Archive for September, 2008

Opposing a Blank Check for the Financial Industry

Monday, September 22nd, 2008

My letter to my Congressmen

Dear Senators Durbin and Obama and Representative Emanuel:

I’m writing to ask you to oppose Secretary Paulson’s proposal for a blank check to bail out the financial industry. While some form of government intervention may be essential to safeguard the economy, it doesn’t make sense to funnel taxpayer funds, without restrictions, to the very people that got us into this mess.

Privatizing profit and socializing risk is no way to run our economy. It’s disconcerting that the very people who have enshrined personal responsibility and the perfect utility of the free market are being rescued by the public from their own mismanagement.

I support the conditions given by Robert Reich as preconditions for any bailout, namely:

1. The government (i.e. taxpayers) gets an equity stake in every Wall Street financial company proportional to the amount of bad debt that company shoves onto the public. So when and if Wall Street shares rise, taxpayers are rewarded for accepting so much risk.

2. Wall Street executives and directors of Wall Street firms relinquish their current stock options and this year’s other forms of compensation, and agree to future compensation linked to a rolling five-year average of firm profitability. Why should taxpayers feather their already amply-feathered nests?

3. All Wall Street executives immediately cease making campaign contributions to any candidate for public office in this election cycle or next, all Wall Street PACs be closed, and Wall Street lobbyists curtail their activities unless specifically asked for information by policymakers. Why should taxpayers finance Wall Street’s outsized political power – especially when that power is being exercised to get favorable terms from taxpayers?

4. Wall Street firms agree to comply with new regulations over disclosure, capital requirements, conflicts of interest, and market manipulation. The regulations will emerge in ninety days from a bi-partisan working group, to be convened immediately. After all, inadequate regulation and lack of oversight got us into this mess.

5. Wall Street agrees to give bankruptcy judges the authority to modify the terms of primary mortgages, so homeowners have a fighting chance to keep their homes. Why should distressed homeowners lose their homes when Wall Streeters receive taxpayer money that helps them keep their fancy ones?

Please oppose any unrestrained bailout.

Sincerely,

James Seidler

It’s shouting into a tornado, sure, but what else are you going to do?

The Banks Built Their Own Pyre, Then Lit a Match

Thursday, September 18th, 2008

Dean Starkman has an excellent story, “Boiler Room,” at the Columbia Journalism Review exploring how greed and irresponsibility inflamed our current financial crisis. Predatory lending, abandoned regulations and amoral financial industry groupthink led to an atmosphere where home buyers were reduced to suckers begging to be bilked out of their money.

His analysis is summed up as follows:

I realize that borrowers who signed the notes can never be fully let off the hook; no one knows what went on in the room at each closing—although the reporting of the last several years certainly yielded plenty of examples of loans made to stroke victims, the retarded, the elderly, the illiterate, and people who don’t speak English. A fine piece in April of this year by The Indypendent, a New York alternative paper, for instance, describes how an eighty-six-year-old Brooklyn man diagnosed with dementia decided it was a good idea to refinance his 5.95 percent, thirty-year, fixed-rate loan with an option ARM, an instrument that BusinessWeek described as “the riskiest and most complicated home loan product ever created.”

But more broadly, it pays to remember that the borrower is the amateur in this equation, someone who might execute a mortgage twice in a lifetime. A lender will do it a hundred times before lunch.

So, that’s what we know: the lending industry used marketing deception—including boiler-room tactics—on a mass scale against a class of financially vulnerable borrowers (which subprime borrowers are, by definition) and other middle-class financial amateurs already laboring with stagnating incomes and rising costs for health care, education, and, of course, housing.

Conservation Challenges Seen in Gorilla Killings

Wednesday, September 17th, 2008

Mark Jenkins’ July 2008 National Geographic article, “Who Murdered the Mountain Gorillas?,” offers a heartbreaking look at the challenges of conserving endangered species. Corruption, greed and extreme poverty intersect in the Democratic Republic of the Congo’s Virunga National Park, with dire consequences for the area’s mountain gorillas.

Planning for a Post-Bush Future

Tuesday, September 16th, 2008

Mother Jones‘ September/October issue, “Exit Strategy: How to Fix a Post-Bush Nation,” offers a comprehensive breakdown of Bush-era bungling. Exploring topics ranging from executive power to domestic priorities, the magazine examines what went wrong (at no small length) and offers a primer on how the next President can recover from Bush administration misconduct and incompetence.

A few stories stood out as particularly relevant:

Jack Hitt’s “Pursuit of Habeas” outlines the origins of habeus corpus and details why the Bush detainment policy was counterproductive as well as illegal.

James K. Gailbraith’s “How to Burn the Speculators” shows how increasing deregulation of the financial industry, stretching back to Reagan, is tied to today’s financial meltdown. (McCain economic advisor Phil Gramm plays a leading role, but the blame is widely spread.)

Finally, “Bush’s Reign of Error: A Timeline,” provides a quick-hit summary of the 43rd President’s many lowlights. Looking back, the scope of his malfeasance is pretty breathtaking. Among other things, I’d forgotten that Henry Kissinger was initially selected to head the 9/11 commission.

U.S. Attitudes Toward Torture

Monday, September 15th, 2008

There have been many distressing political developments over the past seven years, but the one I find most upsetting is the acceptance of torture as a tool of the U.S. government. The Atlantic blogger Andrew Sullivan has an alarming post on the subject today. Evaluating the results of a World Public Opinion survey on torture, he writes:

A new survey of global public opinion [PDF] reveals the appalling truth. Americans are now among the people on earth most supportive of government’s torturing prisoners. The United States is in the same public opinion ballpark as some of the most disgusting regimes on the planet:

Support for the unequivocal position was highest in Spain (82%), Great Britain (82%) and France (82%), followed by Mexico (73%), China (66%), the Palestinian territories (66%), Poland (62%), Indonesia (61%), and the Ukraine (59%).   In five countries either modest majorities or pluralities support a ban on all torture:  Azerbaijan (54%), Egypt (54%), the United States (53%), Russia (49%), and Iran (43%).  South Koreans are divided.

So America’s peers in the fight against torture, in terms of public opinion are Azerbaijan, Egypt, Russia, and Iran. This is what America now is: a country with the moral values of countries that routinely torture and abuse prisoners, like Egypt and Iran. Even the Chinese, living in a neo-fascist market state, oppose torture in all circumstances by 66 percent, compared to Americans where only 53 percent do! More horrifying: a higher percentage of Americans – 13 percent – believe that torture should generally be allowed than in any other country save China, Turkey and Nigeria. And in the last two years, as the American president celebrates and authorizes the torture of people who have not been allowed a fair trail, support for torturing terror suspects has increased from 36 percent to 44 percent.

The only other countries where support for torturing terror suspects has grown are India, Nigeria, Turkey, South Korea and Egypt. In all other developed countries, support for an absolute ban on torture has actually risen in the past two years. America is now leading the way in legitimizing and celebrating torture as a legitimate tool for governments.

David Foster Wallace

Sunday, September 14th, 2008

I’m not overly familiar with the work of David Foster Wallace, although I did appreciate the piece he wrote for the Atlantic on the American Idea. With his suicide, though, have come a number of appreciations on the Internet, and one of these led me to the following commencement speech by Wallace. It’s well worth reading.

Here’s an excerpt dealing with what I like to call “the bookkeeping”:

And I submit that this is what the real, no bullshit value of your liberal arts education is supposed to be about: how to keep from going through your comfortable, prosperous, respectable adult life dead, unconscious, a slave to your head and to your natural default setting of being uniquely, completely, imperially alone day in and day out. That may sound like hyperbole, or abstract nonsense. Let’s get concrete. The plain fact is that you graduating seniors do not yet have any clue what “day in day out” really means. There happen to be whole, large parts of adult American life that nobody talks about in commencement speeches. One such part involves boredom, routine, and petty frustration. The parents and older folks here will know all too well what I’m talking about.

Palin Profile in the New York Times

Sunday, September 14th, 2008

The New York Times continues to probe Sarah Palin’s record. The most recent profile, “Once Elected, Palin Hired Friends and Lashed Foes,” explores the governor’s history of favoring loyalty over competence in Alaska political positions. Alarmingly, there’s also a history of nontransparency, with Palin using private e-mail addresses and behind-the-scenes dealings to conceal the workings of government.

WASILLA, Alaska — Gov. Sarah Palin lives by the maxim that all politics is local, not to mention personal.

So when there was a vacancy at the top of the State Division of Agriculture, she appointed a high school classmate, Franci Havemeister, to the $95,000-a-year directorship. A former real estate agent, Ms. Havemeister cited her childhood love of cows as a qualification for running the roughly $2 million agency.

Ms. Havemeister was one of at least five schoolmates Ms. Palin hired, often at salaries far exceeding their private sector wages.

When Ms. Palin had to cut her first state budget, she avoided the legion of frustrated legislators and mayors. Instead, she huddled with her budget director and her husband, Todd, an oil field worker who is not a state employee, and vetoed millions of dollars of legislative projects.

And four months ago, a Wasilla blogger, Sherry Whitstine, who chronicles the governor’s career with an astringent eye, answered her phone to hear an assistant to the governor on the line, she said.

“You should be ashamed!” Ivy Frye, the assistant, told her. “Stop blogging. Stop blogging right now!”

Ms. Palin walks the national stage as a small-town foe of “good old boy” politics and a champion of ethics reform. The charismatic 44-year-old governor draws enthusiastic audiences and high approval ratings. And as the Republican vice-presidential nominee, she points to her management experience while deriding her Democratic rivals, Senators Barack Obama and Joseph R. Biden Jr., as speechmakers who never have run anything.

But an examination of her swift rise and record as mayor of Wasilla and then governor finds that her visceral style and penchant for attacking critics — she sometimes calls local opponents “haters” — contrasts with her carefully crafted public image.

Throughout her political career, she has pursued vendettas, fired officials who crossed her and sometimes blurred the line between government and personal grievance, according to a review of public records and interviews with 60 Republican and Democratic legislators and local officials.

More Doubts on Palin

Saturday, September 13th, 2008

Both the New York Times Editorial Board and columnist Bob Herbert share many voters’ concerns about the qualifications of Alaska governor Sarah Palin to be Vice President.

The Editorial Board:

What made it so much worse is the strategy for which the Republicans have made Ms. Palin the frontwoman: win the White House not on ideas, but by denigrating experience, judgment and qualifications.

The idea that Americans want leaders who have none of those things — who are so blindly certain of what Ms. Palin calls “the mission” that they won’t even pause for reflection — shows a contempt for voters and raises frightening questions about how Mr. McCain and Ms. Palin plan to run this country.

Herbert:

While watching the Sarah Palin interview with Charlie Gibson Thursday night, and the coverage of the Palin phenomenon in general, I’ve gotten the scary feeling, for the first time in my life, that dimwittedness is not just on the march in the U.S., but that it might actually prevail.

How is it that this woman could have been selected to be the vice presidential candidate on a major party ticket? How is it that so much of the mainstream media has dropped all pretense of seriousness to hop aboard the bandwagon and go along for the giddy ride?

For those who haven’t noticed, we’re electing a president and vice president, not selecting a winner on “American Idol.”

Ms. Palin may be a perfectly competent and reasonably intelligent woman (however troubling her views on evolution and global warming may be), but she is not ready to be vice president.

With most candidates for high public office, the question is whether one agrees with them on the major issues of the day. With Ms. Palin, it’s not about agreeing or disagreeing. She doesn’t appear to understand some of the most important issues.

I think Herbert’s lede sums up why the media is actually doing its job for once in probing Palin’s beliefs and qualifications. If the Republicans are good at anything, it’s not blinking as they pull off the big con. The slight of hand involved here is just too egregious to be overlooked, though.

Palin Whiffs in First Interview

Friday, September 12th, 2008

Reading the transcript of the Charlie Gibson interview of Sarah Palin is like watching a Big Leaguer strike out at teeball. Sure, the player should’ve never been called up from the minors, but, what can you do? (Except vote for Obama, of course.)

Some lowlights:

GIBSON: Do you agree with the Bush doctrine?

PALIN: In what respect, Charlie?

GIBSON: The Bush — well, what do you — what do you interpret it to be?

PALIN: His world view.

GIBSON: No, the Bush doctrine, enunciated September 2002, before the Iraq war.

PALIN: I believe that what President Bush has attempted to do is rid this world of Islamic extremism, terrorists who are hell bent on destroying our nation. There have been blunders along the way, though. There have been mistakes made. And with new leadership, and that’s the beauty of American elections, of course, and democracy, is with new leadership comes opportunity to do things better.

GIBSON: The Bush doctrine, as I understand it, is that we have the right of anticipatory self-defense, that we have the right to a preemptive strike against any other country that we think is going to attack us. Do you agree with that?

PALIN: I agree that a president’s job, when they swear in their oath to uphold our Constitution, their top priority is to defend the United States of America.

I know that John McCain will do that and I, as his vice president, families we are blessed with that vote of the American people and are elected to serve and are sworn in on January 20, that will be our top priority is to defend the American people.

***

GIBSON: What insight into Russian actions, particularly in the last couple of weeks, does the proximity of the state give you?

PALIN: They’re our next door neighbors and you can actually see Russia from land here in Alaska, from an island in Alaska.

GIBSON: What insight does that give you into what they’re doing in Georgia?

PALIN: Well, I’m giving you that perspective of how small our world is and how important it is that we work with our allies to keep good relation with all of these countries, especially Russia. We will not repeat a Cold War. We must have good relationship with our allies, pressuring, also, helping us to remind Russia that it’s in their benefit, also, a mutually beneficial relationship for us all to be getting along.

***

PALIN: We cannot repeat the Cold War. We are thankful that, under Reagan, we won the Cold War, without a shot fired, also. [Ed. note: Uh, how many things are wrong in that sentence?] We’ve learned lessons from that in our relationship with Russia, previously the Soviet Union.

We will not repeat a Cold War. We must have good relationship with our allies, pressuring, also, helping us to remind Russia that it’s in their benefit, also, a mutually beneficial relationship for us all to be getting along.

You have to read the whole thing to fully internalize that she has NO FUCKING IDEA WHAT SHE’S TALKING ABOUT!!!! And people are pretending she could be President! Jesus!

Drill Baby Drill

Wednesday, September 10th, 2008

From the New York Times: a sex, bribes, collusion and drugs scandal at the governmental department responsible for collecting money from oil companies:

As Congress prepares to debate expansion of drilling in taxpayer-owned coastal waters, the Interior Department agency that collects oil and gas royalties has been caught up in a wide-ranging ethics scandal — including allegations of financial self-dealing, accepting gifts from energy companies, cocaine use and sexual misconduct.

You have to read the whole story to get a full grasp of the piggishness, but one character who stood out was Gregory Smith, a director of the Denver office of the Minerals Management Service. As the Times details:

The report said that from April 2002 to June 2003, Mr. Smith improperly used his position with the royalty program to help a technical services firm seek deals with the same oil and gas companies. The services firm paid Mr. Smith more than $30,000 for asking the oil companies to hire it, the report said.

Mr. Smith requested and received approval to take on the outside work, but the report says he misled the office into thinking he would be performing technical consulting, rather than marketing the firm to companies with which he also conducted official business

The report accuses Mr. Smith of improperly accepting gifts from the oil and gas industry, of engaging in sex with two subordinates, and of using cocaine that he purchased from his secretary or her boyfriend several times a year between 2002 and 2005. He sometimes asked for the drugs and received them in his office during work hours, the report alleges.

The report also says that Mr. Smith lied to investigators about these and other incidents, and that he urged the two women subordinates to mislead the investigators as well.

But don’t worry–it’s not like he’ll face any repercussions for his actions.

[Smith and another worker] retired during the investigation, rendering them safe from any administrative punishment, and the Justice Department has declined to prosecute them on the charges suggested by the inspector general.