling would have revealed the problems of the mailing list, and brought into question whether the effort was needed at all. In the case of Ohio, this is a much more sinister form of incompetence. Someone in their staff took the extra time to design another box that probably doesn't appear on other absentee ballot applications, and their supervisor, who is assumedly similarly inexperienced in Ohio elections, approved it. If these campaign managers are allowed to stay in their office after wasting money on such a large scale, the plot will thick and further peel away the thin, fatty layer of reasonable doubt. Stay tuned.

The Department of Defense: We Deliver Weapons to the World

[Note: This posting was authored by TheRedKap, who is currently behind the Great Fire Wall, and is unable to post directly.]

For those of you at home who are worried that the American economy is crumbling beyond repair, take heart in the fact that the United States is still the arms supplier to the world. All of the usual types of equipment are involved, namely the M-16 assault rifle, the F-16 in various configurations, and the C-17 military transport plane. However, there are a few new surprises. For instance, the United Arab Emirates is reportedly considering purchasing Black Hawk helicopters and Hellfire anti-tank missiles.

Details of the record $32 billion year enjoyed by the Pentagon include a package of various weapons systems to countries in the Persian Gulf region. But, don't worry, all of these weapons are going to our friends, such as an advanced missile defense system for the aforementioned U.A.E., helicopters and tanks for Saudi Arabia and Egypt, , and most interestingly technology to help Jordan secure its border with Iraq. Iraq, soon to be flush with billions of dollars in oil revenue is in the market for modern military equipment, including F-16s, armored vehicles, attack helicopters, and mortar systems. An upgrade to the PAC-3 and munitions for Israel is also in the works, along with at least 25 F-35 Joint Strike Fighters, with options for up to 50 more, with an eye to getting the planes to the IDF "as quickly as we possibly can."

Meanwhile, Russia's 21% of global arms sales, which partly go to Iran and Syria, were recently characterized by the Israeli Ambassador to Washington, Sallai Meridor as "dangerous and destabilizing to Israel and for peace in the region." Sure, the US and Israel were cooperating with the Georgian military prior to the recent 5 Day War, to the tune of $300 million dollars last year alone, but clearly the Russians were unjustified in their reaction to the Georgian offensive into South Ossetia and Abkahzia. The ambassador, for his part, couldn't understand why anyone would see these arms supplies as threatening or destabilizing. Looking through the old crystalline prism of spheres of influence, the Russians are very concerned about the threat upon its borders.

Do not be confused into thinking that these arms sales are entirely funded by the recipients of these weapons systems. The U.S. government, according to numbers from the BEA, spent approximately $3.8 billion dollars in the first quarter of 2008 financing foreign military sales. While this may be a drop in the bucket compared to the monthly deficit our government is currently running, such as the $111.91 billion dollar deficit for the month of August, arms sales are the classic example of foreign diplomacy that has the biggest potential for unintended catastrophic results.

The Walk of Shame: Corruption and Government, Don't Look So Suprised

Apparently the tax law is so complex that even the guy in change of writing it doesn't understand his own obligations under that law. Or maybe he just forgot to report tens of thousands of dollars in income over two decades. Somehow, I think that if I made a similar mistake there would be gruff men in dark suits knocking on my door.

Speaking of money owed to the government. Days after the Interior Department received an award for high standards of integrity the Inspector General of the Interior Department issued a detailed report describing inappropriate conduct among the minerals management services who collect royalties from oil companies. The sordid dealings include contract fixing, inappropriate sexual relationships between regulators and oil company execs, and regulators being on the payroll of oil companies as consultants. The missing money comes in where the MMS has failed to pursue thousands of dollars in royalties owed to the government by the oil companies while they have been racking in record profits and growing fat off of huge tax subsidies. Subsidies which also don't seem to be doing anything to keep gas prices low. At least the "MMS Chicks" had a good time.

Pelosi seems to think this will effect the nature of the debates regarding increased offshore oil drilling. By which she doesn't mean that this information revealing that the Bush administration could have done something about the rising cost of oil will be used to take increased drilling off the table. (Drilling that wont do anything to reduce the cost of oil since it will take decades for there to be any production and that production will be so small as to not make any impact at the pump.) No, this will just result in some language being added to the bill regarding integrity. This new information won't change anything because it has already been decided to go ahead with drilling. In fact congress has decided to go ahead with a worse plan than that suggested by Paris Hilton.

The Friday Bacon

Free The West Memphis Three

Judge Burnett denied the request for a new trial for the WM3. He sided with the prosecution who argued that there being no DNA evidence at the crime scene did not prove the innocence of the convicted. Though if the Paradise Lost documentaries are to be believed there was no actual evidence connecting the three to the crime in the first place. If I understand the process correctly, the next step is to appeal to the Arkansas Supreme court and then to federal court. Unfortunately this could go on for some time.

The Friday Bacon

Cleveland Ohio: Terrible American City, or the Worst American City?

According to the U.S. Census Bureau, Cleveland is the second poorest city after only Detroit Michigan. The downfall of both cities is linked and ongoing but at least Cleveland doesn't have a mayor under indictment for perjury. Local news outlets are trying to cut the sting of the numbers by pointing out that the same report states the average household income in Cleveland grew over the same period. What they either don't realize or are deliberately not saying is that this means the gap between the rich and the poor is widening at the expense of middle income families.

This is the kind of thing one would expect to see in a major urban center that is still experiencing flight of the middle class out of the city into the suburbs. It is also an increased threat to the American Dream. In a city where poverty is increasing and which has been hard hit by the collapse of the housing market it seems increasingly unlikely that this is a place where a working family can get a leg up and advance their financial standing. Which would explain why people are leaving the area.

All of these things combined cut down the tax base while increasing the demand on government services. This isn't just more people becoming a drain on the welfare state. It's vacant buildings becoming bastions of criminal behavior causing a drain on the under staffed police force. Those same vacant buildings are also a drain on the fire department due to arson, which increases response to emergencies and costs of investigation. Lastly, the city has to buy those buildings and demolish them creating costly legal work on top of paying out settlements to the banks that have foreclosed on these houses. The roads are in bad need of repair, and communities region wide have to replace their sewage systems because they violate clean water standards, spewing human waste into lake Erie. The steel industry is dead, but its rotting corpse is lying unburied across the rust belt of America.

Life Lessons and Vice Presidential Candidates

As a child, I learned two lessons about the adult world almost as soon as I was able to tell right from wrong. That the authority granted to adults and supposed authority figures most often is not granted because they are moral or even responsible people and is usually a coincidence arising from their career, rather than given to them through any legitimate means. Second, I learned that most people are not deserving of respect (beyond that due every human) until they prove otherwise. Since I learned those lessons at Catholic school, it took me a while to separate my problem with authority from my perception of all Christians as hypocrites. If you have read some of my other posts on this blog you will notice that I still have that perception of Christians.

Christian hypocrisy is a good transition into discussing the issues surrounding the pregnancy of Sarah Palins unwed teenage daughter. Anti-abortion types will see this as not being hypocritical since Bristol, Palins daughter, will be keeping the child. This is itself a red herring and the hypocrisy I wish to discuss because it ignores the anti-contraception and anti-sexed positions that are associated with an anti-abortion and which Gov. Palin has herself expressed. A friend of mine observed today that you can't treat teen sex like the Easter bunny and decide not to believe in it because it does happen and has profound consequences. Many of those consequences will not be felt by Bristol and her child(eren) because of the financial status of her family. Sadly this is not the case for most unwed teenage mothers. Teen pregnancy is almost a guarantee that the mother and new child will live out their lives in poverty according to the CDC. It is easy to be anti-abortion when you have a safety net. Yet the Bush administration, right wing Christians, and other people with nothing personally at stake continue to push for abstinance only sex education, which has been shown to do nothing to reduce premarital sex or teen pregnancy. At the same time, Jamie Lynn Spears is on a publicity romp, glorifying teen pregnancy. To get back to the accusations of hypocrisy, Sarah Palin has advocated abstinence only sex ed while claiming to be anti-abortion, which is consistent until you notice her unwed teenage daughters pregnancy and have to question Palins parenting.

So while she is telling the rest of the nations women what is right for them she is either not practicing what she preaches or she is ironically suffering the consequences of the polices she supports, but not really suffering from them the same way every one else will. At the same time the Republicans are decrying all the public attention this is getting because its prying into a personal family matter and shouldn't be public, which is hypocritical because of the way in which the very same Republicans dug into the personal sexual lives of the Clintons during the Monica Lewinski scandal.

I applaud Sarah Palin for supporting her daughters choice to become pregnant and to keep her child. (Remember there is always adoption.) I just hope it can be a learning experience for her about the failings of abstinence only sex education even though it will not open her eyes to the deep personal consequences it has for far too many American girls and the resulting social costs to U.S. taxpayers.

Zer-0bama

During Gov. Lingles speech at the RNC tonight the crowd could be heard chanting "Zero," when Lingle attempted to answer accusations that Sara Palin is inexperienced by pointing out that neither Obama nor Joe Biden has any experience in an executive office. The red herring aside, I was immediately inspired. The number zero and the letter "O" are similarly shaped and to distinguish between the two, people and computers will frequently put a slash through the zero. I thought this could be a clever way for the Republicans to say "No," to Obama while also implying that he has no experience as a leader. It could be spelled as 0bama or as zer0bama and pronounced "Zer-obama." Hands off that, I am going to try to sell the idea to the RNC.

The Walk of Shame; Only 115 Shopping Days Left

Today is Labor Day, the Sunday night of all summer. Its still warm out but kids are back in school and the leaves will soon start to turn. That doesn't stop main street from thinking about the big sales figures it draws in for the Christmas season. Especially given the struggling U.S. economy. All summer long they groan in board rooms about slagging sales and strain their little MBA minds to come up with something original and every year the answer is to try to make the holiday season as long as possible.



This is all shit you have heard before. I am just here to vent my rage at seeing Halloween advertisements and sales on fucking Labor Day. All year long I wonder to my self why I have an irrational hatred for corporations despite being "libertarian" and then this shit happens and my rage boils up and I don't have a memory problem any more.

Look at that shit! Discount Halloween candy? That shit won't make it till the end of the month even if you don't eat it. But who fucking cares about that, you are giving it to other peoples kids. Why should you bother to have candy that isn't filled with moth larva after sitting in your kitchen for two months?

The NRA and the upcoming election

The NRA recently sent out a political advertisement that purports to be a survey of members political attitudes regarding gun control issues among other things. They say that this will be used to dispel myths about gun owners and to prove that gun owners are a voting block that needs to be catered to by the political elite. They obviously don't respect the intelligence of their own members since gun owners attitudes regarding gun control are not going to vary significantly enough to require a survey by a lobbying entity that they are members of. What is really going on here is the NRA is sending out anti-Obama propaganda to its membership. I filled out the survey and sent it back with a letter that chastises the survey makers for undertaking such an Orwellian propaganda campaign against their own members, and for filling the "survey" with straw men and red herrings. This type of propaganda is more insidious in a private communication like a letter since there is noone there to point out to the reader what is being done.

I am no fan of Obama but the far right wing nature of the politics of the NRA disturbs me. To me, being pro-gun is about freedom verses fascism, not about left verses right. The fact that John Bolton is a prominent member of the NRA and was given a hero's welcome at the national convention would be enough to raise questions about the motives of the NRA but that fact that they gloss over John McCain's anti-gun votes in their American Rifleman interview where he receives the NRA's endorsement leads me to believe that the NRA is more about promoting a Barry Goldwater type of politics rather than looking out for the Second Amendment freedoms of all Americans.