patrick.net

CaptainShuddup says

Well my clueless friend, unlike YOU, I actually know poor people. I've known them all my life. They have never had less than they do right now. Just because Obama says he's doing things, just so you can gush and say "what a guy, what a guy", the poor are getting shit. Funny you mention Social Security in your list, when it is the liberals right now in Washington, and echoed by the collective Patlib, to end Social Security. And more over, SSI has always been there, it's what Obama is doing to it, today that is the travesty. And you call it an accomplishment?

Yep.

CaptainShuddup says

People don't want unemployment insurance, with out an effective jobs policy that will actually create jobs. Instead they are enticed to extend UEI so far to the point, that every HR department hiring manager in the US, deems them unemployable for life. Because they took the dole for 18 months, while sitting on their asses eating bonbons and watching soap operas.

Nice fucking guy, Obama doomed an entire generation to entitlements for life, because there's not a company in the world that would hire them with a ten foot pole.

Well said.

Maybe it's because I don't know anything about Stockman, and therefore don't know which "side" I'm supposed to be on, but I thought the article was brilliant. Seems like you're all still trying to reduce everything to partisan talking points, when what's happening to this country goes so far beyond that.

Homeboy says

Seems like you're all still trying to reduce everything to partisan talking points...

Oh that's just a new Liberal talking point to shut everybody up, when the other side is making too much sense.

The Professor says

At what point did the money become funny?

Nixon closing the gold window, yes.

http://en.wikipedia.org/wiki/Nixon_Shock

http://research.stlouisfed.org/fred2/series/CPIAUCNS

Homeboy says

Maybe it's because I don't know anything about Stockman, and therefore don't know which "side" I'm supposed to be on, but I thought the article was brilliant.

The article was full of shit. It did hit nicely on the "Kunstler" themes of EVERYTHING IS GOING TO SHIT and here's plausible-sounding reasons.

Starting from the use of Keynes in the title and as a strawman.

Reaganites love talking about Keynes, but their grasp of ANY economic school of thought is about ankle-deep.

Vicente says

The article was full of shit.

What, specifically, was untrue in the article?

It did hit nicely on the "Kunstler" themes of EVERYTHING IS GOING TO SHIT and here's plausible-sounding reasons.

I don't see any similarity at all between the two. Stockman didn't say everything went to shit; he says the economy went to shit, and he's right. Do me a favor - go find yourself a chart of the distribution of wealth in the United States over time, and then tell me things haven't gone to shit.

Starting from the use of Keynes in the title and as a strawman.

Reaganites love talking about Keynes, but their grasp of ANY economic school of thought is about ankle-deep.

I'll tell you who's full of shit - Keynsians. I consider myself a liberal, but I draw the line at licking the ass of people who gave all my money away to Wall Street just because you think I'm "supposed" to. Fuck that.

I saw Stockman on The Daily Show tonight. He didn't say a single word I didn't agree with. Stewart started out the interview obviously thinking he was going to do battle with Stockman, and by the end, they were both in complete agreement.

You can slap all the superficial labels on it you like, but he makes a lot of sense.

When did liberals decide to start defending crony capitalism, anyway? That's not the kind of liberal I want to be.

I disagree with Wall Street worship as well.

BUT he did seem to have some concept that regulation and taxes should "store nuts for the winter". Sounds like a grown up idea but something nobody in power in last 30+ years remembers.

Was Alan Greenspan a Keynesian? Plenty of crony capitalist enablers style themselves as libertarians, randists, and others who all spit on Keynes.

Vicente says

Was Alan Greenspan a Keynesian? Plenty of crony capitalist enablers style themselves as libertarians, randists, and others who all spit on Keynes.

All you can do is cry about crony capitalism when most of the Keynesian money went straight into the pockets of the people that you so despise. Instead, acknowledge that the Keynesian method failed because of human nature and look for alternatives. The more money/credit you make available, the more crony capitalism thrives. Sure, you can try to reign in on that with higher taxes, but money has a tendency to evade and since a lot of people who benefited form the spending are in your camp as well, it will be very hard to progress with any significant taxation (rich democrats and republicans alike have their money offshore). Meanwhile the budget is fucked because you became dependent on spending and the kids are fucked as well. We are all responsible for this shit, not some wealthy boogeyman who exclusively votes republican. Time to confess.

Shorter mell: We conservatives are too powerful to get your way so give up and go with the system we want.

Bellingham Bill says

Shorter mell: We conservatives are too powerful to get your way so give up and go with the system we want.

Do you really believe that? How do you reconcile this with the enormous social equality momentum in the US and the fact the diminishing secular influence of religion and the sorry state the republican party is in? Doesn't seem to me that conservatives are in charge. Or maybe they have made the right moves and became all socially liberal but still want to exploit the poor, who knows? I think that everybody that can get in on the gravy train will get in, no matter what their political thinking is. Money, the great equalizer :)

Vicente says

Stockman, another ex-Wall Streeter peddling lies to the peasants.

Yes, he’s a truth-teller. And truth hurts, flushing out his enemies. Why? They’re sucking trillions from Americans. So you hate him. Counterattack. Big mistake. Don’t dismiss David Stockman. He’s no Kim Jong-Un blow-hard.

http://www.marketwatch.com/story/critical-warning-no-13-stockmans-apocalypse-2013-04-06?link=MW_story_investinginsight

What Keynesian means to the middle class:

(1)You go to work and work hard...
Rich:do more with less resources
Poor:Sit home and wait for the mailman

(2)You buy an over priced house, in a buyers market, and take on an imprudent Mortgage from the bank.

Bank get to already spend money on future interest payments, you have yet to make.
Rich get to buy your house for pennies on the dollar, when you get foreclosed.
Poor gets government subsidy to pay rent to the guy that bought your house, for pennies on the dollar.

(3)You go back to (1)

Bigbubbabear says

Don’t dismiss David Stockman.

Why not?

I mean I'm not down with WORSHIP of any pundit.

Way back in the 80's Stockman worked in the Reagan WhiteHouse.

Stockman eventually had a Come To Jesus moment when he realized that Reaganism wasn't working. He admitted as such. I admire him for that. However this doesn't mean I think everything that comes out of the man's mouth is right. He spent 17 years doing what? Inventing a new heart? No, he was raping and plundering on Wall Street, which makes him suspect in my book. His 2-year stint at Collins and Aikman, he skated out with plenty of money in his pocket and the company went into Chapter 11.

Another example of this is Peter Schiff, who was right about the Housing Collapse but completely wrong on his decoupling nonsense. Should I have stuck with Peter because he was right once? Nope.

Vicente says

I disagree with Wall Street worship as well.

BUT he did seem to have some concept that regulation and taxes should "store nuts for the winter". Sounds like a grown up idea but something nobody in power in last 30+ years remembers.

Was Alan Greenspan a Keynesian? Plenty of crony capitalist enablers style themselves as libertarians, randists, and others who all spit on Keynes.

There you go with the labels again. Who gives a shit what label you put on something? I care whether the idea is sound. Stockman went on the Daily Show and said Glass Steagall should never have been repealed, that banks should not be in the stock market gambling business, that GS and Morgan Stanley were running the treasury, and that we shouldn't have bailed them out. He said "The world would function just fine without Goldman Sachs".

Which one of those things do you disagree with?

Homeboy says

Which one of those things do you disagree with?

I agree until you get down to the "no bailouts".

Yes we shouldn't have lit the house on fire. Let's not do that again. However letting the house burn down to "teach a lesson" isn't good either. Although if I were emperor, the execs and bondholders would have taken a haircut to demonstrate pain must be shared.

Where was Stockman when Glass-Steagall was being repealed? Did he write any editorials about it then?

Vicente says

Way back in the 80's Stockman worked in the Reagan WhiteHouse.

Stockman eventually had a Come To Jesus moment when he realized that Reaganism wasn't working. He admitted as such. I admire him for that. However this doesn't mean I think everything that comes out of the man's mouth is right. He spent 17 years doing what? Inventing a new heart? No, he was raping and plundering on Wall Street, which makes him suspect in my book. His 2-year stint at Collins and Aikman, he skated out with plenty of money in his pocket and the company went into Chapter 11.

But YOU seem to think everything that comes out of the man's mouth is WRONG, only because he used to work for Reagan. We should consider the IDEAS.

mell says

How do you reconcile this with the enormous social equality momentum

aha haa ahaha

mell says

the diminishing secular influence of religion and the sorry state the republican party is in

Fiscal conservatives need social conservatives votes and bodies on the ground to retain the Republicans in control of the House and be competitive every 4 years.

This means the social conservatives -- ie religious nutjobs -- have to get with the new program and stop overtly hating the gays and perhaps women, thought the latter is going to be a harder row to hoe for them.

The bottom line is if you aren't concerned about this graph:

http://research.stlouisfed.org/fred2/series/GINIALLRH

you're either too stupid to understand it or your ideology has made you defective

robertoaribas says

It didn't have to be that way, but that seems to be what some on this thread are proposing as a morally superior system... go figure!

Word. Not just morally, but generally superior, too.

Hey Spain, Greece, lots of quarters of austerity. Where the boom at?

Not bailing out the banks was fine. We have a process for throwing out the dirty water from the tub without throwing out the baby; it's called bankruptcy.

The government could have created a temporary bankruptcy division (100% and explicitly constitutional) to wind up Bank of America, Citigroup, CIT, etc. and sell good assets to more conservative regional and local banks, and made the investors eat the trash.

Instead, everybody was forced to trade cash for trash, and then the banks decided not to lend the money they got, but instead make a greater share of their income from banking fees.

Damned if I can't find this great chart I saw a while back about the relative income of banks shifting from loans to money from fees, but here's an article targeted at bank managers about emphasizing fees:
http://www.independentbanker.org/issues-a-operations/206-revenues/908-measuring-fee-income-success

From Forbes, a bit about seeking to smack the poor with fees:
http://www.forbes.com/sites/halahtouryalai/2012/04/26/how-banks-are-getting-richer-off-the-poor/

Bellingham Bill says

This means the social conservatives -- ie religious nutjobs -- have to get with the new program and stop overtly hating the gays and perhaps women, thought the latter is going to be a harder row to hoe for them.

Now that's what I call a good conspiracy theory!

Homeboy says

We should consider the IDEAS.

Unless the ideas are shit.

I orginally opposed the bailouts and contacted my representative on the matter. Yes I was one of those guys bugging his facebook pals to write Congress to vote NO as well. I wrote a lot about it.

However, I changed my mind lately. The SENSIBLE thing to do was
1) stabilize the system
2) re-enact Glass Steagall.

This was no S&L debacle, the sums involved and counterparty obligations were far too large and globalized banks created another problem. Now all we need to do is re-enact Glass Steagall, so get Stockman cracking on THAT instead of peddling his "well we SHOULD have let the megabanks bankrupt" as that ship has already sailed.

Vicente says

Unless the ideas are shit.

You mean like printing money and bailouts instead of prosecutions?

And that ties in with the Keynesian money printing scheme. It is easier if the same rules apply for everybody to the most extend possible, so we should not let entities create fiat money while we put people behind bars for doing the same thing. This is obviously a gross simplification but I stand by the general gist of it and it can be applied to drones, illegal police or attorney general action (fast and furious anyone?), wiretapping, etc.

robertoaribas says

Allowing a systemic failure of the banking system, and the resultant fear causing cash runs on actually solid institutions, resulting in their failures, and the closings of viable businesses that couldn't get the cash they needed... Well, that is what made the great depression great.

It didn't have to be that way, but that seems to be what some on this thread are proposing as a morally superior system... go figure!

I reject your premise that allowing Goldman Sachs to fail would have caused a "systemic failure of the banking system". I reject your premise that runs on banks would have caused a systemic failure. (For one thing, they didn't have deposit insurance then. For another, it would have been possible for the government to take over insolvent banks and shut them down in an orderly fashion, bailing out depositors rather than just giving trillions of dollars in cash to bank execs to do whatever they pleased with.) I reject your assertion that you know for a fact exactly why events unfolded the way they did during the Great Depression, and that you know for a fact that the exact same thing would have happened if we didn't completely bail out Wall Street with no strings attached. I reject your false dilemna that our only two choices were giving Wall Street whatever they wanted, or an exact repeat of the Great Depression. And lastly, I reject your bullshit strawman that any of us are advocating such an event.

Vicente says

Now all we need to do is re-enact Glass Steagall, so get Stockman cracking on THAT instead of peddling his "well we SHOULD have let the megabanks bankrupt" as that ship has already sailed.

He already said so on TV last night, and I told you as much. Are you unable to read?

Bellingham Bill says

Fiscal conservatives need social conservatives votes and bodies on the ground to retain the Republicans in control of the House and be competitive every 4 years.

I agree, except I would replace "Fiscal conservatives" with Republicans, because if history is any guide, republicans are less fiscally conservative than democrats.

Republicans talk a good game now, because they're trying to create a political wedge between themselves and Obama. I guess it's smart politics. Try to convince the idiot masses that the increased deficits are Obama's fault, rather than the result of a GDP that is so much lower than projected GDP (and tax revenues) when all of the current spending was put in motion.

Not that any of the dimbulbs would read this, but:
http://www.huffingtonpost.com/bob-cesca/repeat-after-me-obama-cut_b_1955561.html

As I've documented before, the CBO reported in January, 2009 that the federal budget deficit for that fiscal year, which began on October 1, 2008, was already $1.2 trillion. President Obama's additional '09 spending added another $200 billion to the deficit, bringing the total to $1.412 trillion. Unprecedented and huge, but given the enormity of the financial crisis and the depth of the recession, there weren't many other options on the table. Add two wars into the mix and there you go.

But since then, deficit spending has dropped precipitously. Why? Chiefly because President Obama signed the Statutory Pay-As-You-Go Act in February, 2010, which mandates that new spending be offset with spending cuts or new revenue. Yes, a Democratic president and a Democratic Congress passed this legislation. Guess how many congressional Republicans voted for the law. Zero. Not one. Perhaps during this week's debate, Vice President Biden could ask Rep. Paul Ryan who voted against the bill.

John Bailo says

This is case of the previous winners of the game suddenly at the risk of losing and therefore just as someone else gets a shot at building a hotel on Pacific Avenue, they kick the game board and say "this is boring, I want to play a new game".

Exactly.

More:

http://www.huffingtonpost.com/charles-ferguson/bank-crimes_b_1675714.html

Robert Sproul says

What is the likelihood that in this debacle, with losses 70 times as great as
the S&L criminal conspiracy, no crime was committed? It defies logic.
I
think your skepticism originates in OBAMA saying that no crimes
were
committed.

The problem is the "burden of proof". It's not whether you or I or Obama THINK a crime was committed, it's what can be proven. I think the banks probably committed fraud, but who knows if it can be proven....

Of course it can be proven. Look at the massive interstate fraud that eventually got papered over as "robo-signing" and settled without jail time in exchange for "helping homeowners" (LOL) with a small reduction in uncollectable debt. There you have actual participants saying on the record to CBS News and others that they observed and actually participated in fraud. They were hired to forge signatures for banks. They've told their stories publicly and expressed their dismay that prosecutors never showed any interest.

In this TBTF era, people seem to have forgotten what honest bankers and honest lawyers are supposed to do for a living. Watch Jimmy Stewart in "It's a Wonderful Life." Of course it takes work to prove any criminal case, that's why it's called a job and they pay you for it.

"Mortgage paperwork mess: Next housing shock?"

"Robo-signing" of mortgages still a problem

My favorite excerpt, "Lenders say they are working with regulators to fix the problem but cannot explain why it has persisted."

Well, duh! It's like taking a part out of a machine and wondering why the machine doesn't work anymore. If you take out the threat of criminal prosecution, criminals continue. If nobody else cares enough to stop them, why should they be expected to stop themselves?

Jon Corzine roaming the earth as a free man is proof enough that they ignore all the proof and just protect their crony buddies instead of prosecuting. Try misplacing 500 million - 1.5 billion and claiming you "don't know" where the money is, pleading the fifth and see how fast your ass lands in prison, incorporated or not. Yeah, I mean he was an Obama supporter, uh oh, oh well.. ;)

robertoaribas says

you don't know what the word fraud means...outway

I do know what fraud means, and you don't know how to spell outweigh.

Electronic check processing required federal legislation to change the law. If the banks wanted to process mortgages faster, they needed to change the law to do that. Instead, they broke the law, then hired people to forge the paper trail, then got regulators not to prosecute them.

curious2 says

Electronic check processing required federal legislation to change the law. If the banks wanted to process mortgages faster, they needed to change the law to do that. Instead, they broke the law, then hired people to forge the paper trail, then got regulators not to prosecute them.

Correct. Tons of companies falter and fail every day because of laws that could and probably should be changed - that doesn't mean that they can disregard the law at their will instead and prosper.

mell says

I mean he was an Obama supporter, uh oh, oh well

That obviously isn't the key:

Where is Phil Gramm hiding? The former Republican senator from Texas, who wrote the radical banking deregulation of the 1990s and was rewarded for his efforts to enrich the banks with a plum job at Switzerland-based UBS, has not been heard from since his bank got nailed by the G-men. Or, as The New York Times put it, UBS now has the distinction of being “the first big global bank in more than two decades to have a subsidiary plead guilty to fraud.”

Surely Gramm, who retired from the bank last year, must know something about the nefarious activities conducted over a time span when he was helping to manage the firm. This latest scandal, involving the rigging of a major trusted banking interest rate, might finally test the theories that he has long written into law that assume banks are best when regulated by themselves—a now obviously dumb idea.

As The Wall Street Journal reported on Thursday: “U.S., U.K. and Swiss authorities alleged a vast conspiracy led by UBS AG to rig interest rates tied to trillions of dollars in loans and other financial products, indicating the practice was far more pervasive than previously known.” But what did Gramm know about this criminal behavior at a bank he helped govern, and when did he know it?

In a deal brokered with the criminal division of the U.S. Justice Department, UBS was also fined $1.5 billion in the massive Libor interest-rate-fixing scam that evidenced a pattern of deep corruption across a score of top banks. But Gramm, the man most responsible for the repeal in 1999 of 60 years of sensible banking regulation that enabled the financial industry to run wild, has not responded to a single question from the mainstream media concerning UBS’ criminal behavior. I assume he has been queried, given his important prior contribution to the sorry state of banking.

When Gramm was still at the bank, his bio page on the UBS website paid tribute to his prior achievements in government: “As chairman of the Banking Committee, Sen. Gramm steered through legislation modernizing the nation’s banking, insurance and securities laws.”

That “modernization” in 2000 made legal the mergers that created the too-big-to-fail banks that had to be bailed out by taxpayers, as well as ensuring that the burgeoning markets in toxic derivatives and credit default swaps were summarily freed from all government regulation. Bill Clinton signed off on the new laws, and his successor, George W. Bush, enthusiastically enforced them.

How fitting then to find the two presidents united again on several occasions documented on the UBS website participating in bank-sponsored panels on “Revitalizing America.” Clinton’s foundation has partnered with UBS in mentoring small businesses in poorer communities, the very areas hit hardest by the banking shenanigans of the past decade. Ever the optimist, Clinton promised that “Our partnership with UBS Wealth Management Americas will give these businesses essential new opportunities to expand and to make a positive difference in underserved communities.” With friends like these ...

The cozy bipartisan reunion of Gramm with the two presidents under the auspices of UBS goes a long way toward explaining the source of our economic misery. It would be instructive to now ask all three whether the crimes of UBS had been enabled by their own actions while they were still running the U.S. government.

That is why I assume the normally loquacious Gramm is on the lam, or surely we would have heard from him by now, at least on the Fox News Channel that has been so solicitous of his wisdom in the past. But not just on Fox. Gramm and his wife Wendy, who was rewarded with a position on Enron’s board of directors after her own stint in government undermining consumer protections, were the high priest and priestess of the religion of radical deregulation that captivated U.S. presidents from Ronald Reagan through Bill Clinton and on to George W. Bush.

Or does Gramm still blame the economic crash on those of us he condemned as “a nation of whiners,” a statement that caused his ejection from a leading role in the 2008 presidential campaign of Sen. John McCain?

If Phil Gramm were to feign ignorance in response to that line of questioning, the way Wendy did after the caper at Enron, where she was a member of the audit committee, it would certainly make the case for ever more government supervision of corporate accountability.

This was, after all, one of the most powerful couples to ever swirl through the platinum revolving door between the highest level of government and corporate power, an exhibit of crony capitalism performed with such exquisite finesse, and yet wild abandonment, that it can almost be considered kinky in its indifference to real world outcomes.

http://www.civilcrime.net/2012/12/why-hasnt-former-senator-phil-gramm.html

finehoe says

That obviously isn't the key:

Obviously not, but an interesting side note ;)

One thing I've learned from this thread.

People use the word Keynesian like they used to use the word Communist.

It's mostly to smear anyone allegedly associated with it, as automatically an enemy. Frequently used by people who described themselves as "Austrian" school of thought.

Very few would describe themselves as Keynesians, so it's not a particularly useful tool.

Keynesian is like saying antibioticist. Some people say you should never use antibiotics, or use them as little as possible, by staying healthy with a good diet plenty of rest, not too much stress etc.

But are the people who for a variety of reasons are prone to infections, and use antibiotics, antibioticists ?

If using antibiotics too often or for every little viral infection that they can't even help is bad, and will cause antibiotic resistant infections, does that mean that using antibiotics is never good ? Even when there is a bad infection that is so bad that it could be fatal without antibiotics?

I guess if someone never took care of themselves in the good times, and when the opportunities were there to be healthy and get strong, the person didn't seize those opportunities, and they were chronically ill and getting infections, maybe you could call the person an antibioticist.

Translation: when we had a chance to pay down debt, or at least continue with surpluses and to not put wars and so much else on the federal credit card we should have seized them. Now we are sicker than we have been in the last 60 years, and the plutocrats say look, its all because of the antibiotics.

finehoe says

mell says

I mean he was an Obama supporter, uh oh, oh well

That obviously isn't the key:

Yeah, my new passionate pursuit is convincing people of the bi-partisan nature of the corporate coup d'etat.
It certainly hasn't made me popular at parties.
In 2010 Democrat funding from Corporate PACs achieved parity with Republicans.
Change can't come from within this system any longer.
The next revolution has to be a debt jubilee and freedom from the bankers.

I am not a Keynesian, I think what we're doing now is avoiding the politically (both domestic politics and geopolitically) impossible with short-term measures.

The Democrat Congress raised taxes in 1993 and what thanks did the electorate give them in 1994?

The door, that's what.

Our tax to GDP is around 26%, and the core problem is our entire asset structure -- debt, savings, investments, it's all the same thing -- is predicated on these low taxes. (Countries with AAA credit ratings have ratios in the 40-50% range)

http://en.wikipedia.org/wiki/List_of_countries_by_tax_revenue_as_percentage_of_GDP

We could double taxes on corporations, picking up $300B/yr, but since corporations own our media and also the overall message and policy machinery (think tanks, Federalist Society, ALEC), not to mention campaign financing, that's a tough row to hoe politically.

We could raise taxes a lot on the top 1-5%, but they're the 'job creators' and all that, LOL (obviously the 1% have got the same power corporations do, not surprising since the 1% own so much of the equity in this country already).

I also think we need to raise taxes across the board -- the Bush tax cuts were a stupid idea that just resulted in higher home prices and housing rents in the end.

But see 1994 for how that idea works.

Then there's the problem of China and our $300B/yr trade deficit with them.

That's $300B/yr flowing out of our paycheck economy and not returning as wages, $3000 per household per year!

http://research.stlouisfed.org/fred2/series/MANEMP

6 million jobs gone already.

Gasoline cost $4000/household now. Little of that cycles back into the paycheck economy:

http://research.stlouisfed.org/fred2/series/CES1021100001

The big rent is of course health care, at $8000+/yr per capita that's around $5000/yr per household in economic rents being pocketed by someone

http://politicalcorrection.org/factcheck/200908050002

But the core problem is all the red team / blue team conservative vs. liberal bullshit stays away from these actual problems.

The Republicans try to keep the tens of millions of religious nutters on their side, since it's golden to have single issue voters pull the lever (to save babies, protect Israel, keep Christ in Christmas, stop the Gay Agenda, whatever) even as you fuck them over financially via the above wealth transfer mechanisms

The critical thing is education. People got to see and agree on the actual problems, not be diverted and blinded by all the bullshit.

Republicans lost HALF their House seats in 1932, and TWO THIRDS of their Senate seats up that year.

THAT was the people speaking a language the politicians understood.

indigenous says

My question is what percentage of the Tiffany denizens are public employees?

Federal employees are paid more than their private-sector counterparts, but it's still completely dwarfed by the obscene amount of money the Wall Street fatcats are making. (Actually, "making" isn't a good word for it. It's more like stealing.)