In the middle of Snowpocalypse 3: The Wrath Of Snow here. Six to twelve inches by tomorrow morning, probably closer to the twelve end because of the Ohio river valley funneling this stuff straight through from the west. There were already 6-12 inches of snow on the ground from the snowstorms last week, too.
There are piles of snow everywhere. Hasn't gotten above freezing in a week and won't really until next week. Could see more snow on Saturday too.
Stay safe out there in the Tri-State.
If all printers were determined not to print anything till they were sure it would offend nobody, there would be very little printed. -- Benjamin Franklin
Monday, February 15, 2010
Too Cool For School
Utah's anti-knowledge Republicans continue the crusade to dumb down the public. After all, a stupid public is a compliant public that does what you want them to do.
Needless to say, that didn't go over too well, even in anti-thinking Utah.
None of this makes any sense. Unless you dig a little deeper...
Republicans. The party of "I got mine. Screw you." Even high school is too socialist for them to support anymore.
At Utah's West Jordan High School, the halls have swirled lately with debate over the merits of 12th grade:Yep, that's the GOP's brilliant plan to save money: eliminate the entire Senior year in high school. Give Utah's students a head start on those Wal-Mart associate and Burger King cashier positions! You don't need book smarts to ask "Would you like onion rings or a drink with that?"
Is it a waste of time? Are students ready for the real world at 17?
For student body president J.D. Williams, 18, the answer to both questions is a resounding no. "I need this year," he said, adding that most of his classmates felt the same way.
The sudden buzz over the relative value of senior year stems from a recent proposal by state Sen. Chris Buttars that Utah make a dent in its budget gap by eliminating the 12th grade.
Needless to say, that didn't go over too well, even in anti-thinking Utah.
The notion quickly gained some traction among supporters who agreed with the Republican's assessment that many seniors frittered away their final year of high school, but faced vehement opposition from other quarters, including in his hometown of West Jordan.No offense, but that's called "early graduation" there, genius. It's been around for a while now. How will that save Utah $60 million a year? Aren't the students already smart enough to graduate early getting out to begin with? Are Utah's graduation standards so lax that $60 million worth of kids are able to cut out early?
"My parents are against it," Williams said. "All the teachers at the school are against it. I'm against it."
Buttars has since toned down the idea, suggesting instead that senior year become optional for students who complete their required credits early. He estimated the move could save up to $60 million, the Salt Lake Tribune reported.
The proposal comes as the state faces a $700-million shortfall and reflects the creativity -- or desperation -- of lawmakers.
None of this makes any sense. Unless you dig a little deeper...
Whether the plan proves viable, it does raise a valid point about "senioritis," said William Sederburg, the state commissioner of higher education. "The thing that Sen. Buttars tapped into is that too many seniors take the senior year off," he said.Ahh. Utah's tax shortfall? High school students' fault. The bastards, soaking up our tax dollars to slack off and text and tweet each other in class. They should be out in the work force paying taxes so the Baby Boomers can get Social Security and Medicare.
Republicans. The party of "I got mine. Screw you." Even high school is too socialist for them to support anymore.
The Unemployment Reality
If Congress doesn't take action by next Friday, 1.2 million Americans will lose their jobless benefits. If they don't take action by May 31, that number rises to 5.6 million. And it gets worse:
According to the BLS, there are a record 6.31 million workers who have been unemployed for more than 26 weeks (and still want a job). This is a record 4.1% of the civilian workforce. (note: records started in 1948).Hopefully. But if you're the GOP, you most certainly want to find a way to monkey wrench this...after all the only people out of work this long are just hippies and minorities anyway, not Real Americans, right? Who will be the first Republican to say we need to cut off unemployment benefits in order to save the economy from debt?
The current qualification dates extension being considered is for another three months. Cynics might argue that some Senators want to limit the extension to an additional three months, so they can use the popular benefit extension in May to once again extend the homebuyer tax credit - hopefully the cynics are wrong!
The Most Successful First-Year President In Generations
Barack Obama got it done in Congress in 2009.
Yes. Let's dump the most effective Democratic President in 80 years for not being effective enough. Assholes.
Obama has been no different from his predecessors in that he's always ready to send a firm message to the other end of Pennsylvania Avenue as he "urges members of Congress" to come together and act. All presidents demand specific action by Congress — or at least they ask for it. But when you look at the votes of 2009 in which Obama made his preference clear, his success rate was unprecedented, according to John Cranford of Congressional Quarterly.And yet the Obama Presidency has been an abject failure according to the Republicans, the Village, and the Useful Idiot Wing of the Democratic Party.
"His success was 96.7 percent on all the votes where we said he had a clear position in both the House and the Senate. That's an extraordinary number," Cranford says.
The previous high scores were held by Lyndon Johnson in 1965, with 93 percent, and Dwight Eisenhower, who scored 89 percent in 1953. Cranford notes that George W. Bush's score hit the high 80s in 2001, the year of the terrorist attacks on the World Trade Center. But Obama surpassed them all, Cranford says.
Yes. Let's dump the most effective Democratic President in 80 years for not being effective enough. Assholes.
Bye Bayh Blackbird, Part 3
And we already have Charles Lane from WaPo blaming the Dirty F'ckin Hippies for the loss of America's Greatest Senator, Evan Bayh.
Florida GOP Sen. Mel Martinez actually quit last year rather than deal with the GOP rampant racism and anti-immigrant fervor. He really was an example of the kind of loss of a political moderate that Charles Lane is talking about.
But no, it's the Democrats who are permanently doomed in the eyes of the Village Elders. They will never be the majority. They will never have respect. They will never have a mandate.
The Village has spoken. The Hoffman Effect is ignored. The Bayh Effect is the only thing that matters: the Dems are shedding their precious, Hippie-hating moderates.
For months now, Bayh has been screaming at the top of his voice that the party needs to reorient toward a more popular, centrist agenda -- one that emphasizes jobs and fiscal responsibility over health care and cap and trade. Neither the White House nor the Senate leadership has given him the response he wanted. Their bungling of what should have been a routine bipartisan jobs bill last week seems to have been the last straw.It's amazing. George W. Bush ran the Republicans into the ground. Just a year later, the Village has already declared Obama and the Democrats in the minority. But it's those last four words there..."damaged political party brand"... that define what it means to be a Villager. If after eight years of Bush's rank incompetence, two bungled wars, Cheney's awful fouthbranch legal junta attempts, all of which leads to getting fully trounced in the 2008 elections, and then the backlash of the far right Teabagger Nation and the hatred that it has spawned haven't permanently decimated the GOP brand, nothing will...and yet it's the Democrats who have the "damaged political party brand."
I don’t doubt that Bayh could have won re-election -- though he probably did not relish the prospect of a very nasty campaign revolving around GOP attacks on his wife’s business activities. Let it never be forgotten that Bayh is a perennial Democratic golden boy, the keynote speaker at the party’s 1996 convention, scion of a political dynasty, proven vote-getter in a red state and, in his own mind, prime presidential timber. For him, then, the question was: even if I win, who needs six more years of dealing with these people, after which I might be 60 years old and trying to pick up the pieces of a damaged political party brand?
Florida GOP Sen. Mel Martinez actually quit last year rather than deal with the GOP rampant racism and anti-immigrant fervor. He really was an example of the kind of loss of a political moderate that Charles Lane is talking about.
But no, it's the Democrats who are permanently doomed in the eyes of the Village Elders. They will never be the majority. They will never have respect. They will never have a mandate.
The Village has spoken. The Hoffman Effect is ignored. The Bayh Effect is the only thing that matters: the Dems are shedding their precious, Hippie-hating moderates.
Drive Moose, Turn Left
The big story at the Daytona 500 over the weekend: a cracked and broken place in America's heart. No, not the pothole in Turn 2, Sarah Palin.
Palin-mania easily surpassed Danica-mania at Daytona International Speedway on Sunday.You don't think Sarah's runnin' for President in 2012? Gonna have one of those Sno-Cats on blocks in front of the West Wing. Just sayin'.
While Patrick got all the headlines for the better part of two weeks, she had no stake in the Daytona 500. Palin did, and as a VIP guest for the race, she ate up all the attention.
When she arrived for the drivers meeting, Palin was immediately mobbed. She briefly chatted with Republican National Committee chairman Michael Steele, shook hands with supporters and smiled big.
She took a seat up front next to Harry Connick Jr., who sang the national anthem for the race. When NASCAR president Mike Helton acknowledged her as a special guest, she got the largest ovation from the room, packed from the front to the back with drivers, team members, support personnel and onlookers.
After sitting through the meeting, Palin could not get out the door. Fans mobbed her, asking for pictures and autographs. Her 12-person entourage, comprised of track security, a policeman, friends and spokespeople, tried to get her to the door and to her next appearance. But Palin could not help herself, and kept signing and posing for pictures.
Even when she was able to get out the door, she stopped every few feet to take pictures. One fan asked where her husband, Todd, was on Valentine's Day. Palin said he couldn't make it because he's in Alaska preparing for the Iron Dog, the world's longest snow-mobile race.
Zandar's Thought Of The Day
When the going gets tough, the tough quit, pretend to be political outsiders, and deny running for President until of course the voice of the people gets loud enough to convince them to serve America once again...
[UPDATE 3:38 PM] Best Bayh Line of the day goes to CNN:
[UPDATE 3:38 PM] Best Bayh Line of the day goes to CNN:
One source said Bayh could consider another bid for Indiana governor. Bayh "hates the Senate [and] hates the left bloggers," said a friend of the senator's who also has been a longtime adviser. "They are getting their wish [of] pure Democrats in the minority."I totally take responsibility for making Evan F'ckin' Bayh quit. I cause earthquakes and traffic jams too.
Bye Bayh Blackbird, Part 2
Greg Sargent surveys the aftermath of Indiana's Dems scrambling to replace Evan Bayh with the signature and filing deadline on Friday.
So, Hoosiers...who would you want to see run for Bayh's seat?
[UPDATE 2:45 PM] Tamyra d'Ippolito has been quietly running a campaign to be the progressive alternative to Bayh, and she has about 3,500 of the 4,500 signatures needed already as Eric Kleefield reports:
If you're in Indiana, especially Brad Ellisworth's district, see if you can help Tamyra out.
Because Bayh apparently gave national Dems no heads-up on his retirement, that leaves Dems in a pickle: No replacement candidate is likely to be able to bring in the 4,500 signatures needed by this week’s deadline. That means that under party rules the state party has until June 30th to pick a replacement candidate.Weather in Indiana right now certainly isn't helping.
The three leading contenders for national and state Dems, according to a Democratic source: Dem Reps Brad Ellsworth and Baron Hill, and Evansville mayor Jonathan Weinzapfel.
The Dem source describes all three as “strong” contenders and says conversations are under way with them. More in a bit.
So, Hoosiers...who would you want to see run for Bayh's seat?
[UPDATE 2:45 PM] Tamyra d'Ippolito has been quietly running a campaign to be the progressive alternative to Bayh, and she has about 3,500 of the 4,500 signatures needed already as Eric Kleefield reports:
"Just so you know, the Democratic heads in Indiana, there are 92 counties, they have been working against us all this time because they have been for the incumbent, Evan Bayh," said d'Ippolito. "So we are calling on them now - it was only Evan Bayh running as the Democratic candidate - and asking them what will they do now. So this does not give us much time."
I asked d'Ippolito whether she expected the party to work against her signature efforts, in order to preserve their ability to select a new candidate. "Well from what we've been dealing with so far from Evan Bayh, I would have to say yes, unfortunately," said d'Ippolito. "Though they would have the choice - I'm a lifelong Democrat, to choose me as the candidate. I would be glad to do that. But they have been fighting me every step of the way."
"So I have no idea what they will do, but they have not been cooperative so far," d'Ippolito added. "It would be nice if they turned around and became cooperative, but I don't know."
If you're in Indiana, especially Brad Ellisworth's district, see if you can help Tamyra out.
Leap Of Faith
MoJo's Andrea Ruggieri explores why there's no Women's Ski Jumping in the Vancouver Olympics, when they're allowed to compete in pretty much every other event (you know, like Luge. It's safer!) Alissa Johnson and Jessica Jerome would be on the US Women's team if there was one. Lindsey Van has the world record jump for any competitor...male or female. But the last bastion of gender equality in the Olympics remains.
On top of outdated anatomical theories, the athletes also face more quotidian problems, from the lack of financing that means they do most of their fundraising themselves to intimations that they don't work as hard as the men. "On a physical level, we put in just as many hours, on the hill and off," Johnson says. "But I think on an emotional level, we give up a lot more. Our battle doesn't just end on the ski jump."Like to see this fixed before Sochi, Russia in 2014. Somehow I think it will be.
In fact, it went all the way to the courtroom. Fifteen athletes, including Johnson, Jerome and Van, sued the Vancouver Organizing Committee (VANOC). They argued that they faced gender discrimination. Their judge this summer agreed, but she ruled that it was up to the IOC, not VANOC, to do something about it. So the only way the IOC will add women's ski jumping is if it chooses to. Maybe, Rogge has said, that'll be in 2014—if the ladies are "ready" and their "level of sport" has improved.
Johnson isn't holding her breath. "I can't set myself up for that type of disappointment anymore," she says. And so for a second time, while her brother flies through the air toward his own Olympic hopes, Johnson will remain grounded, unsure even if she should dare to let herself dream of, one day, doing the same.
Also It Could Be a Sign Of Employers Dressing Up As Claude Raines
The AP is shocked...shocked...to discover that businesses aren't hiring temps in order to turn them into permanent employees but to just screw them out of bennies.
"I think temporary hiring is less useful a signal than it used to be," says John Silvia, chief economist at Wells Fargo. "Companies aren't testing the waters by turning to temporary firms. They just want part-time workers."
The reasons vary. But economists and business people say the main obstacle is that employers lack confidence that the economic rebound has staying power. Many fear their sales and the overall economy will remain weak or even falter as consumers spend cautiously.
Companies also worry about higher costs related to taxes or health care measures being weighed by Congress and statehouses. That's what Chris DeCapua, owner of employment firm Dawson Careers in Columbus, Ohio, is hearing from clients.
DeCapua says corporate demand for temporary workers has surged. That's especially true for manufacturing-related jobs involving driving forklifts, assembling products, packing merchandise and loading it on trucks.
Yet that demand hasn't spilled over into a demand for permanent workers. And DeCapua doesn't see it turning around anytime soon.
"There is so much uncertainty, and when there is uncertainty people and companies hold onto their checkbooks," DeCapua says.
Companies "don't want to hire permanent workers and then have to turn around and get rid of them six months later," he says.
The whole "uncertainty of legislation makes it tough to hire" excuse is so much bullshit it's not even funny. The uncertainty is because of the economy itself The reality is employers get to have it both ways: they get to have cheap labor with no insurance benefits if demand picks up, and expendable labor to get rid of (or better yet a supply of scabs to use to replace more expensive workers with benefits) should demand go down.
Folks, these jobs are going away permanently. They are being replaced by a new crop of temp jobs with no benefits and far less pay. They will become permanent temp positions with a high turnover rate.
We're on our way to becoming a day laborer society.
Bye Bayh Blackbird
I won't have Evan F'ckin Bayh to kick around anymore on this blog. He's not running for re-election.
Nice. I won't miss the guy, and now he has the rest of 2010 to tell Obama to go screw himself too.
Watch.
[UPDATE 11:55 AM] Steve Benen:
Indiana Sen. Evan Bayh will not seek re-election this year, a decision that hands Republicans a prime pickup opportunity in the middle of the country.Best part? Indiana Democrats now have until tomorrow to come up with a candidate to run against Dan Coats or the GOP will get the seat uncontested. A final up yours to the Dems from Bayh.
"After all these years, my passion for service to my fellow citizens is undiminished, but my desire to do so by serving in Congress has waned," Bayh will say.
Bayh will announce the decision at a press conference later today. He was first elected to the Senate in 1998 and was re-elected easily in 2004. National Republicans had recruited former Sen. Dan Coats to challenge Bayh in 2010 although polling suggested Bayh began the race with a 20-point edge. He also had $13 million in the bank at the end of the year.
Nice. I won't miss the guy, and now he has the rest of 2010 to tell Obama to go screw himself too.
Watch.
[UPDATE 11:55 AM] Steve Benen:
And for those keeping score, there are now six Republican Senate incumbents who have decided not to seek re-election, and three Senate Dems. Expect the media to characterize this as a mass Democratic exodus.Assuredly. Keep an eye on the calls of "Democrats running for the hills" when it's the GOP who has more retirements.
And Were Living Here In Harrisburg
The much maligned capital of Pennsylvania could be the Keystone State's keystone to wrecking the municipal bond market. Tyler Durden:
It's going to be a long, ugly road ahead.
A week ago we asked whether Harrisburg is a "doomed city." Today, the city itself answered the question, after passing a 2010 budget which excludes debt payments. In essence, the city anticipates defaulting. The catalyst will be a $2 million missed interest payment on an incinerator due March 1. As Reuters points out laconically, this is "a rarity for a municipal bond issuer." The outcome: official muni default. "Asked whether the city may file Chapter 9 bankruptcy as a way to get its debts under control, [City controller] Miller said that was a "possibility."Will this be the catalyst that sets the muni bond market ablaze? Remember that March is when Quantitative Easing officially ends. And everyone knows what is happening in Europe. Will the next 20 days set the preamble for the next major leg down in the ongoing Great Recession?And you're kidding yourself if you think Harrisburg and Colorado Springs are the only cities in America looking as massive budget holes over the next two years. Harrisburg's next payment is due on March 1. Many other cities and counties are going to be facing similar hard choices over 2010 and 2011. Birmingham/Jefferson County, Alabama was just the beginning. And as conditions get worse, those teetering on the edge will go over.
It's going to be a long, ugly road ahead.
Greek Fire, Part 7
The German people aren't real happy with this whole "bailing out another country" thing. With typical German pragmatism, a majority of Germans say Greece should be kicked out of the Eurozone.
The Greek Fire continues to burn with no end in sight, but it's Germany that may suffer the most damage.
The Emnid poll for Bild am Sonntag newspaper showed 53 percent of Germans asked said the European Union should, if necessary, expel Greece from the euro zone.
Athens has struggled to convince investors it is tackling its debt crisis and markets are nervous about a default.
EU leaders discussed the issue last week and offered words of support but failed to outline concrete steps, further unsettling markets. Euro zone finance ministers are expected to discuss Greece again on Monday and Tuesday.Solves the problem as far as Berlin's concerned. Greece on the other hand, well...not so much. This puts the government of German Chancellor Angela Merkel in a nasty bind. They can't bail out Greece: that would lead to a fracture of the German coalition government. They can't refuse to do so either....that would lead to a fracture of the European Union.
Merkel has adopted a cautious stance on support, saying while Greece will not be left on its own, it is up to Athens to sort out its own problems.
The poll also showed 67 percent of Germans did not want Germany and other EU states to give billions of euros in credit to Greece.
"If we start now, where do we stop?" Michael Fuchs, deputy head of Merkel's conservatives in parliament, told Welt am Sonntag newspaper.
The Greek Fire continues to burn with no end in sight, but it's Germany that may suffer the most damage.
Having To Shovel It Out
It's getting pretty deep and thick on climate change denial, and the Village is more than happy to pile on the Science Hate. Best paragraph:
U.N. Foundation President Timothy E. Wirth, whose nonprofit group has highlighted the work of the IPCC, said that the pirated e-mails gave "an opening" to attack climate science and that the scientific work "has to be defended just like evolution has to be defended."Just like evolution has to be defended. Stop and think about that. In the United States, climate science is now viewed with the same skepticism that evolution is.
Roger Pielke Jr., a political scientist and environmental studies professor at the University of Colorado, said that the U.N. panel could hurt its own public standing by not admitting how it exaggerated certain climate risks or connections, such as linking higher insurance payouts to rising temperatures when other factors are driving this trend.But that won't stop the GOP and the Wingers from lying about it. Scientists are liberals you see. They must be punished.
"The idea that the IPCC can or should strive to be infallible is really not helpful," Pielke said. "When errors and mistakes are inevitably found, the fall is that much further. . . . There's a real risk that the public perception could swing [toward greater disbelief in climate science]. Even though the reality is that the science -- the underlying science -- hasn't changed."
What Digby Said
...on the "Us" in the Us vs Them mentality of the Teabaggers.
And we can thank Bush/Cheney for that. After 9/11, leveraging Hatred Of The Other became a full-time national job. It was Muslims at first, but the list of the Other has increasingly grown to include a number of internal American groups. Dehumanization of the Other was so effective against America's Muslim population (and still is) that they simply turned the technique upon anyone standing between the dead-ender rump of the GOP and power: in this case, Democrats, liberals, scientists, and racial and social minorities.
Once you begin to demonize your own leaders and your own people, it gets to the point where everyone is an apostate at one point or another. Empathy becomes impossible as everyone else besides yourself becomes the apostate who is wrong (see Dick Cheney over the weekend). The whole pyramid become unsustainable. We're seeing that now as the Hoffman Effect ravages the GOP. But the fact of that matter is this particular pyramid can cause a lot of permanent damage to our country when it collapses.
The Real American tribe is (mostly) white, socially traditional and politically conservative. People who fit that criteria are, quite literally, the only people they care about. (At the more extreme edge, they are the only people they think are really people.) They simply can't empathize with those who don't fit that mold.Digby has hit upon the basic pathology of the Teabagger. As I talked about yesterday morning, it's all a cover for hiding the inherent racism in the movement. The hypocrisy, the intellectual dishonesty, the flat out lies, and the unwavering hatred of Obama seemingly refuse to fit into a discernible pattern unless you're willing to admit that the core tenet of the movement is Hatred Of The Other.
For most of us, this all comes down to what I call the Count of Monte Cristo effect. I read that book as a kid and the horror of a system which would allow an innocent person to be locked up forever so seared itself into my psyche that I automatically understood from that point on what injustice was. I didn't need to be a Frenchman in the Napoleonic era to relate. I'd been inside Edmond Dantès head, I'd been Edmond Dantès, and I'd felt, as a human being, what it was to be falsely accused and imprisoned.
I assume that most people have some sort of similar empathetic epiphany as children --- maybe it's just recognizing the hurt you've felt in the eyes of another. But it's fundamental to human development. Why, for some people, it stops at their own family or group, I don't know. But it's clear that among a great many people it does. I hear it every day among some of our most powerful leaders who blithely assert that terrorist suspects don't deserve the same rights as Americans. And yet, they know, that a large number of those terrorist suspects turned out to be innocent. They simply can't extend the horror they would feel if they found themselves in similar circumstances, to these other people. They simply can't accord them basic common humanity.
Even as a matter of self-preservation, I guess they just rely on the belief that their fellow tribesmen will recognize them and come to their rescue if they should ever find themselves in such circumstances. (Or they are so lacking in imagination that the idea that it could happen to them is unfathomable.) But as these folks down in Haiti are finding, their tribe isn't all powerful and they can't always fix things for them. It turns out that having a rule of law commonly respected the world over really comes in handy at a time like this. And every time the US government chisels away at our system of justice in the name of "protecting ourselves", or some yahoo prattles on about how someone doesn't deserve the same rights as somebody else, that fundamental protection gets weaker and weaker.
And we can thank Bush/Cheney for that. After 9/11, leveraging Hatred Of The Other became a full-time national job. It was Muslims at first, but the list of the Other has increasingly grown to include a number of internal American groups. Dehumanization of the Other was so effective against America's Muslim population (and still is) that they simply turned the technique upon anyone standing between the dead-ender rump of the GOP and power: in this case, Democrats, liberals, scientists, and racial and social minorities.
Once you begin to demonize your own leaders and your own people, it gets to the point where everyone is an apostate at one point or another. Empathy becomes impossible as everyone else besides yourself becomes the apostate who is wrong (see Dick Cheney over the weekend). The whole pyramid become unsustainable. We're seeing that now as the Hoffman Effect ravages the GOP. But the fact of that matter is this particular pyramid can cause a lot of permanent damage to our country when it collapses.
Rogue Trader
Simon Johnson takes a look at what's next on the news that Goldman Sachs helped start the Greek Fire and the upcoming audit that will be out of the Fed and Obama's hands.
But blacklisted from Europe? Goldman Sachs? Not going to happen. I admire Simon's analysis on economics, but on politics he's off by a mile here. A year from now Goldman Sachs will be operating like none of this ever happened with more record quarterly numbers. The EU and US economies? That will be a different story...
We now learn – from Der Spiegel last week and today’s NYT – that Goldman Sachs has not only helped or encouraged some European governments to hide a large part of their debts, but it also endeavored to do so for Greece as recently as last November. These actions are fundamentally destabilizing to the global financial system, as they undermine: the eurozone area; all attempts to bring greater transparency to government accounting; and the most basic principles that underlie well-functioning markets. When the data are all lies, the outcomes are all bad – see the subprime mortgage crisis for further detail.Johnson doesn't expect much in the way of punishment, however. I think he's completely wrong even about that.
A single rogue trader can bring down a bank – remember the case of Barings. But a single rogue bank can bring down the world’s financial system.
Goldman will dismiss this as “business as usual” and, to be sure, a few phone calls around Washington will help ensure that Goldman’s primary supervisor – now the Fed – looks the other way.
But the affair is now out of Ben Bernanke’s hands, and quite far from people who are easily swayed by the White House. It goes immediately to the European Commission, which has jurisdiction over eurozone budget issues. Faced with enormous pressure from those eurozone countries now on the hook for saving Greece, the Commission will surely launch a special audit of Goldman and all its European clients.
Instead, Goldman will probably be blacklisted from working with eurozone governments for the foreseeable future; as was the case with Salomon Brothers 20 years ago, Goldman may be on its way to be banned from some government securities markets altogether. If it is to be allowed back into this arena, it will have to address the inherent conflicts of interest between advising a government on how to put (deceptive levels of) lipstick on a pig and cajoling investors into buying livestock at inflated prices.Sadly, Obama's economic team has already answered that question. And they will be twisting EU arms to make sure nothing happens to Goldman Sachs. I'm even more cynical than Johnson here: I believe it's a coin toss to see if Goldman Sachs will even get a slap on the wrist by the EU. The most likely outcome will be an audit that clears Goldman Sachs of any wrongdoing and allows them to continue to operate. Perhaps they will be fined a pittance.
And the US government, at the highest levels, has to ask a fundamental question: For how long does it wish to be intimately associated with Goldman Sachs and this kind of destabilizing action? What is the priority here - a sustainable recovery and a viable financial system, or one particular set of investment bankers?
But blacklisted from Europe? Goldman Sachs? Not going to happen. I admire Simon's analysis on economics, but on politics he's off by a mile here. A year from now Goldman Sachs will be operating like none of this ever happened with more record quarterly numbers. The EU and US economies? That will be a different story...
StupidiNews, President's Day Edition
- The NATO/U.S. offensive in the Afghan city of Marjah is now in the "clearing phase" but there is slow going as IED's and other traps await troops.
- Flash flooding in Haiti is causing more problems as a million Haitians continue to lack basic shelter.
- California real estate investors are paying cash for homes now worth a fraction of the value they had 4 years ago.
- Secretary of State Clinton warns that Iran is becoming a military dictatorship.
- The US ends an 84-year medal drought in the Nordic Combined event in Vancouver as Johnny Spillane takes the silver, Americans finish 2-4-6.