Re: OT- Government Attack on Free Speech

RBnDFW wrote:
John R. Carroll wrote:
Edward A. Falk wrote:
In article <FLCdndSWK6HqUB3XnZ2dnUVZ_u2dnZ2d@xxxxxxxxxxxx>,
John R. Carroll <nunya@xxxxxxxxxxxxxxx> wrote:
Yeah, and they are asking, unlike the Bush administration which
would just have had NSA begin a pattern search analysis on private
citizens in secret.
That's the ironic part. The Bush administration implemented
unprecedented spying on innocent Americans. Illegal warrantless
wiretaps courtesy
of AT&T. Ordering librarians to report on patrons book-borrowing
records and forbidding them to even tell the patrons that they were
being spied on. A "national security letter" is a document from
the government ordering an ordinary citizen to spy on other ordinary
citizens. Google for "patriot act abuses" and get an eyeful.

No need. While it is illegal to disclose even the existence of an
NSL, I believe I have been the subject of just exactly that.

Tom Gardner complains here occasionally about someone he encountered
on Usenet that spam bombed him.

He's lucky. There really are some worked up nut jobs in the world.

What we are currently seeing from the Republican party is fear. They
know that if the economy turns smartly, health care passes and
people realize the benefit, or America moves towards an energy
solution that really has the promise of turning the stranglehold
imported energy into a sort of Mexican stand off - they will suffer
the fate Republican's suffered once America began to emerge from the
carnage of the 30's.

America has been stripping away the protections wrought during the
Roosevelt years from the beginning. They didn't have real success
until Reagan assumed office and have dismantled the protections of
out financial systems one piece at a time since. "Free the
Market's!".
OK, how did that work out for ya'?

We are looking dead on into the abyss and the only reason we aren't
over our heads in tar right now is a group of very good men doing
their best using tools that were created after the last failure of
capitalism.

Republican's can't run on the issues or facts on that basis so
everything is a moral crusade. That is how you get people to
consistently vote against their own best interests and cheer while
they do it. You couldn't explain Sarah Palin and her kind any other
way and this has been going on as an increasingly preferred approach
for nearly four decades.


I have never in my life seen a better example of revisionist
"history".

You don't really believe all that horse***, do you?

The financial services industry has been removing more than six
hundred billion dollars per year from the real economy since the turn of
the century, more or less, and you can't remove that much capital
without consequences. It is worth considering how financial services became
so"exciting" in the first place. "Exciting", by the way, is the term used
in the banking and financial services industries for clerical help that
receives a $90,000.00 bonus or a junior account executive getting a million
bucks at the end of the year. What's not to be excited about?

We started down this road not in August of 2008, but in March of 1982, and
what seemed clever at the time is now ingrained habit. The consequences of
failure have become systemic.

In 1980/81, Savings and Loans were collapsing.

The initial S&L crisis was dealt with using tax policy and revisions to
regulatory legislation. The advantage of formulating or modifying tax laws
over having the Federal government just write a check is that nobody
understands tax law. The benefits can be substantial but they are indirect.
It's easy to pass a tax cut and very hard to put money directly into
someone's hands without voters noticing. Long term debt, mortgages returning
six percent, was being supported by short term borrowings a rates well above
six percent. Mortgages didn't have to default in order to be toxic assets,
they were toxic by definition. Usury laws prevented interest rates on short
term debt from exceeding certain levels -about 18 percent - but these were
State, not Federal, laws. The Federal Reserve raised interest rates
dramatically under Paul Volker, a Reagan appointee, to get inflation under
control and the cost of money skyrocketed. Prime plus one meant 21 percent
interest in 1982. You couldn't get a mortgage at all really, and the economy
suffered with high unemployment as a result.

Inflation, however, was tamed.

Garn-St. Germaine, meant to help S&L's compete, was a key legislative
alteration in the financial landscape. S&L's entered all sorts of areas with
products they hadn't been able to offer and interest rate caps were
removed.The complete "cure" under the Reagan administration was to allow
S&L's to sell off mortgages with low returns, sustain the losses, and then
apply those losses directly against taxes paid to the Federal government
over the preceding ten years. Initially, there was neither a mechanism to
accomplish such sales or a means to dispose of the offloaded mortgages. This
defect was corrected by the creation of mortgage backed securities in the
form of bonds. The sale of these instruments to Federally chartered banks
was illegal initially and had been for 50 years but that was rectified in
short order. Fannie and Freddie promptly blessed or "Franked" the things and
we had the first example of the moral hazards involved with the GSE model.
This act, not CRA mortgages or any other horse crap, is why GSE's failed.

The S&L industry didn't just get well, they made a lot of profit on these
tax abetted transactions.S&L's were chock full of money in an environment
where demand for their product, mortgages, was low. Before anyone could say
"Boo", entire mortgage portfolios had been sold and the IRS/Treasury
Department had filled the coffers with yesterdays tax payments.. This is
where the money came to fund the explosive growth of the next bubble
andbust - High Yield Bonds.That "boom" busted out and the taxpayers bailed
out the S&L's with actual cash at that point through the FSLIC and REITC.
The cost of failure hadn't been either avoided or even shifted. It had grown
significantly, however, and the American taxpayer shouldered a burden of
$200
Bn that was originally less than twenty five.

This cycle has repeated several times since. The financial services sector
sucks one vein dry only to move on the next, and with a larger bore needle
for each subsequent vein, always with the support of bought and paid for
politicians ( on both sides of the aisle ) and with the full knowledge that
the Republican Party had adopted the pattern as one of its formal,
underlying policies. If only the markets were truly free, so went the
mantra, and beginning in 1999, the markets were so freed, or at least the
major impediments removed. The repeal of Glass-Steagal, a seminal event,
went almost unnoticed. By the end of the first Bush term, banking rules and
regulations had been rewritten to allow pensions to invest directly in hedge
funds, hedge funds to own banks, investment banks to own chartered
banks,hedge funds and so forth. This was something that had been completely
illegal - for the obvious reason. The regualtors also decided, as a policy
matter,
to slow roll their oversight and regulatory responsibilities.

Congress, in it's infinite wisdom, had passed the Graham amendment to the
Commodity Futures Trading Act with language that specifically precluded any
government regulatory agency from regulating, in anyway, or even
asking about derivatives. It was literally against the law, as an example,
for the SEC to ask AIG what was going on inside their financial products
subsidiary. Furthermore, to add a little gasoline to the fire, Henry Paulson
restated the regulatory cap on leverage as one of his first acts as
Secretary of the Treasury. What had previously been capped at $1 dollar in
cash for $10 in borrowed money was officially raised to $1 dollar in cash or
assets to $35 dollars in borrowed money and these ratios were just guidance.
Some people went as high as 60:1, intra quarter, without having a regulator
complain. The rationale was that markets would self correct if things got
out of hand.

This is the very definition of a license to steal. The question being asked
in the industry was "is this actually legal?" not "is this a good idea
and sustainable?".

The result has been predictable. America's business schools,
Harvard,Wharton, and the like, admit selectively, and they specifically
select in favor of sociopaths. It shouldn't come as a surprise to anyone
when the graduates, upon rising tothe pinnacle of their respective
professions, create havoc in their wake, but that indeed seems to be the
case.

I'm shocked that anyone would be shocked. Repeating a process and expecting
alternative results on a regular basisisn't a sign of a higher power or
greater intellect. It also doesn't mean anyone knows what they are doing at
all. It means they are literally insane, even if they do happen to know what
they are doing.

The single remaining bastion in 2004 was The Social Security Trust fund.That
money would have provided a fresh vein - the additional fuel to keep what is
really a giant Ponzi scheme, rolling.

Unfortunately for the Bush administration and Wall Street, Americans were
beginning to understand that they had been repeatedly played for fools.
Thank the deity of your choice that the administration of George W. Bush had
incompetence and deceit as it's hallmarks. The Bush administration's plan to
privatize SS was met with what can only be called a resounding THUD, largely
because the President of the United States wasn't trusted to tell anything
resembling the truth or believed capable of exercising good judgment.

In the event, America dodged a bullet.

At this point, American's needn't worry that the guys running the show
areWall Street insiders colluding with their peers. They are not. They are,
however, the product of the culture of bail outs that has grown upover 30
years or so. Given that the only tool they know and can use is a hammer,
every problem looks like a nail. Bernanke, Paulson, Geithner and Kashkari
run around forcefully making the case that there was nothing else to do when
the real truth is that there wasn't anything else that THEY knew how to do.
Their response has been entirely Pavlovian.

The peasant class has also responded in kind, repeating and voting a mantra
that they don't understand and is actually contrary to their own best
interests.

The failure of the domestic automobile industry was said to be due to the
costs of union labor and pension benefit overhead. What this analysis
overlooks is the $2,500.00 per vehicle disadvantage GM had which would only
have dropped to $1,000.00 or so if the labor and cost differential were
removed completely. In other words, they still wouldn't have made money on
sales of the vehicles people wanted to buy in the face of $4.50 per gallon
gasoline.I n fact, the losses would have continued at a grand per vehicle
and the costs that they had divested would just have been shifted to the
State and Federal governments. The other consequence is that the American
standard ofliving would have taken another hit. Taken to it's logical
conclusion, the last thing GM or anyone else ought to be cheering is labor
cost reductions to the point of profitability. You end up looking just like
Chinese then, and everyone knows Chinese, in China, can't afford cars at
all. This is where Ronald Reagan's firing of the striking Air Traffic
Controller's has lead us as an unintended consequence.



--
John R. Carroll


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