Tuesday, September 30, 2008
ECONOMICS FOR DUMMIES
Thursday 25 September 2008
by: Patrick Lagacè, La Presse
Posted today by Mark from today's truthout.org
O.K., let's begin at the beginning, all right? Let's begin with the cost of this Wall Street rescue plan by Uncle Sam.
"There's too many of you!" (Art: Pancho / Le Monde)
We're talking about 700 billion American dollars.
Yeah! Seven hundred billion dollars is Taiwan's GDP; it's the equivalent of the world's 21st economy. It's only slightly less than the 829 billion US dollars that circulate as bills and coins in the world.
I know; it's still rather vague. It's still abstract.
Let's bring it down to what we can understand: Laying 700 billion US one dollar bills end to end would allow us to go two-thirds of the distance from the Earth to the Sun, or 104 million kilometers. They would weigh the same as seven American aircraft carriers.
O.K., I see in your eyes that this all is still hazy. I'll try to do a better summary.
You see, the problem is credit. The banks don't have enough dough and so they are reluctant to lend any. The value of houses has fallen; that of securities backed by mortgage payments also. So those assets are no longer salable by the banks. Financial institutions are choking.
They're choking so much that some have had to renounce the market's invisible hand to embrace - kiss kiss - the government's, which came to the rescue of giants like AIG.
So, American banks hesitate to lend what dough they have.
In an economy based on credit and $20 DVD players sold at Wal-Mart - so many $20 financed by mortgage loans against their house - Americans can't not borrow the money to finance their legitimate pursuit of happiness, guaranteed, as everyone knows, by the Declaration of Independence.
This happiness, as everyone knows, is guaranteed by the purchase of $20 DVD players (but that's not in the Declaration because Wal-Mart didn't exist in 1776) and - up until just recently - by the purchase of $200,000 houses for $450,000, the price set by the market, which market is always perceptive and right.
So, to correct the excesses of an economy doped-up by a real estate bubble, itself doped-up by the easy credit banks were giving their clients like Santa Claus giving out presents to kids on December 25, the American government has decided to administer horse medicine.
I mentioned those 700 billion dollars intended to reestablish the era of easy credit with the goal of allowing every American to buy a new $20 DVD player at Wal-Mart every day. And perhaps even to go back to paying $450,000 for houses worth $200,000 (with no down payment).
That's basic, right?
Good, now we're on the same wavelength.
That's why President George W. Bush took desperate remedies, that is, to delay the extreeeeeemely popular show, America's Got Talent (referring to talent in singing, dancing, acting, of course, not to talent in financial planning) 17 minutes.
So, Mr. Bush, with all the conviction he is famous for, no doubt after having prattled with his personal friend, Mr. Jesus-Christ, addressed the American people in one of those solemn speeches the Americans adore.
"Our economy is in danger," he soberly announced, with a sincerity rivaling that which he displayed before the invasion of Iraq. Then, the 43rd president assured the American people that the present dead-end was, "according to most economists," the fruit of problems that had been developing over the last ten years linked to the massive influx of foreign capital into the chosen country of God Himself.
Strangely, Mr. Bush did not mention that these last 18 months, all the ornaments of his administration snubbed the (many) economists who dared assert that a significant part of the American economy resembled a kind of pyramid scheme based on too-easy access to home ownership and, more properly, a defective government regulatory framework.
Why did Mr. Bush forget to mention that? No doubt an omission on the part of the technician in charge of parading Mr. Bush's text through the teleprompter.
So there we are, blissfully wondering whether 700 billion dollars stuck together can trace a path to the Sun. And whether the American economy will not experience a black and white period like the Great Depression.
Of course, we could worry. After all, if the Americans catch a cold, it's well-known, Canada ends up sneezing. Imagine when they have a Depression: that's the schizophrenia in store for us ...
Personally, I see absolutely no reason to worry: if George W. Bush conducts the war on economic gloom with the same dexterity with which he conducts the war on terrorism, I think we can rest easy.
Mr. Bush, after all, is the man who struck down Saddam Hussein. No little credit crisis is going to scare him; that's for sure.
Saturday 27 September 2008
by: Michael Winship, t r u t h o u t | Perspective
Franklin Delano Roosevelt. (Photo: macslegalhistory.com)
We thirst for leadership, vision, someone who can speak to us in a way that refuses to avert its eyes from the crisis but shines a light of truth upon the problem, then offers hope and possible solutions.
If this is indeed an economic 9/11, as some have suggested, we need that voice now. Right now. And so far it has yet to be heard. Not from McCain, or Obama, or President Bush.
After September 11, 2001, the President stood on a pile of debris with a megaphone and said that the whole world could hear the rescue workers and shared their grief. Soon, words of sorrow degenerated into bumper sticker rhetoric: Axis of Evil, Wanted Dead or Alive, Mission Accomplished. Nor, at a time when people were ready to do whatever needed to be done, was there a call for national sacrifice. Instead, the President invoked not poets or statesman past, but variations on a tee-shirt slogan: when the going gets tough, the tough go shopping.
Over the last two weeks, he has been seen infrequently and when he has spoken his words have rung false. This Harvard MBA speaks Economics as though he were phonetically reading a foreign language.
The President has seemed underinformed, disconnected and not, you should excuse the word, invested. In his address to the nation Wednesday evening, he said that the government was blameless for the financial crisis; it had done what it was supposed to do but had been victimized by overseas lenders, greedy banks and Americans taking on more credit than they could carry. And as he has done too often before, he tried to make us afraid.
"The government's top economic experts warn that without immediate action by Congress, America could slip into a financial panic, and a distressing scenario would unfold." President Bush said. "More banks could fail, including some in your community. The stock market would drop even more, which would reduce the value of your retirement account. The value of your home could plummet. Foreclosures would rise dramatically. And if you own a business or a farm, you would find it harder and more expensive to get credit. More businesses would close their doors, and millions of Americans could lose their jobs."
Contrast what he had to say with President Franklin Delano Roosevelt when he was sworn into office for the first time, in 1933, during the Great Depression. Rather than foster anxiety and panic, FDR proclaimed, "The only thing we have to fear is fear itself," despite the fact that 13 million were unemployed, nine million had lost their savings and a quarter of the banks had closed. Wages had plummeted 60 percent. "The only thing we have to fear is fear itself" is the phrase that everyone remembers, but here's a little more of what FDR had to say:
"This is preeminently the time to speak the truth, the whole truth, frankly and boldly. Nor need we shrink from honestly facing conditions in our country today. This great Nation will endure, as it has endured, will revive and will prosper ...
"In such a spirit on my part and on yours we face our common difficulties. They concern, thank God, only material things. Values have shrunk to fantastic levels; taxes have risen; our ability to pay has fallen; government of all kinds is faced by serious curtailment of income ... More important, a host of unemployed citizens face the grim problem of existence and an equally great number toil with little return. Only a foolish optimist can deny the dark realities of the moment ...
"The money changers have fled from their high seats in the temple of our civilization. We may now restore that temple to the ancient truths. The measure of that restoration lies in the extent to which we apply social values more noble than mere monetary profit ... If I read the temper of our people correctly, we now realize, as we have never realized before, our interdependence on each other; that we can not merely take, but we must give as well."
Idealism and truth-telling intersected in FDR's speech. There was no equivocation, no pass-the-buck. But as decades passed, the belief in government as an instrument to advance the common good was rejected. Ronald Reagan became President, proclaimed that government was not the solution but the problem, and joked that, "The 10 most dangerous words in the English language are, "Hi, I'm from the Government, and I'm here to help."
Now, like a last-minute, battlefield conversion, the White House has rediscovered the value of government as backstop - not to relieve the misery of the people but the agonized indigestion of financial institutions suffering morbid obesity because they ate too much at the big shot banquet.
In these bailouts, there is no altruism but cynicism, the same attitude that scorns the Constitution and tramples civil liberties, that uses national tragedy to advance an unrelated global agenda, that doesn't give a damn as it tries to game and subvert the electoral process because deep down it fundamentally disdains democracy. Winning isn't everything; it's the only thing.
We need solutions, not sound bites or pandering. We need inspiration and hope, not spin or cant. The way things are going, we may have to find it within ourselves. But in the next five weeks, if one of the candidates can discover how to articulate that hope without pandering, can define our national trauma and tell us how to try to make it better without terrifying us, can give us something to believe in without false expectations, he will be our next President.
Michael Winship is senior writer of the weekly public affairs program Bill Moyers Journal, which airs Friday nights on PBS. Check local airtimes or comment at The Moyers Blog at www.pbs.org/moyers.
|1 of 13||Next Photo|
Monday 22 September 2008
by: Robert F. Kennedy Jr., Ring of Fire
Robert F. Kennedy Jr. has expressed concern for the safety of the vote in the 2008 election. (Photo: wikimedia.org)
Transcript from Ring of Fire on Air America Radio
Bobby: "There are about 30 scams the Republicans are deliberately using, particularly in the swing states to get Democratic voters off the rolls. These scams originate in the so-called Help America Vote Act which was passed after the Florida debacle in the year 2000. It was originally suggested by Democrats and Republicans but it was passed by a Republican congress with a Republican senate and a Republican president. And instead of reforming what happened in Florida it basically institutionalized all the problems that happened in Florida. And institutionalized a series of impediments that make it very difficult for Democrats to register, for Democrats to vote and then for Democrats to have their vote counted.
"One of these requirements under HAVA is called "the perfect match" and what that does is little known but it is devastating. A quarter of the voters in Colorado have just been removed from the rolls because of this - just this one scam. And what it does is they use a computer system to compare your registration application to all other government records of you in the state. So they'll look at your social security records, your motor vehicle records and any time you've had any interaction with the government and if there is any information on your voter registration that is different than the information on another government record that they find they remove you from the voting rolls.
"For example, if I registered as Robert F. Kennedy Jr. and yet my motor vehicle license said Robert Frances Kennedy Jr. I'd be removed from the rolls. If your initial is different, if you leave an initial out, if you leave a "Jr." out, if you leave a hyphen out in your name. And what they've done is a study in New York that said 80% of the errors are errors that were done by state clerks who are taking down this information. And particularly immigrant communities that people tend to vote Democratic, people have names … spell Muhammad with an "o" instead of a "u" (crosstalk)
Pap: "Are the Democrats Suing to Stop This?"
Bobby: "No, the Democrats are doing nothing to stop it. In New Jersey, which is a swing state, 300,000 voters in New Jersey were just sent letters saying that they are now ineligible to vote. New jersey is nice enough to actually notify them - most states will not even notify them. And New Jersey intends to send out 870,000 letters so that is three quarters of a million people off the voting rolls in a state that could decide this vote by 50,000 votes. And these are Democrats that are being pushed off the rolls.
Bobby: "Let me tell you about one other of these scams people should know about. If you're a newly registered voter - and of course the Democrats have done these gigantic registration drives - 12 million people on registration - if you're a new voter you MUST include your license or some other state I.D. when you come to vote. What that means is that if you're a college kid (and college kids now - they're sending in absentee ballots - they're not going to the voting place, they do everything online or they do everything remotely - they don't dream of going to the precinct house voting on election day and waiting in a long line) so if they send in the absentee ballot and they don't include a color copy of their license their vote is going to be thrown into a trash can. And none of these people know this because you have had to read the law in order to know it. So there is no notification for when you fill out your registration form, so all of those 12 million people that the Democrats have registered: those ballots are going to be just thrown out.
Pap: "And if Democrats won't talk about this how the hell's anybody gonna know about it? I'm involved with this kind of thing every day - I didn't know that until you just told me. The media is not talking about it. How in the hell is somebody gonna find this out? It's just incredible.
Bobby: "Hopefully - Obama is getting 66 million dollars a month - hopefully somebody in the Democratic organization is going to pay some attention to this before election day.
Posted by Mark from truthout.org
This polling organization has been showing up in realclearpolitics average for the past week or so. The results have been curious. Here's the explanation from today's lead story on fivethirtyeight.com. Mark
I have gotten an increasing number of questions about the GWU/Battleground Poll, which presently gives John McCain a 2-point national lead, even as essentially every other current national poll shows Barack Obama with a lead of at least 5 points.
Just because a poll is an outlier doesn't necessarily mean that it's doing something wrong. Pollsters may have legitimate reasons for having a different perspective on the election, and they may also occasionally produce odd results due to chance alone.
In this case, however, the poll seems to be making a relatively fundamental mistake: it is not weighting by age.
Take a look for yourself at the "weighted tables" that Battleground released a couple of days ago (PDF). These crosstabs provide a ton of detail -- kudos to Battleground for doing so -- but unfortunately there is one red flag. This is the age makeup of their weighted sample:
18-34 17%Intuitively, this probably looks fairly wrong to you -- almost twice as many age 65+ voters as age18-34 voters? And in fact, it almost certainly is wrong. By comparison, here is the approximate age composition of the electorate in 2004, as according to the US Census Bureau**:
18-34 26%Battleground's numbers are not even close. About 19 percent of voters were aged 65 and older in 2004, as compared to the 31 percent in the Battleground sample. On the other hand, 43 percent of voters were aged 18-44, as opposed to Battleground's 29 percent. These differences are much, much too large to be attributable to chance alone. (And all of this is assuming that turnout in 2008 will match that in 2004, even though youth turnout increased markedly in the primaries and is at least somewhat probable to do so in the general election.0
9/30 Daily Kos R2K Tracking Poll: Obama 51, McCain 41
Tue Sep 30, 2008 at 04:19:20 AM PDT
Today's Daily Kos Research 2000 tracking poll has Obama up over McCain 51-41. All trackers are data from three days prior to posting, with R2K numbers from today (yesterday's numbers in parentheses) and the other trackers are from yesterday (previous day's data). LV=likely voter, RV=registered voter.
Today's trackers will have Sat-Mon post-debate data, and will not fully reflect post-debate sentiment. The trackers do, however, include McCain campaign suspension/resumption days, and it's the financial crisis that is driving these numbers.
Obama McCain MoE +/- RV/LV
Research 2000: 51 (51) 41 (42) 3 LV
On successive days, Obama was up +9 Sat, +11 Sun and +11 Mon (MoE +/- 5.1 for individual days.)
One poll to highlight today: Gallup on the assessment of crisis response (click the pic for more readable graphic.)
Stephanopoulos: Voters blame Republicans for bill failure07:19 | 30/09/2008
ABC, Good Morning America
Stephanopoulos stated that the earliest anything can get done in Congress will be Wednesday. He said that "the power is in Wall Street now" as "another dropoff in the market on Wall Street would create more pressure" on Congress and force action in Congress.
Stephanopoulos revealed that a new ABC News poll coming out this morning asked voters who they blame for the failure of the vote. "The voters seem to be blaming the Republicans in Congress more than the Democrats in Congress" and "for the overall economic situation...voters tend to blame President Bush."