we are witnessing the death of a nation - 10/10/08

From Brent on October 10th, 2008:

Lol, this made me chuckle: "Latin leftists gloating over 'Comrade' Bush's bailout"

And something else from Chomsky that is anti-Obama, concerning the Israel/Palestine conflict. Note I am transcribing this from a lecture of his ...

"
We are witnessing the death of a nation, something that doesn't happen very often, called 'politicide' ... What does Obama have to say about this? ... You can look at his website and you'll find this: "Our first and incontrovertible commitment in the middle east must be to the security of Israel, which is America's strongest ally in the middle east." Well there is a security problem, namely for the Palestinians. The question for them is survival and it isn't clear that they will survive. But there is nothing here about our commitment to security for the Palestinians, and for good reasons. They at most could be a weak ally of the USA, and there is a general operative principal that human rights are essentially determined by your contributions to power, privilege, and ideological needs, and Israel makes major contributions, so therefore they have rights, and Palestinians make no contributions, maybe even a negative contribution by their existence, so they have no rights. And Obama is quite clear about that.

Obama also tells you on his website that he favors increases in foreign aid, and gives his reason: "To ensure that funding priorities to Israel are met, military and economic, so for that reason we have to increase foreign aid. Also, Israels right to exist as a Jewish state must never be challenged." As far as I can tell, he's not on record saying that the existence of any country as a white state, or christian state, or muslim state, must never be challenged. You can check and see. But in the case of Israel, yes, it has to be. Can't be challenged.

Furthermore, we can't recognize Hamas, he says, which is correct. It is logically impossible for the USA to recognize Hamas, it would be like Germany recognizing the Democratic Party. It's a party, you can't recognize it. So we won't recognize the elected government in Palestine, which happens to be led by Hamas. And that makes sense on the basis of our conceptions of democracy, in fact it is very illustrative of them.

Palestinians voted the wrong way in a free election, therefore they have to be punished. That is so obvious that you can't even find a comment about it in the free press or anywhere else, cause it's obvious. You vote the wrong way in a free election you must be punished, that's democracy ...

It's totally irrelevant that Hamas has repeatedly called for a peaceful two state settlement of the Israel/Palestine problem, in accord with the overwhelming international consensus, which is barred and opposed only by the United States and Israel... Washington and Israel oppose it, therefore it doesn't matter if Hamas supports it along with everyone else ...

Where does this leave us with regard to the Palestinians? We have two possibilities: one is that the USA will join the international consensus, and Israel will go along with it, as it has no choice. Meaning the USA will accept a two state settlement on the international border, a position the USA has unilaterally blocked for 30 years, with very rare and brief exceptions, and Israel as well.

The other possibility is that the USA and Israel will continue doing what they are doing, right before your eyes, a policy that the Prime Minister of Israel called 'convergence' to rousing applause in the United States... meaning Gaza is turned into a prison where the people can rot, Israel can use it for target practice. As far as the West Bank is concerned Israel will annex everything inside the so called separation wall, which should be called the annexation wall, it's no longer in doubt, which includes valuable land and resources... All of this is totally illegal, there is an authoritative opinion in the world court, unanimous, including the US justice in a separate declaration, that any settlement in the West Bank is illegal in violation of International Law. No disagreement about this in the world, except the Israel High Court, and some people here, so it's all illegal... but that doesn't matter, the government supports it so it doesn't matter ...
"

keating economics - 6/10/08

From Brent on October 6th, 2008

http://www.keatingeconomics.com/??

From Buck on October 7th, 2008

You got to read both sides, and something like this is just pure propaganda. Unfortunately in politics, when you're in the game for a long time, you can sometimes get mixed up in things by mistake. McCain was cleared of involvement in the Keatings scandal and found to have the least involvement whatsoever of the 5 senators involved. Here's a little of what Obama has had his hand in his only short time in politics:

http://www.theaustralian.news.com.au/story/0,25197,23643866-5013948,00.html

The intro to the website you sent says: "The current economic crisis demands that we understand John McCain's attitudes about economic oversight and corporate influence in federal regulation. Nothing illustrates the danger of his approach more clearly than his central role in the savings and loan scandal of the late '80s and early '90s." This implies that McCain was negligent towards oversight and regulation and therefore played a very important role in the current financial crisis.

Check this out:
http://bellalu0.wordpress.com/2008/09/17/bush-and-mccain-proposed-oversight-of-fannie-mae-and-freddie-mac/

and this:
http://corner.nationalreview.com/post/?q=YTBiMjNlZjQzNTM4OGIwMTE3YTU5MjM2ZGVhYzY4NWU=

and then there's this, what he actually said in 2005, 2 years before any of this started (Obama was already in the senate for this, it would be interesting to see which way he voted, I'll look it up when I have more time):

http://www.govtrack.us/congress/record.xpd?id=109-s20060525-16&bill=s109-190

"Failure to pass bailout threatens all Americans" - 3/10/08

From BUCK on October 3rd, 2008

Begin forwarded message:

Date: October 1, 2008

3:15:00 AM EDT
Subject: "Failure to pass bailout threatens all Americans"
Source: Economist's View
Author: Mark Thoma

Jonah Gelbach:

Failure to pass bailout threatens all Americans, by Jonah B. Gelbach, Arizona Daily
Star: The U.S. House on Monday rejected the Wall Street bailout. This mistake threatens all of us, on Main Street, Speedway, Campbell, Golf Links and Oracle.

I'll make five main points.

First, we got into this situation because ... housing prices rose too high. Banks and
other investors made bets that could pay off only if the market kept rising. Now those bets are underwater.

Second, what if we don't pass a bailout? Our financial sector is caught in a trap. No one's sure which borrowers ...[are] going belly up. Even healthy banks won't lend to other banks.

Usually, when banks can't borrow, they sell off healthy assets. But if everyone sells at once, everyone spirals into free-fall. Since all sectors of our economy depend on credit availability, massive layoffs will occur if this situation lasts much longer. It would take years to recover.

Third, the current bill is a big improvement over Treasury Secretary Henry Paulson's initial legislation. It adds oversight and seeks to limit compensation paid to the Wall Street executives who made bad bets. Most importantly, the new bill limits the bailout's cost by giving us, the taxpayers, a stake in companies that get help. The bill isn't perfect, but it's good enough.

Fourth, many are understandably outraged. After years of billion-dollar compensation for a few would-be whiz kids, financial firms now want help from ordinary working people.

But look at it this way. Imagine your child stands wrongly accused of murder. Along with a co-defendant, she faces execution. You can prove your child's innocence. But if you testify at trial, your child's co-defendant will also go free, even though you know he's guilty. Would you allow your child's execution to convict the guilty guy?

This bailout will help some who have caused the mess, but that's an unavoidable part of helping everyone else. Don't cut off your paycheck to spite a financial executive.

Fifth, this bill isn't nearly as expensive as people seem to think. First, $700 billion is less than some realize. Imagine you run a delivery business that makes $60,000
annually and your van breaks down. It will cost you $3,000 to fix it. Should
you fix the van or close down the business? That's a no-brainer.

It's also similar to the bailout, because $700 billion is 5 percent of our economy's 2007 income, $14 trillion, and we'll lose an awful lot more than $700 billion if we let the economy tank. And we'll lose it repeatedly for several years.

Moreover, we're not just going to hand over the cash. The original Paulson plan would have allowed that, but Monday's bill wouldn't. Taxpayers would get a stake in any gains from future sales of the assets the government will buy. And because the government will wait to sell these assets until financial markets have enough capital to operate healthily, these assets might be sold for more later than now. We're putting up $700 billion now, but we'll get some, all or maybe more back later.

There'll be plenty of time to hand out blame. But let's make sure we do that after banking hours — instead of in the unemployment line.

Financial markets and financial intermediaries bring together people who have an excess supply of loanable funds with those who have an excess demand. But why do those with excess demand want the money? They want it because they believe they can use it to make profit through some business venture.

They wouldn't borrow the money if the expected payoff didn't exceed the cost of the loan.

So financial markets channel money to the real economy, and that is the source of the profits you see on Wall Street (beyond the zero sum game among some traders). Loans are paid back - with interest - from the profits the borrower made with the money. Money doesn't breed, simply taking out a loan from a bank won't make you wealthy, you have to do something productive with that money, that is where you get the profits to cover the loan and interest.

So the ultimate source of profits on Wall Street is the real economy (though occasionally, i.e. when there is a bubble, the profits are based upon false valuations in the real sector). Profits come from people doing productive things with the loans that take out, and those productive things employ people and make the economy grow faster. Wall Street is a conduit to the real economy, it is not an end in and of itself, and when that conduit is not functioning properly - when money stops flowing through financial markets - productive activity is diminished and growth and employment pay the cost.

let the bailouts begin! - 3/10/08

From Brent on October 3rd, 2008

http://www.fool.com/community/pod/2008/080919.htm

From Buck on October 3rd, 2008

Unfortunately there's a misconception that this bailout is only helping out the people that made bad choices at the expense of people who didn't.

Fortunately, that's not true.

The people that did make mistakes are going under, being taken over by the better run companies, and in some cases (as in AIG) the government is taking over the company (at a major loss for CEO's and stock holders). For AIG it's an 80% stake. Also, there's a very good chance that tax payers will actually make a profit from this bailout, as long as the bad assets are bought at market value (and not above).

The 700 billion dollars is a max that may need to be spent. The number was actually picked high enough to induce confidence that this plan would be enough. It may not all be used. A similar plan was actually used in the 80's for a similar crisis they had at that time, and in the end the government and taxpayers (like dlbuffy from the article) made a profit.

The free market is like evolution, it's a survival of the fittest type of system, problems come along and the weakest of the gene pool get weeded out, and at the same time things get changed and fixed to adjust to the new atmosphere and new threats. If this had been the 1930's we'd be in a great depression already but people, companies, and governments have learned their mistakes. There are organizations in place like the FDIC to help make the recession as smooth as possible. A lot of why this stuff happened is there were new financial systems built in the last 80 years, whose risks and benefits weren't quite understood yet. Now they're much better understood and companies and government are changing accordingly, like how I told you that Morgan Stanley and Goldman Sachs applied to be bank holding institutions which means they will be more regulated and won't be able to take as big risks, but have more access to assets. The free market didn't fail, it's working perfectly. We're in the downside of a business cycle, which, though can be painful, hypothetically should allow the bad companies to fail or at least restructure and for the good, strong, innovative companies to retrench and prepare for a more prosperous future. Many of the major companies that exist today actually were started during recessions.