Barney Frank v Harvard Student

Although this video is quite famous, I had never seen it before and I suspect many of you have also never seen it. As I watched it, I was fascinated by it, but thought I would not post it until I saw the last two minutes.

For those who have not heard of it, this is Joel Pollak, current candidate for Congress in Illinois' 9th Congressional district, going at it with Congressman Barney Frank (D-Ma), who is currently in a pitched battle to save his seat in a race with another bright, young conservative named Sean Bielat. I have endorsed both Pollak and Bielat. Pollak was a student at Harvard Law School at the time this video was made.

Watching Barney squirm was entertaining, but I'm posting this because of the questions Greta van Sustern asks Pollak in the last two minutes, and the answers that he gives. More below the fold.

Let's go to the videotape.



Did you pick up those last two minutes there? Joel Pollak could have been writing my political biography. I was a Democrat until I got to law school in 1980 (although, unlike my parents, I could not bring myself to support George McGovern in 1972, the first vote I ever cast for President was for Jimmy Carter in 1976). The 1980 election and the way the Leftists at NYU Law argued about it turned me into a conservative Republican. In fact, all of the Orthodox Jews walked around NYU that fall with Reagan buttons in Hebrew - we knew that if Jimmah was re-elected, Israel would be sold out.

A couple of years in yeshiva in Israel convinced me to make aliya (immigrate to Israel) rather than going into politics in the US, but listening to Joel describe his political evolution gave me a real sense of deja vu.

posted by Carl in Jerusalem

Barney Frank v Harvard Student

Although this video is quite famous, I had never seen it before and I suspect many of you have also never seen it. As I watched it, I was fascinated by it, but thought I would not post it until I saw the last two minutes.

For those who have not heard of it, this is Joel Pollak, current candidate for Congress in Illinois' 9th Congressional district, going at it with Congressman Barney Frank (D-Ma), who is currently in a pitched battle to save his seat in a race with another bright, young conservative named Sean Bielat. I have endorsed both Pollak and Bielat. Pollak was a student at Harvard Law School at the time this video was made.

Watching Barney squirm was entertaining, but I'm posting this because of the questions Greta van Sustern asks Pollak in the last two minutes, and the answers that he gives. More below the fold.

Let's go to the videotape.



Did you pick up those last two minutes there? Joel Pollak could have been writing my political biography. I was a Democrat until I got to law school in 1980 (although, unlike my parents, I could not bring myself to support George McGovern in 1972, the first vote I ever cast for President was for Jimmy Carter in 1976). The 1980 election and the way the Leftists at NYU Law argued about it turned me into a conservative Republican. In fact, all of the Orthodox Jews walked around NYU that fall with Reagan buttons in Hebrew - we knew that if Jimmah was re-elected, Israel would be sold out.

A couple of years in yeshiva in Israel convinced me to make aliya (immigrate to Israel) rather than going into politics in the US, but listening to Joel describe his political evolution gave me a real sense of deja vu.

posted by Carl in Jerusalem

Chez Obama Recipe for Recession

Oppose Funding of War - Alan Grayson

Dear Ron,

Next week, there is going to be a "debate" in Congress on yet another war funding bill. The bill is supposed to pass without debate, so no one will notice.

What George Orwell wrote about in "1984" has come true. What Eisenhower warned us about concerning the "military-industrial complex" has come true. War is a permanent feature of our societal landscape, so much so that no one notices it anymore.

But we're going to change this. Today, we're introducing a bill called 'The War Is Making You Poor Act'. The purpose of this bill is to connect the dots, and to show people in a real and concrete way the cost of these endless wars. We're working to get co-sponsors in Congress, but, we need citizen co-sponsors as well. Become a citizen cosponsor today at TheWarIsMakingYouPoor.com. Act Now.

http://www.TheWarIsMakingYouPoor.com

Next year's budget allocates $159,000,000,000 to perpetuate the occupations of Afghanistan and Iraq. That's enough money to eliminate federal income taxes for the first $35,000 of every American's income. Beyond that, leaves over $15 billion to cut the deficit.

And that's what this bill does. It eliminates separate funding for the occupation of Iraq and Afghanistan, and eliminates federal income taxes for everyone's first $35,000 of income ($70,000 for couples). Plus it pays down the national debt. Does that sound good to you? Then please sign our petition in support of this bill, and help us build a movement to end our permanent state of war.

http://www.TheWarIsMakingYouPoor.com

The costs of the war have been rendered invisible. There's no draft. Instead, we take the most vulnerable elements of our population, and give them a choice between unemployment and missile fodder. Government deficits conceal the need to pay in cash for the war.

We put the cost of both guns and butter on our Chinese credit card. In fact, we don't even put these wars on budget; they are still passed using 'emergency supplemental'. A nine-year 'emergency'.

Let's show Congress the cost of these wars is too much for us.

http://www.TheWarIsMakingYouPoor.com

Tell Congress that you like 'The War Is Making You Poor Act'. No, tell Congress you love it.

http://www.TheWarIsMakingYouPoor.com

All we are saying is "give peace a chance." We will end these wars.

Together.

Courage,

Alan Grayson

Fuck You I'm Short Your House

The Big Short
By MICHAEL LEWIS
Reviewed by Felix Salmon, Barnes & Noble
On January 30, 2007, Jamie Mai wrote an email to his partners Charlie Ledley and Ben Hockett. "If a broad range of CDO spreads starts to widen," he said, "it means that a material global financial clusterfuck is likely occurring."

On January 31, 2007, a broad range of CDO spreads started to widen, dramatically. The long-feared meltdown was upon us all -- not that most of us knew it, at the time -- and a very small number of investors was about to get paid out on the trade of their lifetimes. Mai, Ledley, and Hockett were part of that select group, whose tale is grippingly told by Michael Lewis in The Big Short.

The Big Short is not the story of the crisis, as the crisis is commonly understood. The failure of Lehman brothers and of Fannie Mae and Freddie Mac; the stock-market crash; the bail-out of Detroit; the fevered all-nighters pulled at Treasury and the New York Fed; the fears that the entire global financial system was on the brink of collapse -- little if any of that is in this book.

Instead, Lewis has found a different story -- one which he started mining for a spectacular cover story in the December 2007 issue of Portfolio magazine, and which has culminated in this book, over two years later. It's the story of what used to be called the "subprime crisis" before it metastasized into something much larger and more dangerous than that. And it's also, like all Michael Lewis tales, a human story, which takes us deep inside unique characters like Steve Eisman and Mike Burry.

On the face of it, there's almost nothing sympathetic about these men. Their social skills are all but nonexistent; they live in a world of arcane financial analysis which might as well be a different planet for all that it has any bearing on the way that most of us live our lives; and they made their outsize profits by wagering hundreds of millions of dollars on the proposition that Americans across the country would end up being thrown out of their homes after they found themselves unable to make their mortgage payments.

What these men did was not "socially useless," to quote the chairman of the UK's Financial Services Authority, Lord Turner. It was worse than that: it was actively harmful, since they provided the fuel which kept the subprime mortgage furnace burning even when the country was running out of new junk mortgages to write. In most financial markets, bearish bets act as a dampener; in this one, they were a necessary part of the subprime-mortgage machine, and a Deutsche Bank mortgage trader named Greg Lippmann ended up making billions of dollars for his employer -- not to mention a $50 million bonus for himself -- by aggressively going out and finding fund managers to put on the short bets needed to keep the market ticking. (This is the same Lippmann who, when accused of being a "Chicken Little" responded by saying "Fuck you, I'm short your house.")

For Retailers It is Black Tuesday

For Retailers It is Black Tuesday

Tom Van Riper, Forbes Online

For major retailers, the week of darkness has arrived. With $4 gasoline and tight credit keeping consumers' wallets shut, it's time to announce dismal profits. Unless you're a discounter or a seller of hip clothing really ahead of the fashion curve, forget about it. Wall Street is braced for the worst.

Here's one sign of how bad things are: "Coupon redemption is at an all-time high," says Britt Beemer, president of America's Research Group, which studies shopper behavior. Beemer's research shows that 59% of shoppers last month showed up at stores with specific lists of items they were limiting themselves to buying. The historical average over the 29 years he's been surveying: 33%. Also, more people are reporting plans to shift their shopping from chains to independent stores, where they think price haggling is more accepted.

And he finds that half of women shoppers have no opinion of this season's spring apparel lines, simply because they haven't bothered to look closely at them. Better to postpone buying decisions for now. "That's unusual because winter to spring is always the most dramatic seasonal fashion change," Beemer says.

Note: The Administration has shafted the ordinary citizen. The big mistake was discouraging the citizen as CONSUMER.

The retailers now join the consumer led recession parade.

Consumer Led Recession

Hale Bonddad Stewart, HuffPost

In the first quarter of 2008, personal spending on durable goods decreased by 6.1% and personal spending on nondurable goods decreased by 1.3%. The only area of personal spending to increase was services, which increased 3.4%.

In other words, in the first quarter of 2008, people were buying less "stuff". And it's not just a decrease in one category but both categories of physical goods that raises my concern.

Going forward the key variable to watch will be job growth. Declining job growth means declining income, lowering confidence and thereby decreasing spending further.

All of this also means that if this trend continues (declining job growth leading to declining wages leading to declining sentiment leading to lower spending) the second half of this year might have some ugly surprises in store for us.

Reuters - The economy likely shed more jobs in April as the economy continued to weaken against the backdrop of a deeper deterioration in the housing market and a growing credit crunch.

Economists polled by Reuters ahead of the Labor Department report to be released on Friday at 8:30 a.m. EDT have forecast that the economy lost 80,000 jobs after losing the same amount a month earlier.

[excerpt]

The Regime Hasn't a Clue What to Do

The Housing Crisis and the Plague of Potomac Fever

As states move to crack down on predatory lending and abusive mortgage fees, Washington lawmakers tell reporters "it's irrelevant" how many — if any — homeowners are helped. As state legislators to demand serious aid to borrowers, Washington constructs a bailout for financial firms. This is the contrast between minimally healthy (though certainly imperfect) democratic systems in the states, and a federal government ravaged by Potomac Fever — the illness whereby professional politicians forget who they were elected to serve.

David Sirota, TomPaine.com

Surplus U.S. Food Supplies Dry Up

usatoday.com

U.S. government food surpluses — which had previously fed the poor at home and abroad — have evaporated because, with record high prices, farmers are selling their crops on the open market, not handing them over to the government through traditional price-support programs that make up for deficiencies in market price. The upshot: USDA has almost no extra food to supplement the billions in cash payments it spends to combat hunger at home and in developing nations.

Choosing Recession

Lakshman Achuthan and Anirvan Banerji, Forbes

The 2008 recession guarantees many months of job losses that will boost foreclosures and feed the credit crisis. But if fiscal stimulus had reached consumers quickly, it would have forestalled a recession, helping to stabilize the housing market. Such a soft landing would have bought some breathing room in which to resolve the credit crisis until the lagged effect of monetary policy kicked in.

There is a raging debate about how the economy got into recession, and who is to blame. Many have concluded that the housing and credit bubbles guaranteed recession. But because this debate will influence policy for the next economic cycle, the right lessons must be learned from this series of unfortunate events.

An essential point is being overlooked--that this recession was actually avoidable as recently as several weeks ago.

No More Brothels for You

Broadsheet, Salon.com

How's your office bracing for the recession? Switching to generic creamer? Scaling back on those swanky holiday parties? In Germany, one bank is taking drastic measures. According to a recent article in the Independent:

"Deutsche Bank, Germany's largest, has been hit by the global credit crunch so badly that it has issued a memorandum to senior executives telling them that brothel visits and adult channels in hotel rooms cannot be claimed on expenses."

What? You expect these poor executives to pay for their own hookers and porn? Next you're gonna tell them that Anal Intruder isn't tax deductible! Wow, I guess some companies are tightening the belt literally. It's bad enough that people were rioting in Haiti. But having to shell out for your own happy-ending massage? Now that's a global crisis. As one employee groused:

"In the good old days, you could pass off a trip to a knocking-shop as a restaurant if the name wasn't too obvious. But we're in an uptight, locked-down new Puritanism now."

Oh, the injustice.

Panic Time at the Fed

Steve H Hanke, Forbes

U.S. Treasury Secretary Henry Paulson's blundering is becoming more breathtaking with each passing week. At the end of March he rolled out a grand plan to crown the Federal Reserve as the nation's new financial stabilizer. The Fed a stabilizer? That's who created the financial mess we're in.

If this wasn't bad enough, Secretary Paulson then donned his cheerleader's uniform and encouraged Beijing to let the Chinese yuan appreciate against the greenback. All the while favoring in this fashion a debasement of the U.S. currency, Paulson proclaimed that we should remain calm and confident because the economic fundamentals are sound. He reminds me of the stockbroker who performed a valuable service to his partners by always being wrong.

Panic Time at the Fed

The pathos of a losing war and a deep recession provide a wonderful back drop for comedy. We see a drunken passenger who mixes martinis as his ship sinks.

Panic Time at the Fed

Steve H Hanke, Forbes

U.S. Treasury Secretary Henry Paulson's blundering is becoming more breathtaking with each passing week. At the end of March he rolled out a grand plan to crown the Federal Reserve as the nation's new financial stabilizer. The Fed a stabilizer? That's who created the financial mess we're in.

If this wasn't bad enough, Secretary Paulson then donned his cheerleader's uniform and encouraged Beijing to let the Chinese yuan appreciate against the greenback. All the while favoring in this fashion a debasement of the U.S. currency, Paulson proclaimed that we should remain calm and confident because the economic fundamentals are sound. He reminds me of the stockbroker who performed a valuable service to his partners by always being wrong.

The current U.S. financial crisis follows the classic Fed pattern. In 2002 then governor Bernanke set off a warning siren that deflation was threatening the U.S. economy. He convinced his Fed colleagues of the danger. As former chairman Greenspan put it, "We face new challenges in maintaining price stability, specifically to prevent inflation from falling too low." (Given the U.S. economy's productivity boom, the Austrians viewed the prospects of some deflation as just what the doctor ordered.)

In the face of possible deflation, the Fed panicked. By July 2003 the Fed funds rate was at a record low of 1%, where it stayed for a year. This set off the mother of all modern liquidity cycles, and, as members of the Austrian school anticipated, the credit boom ended badly.

True to form, the Fed has panicked again, pushing interest rates down and flooding the economy with liquidity. A broad measure of the money supply (MZM) reported by the Federal Reserve Bank of St. Louis increased at an astounding annual rate of 37.7% from the end of January until Mar. 24. With this money supply surge and February's price gains (from February 2007) of 4% for consumer goods, 6.4% for producer goods and 13.6% for imported goods, it's no surprise that inflation expectations have risen.

It's also no surprise that the dollar remains debilitated, which makes Secretary Paulson's Beijing weak-dollar message so bizarre, particularly since it is based on an incorrect premise propagated by many prominent economists. Harvard professor Martin Feldstein, for example, argues that the bilateral trade balance between the U.S. and China is determined by the yuan-dollar exchange rate. Accordingly, to reduce China's trade surplus with the U.S., he advocates an appreciating yuan.

This advice is nonsense. Trade balances are determined by national savings propensities, not exchange rates. China's savings surplus and America's savings deficiency largely determine our trade imbalance with China. The U.S. Treasury should have learned this lesson after years of forcing the Japanese to adopt an ever appreciating yen, which destabilized Japan's economy without doing a lick of good for trade balances.

Until the Fed dumps inflation targeting and the U.S. abandons its weak-dollar policy, inflation will rule the day. Retain (and add to) your gold hedges.

Beyond Gotcha: The Mosquito Agenda

The Huffington Post — Coupled with the threat of losing health care benefits and declining or absent pensions, facts on the ground underscore the growing economic anxiety and "bitterness" felt by many American workers and their families. The time is ripe for some kind of new New Deal — but where will it come from?

Mosquito Agenda

Many owners of luxury homes put the keys into the mail box and drive to greener pastures. Universally, they neglect to drain their swimming pools.

Quickly, the mosquitoes use the pools as breeding spaces and soon the youngsters seek blood for nourishment. Thus, they can carry diseased blood to a radius of five miles to infect other creatures.

This is a boon for health professionals and emergency rooms. The municipalities must hire workers to destroy the insects, so the pesky critters are creating jobs.

How many businessmen can make that statement?

The Crash of 2008

The Crash of 2008–04–17

When your neighbor is fired, it’s a recession. When you lose your job, it’s a depression.

The economy is an expression of culture. The psychological factors are vital the surge of adrenalin when the customers bring ropes to the bank.

The first report is from the Federal Reserve. Since they are partly to blame for the mess, they do not probe very deeply.

Conditions in the US economy have worsened noticeably in the past six weeks, the Federal Reserve said in its closely-followed Beige Book report.

The central bank's regular snapshot of business activity across the US described "weaker" conditions and "softening" consumer spending.

The report also described the troubled housing market as "anaemic".

The IMF recently warned that the US economy could be set for a "mild recession" this year.

Some commentators believe the economy may already been in recession, although figures published on Tuesday showed that industrial output actually rose slightly in March.

In a speech on Tuesday, one of the bank's senior officials said that the economy had "all but stalled" and may contract in the first half of the year.

"I am not ruling out a recession," said Janet Yellen, president of the San Francisco Reserve Bank.

The Beige Book monitors economic activity in 12 of the country's largest business districts.

The economists at Tom Paine concentrate on the people involved they call Main Street America.

Borosage, Tom Paine

On Wall Street, the masters of the universe have turned to prayer and worry beads. At the Federal Reserve, a full night's sleep is a fading memory. Across Main Street, the recession is starting to hit, stores are shutting down, bankruptcies are spreading, houses are being foreclosed or abandoned. The pain of the recession is just beginning to hit.

Note: Soon, we will see claims the Administration is cooking the books, as an election ploy.

Hmmmm! I wonder how they got that impression.

Finding Life in an Extended Family

With the current economic situation, many younger adults have found refuge in parental homes. It recalls an earlier time when extended families lived under one roof. This is not easy, but it can be enriching.
When my family of four came to America, my brother-in-law threw us out and my mother gave us shelter. She and my wife never got along. Eventually, my wife took our sons back to the old country.
After my mother had a stroke, I moved back to take care of her. After several years she needed a nursing home. We traded the house to ensure lifetime care for her.
I retired to Israel to be with my son and to write books.
Thanks to the decline of the dollar the value of my Israeli pension has risen from $500 to $1000 per month.
The State Department is dragging its feet on my Social Security. They are angry with anyone who writes about stolen nuclear secrets.
My mom did me a good deed and I reciprocated. I think it worked out well for both of us.