The Big(ger) Payback

Looks like Wisconsin Republican Sen. Ron Johnson, the man who took down Russ Feingold last year, has yet to answer some extremely interesting questions as to how he did it and with what money.

Last week the Milwaukee Journal-Sentinel started asking uncomfortable questions about $10 million in deferred compensation Johnson received from his former company, Pacur, weeks after his $9 million self-financed successful 2010 campaign came to an end.

For those of you playing the home version, even in a post Citizens United world, direct corporate contributions to a candidate is a no-no, especially when the corporation in question employs the candidate.  The $10 million just happened to cover the cost of Johnson's campaign, which Johnson says is a complete coincidence.  If that's true, then Johnson surely has a written agreement with the company covering the deferred compensation, yes?

So far Johnson has not produced a written deferred compensation agreement that was signed and dated before he launched his campaign. Absent such an agreement, Johnson could face serious charges that he violated campaign-finance laws barring direct corporate funding of federal candidates, election law experts tell TPM.

Arent Fox's Brett Kappel, an election law attorney, said evidence of a written agreement before Johnson ran for the Senate is critical to prove he did not rely on corporate funds for his campaign.

Well then, that might be a problem if the FEC takes a look at...

Even though watchdogs are raising serious red flags over Johnson's deferred compensation, they're not counting on the FEC, a broken agency that either deadlocks over critical and controversial decisions or fails to take up cases at all.

Never the hell mind.  This ledger domain legerdemain is just how the Galt's Gulch Bandits operate. Any of them will tell you the real problem would be the FEC existing at all.  Smaller government means there's nobody to complain to...well, unless a Democrat gave the appearance of conflict of interest, that is.

Best part is the guy who had $9 mil to spend on his own Senate seat and getting $10 mil payback is a real salt-of-the-earth, Real 'Murican hero.  Didn't Blago just get convicted of trying to sell a Senate seat?  Buying one seems to be pretty okay by comparison, IOKIYAR.

Your Easter Message Of Generosity

...has been cancelled to bring you yet another "compassionate conservatism" state legislative proposal from the GOP, this time in Michigan.

Under a new budget proposal from State Sen. Bruce Casswell, children in the state’s foster care system would be allowed to purchase clothing only in used clothing stores.

Casswell, a Republican representing Branch, Hillsdale, Lenawee and St. Joseph counties, made the proposal this week, reports Michigan Public Radio.

His explanation?

“I never had anything new,” Caswell says. “I got all the hand-me-downs. And my dad, he did a lot of shopping at the Salvation Army, and his comment was — and quite frankly it’s true — once you’re out of the store and you walk down the street, nobody knows where you bought your clothes.”

Under his plan, foster children would receive gift cards that could only be used at places like the Salvation Army, Goodwill and other second hand clothing stores.

Spoken like someone who never realized just how grim the foster care system in this country can be.  But, hey, on paper, foster kids don't vote.  But people who think we should be cutting as many dollars from foster kids as possible do vote.  It's just politics, GOP style:  leave the country arguing about how much icing should be put on the cake while the guys at the top steal the cake itself.

Skippy has the right of it:

now, to be honest, i shop at thrift stores as i believe in recycling and reusing but i am an adult. i have a choice. i am not at that tender age where slights can scar one so easily.

i am also, not a foster child, where an underlying, unspoken message of "you are different"..."you are not one of us"..."you are not wanted" often permeate a psyche.

this state senator wants to codify those messages with this law. this is unconscionable. this is cruel and, unfortunately in these days of social darwinism run amok, is not all that unusual. 

He's right about the social Darwinism. Time to rid America of the looters and moochers, starting with those who need us the most, the GOP says.  They talk about what Jesus would want us to do on Easter Sunday, and how we have to do X and Y to live a good life in His image, and then say that the laws of this country made by men must codify these "Christian beliefs" into law, and then they pull crap like this and say "It's not the government's job to get involved in caring for the poor."  Indeed, if you care, you should donate your money to charities, not expect the government to do it.

It's more than social Darwinism, it's Christian objectivism bordering on the Divine Right of Kings.  It results directly in the nonsense that the people that have money and power also have self-evident morality and that the most anti-Christian thing you could do is to have a government program that helps those who lack money and power...because they are the least moral among us.  After all, if they were good people, they wouldn't be poor, would they?

ABL is even less kind to the GOP on this one, by the way.

On this day of rebirth and resurrection, keep that in mind.  Happy Easter!

Is This The Real Life, Is This Just Fantasy?

Rep. Paul Ryan's Magical Dreamer Budget(tm) is a towering work of fiction.  It might even win some sort of award.  Here's what it's going to do, folks!

Our budget, which we call The Path to Prosperity, is very different. For starters, it cuts $6.2 trillion in spending from the president's budget over the next 10 years, reduces the debt as a percentage of the economy, and puts the nation on a path to actually pay off our national debt. Our proposal brings federal spending to below 20% of gross domestic product (GDP), consistent with the postwar average, and reduces deficits by $4.4 trillion.

A study just released by the Heritage Center for Data Analysis projects that The Path to Prosperity will help create nearly one million new private-sector jobs next year, bring the unemployment rate down to 4% by 2015, and result in 2.5 million additional private-sector jobs in the last year of the decade. It spurs economic growth, with $1.5 trillion in additional real GDP over the decade. According to Heritage's analysis, it would result in $1.1 trillion in higher wages and an average of $1,000 in additional family income each year.

Plus it's clinically proven to stop the gum disease gingivitis and will increase crop yields by 14%.

The man is on crack.  In four years Ryan expects to have created 8 million jobs we've lost, and then enough to push our unemployment rate back down to better than it was under Bush or Clinton, to boost stagnant middle class wages by $1,000 a year, to get our economy growing at China (purported) levels and to do all this by making massive cuts to Medicaid and privatizing Medicare.

Here's what would really happen:  corporate profits would continue to skyrocket at the 25%+ a year rate we're seeing now, which would be plowed back into massive bonus checks and stock earnings for the richest Americans.  Those $1.1 trillion in additional wage growth each year?  Something like $1 trillion would go to the top of the top.  The average American would see next to nothing.

Ryan would get rid of green energy subsidies as "corporate welfare", but keep oil company subsidies.  He'd get rid of Fannie and Freddie, but has no idea what would replace it and the millions of mortgages it holds.

And yes, he would make all these trillions in cuts over 10 years in order to cut the tax rate on the rich from 36% to 25%.

That's really the goal of Ryan's plan, to "create" trillions by cutting taxes on the wealthiest Americans by a third.  You thought Obama was a "wealth distributionist"?  Republicans want to give trillions to the wealthy and make the rest of us pay for it through spending cuts, and they think you're too stupid to notice.  They assure us if we give the rich more money, they'll create jobs.

They will.  They'll just do it on Wall Street and overseas.

Amazing.  So how much will the Democrats capitulate on this?

[UPDATE]  Steve M. speaks for a lot of Americans who would get screwed by this plan after 2022 by saying "Well thanks, Paul."

The nerve of this little elitist. My wife and I are in our early fifties -- fairly close to retirement, yet still young enough, under Ryan's plan, to be thrown on the tender mercies of the free market for our health care when we're old -- and I just want to know what he thinks people in our situation do. Does he think we just sit around blissfully ignoring the passing of time until about about, oh, 64 or so, and then make our plans for how we're going to survive retirement in a couple of hours one evening? Does he think we don't worry about this, and strategize for it, years and even decades before retirement is imminent? 

What he thinks, old friend, is that you're expendable and half of folks your age will vote for the Republicans anyway just because they believe Ryan isn't talking about taking away Medicare from them, he means he'll take Medicare away from "those people who can't afford health care anyway".

As Cynical As They Wanna Be

First lady Michelle Obama weighs in on the Tuscon shooting as a mother and finds a message of hope.

In the days and weeks ahead, as we struggle with these issues ourselves, many of us will find that our children are struggling with them as well.  The questions my daughters have asked are the same ones that many of your children will have – and they don’t lend themselves to easy answers.  But they will provide an opportunity for us as parents to teach some valuable lessons – about the character of our country, about the values we hold dear, and about finding hope at a time when it seems far away.

We can teach our children that here in America, we embrace each other, and support each other, in times of crisis.  And we can help them do that in their own small way – whether it’s by sending a letter, or saying a prayer, or just keeping the victims and their families in their thoughts.

We can teach them the value of tolerance – the practice of assuming the best, rather than the worst, about those around us.  We can teach them to give others the benefit of the doubt, particularly those with whom they disagree.

Ann Althouse sums up the winger response to this message of tolerance:

Shouldn't we learn to be perceptive, analytical, and aware that some of the individuals among us are, in fact, mentally sick and need something other than tolerance and wishful thinking about how good they might be? So why is the First Lady telling us to teach kids the opposite?

If you're still puzzled by such a cynical reaction as this is, this makes perfect sense if you remember wingers like to look at liberalism, with its basic tenets of tolerance, inclusiveness and togetherness, as a mental disease.  And as far as building an America that Christina Taylor Green would have been proud to have contributed to through civil service, Althouse takes a steaming dump on that notion, too.

It would make more sense to teach creationism instead of evolution than to teach these wishful lies about government since children need to learn how to be effective citizens and lulling them into passive admiration of the government undermines the democratic process. Believing or not believing in creationism, by contrast, isn't going to change what happened in the grand expanse of evolutionary time. 

The First Lady is teaching our children wishful lies about government!   Remember when Laura Bush was attacked for the same thing after 9/11?  Oh wait, didn't happen.  Wonder why.   Tolerance:  more dangerous than creationism.

Instead, we should teach our kids to focus on the differences, identify those who possess those differences as possible threats, and to keep a "critical eye" upon them. Other people aren't to be trusted, government sure as hell is not to be trusted.  Look out for Number One, just watch out you don't step in number two, as Rodney Dangerfield once said.  That of course brings up this now infamous observation about Galtism and kids from Rogers at Kung-Fu Monkey:

There are two novels that can change a bookish fourteen-year old's life: The Lord of the Rings and Atlas Shrugged. One is a childish fantasy that often engenders a lifelong obsession with its unbelievable heroes, leading to an emotionally stunted, socially crippled adulthood, unable to deal with the real world. The other, of course, involves orcs. 

Meanwhile, the wingers keep insisting the best way to put an end to "the climate of hate nonsense" is to attack the First Lady of the United States for her message of tolerance.

Nice guys.

Zandar's Thought Of The Day

Steve M. makes a beautiful point.

Look, I'm not defending any New York City sanitation workers who shirked work during the recent blizzard by calling in sick -- the New York Post breathlessly reports that approximately 700 sanit workers called in sick on Monday and Tuesday, twice as many of the department's 6,000 employees as would normally do so. And I'm certainly not defending the plow crew that (again according to the Post) bought beer on the job and refused to plow. (Though I question whether it's physically possible for four sanitation workers to, in the Post's words, "get blitzed" on two six-packs of beer; mildly buzzed and unable to drive safely, but blitzed? Really? I wouldn't get "blitzed" on three beers, and I weigh 140 pounds.)

However, it strikes me as quite odd that right-wingers are disgusted by this. Aren't these the same folks who keep telling us that Ayn Rand is the most profound philosopher of modern times and that, according to her teachings, universal selfishness is the key to paradise on earth? 

These guys are going Galt.  They are indeed withholding their productivity to protest an employer and a city that can't operate without them not treating them what they believe they are worth.  The Tea Party should be thrilled about them exercising their liberty against a government that does not value their work.

Of course, that would mean that the Tea Party is intellectually consistent in their rhetoric, which is where the entire theory breaks down like a '77 Gremlin X hatchback.

And you can bet anyone else in this country that tried an organized walkout like this in any industry, unionized or not, public or private sector, would be pilloried by the right in the exact same way.  That universal selfishness would be raising your costs for the products and services you buy!  Shun the Galties!

Only the rich are allowed to do this.  Regular, "Real Americans" are supposed to work until they die to serve the rich Puritan work ethic ideal.

We Don't Need No Water

...let this muthaf'ka burn.

A local neighborhood is furious after firefighters watched as an Obion County, Tennessee, home burned to the ground.

The homeowner, Gene Cranick, said he offered to pay whatever it would take for firefighters to put out the flames, but was told it was too late.  They wouldn’t do anything to stop his house from burning.

Each year, Obion County residents must pay $75 if they want fire protection from the city of South Fulton.  But the Cranicks did not pay.

The mayor said if homeowners don’t pay, they’re out of luck.

That's not the best part of the response from the Glibertarian Irregulars at National Review.  This is.

Kevin Williamson pops his head into my office, and as expected makes the compelling anarcho-capitalist case for letting the sucker burn. I don’t want to caricature his arguments, but then again, I didn’t have my tape recorder going, so my best approximation is: “Read your Pareto.” The status quo ante was no fire service for folks outside the city limits. Under that system both the Cranicks’ house and the neighbors’ burn to the ground. Under the current pay-to-spray program, only one house burns (as the department responded when a fee-paying neighbor worried that the fire was spreading). QED.


Resources are scarce, Kevin says. What if there are two house fires on different sides of town — one owned by a fee-payer, the other by a free rider — and only one truck to respond?

To recap, the folks at National Review are complaining that the problem is Mr. Cranick offered to pay the firefighters when they showed up and they said no dice, when any American with a functional frontal lobe would tell you the problem is that this "pay-for-spray" operation has been in place for twenty years and nobody in the state of Tennessee could find a better way to handle the situation of rural firefighting.

Gotta love the free market.  Government should apparently only be involved in telling women what they can do with their uterus.  Bonus Yglesias:  Isn't letting the house burn more expensive to the county?

Also, isn't Williamson's rather mercenary approach all, you know, "death panel"-y and stuff?

Double also, hey look, it's our old friend Pareto again.  I'm telling you, understand your Pareto 80-20 rule, and you will understand your Glibertarian-Galtie-Andrew Ryan wannabe Republicans completely.

Specifically Not Feelin' Randy, Part 8

Rand Paul has the solution for Kentucky's long-term unemployed when the jobless rate is near 10%:  Get a job, you lazy bastards!

“In Europe, they give about a year of unemployment. We’re up to two years now in America,” Paul said on Sue Wylie’s WVLK-AM 590 radio program.

“As bad as it sounds, ultimately we do have to sometimes accept a wage that’s less than we had at our previous job in order to get back to work and allow the economy to get started again,” Paul said. “Nobody likes that, but it may be one of the tough love things that has to happen.”

Paul was responding to a question from Wylie about Thursday’s Senate Republican filibuster of a $120 billion package of additional jobless benefits and state aid. Tens of thousands of Americans will have exhausted their unemployment benefits this month without that extension.

Paul said he supports the filibuster. If the Senate thinks the bill is necessary, it needs to find the money to pay for it elsewhere in the federal budget rather than add to the $13 trillion national debt, he said.

“It’s all a matter of making priorities,” Paul said. “Some tough decisions will have to be made.”

Because when you've got a mortgage payment or rent, car payment, day care, groceries, and credit card bills to pay, taking a job at McDonald's for a fraction of what you were earning (and less that what unemployment was giving you) will solve all your problems.  That is if the McDonald's manager wants to actually hire somebody overqualified when they've got 6 applications for every open position.

America can't afford to help you any longer because we're too busy with tax cuts for the rich and for corporations.  The Senate Millionaires Club is just disgusted with how lazy you are.  If you were really a hard worker, Kentucky, then you'd be rich like they were.

The Rand-publican solution:  get a job, you hippie!  You know, even though there's more people than jobs now.  Why haven't you started your own successful small business yet?

Rally Round The Family, Pocket Full Of Euros

The GOP has put all their chips in the pot defending Rand Paul.  I don't see how they have much of a choice, either because the Teapublicans will demand it.  If they throw him under the bus, they're done for in November.  the great part is if they back Rand Paul and his ideas, they lose in the general anyway.  For now, it's all smiles and rainbows in the Bluegrass State.

On the ground in the Bluegrass state, Republicans are excited by the prospects of the Rand Paul candidacy -- they say he can bring fresh blood and fresh enthusiasm to the party and that can help up and down the ballot. But they remain wary of his unique views -- and the possibility of more days like Thursday ahead.

On Saturday, Paul and one-time establishment favorite Trey Grayson will come together for a staged rally with all the key players -- from Senate Minority Leader Mitch McConnell on down -- telling their voters to come together for the sake of winning the general election in November. TPMDC spoke today with several Kentucky Republicans who insisted they will be able to forge the right kind of agreement to beat Democratic nominee Jack Conway. But privately, they admit it might not be so easy.

That's one reason the GOP seems to have settled on a talking point - Paul was set up by the liberal media, who pushed him into a trap that earned him 24 hours of negative press.

"This was just an old type of ploy to get him to slip up on something. It was more of a media gotcha and not any big event," said state Republican Party member and former county chairman Richard Granna. He told TPMDC in an interview that Kentucky voters are more concerned with the European financial crisis than "hashing up something from 1964 that's already been settled."

Yeah, sure.  Kentucky voters are more concerned about the Euro then they are Rand Paul saying that businesses should be allowed to discriminate, that coal companies should be allowed to continue to operate with little to no oversight or regulation, and that Obama's being too hard on poor BP.

The fact that nationally the GOP will have to come out across the board in favor of Paul's crackpot notions all but guarantees they're going to have real trouble come November.  Every GOP candidate needs to be asked if he or she agrees with Rand Paul's ideas.  And the idea that Paul was set up when the interview in question was last month...that's just laughable.

I'm noticing the same excuses to cover Rand Paul's ass that I did for Sarah Palin in late 2008...and we all know how that one turned out for the GOP.

Specifically Not Feelin' Randy, Part 3

Rand Paul continues to top his easy primary rampage over Tray Grayson with arguably the worst general campaign in the history of the universe as this time he manages to alienate anyone who seems to think BP or Massey Energy might be at fault in the recent spate of deadly accidents this year.  Steve M.:

There's a lot of snickering on our side right now because Rand Paul seems to have put his foot in his mouth again while talking to ABC's George Stephanopoulos about the Gulf oil spill:

What I don't like from the president's administration is this sort of, you know, "I'll put my boot heel on the throat of BP." I think that sounds really un-American in his criticism of business.

What's more, as Betty Cracker notes, "Paul managed to imply that maybe the reaction to the recent mine explosion was a touch too anti-business as well." He said:

I mean, we had a mining accident that was very tragic and I've met a lot of these miners and their families. They're very brave people to do a dangerous job. But then we come in and it's always someone's fault. Maybe sometimes accidents happen.

This should really, really hurt him, because, after all, he's a tea party candidate, and that means his supporters are self-reliant people with callused hands who really know the pain of something like a mine disaster.

You'd think that in coal country, Rand the populist candidate would be a little more careful backing Massey Energy over the people.  But as Steve points out, Ol' Rand did the best in exurban areas: the high-property value suburbs of Cincy, Lexington and Louisville.

So Paul's base is people whose fingernails never get dirty. Because, after all, that's who the teabaggers are.

They don't care if the oceans get brutalized or a few miners die. They just want you to cut their damn taxes.

Got that right. Hey fellow Kentucky voters?  You're getting played by the biggest corporate lapdog in the history of the world.  Think Rand Paul gives a damn about coal miners, oil riggers, car plant workers or truck drivers?  Think again.  The only thing that matters to this guy is the rights of business owners to run you into the ground.  You're just capital to the capitalists, dig?

And you can be replaced real easy.  You're just one more unfortunate cost that Rand Paul and his Galtie friends have to pay that lowers their profits.

And should there be any doubt, his friends in the GOP are right behind him, trying to change history by yelling ROBERT BYRD at the top of their lungs and ignoring the last 40 years of actual Democratic Party history, not to mention a GOP Presidential candidate named Barry Goldwater who ran in 1964 on repealing the Civil Rights Act.

These guys are playing you for fools with this populist act.  They could give a damn about the little people.  They just want you to hand over your vote to them so they can continue to rape the economy.

Zandar's Thought Of The Day

Galtie Wingers, that is the subset of Wingnuts that see unrestrained free market libertarian capitalism as the key to a Communist Utopia "worker's paradise", are always looking for reinforcement from fictional charters and popular culture, with the analogies between Ayn Rand's hero John Galt and whatever's hot this month on the intertoobs (free market libertarians love surfing the Socialist collective of the intertoobs, you know).

This month as the Rumpies discover, it's "John Galt is just like Iron Man!"  You know, like he's been just like Batman's Bruce Wayne, Rorschach from the Watchmen, The Green Lantern (some of them, but not that black guy John Stewart, that green Jade chick, or any of those weird alien Green Lanterns dammit!), the Green Arrow (despite being named Oliver Queen), yadda yadda forever and ever amen.

And actually, the best Galtie in pop culture is a villain, industrialist Andrew Ryan from the Bioshock series of games, who built his own underwater city to get away from everyone else and staffed it full of people who were the best and brightest in their field, scientists, artists, industrialists, doctors, and anyone who could afford a ticket to his city of Rapture, then said "free markets rule!  You're on your own!"  Major genetic breakthroughs were discovered that turned man into superman, and the place turned into a bunch of crazy people with shotguns and super-powers trying to kill each other.

And that's basically what Galtism boils down to.  Look at Greece, the Gulf Coast, Iraq, Afghanistan, Pakistan...that's what your "free market" has gotten us.

The Full Galtie

Richard Epstein takes to Forbes today to offer advice for states bleeding red ink:  Go The Full Galtie!

On taxation, don't play the mug's game of imposing ever higher marginal tax rates on ever lower amounts of income. Play it smart for the long haul. Low-income tax rates (and no estate taxes) will attract into states and communities energetic individuals who would otherwise choose to live and work elsewhere. Treasure their efforts to grow the overall pie. Don't resent their great wealth, but remember the benefits their successes generate for their employees, customers and suppliers. Repudiate the politics of envy for the social destruction it creates. Don't fret about the states and communities left behind. Let them adopt the same sound policies to keep people at home. The outcome won't be a zero-sum game. Enterprise is infectious. Open markets are the rising tide that raises all ships. High taxation is the tsunami that sinks them.

I love that.  "Don't fret about states and communities left behind," like they wouldn't include human beings.  Darwin the little f'ckers right off the map!  Open markets!  Free enterprise!  Crush your opposition and take what they have if they can't defend it!  The United States of America becomes May The Best State Win.

On real estate, change the culture so that getting permits for yourself and blocking them for everyone else is no longer the preeminent developer's skill. The government can still prevent buildings from falling down and fund infrastructure through general taxation. But don't let entrenched landowners and businesses raise NIMBY politics to a fine art. Today our dysfunctional land-use processes too often build thousands of dollars and years of delay into the price of every square foot of new construction. The instructive requirements on aesthetics and handicap access should be junked, along with the crazy-quilt system of real estate exactions that asks new developments to fund improvements whose benefit largely belongs to incumbent landowners. And for heaven's sake, learn the lesson of Kelo and stop using the state's power of condemnation for the benefit or private developers.

And while I agree somewhat with the Kelo stuff, junking handicapped ramps, well...see my response to paragraph one:  Darwin the f'ckers right off the map.

(More after the jump...)

The Kroog Versus The Galties

Paul Krugman arrives at the Randian truth of today's GOP:

Given this history, you might have expected the emergence of a national consensus in favor of restoring more-effective financial regulation, so as to avoid a repeat performance. But you would have been wrong.

Talk to conservatives about the financial crisis and you enter an alternative, bizarro universe in which government bureaucrats, not greedy bankers, caused the meltdown. It’s a universe in which government-sponsored lending agencies triggered the crisis, even though private lenders actually made the vast majority of subprime loans. It’s a universe in which regulators coerced bankers into making loans to unqualified borrowers, even though only one of the top 25 subprime lenders was subject to the regulations in question.

Oh, and conservatives simply ignore the catastrophe in commercial real estate: in their universe the only bad loans were those made to poor people and members of minority groups, because bad loans to developers of shopping malls and office towers don’t fit the narrative.

As John Cole points out, this is basically the description of John Galt's utopian paradise in Atlas Shrugged, "Galt's Gulch."

It is a magical place where global warming solves itself, the only thing health care reform needs is more deregulation, if the government would just get out of the way, Wall Street would self correct, and you get to eat Freedom Fries with every meal and never gain weight.

 Republicans aren't serious about anything, other than duping people into believing that only denial and ignorance can save them. It's applied elitism on a global scale.  "I got mine, screw you" is the new motto of the GOP.

Capitalism As Piracy, And Piracy As Capitalism

This Reuters/CNBC story just goes to show you that unfettered free markets always have winners...and losers.  Take for example Somali pirates, branching out into the world of venture capital:

One wealthy former pirate named Mohammed took Reuters around the small facility and said it had proved to be an important way for the pirates to win support from the local community for their operations, despite the dangers involved.

"Four months ago, during the monsoon rains, we decided to set up this stock exchange. We started with 15 'maritime companies' and now we are hosting 72. Ten of them have so far been successful at hijacking," Mohammed said.

"The shares are open to all and everybody can take part, whether personally at sea or on land by providing cash, weapons or useful materials ... we've made piracy a community activity."

Haradheere, 400 km (250 miles) northeast of Mogadishu, used to be a small fishing village. Now it is a bustling town where luxury 4x4 cars owned by the pirates and those who bankroll them create honking traffic jams along its pot-holed, dusty streets.

Somalia's Western-backed government of President Sheikh Sharif Ahmed is pinned down battling hard-line Islamist rebels, and controls little more than a few streets of the capital.

The administration has no influence in Haradheere -- where a senior local official said piracy paid for almost everything.

"Piracy-related business has become the main profitable economic activity in our area and as locals we depend on their output," said Mohamed Adam, the town's deputy security officer.

"The district gets a percentage of every ransom from ships that have been released, and that goes on public infrastructure, including our hospital and our public schools."

Amazing what a decade of anarchy does for advancing the laboratory of libertarian ideals, huh?

John Galt, eat your heart out.

Buyer Of Last Resort

Yet another back-door bank bailout program dumping billions in the laps of the megabanks, this time it's the Fed buying securities and the banks are getting the best price they can for selling them to the Fed, not the taxpayer getting the best price for buying them from the banks.

Wall Street banks are reaping outsized profits by trading with the Federal Reserve, raising questions about whether the central bank is driving hard enough bargains in its dealings with private sector counterparties, officials and industry executives say.

The Fed has emerged as one of Wall Street’s biggest customers during the financial crisis, buying massive amounts of securities to help stabilise the markets. In some cases, such as the market for mortgage-backed securities, the Fed buys more bonds than any other party.

However, the Fed is not a typical market player. In the interests of transparency, it often announces its intention to buy particular securities in advance. A former Fed official said this strategy enables banks to sell these securities to the Fed at an inflated price.

The resulting profits represent a relatively hidden form of support for banks, and Wall Street has geared up to take advantage. Barclays, for example, e-mails clients with news on the Fed’s balance sheet, detailing the share of the market in particular securities held by the Fed.

“You can make big money trading with the government,” said an executive at one leading investment management firm. “The government is a huge buyer and seller and Wall Street has all the pricing power.”

A former official of the US Treasury and the Fed said the situation had reached the point that “everyone games them. Their transparency hurts them. Everyone picks their pocket.”

So how did this happen? It is design, or incompetence? There are serious arguments here for both: the program wasn't thought through all the way, nobody seemed to realize that all of the Wall Street banks would collude on the Fed for the best prices they could get, of course the Fed was going to get ripped off when they announced ahead of time they were going to be buying ahead of time (causing the price to go up), nobody could have predicted, etc.

Of course, given the billions in cash and trillions in loan guarantees (latest price tag, $26 trillion) you'd probably have to go with "they did it on purpose". It's a near-perfect way to funnel cash to all the banks without Congressional oversight or angry voters noticing.

So, if you're looking for a way to understand how these banks that eight months ago needed hundreds of billions to stay alive and are now making record profits and giving out record bonuses, well there you are. It's miraculous how that works.

Yves Smith at nakedcap has more, it turns out that "paying back the TARP money" was just as much of a scam.

There is not a Wall Street derivatives trader on the planet that would have done the US Government deal on an arms-length basis. Nothing remotely close. Goldman's equity could have done a digital, dis-continuous move towards zero if it couldn't finance its balance sheet overnight. Remember Bear Stearns? Lehman Brothers? These things happened. Goldman, though clearly a stronger institution, was facing a crisis of confidence that pervaded the market. Lenders weren't discriminating back in November 2008. If you didn't have term credit, you certainly weren't getting any new lines or getting any rolls, either. So what is the cost of an option to insure a $1 trillion balance sheet and hundreds of billions in off-balance sheet liabilities teetering on the brink? Let's just say that it is a tad north of $1.1 billion in premium. And the $10 billion TARP figure? It's a joke. Take into account the AIG payments, the FDIC guarantees and the value of the markets knowing that the US Government won't let you go down under any circumstances. $1.1 billion in option premium? How about 20x that, perhaps more. But no, this is not the way it went down....

Of course we were played for fools. We were played for fools from the beginning. We've spent our entire economy saving the banks and pretending we're all fine.

We're not.

[UPDATE 11:49 AM] Think about the Fed's security buying scheme while the NY Times is complaining we haven't given out enough bailout cash to the "good banks" in an article ripe with Randian silliness. You're not being fair to the banks that didn't take TARP money! Why should they be punished? It's noooooot faaaaaaaair!

They're just getting money off of schemes like this instead, you see.

Paging Dr. Galt

Hugh Hewitt's argument against Obamacare is that thousands of doctors will simply retire or leave practice if it passes, causing such a critical shortage of physicians that America's life expectancy will decrease precipitously, and that Blue Dog Dems must be made to understand that they have to rise up and kill the bill before it reaches the Senate in order to save America.

Whatever happened to "First, do no harm?" Thousands upon thousands of docs will "Go Galt" if Obamacare passes? I understand and sympathize that being a doctor is arguably the most important job out there, with life and death hanging in the balance on a daily basis.

But I'm supposed to believe doctors will simply quit being doctors because Americans without insurance options are given insurance options?

If it really is all about the money, then retiring early seems rather stupid, doesn't it?

It's illogical GOP fearmongering, like everything else they do.

The Galt Argument Is A Loser

The basic Randian "John Galt" argument is that society is made up of makers and takers, makers contribute to society by production, takers sap society by consumption. As Atrios reminds us, what the hell do banksters actually produce?

Since the answer is "basically nothing" then why do the Galties worship them?

New tag: Galties.