May 2012 archive

Well, what I like to do on formal occasions like this is to take some of the various types of songs that we all know and presumably love, and, as it were, to kick them when they’re down.

I find if you take the various popular song forms to their logical extremes, you can arrive at almost anything from the ridiculous to the obscene, or — as they say in New York — sophisticated.

I’d like to illustrate with several hundred examples for you this evening, first of all, the southern type song about the wonders of the American South. but it’s always seemed to me that most of these songs don’t go far enough. the following song, on the other hand, goes too far. It’s called I Wanna Go Back To Dixie.

Those of you that read this regular series know that I am from Hackett, Arkansas, just a mile or so from the Oklahoma border, and just about 10 miles south of the Arkansas River.  It was a rural sort of place that did not particularly appreciate education, and just zoom onto my previous posts to understand a bit about it.

Hackett schools were horrible when I was going there, so after the seventh grade my parents decided to look for alternatives.  My friend’s parents actually bought a house in a good Fort Smith school district, but there were some domestic issues involved as well and his mum and dad actually preferred living apart.

The only other legal alternative was for me to attend Saint Anne’s High School, the only Catholic high school in town.  Arkansas is only about 3% Catholic, so even to have a Catholic high school was sort of amazing.  The problem was that Saint Anne’s started at ninth grade.  We went for an interview and the principal decided that I had sufficient background to bypass the seventh grade.

Runaway train on entitlement cuts?

digby, Hullaballoo

5/16/2012 01:00:00 PM

I’m afraid we are looking as a scenario in which they’ll end up accepting “tax reform” (another word for tax cuts for the wealthy and corporations) in exchange for tax hikes on the middle class and benefits cuts to social security and medicare. And they will strut and puff and knock themselves over patting each other on the back for being “responsible” and doing the “hard work” of screwing the American people, including the most vulnerable, in the middle of a depression and at a time when their futures have never been more insecure. Heckuva job.

I don’t know what more to say about this. Voting against them will not stop it. Voting for them will not stop it. So far, public opposition will not stop it. Certainly, there’s little reason to believe that the administration will stop it.

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Everyone keeps telling me that they will never cut social security and medicare because they’re popular programs. One would certainly think that should be true. So can someone please tell me what they have to gain by pretending they want to? Honestly, I don’t see it either as a negotiating ploy or a public relations tactic. The only thing I can come up with is that they believe the Village hype that they will be “heroes” for bucking the popular will. And perhaps they will be — not in the public’s mind, of course, but Gloria Borger and Cokie Roberts will think they’re just dreamy and Pete Peterson and his pals on Wall Street will surely be grateful.

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Democrats know all this. Becerra should have his district offices inundated with phone calls. People should picket and protest. But I doubt it will do any good. They are determined to do this and they aren’t being honest about the reasons why. (Either that or they are too stupid to be in elective office and that’s saying something.) Bill Clinton is one of the most astute students of the budget in the entire country. He knows very well that he is spouting utter crapola. There is no earthly reason for him to do this except as a reflexive desire to appear reasonable to people who loathe the very air he breathes — or appease Pete Peterson and his pals. Actually, in his case, it’s probably both.

This has the feeling of a runaway train to me. The Republicans have worn them down and they just want to get past the election. Sure, they may get some little token of a tax hike on the wealthy in return. But it will be nothing to the sacrifices that average Americans will have to make. Indeed, this whole formulation is fundamentally immoral — tax hikes on millionaires in exchange for poor, sick old people having to do with less than their already meager guarantee is disgusting. Couldn’t we at least agree to fuck over the sick, old people only as a last resort?

I disagree with digby.  Vote against them.

• Be Prepared by: ek hornbeck
• On This Day In History May 16 by: TheMomCat
• Not Capitalism by: ek hornbeck
• Say it ain’t so. by: ek hornbeck
• Don’t Believe Your Lying Eyes by: ek hornbeck
• The Wild West Is Where I Want To Be by: ek hornbeck

DocuDharma

DNC Shamed Into Helping Wisconsin Recall, Still Not Committing Funds

By: David Dayen, Firedog Lake

Wednesday May 16, 2012 9:35 am

After some controversy, the Democratic National Committee has agreed to help efforts with the Wisconsin recall. However, this will not include any of the DNC’s war chest of funds, which they are husbanding for the general election.

Debbie Wasserman Schultz, the DNC chair, committed to come to Wisconsin to attend a fundraiser and to recruit volunteers for Tom Barrett’s campaign to recall Scott Walker. In addition, DNC members have been encouraged to contribute to the recall effort. However, the DNC did not pledge funds that they plan to use to support the general election campaign of President Obama and other Democrats in the fall. They certainly have plenty; the President and the DNC just announced that they raised $44 million just in April.

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The question becomes whether a recall failure would have consequences for the fall election. The DNC is clearly making the choice to sit out the recall financially, wait for everything to blow over, and come back in the fall. But there could be a ripple effect here, in a key swing state as well as a state with an open Senate seat and a hot contest there. The failure to keep up the recall energy and dispose of Walker could definitely have repercussions. And there are only three weeks to turn it around.

Electoral victory my ass.  What “Democrats” are really interested in-

The Pete Peterson Fiscal Summit and What It Says About Democrats

By: David Dayen, Firedog Lake

Wednesday May 16, 2012 1:03 pm

(I)t’s interesting to me to see who has been seduced by this power. Republicans are basically saying the same things in the era of Peterson that they have been saying for the past thirty years: they want low taxes and less wealth-redistributing programs to the lower classes. Sometimes they say they want “less spending” and a “smaller deficit,” but only when a Democrat is in office, and only in relation to those redistributive policies. The tax cuts blow holes in the deficit, so that’s not a preoccupation for them.

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The only tax cuts they would entertain repealing are the ones that distribute funds to the lower classes. For example, in their budget bill, they replaced defense cuts with, among other things, a rollback of the child tax credit, which goes mostly to lower-class and middle-class families.

By contrast, Democrats have moved over the last several decades, under duress from Peterson on having to “be serious” about deficits. One after another at last night’s event, Democratic politicians took aim at so-called entitlements, which I prefer to describe as the social safety net.

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I’d like to find the Democrats who are “reluctant to commit to longer-term health-care savings” and who “don’t want to touch Social Security.” Contrary to President Clinton’s remarks, they no longer exist. Even Nancy Pelosi is playing footsie with benefit cuts.

If this doesn’t happen in the near future, it’s because Peterson and his ilk failed to get Republicans to provide cover with any tax increases. But the idea that Democrats are somehow reluctant to get out the budget axe is just wrong. They are far more serious about so-called “fiscal responsibility” than Republicans. In fact, the President on that stage, Clinton, was the one who ended welfare as we know it. We now know, after the Great Recession, the terrible costs to that policy for millions of families. But Democrats haven’t learned from that experience.

So while Republicans are clearly insane about the fiscal future – and impervious to logic, as Tom Coburn showed – the country has drifted to the right because one party has become caught up in pleasing the likes of Pete Peterson rather than their own constituents.

“We have a lot of people in our party who will not be drummed out if they depart from the conventional wisdom,” Clinton said last night. That’s not true. For the conventional wisdom in the Democratic Party is now that “balanced” cuts are needed to the entire budget to move America forward. And if you depart from that… you hear the drums playing, right?

One party.  And it’s not the Republicans, they’ve always been about pleasing the likes of Pete Peterson.

Modern economic philosophy is generally considered to have started with Smith and Hobbes who were reacting against a system of monarchal merchantilism where favored courtiers were rewarded with monopolies in a planned economy enforced by a state claim of exclusive authority on violence.

Read that again because it’s important.

Their groundbreaking contribution was the concept that markets (individuals) could more efficiently allocate resources (capital) than corrupt cronyism.  You know, free market capitalism.

Compare and contrast-

End of the Affair?

The Editors of The New York Times

Published: May 14, 2012

There has been less buying and selling of stock, and there have been huge outflows of investor dollars from domestic stock mutual funds, as detailed recently by The Times’s Nathaniel Popper. If the trend continues, the result could be a less robust market, with fewer companies opting to raise money by issuing shares and fewer investors willing to put their retirement savings into stocks.

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Policy makers should pay attention. Evidence suggests that investors are not merely reacting to tough conditions, but rather are staying away because they do not trust the market. Restoring trust is crucial to restoring the market.

American stocks have doubled in price since the market hit bottom three years ago. But trading in the United States stock market has not only failed to recover since the 2008 financial crash, it has continued to fall. In April, average daily trades stood at 6.5 billion, about half their peak four years ago. By comparison, after the market busts of 1987 and 2001, trading recovered within two years. In fact, going back to 1960, trading had never declined for three consecutive years, let alone four and counting.

Investors haven’t just hunkered down, they have headed for the exits. Since the start of 2008, domestic stock mutual funds, a common way for individuals to invest, were drained of more than $400 billion, compared with an inflow of $52 billion in the four years before that.

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There is also the feeling that the market has become increasingly unfair to investors. For example, Mr. Popper also reported recently on rebates to brokers from stock exchanges. In general, brokers are required to find the best prices for clients who pay them to buy and sell shares. But with the nation’s 13 exchanges now paying brokers for sending them business, brokers may have an incentive to search for the biggest rebate rather than the best price. A new study has estimated that rebates could be costing mutual funds, pension funds and individual investors as much as $5 billion a year.

Also known as “maker-taker” pricing, the rebates have caught the attention of market researchers and investor advocates, including two former economists for the Securities and Exchange Commission who issued a report in 2010 saying that “in other contexts, these payments would be recognized as illegal kickbacks.”

I realize citation of major media outlets is considered but a quaint remnant of irrelevant reality by sycophants and ‘bots, but I thought I’d draw this to your attention.

“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”.

Wednesday is Ladies’ Day

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Katrina vanden Heuvel: It’s time to break up the big banks

Consider $2 billion lost on a bad bet, plus billions more as investors dumped the stock, a providential warning. When Jamie Dimon, the imperious head of JPMorgan Chase, revealed that the bank had lost so much on a derivatives trade gone bad, it was clear warning that, four years after blowing up the economy, the big banks are still playing with bombs. [..]

When Dimon testified before the Financial Crisis Inquiry Commission in 2010, he said that when his daughter asked him what a financial crisis was, he told her “it’s something that happens every five to seven years.” He seems intent on validating his prediction.

But the United States went for decades without a financial crisis after the New Deal regulations shackled the banks. It was only with deregulation under Reagan and Clinton that financial crises have been inflicted on us regularly. Now Dimon’s bank’s bad bets have given us one last warning: It is time to break up the big banks

Maira Sutton: Internet Freedom Activists Protest Secret Trade Agreement Being Negotiated This Week

The U.S. content industry will try anything to preserve its profit margin and power over the creative content market at the expense of the Internet. They will use any tactic that circumvents democratic processes to make new rules for the Internet that favor their interests and not the interests of Internet users or the technical community that actually builds the Internet as we know it. The Trans-Pacific Partnership (TPP) is yet another example of these tactics.

The TPP is a secretive plurilateral1 agreement that includes provisions dealing with intellectual property, including online copyright enforcement, anti-circumvention measures, and Internet intermediary liability. Due to the secrecy of the negotiations, we do not know what is in the current version of the TPP’s IP chapter; the general public has only seen a leaked February 2011 version of the U.S. IP chapter proposal pdf. Based on the one-sided nature of the groups directly involved, and the content of what has already leaked, we should all be concerned about the prospect of the TPP including provisions that will harm online expression, privacy and innovation on the Internet.

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.

Click on image to enlarge

May 16 is the 136th day of the year (137th in leap years) in the Gregorian calendar. There are 229 days remaining until the end of the year.

On this day in 1868, the U.S. Senate votes against impeaching President Andrew Johnson and acquits him of committing “high crimes and misdemeanors.”

In February 1868, the House of Representatives charged Johnson with 11 articles of impeachment for vague “high crimes and misdemeanors.” (For comparison, in 1998, President Bill Clinton was charged with two articles of impeachment for obstruction of justice during an investigation into his inappropriate sexual behavior in the White House Oval Office. In 1974, Nixon faced three charges for his involvement in the Watergate scandal.) The main issue in Johnson’s trial was his staunch resistance to implementing Congress’ Civil War Reconstruction policies. The War Department was the federal agency responsible for carrying out Reconstruction programs in the war-ravaged southern states and when Johnson fired the agency’s head, Edwin Stanton, Congress retaliated with calls for his impeachment.

Of the 11 counts, several went to the core of the conflict between Johnson and Congress. The House charged Johnson with illegally removing the secretary of war from office and for violating several Reconstruction Acts. The House also accused the president of hurling slanderous “inflammatory and scandalous harangues” against Congressional members. On February 24, the House passed all 11 articles of impeachment and the process moved into a Senate trial.

Felix Salmon, finance blogger at Reuters and Matt Taibbi, of ‘vampire squid” fame from “Rolling Stone“, were guests on “View Point with Eliot Spitzer“, discussing the implications JPMorgan’s $2 billion trading loss and why it should matter to anyone with a banking account at Chase, or any other to big to fail bank.

Taibbi and Salmon agree JPMorgan’s risk-taking has broad implications. “JPMorgan Chase takes deposits in from every single mom and pop, and small business and large business, in the world, and the President of the United States,” Salmon says. “They’re a utility bank and it is their job and their duty … to take those deposits and lend them out into the economy. And what do they do instead? They take $360 billion and put it in a hedge fund in London.”

Jamie Dimon’s failure

by Felix Salmon

Drew’s Chief Investment Office quadrupled in size between 2006 and 2011, reaching $356 billion in total, and it’s easy to see how that happened. On the one hand, it was incredibly profitable, with the London team alone, which oversaw some $200 billion, making $5 billion of profit in 2010, more than 25% of JP Morgan’s net income for the year. At the same time JP Morgan accumulated enormous new deposits in the wake of the financial crisis, both by acquiring banks and by attracting big new clients wanting the safety of a too-big-to-fail bank. Historically, JP Morgan has served big corporations by lending them money, but nowadays, as the cash balances on corporate balance sheets get ever more enormous, the main thing these companies want from JP Morgan is a simple checking account – one where they can be sure that their money is safe.

With lots of deposits coming in, and little corporate demand for loans, it was easy for all that money to find its way to the Chief Investment Office, which could take any amount of liabilities (deposits are liabilities, for a bank) and turn them into assets generating billions of dollars in profits.

Never mind the weak tea Volker rule, what is needed is a new, revised Glass-Steagal, the break up the TBTF and protection for investors and the economy.

“He seldom has any point to make except obvious ones” – The Christian Science Monitor