Do Not Lie To Me About These Fucking AIG Bonuses

The fastest way to piss me off is to out-and-out lie to me. I mean Lie. Lie, lie, lie. Prevaricate. Say something you know to be untrue. And that's what's going on right now about these AIG bonuses and from the Obama Administration! Via Jane Hamsher at FDL:

Language from the Senate bill, written by Dodd:

(4) a prohibition on such TARP recipient paying or accruing any bonus, retention award, or incentive compensation during the period that the obligation is outstanding to at least the 25 most highly-compensated employees, or such higher number as the Secretary may determine is in the public interest with respect to any TARP recipient;

Also:

(a) In General- Notwithstanding any other provision of law or agreement to the contrary, no person who is an officer, director, executive, or other employee of a financial institution or other entity that receives or has received funds under the Troubled Asset Relief Program (or ‘TARP’), established under section 101 of the Emergency Economic Stabilization Act of 2008, may receive annual compensation in excess of the amount of compensation paid to the President of the United States.

(b) Duration- The limitation in subsection (a) shall be a condition of the receipt of assistance under the TARP, and of any modification to such assistance that was received on or before the date of enactment of this Act, and shall remain in effect with respect to each financial institution or other entity that receives such assistance or modification for the duration of the assistance or obligation provided under the TARP.

Dodd's version prohibited TARP recipients from paying out bonuses, retention awards or incentive compensation to the 25 most highly compensated employees. It also prohibited any employee of a company receiving TARP funds from making more than the President. Both provisions would have been in effect so long as a company was receiving TARP funds. Since AIG just paid out $1 million in bonuses to 73 employees, Dodd's version limiting all employees to what the President made (roughly $500,000) would have substantially nipped that in the bud.

Very Fucking Crystal Clear. Dodd inserted the "don't pay these people" language into the bill.

In fact, the Wall Street Journal makes it entirely clear. From Jane again and the WSJ:

The most stringent pay restriction bars any company receiving funds from paying top earners bonuses equal to more than one-third of their total annual compensation. That could severely crimp pay packages at big banks, where top officials commonly get relatively modest salaries but often huge bonuses.

As word spread Friday about the new and retroactive limit -- inserted by Democratic Sen. Christopher Dodd of Connecticut -- so did consternation on Wall Street and in the Obama administration, which opposed it.

Who pushed back against Dodd, and told him to neuter the provision? The WSJ says Geithner and Summers:

The administration is concerned the rules will prompt a wave of banks to return the government's money and forgo future assistance, undermining the aid program's effectiveness. Both Treasury Secretary Timothy Geithner and Lawrence Summers, who heads the National Economic Council, had called Sen. Dodd and asked him to reconsider. [emphasis Jane's]

Glenzilla:

Jane's post documents this sequence of events without any possibility for doubt. The debate that took place over limits on executive compensation for bailout-receiving companies only occurred six weeks ago, and it is all documented in the public press. Dodd was the one fighting against the White House in order to apply the prohibition to all bonus payments, i.e., to make the compensation limits retroactive as well as prospective. As but one crystal-clear example that proves this, here is a February 14 article from the Wall St. Journal on the debate over executive compensation limits:

The most stringent pay restriction bars any company receiving funds from paying top earners bonuses equal to more than one-third of their total annual compensation. That could severely crimp pay packages at big banks, where top officials commonly get relatively modest salaries but often huge bonuses.

As word spread Friday about the new and retroactive limit -- inserted by Democratic Sen. Christopher Dodd of Connecticut -- so did consternation on Wall Street and in the Obama administration, which opposed it.

Can that be any clearer? It was Obama officials, not Dodd, who demanded that already-vested bonus payments be exempted. And it was Dodd, not Obama officials, who wanted the prohibition applied to all compensation agreements, past and future. The provision which shielded already-promised bonus payments from the executive compensation limits ended up being inserted at the insistence of Geithner. [emphasis Glenn's]

I'll tell you what change I can believe in; the change of employees, starting with Geithner and Summers.

Obama better clean house and keep promises or we're looking at a one-term-wonder. It's this kind of shit that Republicans eat with a goddamned spoon and it's not neccessary. Obama's administration SHOULD have said "Dodd was right, and we're inserting that language going forward." Because THAT'S THE EXACT POSITION THEY FIND THEMSELVES IN!

Why they find it necessary to pitch Dodd overboard amazes me. Connecticut ALREADY has 1 Rethug Senator named Joe LIEberman; do they want to hand CT 2 fucking senate seats?

Between the lie factor and the politics I am just amazed at the stupidity. And not a little concerned about how it's going to continue in the future. And despite all this bonus hoo-ha, Obama is still going to be painted as a SOCIALIST!

HA! HAHA! HAHAHAHA!

So, some cheery Socialist Music For Us Comrades:



TAGS: Lies!, Christopher Dodd, Change I can't Believe in, Geithner Must Go,

Conservative Fiscal Policy as Grand Larceny

Alan Greenspan, The Alpha Dog of Crony Capitalism

The economy is undeniably THE story these days, with everybody on the edge of their seats wondering if it's really going to 'crater' or will the global intervention that's going on save the day.

When Jon Stewart had Greenspan on The Daily Show (Sept. 18, 2007) he brought up a very interesting point, and I think he nailed Greenspan on his low-interest policies. What Stewart points out is that the existence of the Fed means that there isn't really a free market at all. And after letting Greenspan pontificate on the supposed fundamentals of monetary policy Stewart smoothly demonstrated who was the smartest person in the room.

And it wasn't Greenspan. Not by a long shot.

Alan Greenspan Bums Out Jon Stewart

(Those of you outside the United States can watch this on Canada's Comedy Network.)

Stewart: "So the Fed - or whoever's leading it - could in fact, if they wanted to, goof on all of us."
Greenspan: "They wouldn't want to"
[...]
(Greenspan pontificates at length on fiscal policy - why there is a need for a central bank. Stewart goes along playing dumb to a point. Then he pounces.)
[...]
Stewart: So we're not a free market then. There's an invisible 'benevolent' hand that touches us.
Greenspan: Absolutely, you're quite correct. To the extent that there is a central bank governing the amount of money in the system that is not a free market and most people call it regulation.
Stewart: And so we're really just deciding , , because when you lower the interest rate and drive money to the stocks that lowers the return people get on savings in effect.
Greenspan: Yes indeed.
Stewart: So they've made a choice 'we would like to favor those who invest in the stock market and not those who invest in a bank, that helps us.'
Greenspan: God, no. That's the way it comes out, but that's not the way they think about it.
Stewart: (laughs) Explain that to me, because it seems to me that we favor investment but we don't favor work. The vast majority of people work. They pay payroll taxes and they use banks. Then there's this whole other world of hedge funds and short betting - it seems like craps - and they keep saying, "no no no, don't worry about it, it's the free market, that's why we live in much bigger houses." But it really isn't, it's the Fed. Or some other thing, no?
Greenspan: I think you'd better re-read my book.
Stewart: Alright. But am I wrong in saying that we penalize work by making a choice?

That last question never really got answered, Greenspan going into a rant about psychology versus economic models, admitting that the latter were pretty much useless in the face of the former. To which Stewart replies, "You've just bummed the shit out of me." Which I guess is why they call economics the Dismal Science.

The important point here is that Jon Stewart went up against the presumed alpha dog of conservative economics and utterly defeated him, tearing down a central pillar of laissez faire theories. The markets are not free and fair; no way, no how. The 'invisible hand' is in fact under the control of certain interests, who make choices that enrich some segments of society at the expense of others. The Fed functions as an economic weapon of mass destruction in the Great War on The Middle Class. And frankly it undermines the real fundamentals of the economy in doing so.

This was all predicted a long time ago. I remember reading an article in The Economist back in Reagan's reign warning of the very mechanism Stewart points to. I remember it so well because they called Reaganomics by a term that was new to me - the Rentier Economy. Essentially it's the same thing - a system that rewards ownership above work. The Economist recognized that such a situation was a recipe for disaster, and undermined the strengths of a free market. Indeed they likened the system to a type of feudalism - whereby the wealthy landowners forced the peasants to work, then reaped the benefits of their toil come harvest time. Under such a system their was little incentive for the peasant to work very hard, because he knew the fruits of his labors would just be stolen from him. Nor was there much incentive for the Lords of the Manor to compete or introduce new efficiencies. They already lived on opulent estates in houses with more rooms than they could occupy, and had lots of money to spend on gambling and hookers. It's no wonder that free market economics replaced this system of corruption and greed. The problem is that the free market has devolved into a system of crony capitalism, which I and others have recognized as little better than a system of corporate feudalism.

Crony capitalism ignores a fundamental of economics that's been with us forever, perhaps best expressed by a president known for his honesty.

"Labor is prior to, and independent of, capital.
Capital is only the fruit of labor,
and could never have existed if Labor had not first existed.
Labor is superior to capital,
and deserves much the higher consideration."
-- Abraham Lincoln --

A healthy economy must MUST MUST be based on production somewhere along the line. Flipping real estate and trading paper 'instruments' just don't feed the bulldog. Ignoring that is what has led America into a spiral of debt, with the balance of trade increasing every year, and both the government and the general public living beyond their means in the blithe expectation that the bills will never come due. Worse than that is the fact that the base of paying jobs, particularly in manufacturing, has been eroded by outsourcing during the same time, undermining the ability of the economy to pay back the debt. This is an issue to which Mr. Greenspan seems to have turned a blind eye and a deaf ear, actually going on record as denying that this is harmful.

Bernie Sanders confronts him on the issue in this video. Watch this, Bernie rips him a couple of new ones. You want to start setting America on the right path? Hand Nancy Pelosi's gavel over to Bernie. (Not sure on the date of this exchange, sorry.)

The country clubs and the cocktail parties are not real America. The millionaires and the billionaires are the exception to the rule. You talk about an improving economy while we have lost 3 million private sector jobs in the last two years, long term unemployment has more than tripled, unemployment is higher than it has been since 1994, we have a $4 TRILLION national debt, 1.4 million Americans have lost their health insurance, millions of seniors can't afford prescription drugs, middle class families can't send their kids to college because they don't have the money to do that...CEOs make more than 500 times what their workers make, the middle class is shrinking, we have the greatest gap between the rich and the poor of any industrialized nation - and this is an economy that is improving? I'd hate to see what would happen if our economy was sinking.

...Today you reached a new low, I think, by suggesting that manufacturing in America doesn't matter. It doesn't matter where the product is produced. We lost 2 million manufacturing jobs in the last two years alone, 10% of our workforce. Walmart has replaced General Motors as the major employer in America, paying people starvation wages rather than living wages, and all of that doesn't matter to you?

This is by no means the only time that Greenspan has been confronted by people willing and able to shred his theories. Naomi Klein confronted him on the phone over his definition of corruption and crony capitalism on this segment of Democracy Now dated Sept 24, 2007. In this case she had no argument with his definition, just his refusal to admit that it applied in spades to the Bush administration. And NOBEL PRIZE WINNER Paul Krugman (Congratulations!) pinned a lot of blame for the current crisis on Greenspan and McCain economic adviser Phil Gramm in this interview with NBC's David Gregory. Do a search on Alan Greenspan at YouTube, I'm sure you'll find lots of similar material proving that Greenspan is more ideologue than theorist, and his ideology has driven the country off of a cliff.

CNN's Anderson Cooper has gotten a start on a new feature: 10 Most Wanted: Culprits of the Collapse, where he introduces America to the usually anonymous 'Captains of Industry' who have most contributed to the current economic crisis. So far positions 8, 9 and 10 are occupied by SEC Chairman Chris Cox, Lehman Brothers' Richard Fuld and AIG's Joe Cassano respectively. It will be interesting to see if Alan Greenspan ends up occupying one of the top spots, if not THE top spot. You could also expect to see Treasury Secretary Henry Paulson and the current chairman of the Federal Reserve, Ben Bernanke, along with John McCain's chief economic advisor (and likely Treasury Secretary should McCain defy the odds and get elected) Phil Gramm in top spots. If not, there is no justice. And these are the fools, damned fools and deluded popinjays that the Republican Party would put in charge of finding a solution.

Sad, but true.

~~~~~~~~~~
UPDATE: More insight into this story is to be had at Ice Station Tango.
Roll to the pole!
~~~~~~~~~~

---

AUTHOR'S ENDNOTE: The picture at the head of this post is of George W. Bush presenting Alan Greenspan with the Medal of Freedom. Which, if I was just trying to point out that Greenspan was a useless asswipe, would have sufficed by itself. A picture really is worth a thousand words. I could have saved myself a lot of research and composition. Alas, I didn't even go looking for the picture until I'd put in the hours of work, not least of which was creating the transcript segments from the Daily Show video and the one with Bernie Sanders. Oh well, c'est la vie.

TAGS: Economic Crisis, Alan+Greenspan, Fiscal Irresponsibility
Car, cliff...OH MY GOD!!!

McCain's Economic Guru

Have You Finished Greenspan's Book Yet Mr. McCain?

It's well-known by now that John McCain claims no strength on economic matters. When asked about the subject on January 17, 2007, The Senior Citizen Senator From Arizona infamously said "The issue of economics is not something I've understood as well as I should - but I've got Greenspan's book."

At the time he also promised that filling the void would be a priority when selecting a vice-presidential nominee. Which leads me to wonder which of the FIVE colleges Sarah Palin attended in her quest for a degree in journalism schooled her on the subject. Which leads me on further reflection to the realization that it's a moot point. A journalism major who can't even name a single newspaper that she reads may have absorbed even less from an economics minor, if indeed she ever took one.

Having broken his pledge to find a Vice Presidential running mate with the economics chops to fill the enormous void in his own knowledge, can we really expect that Mr. McGoo McCain has even read the book? He was after all quite willing not only to vote for, but to bang the drum in support of Prince Henry of Paulson's original 'rob from the middle class, give to the rich' so-called bailout scheme without bothering to read the THREE PAGE text of the proposal. So I don't exactly see him as a threat to clean out the shelves at the local library.

There is in fact considerable evidence that McCain has NOT read Greenspan's book - including the fact that Greenspan himself went on the record last month repudiating McCain's economic policies. Think Progress put out a post with video. Greenspan was most vehemently opposed to McCain's extension of the Bush tax cut, which would increase the deficit -already at $10 TRILLION - a guaranteed burden on you, your children, and your grandchildren. AKA The Bush Legacy.

After endorsing Bush’s massive tax cuts for the wealthy which turned Clinton-era record surpluses into record deficits, Greenspan has much to atone for. Telling the truth about McCain’s agenda is a good start.

As the Wonk Room has noted, McCain’s tax cuts would produce the highest federal deficit in 25 years. After inheriting Bush’s $407 billion deficit, yearly deficits under McCain would increase sharply, beginning with at least $505 billion in FY2009.

McCain has not specified how he would pay for his tax cuts, though he claims he will balance the budget in his first term. Recognizing that McCain’s math doesn’t add up, McCain’s top economic adviser Douglas Holtz-Eakin has said, “I would like the next president not to talk about deficit reduction.”

So the bad news about McCain is that he doesn't understand the economy, he has not addressed his weakness with a smart pick of running mate, and he hasn't bothered even to read a book on the subject. The much worse news is that even if he had read the book, it's the wrong damn book. It's Greenspan's policies, driven more by conservative ideology than common sense, that got the country into the mess it's in now. And as Albert Einstein wisely noted, "We can't solve problems by using the same kind of thinking we used when we created them."

This cartoon from Tom Tomorrow brilliantly illustrates how Greenspan's policies for decades have been nothing but a thinly disguised mechanism to transfer wealth to the already obscenely wealthy, unremittingly greedy and shamelessly irresponsible 'entrepreneurial class.' That isn't working out too well. Do we really want to continue on with this kind of thinking?

(Originally published Nov., 2007)

TAGS: John McCain, Economic Policy, Alan Greenspan, Disaster Capitalism

It's the Stupid Economy

Y'all know I don't do 'blink and link' blogging as a rule, but this post from ascap_scab at Reconstitution 2.0 deserves a look-in by all unrulies. Scabbers has done a fair bit of work on this, and documents the imminent collapse of the economy better than I've seen elsewhere. In fact Jolly Roger and his crew at Reconstitution do a fair bit of econ blogging, so I consider it a go-to site in that area.

When the dust finally settles on the Bush administration the smarter historians will look back at debacles such as the Iraq war, the gutting of the Constitution, the purging of the Department of Justice and such not just as crimes unto themselves. They will hopefully twig to the fact that all of the above were really committed to enable a much larger and more heinous crime - the transfer of America's wealth from the middle class into the hands of a tiny group who were obscenely wealthy to begin with. And while the chances of anyone ever being held accountable for all of these other crimes is slim to none, the chance that this wealth will ever be refunded to the thousands who have lost their homes, their jobs and their dignity is exactly zero.

Any bank robber would guess that the job gets easier if you have a guard on the inside in your pocket, even easier if you've also co-opted the cop that's most likely to respond to the alarm. the Bush crime syndicate has co-opted the entire federal government for Pete's sake! And they're wasting no time scooping up everything they can while they can. It's no co-incidence that all these bank failures are happening in the last months of Dumbya's term.

If the average American had any idea how directly Bush policies were aimed at sucking the last dollar out of his or her wallet, there would be massive riots on the streets of every city, town and village in the country. Get over to JR's place for a good read. Prepare yourself to be enraged.

TAGS: The Economy, Bu$hCo™, Housing Crisis, Bank Failures

Agribusiness to Blame for World Food Crisis

It looks like agribusiness caused the world food shortage deliberately.

The World Food Crisis by John Nichols in The Nation:

The only surprising thing about the global food crisis to Jim Goodman is the notion that anyone finds it surprising.

"So," says the Wisconsin dairy farmer, "they finally figured out, after all these years of pushing globalization and genetically modified [GM] seeds, that instead of feeding the world we've created a food system that leaves more people hungry.
[...]
The current global food system, which was designed by US-based agribusiness conglomerates like Cargill, Monsanto and ADM and forced into place by the US government and its allies at the World Bank, the International Monetary Fund and the World Trade Organization, has planted the seeds of disaster by pressuring farmers here and abroad to produce cash crops for export and alternative fuels rather than grow healthy food for local consumption and regional stability.
[...]
Beyond humanitarian responses, the cure for what ails the global food system--and an unsteady US farm economy--is not more of the same globalization and genetic gimmickry. That way has left thirty-seven nations with food crises while global grain giant Cargill harvests an 86 percent rise in profits and Monsanto reaps record sales from its herbicides and seeds.

Who wants to bet that the proposed solution will be more of the same globalization and genetic gimmickry? That's the way the world works these days.

"We can't solve problems by using the same kind of thinking
we used when we created them."
-- Albert Einstein --

No, but the multinationals can reap obscene profits on the crises they themselves have created.

Cross-posted to Ice Station Tango

TAGS: Food Shortages, Genetically Modified Foods, Monsanto, World Bank