12/22/2010 archive

“Punting the Pundits” is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.

Thanks to ek hornbeck, click on the link and you can access all the past “Punting the Pundits”.

Amy Goodman: President Obama’s Christmas Gift to AT&T (and Comcast and Verizon)

One of President Barack Obama’s signature campaign promises was to protect the freedom of the Internet. He said, in November 2007, “I will take a back seat to no one in my commitment to network neutrality, because once providers start to privilege some applications or websites over others, then the smaller voices get squeezed out and we all lose.”

Jump ahead to December 2010, where Obama is clearly in the back seat, being driven by Internet giants like AT&T, Verizon and Comcast. With him is his appointed chairman of the Federal Communications Commission, Julius Genachowski, his Harvard Law School classmate and basketball pal who just pushed through a rule on network neutrality that Internet activists consider disastrous.

Robert Reich: The Year Washington Became “Business Friendly”

History will record 2010 as the year Washington became “business friendly.”

Not that it was all that unfriendly before. Some would say the bailouts of Wall Street, AIG, GM, and Chrysler were about as friendly as it can get. In addition, Washington gave windfalls to drug companies and health insurers in the new health bill, subsidies to energy companies in the stimulus package, and billions to domestic and military contractors.

But for corporate America it still wasn’t friendly enough. Before the midterm elections, Verizon CEO and Business Roundtable chair Ivan Seidenberg accused the president of creating a hostile environment for investment and job-creation. In the midterms, business leaders overwhelmingly threw their support to Republicans.

So the White House caved in on the Bush tax cuts for the wealthy, and is telling CEOs it will be on their side from now on. As the president recently told a group of CEOs, the choice “is not between Democrats and Republicans. It’s between America and our competitors around the world. We can win the competition.”

Fred Kaplan: Political Brinksmanship

Republicans picked a silly fight over START, and they lost badly.

The Senate seems on its way to ratifying the New START on nuclear arms, an achievement that looked unlikely to say the least just a few weeks ago.

If a Republican were president, the accord would have excited no controversy and at most a handful of diehard nays. As even most of its critics conceded, the treaty’s text contains nothing objectionable in substance.

There were two kinds of opponents in this debate. The first had concerns that President Barack Obama would use the treaty as an excuse to ease up on missile defense and the programs to maintain the nuclear arsenal. In recent weeks, Obama and his team did as much to allay these concerns as any hawk could have hoped-and more than many doves preferred.

So that left the second kind of opponent: those who simply wanted to deny Obama any kind of victory. The latter motive was clearly dominant in this debate.

In the 3rd and final part of his series on The Title Fraud Smoking Gun (my treatments of Part 1 and Part 2), L. Randall Wray offers a partial explanation of the deterioration of the US Economy that does not, I think, go quite far enough.

The problem is money.

Specifically that the Tax Policy of this country is not sufficiently redistributive to put it in the hands of people (and Governments) who will use it to buy goods and services instead of people who buy fraudulent fictional financial instruments.

Many people think only the Federal Reserve can coin money, but that’s not true.  By using Leverage a pile of money can get magically multipled by limits set only by the credulousness of the market.  Literally ‘What it will bear’.  Recently as much as 30 to 1 has been customary, but there is no theoretical limit actually.

High (some would call them ‘progressive’) Marginal Tax Rates on Businesses and Individuals reduces the perverse incentive to draw out as much cash as you can, wave your magic multiplier wand, and find some kind of Ponzi Pyramid Scheme to get out in front of.

As always, it is DEMAND that is driving Supply and not the other way round.

Anatomy of Mortgage Fraud, Part III: MERS’S Role in Facilitating the Mother of All Frauds

L. Randall Wray, Huffington Post

Posted: December 16, 2010 09:29 AM

In this piece, let us step back and examine the big picture to answer the question: Why did Wall Street create this crisis? For the answer, we have got to go back several decades. I do not want to give a long-winded history lesson, but it is necessary to understand the transformation that has taken place since the 1960s. Back then, the financial system was small, simple, regulated and relatively unimportant. Banks made commercial loans; thrifts made home loans; and Wall Street handled investment finance. Households had jobs and rising wages so they didn’t need to go into debt to finance rising consumption. With robust economic growth, each generation could expect to have roughly twice the living standard of the previous generation.

Things began to change in the 1970s, and especially in the 1980s as growth slowed, as median real wages stopped rising, and as financial institutions were unleashed to expand activities into new areas. At first households coped with stagnant incomes by putting more family members to work (especially women), but gradually they began to rely on debt. Banks created new kinds of credit and gradually expanded their views as to who is creditworthy. I can still remember one conference I attended at which someone from the financial sector proudly announced that the banks had discovered an untapped market for credit cards — the “mentally retarded”. The argument was that this group would be just as safe as college students, since parents would bail them out in order to avoid having their kids’ credit ratings suffer. This was not a joke — it was a business model.

…

Banks became giant one-stop casinos that facilitated every kind of crazy bet. They would make a loan to you, but then simultaneously securitize it to sell-on to an investor plus place a bet that you would default on your loan so that the security would go bad. For a fee, they’d let a hedge fund manager choose the riskiest loans to bundle into a sure-to-fail financial product that they would then sell to their own customers. And then they’d join the hedge fund in betting against their customers. The more loans they made, the more fees they collected; the more bad loans they made, the more bets they would win. The more debt they piled on households, the greater their profits; riskier debt meant even higher fees and more defaults and thus greater wins from gambling. Prospective death was a booming good business for our undertakers.

America became “Bubbleonia” — with a “bubblicious” economy that moved from one bubble and crash to another: A commercial real estate bubble and crash in the 1980s that killed the thrifts; a series of developing country debt bubbles and crashes in the 1980s and 1990s fueled in part by American banks; a US stock market bubble and crash in 1987; the dot-com bubble and crash at the end of the 1990s; and then the US real estate and global commodities markets bubbles and crashes this decade.

Increasingly, the bubbles were managed cooperatively by Wall Street and Washington. Chairman Greenspan and President Clinton made a pact with Robert Rubin’s Wall Street to pump up “new economy” internet stocks through “irrational exuberance”. When that failed, Greenspan extolled the benefits of adjustable rate mortgages, while President Bush hawked the “ownership society”. Wall Street turned America’s residential real estate sector into the world’s biggest casino — $20 trillion worth of property that could serve as the basis for many tens of trillions of dollars of bets. Bernanke promoted the bubble by assuring markets that America was enjoying the “great moderation” — a new era in which stability dominates — and that in any case, the Fed would protect markets in the case of any hiccups.

Title Fraud is just a symptom of the underlying problem with the Economy which is concentration of wealth.

(I originally posted this item in December, 2009, at The Dream Antilles.  This is a short story by Luis Ramirez, who was executed in Texas on October 20, 2005. My thanks to Abe Bonowitz for passing this story along to me. The story doesn’t require any commentary, and I’m not going to give any. It’s a gift to all of you for the Holidays, Christmas, Chanukah, Kwanzaa, New Year’s, Solstice, whatever holiday, if any, you may celebrate.)

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.

Find the past “On This Day in History” here.

December 22 is the 356th day of the year (357th in leap years) in the Gregorian calendar. There are nine days remaining until the end of the year.

On this day in 1808, Ludwig von Beethoven’s 5th Symphony makes its world premier in Vienna.

Also premiering that day at the Theater an der Wien in Vienna were Beethoven’s Piano Concerto No. 4 in G major, Op. 58, and the Symphony No. 6 in F major, Op. 68-the “Pastoral Symphony.” But it was the Fifth Symphony that, despite its shaky premiere, would eventually be recognized as Beethoven’s greatest achievement to that point in his career. Writing in 1810, the critic E.T.A. Hoffman praised Beethoven for having outstripped the great Haydn and Mozart with a piece that “opens the realm of the colossal and immeasurable to us…evokes terror, fright, horror, and pain, and awakens that endless longing that is the essence of Romanticism.”

That assessment would stand the test of time, and the Fifth Symphony would quickly become a centerpiece of the classical repertoire for orchestras around the world. But beyond its revolutionary qualities as a serious composition, the Fifth Symphony has also proven to be a work with enormous pop-cultural staying power, thanks primarily to its powerful four-note opening motif-three short Gs followed by a long E-flat. Used in World War II-era Britain to open broadcasts of the BBC because it mimicked the Morse-code “V” for “Victory,” and used in the disco-era United States by Walter Murphy as the basis for his unlikely #1 pop hit “A Fifth Of Beethoven,” the opening notes of Beethoven’s Fifth Symphony have become a kind of instantly recognizable musical shorthand since they were first heard by the public on this day in 1808.

SNL Special, Alec Baldwin, Steve Martin and Justin Timberlake (repeat).

The important thing is the rhythm. Always have rhythm in your shaking. Now a Manhattan you shake to fox-trot time, a Bronx to two-step time, a dry martini you always shake to waltz time.

• ABC Family– Miracle on 34th Street (not the good 1947 version), The Polar Express
• AMC– Road House
• Disney– Beauty and the Beast: The Enchanted Christmas
• Discovery– Dirty Jobs (last week’s Holiday Special and new), Auction Kings (premier)
• ESPN– College Throwball, Beef ‘O’ Brady’s Bowl: Louisville v. Southern Mississippi
• ESPN2– Women’s College Hoopies, Florida State @ Connecticut (Sorry Wooden, #89), College Hoopies, UNLV @ Kansas State
• Food– Cupcake Wars (premier)
• FX– Christmas With the Kranks, Deck the Halls x 2
• Lifetime– Undercover Christmas
• National Geographic– All Jesus, all the time (premiers)
• Nick– Merry Christmas, Drake & Josh, Glenn Martin, DDS (premier)
• Oxygen– The Sing-Off x 2
• Sci Fi– Alice (not as good as Tin Man)
• Speed– Monster Jam
• TBS– Family Guy marathon, Glory Daze (premier)
• Turner Classic– Sunny Side Up, Swing Time
• TLC– What Not To Wear x 2 (premiers)
• TNT– A Christmas Carol
• Toon– Tower Prep x 2 (premiers)
• USA– Gone in Sixty Seconds x 2
• Vs.– Devils @ Caps

Later-

• AMC– Tremors
• Sci Fi– Headless Horseman, Eureka (Holiday Special repeat)
• Turner Classic– The Thin Man, Adam’s Rib

Dave hosts Jamie Foxx and Sofia Vergara.  Jon and Stephen in repeats, 12/8 and 12/9.  Conan hosts Kevin Spacey, Kristen Schaal, and Los Lobos.

Boondocks– The Fund Raiser.

How many drinks have you had?

This will make six Martinis.

All right. Will you bring me five more Martinis, Leo? Line them right up here.

Zap2it TV Listings, Yahoo TV Listings

Evening Edition is an Open Thread

1 Gbagbo defies UN, insists ‘I am president of Ivory Coast’

by Dave Clark, AFP

12 mins ago