On Monday we commented about the proposed G.S.E. bailout plan, which was hastily cobbled together over the the last weekend by officials of the Federal Reserve and U.S. Treasury Department, with an object of expanding FED authority to provide rescue taxpayer funding, to prevent the twin public/private hybrid mortgage industry entities, Fannie Mae and Freddie Mac, from further sliding into financial oblivion.
We watched FED Chairman Ben Bernanke's testimony before the Senate Banking Committee yesterday, during which he made his first pitch to congress for expanded FED financial and regulatory authority.
We've been scouring the web for one particular video segment of yesterday's committee hearing, and the one we were searching for finally popped up on YouTube about an hour ago. We hope you'll share our delight, as Kentucky Senator Jim Bunning tears FED Chairman Bernanke "a new one." (WCF Disclosure: We have no idea who the Arab guy is who rattles on in the left frame, or why he chose to mug and comment on camera. Fast forward to 1:42, and you can skip most of the guy's blathering, and get to the real red meat):
Don't let the cat get your tongues.
20 comments:
I realize it's a drop in the bucket, but I'd like to see those who got filthy rich off debacles like this be required to pay back their ill-gotten gains.
Although Bunning is a laughingstock, it's a rather pathetic situation. Simply Google "Bunning Alzheimer's" for a smorgasbord of commentary on the former baseball hero the geniuses of Kentucky have elected to the Senate. (They have the same impediment as the electorate of Ogden.)
In re: Curses on FDR
Permit me to quietly note that very nearly all of the major banking scandals and collapses --- including the Savings and Loan crisis when something north of 4 thousand banks failed, holding federally insured deposits, that cost the taxpayers many billions of dollars --- could have been avoided had Republicans not gutted and outright repealed the key New Deal era banking regulations [like the now gutted Glass Stegal Act]. Repealing those limitations on banking activities... always called "getting government off the backs of business"... is what made but the SandL crisis, and the current one, possible in the first place.
By the way, gutting those regulations, and those on the energy industry that made Enron possible, were all strongly advocated by Sen. Phil Gramm, now chief economic adviser to John McCain.
Instructive piece on Robert Reich's blog, headed " The End of the Great Moderation, the Bailouts of Freddie & Fannie and Wall Street, and the Tattered Safety Net for Everyone Else". It's the second item currently posted on the blog. Link here.
Here, btw, is Reich's current recommendation on how to handle Fannie Mae and Freddy Mac meltdowns. I like it:
Tuesday, July 15, 2008
A Modest Proposal for Ending Socialized Capitalism
Socialized capitalism of the sort the Fed and the Treasury are now practicing, consisting of private gains and public losses, is untenable. On the other hand, it's also true that giant Wall Street investments banks as well as Fannie Mae and Freddie Mac are too big to fail. How to reconcile these conflicting principles?
Here's a modest proposal: When taxpayers insure a giant entity against loss -- as we now are with Freddie, Fannie, and Wall Street investment banks -- those entities must agree that:
(1) for the duration of the bailout, their top executives cannot receive total annual compensation higher than that received by the President of the United States, and
(2) the government gets five percent of their current valuation as shares of stock (roughly representing the benefit to their shareholders of the federal insurance) -- so that if and when the entities become profitable again, taxpayers are compensated for the risk they've taken on.
Article posted on the Reich blog, link in comment above.
Permit me to quietly note, as the latest version of "that damned FDR" chorus tunes up, that it was another New Deal creation... the Federal Deposit Insurance Corporation [FDIC] that is currently stabilizing the banking system by insuring deposits of ordinary folk up to $100K. Think the run on IndyMac was a problem? Consider it multiplied five or six thousand times as folks raced to withdraw deposits and keep them "safe" under the mattress.
BTW, Indy Mac, the wires just announced, is now under investigation for commercial fraud in its real estate loan operations.
Ah, yes, if we could just "get government off the backs of business" and let all the public-spirited CEOs and bankers, like Ken Lay for example, lead us out of the economic wilderness....
Rudi:
You might want to do a little digging on Bunning's mental state. It seems his staff is largely doing the Senator's job and protecting him from the public noticing his condition. And that is a full time job now. Bunning, at times in public venues has seemed barely aware of where he was or what was happening around him. But like many in his situation, he has more lucid periods and less lucid ones. So you might want to look around a bit for more information before you completely dismiss MM's comments.
Bunning's "mental state?"
look at the video again. It's a masterpiece of impromptu argument, I think.
And which folks are arguing that Bunning is nuts?
Oh yes... The same pack of Keyensian socialists, of course, who are busy reducing the value of the dollar to near-zero..
You're a lovable guy, Curmugeon, but it's disturbing that your brain shuts down on economic issues.
Rudi:
As to reducing the dollar's value, permit me to suggest that is largely the consequence of the Bush Administration and its docile Congress running the national debt into the stratosphere over the last seven years by their fiscally insane "supply side" economic policy, which in plain English meant "cut taxes hugely, while we monumentally increase spending." Unless you're arguing that Bush and Hatch and Bennett and their ilk are really Keyensian socialists, in which case it isn't only Bunning's mental state I'd be questioning.
I gather from your answer you haven't done any digging on Bunning's problems, which first became publicly noticed in the months before his last election. Let me humbly suggest, again, that you do a little digging around before completely dismissing MM's comments.
ON Bunning on the tape:
"Look at the video again. It's a masterpiece of impromptu argument, I think."
OK, I did look at it again. A master piece of impromptu argument? Hardly. He's reading a prepared statement.. and stumbling here and there over his own words. Nothing "impromptu" about it.
Though I have to admit, I really do enjoy it when right wing Republicans accuse other Right Wing Republicans of being socialists. Man, this stuff is better than John Stewart does.
Bush, Hatch, Bennett et al --- pink right down to their jockey shorts, Bunning claims.... God, I just love it!
"Unless you're arguing that Bush and Hatch and Bennett and their ilk are really Keyensian socialists..."
Yes, That's exactly what I'm arguing. 90% of the US Congress has no economics training at all, and thus believe that economics is actually a practical science -- like Engineering.
"I gather from your answer you haven't done any digging on Bunning's problems, which first became publicly noticed in the months before his last election."
I googled it before my last post, and had to laugh. Once again I ask: Are we going to get down to smear tactics... or will we take
Bunning's off-the-cuff statements on their own merits?
Rudi:
Well, I'm not at all sure formal training in economics is necessary to be a wise legislator. I can think of a lot of people with a great deal of formal training in economics... Phil Gramm comes to mind... who haven't got the sense god gave to an oyster. I'm sure you could too.
Quips based on stereotypes are not often instructive, but I think this one may be: "If you took all the economists in the world, and laid them end to end, they wouldn't reach a conclusion."
"Well, I'm not at all sure formal training in economics is necessary to be a wise legislator."
At the very least, I believe every legislator ought to be well-educated enough to know that economics (still a social science, actually, AFAIC) is about as far from an "exact science" as you can get.
About that, I'm sure all reasonable and well-educated people ought to be able to agree.
Rudi:
Just to cheer us all up, I caught part of CNBC's "The Closing Bell" this afternoon before coming in to teach a night class. Some European analyst was being interviewed about Bernecke and the Fed. He said he sympathized with Mr. B's problem. He has to deal with inflation, which poses the greatest threat to the economy, with economic stagnation, which poses the greatest political threat, and with the falling dollar, which may end with the Euro becoming the world's reserve currency. And he has to deal with all of that in such a way as to prevent the the recession "from morphing into a depression."
First time I heard that word used.
You wouldn't agree with the guy's conclusions, Rudi. He thought Bernecke might, looking back from a decade or so ahead, win a Nobel Prize for the acrobatic fiscal balancing act he's attempting. But I found it interesting, in a chilling sort of way, to hear the word "depression" brought into the conversation for the first time.
In this corner, we have the "Let's just draw another line in the sand" Rrrrrruudddiiii-ziiinnkkk!
AND, in this corner, we have "I'll see your line, and raise you another" Currrrr-mudggggennnnnn!
And the winner is .....
Rudi: I thought we could all use some good news in these parlous times, and so I offer this. The NY Times today reported that the grand opening of The Museum of the American Cocktail will be held in New Orleans on 21 July. [Museum website is Rudi: I thought we could all use some good news in these parlous times, and so I offer this. The NY Times today reported that the grand opening of The Museum of the American Cocktail will be held in New Orleans on 21 July. [Museum website is here..
From the Museum's press release:
We are pleased to announce that The Museum of the American Cocktail (MOTAC) will open the doors to its spectacular new home in New Orleans this July. The unique-and-expanded exhibit, designed by Curator, Ted "Dr. Cocktail" Haigh, features two hundred years of cocktail history - vintage cocktail shakers, Prohibition-era literature, music, bar tools, and exciting cocktail memorabilia from the collections of the Museum's friends and founders.
A ribbon cutting ceremony will be held on Monday morning July 21st, 10:30am following the Tales of the Cocktail event. We hope that many of you will remain in New Orleans on Monday morning to join us for this very special occasion! Our MOTAC sponsors are welcome to display or serve their product. Cocktails and hors d'oeuvres will be provided by Cafe Adelaide.
As a paid professional historian, I can only say how glad I am that this important and here-to-fore neglected area of American History will at least receive its due. And what better place to receive it than The Big Easy.
Jennifer,
LOL !!!!
thank jake garn for the s&l melt-down.
Jon Stewart and The Daily Show tackle the economy, and the IndyMac, FreddieMac and FannieMae bailouts. Hoot and a half. Link here.
It's time to impeach every congress person that supported this bailout.
So we are about pour our hard earned tax dollars into these companies to the tune of upwards of $300 billion because they are insolvent.
But on Aug. 29 Fannie Mae is paying out a dividend of .05/share for common stock and up to .51/share for preferred stock. So let me get this correct... dividends are payments of profits to shareholders and the company is insolvent so where is this dividend money coming from? You and I... we're pouring it into the front door while they spill it out the back door into the pockets of all the crooks. Call your Senators Hatch and Bennett and demand they return from vacation and take immediate action to save our tax dollars from this direct theft!!!!!!!!
I'm a Marine Vietnam vet (disabled) and I'm as ashamed of my country as I've ever been.
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