Galt'd!

Apparently it's ok to send Americans to fight and die in a war built on lies, but it's not ok for them to pay higher taxes.

Galt!

The Stimulus Plan

Ambinder has the summary.

Run Hank Paulson Out of Town

The U.S. government is close to committing billions in additional aid to Bank of America Corp. as the nation's largest bank by assets tries to digest its Jan. 1 acquisition of Merrill Lynch & Co., according to people familiar with the situation.

[...]

Any possible arrangement might protect Bank of America from losses on Merrill's bad assets. There would be a cap on the amount of losses the bank would have to absorb with the federal government being on the hook for the remainder, according to one person familiar with the matter.

[...]

The talks with Bank of America were driven by Treasury Secretary Henry Paulson, people familiar with the matter said, because he was concerned that without help the deal wouldn't close, leaving Merrill adrift. The merger did close Jan. 1 with the understanding the two sides would hammer out a plan, said a person familiar with the talks.

Hank is working for the bankers, not the taxpayers.

Obama's Economic Team

Roubini likes.

Oops

AP:

Republican John McCain has maneuvered himself into a political dead end and has five weeks to find his way out.

Last Wednesday, McCain suspended his presidential campaign to insert himself into a $700 billion effort to rescue America's crumbling financial structure. In so doing, he tied himself far more tightly to the bill than did his Democratic opponent, Barack Obama.

...

Within hours, however, the measure died in the House mainly at the hands of McCain's own Republicans.

Initially, McCain went silent, choosing instead to send his chief economic adviser out with a statement that blamed Obama, claiming that the first-term Illinois senator had put his political ambitions ahead of the good of the country.

Read the whole article, it's pithy and damning.

Whiner

Sidney:

After making it through their first debate with their civility intact, the major presidential candidates today stepped up their rhetoric in attacks over how to deal with economic issues.

At a rally here, Republican John McCain accused rival Sen. Barack Obama of failing to show any leadership during the congressional negotiations over a $700-billion bailout package, which was defeated in the Houses today. Campaigning in Colorado, Obama argued that the country can't afford to gamble on McCain, according to excerpts supplied by the campaign.

Never mind that the package was set to pass last week until Senator Sissypants showed up and gave House Republicans a reason to defeat this on solely political grounds (i.e., make Democrats look bad). They made this mess, they stopped us from fixing it and somehow it's our fault? Shove it.

Bailouts R Us

Because they're our friends!

More Dodd!

No Way, No How

Can Sarah Palin be VP:

In an interview with Fox News Channel, Palin said: "It was an unfair attack on the verbiage that Sen. McCain chose to use because the fundamentals, as he was having to explain afterwards, he means our work force, he means the ingenuity of the American people. And of course, that is strong and that is the foundation of our economy."

Our ideals our strong, therefore we must be a nation of whiners. Thanks, Sarah!

Financial Crisis, Simplified

Atrios, PhD:

Through this crisis, there's this underlying narrative that something can be done, that there's just a wee liquidity problem. But underlying all of this is the fact that banks made a bunch of stupid loans which aren't being repaid. A bunch of people made highly leveraged investments in securities backed by those loans. A bunch of other people sold insurance on those securities and related debt.

Lots of money is being lost and there isn't any way to fix that.

Someone give this man a podium.

More Important Things to Do

Earmarks:

The total national debt, as I write this, is $9,679,000,000,000.00 (nine and a half trillion).

The Budget for 2008 is close to $3,000,000,000,000.00 (three trillion).

Our budget deficit for this year is going to range in between $400-500,000,000,000.00 (four hundred to five hundred billion, give or take a few billion).

The total value of wasteful earmarks in 2008 (according to CAGW) will be approximately $18,000,000,000.00 (eighteen billion).

In other words, when McCain talks about earmarks, he is talking about 3% of our annual budget deficit, .6% of our annual budget, and a number too small to even report when discussing our national debt. Or, put another way, he is talking about two months in Iraq, something he wants to keep going indefinitely.

John McCain is a liar and cannot solve our problems.

Tax Cuts Pay for Themselves

Except when they don't:

The budget deficit will jump by $246 billion to $407 billion, according to an updated estimate by the Congressional Budget Office released Tuesday.

Last year, the budget deficit was $161 billion. The government's budget year ends Sept. 30.

The agency attributes the jump to "a substantial increase in spending and a halt in the growth of tax revenues."

McCain must not be allowed to win this election. He doesn't give a damn about the economy. Looking forward to Thursday's debate.

Why Hello Mr. Pot!

JP Morgan Chase’s chief executive, Jamie Dimon, said U.S. regulators should investigate whether people betting on Bear Stearns‘ stock falling deliberately brought down the investment bank.

“Where there is smoke, there’s fire,” Mr. Dimon said in an interview with Charlie Rose on PBS, televised on Monday. “I think the Securities and Exchange Commission should investigate it, okay? I think if someone knowingly starts a rumor or passes on a rumor, they should go to jail.”

Then the same should go for those who make absurdly optimistic predictions about their companies' performances. If people can be punished for causing a stock to unduly drop, they should also take heat for causing one to unduly rise.

Then again, when stocks rise everyone makes money, so who cares?!

Link.

Bush to Talk on Economy

Mr. Bush, in a departure statement on the South Lawn, sought to address anxieties about the economy.

"A lot of Americans are concerned about our economy. I can understand why," he said. "Gasoline prices are high; energy prices are high." He said the economic stimulus package approved by Congress should help matters.

Bush talking on a subject of which he has absolutely no clue will surely help people's anxieties.

Link.

Get Uncle Alan His Meds

He's talking crazy again:

The United States has fallen into an "awfully pale recession" and may remain stagnant for the rest of the year, former Federal Reserve chairman Alan Greenspan was quoted on Monday saying.

"We're in a recession," Bloomberg news agency reported Greenspan had said in a television interview. "But this is an awfully pale recession at the moment. The declines in employment have not been as big as you'd expect to see."

Pale? If you call negative GDP growth and skyrocketing prices pale, then ok. As for the employment figures, 1. the unemployment rate doesn't tell the whole story (i.e. it doesn't include people who have been looking for work for over 6 months, those who have given up altogether or those who work part time), and 2. our latest economic boom was really a jobless recovery.

We're in for a bumpy ride. Buckle up and save.

Economic Outlook

I don't think so.

Many on Wall Street, the epicenter of the credit mess, seem to think that the worst is over. For the first time in months, analysts and executives sound upbeat again. Many of them see a broad, sustained recovery in both the economy and the financial markets coming in the second half of this year, a prediction some market strategists call hopeful at best.

For now, policy makers are echoing the mood on Wall Street. Treasury Secretary Henry M. Paulson Jr. said in an interview with Bloomberg Television on Thursday that “we are closer to the end of this problem than we are to the beginning.”

Sure, we'll trust the perennial optimists to tell us when the market has bottom. Look at this chart of the S&P 500 from 4Q07 to date. First they told us there was no crisis, then they told us it was contained, now they're telling us it's already passed.

It is, of course, not uncommon for Wall Street to run ahead of the broader economy. Investors, after all, make money by anticipating the future. The job market, by contrast, improves more slowly than other aspects of the economy.

But specialists say the two sides will eventually converge. Either the markets will give up their recent gains or, if the optimists are right, the broader economy will show greater strength as tax rebate checks and lower interest rates stimulate the economy.

That first sentence sums it up really well. Look at the logic on which the optimists - let's call them ponyboys - are banking their recovery on: tax rebate checks - $600 is enough to solve every negative homeowner equity and bad commercial/real estate loan ever! - and lower interest rates - $4 gas! That stimulates somebody's pockets - will save the world.

Ride on ponyboys, ride on into the sunset.

Complainer in Chief

He's at it again:

U.S. President George W. Bush said on Tuesday the U.S. economy was facing a "tough time" because of rising food and energy prices and a weak housing market, and faulted Congress for inaction.

"Many Americans are understandably anxious about issues affecting their pocketbook, from gas and food prices to mortgage and tuition bills," Bush told a press conference.

"They're looking to their elected leaders in Congress for action. Unfortunately, on many of these issues, all they're getting is delay," he added.

I had 6 years of a Republican presidency and Congress and all I got is this crappy economy? Never mind their appalling lack of leadership that got us into this mess in the first place. Never mind the White House's attempts to stop the Frank-Dodd bill or the Treasury's bailout of Bear Stearns. Never mind that he has done nothing to help fix our economy. Just blame everyone else.

I Didn't Do It!

Uncle Alan says he's innocent:

Former Federal Reserve Chairman Alan Greenspan has lashed out again at his critics, saying he was being blamed unfairly for the credit crisis and that he had no regrets about decisions he took while at the helm.

In an interview in Tuesday's Wall Street Journal, Greenspan, who left the Fed in early 2006, says critics are ignoring evidence in his favor and failing to give credit to the thinking behind the Fed's decision to lower rates when he was in charge.

No one could have predicted that encouraging home ownership in such a reckless manner and keeping the interest rate below the inflation rate for so long could have had such an effect. Except they did, and Greenspan was wrong. It's his Randian problem and he'll have to shoulder the blame for it.

Do As I Say, Not As I Do

So says the world's largest emitter of greenhouse gases:

U.S. Treasury Secretary Henry Paulson urged China to drop tariffs on environmental equipment, saying trade barriers are hindering efforts to clean up a nation that has 16 of the world's 20 most polluted cities.

``There's something that doesn't seem economically sensible and morally right'' about charging a tariff on clean technology, Paulson said after his speech today on energy and the environment at the Chinese Academy of Sciences in Beijing.

The only things that are economically sensible and morally right in Paulson's book are those that make him and his buddies more money. See Bear Stearns, where American taxpayers will bear the brunt of their losses if they exceed $1 billion. Based on Tuesday's subprime loss league table, their losses will.

Doublespeak

Bushco:

The dollar is likely to remain under pressure for the next few months at least, but its weakness is not inconsistent with the Bush administration's strong dollar policy, former U.S. Treasury undersecretary Tim Adams said on Monday.

"A strong dollar policy is a pledge by the United States not to use the dollar as a tool to gain competitive advantage in global markets. So it's not inconsistent," Adams, who was the Treasury's top international official until last summer, told a conference in Hong Kong.

Who are you going to believe? Me or your lying eyes?

Placating David Broder

Hillary.

There is no one person more responsible for the current depression than Alan Greenspan. And after it all fell to pieces, he had the gall to tell us "nobody could have predicted it." Bullshit. We did. That's just more of the same line we've heard time and time again since this administration took office.

The money quote is hilarious.