Wednesday, December 1, 2010

Last Call

The South shall rise again, apparently.

Are you fed up with the feds? Do you think that 1) Obama is a modern-day Abe Lincoln, and 2) that's a horrible thing?

Are you into celebrating eugenics your heritage, defending slavery your homeland, and denouncing the US Constitution unfair tariffs on your exports?

You might be a neo-Confederate! And brothers and sisters, do we have a club for you! Just in time for the 150th anniversary of the shots that started the Civil War, one longtime Southern—ahem—heritage society, the Sons of Confederate Veterans, is celebrating with a huge membership drive and a bevy of TV commercials...some of which had been airing on the History Channel. Until Monday, that is, when the History Channel figured their ads should probably reflect some basic understanding of, you know, history.

Funny guys, these SCV fellows...second we get a black President, we get Gone With The Wind.  Amazing how that works. 

Now, Civil War revisionism is nothing new. For generations, Southern apologists have argued that the stars and bars and rebel gray are about "heritage," not hate; that the war was fought over "states' rights," not slavery. But the SCV's new ads are custom-tailored to our post-Obama tea party zeitgeist. The code words have changed from "states' rights" to "federal taxation." The war was "really about money and control," we learn, not long after hearing how the aggressive radical Abraham Lincoln had no qualms about throwing waves of Northern soldiers to their deaths to extract a tribute from the poor, put-upon men of Dixie who "stood courageously for liberty." Says the sing-songy female narrator who delivers these historical "truths":
Don't let others do your thinking for you! Don't allow them to rob you of your heritage while they celebrate their own! Be proud of your Southern history and heritage!
Also, wear ear protection when in range of race-bating dog whistles of this volume.  Best part:  One of the members is South Carolina Republican Joe "You Lie!" Wilson.

I don't mind people taking an interest in history.  I do mind people revising it.

Turn On The Lights, Watch The Roaches Scatter, Part 45

John Carney again, this time discovering the side effect of banks using MERS to fake paperwork:  leaving county clerks (and more importantly county clerk fees) out of the loop.  Guess what?  Broke-ass counties want their money, and guys like Massachusetts Recorder of Deeds for South Essex John O'Brien are going to get what MERS owes.

“It’s a basic issue of fairness. MERS says that if you are a member of their club, you can avoid fees on assignments of mortgages forever. Those are fees that everyone else pays,” O’Brien said. “I’ve never before heard of a private company that has attempted to unilaterally take over such a public function as property recordation. Imagine if someone tried to do this with drivers licenses.”

O’Brien has asked Coakley to investigate whether MERS may owe fees for recordation it has avoided. He is taking this very seriously. 

“I intend to pursue this as vigorously as the banks pursue a consumer who doesn’t pay a fee. If you don’t pay them, they’ll pursue you to the gates of Hell,” he said. 

O’Brien, who was named “Public Official of the Year in 2000 by the National Association of County Recorders Election Officials and Clerks, is unimpressed by MERS’s official response to his request for an investigation. 

“Massachusetts has very clear cut rules. Recordation is not optional. It’s mandatory. It cannot be avoided,” he said. 

Hell hath no fury like a public bureaucrat scorned. D-Day picks up the story from here:

This is a shoe that hadn’t yet dropped – the evasion of fees by the banks using MERS. County governments are as cash-strapped as virtually every other government entity, and MERS’ entire reason for being is to strip them of land title recording fees, which they’ve been doing for over a decade. Massachusetts happens to have extremely precise recording laws, and thus this is the best place to start this new front in the war on the corrupt banks. MERS would be liable for billions, and they’re owned by the big banks (and the GSEs), so that money would transfer over.

You'd better believe just about every other deed clerk and registrar's office is going to want to have a little talk with MERS about ten years of back fees owed for every mortgage transaction they've made.

The banks are in mortal peril, folks.  And they damn well know it.  They got Capone on tax evasion, after all.

Just Another Public Servant

And Obama budget guru Peter Orszag is heading to Citigroup in a move that should shock no one.

Citigroup Inc., recovering from its $45 billion bailout in 2008, is in advanced talks to hire former White House Budget Director Peter Orszag, people with knowledge of the matter said.

Orszag, 41, may take a job in the New York-based firm’s investment-banking division, the people said, declining to be identified because the discussions are private. An announcement may come as early as today, one of the people said.

Orszag, an economist trained at Princeton University and the London School of Economics, helped shape U.S. economic stimulus during the financial crisis and overhaul the health- care system. The youngest member of President Barack Obama’s cabinet, he spent 18 months as White House budget director, stepping down in July.

He has since become a distinguished visiting fellow at the Council on Foreign Relations and a contributing columnist for the New York Times, writing about health care, budget policy and Social Security. His successor as budget director, Jacob Lew, worked at Citigroup from 2006 to 2009.

We take a budget director from Citigroup, we have to give one back.  It's only fair.  They're the ones that run the country, not the White House.  Wouldn't want to inconvenience them.

The Fed accepted a total of $1.31 trillion in junk-rated collateral between Sept. 15, 2008 and May 12, 2009 through the Primary Dealer Credit Facility. TARP was nothing compared to this.

Anyone suggesting that the Fed's "emergency lending" facilities are just part of macro or monetary policy is kidding themselves. The Fed refused to accept junk-rated collateral until Sept. 15, 2008. When it became clear that Lehman was going off the rails, they started accepting junk-rated collateral-- even from Lehman Brothers itself!

That makes it very clear that the Fed was bailing out these firms in the midst of a crisis. They made a conscious decision to lower their lending standards in order to save big Wall Street firms with no strings attached.

From February 24, 2009 through May 12, 2009, Citigroup and Bank of America were the sole companies to borrow through the Fed's Primary Dealer Credit Facility, and they used it every single day. A total of 16 firms were eligible for the facility.

This Fed Audit data should shame all of the conventional-wisdom Democrats out there declaring TARP a success because of the recent CBO score. To put it mildly, these folks are totally missing the point. TARP was a "success" in large part because of the Fed's no-strings-attached efforts. And we now know that the Fed was willing to accept junk-- literally junk bonds-- as collateral for its no-strings-attached loans.

TARP and the stress tests only "worked" insofar as they convinced banks that the government would shoulder infinite future losses from the banking sector. We're now paying the price for that commitment in the form of massive foreclosure fraud, in which untold numbers of borrowers are being improperly kicked out of their homes in the name of bank profits. 

And so it goes.  This too will go down the memory hole.  The banks got trillions in free money.  In return they put up used toilet paper and mortgage cole slaw worth nothing.

No wonder Orszag is going there.

Zandar's Thought Of The Day

Today's lesson:

Leak classified info about the wars in Iraq and Afghanistan? Get attacked as a "traitor" but you survive.

Leak secret diplomatic cables embarrassing world figures?  You're still in the game.

Threaten to leak about a major US bank?  Interpol comes for you and you get wiped off the internet for a while.

Here endeth the lesson about who is really in charge of the universe.

But The Catfood Commission Came Back, The Very Next Day...Again

Final Catfood Commission report is out, and it's time to suffer for your overlords, America.

The report is an uncompromising blueprint for deficit reduction. As was last month's original version, it is likely to draw fire from the left for its spending cuts and the right for its revenue increases.

While its scope and the magnitude of its recommendations are very similar to the original Bowles-Simpson plan, there are some differences.

Among them: The amended plan recommends that lawmakers consider a one-year payroll tax holiday either for workers or employers as an economic stimulus measure. That echoes a stronger payroll tax holiday proposal offered last month by another debt reduction task force co-chaired by Alice Rivlin, who also sits on the president's commission.

Overall, spending cuts would account for roughly 74% of the deficit reductions. Tax measures -- including a reduction in tax breaks -- would account for roughly 26%.

And actually instead of that $4 trillion in deficit reduction in the final plan, it's actually about $2.2 trillion in spending cuts and a trillion plus in  getting rid of middle class tax breaks like mortgage deductions...but it mysteriously lowers the top tax rate from 35 to 28%.

So, a massive, massive tax cut for the rich.  The middle class gets a tax cut to 22% but loses a big chunk of deductions and comes out break-even at best.  The poor will pay more because hey, there's a gas tax and the lowest tax rate goes up on them from 10% to 12%.

So yeah, this is really a horrible plan across the board.  Already, several members of the commission have come out to say they like it.  Should be fun when it comes to actually doing a budget, huh...especially when the Republicans take out the tax increases, keep the tax and spending cuts, and make ordinary Americans suffer.  Remember, what we're seeing here is the flat rate deduction tax breaks eliminated, but for the wealthiest Americans those losses will more than be made up by the large percentage in their tax rate savings.

Don't think this vanishes on Friday either.  It'll be back.

Midnight At The Oasis, Part 2

Sorry America.  The deficit is more important than Christmas.

Extended unemployment benefits for nearly 2 million Americans begin to run out Wednesday, cutting off a steady stream of income and guaranteeing a dismal holiday season for people already struggling with bills they cannot pay.

Unless Congress changes its mind, benefits that had been extended up to 99 weeks will end this month.

That means Christmas is out of the question for Wayne Pittman, 46, of Lawrenceville, Ga., and his wife and 9-year-old son. The carpenter was working up to 80 hours a week at the beginning of the decade, but saw that gradually drop to 15 hours before it dried up completely. His last $297 check will go to necessities, not presents.

"I have a little boy, and that's kind of hard to explain to him," Pittman said.

The average weekly unemployment benefit in the U.S. is $302.90, though it varies widely depending on how states calculate the payment. Because of supplemental state programs and other factors, it's hard to know for sure who will lose their benefits at any given time. But the Labor Department estimates that, without a Congress-approved extension, about 2 million people will be cut off by Christmas.

Congressional opponents of extending the benefits beyond this month say fiscal responsibility should come first. Republicans in the House and Senate, along with a handful of conservative Democrats, say they're open to extending benefits, but not if it means adding to the $13.8 trillion national debt.

However adding $700 billion to that national debt by extending the Bush tax cuts for those making $250,000 or more is completely fiscally responsible.  Merry Christmas, two million unemployed Americans from your friends at the Republican party, who killed this measure yet again yesterday.  Some 33,000 here in Kentucky, 88,500 in Ohio and 66,800 in Indiana will be having a great holiday season thanks to the GOP Grinch.

Because every one of the people who will lose their benefits is shiftless and lazy and evil, right?  Certainly none of them are Republicans.  But hey, punish the poor for being poor, reward the rich for being rich.  That's the way it goes.

A Bunch Of Block Heads

Ladies and gentlemen, behold the spirit of compromise as displayed by Senate Republicans.

Just hours after Democrats and Republicans agreed to bargain on tax cuts, and fewer hours still after Defense Secretary Robert Gates implored Congress to repeal Don't Ask, Don't Tell this year, word leaked that Republicans aren't really interested in any of it -- a major repudiation of Gates' authority.

According to a letter delivered to Senate Majority Leader Harry Reid this morning, Republicans will block all debate on all legislation until the tax cut impasse is bridged and the federal government has been fully funded -- even if it means days tick by and the Senate misses its opportunity to pass DADT, an extension of unemployment insurance and other Dem items.

"[W]e write to inform you that we will not agree to invoke cloture on the motion to proceed to any legislative item until the Senate has acted to fund the government and we have prevented the tax increase that is currently awaiting all American taxpayers," the letter reads. "With little time left in this Congressional session, legislative scheduling should be focused on these critical priorities. While there are other items that might ultimately be worthy of the Senate's attention, we cannot agree to prioritize any matters above the critical issues of funding the government and preventing a job-killing tax hike."

It was penned by Senate Minority Leader Mitch McConnell, and signed by all 42 Republicans. 

This is what the Republicans are all about.  They will only discuss getting 100% of what they want, and they will refuse to allow anything else to even come to a vote:  no START treaty, no DREAM Act, no repeal of DADT, no unemployment benefit extensions, nothing but extending tax cuts for their rich buddies.

That's all that they will allow.  It's their way or nothing.  Petulant, screaming enfants terrible' pitching a fit on the Senate floor.  No compromise.  No quarter.  No reaching across the aisle.  Only partisan rancor.  That's all they have.

Forget anything getting done in the lame duck.  The brats won't allow it, despite overwhelming support for ending DADT, for ratifying START, for not cutting off 2 million Americans at Christmas, and for strengthening our military through the DREAM Act.

And the best part is the Senate Dems will now completely fall apart as a result on the two things the Republicans will allow to come to a vote, tax cuts and the omnibus spending bill, and give the scary Republicans exactly what they want.

So yeah, why bother, apparently.  Some leadership from the White House might be nice...

The Power Of Name-Calling

Finally, the Fed will reveal just who got the $3.3 trillion in loans, guarantees, and other aid when the banking crisis went down.

The Federal Reserve, under orders from Congress, plans today to identify recipients of $3.3 trillion in emergency aid the central bank provided as it fought the worst financial crisis since the Great Depression.

The Fed intends to post the data on its website at midday in Washington to comply with a provision in July’s Dodd-Frank law overhauling financial regulation. The information spans six loan programs as well as currency swaps with other central banks, purchases of mortgage-backed securities and the rescues of Bear Stearns Cos. and American International Group Inc.
The disclosures may heighten political scrutiny of the central bank already at its most intense in three decades. The Fed’s Nov. 3 decision to add $600 billion of monetary stimulus has met with backlash from top Republicans in Congress, who said in a Nov. 17 letter to Chairman Ben S. Bernanke that the action risks inflation and asset-price bubbles.

“It is quite conceivable it is going to stir up the political pot,” said Ward McCarthy, chief financial economist at Jefferies & Co. Inc. in New York. “But political criticism isn’t going to prevent them from doing what they need to do. An important part of being a Fed official is to understand whatever you do is going to come under scrutiny.” 

More on this as it becomes available later today.   Just who all got what of this three trillion plus, and when are they paying it back?

Workin' Hard For The Money

Productivity numbers are out for third quarter and are looking up.

U.S. non-farm productivity grew faster than previously estimated in the third quarter as employers squeezed more output from workers and kept costs contained, a government report showed on Wednesday.

Productivity increased at an annual rate of 2.3 percent rather than the 1.9 percent pace reported last month, the Labor Department said, after contracting 1.8 percent in the second quarter. 

The upward revision to third-quarter productivity, a measure of hourly output per worker that is viewed as an indicator of the economy's vitality or lack of it, matched economists' expectations. 

I agree, employers are "squeezing more output" from workers.  Lord knows wages aren't going up.

Jousting At Health Care Windmills

Yet another federal judge has upheld the individual mandate provision in health care reform as constitutional.

A federal judge in Virginia on Tuesday rejected a legal challenge to the healthcare reform law, the second time the law's mandate that people buy insurance has been ruled constitutional.

The lawsuit was brought by Liberty University, which also argued that the law violates the First Amendment by requiring people to buy insurance that could cover abortions.

"I hold that there is a rational basis for Congress to conclude that individuals' decisions about how and when to pay for health care are activities that in the aggregate substantially affect the interstate health care market," ruled U.S. District Judge Norman Moon, a Clinton appointee. "Nearly everyone will require health care services at some point in their lifetimes, and it is not always possible to predict when one will be afflicted by illness or injury and require care.…

"Far from ‘inactivity,’ by choosing to forgo insurance, Plaintiffs are making an economic decision to try to pay for health care services later, out of pocket, rather than now, through the purchase of insurance. As Congress found, the total incidence of these economic decisions has a substantial impact on the national market for health care by collectively shifting billions of dollars on to other market participants and driving up the prices of insurance policies."

Again, all this is headed for the Supreme Court, and it will probably end up resting on the shoulders of Justice Kennedy.  These lower court rulings are less important, but we are seeing a pattern now of judges upholding the law as constitutional under the Commerce Clause.

The opponent of health care reform are trying to just shotgun out lawsuits until they find a judge that agrees with them.  It's a good short-term strategy, but not a good long-term one.  Still, the argument by the right that the provision is "clearly unconstitutional" doesn't appear to be so self-evident.


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