The Economy - Government for Sale?

[Joos]

But Mulu, we need EXPERIENCE...and Obama has none. It doesn't matter that this "experience" will lead us down four more years of the same crap with the same people in charge, just different figureheads.

[ç i p h é r]

Cipher, as to your OP, did you know that the major news networks are reporting that McCain's campaign chairman was a lobbyist for Fannie Mae who earned approximately $2 million in fees from them over a 2 year period to *drumroll* lobby for less regulation.

No, I tuned out the media and their sound bite wars a long time ago. But, it's not a surprise. The money flows in both directions. Lobbyists don't bet on red or blue. They bet on both.

Just look at the money trail published by OpenSecrets.org:

http://www.opensecrets.org/pres08/contr ... cycle=2008

Does this surprise you, in particular that Obama has accepted 2x the contributions that McCain has from the very crowd he's been demonizing on the campaign trail? Hardly change we can believe in, don't you think?

Do you really think McCain is the solution? I'll grant you he's better than the current monkey, but he has an awful lot of similar ideas and outlooks.

On wasteful spending, yes. McCain will have veto power as president and I believe without a doubt that legislation with earmarks will be vetoed. I can't think of anyone who has been as outspoken on this issue as he has, and his credibility here is flawless. He's never asked for a single earmark.

On diplomacy, his language has been uncharacteristically aggressive at times in this election, but I don't think this is the real McCain. The real McCain is the guy who has consistently demonstrated his ability to work with Democrats in Congress to get things done. McCain-Feingold, McCain-Kennedy are two fairly recent examples I can think of that demonstrate this bipartisan spirit. He even gets along with Hillary, who is anathema to many Republicans.

Also, as I have noted before, between McCain and Palin, they have 3 children serving in the military. Lots of incentive to keep the military option where it belongs - as the last option.

There is a slight difference you see.

I agree with you. There is a slight difference.

But Mulu, we need EXPERIENCE...and Obama has none. It doesn't matter that this "experience" will lead us down four more years of the same crap with the same people in charge, just different figureheads.

Have you looked at who Obama selected for his running mate? You know, that guy who's been in the US Senate for almost 30 years. That's 3 decades, probably longer than most of you have been alive. Yeah. That's different.

What I am curious about though is, what does this say to you about Obama?

[Mulu]

On wasteful spending, yes. McCain will have veto power as president and I believe without a doubt that legislation with earmarks will be vetoed.

That's called gridlock. He doesn't have a line item veto, which means if he wants, say a budget for Iraq, he's going to have to sign whatever comes out of Congress, or face passing nothing.

Besides, McCain seeks earmarks himself. Aid to Israel is technically an earmark, and an expensive one to boot.

McCain's promise to cut $100 billion in earmarks has been challenged, and the McCain campaign backed down from the promise, claiming he would have a $100 billion reduction in overall spending. They still haven't given any details as to how they would even accomplish that. Sounds like an empty campaign promise to me.

On diplomacy, his language has been uncharacteristically aggressive at times in this election, but I don't think this is the real McCain.

I honestly don't know who the real McCain is anymore. He used to be a guy I respected, then he sold his soul in an attempt to get elected, veering hard right and picking up Palin the speaking in tongues, global warming denying, knows nothing about foreign or domestic policy Creationist as his #2. He's willing to risk making this person the President should he croak, just to give him a chance at the White House (best part is it isn't working after all, the temporary bump has turned into a reversal. For every action... ).

Also, as I have noted before, between McCain and Palin, they have 3 children serving in the military. Lots of incentive to keep the military option where it belongs - as the last option.

Oh please, children of important people serve deep in the Green Zone, or someplace like Anaconda. They don't get risked anymore.

What I am curious about though is, what does this [Biden] say to you about Obama?

Well, I voiced my displeasure about this pick immediately, and Big Mouth has already opened his big mouth and criticized his own campaign, the idiot. Fortunately it happened during the worst financial crisis since the Great Depression so few people noticed or cared.

What it tells me about Obama is that he realizes he's going to need someone with a lot of experience on his team to make the kind of changes he wants to make, even if it's Senator Gaffe himself.... I wouldn't have done it, but he's the one running.

Back to the economy:

So far this year, a dozen federally insured banks and thrifts have failed, compared with three last year. The country's largest thrift, Washington Mutual Inc., is faltering.

The media sure didn't like the way McCain responded to the crisis.

Lawmakers raised doubts Monday about what would be the largest government bailout in American history, but a bigger, more terrifying question lurked right under the surface:

What if it doesn’t work?

Failure, says one insider, is not an option.

“The alternative is complete financial Armageddon and a great depression,” said a former Federal Reserve official. “Where do they go after this? Well, the U.S. government could nationalize the banking system outright.”

A few months ago, that idea would have been laughed out of the room.
But no one’s laughing anymore.

While almost no one wants to dwell publicly on the possibility that a $700 billion package could simply be too small to forestall a financial meltdown, privately some aides were already thinking of what the government might do if the Treasury plan passes but fails.

In a statement Monday, President Bush said that “the whole world is watching to see if we can act quickly to shore up our markets and prevent damage to our capital markets, businesses, our housing sector and retirement accounts.”
What the president didn’t say is that the whole world will be watching to see not just if Washington can act but whether Washington’s actions can still make a difference.

Under the current plan, the U.S. government will buy up to $700 billion in assets from private holders on Wall Street. That would help banks stabilize their balance sheets, and in theory provide an incentive for banks to begin extending credit among themselves again — a critical component of a functional financial system.

So what’s Plan B?

There really isn’t one.

If this week’s bailout doesn’t work, the government will probably have no choice but to continue to buy assets. There’s no one left to pick up the tab. “The private sector got us into this mess,” said House Financial Services Committee Chairman Barney Frank (D-Mass.). “The government has to get us out of it.”

Said Senate Banking Committee Chairman Chris Dodd (D-Conn.): “The last thing any of us want is to be back here in a month coming up with some new plan because this didn’t work. It’s important that we act quickly, but it’s more important that we act responsibly.”

That’s congressional code for: “Hey, wait a minute.”

The Banking Committee’s ranking Republican was of a similar mindset. “I am concerned that Treasury’s proposal is neither workable nor comprehensive, despite its enormous price tag,” said Sen. Richard Shelby of Alabama. “In my judgment, it would be foolish to waste massive sums of taxpayer funds testing an idea that has been hastily crafted and may actually cause the government to revert to an inadequate strategy of ad hoc bailouts.”

Ultimately, the negotiations will come down to doling out huge new powers, including:
• Buying Power: This is the cornerstone of the proposal — allowing Treasury to buy up to $700 billion of privately held assets in the market. The original proposal called for buying power to be limited to “mortgage-related” assets, but a later draft expanded that to allow the government to purchase any “troubled assets.” There’s a staggering difference in authority between the two phrases, and it is a moving target as of press time. The banking industry generally favors the second version, but that potentially exposes taxpayers to much higher costs.
• Managing Power: Under the Bush administration’s plan, Treasury would hire private managers to handle the hundreds of billions of dollars’ worth of assets it will soon own. But Treasury was silent on whether those managers would be able to actually negotiate directly with homeowners who hold the troubled mortgages. Democrats would go further and demand that bankruptcy judges be given the ability to renegotiate those failing mortgages on behalf of homeowners. This will be one of the more contentious sideshow fights of the negotiations.
• Global Power: Under one version of Treasury’s proposal, the government would have the power to buy assets from any institution in the world that it deemed worthy of a bailout.
• Pay Power: Democrats on Capitol Hill say they want the final plan to include restrictions on payouts to the executives of the financial institutions that take the taxpayer lifeline. Paulson says he doesn’t like this idea, but it may be tough for elected officials to oppose this populist carve-out in an election year.
• Equity Power: Democrats would like the government to get shares in the financial institutions that take federal help — effectively giving taxpayers ownership stakes in the nation’s largest banks and providing them with a huge windfall if those institutions prosper in future years.
• Oversight Power: Treasury’s initial proposal included very little room for congressional oversight of the new effort, calling for reports to be sent to the Hill just twice per year. That isn’t flying with Democrats or many Republicans on the Hill; if a bill makes it through Congress, it will almost certainly have much stronger oversight provisions.

[HATEFACE]

Pssst. Hey Mulu. Track Palin is serving in Diyala province and that isn't bagdad or near the green zone. - It's also a very deadly area with plenty of Al Quaeda militants and Iranian backed insurgents (Well, not so much any more but still. . .)

Diyala province also borders Iran - just FYI. McCain's son is a US Marine. - You know the type. The ones that you have to physically try to keep away from the battle. ;p Jimmy McCain is a Marine and I am not sure where he is stationed. - McCain rarely speaks about Jimmy service but that's fine. Beau Biden is the one most likely of the bunch serving in the green zone what with being a cpt. in the National guard an' all. - But make no mistake his contribution is no less important.

[edit: inflammatory-kmj]

[ç i p h é r]

Heh. The Senate Banking committee, chaired by a Democrat who's received bazillions in contributions from financial institutions run by crooked executives. Anyone seeing the connection here? Oh shit. This happened on OUR watch.

They should write the book on How Government Doesn't Work and donate the proceeds to a government bailout fund.

I honestly don't know who the real McCain is anymore. He used to be a guy I respected, then he sold his soul in an attempt to get elected, veering hard right and picking up Palin the speaking in tongues, global warming denying, knows nothing about foreign or domestic policy Creationist as his #2.

That's the problem with our political system. Good people cannot rise to power without placating the extremes, not that I agree entirely with your characterization of Palin - that's just left wing demagoguery. A man does not change his stripes in one election cycle. What's on their record is what matters. Obama is as left as you get. McCain is as centrist as you get. Even moderate Democrats see it that way.

What it tells me about Obama is that he realizes he's going to need someone with a lot of experience on his team to make the kind of changes he wants to make, even if it's Senator Gaffe himself.... I wouldn't have done it, but he's the one running.

Well that was a question for Danielmn, but ok, you are making the case that experience does indeed matter then. Since Biden's experience trumps Obama's considerably, who's really making the decisions? Are you concerned with that at all or are you simply satisfied with having a Democrat in office, regardless of who it might be? I'm guessing about 40% of the population fits into that category - don't care who so long as it's a D or R - including you, which makes me wonder why I'm even typing this. Too late now.

[fluffmonster]

You don't seem to understand much about currency markets. The reason the dollar fell was that this country has been borrowing from the rest of the world for a very long time.

Isn't that the essence of deficit spending? Borrowing money?

You are talking about only government borrowing; I am talking about national borrowing. Even when Clinton was running a surplus, private borrowing was quite significant enough that the nation still needed very large capital inflows.

Of course, this still doesn't explain why you felt compelled to bring up a weaker dollar anyway, as if a weaker dollar were somehow a failure, which speaks to a certain misconception in its own right.

Right, a weak dollar is meaningless. Where do you teach? Aren't our oil prices affected by the strength of the dollar? Other commodities? In fact, isn't foreign take over of domestic corporations in part fueled by the devaluing of the dollar? I mean, I get that the value of the dollar isn't the be all end all of economic measure, but it isn't trivial.

Where do you learn? I never said a weak dollar is meaningless; I said you misunderstand what it means. Invoking the value of the dollar as a benchmark of adequacy of economic management like you did was presented as a be-all, end-all measure that is in actuality not only inadequate as a be-all end-all measure, but inadequate as a measure at all (of quality of presidential economic management) and in no way supported the contrast you were trying to make...you were basically pulling a chain of causality out of your ass. You further imply that the weaker dollar is bad, which is plainly ignorant...its good for some, bad for others. If you didn't mean it that way, you shouldn't have said it that way, but as is your wont your inner know-it-all got the better of you and also shows you are not above presenting as fact what is mere conjecture. You overstated yourself and got owned. In a bit of irony, you then try to turn the issue into something it wasn't to hide your own shortcomings...maybe you should start advising McCain, he's always willing to make use of such a strategy.

[HATEFACE]

You don't seem to understand much about currency markets. The reason the dollar fell was that this country has been borrowing from the rest of the world for a very long time.

Isn't that the essence of deficit spending? Borrowing money?

You are talking about only government borrowing; I am talking about national borrowing. Even when Clinton was running a surplus, private borrowing was quite significant enough that the nation still needed very large capital inflows.

Of course, this still doesn't explain why you felt compelled to bring up a weaker dollar anyway, as if a weaker dollar were somehow a failure, which speaks to a certain misconception in its own right.

Right, a weak dollar is meaningless. Where do you teach? Aren't our oil prices affected by the strength of the dollar? Other commodities? In fact, isn't foreign take over of domestic corporations in part fueled by the devaluing of the dollar? I mean, I get that the value of the dollar isn't the be all end all of economic measure, but it isn't trivial.

Where do you learn? I never said a weak dollar is meaningless; I said you misunderstand what it means. Invoking the value of the dollar as a benchmark of adequacy of economic management like you did was presented as a be-all, end-all measure that is in actuality not only inadequate as a be-all end-all measure, but inadequate as a measure at all (of quality of presidential economic management) and in no way supported the contrast you were trying to make...you were basically pulling a chain of causality out of your ass. You further imply that the weaker dollar is bad, which is plainly ignorant...its good for some, bad for others. If you didn't mean it that way, you shouldn't have said it that way, but as is your wont your inner know-it-all got the better of you and also shows you are not above presenting as fact what is mere conjecture. You overstated yourself and got owned. In a bit of irony, you then try to turn the issue into something it wasn't to hide your own shortcomings...maybe you should start advising McCain, he's always willing to make use of such a strategy.

I'm willing to side with fluff because he's an economist, irregardless of how I disagree with his politics.

[ç i p h é r]

[HATEFACE]

I have to give him that much Cipher. He did admit to me that democrats in congress were responsible for our uh, "worst economic disaster since the great depression." - heheMulu, last night in chat. Our little economic disaster was entirely preventable and yet there are cries for regulation. - Go figure.

[Grand Fromage]

Subject: REQUEST FOR URGENT CONFIDENTIAL BUSINESS RELATIONSHIP

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This is a matter of great urgency. We need a blank check.

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Please reply with all of your bank account, IRA and college fund account numbers and those of your children and grandchildren to wallstreetbailout@treasury.gov so that we may transfer your commission for this transaction. After I receive that information, I will respond with detailed information about safeguards that will be used to protect the funds.

Yours Faithfully
Minister of Treasury Paulson

[Mulu]

Fluff, you're starting to sound like a Reagan economist.... Deficit spending is harmless, a falling dollar helps as much as it hurts. Come on man, a falling dollar hurts *everyone* through increasing the price of already too high oil, especially the working class. Admit that and then we'll talk about economic fallacies like rational decision making, perfect information, over-simplistic mathematical models and the non-replicable nature of economic "research."

And yes I know a falling dollar helps manufacturers and exporters, but overall the effect appears to be negative. Doesn't mean a really high dollar would be positive. Where the "sweet spot" lands is a question economists can't seem to answer.

Hateface, I don't chat. You appear to be having a mental breakdown. Actually, you've appeared that way for quite some time, but now it's getting serious.

[Mulu]

not that I agree entirely with your characterization of Palin - that's just left wing demagoguery.

Show me the error.

A man does not change his stripes in one election cycle.

I'm not so sure about that. He actually hired the guy who smeared him in South Carolina on the whole "black baby" thing, after claiming it was unethical. So much for ethics.

Since Biden's experience trumps Obama's considerably, who's really making the decisions?

The boss always makes the decisions. Even Bush makes the decisions.

After nearly 8 years of burning the US to the ground, it's time for the opposition party. Republicans had their chance, they squandered it. And given that McCain and Palin have basically hired the Bush team as their own, well it's pretty obvious they won't be agents of change.

[HATEFACE]

Hateface, I don't chat. You appear to be having a mental breakdown. Actually, you've appeared that way for quite some time, but now it's getting serious.

No, I was just briefly laughing at you, before continuing on about how I was talking about last night in chat with Fluff - He (Fluff) admitted that democrats were at fault. Also Fluff is an economist and as such held to an opinion irregardlesss of party affiliation. Sorry if I found your comment that "this is the worst economic disaster since the great depression." That's like saying the creek behind my house is the biggest gorge since the grand canyon. Maybe I'm more optimistic about the markets than you.

After nearly 8 years of burning the US to the ground, it's time for the opposition party. Republicans had their chance, they squandered it. And given that McCain and Palin have basically hired the Bush team as their own, well it's pretty obvious they won't be agents of change.

Change is just a word. Like all words they can be implanted into the subconcious of america. He has no different foreign policy. He is a card carrying democrat in league with banks and credit card companies to ensure that america doesn't own the shit that they buy. Hmm, honestly - Could be the very reason why they ensure that government debt is lowered. - but whatever, politicians say nothing of credit cards. There is no change there. The word is a cliche. The only change I see is a possible return of the draft due to his dubious language and that is change I do not want what with his lowering of defense spending.

http://en.wikipedia.org/wiki/Democratic ... ederalists Blip!

http://en.wikipedia.org/wiki/Democratic_peace_theory Bloop!

[Mulu]

Sorry if I found your comment that "this is the worst economic disaster since the great depression."

That's how the media, and the federal government, are characterizing it. McCain called it the worst situation since WWII. So it's not really my comment, it's mainstream.

[HATEFACE]

Sorry if I found your comment that "this is the worst economic disaster since the great depression."

That's how the media, and the federal government, are characterizing it. McCain called it the worst situation since WWII. So it's not really my comment, it's mainstream.

Mainstream doesn't necessarily mean truth.