Holy vote counters, Batman!
Arlen Specter, the lawyer who once upon a time became a District Attorney as a registered Democrat on the Republican ticket, has demonstrated once and for all that Washington maybe ought to take over the car business. After all, there is no one on the planet — not even the bond traders or mortgage brokers — who has a better handle on the ethics of used car salesmen than our top level politicians.
Old joke:
How do you tell if a politician is lying?
His lips are moving.
What is wrong with people today?
Credit card offers packed the sale fliers today. Credit card offers jam my email inbox. Newspapers report that there is no money around to lend. Hello?
Politicians said the sky had fallen.
The news media picked it up.
The stock market dipped.
Politicians beat up the bankers.
The news media picked it up
Bank stocks slid to nothing.
Politicians said real estate tax revenues had crashed.
The news media picked it up.
The stock market tanked.
Politicians beat up General Motors. Oh, sure, they beat up all three automakers but they hammered General Motors unmercifully.
The news media picked it up
Car stocks crashed.
“Just as lower prices are drawing more buyers to the troubled condo market, federal rules are making it even harder for them to get loans,” the Miami Herald reported today.
God help us, doesn’t everyone see the pattern here? It’s no joke.
Some neighbors call Roy Haynes “the World’s Cheapest Man.” I was outraged since I think of myself that way; I reckoned they missed a bet until I saw him dumpster diving on the local news. He dives every day. I do it only when I see something really good and then almost never if there are news cameras about.
Mr. Haynes says to live like “every year is a recession.”
Meanwhile, outspoken California food activist Alice Waters knows we have to make tough choices. She wants us to give up our Nikes to buy organic grapes. Never mind that organic grapes cost four times as much as the Chilean grapes on sale this week or that I have never been able to buy Nikes in the first place.
Methinks Mr. Haynes gets it more than Ms. Waters.
The lead recession story today is that A.I.G. released the names of dozens of the financial institutions they shuffled our bailout money to. We provided $12 billion each for Société Générale, and Deutsche Bank, and “smaller amounts to Barclays and UBS. Wachovia, a bank that is already defunct got $1.5 billion more defuncter.
Now I really can’t buy any Nikes.
National Economic Council chair Lawrence Summers appeared on Face The Nation to talk about it.
The NY Times cherry picked this quote from Mr. Summers’ 15 minutes in the spotlight, “There are a lot of terrible things that have happened … but what’s happened at A.I.G. is the most outrageous.” That irks me because Mr. Summers told Bob Shieffer that the government can’t do much to stop insurance giant’s payout of millions “because they [the bonusees] all have contracts.”
Mr. Shieffer reminded him that A.I.G. managed to cut salaries and bonuses and jobs for all their other people and that there were plenty of “financial wizards at Starbucks with their laptops open, looking for work.”
Mr. Summers, who, despite the NY Times article, apparently thinks the Administration is doing a good job managing this mess, had no reply.
In other news, “Financial fraud is focus of attack by prosecutors” as Bernie Madoff went to jail. Fortunately, it’s not just Mr. Madoff. Unfortunately it’s not Congress. “Across the country, attorneys general have already begun indicting dozens of loan processors, mortgage brokers and bank officers. Last week alone, there were guilty pleas in Minnesota, Delaware, North Carolina and Connecticut and sentences in Florida and Vermont — all stemming from home loan scams.”
I’m thinking the foot soldiers will go to jail but anybody with a bonus over a million bucks is home free.
I had a nice chat with bank president Rick Manahan last week. Mr. Manahan heads the Peoples Trust Company, a privately held community bank with branches in Enosburg Falls, Essex Town Center, Georgia (the town, not the state), St. Albans, and Swanton, Vermont. Like almost all “real” banks1 Rick has no toxic loans; unfortunately like almost all real banks he is now forced to stave off the regulatory nightmare sure to envelop the community banks. His bank will hold the funds for the CapCancer event this summer and will sponsor us as well.
The regulatory issue is a real one. Doctors’ offices have about 6 staff members per doc now because they have so many regulatory and insurance demands to meet. Banks already seem to have about a 1:1 ratio of employees to customers (I made that up) to meet their legal obligations. I don’t think we need to saddle them with more.
“Rules don’t work if people have no fear of them,” Barney Rubble said last week. I think Joe Stalin said it first.
Back to Mr. Summers. He is the (drummed out) Harvard president who said that women have lesser aptitude for work in the highest levels of math and science. The economics prof was Clinton’s Secretary of the Treasury and now heads Obama’s National Economic Council. He is one of more than two dozen members of the Obama inner circle who served in previous administrations.
Change?
I don’t think so.
I do think Mr. Summers must be the brains behind calling the 9,000 earmarks “old business.”
Are we managing this mess?
I don’t think so.
I had hoped I wouldn’t have to blog about this mess any more. I guess that really means I had hoped the people we elect to represent us were at least three quarters as smart as I am.
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I don’t get it. I have spent most of a year hammering our Congress critters about how they just don’t listen and look at what happened. I floated this whacko “windfall bonus tax” and, for first time, they listened!
Let’s see if I have this right: The White House is still trying to “formulate a policy” and the Congress is scrambling to “implement new rules.” Sounds like no one in Washington deserves their bonuses, either.
On the other hand, Mr. Summers apparently still believes the Administration is doing a good job managing this mess. Must not be any female mathematicians on the team, innit.
1“Real” banks means the kind of community bank we used to have. These companies might be large, even statewide, depositories but they have concentrated on banking instead of getting into trouble with reinsurance and other playgrounds outside their areas of expertise.
I saw Missy and Biff when I stopped for the daily fishwrap at the general store and bait emporium here in North Puffin this morning.
“Obama’s attack dogs have it wrong,” Missy said before I had even knocked the snow off my boots. Attack dogs? Missy wears bling which dangles and jangles when she dips her minnows out of the bait tank. She usually prefers to talk about fishing and motorcycles and her job with the state so I put down my newspaper and paid attention.
“Even Biff notices that they go off and drag Monica Lewinsky or A-Rod on steroids or Global Warming through the news,” she pointed to my newspaper, “when they want to distract us from what’s going on in Washington.”
Missy is right. It’s not that anyone, particularly Biff the Plumber, wants the much vaunted (and incalculably expensive) recovery to fail. It’s simply that the much vaunted (and incalculably expensive) recovery has no chance to succeed and everyone in the Administration is afraid we might notice.
I am not a national economist nor do I play one on television. I have, however, run a small business for more than 20 years and kept a budget for more than 40. I may not show my butt crack on the job but I’m obviously closer to Biff the Plumber than to my Congress Critters.
“Last month Obama said the Republicans were his BFFs,” she said. “Now he’s acting like they stole the ball in Keep-Away again.”
Indeed. The current spat lets the Administration skate past the fact that not one single solitary penny spent by a government creates wealth. Oh, dont get me wrong. Government spending makes plenty of people particularly elected people wealthy but it does not create wealth; it just moves the money from one pocket to another. The GDP not only does not rise, it falls when all spending is government spending.
Government spending is the country-wide equivalent of taking in each other’s laundry.
Government borrowing is the country-wide equivalent of taking a reverse mortgage on your house.
But wait! A reverse mortgage sounds like a pretty good idea. You still can’t take it with you but you get to spend it all before you go.
“We decided against a reverse mortgage last year,” Missy said. “The cost is too high and we figure we should leave at least a little something for the kids if we can.”
When the government takes a reverse mortgage on our national house, the kids will get less than nothing. That means the much vaunted (and incalculably expensive) recovery may ruin us.
Missy said she asked Vermont’s lone Congressman if he could prove the G.R.A.F.T. Act would work.
“‘The President understands what Vermonters know: our economy is struggling and bold action is required’,” she said Peter Welch told her. “‘This plan is a major step toward restoring our lost jobs, lost wages and lost opportunities. This bill achieves those goals.'”
She asked him how.
“It relieves pressure on Vermont taxpayers, creates sustainable green jobs, and provides relief,” he said.
When she said she wants some data to back that up, he went on to the next question.
I agree. When 32,000 thousand scientists say “Hey, global warming doesn’t happen the way the politicians say it does,” I’d rather listen to the data than to some rock star with an advertising budget. And when the impartial Congressional Budget Office tells Peter Welch the G.R.A.F.T. Act won’t work, perhaps he should listen. Unless the CBO (his BFF just last week) is no longer his sandbox sweetheart.
And, just in case you thought the friendly pranks had, well, grown up, the Democratic Congressional Campaign Committee took time out from spending money to divert us with some fun.
We ought to be past the schoolyard BFF stage.
If we don’t stop acting like spoiled little kids, the people wearing ties inside the Beltway will bankrupt our proudest industries. And then they surely will bankrupt the entire country.
Vermont Gov. Jim Douglas (R-VT) has spent several hours as President Obama’s special guest; this state expects to receive about $900 million as details of the G.R.A.F.T. Act payouts to the states trickle into public view. The President and the U.S. Congress expect some of those funds to shore up “revenue shortfalls” in the states.
Vermont has a TWO hundred million dollar deficit looming over the next two budget years so the Democratically controlled legislature has decided to spend THREE hundred million dollars of our portion of the G.R.A.F.T. Act windfall to “stabilize” the budget.
The Speaker of the Vermont House has proposed a three-man oversight committee to assure the money is spent wisely.
Apparently that is not enough. The Democratically controlled legislature decided today to RAISE taxes by $24 million dollars in order to make up for the revenue shortfall.
Hello?
I think we just fell into Fiddler on the Roof.
“Alms for the poor, alms for the poor,” called Nahum, the beggar.
“Here, Reb Nahum, is one kopek.” Lazar Wolfe gave him the coin.
“One kopek? Last week you gave me two kopeks.”
The butcher shrugged. “I had a bad week.”
“So, if you had a bad week, why should I suffer?”
Vermonters are having a bad day. The unemployment rate here was 6.4% in December, before the latest round of layoffs at IBM and other Vermont companies. My wife, like so many other American workers, has had her “full time” job cut to just three days per week.
Vermonters are having a bad day but the legislature has voted itself two kopeks.
I have some (small) hope that Vermont will do the right thing on the state budget. After all, a few million is a small enough number that people will notice. I have absolutely no hope that Washington will do the right thing. Congressional action to fix the proposed 1.3 trillion dollar Federal budget comes under rule, It is easier to sell a big lie than a little one.
Watch and learn. The largest Federal budget ever proposed will be bigger when it passes.