Is This the Economic "Big One"?

George Soros made his money by understanding the dynamics of speculative bubbles. He understood "herd mentality" and observed that many speculative bubbles had two peaks. The dip following the first peak was a "testing" phenomenon; that is, some investors get a little wary of the staggering heights and pulled out their investments. If the bubble didn't collapse, they would re-invest, along with others, creating a second larger peak. The bubble would eventually burst signifying the end of the second peak.

The whole US economy might be operating according to Soros' observation of multi-peak bubbles. If this is the case, one question is, "What peak did we recently observe collapse? Was it the first peak or the second?"

One view is that the end of the first peak was signified by the 2000-2001 stock market crash and that we are now witnessing the end of the second peak. This is shown in the graph of the Dow Jones stock index below. Keep in mind the Dow Jones is not the economy, nor even a good reflection of the economy. But, it is a pretty convincing picture, no?

Is this a classic Soros double-peak speculative bubble bursting?

Despite the convincing picture above, another perspective holds that this is not the "big one." This perspective crossed my mind when I read the following about Obama inviting former Federal Reserve Chairman Paul Volcker to head his newly created Economic Recovery Advisory Board:

Volcker is no stranger to economic crises, having led the Fed under two presidents from 1979 to 1987. Volcker is a legendary central banker who raised interest rates and restricted the money supply to tame raging inflation in the 1980s. It was a painful prescription that helped send the economy into one of the nation's worst recessions.

I thought, as many have, that the debt-based US economy is still a house of cards, a fact being hidden by government bailouts. The Federal Reserve has stealthly pumped over four-times as much money into failing Wall Street institutions than the US Treasury Department's $700 billion bailout package is poised to do (This doesn't count the US tax payer "guaranteeing" of potential future losses, which brings the total tax payer obligation to over $7.7 trillion).

To put it in perspective...

The money that’s been pledged is equivalent to $24,000 for every man, woman and child in the country. It’s nine times what the U.S. has spent so far on wars in Iraq and Afghanistan, according to Congressional Budget Office figures. It could pay off more than half the country’s mortgages.

Some of the new money being created by the Federal Reserve appears to be disconnected from the issuing of Treasury notes. If true, this is a money printing process that could be highly inflationary.

Under the alternative line of reasoning that says "we are not currently experiencing the big one," the collapse of the dollar signifies the remaining "bubble" that has yet to collapse. According to this view, Team Obama will work some magic to "stabilize" the situation. Money will flow back into the stock market. A third peak in the big bubble will be created. It might not appear as a Dow Jones bubble, but will be a bubble in the form of an over-valued US dollar. We'll have runaway inflation and remember the line above?

Volcker is a legendary central banker who raised interest rates and restricted the money supply to tame raging inflation in the 1980s. It was a painful prescription that helped send the economy into one of the nation's worst recessions.

It won't be Volcker who'll do the deed, but the deed will be done. That's when the third peak in the speculative bubble will come. Then we'll really find the bottom.

Psssst... Do Something

• Contact the Broadcast Media
  
• Contact the Newspapers
  
• Contact the US Senate
  
• Contact the House of Representatives

Sources:

Associated Press, Obama reassures nervous nation on ailing economy, November 28, 2008.

Bloomberg News, U.S. Pledges Top $7.7 Trillion to Ease Frozen Credit, Mark Pittman and Bob Ivry, November 29, 2008.

When Will We Reach the Bottom?

In the recent past I've pondered the question of "where's the bottom of the stock market." Now I ponder "When will we reach the bottom?"

A lot is made of the increasing rate of mortgage foreclosures, more this month than last month, and so on. Eventually, there will be a month with fewer than the previous month, the monthly rate of foreclosures will decrease, and we will have passed the peak... of foreclosures. Lets assume that the bottom of the stock market will be around the same time (could be longer, could be a little sooner).

The rate of foreclosures is strongly influenced by the schedule of when adjustable rate mortgages (ARMs) readjust from low teaser interest rates to high rates, which are often unaffordable and lead to foreclosure. The peak in the number of subprime ARM interest rate resets per month came at about the end of 2007, tapering off to a low right about now in late 2008 (about month 22 in the graph below, where January 2007 corresponds with month 1).


However, another wave of ARM rate resets is coming and will peak about two years from now. It has been pointed out that the holders of these mortgages, which are of better quality than subprime, might be able to refinance to a fixed rate and afford the transition. True, but this is potentially offset by the fact that many of the associated property values will be worth less than when they were purchased. Statistics say some will fail so that we'll have another wave of foreclosure problems growing to a peak over the next two years.

That's the story on residential mortgages. What about commercial mortgages? According to the Associated Press,

the same events poisoning the housing market are now at work on commercial properties, and the bad news is trickling in. Malls from Michigan to Georgia are entering foreclosure. Hotels in Tucson, Ariz., and Hilton Head, S.C., also are about to default on their mortgages.

That pace is expected to quicken. The number of late payments and defaults will double, if not triple, by the end of next year, according to analysts from Fitch Ratings Ltd., which evaluates companies' credit.

"We're probably in the first inning of the commercial mortgage problem," said Scott Tross, a real estate lawyer with Herrick Feinstein in New Jersey.

And there are compounding factors.

Unlike home mortgages, businesses don't pay their loans over 30 years. Commercial mortgages are usually written for five, seven or 10 years with big payments due at the end.

There's also a chain-reaction effect. As the economy turns down, retailers who are renting space in malls will close some of their stores and stop paying rent. The mall owners will loose their ability to pay their mortgages, and more commercial foreclosures will ensue, placing greater burden on the financial sector, which will be reflected in the stock market.

So when do we reach the bottom? Here's another hint.

About $20 billion [in commercial mortgage payments] will be due next year, covering everything from office and condo complexes to hotels and malls. When those $20 billion in mortgages come due next year — 2010 and 2011 totals are projected to be even higher — many property owners won't have the money.

With both residential and commercial real estate foreclosures possibly peaking out two years from now, it doesn't look like the bottom will be here too soon. This malaise will likely be with us for a while. We seem to have caught what Japan had, for over a decade, starting in the late 1980s.

Psssst... Do Something

• Contact the Broadcast Media
  
• Contact the Newspapers
  
• Contact the US Senate
  
• Contact the House of Representatives

Sources:

First Rate Progressive Economic Voices

According to Paul Krugman:

the Obama administration’s new economics advisory board would seem like a very good place to give progressive economists a voice. There are a number of excellent people whom Obama might not want to put in line positions but would be very much worth bringing in to offer well-informed alternative views. At the risk of insulting those I forgot to mention, I would think immediately of James Galbraith, Larry Mishel, Dean Baker, Jared Bernstein.

Sources:

Paul Krugman's Blog entry, About that advisory board.

List of Failed US Banks

List of Failed Banks provided by the FDIC (Thanks to CalculatedRisk Blog).

Shock Doctrine Antidote

Shock Doctrine capitalism is at work. Memory is an antidote. Paul Krugman has done well wielding the antidote in this blog entry.

Oh! Look! Congressman John Boehner has egg on his face. Perhaps he should be exposed for his attempted exploitation of the shock doctrine.

Psssst. Do Something!

Contact John Boehner: (202) 225-6205 or
(800) 582-1001.
More contacts

Contact the Media. Explain to the editors why you think John Boehner has egg on his face.

The Bottom: More Thoughts

I recently did a little thinking on "Where is the Bottom of the stock market?" Here are some more thoughts, mostly from articles by Bill Bonner. He says,

major bottoms don’t happen at the beginning of a recession; they happen at the end of one…when an economy is ready for another big growth spurt.

In the discipline of optimization, a distinction is made between "local minima" and a "global minimum;" that is, some local canyons are pretty deep, but somewhere out there is the very deepest canyon. These are bottoms in space. But what about time? If this recession lasts a couple years, then we might see some short term (local) "bottoms," as well as the long term, deepest (global), bottom.

Bonner also says to keep your eye on the earnings if you want to watch for "the bottom"

when [stocks] are cheap… when they sell for 5 to 8 times earnings, not 10 to 15 times.

He also has some insight in a less quantitative sense:

Most important, a real, major bottom doesn’t happen when you’re looking for it... You’ll be able to see it coming…after you’ve forgotten to look.

Bonner has a prediction for the bottom:

When the Dow gets below 5,000 we might be tempted to buy. Until then, it’s sell… sell… sell.

By the way. I don't buy all of Bonner's libertarian policy views, but some of those libertarian economists do tell it like it is on the numbers.

Sources:

Contrarian Profits, We’re a Long Way from the Bottom of this Bear Market, Bill Bonner, July 15, 2008.

Contrarian Profits, Watch the Dow Hit 5,000 After This Bear Market Bounce, Bill Bonner, October 14, 2008.

The Market IS Self-Correcting

Commercial banks and speculative investment banks should NOT be allowed to blend operations. The market knows this and is dealing out its punishment to those who violated this principle. One person in particular who is being punished is former Treasury Secretary Robert E. Rubin.

The following excerpt is from a New York Times article to which Paul Krugman links in his blog on Citigroup's crisis.

[Citi]bank’s downfall was years in the making and involved many in its hierarchy, particularly [CEO] Mr. Prince and Robert E. Rubin, an influential director and senior adviser.

Citigroup insiders and analysts say that Mr. [Charles O.] Prince and Mr. Rubin played pivotal roles in the bank’s current woes, by drafting and blessing a strategy that involved taking greater trading risks to expand its business and reap higher profits. Mr. Prince and Mr. Rubin both declined to comment for this article.

When he was Treasury secretary during the Clinton administration, Mr. Rubin helped loosen Depression-era banking regulations that made the creation of Citigroup possible by allowing banks to expand far beyond their traditional role as lenders and permitting them to profit from a variety of financial activities. During the same period he helped beat back tighter oversight of exotic financial products, a development he had previously said he was helpless to prevent.

Try to cheat the market, and the Country, and the market will punish you. And to think that Obama has been taking advice from Rubin. That might be coming to an abrupt end.

Update:

Citigroup said Friday it is splitting up into two businesses as it reported a fourth-quarter net loss of $8.29 billion — its fifth straight quarterly loss.

There has been harsh blame for Citigroup's woes directed at the board, too — and the company said Friday it plans to get rid of more board members after the recent departure of long-time director and former Treasury Secretary Robert Rubin. [2]

Sources:

New York Times, Citigroup Saw No Red Flags Even as It Made Bolder Bets, November 22, 2008.

2. Associated Press, Citigroup posts $8.29B loss, splits up the company, January 16, 2009.

Graphic Credit: Egg on Face, GDAEman.

Israili Government Falls for the Trap

Oops! International activists laid a trap for Israel, and Israel took the bait. The activists went out on Palestinian fishing boats to serve as witnesses to any mis-deeds by the Israeli government.

Mission Accomplished: The activists are now being held in Israeli prisons having been effectively taken by gunpoint from Palestinian territory.

Read More on Democracy Now Website

Where is the Bottom?

The entry was updated December 10, 2008.

A picture of the Dow Jones stock value since 1930 gives some perspective on forcasting the bottom of the continuing stock market crash.

First, Reagan's drive for "less government" in the 1980s slashed the regulatory actuaries. They are the people responsible for helping ensure economic risks are well defined and transparent. This is one of the basic underlying assumptions of a market (perfect information).

Then, Clinton continued the trend that fostered excessive growth of the speculative financial services industry at the expense the real economy. Financial services don't produce anything. In a healthy economy, financial services represent a small fraction of the economic activity that facilitate investment in production of real products and services that lead to job creation and benefits shared widely by society. A financial services economy creates fewer jobs and distributes the wealth to a tiny fraction of the people.

Ours has not been a healthy economy for the past few decades. This unhealthy shift is expressed in a shift of profits from manufacturing to the financial industry in the table below.

Industry	1980 Profit	2005 Profit
Manufacturing	45%	18%
Financial	18%	45%

Our economy has become hollow, which underlies the original question: How far down will the hollow part of the economy collapse before it reaches the solid foundation (assuming we don't artificially prop up the hollow part by a bailout)?

We can explore this question in terms of the Dow Jones stock index shown in the graph above. Stock values started to go up in the mid-1980s in response to Reagan deregulation. The growth trend went up gradually indicated by the hand-drawn line that intersects the present year at a Dow Jones index of about 8,000.

Stock values started to shoot way up in the mid-1990s in response to Clinton's de-regulatory policies and the dot-com mania. We can see the dot-com bubble burst in 2000, and the re-bound induced by additional de-regulatory policies of George W. Bush between 2001 and 2007.

Once the hollowness of the economy was exposed in late 2007, the current big crash came, and we're all wondering "where is the bottom?"

If we believe that the growth spawned by Reagan policies was solid growth, then the upward trend line might suggest a bottom at 8,000. But was the trend in growth under Reagan policies real or itself hollow? I think growth under Reagan policies was somewhat hollow too. So, where is the bottom?

Lets assume that the stock value before the 1980 Reagan influence was solid. Lets also assume that the world population is a reasonable rough expression of an underlying foundation to support economic growth indicated by stock values.

The world population was about 4,400,000,000 in 1980, and the Dow Jones was 1,000. The world population was about 6,600,000,000 in 2007, a 33% increase. A 33% increase in the Dow Jones would be about 1,333. Not much increase. So, lets assume that in addition to 33% population growth, the product-demanding middle class quadrupled since 1980.

Assuming the Dow Jones companies serviced that demand, which it didn't, the Dow Jones would be 4,333, add inflation and maybe the bottom is at 5,000 - 6,000, which would be optimistic.

Remember, we're not talking about artificially inflated stock prices. We're taking about stock values that represent a solid underlying foundation of producing something demanded by real needs, not the "need" for the tiny elite minority to create personal wealth.

Update 1: I've added some more thoughts after talking to a friend. It might seem obvious, but the observation is that bottoms don't happen at the beginning of a recession, they happen at the end of a recession. Not sure I completely buy that, but there is some logic to it.

Update 2: Paul Krugman, December 19, suggests we might not be there yet. It has something to do with Tobin's "Q" Ratio.

Sources:

Manufacturing and Financial industry profit estimates are from Figure 2.1, in "Bad Money," Kevin Phillips. Original Source: Ray Dalio, Bridgewater Associates.

Speculators are not "Investors"

I'm probably not alone in my view of the following statement by Neil Mellor, an analyst at Bank of New York Mellon.

Alongside the dismal outlook painted by leaders in the U.S. automotive industry, growing fears surrounding the drastic rate of disinflation across the globe and renewed fears for the U.S. banking sector, this has sent investors scrambling for cover once more.

If the "instruments" traded on Wall Street have no connection to a tangible economy, then what are they "investing" in? They aren't "investors," they are "speculators" in the worst sense of the term.

Let the speculative "instruments" die so that our society can rediscover an economics founded on fundamentals that benefit real people, not just the cuff-linked and spangled elite. There will be pain in the short run, but that sacrifice will build our character as a nation.

Sources:

Associated Press, Recession fears send world markets down, PAN PYLAS, November 20, 2008.

It's Not Just Bush

Here's a 1:19 min version of Ryan Harvey's song, "It's Not Just Bush."

It's not just Republicans either, "cuz you're voting for a class." This YouTube short doesn't quite do justice to the song, but it's a good teaser.



Check out Riot Folk

Our Veterans

For some reason I'm most deeply moved when ever I hear reporting about the situation of military veterans. I just listened to last week's podcast of Bill Moyers Journal hosted by Deborah Amos, which ended with a piece acknowledging Veteran's Day. At the end, I literally shed a tear.

I think my emotions relate to my sense of injustice. This is a sentiment that moves me on most issues, including the shaft the common working person is experiencing with an economic system that has been tilted in favor of the elite and a bailout that is also tilted that way.

Many military people aren't informed about the political factors that determine their fate. Some do, however, take the time to learn what Maj. Gen. Smedley Butler learned. They learn that most members of the military are pawns in a rich man's game. But that's not the theme of this essay.

Deborah Amos asked: "How should the rest of us who don't serve in the military honor the service of those who do?" She posed the question to veterans, and here are their responses.

JOHN CAMPBELL: Once the parades are over, then what happens? How do you fill in? How do you really continue to bring support for people that feel, in a lot of ways, so isolated? That's what we really think we're missing is this sense of community.

ANDREW ROBERTS: Putting the yellow ribbon in the window is great, but that's not supporting the troops. Right now- you know, if you look at World War II, there was all sorts of different things that were going on. There were little kids were running around collecting the rubber off their pencils to contribute to the war in some way. To support the troops in some way. And you just don't see that going on right now.

CARLOS LEON: First thing they could do is go to your local VA's and volunteer, or just go to say "hi" to a veteran. For a guy that's laying, or for a woman, that's laying in bed and can't really do much, and a total stranger comes by and says "I just wanted to come by and say good afternoon or good morning," that's a big deal.

DREW BROWN: Even just a handshake. Just "hey man, welcome home, and thank you for your service." That usually is enough. That warms my heart more than you know. And it's a huge thing, because veterans always feel this sense of separation from the society that they protect.
If you just take that little bit of time, you know, to just write a letter or, you know, get a care package or put little things in like, you know, a comic book for some of the guys or, you know, a magazine, that's more than enough. And it's very well appreciated.

KRISTEN ROUSE: A really important lesson that I learned in the military, is that you have to help people where you can. If you can do something for somebody, then do it. Whether that be, you know, serving the public in one way or another, military service, community service, political service, medical ser--, you know, whatever it is that you can do to help other people in this country and in other countries too.

ANDREW ROBERTS: There are many organizations out there that really work very hard, every single day, to support the troops in some capacity.

Sometimes just being a member of those organizations makes them more powerful. That's supporting the troops. That's actually doing something.

GENEVIEVE CHASE: The best thing people can do is be aware. Pick up the newspaper and read about what's going on.

ROMAN BACA: So many children are uneducated about the military, and I have kids walking up to me all the time and say "You're in the military? What's it like? What'd you do? Did you shoot somebody?" Parents need to get involved and educate their kids about a lot more.

ANDREW ROBERTS: I mean, I haven't even heard a call to service to join the military at all. So I think that that's an important first step to help galvanize the American population.

DON BUZNEY: I know when I came back from Vietnam, I was told that I could not be hired because I'd spent four years in the military. And my civilian counterparts had more civilian-type experience.

So, overcome that. Recognize the talent, the skills, the training that the men and women in uniform have and they bring back to. So, find a veteran. Give them a hug, and find them a job.

GENEVIEVE CHASE: I really encourage Americans who can to take a minute to write a letter to their congressman or to their senator, and say, "Can you please remember our vets?"

ANDREW ROBERTS: We just have to continue to remind our leaders that these are our veterans, and they've made tremendous, tremendous sacrifices for our nation. They ask for very little in return. But we owe it to them to make sure that we get them what they need when they come back.

Sources:

Bill Moyers Journal, Honoring Our Veterans, November 14, 2008.

Stop Blaming the Community Reinvestment Act

The right wing talking points, blathered by establishment media pundits, say that all those mortgages forced upon poor black people by the Community Reinvestment Act caused the bubble that caused the financial mess. Basically, it's all Bill Clinton's fault.

Well, Bill Clinton might share the blame as leader of the corporate wing of the Democratic Party, but it wasn't the Community Reinvestment Act that did it; that law was enacted in 1977. According to Aaron Pressman who blogs on Newsweek:

University of Michigan law professor Michael Barr testified back in February before the House Committee on Financial Services that 50% of subprime loans were made by mortgage service companies not subject comprehensive federal supervision and another 30% were made by affiliates of banks or thrifts which are not subject to routine supervision or examinations.

Hard for CRA to be the majority of the subprime problem when it wasn't even a majority of the subprime market. CRA loans had more regulatory supervision, required recipients to receive counseling before and after receiving the loans, CRA Banks were more than twice as likely as other lenders to retain originated loans in their portfolio and the CRA loans were lower intrest rates making them easier to pay (less subject to defaults). This is what the Traiger & Hinckley Study finds (PDF file here).

Paul Krugman provides us the data to show it also wasn't Fannie and Freddie. As I've explained, the hyper profits being made on Wall Street by selling bonds backed by everything, including new mortgages, and all the derivatives of those bonds (basically things like insurance on the bonds, bets on future prices of the bonds and the insurance, and other crazy poker game gizzmoes), generated GREAT DEMAND on Wall Street for new mortgages (like Ross Perot's great sucking sound). When you build profits on a house of cards, you can predict the outcome.

The regulators in Washington let the bubble grow and should have predicted the outcome. They are truly to blame, because regulators should know something about a history rife with speculative booms and busts.

And we know something about insiders walking off with the windfall profits. Our mission, if we choose to accept it, is to claw back those profits from the swindlers.

Sources:

BusinessWeek blog, Community Reinvestment Act had nothing to do with subprime crisis, Aaron Pressman, September 29, 2008.

Obama White House Staff

Updated December 1, 2008

Chief of Staff: Rahm Emanuel will serve as Obama's chief of staff, a position that is in charge of the White House operations. Emanuel steps down as an Illinois Congressman. He's considered very conservative on foreign affairs with particular note in ardent support of Israel.

Mona Sutphen will be deputy chief of staff under chief of staff is Rahm Emanuel. A member of Obama's transition team staff, Sutphen has been managing director of Stonebridge International, a strategic consulting firm based in Washington. Sutphen also was a foreign service officer and worked on the National Security Council in the Clinton White House.

Advisers and Assistants: Pete Rouse will be a senior adviser. Rouse was Obama's Senate chief of staff, a post he also held while working for former Senate Majority Leader Tom Daschle of South Dakota and Sen. Dick Durbin, D-Ill.

Jim Messina will be another deputy chief of staff. He is now director of personnel for Obama's transition team and was national chief of staff during the presidential campaign.

Philip Schiliro will be assistant to the president for legislative affairs when the new administration takes over Jan. 20. Schoilior is a longtime Capitol Hill aide.

Valerie Jarrett Klain will be a senior adviser and assistant to Obama for intergovernmental relations. She is a longtime Obama friend and supporter.

Cecilia Muñoz will serve as Director of Intergovernmental Affairs. Muñoz currently serves as Senior Vice President for the Office of Research, Advocacy, and Legislation at the National Council of La Raza (NCLR), where she supervises all legislative and advocacy activities conducted by NCLR policy staff. Muñoz is the Chair of the Board of Center for Community Change, and serves on the U.S. Programs Board of the Open Society Institute and the Board of Directors of the Atlantic Philanthropies. [2]

Economic Policy:

Lawrence Summers will be Director of the National Economic Council (NEC), which serves as Assistant to the President for Economic Policy. Summers was Treasury Secretary under Bill Clinton and recently served as President of Harvard. Summers is controversial as leaning strongly toward free market fundamentalism, for making statements about women being fundamentally less capable than men and for having a conflict with African American professor Cornell West that contributed to West's departure from Harvard.

Communications: In addition to Press Secretary Robert Gibbs, several staff have been named.

Ellen Moran will be director of communications at the White House — in charge of getting Obama's message out. Considered an "outsider," she comes from being executive director of the EMILY's List — a Washington-based organization that backs female candidates who support abortion rights. She also has worked for the AFL-CIO.

Dan Pfeiffer will be deputy director of communications under Ellen Moran. He is communications director for Obama's presidential transition team. He helped managed the press operation on the Obama campaign.

Jonathan Favreau will serve as Director of Speechwriting. Jon Favreau served as Director of Speechwriting during the 2008 presidential campaign. He has worked for President-elect Obama since February 2005, when he joined Obama's United States Senate office as Speechwriter. Previously, Favreau served as Deputy Director of Speechwriting on John Kerry's 2004 presidential campaign.[2]

Vice Presidential Staff:

Ron Klain will serve as the Vice President's chief of staff, the same position he held for Vice President Al Gore.

Sources:

[1] Associated Press, Obama leaves Senate, names more White House aides, November 16, 2008.

[2] Change.gov (Obama's President-elect Web Site) President-Elect Barack Obama names two new White House staff members.

Who Caused the Cookie to Crumble?

The Associated Press coverage of the historic economic summit in Washington, DC the last two days summed up with this sobering indictment of US economic policy under both Republican and Democratic Party leadership:

Talk of blame was kept to a minimum, though many still hold the belief that the primary fault for the cascade of ruinous events lies with a U.S., where it has become the norm to offer easy credit, outsize rewards for high-risk investing, and lax oversight to the whole process.

Also remember: It wasn't an accident, as if they thought the bottle wouldn't break when they threw it on the ground. The economic policies were designed to create speculative expansion (a phony economic bubble). Insiders knew how to reap huge profits before the inevitable bubble burst. They also knew that the vast majority of people would get hammered, but some like to argue that "the economy grew a lot during the expansion." It grew alright, for a small slice of insiders (it's that 'wealth distribution' detail that is so easy to overlook). And "the insiders" include Democratic Party people too, not just Republicans.

On a more specific here's who's responsible for the collapse.

Sources:

Associated Press, Econ summit vows action — takes few concrete steps, November 15, 2008.

Obama: Get Beyond Clintons

The Clintons represent the corporate wing of the Democratic Party. They're the ones who have made windfall profits while driving the economy into the ground: NAFTA, 1996 Telecommunications Act, allowing speculative investment banks to merge with commercial banks (roll-back of the Glass-Stegal Act).

Obama needs to avoid Clinton era people as cabinet members, like Larry Summers being considered for Treasury. We want change, and Hilary Clinton for Secretary of State would represent the status quo.

It is OK to have Clinton era people help with the transition, given their practical experience with the mechanics of how the White House works. There are also any number of ways to benefit from Clinton era people for advice without giving them Cabinet posts. But Obama has to get beyond the Clinton era people if his message of change is to have legitimacy.

Fuck'n Funny Joe

His wife is worse than the FCC, Joe Scarborough's use of the word "Fuck" on the air, and his colleagues' responses, is really funny. A must-see:

"Oh shit, I didn't say "fuck" on the air did I?"

The commentary on "the steady nature of Barack Obama," and his campaign, is interesting to hear on establishment media aside from the f-word.

Other copies of the Clip:





Spoof Version:



Sources:

Ahhhh... Fall

Sources:

Photo Credit: Boodie

US Auto Industry Demise

OK. Lets face it. The US Empire is crumbling as evidenced by the business failures of GM, Ford and Chrysler. It's not as if they didn't have a warning, twice, with two gasoline price shocks in the 1970s. Big gas guzzlers are dopey.

Unfortunately, Empires are dopey, which is why history is littered with tales of their demise. But I get ahead of myself.

Just as many of us saw this bubble burst coming, we also saw the unpopularity of the Proud American gas guzzler coming. I'm convinced that picking up the phone and talking to the people in charge, if you can get thru to them, is what we need to do. They are firgg'n out of touch. Any one of us could waltz in, learn the administrivia and be 10k ahead of them on the Big Picture. So, we could call. Offer our advice. Make Friends. Influence the idiots... er, I mean, the Titans of Industry (Financial for the most part).

ERrrr..... Anger is an acceptable response in this historic moment. Now is when we must reflect on the wisdom of the Ghandis and Kings.

And now, and ad from our Sponsors: (note how I capitalize "Sponsors" because they are SOOOOOOooooo important [sic.], which is why they're being bailed out with the banks):


Sources:

Honor Smedley Butler on Veteran's Day

Major General Smedley Darlington Butler, USMC,

• 1881 - 1940
  
• Two-time recipient of the Congressional Medal of Honor

"I spent 33 years and 4 months in active service as a member of our country's most agile military force--the Marine Corps. I served in all commissioned ranks from second lieutenant to Major General. And during that period I spent most of my time being a high-class muscle man for Big Business, for Wall Street and for the bankers. In short, I was a racketeer for capitalism. I suspected I was part of a racket all the time. Now I am sure of it." -- Smedley. D. Butler

How to Stop Wars of Empire:

"A few profit – and the many pay. But there is a way to stop it. You can't end it by disarmament conferences. You can't eliminate it by peace parleys at Geneva. Well-meaning but impractical groups can't wipe it out by resolutions. It can be smashed effectively only by taking the profit out of war." -- Smedley. D. Butler

It is for this reason that the US Congress must investigate, without immunity, war profiteering during the Bush years. The findings must be prosecuted. The ill-begotten profits, tax-payer dollars, must be clawed back and returned to the US Treasury. I urge veterans to join the broad-based movement to make this happen.

Famous Butler Essay: War is a Racket

Post Script: Smedley Butler also exposed a group of wealthy industrialists who plotted a military coup to overthrow the government of President Franklin D. Roosevelt in 1934 [1].

Sources:

History Today, An American coup d'etat? (plot against Franklin D. Roosevelt, 1934) November 1, 1995, vol.45, Issue 11, Clayton Cramer.

Relax to Nordic Beauty

The Beauty of the Nordic Countries

Sources:

YouTube Channel: Elindomiel

Next Steps

Like FDR said after he was elected in 1932, "I agree with you, I want to do it, now make me do it." -- Franklin Delano Roosevelt.

What do we want?

• Out of Iraq with No Permanent Bases
  
• No Escalation in Afghanistan (It's a dry quagmire)
  
• Universal Health Care with No Insurance Middle-man
  
• Election Reform One person, One voice, One vote, no corporate speech nor money
  
• Fair Trade not Corporate Free Trade
  
• Spread the Wealth down to the people from whom it was taken over the last few decades
  
• Enforce Environmental Laws
  
• Investigate and Prosecute the Crimes of the Bush Administration
  

That's just for starters.

Unity: Is it Possible?

I've been an advocate for holding Bush administration officials accountable for their criminal acts. Impunity begets a culture of high crimes and misdemeanors, a general erosion of civility.

This nation faces a serious challenge of balancing accountability while trying to spawn enough unity to solve some serious challenges.

My recommendation would be for a few select members of Congress to take on the issue of accountability with deep probing investigations. The information will come out and speak for itself. The natural course of action will be revealed.

The Obama White House can stay above that fray.

Early Exit Poll Presidential Results

First news in from Kentucky, which goes to McCain with 8 electoral votes. Obama take Vermont with 3 electoral votes.

Update:

Then the bottom fell out for John McCain. ;-)

Sources:

MSNBC Exit Polls updated every two minutes.

Four Key States to Watch

If Obama wins any two of the following states, then it is over for McCain.

• Florida
  
• Ohio
  
• Pennsylvania
  
• Virginia
  

Early Exit Polls 2008

Early exit polling information released to the public is limited to voter demographics and their general opinions, rather than results of how people voted. This is to avoid influencing the perceptions of voters who vote later in the Western states.


Early Exit Poll Results Favor Obama:

• It's the Economy Stupid: Six in 10 voters picked the economy as the most important issue facing the nation. Many people associate the economic troubles with the deregulatory ideology of the Republican Party.
  
• To Repeat, "It's the Economy": 5 in 6 people are very or somewhat worried the current economic crisis will harm their family's finances over the next year.
  
• Health Care: wo-thirds of voters said they're worried about being able to afford the health care. This issue generally breaks in favor of the Democratic Party.
  
• New Voters: One in 10 voters said they were voting this year for the first time, and that group was disproportionately young and nonwhite.
  
• Survey Under-Estimates? A quarter of new voters said they don't have landline phones at home, only cell phones. Most surveys are conducted by landline phones, suggesting that polls might have under-counted these people who are likely Obama voters, due to age and voter registration efforts by Obama's campaign.
  

Early results the Might Work Against Obama:

• White Evangelical Turn-out: One in four voters were white born-again evangelical Christians. It is important to note, however, that Obama is an evangelical and there is a strong tradition of progressive evangelicals who take seriously their stewardship of the Earth.
  
• Offshore Drilling: Two-thirds favor drilling for oil offshore in U.S. waters where it is not allowed now.
  

Sources:

Nov4

Sources:

Photo Credit: Boodie

Blog Modifications Underway

Please Excuse the "Read More" goofiness. I'm trying to sort it out. The approach I'm trying to use forces every page to have a "Read More" note even if there isn't anything more to read.

Chrysler Sold!

It's true. Lets not pretend that America hasn't been in decline for decades. We recently hear "Chrysler might be sold" as if it still has any semblance of an American icon.

Yes. Chrysler has been sold.

"In 1998 Chrysler was sold to Daimler-Benz, forming DaimlerChrysler AG. Chrysler Corporation then was legally renamed DaimlerChrysler Motors Company LLC, while its total operations began doing business as Chrysler Group. This was initially declared to be a merger of equals, but it quickly became evident that Daimler-Benz was the dominant partner." [1]

"DaimlerChrysler announced on 14 May 2007 that it would sell Chrysler to Cerberus Capital Management of New York, a private equity firm that specializes in restructuring troubled companies."

Sources:

1. Thanks to who ever loaded this onto Wikipedia.