The Credit Crunch, Simplified

"Leave Sarah Alone"

Something that was bugging me:

I knew Paulson reminded me of someone.

Per Wikipedia, Paulson was raised as a Christian Scientist and worked in the Nixon admin. as assistant to John Ehrlichman during the events of the Watergate scandal, for which Ehrlichman was convicted to a prison sentence. Paulson joined Goldman Sachs in 1974 and eventually became its chief executive. The company was under investigation for fraud by Elliott Spitzer during Paulson's leadership. (As of 10-2-08, the Wikipedia entry on Paulson mentioned this, but the entry's been scrubbed since my previous post on the topic. Spitzer himself has, of course, been conveniently neutralized.)

Paulson is the person whose job it is to restore our confidence in the markets.

I'm gonna be Paulson for Halloween -- a decent candidate for the new scariest person on Earth.

UPDATE: Here's more from Spitzer on Paulson and the bailout.

Two Items You're Not Hearing About in the Corporate Media:

Progressive Dems have proposed an alternative to Paulson's bail-out plan; full Scoop here. (Thanks, ingin!)

Meanwhile, what looks to me in a YouTube video like at least a thousand protestors have been demonstrating on Wall St.: "You broke it, you bought it, no bail-out!"

Are We Palin-Ready?

I doubt it.

comedic break

Vintage Jon Stewart, with Maher while he was still coloring his hair. Second half not quite as funny (but the commercials at the beginning aren't bad).

Contact Your Congresscritters!

We may or may not now face economic catastrophe -- is anyone here besides me old enough to have had a grandparent driven to crime by the Great Depression? -- but what kind of bailout we now do definitely IS in the same ballpark as the decision whether to invade Iraq.

The devil IS in the details -- or, as usual lately, in the LACK of them.

I think it's very important that we let Congress know what WE want -- if we don't, you can be sure someone else will GET what THEY want. (Sorry for all the caps and ital, but I'm really kinda concerned as to whether everyone gets how crucial this juncture is, not because we're about to melt down, 'cause I'm not so much convinced we are, as because we're on the verge of enabling big money to bring about the destruction of economic democracy.)

That said, here's what I just sent to my gov'l rep (you can reach your own rep(s) here -- feel free to use or modify my text -- and you can always reach that url through the link in the sidebar at left (if you'd like more info re- the bases & background for my letter below, pls see my previous posts with the label, "it's the economy". My own rep., by the way, is a pretty good Dem but voted FOR the bailout):

I have some acquaintance with debt "workouts" involving pretty big borrowers persuading pretty big institutions to settle for cents on the dollar. Generally, the bigger the money, the MORE accountability is demanded.

Lenders -- let alone equity investors -- LET ALONE DONORS, which is what this last bailout bill would have made us -- do NOT extend credit, invest, or GIVE money away, unless the people asking for the money OPEN their books and disclose exactly what their assets and liabilities are, what their finances looked like last year, what they plan to do with the money, etc.

Can you imagine a bankruptcy case in which the debtor asked his or her creditors to help cover his/her debts but refused to open his/her books or disclose what their liabilities were?

Ok, in any workout, you expect some spinning, jockying, etc., BUT NOTHING like the ultimatum now thrust at us: GIVE US YOUR MONEY OR DIE!

The proponents of this bill can't or won't even tell us where they got the number.

If this were really an emergency, or at least if they really cared about it, they would have presented something a reasonable lender/investor/donor might conceivably accept. They'd be able to tell us how they came up with $700 billion, and they certainly wouldn't have demanded absolute unaccountability as to what they do with it.

Either it's not really an emergency, or they care more about the looting opportunity than about bailing out the economy.

EITHER WAY, IT'S IMPERATIVE THAT THE DEMS WRITE THEIR OWN BILL -- FAST.

Nature abhors a vacuum. Unless we've got Plan B ready, we'll be stuck with some version of Plan A.

To my mind, NO bailout should afford the kind of power and immunity to any member of the executive branch that even the "compromised" bailout bill would have done (given the virtually total lack of any meaningful enforcement even for Constitutional violations).

Apart from that, a reasonable precondition for a sane bailout would be the un-repealing of Glass-Steagall, plus extending it to cover new kinds of institutions.

P.S.: In case you didn't know, the plan presented by Paulson is known to have been sitting on the shelf for months -- so it's not like they didn't have time to work out something more reasonable, if they thought they might need to get something passed quickly.

UPDATE: After I sent this letter, I came across these notes taken from a telephone conference between Treasury and ca. 800 Wallstreeters.

FURTHER UPDATE: Kucinich agrees with me:

More Re- the Bailout (It's Not Dead Yet)

Few have had time or whatever to actually read the proposed bailout bill that was just (for now) defeated. From one who did, the bill would have provided:

1. That Sec. of Treasury Paulson can violate all statutes with impunity, and no one can sue.

2. That even if you prove a Constitutional violation in court, any order in your favor is STAYED (put on hold) until Paulson is done appealing.

3. So after you litigate for months or years in appellate courts, and assuming you finally win (again) in the trial court AND the final court of appeal, all you get is an equitable order for the Secretary to (finally) stop violating your Constitutional rights -- WITHOUT any enforcement remedy if he fails to do so (i.e., any penalty to him or compensation to you).

4. And, even then, he can keep on violating your statutory rights, forever.

More here.

Here's Pelosi on the bill (and if you don't get what she says, I suspect you could benefit from diversifying your news sources).

Here's The New York Times re- the plunderers' machinations in connection with the bailout bill:

"Even as policy makers worked on details of a $700 billion bailout of the financial industry, Wall Street began looking for ways to profit from it.

"Financial firms were lobbying to have all manner of troubled investments covered, not just those related to mortgages.

"At the same time, investment firms were jockeying to oversee all the assets that Treasury plans to take off the books of financial institutions, a role that could earn them hundreds of millions of dollars a year in fees."

There are many alternative approaches to resolving this crisis -- as Bloomberg reports, "Hundreds of Economists [Have] Urge[d] Congress Not to Rush on Rescue Plan," and there are in fact good arguments that one or more alternative approaches would work BETTER -- but unfortunately, only one constituency had a plan sitting on the shelf ready for the crisis they helped create.

Finally check this out re- the interests of the Carlyle Group.

We can't afford to let them scare us into another gargantuan mistake. Go here to find out how your congresscritter voted; and/or contact them here.