Ending Banker's Holiday: Part Three (A Rant!)

This morning on This Week this guy, George Stephanopoulos, asked those sitting ar a table, George Will, Paul Krugman, and economist Nouriel Roubini (aka Dr Doom b/c he prophesied the housing crisis 15 minutes b/f it happened)(and some lady from Business Week I don’t know), if there ought to be established something like the 9/11 Commission to learn from the current economic crisis. Everybody was non-committal to dismissive, Krugman saying sufficient discussions were already taking place. His slightly bashful dismissive was hard to read. Was he smirking about the wasteful, ineffectuality of the 9/11 Commission? Or does he really think there is nothing policy-wise to be learned from the current mess?

Soon enough the conversation veered towards a table response to this very desire to blame someone or something for our current problems. (Who needs a Commission?!) A consensus ar the table quickly emerged to make the point that 300 million people in America (and another 300 million in Europe, Krugman added) were all responsible for going on a “25 year credit spending spree,” saving little and spending beyond our means. Really? That’s the ultimate cause of the biggest global economic crash since the 1930s? We were all just maxing out our credit cards too much?

Now it’s not that I don’t think there shouldn’t be consequences for not paying your debts but didn’t congress already establish what many consider quite harsh, unforgiving bankruptcy laws in 2005? B/f the crash? And I’m not suggesting that people who took on mortgage debts they couldn’t pay shouldn’t be held responsible. But isn’t there a sense of proportion here we’re missing when pointing fingers at millions of working people for receiving 70 billion in subsidies while four or five banks will be lavished w/ up to 2.5 trillion? So why have people gone on a 25 year credit spending spree, anyway? Might it have anything to do w/ the fact that real working class wages have not risen since the 1970s?! (U.S. Bureau of Labor Statistics)

Wouldn’t it be far more accurate to say that this crisis is the result of 25 years of supply side economics that were supposed to trickle down to the rest of us but never did; that this crisis is the result of 25 years of “free market” deregulation and predatory casino capitalism fed consumer pipe dreams and Scroogy anti-labor demagoguery; that this crisis is the result of a 25 year surge in income inequality of staggering numbers not seen since the Gilded Age? (The Height of Inequality)

And wouldn’t it be important that this be said so that we might not repeat this catastrophe again? So that we might not have the same self-serving assholes that led us into this mess continue in their machinations from positions of power? The length and depth of capitalist cyclical downslides were significantly longer and deeper (during the Gilded Age) before the Depression precisely because of the sweeping government interventions and social safety net measures established by the FDR’s New Deal. It wasn’t just a bunch of government bailouts of failed industries. Now in the biggest free-fall since the Great Depression are we going to forget that?!

I’ve read it suggested that this cover-up recovery is b/c the Wall Streeters gave more money to Obama’s campaign, reportedly 10 million plus (CounterPunch), than any other constituency. But Obama amassed the biggest campaign funding war chest in history. Over 700 million or something like that. Why would 10 measly million buy so much influence? Please let this be the media chatter drama of the moment, the left’s unreconstructed doomy fatalism, the last bleats of the Right’s dying free market fundamentalist ideology, and Obama’s careful, patient, measured steps to right the ship of state. B/c this growth model, Wall Streeters hustle a bubble like mad, then go on bonus junkets to the Caribbean, while Main Streeters take it on the chin, chewing on their own pride in austerity and sacrifice, can’t last. Eventually some angry, smart young people will rally a mob to tear the whole thing apart. And it’ll be fun while it lasted for those who hit the jackpot. But there will be hell to pay for the rest of us.

Ending the Banker's Holiday: Part Two

“Politics are hard to predict,” Lawrence Summers
(aka “The Professor,” Obama’s Chief Economic Advisor)

So the first attempt by the Obama team to address the banking crisis last Tuesday was a bust. It didn’t even please Wall Street, who at this point would seem to be the only constituency being given any serious consideration. I was hoping for better but, knowing what they had to offer, Summers and Geithner could not anticipate this political reaction?! The closest to an actual “plan” was barely distinguishable from ideas floated by Henry Paulson and the Bush team last fall. And still hung-up on the same question: what price should the public pay for the “bad” assets amassed by the banks?

“Markets are a great way to organize economic activity,
but they need adult supervision.” –Wall Street Journal

Most distressing is the contrast between the Obama team’s dithering and what is emerging from smart Economists as a few obvious needed steps to be taken:

1) Quit the charade to—what?— fit some myth of private ownership that has always been a gross distortion of American history anyway. Nationalize the banks, even if only for a temporary period. It is an insult to taxpayers to pour hundreds of billions of public money into the private banks black hole, from 450 billion (Krugman) to 2.5 trillion (Reich), without any means to exercise control over how the banks spend that money. On the one hand, 18 billion paid in bonuses to bank managers since the meltdown is small potatoes; on the other, it is indicative of the fact that these people do not operate in the world where the rest of us live, where people actually have to work for a living, and is a flagrant slap in the face to the public bailout. These are NOT people we can trust to make Wall Street work for Main Street, duh.

2) Many agree that a crucial tipping point in our current predicament was the repeal of the Glass-Steagall Act in 1999. This Depression Era legislation set rules about the appropriate business of banks and established boundaries to avoid conflicts of interest in the financial sector. Its repeal— ratified by the Clinton-Rubin team, lest you’d like to blame all this on the Bushies—unleashed unsavory links between investment banks and junk money managers and fraudulent real estate mortgage companies. Prior to the repeal subprime mortgages constituted 5% of the real estate market; by 2006 the number had reached 30% (Wikipedia). Capitalism is by definition cyclical, alternating between bull runs and bear markets, but it’s the repeal of Glass-Steagall that has blown this most recent bubble to such gigantic, at this point still seemingly bottomless, toxic, world-wide proportions. (CounterPunch.)

3) The crux of this bubble trouble was the simple fact that Wall Streeters and their minions were making beaucoup dollars selling and reselling debt assets without any personal financial risk, without having to maintain any minimum of capital to debt ratio, let alone any responsibility for reporting these tenuous financial arrangements. The credit rating agencies whom should have cried foul failed miserably. Even though as early as ’03 Warren Buffett and a few other prominent members of the business community were calling unregulated derivatives markets “timebombs,” the Securities and Exchange Commission, our government watchdogs, did nothing. Perhaps the poor reception on Wall Street to the Obama team’s vague, tepid plan indicates that at this point even a majority of Wall Street has had enough of this insider’s game. How could we expect the Wall Street elite— including Geithner and Summers— to reform themselves? It’s time to clean house, closing the revolving door between Wall Street and Washington, establishing new independent government oversight that will reestablish rules that reward hard work and honesty. Isn’t this what Obama promised he’d do anyway? (Baseline Scenario.)

Steps 1 and 2 seem inevitable if it wasn’t for the dithering. But can they be carried out substantively without step 3? None of this should be surprising after watching Obama select as his economic advisors, one after another, from the Clinton team. A group as responsible as anybody for setting the stage for the current debacle. And, still, I want to hang on to something in Obama’s rhetoric. The stuff necessary to finally ending this second Gilded Age out of the simple, sober recognition— breaking with the supply-side, trickle-down delusions of the Reagan Revolution— that a healthy middle class is the most important investment for long-term economic growth.

Quotable:

“Apparently, the president has a half-brother named George Obama, who lives in Kenya, and George Obama was arrested on Saturday for possession of marijuana. He was walking around the village telling people his brother was the president, so they assumed he was high and arrested him.” -Jimmy Kimmel

cloying sounds that make my teeth hurt

It’s probably Feist’s fault. Her silly enthusiasm is sexy. I liked “Mushaboom” as much as the next pop fan. But “1234” was the tipping point. Mentioned frequently in writing last year near the word “magical,” it triggers in me a mad impulse to destroy. And now it has incited a rash of cloying singer-songwriter tunes that make my teeth hurt.

It’s not the metrosexual hybrid mixes of acoustica and skipping electro-lite beats and moody synthesizer melodies. The only Death Cab For Cutie I can stand came in the Postal Service. It was that sublime 2003 record that alerted me to the uptapped alternative pop possibilities of mashing the sensitive side of indieland with some electronica. French popsters AIR (or Serge Gainsbourg?) pioneered this particular genre vibe mixing sweetly sardonic hooks and soundtrack drama and digital tempos in the late-90s.

Some of the recent problem appears to be a drift into organic singer-songwriter Puritanism combined with a kiddie pop fixation. Recent hits “New Soul,” by Yaim Nael and “Bruises,” by Chairlift, sport a naifness that is unbelievably grating. What makes Goldfrapp’s “Fly Me Away,” a tune certainly not lacking in silly love song sentiment, great is the glammy disco ball that spins overhead. Kick off those Birkenstocks, girls.

Better is Lily Allen’s balance of acid lyrics with the sweet melodies and smooth tempos. Or the dark qualms in Lykke Li’s shuffling ditties that echos outward like a splash on a still pond. The Bird and The Bee go for similar contrasts but only have artless slogans to offer for words. Kate Nash has wit but no swing. And, still, the doomy lush tendencies of Allen and Li can be tiring.

Madonna’s “Miles Away,” from an otherwise dreary album, is a worthy model. Too bad more young singers aren’t trying to copy Robyn. Making it something you can move to is always a good thing. Not that I don’t think there’s room for more roots or rock music flourishes in the indie electronica mashup but the recent run of nursery-rhyme cutesiness has gotta go.

To my sweetheart on Valentine’s Day—

Please stop dancing in my head
I have cried till I'm half dead
Please stop dancing in my head

Please stop dancing in my mind
I have cried till I'm half blind
Please stop dancing in my mind

Please stop dancing in my heart
I can't seem to make it art
Please stop dancing in my heart

Please stop dancing in my soul
I can't make it rock and roll
Please stop dancing in my soul

Please stop dancing in my sleep
I can't make it twang and beep
Please stop dancing in my sleep

Please stop dancing in my eyes
I can't make it pretty lies
Please stop dancing in my eyes

Please stop dancing in my blood,
ill wind blowing no one good
Please stop dancing in my blood

Please stop dancing in my life
I will never be your wife
Please stop dancing in my life.

By Stephin Merritt, The Magnetic Fields

Blossom Dearie was a Songbird

Blossom Dearie, who died on February 7 aged 82, was one of the great interpreters of American song in the post-war era. She did not like to be described as a jazz singer (although she grew up in a jazz milieu), nor as a supper-club singer (although she often entertained in supper clubs); a mixture of the two, she preferred to call herself "a songwriters' singer".

- Telegraph U.K.

(See NY Times Obit.)

dope, money, & baseball

Gawd, at least A-Rod has confessed. It's the lying, denials, the prevaricating that drives me most mad. The ass covering of the league through this whole debacle stinks, of course. And the mock outrage of the media— A-Fraud’s a cheater, No!!!— is just grating. Why can’t we all just agree that between ’94 and ’04 a lot a lot of players were juicing? Bonds, McGuire, Sosa, Giambi, Clemens, Boone, Brady ‘fucking’ Anderson, et cetera. (The Onion.) One hundred and four players tested positive in ’03. If they tested the whole league that means about 14% were found juicing. Let’s just add an asterisk to those years and offer everybody amnesty. Form some sort of independent truth commission to clear the deck: you can come forward w/ the truth and you’re forgiven; you don’t and evidence is found that you were using and you’re Pete Rosed. For me, it’s the dribs and drabs, the mini media event dramas that are killing the sport, turning it into something more like wrestling: will Clemens’ ‘roid rage get the best of him? will A-Rod ever make it to the Hall of Fame now?! It’s almost as if Selig thought this were a way to make baseball fans out of folks who watch Bad Girls and Court TV.

Mr. President: End Banker's Holiday

Okay, it looks like some kind of stimulus bill spending near a trillion dollars is going to be passed soon. This is necessary. Consumers have stopped consuming. (Or reduced consumption significantly.) Demand is down, so production slows, and jobs disappear. Government spending (as opposed tax cuts, BTW) is the surest way to stimulate demand and create jobs and so increase consumer spending and consumption.

But don't we need to consume less? Aside from the lost jobs, might not that be a good thing for environmental reasons? In the long run, yes; it's necessary. But better we make the adjustments to a more sustainable economy gradually or at least consciously, in big reform responses to shocks to the system like the current one. The miseries in terms of job loss and poverty visited upon the vulnerable by doing nothing ab the current crisis are not something I want to see. The press mentions the possibility of 10% unemployment w/ a shudder. I don't know how dire that'd be; I lived through 11% in the early '80s and I don't remember much looting and killing. But what would 20% (it was supposed to have reached 27% at the depth of the Depression, and unemployment statistics are notoriously known to be lowball)look like? Protests in the streets, to be sure. More crime and violence, undoubtably. Child hunger? Impoverished seniors? Increased homelessness. Etc.

We want to rebuild now, get people back to work and spending, w/ programs/projects that move us towards a sustainable, green economy. And government spending is the best way to get the job started. Right now, the only way.

What I don't get is how come in the partisan stimulus debate there has been virtually no discernable talk ab what's going to be done ab fixing the financial markets that started the collapse?

Last night all the talking heads, from both sides, were going on ab how "ordinary Americans" feel ab the stimulus package, desires for jobs and tax cuts, fears of big government and deficits, etc. Right, people want jobs and job security, they want to know that what they have is still going to be worth something tomorrow. But what's hanging over the stimulus debate is the fact that Wall Street, the very people who started this titanic mess, have already been given hundreds of billions of dollars w/out any accountability; w/out any indication that the bailout fixed anything; without any sense that the bankers get that their wreckless gambling w/ "other people's money" is "shameful," unacceptable.(See link.)People want to know that this is not the foxes guarding the hen house.

The right has for the moment gained traction w/ their own standby, accusing Obama's plan of fatcat Liberal spending. Under the circumstances the argument is beyond stupid, it's dangerous. But they've been able to do this largely, I think, b/c ordinary Americans don't get why banks are getting hundreds of billions of dollars w/ no strings attached while working people continue to lose their jobs and homes. Limiting CEO salaries seems like the right thing to do, apoligizing for nominating a guy who has been in bed w/ the industry he's supposed to bring under control, okay, but this is little more than defensive PR window dressing.

The first thing Franklin Roosevelt did during the Great Depression was shut down the banks and have them audited. Then he started the Federal Deposit Insurance Corporation which, basically, required banks to hold at all times some percentage of their deposits. This is widely understood as returning stability and trust in the banking system. Not coincientally the crux of the present catastrophe has a similar ring: "loan originators retain no residual risk for the loans they make, but collect substantial fees on loan issuance, which causes unchecked degradation of underwriting standards." (Wiki) Let people play w/ other people's money and they will eventually gamble it away. Obviously, we need some new rules, and credible, transparent, independent enforcement of those rules. But nothing substantial is being done.

Ordinary Americans may not understand tranches and CDO swaps but they know that the build up to the current economic catastrophe has been an insider's game. Obama's economic team is all insiders but he got elected, at least in part, b/c he promised to change the way the government does business in Washington, to uncouple the unhealthy relationship betw big business and politics. He has believers in ordinary Americans but he needs to convince Wall Street before he loses Main Street. Do so and old arguments ab liberal spending versus tax cuts, supposedly hanging up the stimulus bill will stop getting in the way.

R.I.P. Lux Interior

Lux Interior, of punkabilly originals The Cramps, passed away this morning due to an existing heart condition. Following is one of my favorite punk songs by The Cramps, "Human Fly." Feel free to stomp around while singing along. Lux would like that.



Well I'm a human fly
It's spelt F-L-Y
I say buzz ,buzz, buzz, and it's just because..
I'm a human fly and I don't know why
I got ninety six tears in my ninety six eyes.

I got a garbage brain, it's drivin' me insane
And I don't like your ride, so push that pesticide
And baby I won't care, 'cause baby I don't scare
'Cause I'm a reborn maggot using germ warfare. Rockin'
Zzzzz...

I'm a human fly
It's spelt F-L-Y
I say buzz, buzz, buzz, and it's just because..
I'm a unzipped fly, and I don't know why
And I don't know, but I say

Buzz...ride tonight
And I say buzz...rocket ride
And I say buzz...I don't know why
I don't know I just, don't know why.

Superbowl Sunday

Wow,two really, really good superbowls in a row. I'm going to have to revise my sense of Superbowl Sunday as one of those perennially over-hyped American holidays like New Year's Eve and Halloween. There were so many big plays. The Cardinals are ab to punch it in from the one and take the lead b/f the half and the Steelers return the turnover 100 yards for the score! And still Warner and the Cards recover for a heroic, two-touchdown 4th Quarter comeback (Fitzgerald is this amazing combination of craft and athleticism), only to be turned back by the Steelers, one last time, w/ barely over a minute to go. Rothlisberger's swashbuckling ability to stay alive to make a pass on the money, all day long, was ridiculous. And then that kind of catch by Santonio Holmes w/ less than a minute to go?! Great action.

There was this piece in the Sunday NY Times ab which of the big three sports can honestly lay claim to America's "national pastime": football wins all the polls and makes the most revenue, baseball sells the most tickets to games, and more Americans play basketball than either the other two. I'll stick w/ baseball. Still, how come football is the most militaristic and bureaucratic and macho violent of the big three pro sports but seems somehow to have the least crazy player salaries and drug problems and the most competetive parity?

And then there was the Bruce halftime show. The guy is a shadow of his former self musically; has been for almost thirty years. But in terms of sheer arena rock entertainment values, even if they are the same moves he's been doing for all these years, did he not raise the roof? At the very least, there was a showmanship bravado there that I cannot recall at all in any recent superbowl halftime performance, Tom Petty, Janet's left tit, whathaveyou.

Anyhow, a good day for some Americana. Must be the Obama factor!