Gloves officially off

For those of you out there who were afraid the O-man couldn't throw a punch, well, that's not much of a question anymore is it?



Devastating doesn't nearly say it.

Wow.

For some reason bailing out the rich is unpopular

The trend, since the onset of Reaganomics (aka Voodoo economics, trickle-down economics) has been an increasing disparity between the relative wealth of the rich and virtually everyone else.

This gap held its own during the Clinton administration, only to reach new levels of disparity during the reign of King George.

Is it all surprising that an emergency financial package which seems aimed primarily at bailing out the very beneficiaries of the Reagan revolution are universally reviled by the vast majority of the people?

So, the next time a conservative asks what the problem with the rich getting richer, you ow have an answer.

Time to get to know our new masters

The other day Mrs. CaliBlogger, understandably concerned about the burgeoning financial brouhaha, asked me about the security of our primary bank, Union Bank of California.

I blithely told her that the main problems were with investment banks and that regardless, our minuscule deposits were FDIC insured.

She (darn her and her inconvenient facts) pointed out that WaMu and Wachovia were commercial banks. She also wasn't clear on what kind of rigmarole the FDIC would put us through if worse came to worse.

So, as always when faced with a troubled mind, I sought the wisdom of the Delphic Oracle known as the internets and soon found out something interesting indeed, my UBOC had just been bought out. Indeed the buyer (Mitsubishi UFJ Financial Group) has been working on this for a while. And, if you think about it, such deals aren't particularly unusual.

Big companies buy out smaller companies all the time.

So that got me thinking, instead of holding auction where the US government buys out bad debt instruments, shouldn't we be working instead on selling off these badly run Wall Street behemoths to the highest bidder?

Central banks all over the world are sitting on mountains of dollars. If market liquidity is the problem why not encourage those governments to use those dollars to "buy American" if you will.

The way the market's crashing there have GOT to be some bargains out there.

And sure, it'll be a little weird that GM will be owned by the People's Republic of China, but I bet they'll give us great terms on that next Hummer.

Fly in the ointment

I'm not thrilled by need for the proposed bailout, nor am I entirely convinced of the efficacy of the scant provisions that have been floated.

But I'm sure of one thing: the LAST thing the bailout negotiations needs right now is an injection of partisan campaign politicking into the mix.

John McCain, apparently disagrees:

But after the meeting broke up about an hour later, the top Republican on the Senate Banking Committee, Sen. Richard C. Shelby (Ala.), who strongly opposes the bailout, told reporters, "I don't believe we have an agreement." He said he voiced his concerns in the meeting, calling attention to a letter from leading economists that lays out objections to the plan. The bailout plan "will create more problems; we're rushing to judgment," he said in summarizing the economists' argument....

A visibly irritated Sen. Christopher J. Dodd (D-Conn.), chairman of the Senate Banking Committee, summarized the impasse in more pointed terms. He told CNN that the meeting was thrown off when Republicans brought up "some new core agreement" that supposedly had been floated by McCain and was being considered by the Treasury Department.

"What this looked like to me was a rescue plan for John McCain," Dodd fumed. "This is a sad day for the country." He said he still hopes that a deal can be struck but that the Republicans "need to get their act together and decide what they're for."

And so McCain's policy of government by gimmick continues.

Seriously, is this REALLY what you want for the next four years? To live in a state of constant anxiety about what the man with the red button (and I'm not talking about this clown's nose) will do?

John McCain: Crisis manager

As you no doubt have heard, Republican John McCain Is "suspending" his presidential campaign in order to "assist" in resolving the current financial crisis.

Why does this sound to much akin to the resignation of a disgraced bureaucrat who's going home "to spend more time with his family"?

Regardless this strikes me as a cagey political move from master stuntmeister McCain.

Given the ineptitude with which he's handled the crisis so far, campaign silence from McCain will probably work better for him than letting him speak.

Plus he should be good at this since the financial "meltdown" seems to following the classic Republican model: let a problem fester for years without addressing it, then arm-twist panicked Democrats into giving Republicans the extraordinary powers required to deal with the crisis the Republicans themselves created.

As the man in the Guinness ad says: "brilliant"!

Government by crisis

Where have we heard this before?

A national crisis occurs.

The costs of responding will be limited.

But we must act now, now, now or face impending doom, a figurative, if not literal mushroom cloud.

Now I'm not saying some drastic measures won't be needed to shore up an economy teetering on the brink of collapse, but still that doesn't mean we should allow ourselves to be railroaded into just any old deal because BushCorp™ says it's urgent.

Any benefit of the doubt was lost to this crew a looong time ago.

For a far better and more thorough analysis of the similarities on how the Bushies are selling their bailout like they did the invasion of Iraq I suggest Glen Greenwald.

My main point is this, because we need to do _something_ does not mean we should do just anything.

AIG Bailout

If you owe the bank $10,000 that's your problem (so goes the joke), but if you owe the bank $10,000,000 it's the bank's problem.

And if you ad a few more zeros it becomes the government's problem.

And make no mistake, this bailout was necessary, given the current circumstances.

And yet one wonders, need it have been?

Or, could it be, that the AIG bailout is yet another example of the GOP's favorite crisis management technique, management by crisis. I.e: ignore a problem until it reaches catastrophic levels, then scramble like mad to find enough duct tape to keep the thing from falling apart?

And, before I get into a round of Bush-bashing, let me make clear, I don't think this problem is Bush's per se, and I don't think Democrats are immune from procrastination, but the GOP's governing philosophy (if it can be called such) seems to lend itself to such disasters.

Best enunciated by St. Ronald Reagan: "Government is not the solution to our problem. Government is the problem."

And, since government is the problem, why not staff it with incompetent, corrupt cronies? (Katrina)

Why not use it to enrich your friends? (Iraq)

Why not ignore your rival's warnings about the world's dangers? (9/11)

Why not deregulate and let the free market's invisible hand rule and let the chips fall where they may?

But of course, when push comes to shove Republicans only want the chips to fall where they may when they fall on someone else.

I'd post more examples of the results of the GOP's "government is the problem" philosophy, but my head hurts.

[x-posted at Daily Kos]

Dilbert, the economy, the election and you

For those of you not familiar, Scott Adams is the creator of Dilbert, the widely read comic strip about the absurdities of life inside and outside the cubicalized modern world.

He also blogs regularly.

Lately, in his largely fruitless attempts to make sense of the current political situation (I'm not implying blame her, I just recognize that finding a rational response to the absurd may well be a hopeless endeavor) Mr. Adams decided to finance a survey of economists. His goal: to see which presidential candidate's economic plans make the most sense (at least to economists).

Says Adams, “I found myself wishing someone would give voters useful and unbiased information about which candidate has the best plans for the economy. Then I realized that I am someone, which is both inconvenient and expensive.”

At considerable personal expense, Adams commissioned a survey of over 500 economists, drawn from a subset of the members of the American Economic Association, a non-political group, some of whose members had agreed in advance to be surveyed on economic questions.

Obama supporters will be pleased to find that their candidate gets the nod, though McCainiacs will protest that the results are skewed because, as it happens, most economists are Democrats.

Most important (if this can be called important) is that those all important independents also generally favor Obama's economics.

As to what this all means, Mr. Adams:

“If an economist uses a complicated model to predict just about anything, you can ignore it. By analogy, a doctor can’t tell you the exact date of your death in 50 years. But if a doctor tells you to eat less and exercise more, that’s good advice even if you later get hit by a bus. Along those same lines, economists can give useful general advice on the economy, even if you know there will be surprises. Still, be skeptical.”

Detailed survey data here.

CNN article here.

Good economic news!

With first quarter economic news dour at best, it's good to know that some American industries are thriving.

Carbon Tax

It makes sense to me. But, as a proper skeptic, I have to believe there are downsides.

That being the case I ask, what are they?

Please read Steve Chapman's article first, then let me know, why shouldn't we do this?

[H/t to Andrew Sullivan]

[UPDATE: In comments Dan recommends checking out the Carbon Tax Center for additional information. I recommend it too -CK]

Energy futures up. Oh Boy!

Nothing illustrates the divide between everday Americans and the corporate world so beloved by BushCorp™ Republicans as the business page articles hailing the health of energy prices:

Energy futures up after data
By Lisa Sanders, MarketWatch
Last Update: 4:09 PM ET April 20, 2005

DALLAS (MarketWatch) - Crude and its products added to gains Wednesday on the New York Mercantile Exchange after the Energy Department and the American Petroleum Institute reported an unexpected drop in U.S. crude and gasoline supplies.

May crude was last up 11 cents, or 0.4%, at $52.40 per barrel after trading as high as $53.10; June crude, which becomes the front contract on Thursday, gained 0.4%, or 18 cents, to $53.85 per barrel; May gasoline were flat at cents to $1.57 per gallon, having earlier touched a high of $1.5950; and May heating oil was up 0.1 cent at $1.50 per gallon.

Woohoo energy futures are up! I made a bundle on the futures exchange. Tough luck for the poor suckers who'll have to cut back on food to pay for their heating oil and enough gas to drive to their minimum wage jobs. What can I say? Stuff happens.

So. If you ever wonder why the Prez and his Wallstreet buds are so bullish on the economy while you're scraping the sofa cushions for enough change for Taco Tuesday, this is why. The megacorps are happy when oil prices go up, just more money in their pockets.

Paying retail for healthcare

Americans pay double what Canada and France due for health care. And astoundingly the US government alone already contributes more to this cost per capita than either of those countries. And yet in the US infant mortality is higher and life expectancy is shorter. We are obviously not getting the most bang for our healthcare bucks.

Paul Krugman, in his continuing view of the broken American health care scheme has some suggestions as to why:

Why is the price of U.S. health care so high? One answer is doctors' salaries: although average wages in France and the United States are similar, American doctors are paid much more than their French counterparts. Another answer is that America's health care system drives a poor bargain with the pharmaceutical industry.

Doctors overpaid? I'm willing to argue that another time. Big pharma gougeing us? No surprise there. Congress has been in their pockets for years.

But the big offender? Money quote here:

Above all, a large part of America's health care spending goes into paperwork. A 2003 study in The New England Journal of Medicine estimated that administrative costs took 31 cents out of every dollar the United States spent on health care, compared with only 17 cents in Canada.

Nearly a third of medical spending goes to cover admin? Sure. Think of all those medical insurance companies with their presidents and CEOs and vice-presidents of marketing all doing the same jobs as all the other presidents and CEOs and vice-presidents of marketing ad, almost, infinitum.

And it doesn't take a Ph.D. in economics to see that as long as corporations can turn a profit of the sick and dying prices for US healthcare will continue its exorbitant growth.

[UPDATE] Kevin Drum has some very interesting observations on American healthcare satisfaction:

In America, where the elderly are covered by a national system and others aren't, the elderly are more satisfied [than the general population] by a whopping 27 percentage points.

Second, even the poor are more satisfied with their healthcare than the rest of us. The poor generally rely on a combination of Medicaid, emergency rooms, and free clinics for their healthcare, a system that's hard to beat for sheer inefficiency and appalling service. But even at that, the rest of us, who are mostly covered by employer-provided health insurance, are less satisfied than the poor. The system of health coverage provided to the vast majority of American citizens is so bad that we like it even less than the jury-rigged system the poor are forced to use.

Hmmm, now why IS that?