Last Call

K Drum on Plan N:

So: the FDIC can't run Citigroup and nobody in their right mind wants to buy them. On the other hand, with Citi's stock hovering around a dollar, their shareholders have already lost nearly their entire investment. Allowing Citi to fail would hardly cause them any more damage than they've already suffered. So why not just let them go under, as Shelby wants?

The answer is that we could do this. This was the gamble Ben Bernanke and Henry Paulson took last September when they allowed Lehman Brothers to fail — dammit, it's time to enforce some market discipline on these guys! — and their gamble failed spectacularly. The global financial system nearly collapsed even though Lehman wasn't all that big.

But hey — maybe Lehman taught everyone a lesson. Maybe all of Citgroup's creditors and counterparties have already priced in the possibility of default. You never know. And maybe if Citigroup fails, and they all end up with a bunch of worthless notes, they'll just shrug and go about their business.

Then again, maybe not. Maybe Citigroup really is too big to fail. And maybe if they fail, and all their creditors and noteholders and counterparties are stiffed, maybe they'll all fail too. And then all of their creditors and noteholders and counterparties will also fail. Etc. And then it's back to the dark ages for all of us.

Which is it? I don't know. All I can say is: Richard Shelby has way bigger balls than I do. Call me a wuss if you must, but I'm really not willing to gamble on nuclear meltdown, especially since I think the odds are pretty strongly in favor of Citigroup having the ability to take all the rest of us down with them if they collapse. Shelby, however, the ranking Republican member of the Senate Banking Committee, guardian of the nation's financial health, is apparently willing to just say "fuck it," roll the dice, and hope against hope for snake eyes.

Of course, this is precisely the kind of imbecilic, high-stakes gambling that got us into this mess in the first place. Maybe Shelby ought to think twice before deciding that the hair of the dog might get us out.

The really scary part is not that Kevin is right, it's that the time is rapidly approaching where we won't be able to save Citigroup, AIG, GM, GE, Bank of America, etc. and will indeed have to let them fail.

The spectacularly scary part is most likely a major counter-party bank in Europe is going to fail first, saving us the trouble of letting Shelby push the Big Red Button. The tsunami from the European banking system going under will then force Obama's hand one way or another. After all, AIG had to be saved because if it didn't, Europe would have folded and we would have followed.

But the banks are dying. They will not survive the year assuredly, and odds are pretty good they won't make it to July 4th. Many of those European banks are going to collapse sooner. They will take many of ours with it. It's just a matter of time, now. Europe, especially Eastern Europe and the Mediterranean countries like Italy and Greece, are on the verge of complete financial collapse. With one of those countries with the Euro as currency goes under, the Euro goes along with it, the European banks with the Euro, and then the whole ball of wax.

Checkmate.

Push The Button, Frank

Zandardad sent me this HuffPo article from former GOP operative Frank Schaeffer as he excoriates his former party completely and thoroughly, and it's pretty explosive stuff.

How can anyone who loves our country support the Republicans now? Barry Goldwater, William F. Buckley and Ronald Reagan defined the modern conservatism that used to be what the Republican Party I belonged to was about. Today no actual conservative can be a Republican. Reagan would despise today's wholly negative Republican Party. And can you picture the gentlemanly and always polite Ronald Reagan, endorsing a radio hate-jock slob who crudely mocked a man with Parkinson's and who now says he wants an American president to fail?!

With people like Limbaugh as the loudmouth image of the Republican Party -- you need no enemies. But something far more serious has happened than an image problem: the Republican Party has become the party of obstruction at just the time when all Americans should be pulling together for the good of our country. Instead, Republicans are today's fifth column sabotaging American renewal.

President Obama has been in office barely 45 days and the Republican Party has the nerve to blame him for the economic and military cataclysm he inherited. I say economic and military cataclysm because without the needless war in Iraq you all backed we would not be in the economic mess we're in today. If that money had been spent here at home on renovating our infrastructure, taking us toward a green economy, putting our health-care system in order we'd be a very different situation.

As the father of a Marine who served in George W. Bush's misbegotten wars let me say this: if President Obama's strategy to repair our economy, infrastructure and healthcare fails that will put our troops at far greater risk because the world will become a far more dangerous place. So for all you flag-waving Republicans who are trying to undermine the President at home -- if you succeed more of our troops will be killed abroad.

When your new leader Rush Limbaugh calls for President Obama to fail he's calling for more flag-draped coffins. Limbaugh is the new "Hanoi Jane."

Do read the entire thing, it's breathtaking, no-holds-barred stuff...and it's 100% correct. The GOP has reduced itself to a cheap parody of a responsible opposition party. It has so utterly failed at its own ideals that it doesn't represent anything anymore other than contrarian reactionary drivel. It is the party of insulting, childish paranoia, a group so steeped in its own delusionary hatred that it cannot see that it is tearing the country apart.

But what did you expect?

Old, Tired Thinking

After 9/11, Republicans repeatedly accused Democrats of having a "pre-9/11 mindset" that didn't take into account how the world had fundamentally changed as a result of September 11, 2001. I'm glad to see somebody is calling out Republicans (and more than a few Democrats) for now having a "pre-recession mindset."

What are we left with? Republicans are pushing the same tax cuts they wanted before the recession. They're making the same arguments about spending they offered before the recession. They're engaged in the same petty games they enjoyed before the recession. In the midst of "an all-hands-on-deck emergency that's as trying as war," and in "the throes of a catastrophic economic crisis," the failed minority party, ignoring the election results, public opinion, and everything we know about economics, have the same approach to the economy that they had at this point a year ago. And the year before that. And the year before that.

In fairness, the administration is not without fault. Too many Treasury Department offices are empty, in large part because of the administration's vetting process. For that matter, administration officials, as Paul Krugman explained this morning, "don't want to face up to the dire state of major financial institutions because it's very hard to rescue an essentially insolvent bank without, at least temporarily, taking it over. And temporary nationalization is still, apparently, considered unthinkable."

But at least the president and his team recognize the crisis for what it is. Perhaps, one of these days, Republicans will shake their "pre-recession mindset" and improve the government's ability to respond to the economic 9/11.

And that's true, all the way across the board. It's time for Plan N, guys.

Bite the bullet and do it.

Can't Have It Both Ways

John Cole comes up with a very good point today:

I don’t get it. The Republicans and some in the media are calling this the Obama recession and the Obama bear market and the Obama economy, but this says it will be the longest recession on record. Yet Obama has only been President for a few weeks. The math just doesn’t seem to work.

Sometimes I think the media and the Republicans are just making shit up.

Well of course they are. That's the whole point of the goddamn Village. You see, it's both the longest recession ever and it's all Obama's fault for not fixing it in his first six weeks in office.

Clearly we should impeach. After all, six weeks is just too much time to waste by giving it to the apparently intellectually inferior and narcoleptic Obama.

Zandar's Thought Of The Day

Brad at Sadly, No!:

Here’s the deal, dudes: if the economy is not recovering by mid-2010, you can kiss the Democrats’ hold on the House of Representatives bye-bye. If the problem persists beyond that, you can say hello to President Moose-Eater in 2012.

The point is, cleaning up the banking system has to be the Obama administration’s #1 priority. If they fail at that, then every other worthwhile initiative — from national health care to investments in green energy — will fall by the wayside and the country will be even worse off than it is right now.

And he's right.

And you know what? With the Helicopter Ben and Timmy The Invisible Boy show going on, Obama will never be able to fix the economy. These guys are recycling the same ideas that failed six months ago, and it's so obvious even the morons on Wall Street can figure it out. And what are Democrats in Congress doing? Holding hearings on whether or not banks should be allowed to lie about how much their toxic assets are worth and should be able to overvalue them in order to restore confidence in the financial system.

Lying to restore confidence. What a brilliant idea. Here's your plan.

1. Get rid of Geithner, Bernanke, and Larry Summers. One possible replacement, KC Fed President Tom Hoenig.
2. Enact Plan N.
3. Get the rest of the world to go along with Plan N. (Hey, the UK's not ruling out Plan N, kids.)
4. Reconstruct the financial system minus the idiots who lost us trillions.

Only then will we be able to climb out of this mess.

[UPDATE] At this point, GOP Senators are calling publicly to let big banks fail rather than keep propping them up with money.

Sen. Richard Shelby, R-Ala., ranking member on the Banking Committee, said the United States should not mimic Japan, which in the 1990s propped up failing banks and prolonged its economic downturn.

"Close them down, get them out of business. If they're dead, they ought to be buried," Shelby told ABC's "This Week" program. "We bury the small banks. We've got to bury some big ones and send a strong message to the market."

Financial authorities have been under increasing fire as hundreds of billions of dollars of loans and capital infusions into distressed institutions have failed to halt the economic downturn, which has only accelerated in recent weeks.

Sen. John McCain, R-Ariz., who remains a party leader after losing the 2008 White House race to President Obama, criticized the new administration's response to the banks.

"I don't think they made the hard decision and that is to let these banks fail," McCain told "Fox News Sunday."

These are tremendous words. There's no doubt in my mind that the political viability window for Plan N is now wide open.

Time to do it.

You Bet Your Career

Michael Steele went up against Rush, Steele is now in mortal danger of being tossed out as RNC chair at this point. Nobody within conservative circles dares take on the Oxycontinfather...until today.

Who dares to bare fangs at Lord Limbaugh? In the role of Oliver Twist, it's little David Frum!

Every day, Rush Limbaugh reassures millions of core Republican voters that no change is needed: if people don't appreciate what we are saying, then say it louder. Isn't that what happened in 1994? Certainly this is a good approach for Rush himself. He claims 20 million listeners per week, and that suffices to make him a very wealthy man. And if another 100 million people cannot stand him, what does he care? What can they do to him other than … not listen? It's not as if they can vote against him.

But they can vote against Republican candidates for Congress. They can vote against Republican nominees for president. And if we allow ourselves to be overidentified with somebody who earns his fortune by giving offense, they will vote against us. Two months into 2009, President Obama and the Democratic Congress have already enacted into law the most ambitious liberal program since the mid-1960s. More, much more is to come. Through this burst of activism, the Republican Party has been flat on its back.

Decisions that will haunt American taxpayers for generations have been made with hardly a debate. The federal government will pay more of the cost for Medicaid, it will expand the SCHIP program for young children, it will borrow trillions of dollars to expand the national debt to levels unseen since WWII. To stem this onrush of disastrous improvisations, conservatives need every resource of mind and heart, every good argument, every creative alternative and every bit of compassionate sympathy for the distress that is pushing Americans in the wrong direction. Instead we are accepting the leadership of a man with an ego-driven agenda of his own, who looms largest when his causes fare worst.

In the days since I stumbled into this controversy, I've received a great deal of e-mail. (Most of it on days when Levin or Hannity or Hugh Hewitt or Limbaugh himself has had something especially disobliging to say about me.) Most of these e-mails say some version of the same thing: if you don't agree with Rush, quit calling yourself a conservative and get out of the Republican Party. There's the perfect culmination of the outlook Rush Limbaugh has taught his fans and followers: we want to transform the party of Lincoln, Eisenhower and Reagan into a party of unanimous dittoheads—and we don't care how much the party has to shrink to do it. That's not the language of politics. It's the language of a cult.

Put aside the fact that Frum doesn't have what the Republican Party needs -- actual solutions -- either, in fact in the article he basically says the GOP needs to take up the Democrats' health-care reform and global warming positions.

I got news for you, Dave. Democrats have already been there on that. The positions you're espousing are the ones the Demos have been all over for a long, long time now, and mostly ridiculed by yourself and the entire GOP. America trusts you no longer. Frum sees that now, of course. He's trying to portray himself as a Sensible Centrist, but hey...he's jumped ship on his National Review buddies and is now burning bridges with Rush.

Maybe he'll eventually figure out he has been wrong all this time. Hard for a man to take, I know. But he's dead to the GOP now as surely as Ahnold or Charlie Crist is, and frankly, I don't have any sympathy for the man. You spend twenty years doing yeoman's work for the cartel that got us into this mess and claim you're reformed now?

Be off with you, Frum.

Dubya In The Dock

With the International Criminal Court having issued a warrant for the President of Sudan, the natural follow-up question is of course "Is George W. Bush next?"

An ex-UN prosecutor has said that following the issuance of an arrest warrant for the president of Sudan, former US President George W. Bush could -- and should -- be next on the International Criminal Court's list.

The former prosecutor's assessment was echoed in some respect by United Nations General Assembly chief Miguel d'Escoto Brockmann of Nicaragua, who said America's military occupation of Iraq has caused over a million deaths and should be probed by the United Nations.

"David Crane, an international law professor at Syracuse University, said the principle of law used to issue an arrest warrant for [Sudanese President] Omar al-Bashir could extend to former US President Bush over claims officials from his Administration may have engaged in torture by using coercive interrogation techniques on terror suspects," reported the New Zealand Herald.

The indictment of Bashir was a landmark, said Crane, because it paved a route for the court at The Hague to pursue heads of states engaged in criminality.

"Crane also said that the [Bashir] indictment may even be extended to the former president George W. Bush, on the grounds that some officials in terms of his administration engaged in harsh interrogation techniques on terror suspects which mostly amounted to torture," said Turkish Weekly.

"All pretended justifications notwithstanding, the aggressions against Iraq and Afghanistan and their occupations constitute atrocities that must be condemned and repudiated by all who believe in the rule of law in international relations," Brockmann told the Human Rights Council. "The illegality of the use of force against Iraq cannot be doubted as it runs contrary to the prohibition of the use of force in Article 2(4) of the United Nations Charter. It sets a number of precedents that we cannot allow to stand."

It's an interesting exercise in what if, but that's all. Not even I expect the ICC to issue an arrest warrant for an American President. Nor do I expect Patrick Leahy's truth commission to get off the ground either. I fully expect Dubya to get away with every single horrible and illegal act he did over the last eight years with no recourse whatsoever.

Well, other than the recourse that the GOP is in exile right now. But the reality is that too many Democrats in Congress signed off on Bush's programs. Any smoking guns that are found will be aimed at the Dems too. Jay Rockefeller, Dianne Feinstein, John COnyers, Barney Frank, Nancy and Harry, possibly Leahy himself...and the Junior Senator from Illinois, one Barack Obama...what did he know?

Bush can't be taken down without removing most of the leadership in Congress on both sides of the aisle. They knew what Bush was doing. They knew exactly what he was doing. They allowed it to happen. They are just as complicit, particularly the Intelligence and Foreign Affairs committees.

Like I said, it'll never happen. After all, Obama has no problem keeping Bush's wiretap program to spy on Americans. He's already complicit in Bush's crimes.