TCS Daily


The AIG Outrage

By Larry Kudlow - March 17, 2009 12:00 AM

This whole AIG fiasco — where the entire political class is suddenly screaming over bonuses paid to derivative traders in AIG's financial-products division — is just a complete farce. What it really shows is how the government has completely bungled the AIG takeover. Blame the Bush administration and the Obama administration. It also shows, once again, why the government shouldn't run anything, because it cannot run anything.

AIG should have been placed in bankruptcy last fall under some sort of government sponsorship. While in bankruptcy, all the salary contracts (and every other AIG contract) would have been nullified and voided. At the same time, there would have been an orderly liquidation and sale of AIG's assets and separate divisions.

But as things stand now, there still is no clear roadmap for the dissolution of AIG. There are ideas, but nothing is set in concrete.

And as for the $165 million or so in AIG bonus payments, the Obama administration — including the president, Treasury man Tim Geithner, and economic adviser Larry Summers — knew all about them many months ago. They were undoubtedly informed of this during the White House transition.

So there's no big surprise. Nobody should be shocked. But President Obama is doing his best play-acting ever. He knows full well that the nationwide outcry against federal bailouts and takeovers is only going to get worse on his watch. His poll numbers are already falling, and this AIG episode is going to pull them down more.

Incidentally, has anybody asked Team Obama why it is more than willing to break mortgage contracts with a bankruptcy-judge cram-down, but won't cram-down compensation agreements for AIG, despite the fact that the U.S. government owns the company? Kind of odd, don't you think?

The Wall Street Journal editors get it right when they ask: Who's in charge and what's the game plan? The whole AIG story is an outrage.

What's more, AIG is acting as a conduit for taxpayer money that is being sent to dozens of derivative counterparties, including foreign banks and American banks like Goldman Sachs. If we're going to bail out all these other firms, why not bail them out in full taxpayer view? Why is the money being laundered furtively through AIG? And where exactly is the end game for AIG? How are the taxpayers going to be repaid?

And what is Treasury man Geithner's role in all this? He appears to be the biggest bungler in what has become a massive bungling. My CNBC friend and colleague Charlie Gasparino thinks Geithner can't survive this. I am inclined to agree.

Nevertheless, behind the furor over AIG, there is some good news to report on the banking front. This week's decision by the Federal Accounting Standards Board (FASB) to allow cash-flow accounting rather than distressed last-trade mark-to-market accounting will go a long way toward solving the banking and toxic-asset problem.

Many experts believe mortgage-backed securities and other toxic assets are being serviced in a timely cash-flow manner for at least 70 cents on the dollar. This is so important. Under mark-to-market, many of these assets were written down to 20 cents on the dollar, destroying bank profits and capital. But now banks can value these assets in economic terms based on positive cash flows, rather than in distressed markets that have virtually no meaning.

Actually, when the FASB rules are adopted in the next few weeks, it will be interesting to see if a pro forma re-estimate of the last year reveals that banks have been far more profitable and have much more capital than this crazy mark-to-market accounting would have us believe.

Sharp-eyed banking analyst Dick Bove has argued that most bank losses have been non-cash — i.e., mark-to-market write-downs. Take those fictitious write-downs away and you are left with a much healthier banking picture. This is huge in terms of solving the credit crisis.

In a column last week I suggested that not one more dime of government money is necessary for the banks. Instead, the marriage of the cash-flow valuation of bank assets and the upward-sloping Treasury yield curve will do the trick. Net interest margins are rising as banks purchase money for near-zero interest and loan it out at profitable rates. And the new mark-to-market reform will allow banks to hold their toxic assets for several more years and work them out — just as they did back in the 1990s.

We don't need more TARP. We don't need to take over more big banks. And we don't need to have the government run things it simply isn't capable of running.


This article first appeared on Kudlow's Money Politic$.
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167 Comments

But Larry, you're WRONG!
Everything is absolutely slicker than snot now that Roy's Wise Men (Team Obama) are running the show!

Didn't you hear?

Conspiracy
It is beginning to look like there is something going on behind the scenes that no one wants to talk about.
I hope it is as simple as the government needs to appear to be the savior else the people will realize they do more harm then good (that's happening anyway is not not?).
Something else I wonder about is how people get million dollar severance packages? The gov. of MA, BHO's friend, a lawyer, was paid millions of dollars to leave Coca-cola and a mortgage company. Was it hush money or was he just incompetent or both?

Unbelievable...
Larry,

You said "AIG should have been placed in bankruptcy last fall..."

So then what would have happened? Far worse than what happened when Lehman Brothers failed..that's what.

A bankruptcy would have caused AIG to default on all of its liabilities...and the global impact of that breach would have taken down many of its counterparties...an unknown number of players large and small...including some governments. Financial capitalism itself would have been placed at serious risk. We should not have let Lehman Brothers fail. That mistake was the trigger that put us into this death spiral.

AIG's problems themselves were related to the Lehman Brothers default insofar as Lehman Brothers debt instruments were guaranteed by AIG's Credit Default Swap operation...and more than the Lehman paper was covered. All of the naked positions were covered too...and we still don't know the full impact of that portfolio or how large that number actually was.

If, as an alternative George Bush or Barack Obama was enabled by the Congress to actually nationalize AIG and the many others then the Administration could dictate such matters as compensation...but none of those politicians want to be called Communists.

So there are your choices. Let AIG fail and destroy global civilization. Seize the Balance Sheet intact and be declared Socialists. Instead we must continue to pump in the money required to cover AIG's obligations because AIG cannot be allowed to "go bankrupt"...and AIG itself will decide how much to pay its people.

And this...Credit Default Swaps were a very good business when it was broadly assumed that such a thing as Lehman Brothers going bankrupt was unthinkable. But it did happen. It should not have happened and our government messed up more than anyone.

The people inside that unit of AIG were not stupid or particularly greedy...or even very well paid by Wall Street standards. They were financial technicians rather than M&A brokers or the creators of Collateralized Debt Obligations. We are blaming the AIG people rather than our own government. I am listening to President Obama blaming AIG rather than George Bush or Bill Clinton or Ronald Reagan. Reckless Supply Side, trickle down economic policies brought us to this moment...just like the S&L fiasco that immediately followed the implementation of Reaganomics...and the best we can do now is throw money at the GDP number to cook our own books while more people are losing their jobs and more homes are scheduled to be foreclosed.

President Obama is simply trying to stretch this thing out enough to get himself reelected. Maybe that will work for him. But it will definitely not get this economy growing again.

".including some governments."
THAT is not what is being talked about?

"S&L fiasco that immediately followed the implementation of Reaganomics"

This was caused by government 'insurance' guaranteeing the loans. Sounds familiar.

"FDIC Criticizes MA Bank With No Bad Loans for Being Too Cautious" 'Needs to improve CRA rating'
" A Massachusetts bank that has defied the odds and remained free of bad loans amid the economic crisis is now being criticized by the Federal Deposit Insurance Corp. for the cautious business practices that caused its rare success.

The secret behind East Bridgewater Savings Bank's accomplishments is the careful approach of 62-year-old chief executive Joseph Petrucelli.

"We’re paranoid about credit quality," he told the Boston Business Journal.

That paranoia has allowed East Bridgewater Savings Bank to stand out among a flurry a failing banks, with no delinquent loans or foreclosures on its books, the Journal reported. East Bridgewater Savings didn’t even need to set aside in money in 2008 for anticipated loan losses.

But rather than reward Petrucelli's tactics, the FDIC recently criticized his bank for not lending enough, slapping it with a "needs to improve" rating under the Community Reinvestment Act, the Journal reported."

http://www.foxnews.com/story/0,2933,509584,00.html

CRA had NOTHING to do with bad loans?

Smiling like he has good sense...
Larry,

You said "...mortgage-backed securities and other toxic assets are being serviced in a timely cash-flow manner for at least 70 cents on the dollar."

But that is the problem. The CDOs themselves are so complex that no one of them...let alone all of them...can be teased apart enough to project the cash flow going forward on each of its myriad tranches, discounted appropriately and then all added together to arrive at a "net present" valuation for each such bundle.

CDOs were assembled against performance/risk models that have now failed. Just because a particular CDO is behaving as if 70% of its underlying debt instruments were still alive and well...implying that 30% are no longer performing and might, therefore, be lost forever...is not much help today as we cannot know how the remaining assets will do even next month...let alone through maturity. The model parameters have been breached...all bets are off.

Further, if there has been a 30% loss of principal already then a bundle that had a 20% face value yield, for example, has already lost more than it was projected to ever earn. Those bundles need to be pulled into a single portfolio, the outstanding debt instruments need to be redeemed, the collateral salvaged by whoever stands to take the losses involved and that would be the American taxpayer.

Insofar as you cannot let those banks and non-banking financial institutions actually fail into the hands of the FDIC or the courts in order to get at those "toxic" assets the government needs to seize the Balance Sheets intact. Only being a majority owner is not enough...we cannot even call the shots regarding compensation the way this stands today. We need to bite our lips and get real.

Nationalize the banks. Write the laws and do it now. If that makes our politicians Communists then our politicians are Communists...and the way they have been managing our Supply Side economy...they've been Socialists already for quite some time. Even our Republicans most recently in power were not the Conservative Libertarians they thought they were...in the crunch they behaved like reckless totalitarian liberals. How is what George Bush did last year any different from what Barack Obama is doing today? That's right. Same pathetic thing. Throwing money at the problem.

We need a Thomas Jefferson. We need a Republican to sort this out. With a smile on his face because he actually knows what he is doing. Instead of that nervous smile our current President walks around with every day.

Are finance people so stupid?
I don't understand this 'too complicated' BS.

I pay my mortgage to one company. If they hold the mortgage, they keep the money. If they don't hold the money, they send it to another company.
We now have computers and account numbers and unless there is fraud involved, every penny of that mortgage should be able to be traced to the holder.
Why should CDOs be any different?
Assigning risk should not be so difficult either if each component of the risk is known. A package of 10,000 mortgages with each one having a risk associate with it can be combined to calculate an aggregate risk.
Unless outright fraud is involved or if people were too incompetent to document mortgages correctly, I don't understand why the bad mortgages can't be isolated.

Unless, of course, someone doesn't want to isolate them and start the economy moving again.

"

A security that is collateralized by loans, leases, receivables, or installment contracts on personal property, not real estate.

asset-backed security

A debt security collateralized by specific assets.


Firms that compile information on and issue public credit ratings for a large number of companies. , and credit enhancers with an alternative to scripting languages and spreadsheets. VST offers an intuitive, flexible, and open environment that not only reduces modeling time, but also shortens the learning curves associated with financial engineering. "With MATLAB, users can use VST to develop analyses and avoid focusing on the underlying technical computing details," said Stephen Murray


Product Manager at Lewtan Technologies. "Because MATLAB is a flexible and open development environment, we were able to develop a powerful structuring tool to fulfill the needs of our users in the securitization Securitization

The process of creating a financial instrument by combining other financial assets and then marketing them to investors.

Notes:
Mortgage backed securities are a perfect example of securitization."

http://www.thefreelibrary.com/The+MathWorks+Enters+Application+Development+Arena+With+MATLAB+-+the...-a053388259

Maybe that is the problem? Too many MBAs have poor math skills. Maybe they need to hire a few engineers to untangle the 'mess'.

May also be spelled as "securitisation. industry.""

Palpable Fction another Forest Dump
"So there are your choices. Let AIG fail and destroy global civilization.Seize the Balance Sheet intact and be declared Socialists. Instead we must continue to pump in the money required to cover AIG's obligations because AIG cannot be allowed to "go bankrupt"...and AIG itself will decide how much to pay its people."

"Reckless Supply Side, trickle down economic policies brought us to this moment...just like the S&L fiasco that immediately followed the implementation of Reaganomics."

For a guy whose claim on a Wharton education seems increasingly tenuous, this is a new adventure in vacant blither and hackneyed cliches. Who's writing your stuff Forest, Roy?

Exactly how would the ORDERLY resolution of an insolvent organization "destroy global civilization"? It wouldn't.
It might distress Forest's friends at the yatch club, but that wouldn't be the end of "global civilization". The problem was the balance sheet and government seizure isn't some magic elixir. Most of us would simply do what we did before, except we might find out that well-spoken customer service "associate" at the bank was a Wall Street refugee with an suddenly Ivy pedigree. I suppose for people that talk with their teeth perpetually clenched that's the end of civilization, you know actually having a job that involves dealing wih "little people".

You want to see the destruction of global civilization, see the architects of the new chaos, Dodd, Frank, Geinther and the rest of the hee-haw gang act suprised and outraged. See the commissar of the bordello is insisting on names. Insert a jack-boooted, monocle clad, riding-crop equipped Nazi, insttead of a bloated panderer and the picture is complete. "Vee have yays of making you talk!, yah?". So much for the Democrats vaunted "right to privacy". Then there's the matter of the 95% tax and its evisceration of idea of equal treatment under the law.

Now let's ask an obvious question. Why are so many people paid "bonuses"? Well, its pretty simple actually. Back in the 1990's -the last time the party of the jackass was in complete control and got all ginned up about "excessive" compensation, they dreamed up something called Internal Revenue Code 162(m), which specifies employee wages in excess of $1m are not deductible as business expenses by the employer on their 1120, unless (among other things) its "performance based". So instead of paying a nice salary the employees now get a "compensation package". So these bonuses aren't some sort arbitrary and capricious windfall, they are part of the agreed upon wages-just like the commissioned sales person receives. No matter, these are a just few people, and their contracts and privacy can certainly be sacrified to advance global socialism, because as we know a it isn't possible for an individual to MEET THEIR PERSONAL PERFORMANCE goals if THE ENTIRE COMPANY doesn't do well.

Nor was the S&L debacle a by-product of "Reaganomics". They were creations of government, private institutions designed to serve the grand and glorious goal of "affordable housing" (Sound familiar?)As a result of their mandated mission, they were limited in geographic scope, product offerings and unable to respond the changing market conditions. When the DEMOCRATS insisted on limiting the mortage tax deduction, not gradually, but immediately as the price for reducing marginal rates in the 1986 tax act, the bubble burst. (Hmm...here we go again) Then again here's another little problem with Forest's dump-in 1991 the Fed's passed FDICIA (the Federal Deposit Insurance Corporation Improvement Act and Sarbanes Oxley both putatively designed to protect the integrity of capital markets. But you keep believing in prudent government interference in those big bad markets and the tooth fairy and gee maybe you'll get some candy from an oviparous rabbit in a few weeks.

What's problem? Dems created the problem and BOob approved it.
What is the problem? The democrats run congress and they (pelosi I read recently) created that stinker legislation which allowed AIG to grant bonuses. Dodd, that slimy turd was recently caught admitting his part in the bonuses. So, what is the outrage?

Oh, yeah, now I remember, NOBODY in congress read the thing before they passed it. BOob signed it after his vacation and viola, crap in, crap out.

Now congress is showing such moral indignation as to make even the bible pumpers blush with embarrassment.

Yes, its business as usual for congressional democrats. Good thing we also elected BOob rather than that backwoods hick from Alaska. After all, she only had the executive experience of running a state. BOob was a law college professor and is presently showing his soon to be recognized perpetual incompetence in dealing with anything of relevance and consequence.

"Hope and change". translation: "boy are people stupid"

Excellent article
Hits it pretty squarely on the head. But hindsight is 20/20 and trying to value those toxic assets would have been a nightmare. Quite possibly could have unraveled the whole plan. But there is always a but. Good article.

" trying to value those toxic assets would have been a nightmare"
WHY?

Everyone keeps saying that with NO proof. Do you know or are you just parroting the party line?

Role Playing
"President Obama is doing his best play-acting ever."

Ain't THAT the truth -- a vastly underexperienced political whelp playing President will be the legacy of this administration. (Well, that and the economic havoc they wreak.)

Demise
I really can't see Geithner surviving as SOT. I mean, he's proven such an abominably inadequate choice that him remaining would look like nothing but a stain on The One's presidency.

But then, an abominably inadequate President DID just get elected in this country . . .

Capitalism untrammeled
Let's not forget that the administration currently in place is the one that was put there by the hedge fund managers, bankers and financial services crowd. We can hardly expect them to do things differently than they've done.

Thanks go to Dodd of the Senate Banking Committee, for fessing up to the crime. Yes, it was he who put the language in that ensured the perps would get their bonuses anyway. And it was he who then defensively said that the word had been cleared with his higher ups. These people know where their paycheck is coming from.

Don't get all high and mighty about this. The last administration was still safely tucked away in someone's pocket. Only then it was the war industries, and the ag and pharma industries who rang the chimes while we all said vespers. Now it's the turn of the banks, brokerages and insurance houses. It's just "democracy in action". Both teams are playing on the capitalist side. And our political dialog runs the gamut, not from A-Z, but from A to maybe A-prime.

If you rebel soldiers and we members of the liberal community could ever get our acts together, maybe we could present a united front to address this state of affairs. And cash wouldn't continue to determine the outcome of every vote. But they have been able to neatly divide us from one another, putting in your minds a demonization of what having a liberal outlook means. It's this misconception that puts you on their side, against your fellow man. And ensures that we will continue to experience Bidness As Usual.

We can fight amongst ourselves later. But I would suggest uniting against our common enemy.. Big Money.

You just can't get good help
Here's another thing. All the boobs are howling for Timothy's blood nowadays, but there are no credible replacements waiting in the wings. Notably, the O administration has been unable to find good staff for ANY of its Treasury openings.. still vacant as of today.

Nobody wants the work. A, it's futile. Stuff's going to go bad no matter how well you try to deal with it. B, you won't be appreciated. The mob is ready with their pitchforks and torches for whoever's brave enough to try coming to grips with it. C, the pay's lousy. You can do a hundred times better staying inside financial services.. even today.

The bottom line is that anyone who can do the work pretty much has to come from within the industry. No one else has a good feel for it. And the personality type who's made a career at making zillions for personal gain is typically NOT good at being the sheriff.

Or, maybe we could ask Paul Krugman. He's certainly up on the issues. And he'd be one sheriff who was not in the pay of the cattle rustlers. Plus, if you look at his track record over the past twenty years, he's been able to call the games pretty good.

Over time it adds up
This line of reasoning seems awfully tenuous to me. You say of the brilliant minds who crafted the edifice that just came down, "No matter, these are a just few people, and their contracts and privacy can certainly be sacrified to advance global socialism, because as we know a it isn't possible for an individual to MEET THEIR PERSONAL PERFORMANCE goals if THE ENTIRE COMPANY doesn't do well."

They may be just a few. But even a couple of thousand hotshots gaining a million apiece on everage tots up to a couple of billion dollars. And that money has to come out of the common pot. It's like paying the dealer huge sums to shuffle the deck. He uses other people's cards but takes a cut from each hand. Naturally his first instinct is to churn the portfolios, adding layers of density so he can claim a percentage each time the same cards get laid out in different order.

Can he meet personal performance goals if the company as a whole is going down? Super, you certainly know the answer to that one. That's precisely the way the game is played.

Do CEOs all have their golden parachutes packed and ready, waiting for the moment their hothouse creation collapses and comes apart? To paraphrase our nearly elected VP, "You betcha!"

They get paid to pump. And if the water's coming in faster than they can pump it over the gunwales, that's a GOOD thing. That means they can pay themselves all the more, as an incentive to pump all the harder.

Yes Roy, the POWER MONGERs succeeded in dividing us, using the likes of YOU for DEMONizing others
..

I thought I'd get a hit from you
..but you never completed your thought. Add some flesh to those bare bones. Explain to us, using a bit of detail, how the State has hijacked the fortunes of us all, using our resources to support a structure that's breaking all our backs.

Go to it. You're the man for the job.

Common enemy is big government, not big money.
True capitalist don't want or need government regulations to control their business.
They only want a government to establish the legal framework to be able to enforce contracts.
Those 'capitalists' you refer to bribe the government to control their competition. That is socialism.

Ask Mit Romney. Let's see how bipartisan BHO really is.

Or Steve Forbes or ....

BHO want the chaos.
That's how tyrants operate. Distract the masses so no one will notice the socialist programs he is attempting to pass.
That's how FDR did it.

"The Communist (Dem) Party grasps the opportunity to realign the Chinese (USA) economy and society.
http://www.forbes.com/2009/03/18/chinese-communist-party-opinions-contributors-secret.html

Can't let a crisis go to waste!

He's the arch-fascist
Hire Mitt? He'd just fire everyone, and keep only a skeleton crew to run the world with. We'd all be out of work.

All of us except the military. He'd need to keep them on to keep the disgruntled, unemployed masses under control.

Great idea. Not totally unexpected, from you, but an idea nonetheless.

Interesting conspiracy theory
I've never asked, marjon, but what are you, 126? No one has ideas like yours who wasn't 50 back in 1929.

So far those of us who are authentic socialists haven't been able to detect the socialism in the Obama agenda. We're in the early stages of another round of Wall Street Rule. Or so it would seem to anyone reading those few remaining newspapers.

As for war, he's proving himself to be very much a war kind of guy. You should feel happy for that. The direction he's heading us in, we'll be at war for another decade, perhaps an entire generation to come.

What his term is redistributing is DEBT. Don't be an idiot. Wall Street's getting the bailout and we, the poor proletariat, are getting the bills.

The current crew is doing a bang up job. So good they need to PAY them to stay.
Pay me a million dollars and I can screw up the financial system just a good as they can.

Debt
Why must it be paid back?

Who will force repayment?

to roy, the greatest evil is having more than he does
He actually believes that big business runs the govt.

Then again, there is no limit to the number of fairy tales that roy fervently believes in.

Nobody wants to work for the incompetant boob who is doing his best to destroy the economy.
Surprise, surprise, surprise.

Krugman, the man who's been wrong on everything?
Only in roy's world, would being consistently wrong qualify you for anything.

Rahm stated that you can't let a good crisis go to waste.
As to your claim that Barry isn't a socialist.
Nationalizing the banks isn't socialism?
Nationalizing health care isn't socialism?
Spreading the Wealth isn't socialism?

If you can't find the socialism in Barry's programs, it's because once again, your eyes are shut and your fingers are buried two knuckles deep into your ears.

Mit is not a socialist (fascism is socialism)

Disowned by every extreme
Sorry I haven't been able to read your Forbes article yet. I cranked it up, waited, then went out for lunch. And when I got back the page still hadn't loaded. I'd liked to have read all about the Obama-China connection.

I'll try again tonight. Maybe by morning it'll be ready.

But I've no doubt it's some very bad news. Meanwhile take a look at what the real commies (World Socialists) have to say about him:

"In a statement to the press as he left the White House Wednesday, and at a town hall meeting in Southern California later the same day, President Barack Obama defended his policy of bailing out Wall Street financial interests, including those directly responsible for precipitating the current economic crisis.

"Millions of working people face the prospect of unemployment, foreclosure, poverty and homelessness. For them there will be no bailout, and no million-dollar bonuses like those paid out to 73 executives at the bankrupt financial conglomerate AIG, with the consent of the Obama administration and Congress."

etcetera

http://wsws.org/articles/2009/mar2009/aigg-m19.shtml

For that matter, the folks over at Mises.org thinks he's a fascist. From the redoubtable Gary North, no less!

(excerpt)
"We are now seeing what hard-core liberals always predicted would happen: the economic convergence of the two systems, USA and USSR. The system of economic convergence is fascism. That was what the liberals always wanted, but called it something else: "economic democracy" or "the government-business alliance."

http://mises.org/story/3333

So we have a real diversity of opinion. He's a Wall Street stooge. He's a fascist. Wait, I kind of agree with both those assessments. So are the Austrians and the Commies in some agreement here? Whatever, Wall Street now rules.

Wait. Now I've got China's Dirty Little Secret up. And I swear, Obama's not mentioned anywhere in the text. Are you sure this is where you wanted to point us? I can't figure out whether you think we're in the Communist (Dem) Party or in the Chinese (USA) economy. Which way is up?

Can it be that Obama's secretly in the middle? And that all the extremes are against him for the same reasons?

For example..?
I was looking forward to reading your example of how Krugman was wrong about something. Imagine my surprise when I found your little jibe to be content-free!

Why must debts be paid?
Marjon, I think you may have lost your place. If it gets out that the US doesn't intend to, or can't repay its various debts, the world economy collapses. It is, after all, dollar based.

Try to focus on the issues, please!

Geithner will be kept around...
...after all, he's the perfect Janet Reno for Obama.

But next up: Directive 10-289 is coming folks!

What is Directive 10-289?http://www.abovetopsecret.com/forum/thread446514/pg1

Real-life California version of Directive 10-289 is in the works:

http://www.taxfoundation.org/blog/show/23538.html

Consistency, please!
But mar, in virtually your next post you're telling us that fascism "is" socialism. Whatever that means.

Fascism, in the classic Mussolini definition, is the marriage of corporate and government interests. Naturally it is controlled by the corporatists. Or in our case, as the old industrialists are now running transnationals out of Liechtenstein or the Caymans, the Wall Street crowd.

Naturally they want to use government guaranties for their zany schemes of wealth. Because they know the schemes don't work without constant bailing out!

(Note that the Fed, as of last night, had valiantly come to their rescue with a neatly printed one trillion dollars.. wrapped up in paper bands for them to use.)

That's why these financial fellows bought and paid for the Obama presidency. This is nothing that should come as news to you.

I think you guys need more words. I use fascism to designate this particular form of government, where rich folks take over government control and use it to further their own purposes.

When it's poor people who do that (a state of affairs that's never happened for more than a couple of weeks in all of recorded history) I like to call that socialism.

In fact to me, that's why we have two separate words for those two vastly different forms of government. But if you want to think that both are simultaneously socialist, or fascist, or whatever you want to call it.. I hope that works for you. To me it's an indication of a foggy mind.

Socialism, state control of property
Does it matter who or what controls the state?

Dictator, mob, or rich guys, its all the same when they take away individual rights.

The cat is out of the bag.
People are losing FAITH in the USA government capability of paying.

Continuity in government
You really should have gotten more hits on this comment than you have.. it cries out for amplification.

"How is what George Bush did last year any different from what Barack Obama is doing today? That's right. Same pathetic thing. Throwing money at the problem."

So you've noticed the similarity too, have you? Here's a name from the not too distant past: Henry Paulson.

Need I say more? How would getting another Republican help matters any?

There's a little more to it than that
Money Owns Everything.

We have the means at our disposal to end the rule of money right now.. it's on very shaky ground. But we're all afraid to try it.

More than that..
People lost faith in our government a long time ago. That's why our creditors have been banding together to keep us afloat.

How long will they be able to do it? We're like the drowning victim, flailing about, nearly drowning the lifeguard who came out to save us.

When entire blogs/websites dedicated to exposign Krugman's inaccuracies and lies exist..
...then I'd say Krugman has been wrong about more than just 'something'. Some have been around since the 1990s.

http://www.krugmanwatch.com

http://www.polyconomics.com/memos/mm-990106.htm

You should get good help
All the boobs are howling for Timothy's blood nowadays, but there are no credible replacements waiting in the wings.

Really? What makes this guy so uniquely invaluable?

He's not an academic Phd, so there's thousands better educated than him. There are thousands of people with better executive experience than him, he's a career bureacrat and flailing badly-in part because his boss thinks governing is campaigning (if your only tool is a hammer, every problen is a nail) and making sure that Earth Wind and Fire give private concerts.

Why hell, some of us can even use Turbo Tax better than him.

What do you get paid for?
I see no discernable skills. Most reason seems "tenuous" to you because you don't engage in it. Mastering tedious leftist ciches may be a skill, but it has no value to a willing buyer.

Divide et Impera
A technique known long before the Roman poet Juvenal coined the phrase "bread and circuses" to explain the secret to governing.

State Control

Dictator, mob, or rich guys, its all the same when they take away individual rights.

No and that's the best argument against the untrammeled arrogation of power by the state you love.

Arch Fascist -Barney Frank
I want names!

So much for the "right to privacy" found in the unemerated penumbrae of the Constitution, e?

Arch Facists don't Fire -They Hire
You control people much better when you pay them. Hitler had an enormous state apparatus.

To Quote "Red" Foreman. You are a dumb-ass.

Roy has many mental impairments... But "Wallet Envy" is the big one
*NM*

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