Rolling US Economy Into The Shitbin Thread

I bet you'd all like to read Matt Taibbi in RS?

http://www.rollingstone.com/politics/story/26793903/the_big_takeover

In essence, Paulson used the bailout to transform the government into a giant bureaucracy of entitled assholedom, one that would socialize "toxic" risks but keep both the profits and the management of the bailed-out firms in private hands. Moreover, this whole process would be done in secret, away from the prying eyes of NASCAR dads, broke-ass liberals who read translations of French novels, subprime mortgage holders and other such financial losers....

None other than disgraced senator Ted Stevens was the poor sap who made the unpleasant discovery that if Congress didn't like the Fed handing trillions of dollars to banks without any oversight, Congress could apparently go fuck itself — or so said the law. When Stevens asked the GAO about what authority Congress has to monitor the Fed, he got back a letter citing an obscure statute that nobody had ever heard of before: the Accounting and Auditing Act of 1950. The relevant section, 31 USC 714(b), dictated that congressional audits of the Federal Reserve may not include "deliberations, decisions and actions on monetary policy matters." The exemption, as Foss notes, "basically includes everything." According to the law, in other words, the Fed simply cannot be audited by Congress. Or by anyone else, for that matter.

http://www.federalreserve.gov/oig/

Consistent with the Inspector General Act of 1978 (IG Act), as amended, the Office of Inspector General (OIG) of the Board of Governors of the Federal Reserve System (Board) will
conduct and supervise independent and objective audits, investigations, inspections, evaluations, and other reviews of Board programs and operations;

promote economy, efficiency, and effectiveness within Board programs and operations;

prevent and detect fraud, waste, and mismanagement in the Board's programs and operations;

review existing and proposed legislation relating to the Board's programs and operations and make recommendations regarding possible improvements in such programs and operations; and

keep the Chairman and Congress fully and currently informed of problems.
Congress has also mandated additional responsibilities that have a significant impact on our resources and workloads. For example, the Federal Deposit Insurance Act (as amended) requires the Board's OIG to review Board supervision of failed financial institutions that result in a material loss to the bank insurance funds and produce, within six months of the loss, a report that includes possible suggestions for improvement in the Board's banking supervision practices. In the information technology arena, the Federal Information Security Management Act of 2002 (FISMA) provides a comprehensive framework for ensuring the effectiveness of security controls over information resources that support federal operations and assets. Consistent with FISMA requirements, we perform an annual independent evaluation of the Board's information security program and practices to include evaluating the effectiveness of security controls and techniques for selected information systems.

i just beat Matt Tabbi--do i get to work at RS

hey look the guy that Matt Tabbi quote re: The Federal Reserve being audited works for. . . Ron Paul. Really makes you think

"They're supposed to be temporary," says Paul-Martin Foss, an aide to Rep. Ron Paul. "But we keep getting notices every six months or so that they're being renewed. They just sort of quietly announce it."

i didnt realize youve taken on gabbneb & ethan's old work

work is supposed to be hard--that was too easy

i think youve lived in that Company Town too long

did you read what i posted--do you realize the Fed Reserve has an inspector general? please answer in the form of a nickname.

looks like legalese to me, zzzzzzzzzzzzz

can I stop making the payments on my credit cards yet?

Obama is a Leo (like me)...Here's his horoscope for the month of March...

It's time for you to really put a lot into your career this month, starting the 1st. You're ready to take it to the next level, but it won't get there unless you roll up your sleeves, put your head down, get some traction and push! If you've been working up a good sweat at work, you're entitled to a nice relaxing evening with friends on the 4th -- but don't get too wild. It could be time to tighten the belt on the 9th and 10th: You're ready to explore and begin some long-term savings strategies -- it won't hurt to be more economical and, right now, it could help a lot. Thanks to your regular workout routine, you've got a newfound sense of calm and quiet that could put a long-entrenched family dynamic in a new light on the 15th. What will you do with this information? Don't forget on the 20th that any well-oiled career should include time for physical exercise. You're in this for the long haul, so get to the gym! Your instincts are right on when you sense a toothy, long-tailed rodent lurking in a business proposition. Don't sign. It's not a good deal if you smelled a rat. Plan a lovely night out with friends on the 30th. You've all worked hard this month!

(just something trivial...not designed to derail the thread or bring the level of discourse to a new low or anything...ignore it if you want)

Plan a lovely night out with friends on the 30th. You've all worked hard this month!

Dinner with the Cheneys?

lol

what would be the marching slogans, morbz? "hey hey ho ho timothy geithner's gotta go"? "what do we want? nationalization! when we want it? now!" "no blood for collateralized debt obligations!" not very catchy.

Try "Break Up The Banks!" Rallies are being planned.

Is Maxine Waters retarded?

Who the hell would EVER vote for that woman?

what was that in reference to?

i'll take a stab -- her questioning today of geithner's goldman sachs ties?

uh guys

"China Urges New Money Reserve to Replace Dollar"

http://www.nytimes.com/2009/03/24/world/asia/24china.html?_r=1

i actually never thought i would live to see that headline.

i'd be interested to know what people her make of this. i'm tempted to see it as a counterpart to the chinese premiere's remark last week that he was "worried" about the dollar. it could be that this current statement (released in chinese and english) is simply to add a little fire to that, to goose the united states into taking all measures necessary to keep the dollar strong (when the temptation in this financial crisis, especially given the massive debt looming, is to let the dollar sink) and they actually have no intention of doing anything concrete about creating an alternative to the dollar

it's actually a pretty obvious geopolitical strategy, especially given how much US currency that China is sitting on.

But it's smoke and mirrors unless the US economy collapses.

hard to tell who looked dumber yesterday, maxine waters or michelle bachman

China concern-trolling.

http://www.nytimes.com/2009/03/25/opinion/25desantis.html

Haha, anyone feel sorry for this guy and his 'earnings'? It would've been more effective if he a. didn't mention the amount b. didn't make charity-giving into a passive aggressive act.

i don't feel sorry for him -- you really shouldn't expect $750,000 for doing work for a bankrupt company -- but some of his points are fair enough. that particular group being singled out as the villains of the global economy is obviously pretty silly.

hes kind of right but hes right in such a terribly dickish passive aggressive whiny way that i dont really care

i don't know if this was mentioned or not yet, but it sure makes me feel for wall street.

As for how he and his fellow Wall Streeters could still afford such afternoons, he said: “We all made so much money in the past five years, it doesn’t matter.”

A 29-year-old man who works for a large investment management firm and was at Bagatelle’s brunch one recent Saturday and at Merkato 55’s the next, put it another way: “If you’d asked me in October, I’d say it’d be a different situation, and I don’t think I’d be here. Then the government gave us $10 billion.”

While few analysts believe that the dollar will be replaced as the world’s dominant foreign exchange reserve anytime soon

These are different analysts than the ones that told us the economy was doing awesome for most of last year, right?

Though it does make me happy that China is against dollar inflation, the whole IMF/NWO global currency idea has always seemed kind of scary.

CHOCOLATE PRODUCTION IS UP

that's one of those 'ppl working on their sex lives in a downturn' things isn't it

LAYOFFS NECCESSARY TO COUNTER WORLD INFLATION THREAT, SAYS WORLD RESERVE CHAIRMAN

“If you’d asked me in October, I’d say it’d be a different situation, and I don’t think I’d be here. Then the government gave us $10 billion.”

kill em all, for real

check their hands for traces of caviar

'“If you’d asked me in October, I’d say it’d be a different situation, and I don’t think I’d be here. Then the government gave us $10 billion.”'

isn't he just saying that he still has a job? I mean this sounds bad at first, on the other hand, a bailout that continues to give people their salary doesn't come with strings attached w/r/t how they spend their salary. Note I didn't bother to read the actual article because I'm lazy.

interview with ex-Treasury Sec. Paul O'Neill on last night's PBS Frontline Ten Trillion and Counting was depressing as hell. transcript here: http://www.pbs.org/wgbh/pages/frontline/tentrillion/interviews/oneill.html

I favor wasteful and capricious spending by the wealthy -- it's the best way to get that money into the hands of the middle class.

Overpriced stuff like bottle service is like a de facto prestige tax. I like it.

I was at the Treasury as the secretary from Jan. 20, 2001 until I got fired at the end of November 2002. I got fired for several reasons, including (that) I kept saying, "I'm looking at all these intelligence reports, and I don't find anything in here that rises to the level of evidence of weapons of mass destruction." ...

In addition to that, as President Bush was getting ready to recommend another tax cut beginning in early 2002, I said we shouldn't have another tax cut. ... I said we could have another 9/11, and if (we) did, it could cost us $100 billion easily.

The 10,000-page tax code, (is) proof we're not an intelligent people, and it desperately needs to be reformed. And it will take some money to smooth the transition from 10,000 pages to 10 pages that (the American people) can understand and believe in.

We need to fix Social Security and Medicare, and that's going to take a fair amount of money to do those things, ... so we shouldn't have a tax cut. And I kept saying it to the point that finally ... I got fired. So it's not really true that Barney Frank can say nobody raised it. I raised it at the highest levels of government. When I went to Congress to testify, I raised these issues with them. There were no takers.

I am interested in what that must have been like for you personally. Is it the kind of thing where Paul O'Neill walks into a room and everybody stops talking? How did that go?

... At the beginning when I started saying these things, there were other people sitting around the circle who nodded their heads and said: "I agree with Paul. I think he's really right. I know something about the economy, and it sounds right to me." But it was noticeable, the more we moved into the summer, the early fall, nobody else was nodding their head anymore.

The president really didn't want to hear what I thought, which was his right. I was happy to be fired at the end of November 2002. I didn't want to be part of something I thought was fundamentally wrong. I would not have wanted to go and testify to the Congress that this was all a wonderful idea when I thought it was a terrible idea. And unfortunately I turned out to be right ....

Did you walk into the Oval Office at any point, you and the president, and say, "Mr. President, I've got to put it on the line: For the country and for the administration, this is a terrible idea"?

I just kept talking about the facts, you know. I didn't ever go in and say, "Hey, this is awful; I'm not going to be part of this." But I said over and over again what I just said to you about the reasons why we shouldn't do this.

To him?

Absolutely to him, multiple times.

What was the president's response?

You know, he didn't really respond.

Nothing?

No.

He had to say a word or two.

No, absolutely not. That was my experience the whole time I was there. I said lots of provocative things to him, and I never really got a response. ...

This issue of stimulus is a different issue. This is about borrowing money and spending it for things; it's not about recapitalizing the financial system. So let's use some numbers. Right now we have, arguably, 10 million unemployed people. So if we said we were going to give every one of those 10 million people $40,000 a year for the next couple of years while we're in this ditch, how much would that cost us? Well, let's see: 10 million times 40,000 -- that's $400 billion. So if we're going to do $700 billion, what are we going to do with the other $300 billion?

Hadn't thought of it like that. I like this plan sign me up.

Safire in 1998 http://www.nytimes.com/1998/04/16/opinion/essay-don-t-bank-on-it.html:

1. No private enterprise should be allowed to think of itself as ''too big to fail.'' Federal deposit insurance, protecting a bank's depositors, should not become a subsidy protecting the risks taken by non-banking affiliates. If a huge ''group'' runs into trouble, it should take the bank down with it; no taxpayer bailouts should allow executives or stockholders to relax.

Gill Sans is a pretty terrible font for body text.

I keep having a vision of a New Yorker style cartoon where a fat dude sits on his living room couch, surrounded by Cheetos and beer and remote controls and his wife stands in the doorway, looking at him, and he's saying "I'm too big to fail"

Scheer: another ex-Goldman Rubinite on the way...

Obama's Toxic Advisers

Bernie Sanders, the senator from Vermont who is independent in spirit as well as party label, has placed a hold on President Obama's nomination of Gary Gensler to head the Commodity Futures Trading Commission.... I am eager for Barack Obama to succeed, but I see this appointment as further evidence that the president has entrusted his economic policy to the wrong people.

Gensler helped create this financial crisis when he was in the Treasury Department back in the Clinton era, when bipartisan cooperation with Wall Street lobbyists was all the rage....

In congressional testimony supporting the radical deregulation of the financial derivatives market, Gensler had insisted with great enthusiasm that "OTC derivatives directly and indirectly support higher investment and growth in living standards in the United States and around the world." As to the many trillions of dollars in credit swaps that now afflict the world economy, Gensler specifically called for freeing swaps of this kind from existing government regulation in the Commodity Exchange Act, which regulated other futures such as wheat sales. He said, "...[S]wap transactions should not be regulated under the CEA. ..."

Not much time to get into it now, I'm afraid, but I spotted two very interesting related pieces about the financial industry's rise in the U.S.: the first, a short post from Josh Marshall, and the second, a long article from Simon Johnson in the May issue of The Atlantic (which was released early online, obv.).

For me, these articles raised questions about the nature of work in the United States, e.g., why did we allow ourselves to get to the point where the financial sector was the nation's "dominant industry" (paraphrasing the CEO at the press-conference after Pres. Obama's meeting with business leaders); what kind of work should we, as a nation, emphasize, especially after the rush to globalize the economy (presumably so we could enjoy the higher-end service jobs, a notion that's always seemed to be a bit silly to me)). Anyway, interesting pieces.

I'm looking forward to reading those articles. But "we" can't enjoy those higher-end service jobs, because there can't be enough of them. Maybe this is the same as all the other riggings of economies to favor the rich throughout history. But this one seems different, because even the kinds of jobs you'd think you couldn't take away, like farming b/c people have to eat, are in fact hardly possible now in the US.

Also of interest is Simon Johnson's TPM interview of about a month ago:

Listen to how casually radical his proposed solution is: Be ready to take down a series of elites and, as Johnson puts it, "oligarchs" in the U.S. fiancial sector to, essentially, "drain the swamp" and get the economy and banking sectors moving again.

Haha. Okay, that didn't work. Try this.

iirc he dropped the 'o' bomb more than once on moyers a few weeks ago