02/13/2012 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”.

Paul Krugman: Severe Conservative Syndrome

Mitt Romney has a gift for words – self-destructive words. On Friday he did it again, telling the Conservative Political Action Conference that he was a “severely conservative governor.”

As Molly Ball of The Atlantic pointed out, Mr. Romney “described conservatism as if it were a disease.” Indeed. Mark Liberman, a linguistics professor at the University of Pennsylvania, provided a list of words that most commonly follow the adverb “severely”; the top five, in frequency of use, are disabled, depressed, ill, limited and injured.

That’s clearly not what Mr. Romney meant to convey. Yet if you look at the race for the G.O.P. presidential nomination, you have to wonder whether it was a Freudian slip. For something has clearly gone very wrong with modern American conservatism.

Chris Hedges: Occupy Draws Strength From the Powerless

There is a recipe for breaking popular movements. I watched it play out over five years in the war in El Salvador. I now see these familiar patterns in the assault against the Occupy movement. It goes like this. Physically eradicate the insurgents’ logistical base of operations to disrupt communication and organization. Dry up financial and material support. Create rival organizations-the group Stand for Oakland seems to be one of these attempts-to discredit and purge the rebel leadership. Infiltrate the movement to foster internal divisions and rivalries, a tactic carried out consciously, or perhaps unconsciously, by an anonymous West Coast group known as OLAASM-Occupy Los Angeles Anti Social Media. Provoke the movement-or front groups acting in the name of the movement-to carry out actions such as vandalism and physical confrontations with the police that alienate the wider populace from the insurgency. Invent atrocities and repugnant acts supposedly carried out by the movement and plant these stories in the media. Finally, offer up a political alternative. In the war in El Salvador it was Jose Napoleon Duarte. For the Occupy movement it is someone like Van Jones. And use this “reformist” to co-opt the language of the movement and promise to promote the movement’s core aims through the electoral process.  

Your trillions in free money at work-

Missouri Becomes Second State To Divert Foreclosure Funds Away From Homeowners To Balance Its Budget

By Travis Waldron posted from ThinkProgress Economy

Feb 13, 2012 at 9:26 am

Last week, Wisconsin Gov. Scott Walker (R) announced that he would use the funds his state received from a $26 billion mortgage settlement between 49 states and the nation’s largest banks to help balance the state’s budget, even though the settlement money was marked to help homeowners. In all, Walker will use $25.6 million of the $31.6 million Wisconsin’s state government receives to help close a budget shortfall.

Though Walker’s move to push struggling homeowners aside may seem radical, it is now being followed by at least one other state. Missouri Gov. Jay Nixon (D) and Attorney General Chris Koster (D) have pledged to put $40 million of the state’s $196 million share of the settlement into the state’s general fund to boost its higher education budget…

60 pieces of silver.

California’s size lands state big share of foreclosure settlement

By Alejandro Lazo, Los Angeles Times

February 11, 2012

California walked away with the biggest chunk of this week’s landmark foreclosure settlement partly because of the state’s size but also because of Bank of America’s desire to escape the legacy of its Countrywide problems.

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California’s large share came even though there have been few complaints among state homeowners about the kind of improper robo-signing practices that launched the talks, which quickly morphed into settlement negotiations about errors that occurred throughout the foreclosure process. More than a year ago, evidence began emerging about robo-signing, in which foreclosure documents were signed without being read or with phony names and titles.

“The robo-signing was the hook for the investigation, that was the most outrageous thing that got the whole thing started. But the robo-signing does not amount to the worst things that servicers have done. What caused the ball to pick up steam was all of the other abuses,” said Kurt Eggert, a professor at Chapman University’s law school. “The servicers really needed California in this deal.”

By signing on, California waived a litany of claims it could have brought against the banks, including unfair or deceptive business practices and general consumer protection statutes that applied to wrongdoing in the loan modification and foreclosure process…

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“They are by far the most important mortgage lending state in the country, and as a result are the most important foreclosure state,” said Guy Cecala, publisher of Inside Mortgage Finance. “It is crucial to have them as part of a settlement.

“These banks badly need to get back in the business of processing foreclosures,” Cecala said, “and it is a huge deal if you don’t have the California attorney general breathing down your throat.”

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Wells Fargo spokesman Tom Goyada said the settlement “is not a one-issue agreement. It covers a range of issues and we are happy to have those set aside and put behind us.” Chase declined to comment. Ally and Citibank did not respond to requests for comment.

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If the banks don’t fulfill the $12-billion guarantee, they will have to make cash payments of up to $800 million directly to the state, a provision that is enforceable in California court, instead of federal court in Washington, where the rest of the deal is covered.

The big banks win again

Foreclosure victims get little help in a mortgage-settlement plan that only benefits the banks’ bottom line

By Matt Stoller, Salon

Friday, Feb 10, 2012 10:00 AM Eastern Standard Time

Rather than settling anything, this agreement is simply a continuation of the policy framework of both the Bush and the Obama administrations. So what, exactly, is that framework? It is, as Damon Silvers of the Congressional Oversight Panel, which monitored the bailouts, once put it, to preserve the capital structures of the largest banks. “We can either have a rational resolution to the foreclosure crisis or we can preserve the capital structure of the banks,” said Silvers in October, 2010. “We can’t do both.” Writing down debt that cannot be paid back – the approach Franklin Roosevelt took – is off the table, as it would jeopardize the equity keeping those banks afloat.

This policy framework isn’t obvious, because it isn’t admissible in polite company. Nonetheless, it occasionally gets out.  Back in August 2010, at an “on background” briefing of financial bloggers, Treasury officials admitted that the point of its housing programs were to space out foreclosures so that banks could absorb smaller shocks to their balance sheets.  This is consistent with the president’s own words a few months later.

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At the time, the President was referring to HAMP, the $75 billion program announced in March 2009 as the administration’s signature program to address problems in the housing market. HAMP had been created because Sen. Jeff Merkley of Oregon demanded some remaining bailout money be used to help homeowners, or he would withhold a critical vote on unlocking the authority for the administration to get more TARP money. Larry Summers sent a letter to Merkley offering both a debt write-down plan (“cramdown”) and the dedication of up to $75 billion of money to help homeowners, in return for his vote.  In fact, administration officials had already decided that they would not pursue a debt write-down.

The settlement announced yesterday, whether you believe the $25 billion number (of which only $5 billion is actual cash), is one-third the size of HAMP. As Obama noted nearly two years ago, that’s just not very much gravel.

A more realistic solution to the problem was actually debated within the administration during the transition, in debates revealed by economist Laura Tyson at the Financial Times’ View from the Top Conference in 2011.  She noted that top officials had to decide whether to engage in mass write-downs of debt similar to FDR’s programs in the 1930s by using tools such as judicial modification, or whether to allow millions of foreclosures to go forward. They chose the latter. The current foreclosure epidemic, in other words, is partially a policy choice.

Everything done subsequent to that decision has been designed to mask this essential policy choice. This settlement is simply the latest example. While the headline number on the settlement is $26 billion, the actual cost to the banks and benefit to homeowners could be far lower, depending on how this complicated system of “credits” will be allocated. The banks will in all likelihood be able to charge off activities they had already planned, such as not pursuing deficiency judgments, refinancing and loan modifications. Some of the money may wind up being be paid not by banks, but by investors, such as pension funds.

Moreover, when the banks have reached settlements with law enforcement officials, they generally don’t hold to them.  The Nevada attorney general recently sued Bank of America for violating an agreements the state had made with Countrywide (once the largest mortgage originator in the country, now owned by BOA)  to end various predatory practices. When you issue parking tickets instead of handcuffs for multibillion-dollar crimes, the crime spree continues unabated. And obviously, HAMP, which was originally budgeted at three times the size of this settlement, has been a complete catastrophe.

The Afghanistan Report the Pentagon Doesn’t Want You to Read

Dereliction of Duty draft pdf

Truth, lies and Afghanistan

How military leaders have let us down

By LT. COL. DANIEL L. DAVIS

In Afghan War, Officer Becomes a Whistle-Blower

By SCOTT SHANE

Lt. Col. Daniel Davis’ Truth-Telling Continues: Long Report Published by Rolling Stone

by Jim White

Col. Davis Goes to Washington: A One-Man Battle for Truth-Telling About Afghanistan

by Jim White

Honorable Military Whistleblower: Why Daniel Davis Is and Bradley Manning Is Not

by bmaz

As Greece stares into the abyss, Europe must choose

Maria Margaronis, The Guardian

Sunday 12 February 2012 14.10 EST

When you ask people on the street if they would rather Greece went bankrupt than submit to further measures, many now point out that it is already bankrupt, that public sector workers have gone unpaid for months, that hospitals have no supplies, that the poor are being wrung dry in order to pay the banks. “Let’s get it over with,” a woman who works for the education ministry said to me. “Then we’d know we only had €250 a month and we could start again. This is not the people’s Europe we dreamed of.” The fact that Poul Thomsen of the IMF, the eurozone’s poster boy Mario Monti, the markets and countless economists agree that more austerity will deepen Greece’s depression without making the debt sustainable adds weight to her argument. The icy reception given last week to the Greek delegation in Brussels confirms the sense that its lenders are ready to end the relationship.

Why, then, have large sections of the Greek elite clung so hard to the fantasy that a new loan deal can “save” the country? The obvious answer is that default is a black hole and an enormous risk. No one can predict what suffering a default might bring. Another is that the current crop of politicians built their careers in the system that is now unravelling, based on oligarchies, clientelism and corruption; they’ve proved unwilling to make the reforms that might, in a different global climate, have revived both Greece’s economy and its democracy.

The deeper reasons, though, may be cultural and political. The crisis has intensified old splits in Greek society. You can see it in the polls, which show support ebbing from the centre to the edges of the political spectrum, and especially to the fragmented left. You can see it, too, in the historical parallels people reach for in a vain attempt to name this unprecedented nightmare. Protesters chant slogans from the dictatorship of 1967 to 1974, comparing the deal’s Greek enforcers with the CIA-backed junta. Both left and right talk about a new German occupation – an understandable reference given that Germany is calling the shots and that Greeks last queued at soup kitchens in the 1940s, but one that can edge into racism or crude exaggeration, as in a recent headline that read simply “Dachau”. Both those tropes call up the silent ghosts of the Greek civil war, which launched the cold war in Europe and outlawed the Greek left for the next 30 years. In this story, the west plays the part of the repressive imperial interloper.

For the liberal centre, this is populist anathema. To them Europe is still Greece’s heartland and its hope, the only guarantor of liberal capitalism, human rights and democracy. A few weeks ago a distinguished law professor compared the prospect of default to the Asia Minor disaster of 1922, which brought a million-and-a-half refugees into Greece and convulsed the state, and went so far as to suggest that leaving the eurozone would end the 200-year cycle of the Greek Enlightenment.

Next Steps for Greeks after the Austerity Bill (AKA: Hope for Greece, at last)

by Ian Welsh

2012 February 12

Ok, another austerity package just passed.  That’s the bad news, but amidst the bad news there is some good news.  More than 40 MPs were expelled from the PASOK and ND parties, two from LAOS-those MPs need to form a new, explicitly anti-austerity, pro-default government.  Odds are good they will win the next election, and can form the new government.

No deals made by a sovereign are unrevocable.  Whatever this government is doing, has done and will do, can be undone by a new government.

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Greece can be fixed, if the Greeks are willing to do what it takes, both in terms of electing a new government and that government doing the right things.  Those things will be unorthodox and painful, but no more painful than austerity, and unlike austerity, they will lead to a better economy, and based on experience elsewhere, probably within two or three years of doing the right thing, with some relief being felt within 6 months.

What passes for smart on the Greek Debt Crisis

by Ian Welsh

2011 November 4

It didn’t take years for Argentina when they defaulted.  When Iceland told Europeans to go take a long flying leap of a short pier, it didn’t take them years.  In fact, my best guess is it would take a year, maybe less.  There is too much money chasing far too few returns.  Contrary to the idea that there isn’t enough money in the world, the problem is that there is too much, and it is chasing diminishing returns.

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No, no they don’t have to bail out the banks.  Not for the full value of the default (if Greece just said “we won’t pay”, as opposed to “we’ll pay at some point”.)  The banks have shareholders and bondholders.  Those institutions and people take the losses.  Some of them are public (pension funds, etc…) but many of them aren’t.  Let them eat their losses.  The banks go under, you refloat them, but the cost of doing so is far less than paying off all the bad loans, because the private actors have taken their losses and any excess losses, well, they’re just written off.  Same as when you realize cousin Fred ain’t ever paying you back than $100.  It’s gone.  Done.  Over with.

The only reason “all the debts” must be paid off is because the rich demand it.  They don’t want to take their losses. This is what should have been done in the US.  It is what should be done in Europe.  It is what our lords and masters refuse to do at all costs, because the people who own them, or they themselves, or their friends, or their lovers, are the ones who will take the bath.

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According to the IMF, hardly an organization that wants countries to default, the effect on the economy of defaulting is one year of sharp pain, followed (perhaps) by a few years of lesser growth than otherwise.  In other words, not that bad, and no worse than Greece has already suffered.

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(C)ountries could simply slap on currency controls, which experience shows (most recently and clearly in the Asian currency crisis of the 90s), works.  And permanent austerity, which is what France and Germany want to impose on Italy, Greece and Spain (with the apparent cooperation of their political classes, I might add) will erode the value of the bank holdings in time anyway.

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There are economic tools for dealing with these issues.  Capital and currency controls are one of them, the distinction between default (we’ll pay you eventually, as opposed to we’ll never pay you) is another.  The question of who is being bailed out (private investors, in large part) is another.  And bailing out those investors is a political act, their money is their political power.  The current political class, who is complicit with the current monied class, of course wants to bail them out.

All of this is before we even get to the horribly anti-democratic nature of all of this: the repeated refusal of the political class to allow referendums, the complicity of all major political parties in the process (notice there is no party to vote for if you want to default), and so on.

There is no actual democracy in any part of the world which is attached to the Wall Street centered financial system.   Calls can run up to 1000:1 against TARP and it will pass.  Strong majorities can be for or against particular policies and if the elite disagrees, that’s all that matters.  There are no parties to vote for if you are against the current system.

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Politicians compete for the money and favors of the rich, and what they sell is the ability to wrangle you: to pass the austerity bills, to cut the benefits, to privatize the jewels of the public system, to force through the multi-trillion dollar bailouts.  They control government for the benefit of the rich.

And the rich pay all the way down the line.  They control the media, right down to the bottom, to make sure that what is discussed is what they want discussed, in the terms they want it discussed.  That default isn’t that bad: forbidden.  That currency controls mitigate damage in these circumstances: forbidden.  That lenders will lend to defaulting countries almost immediately: forbidden.

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.

February 13 is the 44th day of the year in the Gregorian calendar. There are 321 days remaining until the end of the year (322 in leap years).

On this day in 1633, Italian philosopher, astronomer and mathematician Galileo Galilei arrives in Rome to face charges of heresy for advocating Copernican theory, which holds that the Earth revolves around the Sun. Galileo officially faced the Roman Inquisition in April of that same year and agreed to plead guilty in exchange for a lighter sentence. Put under house arrest indefinitely by Pope Urban VIII, Galileo spent the rest of his days at his villa in Arcetri, near Florence, before dying on January 8, 1642.

Galileo Galilei (15 February 1564 – 8 January 1642), commonly known as Galileo, was an Italian physicist, mathematician, astronomer and philosopher who played a major role in the Scientific Revolution. His achievements include improvements to the telescope and consequent astronomical observations, and support for Copernicanism. Galileo has been called the “father of modern observational astronomy”, the “father of modern physics”, the “father of science”, and “the Father of Modern Science”. Stephen Hawking says, “Galileo, perhaps more than any other single person, was responsible for the birth of modern science.”

The motion of uniformly accelerated objects, taught in nearly all high school and introductory college physics courses, was studied by Galileo as the subject of kinematics. His contributions to observational astronomy include the telescopic confirmation of the phases of Venus, the discovery of the four largest satellites of Jupiter (named the Galilean moons in his honour), and the observation and analysis of sunspots. Galileo also worked in applied science and technology, inventing an improved military compass and other instruments.

Galileo’s championing of Copernicanism was controversial within his lifetime, when a large majority of philosophers and astronomers still subscribed to the geocentric view that the Earth is at the centre of the universe. After 1610, when he began publicly supporting the heliocentric view, which placed the Sun at the centre of the universe, he met with bitter opposition from some philosophers and clerics, and two of the latter eventually denounced him to the Roman Inquisition early in 1615. In February 1616, although he had been cleared of any offence, the Catholic Church nevertheless condemned heliocentrism as “false and contrary to Scripture”, and Galileo was warned to abandon his support for it-which he promised to do. When he later defended his views in his most famous work, Dialogue Concerning the Two Chief World Systems, published in 1632, he was tried by the Inquisition, found “vehemently suspect of heresy”, forced to recant, and spent the rest of his life under house arrest.

ATHENS – After violent protests left dozens of buildings aflame in Athens, the Greek Parliament voted early on Monday to approve a package of harsh austerity measures demanded by the country’s foreign lenders in exchange for new loans to keep Greece from defaulting on its debt.

Though it came after days of intense debate and the resignation of several ministers in protest, in the end the vote on the austerity measures was not close: 199 in favor and 74 opposed, with 27 abstentions or blank ballots. The Parliament also gave the government the authority to sign a new loan agreement with the foreign lenders and approve a broader arrangement to reduce the amount Greece must repay to its bondholders.  [..]

But the chaos on the streets of Athens, where more than 80,000 people turned out to protest on Sunday, and in other cities across Greece reflected a growing dread – certainly among Greeks, but also among economists and perhaps even European officials – that the sharp belt-tightening and the bailout money it brings will still not be enough to keep the count

The killing of Greece

By Delusional Economics

What makes the situation completely surreal are the numbers. Greek debt in 2008 was approximately 260bn Euro. The first bailout was 110bn, the current one, that appears to be tearing the country apart, is 130bn. Add in the PSI+ haircut of approximately 100bn ( after sweetener deduction ) and you realized that Europe could have simply paid the entire bill in 2008 and saved itself 80bn Euro. Ok, that is an oversimplification of the problem but you can see my point.

However now, after 340bn Euros, Greece is still has an unmanageable debt, is in a far worse position than it was 3 years ago and it appears the country itself is coming apart at the seams.

So basically the Greek politicians and the other Eurocrats took a quarter of a billion euro problem and turned it into a existential trillion Euro one. Worst still their refusal to work cooperatively and misguided policies based around “expansionary fiscal contraction” have plunged Greece into a depression which threatens contagion to other weak economies. Yet at this point I can see absolutely no data suggesting the country is in any way more competitive than it was 3 years ago.

Greece – A Default is Better Than the Deal on Offer

By Marshall Auerback

Pick your poison. In the words of Greek Finance Minister Evangelos Venizelos, the choice facing Greece today in the wake of its deal with the so-called “Troika” (the ECB, IMF, and EU) is “to choose between difficult decisions and decisions even more difficult. We unfortunately have to choose between sacrifice and even greater sacrifices in incomparably more dearly.” Of course, Venizelos implied that failure to accept the latest offer by the Troika is the lesser of two sacrifices. And the markets appeared to agree, selling off on news that the deal struck between the two parties was coming unstuck after weeks of building up expectations of an imminent conclusion.

In our view, the market’s judgment is wrong: an outright default might ultimately prove the better tonic for both Greece and the euro zone.

The only questions that remain to be resolved are these: have all of the parties begun preparations to mitigate the ultimate impact of an outright default by Athens? And will the ECB be sufficiently aggressive in combating the inevitable speculative attacks on the other members of the euro zone periphery, which are almost certain to ensue, once Greece is “resolved” one way or the other.

Greek Bailout Deal, With More Austerity, Poised to Pass Parliament Amid Riots

I’m curious what record unemployment and poverty, bonfires and 100,000 protesters in front of Parliament is, then, if not uncontrollable economic chaos and a social explosion. And Papademos added, strangely, that the deal would allow Greece to return to economic growth in late 2013. I don’t know where this claim was pulled from. Austerity has only brought a deeper recession – and a higher debt-to-GDP ratio – thus far.

About 20 members of the coalition of parties – which control 236 of the 300 seats in Parliament – said they would not agree to the deal. But this leaves a healthy cushion for success. Three members of the Socialists resigned from their party after the bailout terms were announced.

European finance ministers would not agree to bailout terms until Greece passed them first in the Parliament, as they have run out of patience with the Greek’s ability to abide by prior deals. The deal would pave the way for a work-out with Greece’s creditors that would include a nearly 70% haircut on existing debt. European leaders hope this will be seen as a “voluntary” reduction and not a default event that would trigger credit default swaps, but leading rating agencies have already said they won’t see it that way.

Yes, this is a mess with wide ranging global impact.

I think there ought to be a rule. If a famous musician just a few years younger than you survives their twenties, they ought to make it until you can go as a retiree yourself see them singing golden oldies on a golden oldies tour. That’s the way it ought to be.

This is not a political diary, as such, but just a log of my reaction to hearing the news. I heard the news on twitter, and after clicking through to listen to the linked YouTube clip … and verifying the news, which at first I could not believe … I set to browsing Youtube and sharing little reactions and memories, as one does when thinking about the passing of a pop culture star.

The tweet that sent me off on my journey was this one, which I retweeted with my visceral reaction:

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V @edgery / @TheTweetOfGod: This will always and forever be the definition of “nailing it”. […] || Wow. Shivers.

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My lord, it gave me chills again. Someone with the range to not merely belt out the high notes, but to sing them, and toss in a rising flourish on top of “Home of the Free” … and the ability to sing the anthem as a song.

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NB. A lot of these clips are the VEVO music rights clearing house system, which inserts ads ~ but their ad servers may be running behind due to the load, so if there is more than normal buffering, that could be the problem.

Two weeks ago we began a short series on milk, in particular cow’s milk, used as a food by humans.  We mentioned that humans are the only species to drink any kind of milk after infancy (unless we feed it to animals).  We also mentioned that human milk is the very best food for human infants.  Next week we shall end the series by talking about the advantages of real milk to infants unless readers would rather see a discussion of cheese first.

Last time we pretty much focused on fresh milk and few derivatives of it.  This week we shall look at some of the derivatives of milk, either fresh or fermented.  There is a marvelous variety of liquid milk derivatives available, and some are very delicious.  In addition, there is butter which obviously is not liquid.

For a product as perishable as milk, it is amazing that so many wholesome fermented products can be made from it.  There are reasons for that, and we shall get to them in due course.