Sunday, December 11, 2011

Prayer In Schools Prayer By Schools

The US Supreme Court has ruled against prayers lead by or promoted by schools and other agencies of the government.

It has not forbidden prayers in schools by individuals.

Wednesday, December 7, 2011

Needless Fed Freakout

A lot of folks from Tea Partiers to liberals are getting worked up about what they think the audit of the Federal Reserve disclosed -

What folks think happened and the reality can be very different, however. (I'm not going to argue that the US banks and the Fed are princes all around, but the reality of some of the stuff people are worked up about was a lot different than what they think was going on.)

Bottom line here is that the Daily Kos and many others are freaking out about stuff that was good for the US economy and very low risk.

I haven't looked at every aspect of what the audit found - but I have looked at two programs which folks are needlessly freaking out about.

(You might want to pour a fresh cuppa - some of this stuff is semi-difficult.)

I. The Commercial Paper Funding Facility

Bottom line: The Fed's Commercial Paper Funding Facility funneled money to "Main Street USA" to promote our economy.

As an example, the Daily Kos noted ( that
"Pages 135 & 196 – Sixty percent of the $738 billion “Commercial Paper Funding Facility” went to the subsidiaries of foreign banks. 36% of the $71 billion Term Asset-Backed Securities Loan Facility also went to subsidiaries of foreign banks."

One can hear the author muttering "Outrageous! Another $738 billion given away to the banks, and most of them subsidiaries of — wait for evil – 'foreign banks!'" Oh the xenophobia!

Let's start with a very simple idea - let's stop and ask what a "Commercial Paper Funding Facility" (a "CPFF") is and what it does.

First, what the heck is "commercial paper?"

Commercial paper is simply short term promissory notes that corporations use to fund their day to day activities - inventory purchases, payrolls, operations, etc. (Much of this is low risk self-liquidating - borrow to buy inventory today and pay it off in, say, 6 months after the inventory is resold.)

The maturities of commercial paper run from 1 day to 270 days. And because the commercial paper is unsecured (no underlying mortgage or security interest in some sort of property) the commercial paper markets are pretty much limited to the highest rated companies.

Typically banks will buy commercial paper from one company (a method of lending to those companies) and resell it at a slight spread to another company which has some excess short term cash to invest at the moment.

The CPFF was simply the Fed providing funds to the banks so they could, in turn lend short term to (by buying commercial paper of) the best corporations so they could operate day to day.

That is money that went to Main Street to keep the economy running.

And the fact that some of it went to "subsidiaries of foreign banks?" Let's stop and ask, "which subsidiaries? The Beijing branch of Deutsche Bank, maybe?

Nope. The CPFFs to such subsidiaries went to the US subsidiaries of the foreign banks - the subsidiaries they set up in the US to do business with US companies. So the Pittsburgh subsidiary of, say the Dutch Bank ABN AMRO does business with US companies (mainly in the industrial midwest, I'm thinking.)

So that $738 billion of CPFF money to "subsidiaries of foreign banks" helped promote the US economy right here on Main Street USA.

Looks like a winner to me....

(The real question to me is what was the spread the banks were charging? Were they getting those CPFF funds at, say, 1% and charging the corporations floating the paper 10%?

That would be objectionable. It would take a lot more research that the Daily Kos indulged itself in to discover that.)

II. Currency Swaps (Buckle up...)

Bottom Line, the risks were much less than the face amounts and they supported the US dollar around the world.

Daily Kos tells us about the outrageous amount of currency swaps:
"Page 205 – Separate and apart from these “broad-based emergency program” loans were another $10,057,000,000,000 in “currency swaps.” In the “currency swaps,” the Fed handed dollars to foreign central banks, no strings attached, to fund bailouts in other countries. The Fed’s only “collateral” was a corresponding amount of foreign currency, which never left the Fed’s books (even to be deposited to earn interest), plus a promise to repay. But the Fed agreed to give back the foreign currency at the original exchange rate, even if the foreign currency appreciated in value during the period of the swap. These currency swaps and the “broad-based emergency program” loans, together, totaled more than $26 trillion. That’s almost $100,000 for every man, woman, and child in America. That’s an amount equal to more than seven years of federal spending -- on the military, Social Security, Medicare, Medicaid, interest on the debt, and everything else. And around twice American’s total GNP."
$10 Trillion! OMG!

Note first: the quotation marks the Daily Kos used around the word "collateral," as if holding one currency as collateral against an obligation in another currency is less than real or valuable.

Heck, when it comes to collateral, you can't ask for anything more liquid or better than actual currency.

So Daily Kos writer is up in arms about something that was a positive in those deals.

And second, what they don't tell you (and I am guessing they just didn't know) is that in currency swaps, the notional value is far more than the real value at risk. The amount at risk is a combination of (1) the opportunity value of the interest accrued, and (2) the amount that one currency might move against another.

Example: Let's say I have US $100 (100 US dollars) and you have 7764.7003 yen (JPY)

You deposit your 7764.7 JPY with me as collateral, and I give you $100 to be repaid in 1 year at 5% interest. In one year, you'll owe me US$105 and I'll owe you JPY7764.7 in return of the collateral you put up.

If the exchange rate doesn't change, all I have at risk is the amount of the interest I'm charging you, US$5. (Which is 5% of the notional value of the deal.) And my loss there is the US$5 I could have earned lending it to someone else.)

But exchange rates always fluctuate, of course.

Suppose the value of the yen appreciates against the dollar. My risk is actually lower, and if the yen appreciates more than 5%, I have no risk!

Say you go out of business and can't repay that US$100 or the US$5 interest. If Yen has gone up against the dollar, I might be ahead of the game, holding collateral which is now worth more than the US$105.

If the yen goes down against the dollar, I might lose (1) the US$5 plus (2) the amount of the exchange lose.

Over the last one year, the value of the yen against the dollar has ranged from JPY 86.67 per dollar to JPY 76.0 per dollar - so the amount at risk over that would be about 1/10th of the notional value.

And because the Fed was dealing with a number of different currencies, and the interactions among the currencies are such that when one goes up others are likely to go down; and because the swaps involved a large number of counterparties, the true amount at risk was well less that even that 10% of the notional values.

In the 80's, commercial banks planned on about 5% losses on commercial loans and built that expectation into their pricing- anything less than that indicated the lenders weren't being aggressive enough. If we assume that in these interest swaps, the Fed would face the same 5% risk of loss, the true amount at risk would have been 0.5% of the notional face amount of those swaps - without any consideration that many of any which might failed would have been fully or largely collateralized.

So, instead of "That’s almost $100,000 for every man, woman, and child in America," it would be more accurate to say "That’s not even$5,000 of collateralized risk for every man, woman, and child in America which helped promote the value of the US around the world."

That looks like a winner to me also.

Tuesday, November 29, 2011

To My Sunny Day Dem Friends

You keep telling me I shouldn't criticize President Obama; he's the master chess player -- wooing the independents and moderate Republicans by demonstrating what a fair and bi-partisan guy he is.

"And besides, Bob, he has your vote, where else are you going to go? Why should he do anything progressive"

Well guess what, my Pollyanna-politico friends. It isn't working.

Per the latest Gallup poll, Obama’s approval rating has dropped across the board, most — 10 percentage points, from 40% to 30% — among pure independents.

And nearly as much — eight points — among moderate/liberal Republicans, from 29% to 21%. [Gallup poll]

They don't say why - apparently they don't ask that question.

Maybe its because the economy hasn't completely turned around quickly enough for impatient Americans?

But maybe it's because, more and more, he is seen as an ineffectual leader, always willing to compromise and to compromise far to the right of what most people want, never willing to actually fight for anything.

(I guess you need a comfortable pair of shoes to fight for stuff and he seems to have lost his in the move to the White House.)

Whatever it is, he isn't accomplishing the goal you say he is reaching for.

So, should he keep on pursuing an unsuccessful strategy?

Or become the leader we elected him to be?

Saturday, November 26, 2011

OWS Costs In Perspective

The relative sizes of some current economic facts:

It has been said that the Occupy Wall Street demonstrations have cost cities $13 million dollars. That's a lot of money. (Of course, one can ask whether the massive police reactions to OWS were necessary and thus whether that 13 million was necessary, but, OK, let's accept the $13 million figure.)

Let's picture that $13 million as filling the standard size bed of my Ford F150 pickup.

The direct losses from Wall Street's unregulated speculation in the toxic sub-prime CDOs were about $9 billion.

Based on my F150 scale, that $9 billion would fill about 6 ½ standard highway sized tractor-trailers (with a 53' trailer.)

And corporations in the US have about $2 trillion in savings, which is money not spent on jobs and production and business activities.

Based on my F150 scale, that $2 trillion would fill about 1,450 standard highway sized tractor-trailers .

Bumper to bumper, that's about 20 miles of 18 wheelers hauling that $2 trillion dollars out of our nation's economic activity.

Monday, November 14, 2011

Free Markets and Consequences

The term "free markets" means markets and commercial activities with few or no restrictions.

What human activity doesn't end in tragedy when human impulses are left unrestrained? (Whether you view it in terms of "original sin," human nature, or karma, unrestrained human impulses can be catastrophic.)

The US and world financial markets became ever "freer" under the policies and practices of (i) libertarian Alan Greenspan of the Federal Reserve and (ii) the GOP controlled US government during Bush II's first administration. (Not to mention the whole Reagan Revolution thing.)

Who thinks the crash of 2008 was just something that happened without cause?

Let's face it: Derivatives (and their rating scheme) operated in almost a pure "free market."

Derivatives were the direct cause of the crash of 2008.

Monday, November 7, 2011

Real Voter Fraud

Should it take 3 Democratic voters in Ohio to equal 1 Republican voter?

The Ohio GOP has decided it should and that it's fair.

That it's fair to negate the votes of 25% of Ohio Voters. (Calculations below.)

Republican leaders love to shout about "voter fraud." Yes, a vote cast by an ineligible person is a type of voter fraud. (After an intensive 5 year investigation, the Bush II administration found about 120 cases nationwide worth prosecuting. And one would assume half would vote for one party and half for the other – unless you assume that all single-vote fraudsters would vote for just one party....)

But also: denying an effective vote to an eligible person is another type of voter fraud.

Gerrymandering - the drawing of districts to favor one party over another is being taken to extremes by the GOP in Ohio.

Ohio is a swing state, sometimes going Democratic, sometime Republican. It is, in essence, split 50% Republican, 50% Democrat.

So it's 16 Congressional house memebers shoud be roughly split 50%/50%, right?

The GOP dominated legislature has redrawn district maps for the 16 Ohio Congressional districts in such a way as to almost ensure there will be a 12 Republican to 4 Democrat split in our House delegation.

In 2008, 5,607,879 people voted for president in Ohio. So let's say there are 2,803,939 Republican voters and the same number of Democrat voters. (Yes, this is an over-simplification, but we're talking averages here.)

There are 350,492 people per district. Through the extreme redistricting of the GOP, Democrats in 4 districts (the 8 expected by the averages minus the 4 lost through the extreme gerrymandering) are being denied representation.

That's 1,401,968 voters being denied an effective vote - 1.4 million cases of overt voter fraud. Brought to us by the Ohio GOP's extreme redistricting.

Wednesday, October 26, 2011

Stifling Regulation

I accept, I even believe, that conservatives really do love our country and that they want to be patriotic. But it seems to me that they don't always strive for logical consistency in their positions.

In a number of states in the past year, GOP controlled legislatures have passed and/or are trying to pass a range of restrictions on and regulations of voting and voter registration.

On the one hand, conservatives argue that business regulations stifle business. They argue that we should decrease or even eliminate such regulations.

At the same time, they actively promote increased regulation of voting in our country.

Since voting is at the core of democracy, by their own logic, they are stifling democracy.

It seems to me that stifling democracy is directly opposed to their intent and desire to be patriotic.


Monday, October 24, 2011

Picking Winners And Losers

Some people think it is only a rhetorical question to ask: "Should our government be in the business of 'picking winners and losers?'"

I think it is a real question, not a foregone conclusion.

It was during my first year with the legal department of a large NY bank that I learned that, for corporate lending officers, it is a negative to have a 100% success rate - to never pick a borrower who failed. I learned that if you never make a loan which goes bad, you are being too conservative in pursuit of opportunity.

And working for large banks, I had plenty of opportunity to deal with the "troubled assets" folks; the bankers to whom corporate borrowers were transferred when suffering the slings and arrows of outrageous fortune.

Even before the fiascos of the Age of Definitives, commercial banks regularly made bad bets despite intensive credit analyses.[1]

Most conservatives like to argue that the government shouldn't be in the business of picking commercial "winners and losers" and they like to point to the failure of the solar company Solyndra LLC as proof. [2]

It occurs to me that if banks, the acknowledged experts in "picking winners and losers," get it wrong sometimes, how on earth can we blame the government when an occasional horse it has backed doesn't finish the course?

Those same conservatives love to argue that the government should follow business principles. (I disagree, because our government has much wider responsibilities than maximizing profits for a limited group of investors, but let's accept the idea for a moment and examine it.)

And proponents of capitalism also argue that investors deserve the lions share of profits because they have taken risks. [3]

So, on the one hand they argue that government should be run like a business, but on the other they say that government shouldn't take risks or "pick winners or losers" when that is precisely what business does routinely

There are some folks in this world with whom you just can't win, I guess.

The question isn't "Should our government be in the business of 'picking winners and losers?'"

The question is :"How should the government do so, when appropriate, in a responsible manner?"

= = = =
[1] Think of all the banks - and other business people - who picked Enron as a winner, and yet it turned out to be built on undetected frauds.

People need to be aware that the derivatives insanity mainly comes from the super-aggressive investment banking side of our newly combined "banks," not the commercial corporate banking side. The problem isn't with "too big too fail" - the problem is intermingling critical banking services such as our credit system and our payment systems with the high risk activities of investment banking - it hurts if a large investment banks fails – it is critical if our credit and payment systems fail

[2] It is a toss up whether conservatives trot out this "shouldn't be picking winners" arguments before or after they tell us this is an Obama administration scandal, ignoring the fact that the Bush Admin first started pushing it as a company to support.

[3] Totally ignoring the huge risk involving their very livelihoods that people take when they accept a job with a company. Typically, investors risk "extra cash" they have; workers risk their economic (and sometimes, physical) lives on the success or failure of the company they work for.

Friday, September 23, 2011

Critical Facts About Banking

It's too bad there is so much uninformed thinking about the bank "bailouts."

The seeds of the 2008 crisis were much the same as the seeds for the bank failures in 1929 and the Great Depression which followed - the combination of commercial banking functions (credit services and payment systems) with investment banking (forming investment pools of capital.)

The banking system we established after the crash divided commercial banking from investment banking.

Commercial banks handled deposits, extensions of credit (lending) and especially our payment systems - originally check clearing, but also wire transfers and generally almost all payments in the stream of commerce. (No payment systems, no commerce. High risk payment systems, high costs for commerce.)

These three functions are so important to a smoothly running economy that we deemed the large commercial banks to be covered by an implicit "guarantee" of our central bank. the Fed" as the "lender of last resort. (That did not mean all banks would be automatically bailed out if they were failing - it did mean that the fed would support them in times of need.)

Payment systems are particularly vulnerable to cascading system failures - and without effective and safe payment systems, our economy as we know it could not survive.

Commercial banks were covered by a comprehensive set of regulations geared to assure the "safety and soundness" of the banks and the banking system.

Commercial banks were considered low risk, and thus low investment return.

Investment banks pooled the money of investors (excess capital) and disperse it as investment capital.

With investment banking, there is not the systemic risk that the payment systems have, and the money is money intentionally put at risk in investments.

The investment banking sector was high risk, high reward, with relatively few regulations beyond attempts to reduce business fraud.

For reasons not really germane here, commercial banks were, profits wise, sucking wind starting in the late 80s.

The "fix" was to allow commercial banks and investment banks to merge (through the 'repeal' of that separation in the Glass-Steagall Act) - bringing the high risk functions of the investment banks under the Fed's "lender of last resort" function so necessary for the payment systems and the universal need for credit.

And thus, we had the inevitable investment banking failures of 2008 and the inevitably critical need for the "bailouts" to rescue the credit and payment system functions.

Friday, September 9, 2011

'Red Tape' and Republican-Lite

I'm still digesting President Obama's address on jobs last night.

But what's this "red tape" business, Mr President?

Is there a GOP jingle you don't buy into?

In case you didn't notice, "Red tape" is just another, underhanded way of referring to and slighting regulations.

Regulations save lives, Mr President. They save our environment, they protect our economy. And they protect jobs!

"Job killing regulations?" Pure right wing jingoism.

Regulations are checks and balances on, inter alia, corporations getting away with risky and even deadly self-serving acts to maximize profits for investors. Corporate self-interests are not always aligned with our country's self-interests.*

"Job killing regulations?" Go ahead, gut the EPA. We don't need all those jobs in the tourism and outdoor sports industries. We don't need all those "waste management" jobs.

Mr President, do you really think we don't need all that stuff that regulations protect? Sure, go ahead, buy into another GOP short-sighted, pro-business anti-people and anti-country idea. Whatever is good maximizing corporate profits is good for America, right?

Please Mr President, don't keep buying into right wing ideas and issue framing

For Pete's sake, don't you understand that you're losing support because in 2008 53% of the American people thought they were voting for a Democrat?

Please, understand, you caught a dangerous economic infection when you were hanging out with those Chicago School of Economics types. And that infection is going to kill your second term. And the American economy, as well.

= = = =
* Re "self-interests"

Please compare:

"Maximize Investor Profits"


  • form a more perfect Union,
  • establish Justice,
  • insure domestic Tranquility,
  • provide for the common defence,
  • promote the general Welfare, and
  • secure the Blessings of Liberty to ourselves and our Posterity"

Thursday, September 8, 2011

Will His Coffin Be Nailed Shut Tonight?

What the heck, I may as well go out on a limb and thrill my many followers:

I'm afraid that without bold action and proposals, in tonight's "jobs" address to Congress President Obama will be nailing the lid shut on his re-election chances in 2012

I believe President Obama has failed as president because too many of his policy initiatives have been modified to reflect extreme positions in the right wing.

He has failed to deliver a vision of governance or leadership to the American people and has become little more than an echo chamber for failed GOP economic ideas.

Some speak of his leadership of the American people as a whole.

A very large majority of the American people supported the public option in the health care bill. After a few tepid references to the public option in some early speeches, he never pushed for it - again, what the majority of people wanted.

More than 70% of the American people want tax increases on the richest, and he hasn't even asked for that, much less pushed for it.

It seems as if Obama can't even follow the American people, much less lead them.

I view this as a leadership failure of unprecedented degree.

The majority of American people are shouting for him to stand up to the GOP and become a leader.

This is almost certainly his last chance to do so.

The private sector has not produced job growth over the past 11 years despite tax cuts and deregulation.

I believe that if Obama limits himself to hoping that jobs will mysteriously appear if he and we just continue to embrace GOP policies, to hoping that the private sector will somehow be induced to create jobs through tax cuts, he will have nailed the coffin lid shut on his re-election chances in 2012, because those GOP policies implemented over the past 11 years haven
n't created jobs. More of the same will lead to the same results.

Thursday, August 25, 2011

Bush's Stimulus Package II

Yesterday I posted a message about Bush's Stimulus Package, but the graphic left a bit to be desired.

This chart shows the year to year growth (changes) in federal spending.

Note that Bush increased spending significantly - which, by another name, is a stimulus package. This graph shows how much stimulative growth in spending we saw under Bush.*

Also note that the Obama 2009 spike includes (i) TARP spending which was enacted during Bush's administration, and the Recovery Stimulus package, which was enacted to combat the effects of Bush's Recession. We can differ on how much of the 2009 spending is the responsibility of Bush and how much the responsibility of Obama. See, e.g.,

* (Note that my source from which these figures were calculated does not indicate if they include the "off-balance sheet" spending on the Iraq and Afghanistan wars, which were not included in Bush's budgets, but were paid for with "supplemental appropriations" and noit included in the budget itself. My source was

Tuesday, August 23, 2011

Bush's Stimulus Package

I have a conservative friend who got all excited when he found out that federal revenues grew during the BushII admin "even with the tax cuts."

Like all good conservatives, he seems to think that the fact that Bush also significantly increased federal spending, thus stimulating the economy, is a fact better left unmentioned and unrecognized. In fact, he called bringing up the increased spending and the stimulus effect of it "twisting the logic."

So, I charted growth in[1] revenues as a percentage of GDP from 93-2008. I also through in a line of GDP growth during those years. which is pretty much a steady increase. (The slopes of the 2 curves don't necessarily match; the significant fact on GDP here is that it pretty steadily grew until Bush's Recession hit)

Through the Clinton years, revenues as a percent of GDP grew at a stead.

Of course, when Bush cut taxes, the revenues as a percent of GDP dropped.

If you assume revenue growth would have pretty much continued on the Clinton era path (as projected with the green line in the graph) you can see just how much revenue we lost because of the Bush tax cuts.

[1] On edit, per correction in first comment made.

Monday, August 15, 2011

Whose Debt Is It?

Republicans love to tell us they are fiscally responsible and the "Tax and Spend" Dems run up a lot of debt. Let's go to the Pie Chart....

If you think the TARP, Iraq and Afghanistan wars and Recovery Act funds spent to stop the economic collapse at the end of the Bus admin are GOP debt, then the GOP has r
un up over 75% of our debt. If you think they should go on Obama's plate with his slice of the pie, then the GOP "only" run up about 62% of the debt. Maybe dems are "Tax and Spend..." but the GOP seems to be into "spend what you don't got AND cut taxes to make sure you'll have even less when the bills come due."


Monday, August 8, 2011

Opps, Maybe

For the moment it looks like I swung at and missed a wild pitch by S&P in this blog entry:

OTOH, compared to what seems to be happening on Wall street:

The markets get scared by S&P, and they react by investing in US treasuries, showing S&P was dead wrong....

Kind of a Wall Street Mobius strip

Friday, August 5, 2011

Go To The Economic Videotape

Let's go to the Economic Videotape and look back to 1936 (and compare it today):

The country is in the grips of the Great Depression, but has begun to recover under Roosevelt's New Deal "pump priming" stimulus plan. But Roosevelt is in a re-election fight and the Republicans have been screaming about deficit spending.

So Roosevelt agrees to an austerity package to enhance his re-election chances. (Sound familiar?)

The country's economic recovery reverses and we go into the '37 recession.

So e go back to the New Deal's deficit spending to stimulate the economy and the recovery recommences.

Then 1941. Something really big happens and the government has to spend vastly higher amounts of money in the economy and borrow to do so.

Look at the economic events - vastly increased government spending and borrowing.

The economy bounds back with the massive government spending program put into place. Yeah, it was done to fight WWII. But if you describe that period from an economic point of view - it was huge stimulus package built on deficit spending.

Are we going to have to have another World War to convince ourselves that the solution is government spending?

Tuesday, August 2, 2011

Matt Damon, Teachers And Values

I don't pay much attention to Hollywood and movies and TV and actors and stuff. Nothing against 'em, I'm just not all that interested. (My former wife was amazed recently that (1) I remembered the name of the movie "The Legend of Bagger Vance" and (2) that I remembered that it starred Will Smith. I was a little surprised, myself. Good movie - teaches some lessons. The kind of movie I do like. Like "Good Will Hunting" too.)

I don't automatically assume that an actor's comments or views about anything are necessarily worthwhile.

On the other hand, however,I figure it takes some smarts to make it to the top of any field, and I certainly won't dismiss an actor's comments just because he or she is an actor.

I ran across a short clip of Matt Damon speaking about teaching, and a comment he made struck me as going to the heart of a big problem in our society and current politics.

Discussing the teaching profession, an interviewer asked him if it isn't job insecurity which keeps him working hard.

His first, partial response is "I want to be an actor."

And then he hit it out of the park:
"You take this MBA style thinking - it's the problem with ed policy right now. It's this intrinsically paternalistic view of problems that are much more complex than that."
I'm not sure that the issue is really paternalism - but he goes to the core of a real societal problem - the idea that issues are one dimensional and can all be solved by the application of business and corporate values and modes of analysis - that all of life and life's problems are a matter of profit motive and economic fears and dreams.

He goes on in the video to discuss the love of teaching as the motivator for teachers, a factor which just doesn't get much attention in our modern, "corporate-values are all" society. (Looking at his wiki bio, I'm guessing he gets his insights into and knowledge of teaching from his mother, "Nancy Carlsson-Paige, an early childhood education professor at Lesley University.")

Over my life, I have seen a steady shift to the idea that commerce and profits and economic self-inteerst are the end all and be all of life. We see it in attitudes about the environment; we see it when the mall becomes the destination of choice for idle hours. We see when some one says "he'll be a good political candidate, he's a business man...."

Commerce and economic self-interest are important, but we don't serve either our personal nor or national self-interest when we make them the center of our consciousness and of our values.

= = = =

Matt, if your clipping service passes this along (yeah, right, Bob) - I've only seen a few of your films - I was impressed by your performance in 'Bagger Vance,' which maybe shows you just how far out of mainstream Hollywood I am.... BTW, when I was mentioning it to my former wife, I'd forgotten you starred in it, too. Sorry.)

And thanks for standing up for teachers! Makes all that stardom even more valuable, right? (Except to the MBAs maybe)

Monday, August 1, 2011

The Great Obama Spelunking Adventure

I just viewed a message from the President emailed to me Monday morning after The Great Obama Spelunking Adventure. (A.K.A. "He Caved.")

He said "we settled this the only way we could."

The idea that capitulation to the right winger extremists is"only way we could settle this" is nothing if not an admission of your failure of leadship, Mr. President.

President Obama argued that this situation has "launched an important debate about how we approach the big challenges we face...."

No, Mr President, this "deal" has answered that debate, which has been raging throughout your presidency." Sadly, when a strong leader was most needed, your answer has consistently been surrender to the extremists.

"... and about whether we tackle our challenges by calling on our best values as one country."

"One country," Mr President? With a sadly powerful yet tiny minority of extremists willing to scuttle our nations strength and economy, you think we are "one nation?" You think we can be one nation when the GOP can only answer "No?"

"This chapter is over but the work of the great debate continues."

I'm starting to think you really are delusional. A temporary insanity, I hope. This isn't just putting the best face on a bad situation and a timid response to it.

Your speech seems to demonstrate you really don't have a clue as to just how badly you have done as President and in fulfilling the President's role, his duty, as leader of the country.

I weep for America. When we desperately need leader, we get capitulation and your fantasy defense.

Saturday, July 30, 2011

The Great GOP Tax Hike of 2011

On Edit: The Monday following the Great S&P Downgrade.

At the moment, it looks as if I was way wrong.

Short terms, anyway. It looks as if my prediction was miles off the mark - t-bill rates seem to be holding steady, or even dropping as investor money flees the stock market and looks for the best bet in town.

At this point, it looks as if the market has shown us just how wrong S&P was in down grading treasuries.

We'll have to await developments, of course, including the t-bill auctions later this week.

For the moment, though, it looks like I swung at and missed a wild pitch....

Originally posted:

The Republican party has thrown our ability and willingness to pay our obligations into question, world-wide. An increase in perceive credit risk, regardless of the credit rating, will drive our nation's cost of borrowing up. (See, also, my blog just before this.)

Short term t-bill rates have been volatile, with investors demanding higher yields on already issued t-bills. There will be an auction on Monday - we'll get a feel then as to just how the GOP caused crisis will cost us all, directly and indirectly.

If T-bill rates go up, all lending rates will go up (except for the relatively tiny amount of "fixed rate" loans currently outstanding:)

Which means:
  • Increased credit card rates;
  • Increased rates on variable rate mortgages;
  • New loans will be more expensive - for everyone ;
  • Companies borrowing to bring in inventory will be paying more and passing that cost on to consumers;
  • Oil drilling companies, transportation companies and refiners will all be paying more to finance their activities - and passing that cost onto consumers;
  • Inter-bank lending will become more expensive, driving up the cost of payments made through the bank payments systems - meaning increased bank transaction charges.
I'm sure there's more, but isn't this already too much of a "tax increase" to pay because of the right wing taking our credit hostage to advance their radical and unpopular ideas?

Is Our Goose Already Cooked?

Is Our Country's Sovereign Credit Goose Already Cooked? - Is our cost of credit already sure to rise, with all the consequent increased cost which will end up being taken from the peoples' wallets?

In determining the interest rates for lending, credit ratings are important, but they aren't the sole determinant of credit risk and thus cost of credit. Credit costs depend on how potential "lenders" (in this case treasury bill purchasers) perceive US sovereign debt risk.

The market - the "free markets" - will determine how much risky they perceive US debt to be and the interest rates we have to pay will vary accordingly.

It seems to me that the GOP's battle to the death has already made it likely that our credit is already damaged and we will have to pay more for our sovereign borrowing - we'll have to wait to see how the T-bill auctions go.

Thursday, July 28, 2011

A Broken GOP Promise

Less than a year ago, in September 2010, the GOP proudly made a "Pledge to America," containing a number of their promises to the American people.

One of those promises was to not tie unpopular issues to important legislation:
"We will end the practice of packaging unpopular bills with "must-pass" legislation to circumvent the will of the American people. Instead, we will advance major legislation one issue at a time."

This entire debt ceiling debate is a complete and blatant repudiation of that promise because the GOP is demanding cuts major programs which help people in desparate need

The GOP is tying unpopular legislation to a must pass bill - and, in doing so, they are trying to circumvent the will and the needs of the American people

Is there any honor in the GOP actions on this critical issue?

Monday, July 25, 2011

Dems For Buddy?

On Edit....

I wrote originally wrote this blog about possibly supporting the Republican dark horse Buddy Roemer -- based on some of his general pronouncements, particularly his opposition to the power of big business over our government.

Well, never mind. I found these positions in one of Buddy Roemer's speeches (the all-caps are his):
Just another anti-government tear-it-down-istas??

Even Adam Smith the "father of modern capitalism" approved of government subsidies to start up industries. (And we won't go into that "unproven energy technologies" bs. Somehow, too many power seekers seem to believe whatever they proclaim, and ignore the reality, such as the proven energy technologies of wind and solar (with tide coming our way.))

It is looking as if he'st another right winger who erroneously thinks that when the founders spoke of limited government, they meant small and weak.

What they meant was, as opposed to a monarch with almost unlimited powers vested in the one person, a limited government is one with (1) the limits which arise internally from the checks and balances among the three branches of government and (1) the limits which arise externally from the power of the citizens to vote.

He also points firmly in two opposite directions at once, advocating both strong protectionist measures - which we ditched as part of the Reagan Revolution and allowing jobs and production to be shipped overseas (an idea I support) while simultaneously chanting about "free trade."

Finally, he supports "deregulation of small business." Well, maybe he doesn't know that small business is already excluded from a wide range of regulations.

He shouts (again, his all-caps"):
Note that he seems to be trying to pull a fast one - suggesting that the number of pages of comments in the Fed Reg somehow reflects the number of regulations.

I don't access to the Fed Reg or the tools to measure the relationship of comments to actual regulations. However, part of my practice in the last century was reading the Federal Register everyday to look for an analyze regulations which affected by bank clients. From that experience, I can tell you that the vast bulk of printed material in the Fed Register is made up of comments: comments on potential regulations, comments on proposed regulations, comments on regulations adopted, and comments on regulations which were not adopted.

Elimination of all regs since Obama was elected. Hmmmm. Looks like an unintended admission that he's just another Anti-Obama-ite

And then he proclaims:
Partisan bull pucky! Regulations are the checks and balances on industry and commerce, protecting us against such things as environmental pollution and shady business practices.

Regulations are no more taxes than the Ten Commandment's prohibition that "Thou shalt not steal" is a tax. God is taxing me by prohibiting from building my wealth through theft.

Building a product more cheaply through polluting the environment, or through chicanery, is nothing but theft, the Ten Commandments regulation against it isn't a tax.

BTW, it is an honor to pay taxes, it is patriotic. The anti-tax mania of the Republican party, and it's offspring of questionable parentage, the Tea Party weakens our country.
“I like paying taxes. With them I buy civilization.”
– Justice Oliver Wendell Holmes
"Every tax, however, is, to the person who pays it, a badge, not of slavery, but of liberty."
- Adam Smith, the "Father of Capitalism:"

Yes, maybe regulations increase the cost for a company to do business, but they protect our country and our the society from businesses sticking the public with costs such as pollution-caused disease.

= = = = End Edit

The original post:

As a life long liberal, there is much about today's politics which I lament. I knew in 2008 when I canvased and phone banked and even did data entry for then candidate Obama that, despite the right wing fixation, Obvama was and is no liberal.

I did not expect him to surround himself with Goldman Sachs people and apparently but their investment bankers view of reality. And he seems to have fully embraced corporate power and corporate ideas - perhaps he spent too much time talking to advocates of the Chicago School of Economics when he was at the University of Chicago.

But a dark horse has appeared on the Republican side of the aisle, but he sounds more like a Democrat than do many of today's democrats.

Buddy Roemer.

It has been written that "His platform is twofold. First, he wants to focus on creating jobs by deregulating small businesses, making the country energy independent and cutting back on unfair foreign trade.

"Second, he wants to eradicate the power of special interest money in Washington. Accordingly, he is refusing to accept money from any political action committee, and he has limited the amount of money supporters can donate to $100 a person.",(the DailyCaller, link above)

I have concerns about that bit about "deregulating small business." Small businesses are already excluded from a lot of regulations and I'm concerned that this is just a disguised Republican "regulations are evil" pitch.

(Regulations are nothing more or less than checks and balances on groups of people and commerce. The process of adopting regulations allows plenty of opportunity for business and trade groups to participate and shape the regulations. Regulations are not just some form of random tyrannical pronouncements from faceless bureaucrats.)

And being in favor of "energy independence" is pretty much as bold a position as being in favor of Mother's Day.

There are a lot of details to come, he has mainly voiced solme generalizations, but I'm sure going to be keeping my eye on his campaign.

But who knows, maybe a Republican will finally qualify for my vote for President....

Thursday, July 21, 2011

Breitbart on Palin's Undecided

I just ran across an analysis on Andrew Breitbart's Big Hollywood site of the relative success of Sarah Palin's "Undefeated."

Not surprisingly, the "analysis" raves about the box office success of Palin's "Undefeated."

For starters, the "analysis" doesn't discuss the significance of only 10 theaters even willing to show it on the opening weekend. One of the most recognized, high profile politicians could only get 10 theaters? With Murdoch's Fox behind her? Interesting fact and interesting commission from the "analysis."

Using a table listing "Documentaries - Political" the article announces: "'The Undefeated' ranks as #15 in the all-time highest grossing debut category."

Wow!!! In terms of gross, it just edged out the famous documentaries I.O.U.S.A. and America: Freedom to Fascism. I bet you heard as much about them pre-opening as you heard about "the Undefeated," right?

= = = = Update = = = =
The Undefeated, during its second week in theaters, brought in $24,000 in sales in 14 theaters. The movie’s per theater average, touted as a bright spot by the Breitbart piece, dropped 73%, from $6,513 to S1,714, according to estimates by the industry website Box Office Mojo. (For some reason, that site calculates it as a 63% drop, but I think their calc is based on gross, not gross per screen)

So, you ask, how did other 2nd week movies fare?

"Harry Potter" dropped even more, 71.6%, to "only" $10,986 per screen.
"Winnie the Pooh" dropped 34.6% to only $2,138 on 2145 screens
"Snow Flower and the Secret Fan" increased 47.0% on 61screens to $3,230 per screen
"Tabloid" went up 52.4% on 31 screens to $4,484 per screen
"Life, Above All" went up 29.1% on 10 screens to $1,780 per screen.

Apparently, "The Undefeated" lost the buzz wars to "Snow Flower and the Secret Fan." Go figure
= = = = = = = = = = = =

The writer scrutinized the data table and came up with: "On a comparative number of screens (less than 10), 'The Undefeated' enjoyed the fifth highest-grossing debut in the history of political documentaries." (Per the table, the vast majority of documentaries open on 1 screen. And consider the advance publicity they get....)

Actually, the "Undefeated" came in sixth in that interesting category (but is anyone really concerned with accuracy when it comes to a Breitbart based source?)

I'm not sure how the number of screens is important, but let's look at those "10 or less" and see who "the Undefeated" trailed behind:

RankFilmGrossPer Screen
1An Inconvenient Truth$281,330$70,332
2Bowling for Columbine$209,148$26,143
3Roger and Me$80,253$20,063
4Outfoxed: Rupert Murdoch's War
on Journalism
5The U.S. Vs. John Lennon$69,143$11,523
6The Undefeated (2011)$65,132$6,513

Boffo Box Office, right? For one the biggest political celebrities today!

(If I had Lexis Nexis, I'd do a search for media mentions priors to the release date - Bet that would be interesting.)

BTW, for 10 or less theaters, it came in 31st for the box office take per screen. It was just edged out by
"Can Mr. Smith Get to Washington Anymore?" ($6,742 in the one theater it opened in);
"The Panama Deception" ($6,563 in the one theater it opened in); and
"Outrage" ($6,518 - dang, just $5 more - in the one theater it opened in.)
(The full list is below.)

My experience is that most people fall into one of two categories:
  1. those who let their ideologies dictate the facts they see (and filter out those they don't want to see), and
  2. Those who look at all the facts and form their opinions from them.
Guess which class our "analyst" falls into....

= = =
The list of documentaries which had higher per screen box office than the heavily promoted "The Undefeated:" How many have you heard of? Ever?

1 An Inconvenient Truth
2 Your Mommy Kills Animals
3 Control Room
4 Bowling for Columbine
5 Roger and Me
6 No End in Sight
7 The War Room
8 The Trials of Henry Kissinger
9 The Weather Underground
10 The Fog of War
11 The War Tapes
12 The Hunting of the President
13 The U.S. Vs. John Lennon
14 Feed
15 Grass
16 Suicide Killers
17 An Unreasonable Man
18 Fidel
19 Power and Terror: Noam Chomsky in Our Times
20 Why We Fight
21 The Last Mountain
22 Giuliani Time
23 Ballot Measure 9
24 The Yes Men
25 Our Brand Is Crisis
26 In the Face of Evil: Reagan's War in Word and Deed
27 For the Bible Tells Me So
28 Can Mr. Smith Get to Washington Anymore?
29 The Panama Deception
30 Outrage
31 The Undefeated (2011)

Boffo box office, indeed. A raging success for the conservative cause, right?

Saturday, July 16, 2011

Who Increased How Much Debt?

This graph is a bit simplified. Reagan, Clinton and Bush II served 8 years, Bush I only 4, and Obama has only served 2 1/2.

And debt can arise from additional spending, or decreased revenue, or both.

If you "annualize the increase in debt, Obama would be just a tad below Bush II (Bush II - 10.75%, Obama 9.2%)

But Bush choose to reduce revenue and increase spending; Obama was stuck with both Bush's decreased revenue from his tax cuts and the even further reduced revenue from Bush's Recession. And a big chunk of Obama's increased spending was the "one time only" stimulus package.

Of course, Obama has embraced many GOP economic practices, so we'll have to see how this plays out over time.

So far, though, the Republican Presidents are way ahead when it comes to fiscal irresponsibility.

Thursday, July 7, 2011

Where Are The Jobs

Jobs! Deficits! Jobs! -- It looks as if the GOP is swinging back to their "jobs, jobs, jobs" chant.

They tell us we can "create jobs" with (1) tax cuts, (2) expanding the wealth of the richest and (3) gutting checks and balances on corporate power
(also known as regulations.)

In the Bush II administration, we had (1) huge tax cuts, (2) huge redistribution of wealth to the richest and (3) huge cuts in regulations.**

So our economy and job growth should have been soaring during the Bush administration, right?

And so let's look at the results:

Over the eight years of the Bush admin, in aggregate we lost jobs. (The orange line.)

There were a few years - from the end of 2003 to the end of 2006 - where job growth (the bottom dark blue annual job growth line) was slightly above that needed to just keep pace with the growth of the workforce population (the horizontal green line.***) That was when the Bush deficit spending was at the highest.

The yellow line shows the aggregate number of jobs needed to keep up with populations growth.

The only significant job growth we have seen since 2000 was in 2009, the year the Obama Stimulus package was at work (the sharply rising cyan/light blue line.) The GOP pretty much shut it down and stopped any extension of the proven economic policy of "pump priming, and job growth has dropped back.

As is said, people are entitled to their own opinions, but they are not entitled to their own facts.

And the facts are that GOP economic policies result in massive transfers of wealth to the rich and no job growth (or economic growth) for the rest of us.

= = = =
* The 2011 figures were extrapolated from the first 5 month's figures

Over the past couple of years, we have also seen corporation running up record profits and savings, but not creating jobs, at least not here in the US. See for a discussion of the effects of unthinking support of corporate powers.

*** I have found figures for the job growth needed to keep up with the growth of the workforce population ranging from 125,000 new jobs a month to 137,000 a month. This chart uses the higher figure

Sunday, July 3, 2011

Picture $84 Million

"Philippe P. Dauman, the chief executive of Viacom made $84.5 million in 2010, after signing a new long-term contract that included one-time stock awards." NY Times

On Facebook, someone said "I am trying to picture the 'mass' or 'size' of $84.5 million, in $1 bills

OK, here we go: A dollar bill is 0.0043" thick, and measures 2.61" x 6.1"

A stack of 84.5 million one dollar bills would be 363,350 inches high (new dollar bills from the mint)

That equals 30,279 feet which is 5.73 miles high.

Commercial long haul jets fly at 30,000 to 40,000 feet.

One flying at "only" 30,000 would hit the top of that pile, cutting off 279 feet, costing him $5,407 dollars!


My F150 standard cab "short bed" pickup bed is 6'5" x 5'2" x 1'8"

Ignoring the wheel wheels inside the bed, it would take 60 pickup trucks to haul around his 84,500,000 one dollar bills.

That line of trucks, bumper to bumper, would be 1,072 feet long; "only" about 3 1/2 football fields.

Now, when they're following him at 60 mph with the recommended 6 vehicle lengths between, his money parade will "only" stretch out 1.42 miles long.


Laid end to end $84.5 million in dollar bills = 824 miles, stretching from New York City, past Chicago, and ending up in Leland Grove ILL, just past Springfield, ILL.

Or.... If you want to head south, those dollar bills won't quite reach Jacksonville FLA

Saturday, June 25, 2011

Gotta Act NOW!

We're being told we have to fix Social Security RIGHT NOW! "It's Broke!"

When you look at the facts, though, right now it has a surplus. In 20 plus some years, if we don't make some changes to fix it, it'll only be able to pay out something like 78% of it's obligations.


Let's see, 27 years ago.... in 1984.... when I was just a sprout...

Yeah, right, we have to act "RIGHT NOW."

It occurs to me: I used to work for some big banks and one of my hats was guarding against con men trying to diddle them as part of their brokered funds schemes (Think 'Nigeria emails' before email arived on the scene.) I even worked with the FBI on some cases.

Once, I was telling a young agent new to the white collar crime beat about how the brokered funds scams worked and how the con men tried to get banks involved. I mentioned that a hallmark of these cons was the pressure to "act now, right now" ["Before you have a chance to think about it.]"

The FBI agent responded that they use the same technique in counter-espionage in turning agents.

Gee, "Act Now!"

You don't think today's GOP is trying to pull a fast one, do you? Con us into abandoning our society;s needs so they promote corporate profitability?

(Maybe we can fix SS with the hidden Nigerian bank deposits the GOP candidates have in some Swiss banks...?)

Tuesday, June 21, 2011

An Economic Wrong Turn

The Republican Party has traditionally promoted corporations and commerce as a way for the country to grow economically. Some 50 years ago, the chairman of GM announced "What is good for GM is good for the country."

I personally don't completely agree, but many reasonable people believe that to be true. And it may well have been largely true in the pre-global economy of the 1950s.

About 235 years ago, Adam Smith, the father of economics and of capitalism, taught us that a necessary element of creating and building national wealth is to promote and maintain domestic production - to stop importing goods from abroad. (England had put the same restrictions on Scotland as it had on the colonies and they faced the same issue.)

We no longer promote domestic production, and, especially, "our" corporations no longer do so; not when their self-interest dictates chasing cheap labor and moving production overseas.

To the extent that a corporation's profits are maximized by moving manufacturing overseas to get a competitive advantage from cheap labor, that corporation's self-interest no longer promotes the wealth of our nation. I believe we should resist accommodating corporate self-interests which are no longer aligned with our national interests.

In following and promoting corporate interests as the large corporations turned from national entities to being to an international foundation, we as a nation have taken a very wrong turn.

Perhaps this is why today's GOP has become so inadvertently unfocused and, to some, even a bit crazed.

I believe Republicans are truly patriotic - they love our country. I disagree with how one best manifests love for country, but I also believe there is no one fixed way to do so.

I suspect that thoughtful people on the right subconsciously understand that the self-interest of today's international corporations in today's global economy does not and cannot promote our national self-interest, our national economy or our national security.

And that conflict between (i) their natural patriotism and (ii) their subconscious realization that automatic support of large corporations which no longer serve American interests is what makes today's GOP policies so "schizophrenic," so cognitively dissonant.

I believe that if we restore a truly traditional values of economics as put forth by Adam Smith, his "invisible hand" will steer us back to the road of national wealth, health and security.

[On Edit]

This TEDxAustin Robyn O'Brien lecture on our food supply and maximization of corporate profits with the attendant effects on our society is thought-provoking:

Thursday, June 16, 2011

Courts Gone Wild

Bottom line: We are seeing conservative courts undermine our legal system in their pursuit of political ends instead of a pursuit of justice.

It occurs to me that the recent Wisconsin case, Wisconsin v.
Fitzgerald, Fitzgerald, Ellis, Suder and La Follette, , on the legitimacy of the public union busting legislation, and the Citizens United case in the US Supreme Court share an alarming example of judicial overreach and abuse of our legal system for political purposes.

Two bedrock principles of our legal system:

First: Trial courts determine what the facts are and they make the initial rulings of law.

Our appeals system is almost entirely limited to review of the legal holdings - appellate courts do not "retry" the facts and liticants can't appeal the trial court's factual findings (except in extraordinary circumstances.) Appellate courts use the facts as developed on the record by the trial court. Trial courts are good at determining facts, appeals courts are supposed to be limited to ruling on legal issues.

Second: Appellate courts only review the issues brought to them; issues "preserved on the record" for appeal. This is to promote judicial efficiency and economy and limit courts from overreaching their mandate and discrediting themselves.

In this Wisconsin case, it seems that the Wisconsin Supreme Court majority didn't decide the appeal from the court below and didn't restrict itself to the developed record.

Instead, it cobbled together a process of "original jurisdiction" to avoid being restricted to the well developed and fully aired factual record.

In other words, this court avoided one of the central principles of our hierarchal legal system so that it could make up its own factual record and achieve the result it wanted. (See, Abrahamson, C.J., dissent at para 96, as well as the dissent of Judge Crooks starting at para 130)

In a similar display of judicial arrogance, in Citizens United, the US Supreme Court violated that other central tenant of our jurisprudence: appeals courts limit themselves to the issues preserved for appeal.

In Citizens United, when the case first made it to the Supreme Court, the appeal did not include the issues which the court ultimately ruled on. But the Robert's court sent the litigants back to brief and present another issue entirely. One that hadn't been preserved for appeal, but which the Roberts' majority had decided it wanted to make law on.*

These two cases are glaring examples of high level two courts manipulating the system and ignoring bedrock principles of judicial review so as to reach a political end.

And _that_ is the real tragedy of the modern, right wing embrace of overtly politically driven courts.

More and more people believe the courts are nothing but political juggernauts.

And that is just one more example of right wing anarchism: "Government is the problem."

What kind of "traditional value," which "conservative principle" calls for unrelenting attacks on the very structure of our government?

= = = =
* I am not arguing against judicial activism: in properly limited role, judicial activism has been played a central and important role in the development of our laws.

I am arguing that when high courts don't follow the most basic and important rules and they pursue political results instead of pursuing justice, our country suffers. Deeply

See these pervious blogs on judicial activism and related issues:

Wednesday, June 15, 2011

Sources of the Deficit

According to the non-partisan Congressional Budget Office, the following factors are what have contributed to the current deficit and what will be contributing to the budget deficit projected for 2019.

Maybe if we see the causes, we can come up with some realistic fixes which don't just try to dismantle our government?

Monday, June 13, 2011

Breaking News Mr President

You're reading it here first: President Obama is going to lose in 2012.

The GOP has consistently out maneuvered him in framing the message of the day and he is always a couple of steps behind them.

He has pizzed off his base and won't have the ground game he had in 2008.

He has, to a large extent,* dropped the ball on creating jobs and has made GOP policies, which really don't work, his own.

The only thing he has going for him is whether independents and moderates will pick up on how extreme whoever the GOP candidate is, and the GOP is really good at creating smoke screens.

No more hope for me, and the only change I've seen is the President changing into a Republican.

= = = =
* On edit.

After doing some hard looking at the numbers, his record on jobs isn't terrible, and we are wll ahead of where we were when he took office, but I believe he lost his focus on job growth and that if he had kept it as a current important issue, and if he had effectively communicated about the issue, the situation would be better than it is.