October 6, 2008 9:44 AM

Meet Neel Kashkari

Mr. Kashkari (biography here) is now in charge of rescuing the financial markets. Is it any surprise that his previous employment was with Goldman Sachs?

Given their decline today, the markets don't like the fact that having convinced everyone that meltdown is imminent, the Bush Administration is now taking a month to actually do anything. This is the gang that cannot shoot straight.

October 3, 2008 2:03 PM

Bush Signs, Let's Hope the Bailout Works

President Bush has now signed the $700 billion bailout plan, as 58 votes switched from no to yes in House. Chief House negotiator Representative Barney Frank promised to work on the root causes of the crisis next year.

This is not promising, but now that the horrible legislation is passed, I hope that the credit markets become less fearful, and that Treasury Secretary Paulson is a wise steward of his newly granted powers.

October 3, 2008 10:13 AM

Washington at it's worst

following the votes as various opponents of the bailout switch, it is clear that the House will pass the bailout bill. The bailout is ugly, and the "sweeteners" don't all look so sweet to me. Not a single bit of re-regulation of credit default swaps. No help for those in foreclosure. Those are too hard, or too complicated, perhaps those are just deal killers for financial industry lobbyists. I wonder what the deal killers were for our side?

October 1, 2008 8:12 AM

What Now?

This evening the Senate will come together to pass the Paulson/Bush bailout plan, with two changes from the defeated House bill. The Senate is adding on an increase in FDIC deposit insurance from $100,000 to $250,000, and a package of business tax breaks - some good ones, some bad ones. They will then go home and dare the House NOT to pass it.

This bill is little better than the rejected House bill but with only one third of the senate up for election, it will pass.

So the real issue is what happens in the House. A group of progressive representatives have introduced the No Bailout Act, and are backed by SEIU. While there are some portions of the proposal I disagree with, such as the suspension of certain accounting standards, it is a far better proposal for fixing the problem and helping the economy than the Paulson/Bush plan.

Most importantly, the progressive alternative deserves a vote. The senators can afford airfare to fly back to DC to consider a new proposal if it passes.

September 30, 2008 11:35 AM

Facebook: Tell me this is a joke!

Just read that Facebook has hired Ted Ullyot, former right hand man for the disgraced former Bush protector, Alberto Gonzales, as general counsel. Forget politics - what is Facebook thinking? Why would either members or those entering into legal agreements assume anything other than this is a setup for deceit, invasion of privacy, and outright criminal activity?

September 30, 2008 10:56 AM

Dogfood Anyone?

George Bush blusters, the House huffs and the rest of us wonder what we're going to live on during our twilight years.

Meanwhile, two of the groups we're supporting in 2008, United for a Fair Economy and Campaign for America's Future, are doing their utmost to give the average citizen a voice in these precarious times. Check out their take on the current crisis, it's impact, and what you can do about it.

September 30, 2008 9:14 AM

Is Mukasey Doing the Right Thing or Running Out the Clock?

Attorney General Mukasey, after receiving a scathing internal report on a "fundamentally flawed" process for firing U.S. attorneys, named a special prosecutor to investigate former attorney general Alberto Gonzales and Karl Rove. It will be up to Nora Dannehy to determine if criminal charges are warranted.

Given the active obstruction and refusal to provide sworn testimony by many involved, it seems likely that ONLY criminal charges will lead to a useful conclusion - well after the election.

September 29, 2008 8:11 AM

Still Vote No on the Bailout

If one reads the headlines or the press releases, one might conclude that significant progress has been made in making the Bush bailout bill into something that is more reasonable. I, for one, was considering moving into reluctant begrudging support when I read about limits on Wall Street compensation, serious oversight, equity in the bailed out firms, and limiting the first pool to "only" $250 billion, rather than the full $700 billion.

Unfortunately, I was wrong. In each case, the limits that are being incorporated are either meaningless or explicitly designed to fool us. And after initially arguing for actually helping those foreclosed upon, our elected officials have negotiated away any bankruptcy reform, saying that it is too complicated to take up now. Really? If I recall correctly, it was one of the lobbyists for the banking industry that said that it was bankruptcy reform was a deal killer. But it is the only thing that actually helps someone we care about.

Just a few notes on each of the promised reforms:

Oversight - oversight will be provided by the same people who got us into this mess - the Federal Reserve, the SEC, the Treasury Secretary, the Secretary of HUD, etc. This is a total sham.

Limits on executive compensation - the legislation at best makes executive compensation cost more as it limits tax deductions. It does not undo ANY existing deals, including golden parachutes. Again, a sham.

Equity compensation for bailouts - this is entirely optional, not mandated.

Limited first tranche - this again is intended to mislead us. At first I had hoped that well, we had limited Bush to $250 billion, and since the new legislation allows the Secretary of the Treasury to pay any price for any security, this would allow a new Secretary of the Treasury to stop bailing out Wall Street and start bailing out homeowners, small businesses, and others. But the fine print makes it clear. Bush can get another $100 billion by simply saying he needs it without any congressional review. Congress at first glance has to approve any more, but Bush can veto that vote! Effectively, Bush is likely to be able to spend the entire amount before he leaves office if he wants to do so.

We are in a serious mess. The Bush Administration played Congress just right and got everything it wanted. This is not a serious solution befitting the magnitude of the problem.

September 26, 2008 10:16 AM

The Bailout Comes to Alice in Wonderland

As only the most cynical pundits predicted, now Democratic congressional leaders have managed to ally themselves with the unpopular out of touch President Bush, while House Republicans sound populist notes.

Those same House Republicans are floating a proposal to address the crisis by cutting capital gains taxes. Really.

While Democratic leaders announce that they are willing to cave on allowing bankruptcy judges the right to restructure mortgages for those who have been foreclosed and forced from their homes. Again, really.

Some readers of my commentaries have wondered whether our opposition to the rescue bill means that there are not serious cracks in the financial system. Not at all. They are very serious. What is concerning to us is that the Administration has simultaneously proposed a solution that on the merits is not very good (more on that in a moment), ignored existing serious problems with obvious solutions, and left themselves plenty of room to enrich their friends.

Lots of alternative solutions have been batted around for a spare $700 billion - any of the following have some merit - specifically, more merit than the Administration plan:

1. inject $100 billion into the FDIC reserves to prevent loss of depositor confidence;
2. support the Federal Reserve in its injection of capital into ailing firms, such as AIG (did anyone know that the Fed could take equity stakes in financial companies until two weeks ago? Targeted equity investments in at risk firms, at market prices, are far better than the purchase of toxic debt.
3. immediately apply capital requirements to credit default swaps.

The underlying economic problem is that the value of housing in the United States has fallen dramatically. It has not ceased falling, either. Since real mortages are now defaulting, and foolish Wall Street mavens created synthetic securities they did not understand but profited from free of disclosure or regulation, Wall Street has magnified the underlying real economic problem. It is realistic to expect a major contraction that simply reflects real economic losses. This cannot be papered over.

September 25, 2008 6:42 AM

Meanwhile, GM and friends get their $25 billion

As debate raged on the Bush Administration's Wall Street bailout, the House approved, in a 370-58 vote, the launch of a $25 billion loan program to the auto industry. Details are left to the Energy Department as to eligibility and use of the funds, and one can assume that lobbyists are ready with language.

I expect much the same for Wall Street - there will be much talk, but in the end, Bush is likely get his plan approved with minor adjustments this week, with great discretion as to how to proceed.

Perhaps the several million people whose homes have been foreclosed should set up a trade association, complete with lobbyists and a political action committee.

September 24, 2008 10:16 AM

Call Congress. Tell them no.

It is worth noting that Wall Street has not collapsed while Congress hears from angry constituents about the Bush bailout. When announced, the market went up 400 points. When doubts were raised, it went down 300 points. That does not a crisis make.

If you have any personal doubts about whether the bailout is a good thing, just ask yourself whether you would trust Dick Cheney to allocate the $700 billion among the hedge funds, foreign banks, and associated financial institutions. No prior review. No conflict of interest policies. No guidance on whether the Bush Administration would pay more than market value or less than market value.

This program would have FAR less oversight that our expenditures in Iraq, and it will be years before we have the full picture of the corruption, bribery, loss and outright theft that characterized that misadventure.

If Congress buckles to the Bush pressure, having forced a few face saving figleafs onto the bailout legislation, all $700 billion is likely to be gone before a new Administration comes in. And that is probably the point.

Do not be fooled by the skeptical sounds coming out of Washington. That is all performance. The inside the beltway crowd wants to make a deal. It is our job to say that no deal is acceptable. Call early and often. It is okay to be angry.

September 23, 2008 5:07 PM

Polar Bears Resort to Cannabalism as Arctic Ice Shrinks

Check this out at CNN.

I wonder how the global warming deniers and delayers sleep at night.

The future is going to judge us harshly, and we deserve it.