Karma bites

More on TARP

Will Wilkinson at the Economist's DIA.

A blatant handout to powerful Democratic interest groups.

So, Megan McArdle is totally right about the auto bailout and stuff...

I would paint a moral equivalence to Bush Republicans' Medicare Part D and the Florida vote--except that handout is perpetual and significantly bigger because it had broader public support, including from social welfare Democrats.

Financial regulation

A way forward (ht Mankiw)

Bailout mania

NYT: "Tired of the government bailing out banks? Get ready for this: officials may soon ask banks to bail out the government."

How are those bailouts comming?

Hennessey charts CBO estimates...

The more things change...

Here's Milton Friedman discussing "the Great Depression, the New Deal, the auto industry, auto (Chrysler) bailouts, greed, Amtrak, auto emissions regulation and airbags, Ralph Nader, tariffs, free trade, price controls and gas shortages, oil companies, etc., and other topics that are still relevant today."



Links to parts 2-5 here.

Bonus: again in 1980.

29 Democrats needed

Just got this email (emph. mine):

Dear Gherald,

Rahm Emmanuel is pressuring progressives to change their vote and abandon their principles. You can help fight back.

Your Representative is getting intense pressure from Emmanuel to pass more money for the war in Afghanistan, as well as $100 billion to bail out European banks, not to mention an amendment to block the release of detainee torture photos.

Your Representative voted the right way the first time. Give them a call and ask them to hold firm: http://action.firedoglake.com/page/s/supplemental

If 39 Democrats commit to vote against the bill it won't pass, and 10 have already agreed to do so.  We need 29 more.

For once, the votes of progressive members of Congress actually matter when it comes to funding the war. But they are being heavily pressured by Congressional leadership to toe the line.

Please call your Representative's office and let them know you support their commitment to bringing our troops home safely, and urge them to vote against this bill.

We've got the phone number for your Representative here: http://action.firedoglake.com/page/s/supplemental

After you call, please forward this email to friends in your district, and ask them to call too. A few hundred phone calls at this crucial time may make all the difference!
Thank you for help.

Jane Hamsher
FDL Action

I called my representative, a staunch progressive, and her office doesn't yet know how she'll be voting.  Check out the list and call yours to put some pressure on and get them to join Republicans (because of the IMF funding) and bat this thing down.

Update: The detainee photo suppression is gone.

How stupid do they think we are?

I hope other lefty economists have some shame.

Free* government money!

* we'll tax you later

Heading to Canada might actually become a good option...

The quagmire ahead

David Brooks lays out the gory consequences of the Obama administration's takeover of GM.

Gulp. It's worse than I expected.

Update: It gets even worse. Criminy.

I understand the plight of autoworkers, but their union is dysfunctional, has lead to a dysfunctional company, and due to its political power is now receiving preferential treatment that will lead to even more dysfuction.  The market has determined that GM and the UAW are doomed, but Democrats won't let them die and have arranged for the long, perpetual bailout of taxpayer and union co-ownership of the company, throwing the rules of capitalism and international trade out the window and creating an entity the marketplace will seek to avoid like a toxin.

Oops

The Obama administration's favored constituency service for Big Labor has produced its first unintended consequences.

Too big to fail

Favored constituency service

Discussing Obama's interventions, Jon Henke goes there:

"I am altering the deal. Pray I don't alter it any further." —Darth Vader

A hedge fund manager defends the rule of law.

Obama's takeover of GM

Doesn't look pretty for the bondholders, and legally they were supposed to be paid first. This is a fair bankruptcy?

I'm going to wait for someone who knows what she's talking about, like Megan, to weigh in before I jump to conclusions on this. Because from these numbers it sure looks like Obama's version of assisting GM with "hard choices" is to reward unions for their parasitic, company-destroying behavior with a disproportionate stake in the company.

Grading Obamanomics

Robert Reich was Clinton's Secretary of Labor and is a professor at the University of California at Berkeley. He writes:

As a university professor I'm accustomed to giving grades. So here's my report card on Obamanomics so far:

The 10-year budget gets an A. It's an extraordinary vision of what America can and should become, including universal health insurance and environmental protections against climate change. And the budget takes a little bit more from the rich and gives a little bit more back to the poor and lower middle class, which seems appropriate given that the income gap is wider than it's been since the 1920s. I'd give the budget an A plus except for its far-too-rosy economic projections.

The stimulus package gets a B. Good as far as it goes but doesn't go nearly far enough. $787 billion over two years sounds like a lot of stimulus. But the economy is operating at about a trillion and a half dollars below its capacity this year alone. And considering that the states are cutting services and increasing taxes to the tune of $350 billion over this year and next, the stimulus is even smaller.

The last grade is for the bank bailouts. I give them an F. I'm a big fan of this administration, but I've got to be honest. The bailouts are failing. So far American taxpayers have shoveled out almost $600 billion. Yet the banks are lending less money than they did five months ago. Bank executives are still taking home princely sums, their toxic assets and non-performing loans are growing, and the banks are still cooking their books. And now the Treasury is talking about converting taxpayer dollars into bank equity, which exposes taxpayers to even greater losses.

So that's the report card. An A on the budget, B on the stimulus, and F on the bailout. On the whole (given how I weigh grades) that gives Obamanomics a C-plus. Not bad given the magnitude of the problems Obama inherited. But by the same token, not nearly good enough.

I'll give Obama close to an overall C+ as well. But my breakdown is very different.

The 10-year budget gets an F. It's the polar opposite of the Clinton-Gingrich years, and worse than those of solid Republican control-- there's absolutely no fiscal restraint to be seen. It's a nightmare scenario for anyone in the center and right-of-center.

The stimulus effect is difficult to judge at this early point. Theory-wise it sure runs contrary to the historic triumph of laissez faire-ish principles. But I'm going to be optimistic and give it a B like Reich.  One can hope.

Lastly, Reich's assessment of the bank bailouts doesn't seem to grapple with the tradeoffs and compromises that make the PPIP more palatable than nationalization or bank runs. And he says he's concerned about equity stakes exposing taxpayers to losses, but don't equity stakes actually have more potential for upside compared to mere loans, which could also be losses?

Other lefties like Yglesias and Krugman were arguing that the original bailouts were subsidizing losses and privatized gains. They wanted a nationalization of gains so the taxpayer could benefit from these investments. Well, that's what equity is for. It's called capitalism. Now obviously I'm no expert on this subject, either, but I'll give Obama another optimistic B. It could end up lower as things pan out, but Reich's F strikes me as highly unlikely

Spending free fall

Link blag

Radley:

Just so I have this straight, Milton Friedman is a villain because he had a five-hour meeting with murderous dictator Pinochet, gave a lecture at a Chilean university, and because Pinochet later implemented some of Friedman’s ideas (to the great benefit of the Chilean people, I might add). Meanwhile, lefty activists and politicians can freely meet with murderous dictator Fidel Castro, publicly slobber all over him, fete him even as actual Cubans are risking their lives to flee his regime, and there’s nothing ill to be said about them. Because . . . free health care!

Speaking of the U.K. you gotta’ hand it to them. When it comes to massive invasions of privacy and creepy government surveillance, they don’t mess around.

Justice Scalia gives speech praising the Constitution. But only before ensuring that there would be a ban on recording his speech. He then paused the speech to excoriate a journalist for taking still photos of him. I’m sure the irony was lost on him.

Reason: Obama's Secretary of Education is fundamentally dishonest. Cato piles on.

Megan: Glenn Greenwald doesn't know what he's talking about wrt Larry Summers.

Post contra Post: Thankfully not everyone at the paper who writes about climate change is named George Will.

Reason: Now we're bailing out LIFE INSURANCE companies? Fuck me. As Megan says, this can't go on.

Economist: The black market is growing.

Megan: D.C. is poorly governed

How did U.S. marines torture Saddam Hussein? By making him watch South Park, of course.

2008 Tax records reveal Sasha Obama made $136 in allowance money.

Of babies and boys (photos)

Link blag

The Post: Short '06 Lebanon War Stokes Pentagon Debate...

A war that ended three years ago and involved not a single U.S. soldier has become the subject of an increasingly heated debate inside the Pentagon, one that could alter how the U.S. military fights in the future.

When Israel and Hezbollah battled for more than a month in Lebanon in the summer of 2006, the result was widely seen as a disaster for the Israeli military. Soon after the fighting ended, some military officers began to warn that the short, bloody and relatively conventional battle foreshadowed how future enemies of the United States might fight.

Drezner: 13 Unexpected Consequences of the Financial Crisis...

7. Skirts will get longer. Here’s a piece of Wall Street folk wisdom: There is a rough correlation between bull markets and bare knees. During boom times, skirts get shorter. In these bearish times, prepare for hemlines to head south. Somewhat in relation, we’ll see something else go north: the age and weight of Playboy centerfolds. Evolutionary biology encourages people to seek “more mature” mates during times of economic insecurity, argue Terry F. Pettijohn and Brian J. Jungeberg in one of the more interesting studies published recently in the Personality and Social Psychology Bulletin. To support their claim, the researchers showed that during recessions, centerfolds get older and, well, rounder. Similar studies have confirmed an identical trend in movie comedies—male and female leads get older during recessions.

Unreligious Right: Another Strange Poll...

Sixty-five percent of conservative Republicans have an unfavorable view of Islam. I'm surprised it's not higher. But what about liberal Democrats? Sixty percent of them have a favorable view of Islam. Really, 60% have a positive view of Islam. Is it any wonder liberals are so clueless? What causes this favorable view? Simple ignorance? Living in a dream world? Blaming problems involving Islam on the U.S.?

FiveThirtyEight: Whigs, Federalists Strongly Differ on Support for Obama...

[..] measurements of the partisan split in support for the President, as Pew Research has done here (they found a record partisan split in Obama's approval ratings, with 88 percent of Democrats but just 27 percent of Republicans approving of Obama's performance) are not quite as straightforward as they might seem. This is because partisan identification is at least somewhat fluid. The Republicans, in particular, have lost quite a bit of support over the past several years; those persons who continue to identify as Republicans are a hardened -- and very conservative -- lot. Just 24 percent of voters identified as Republican when Pew conducted this survey in March, which is roughly as low as that total has ever gotten.

Radley reminds you that libertarian free market proponents are not corporate apologists:

The U.S. Chamber has released its rankings of “business-friendly” members of Congress. Next time someone accuses libertarians and other free market proponents of being corporate apologists, send them this Tim Carney analysis of the Chamber’s list. Ron Paul, for example, scored lower than 90 percent of the Democrats in the House. Pro-free market, anti-tax Republicans scored lower than left-liberal Democrats like Hillary Clinton, Barack Obama, and Joe Biden. When you look at the issues the Chamber considers pro-business, it pretty quickly demolishes the notion that free markets and big business have much of anything to do with one another.

Why did the housing crash ruin the financial system while the dot-com collapse did not? WSJ has a longish article by a 2002 Noble laureate.

NewMajority tells Wall Street Bankers how to be capitalists.

It's not often I get to say this, but The Weekly Standard's budget recommendations are better than both Obama's and the House GOP's. Apart from defense spending, of course, where they're as nuts as ever.

TMV rounds up opinions on Obama's European tour.

NY Gov. Paterson is toast, voters say 63-22 he does not deserve election to full term.

Farm subsidies won't be cut? Fraking bastards.

The next Alien vs. Predator?

Police in Detroit break up pillow fight. NYC has better luck.

Link blag

Hot Air: Obama’s new GM CEO: You know, bankruptcy looks really good now...

[We never should have given money to GM; it wasted billions of dollars and months of restructuring]

David Brooks: Car Dealer in Chief...

… if you are in the restructuring business, you can’t let these stray thoughts get in the way of your restructuring. After all, restructuring is your life. Restructuring is forever. Restructuring is like what dieting is for many of us: You think about it every day. You believe it’s about to work. Nothing really changes.

When the economy cratered last fall, the professionals at G.M. went into Super-Duper Restructuring Overdrive. In October, they warned the Bush administration of a possible bankruptcy filing and started restructuring. In December, they came back asking for a loan while they … (wait for it) … restructured.

The Bush advisers decided in December that bankruptcy without preparation would be a disaster. They decided what all administrations decide — that the best time for a bankruptcy filing is a few months from now, and it always will be. In the meantime, restructuring would continue, federally subsidized.

Today, G.M. and Chrysler have once again come up with restructuring plans. By an amazing coincidence, the plans are again insufficient. In an extremely precedented move, the Obama administration has decided that the best time for possible bankruptcy is — a few months from now. The restructuring will continue.

POST SCRIPTS: Women's Right to Vote, the Beginning of the End for America?...

The result of the 19th amendment has been the ascension to power by the same kind of Marxists Ronald Reagen defeated from the Soviet Union. The weapon of destruction was not a nuclear warhead though, it was an emotional outburst that melted the brains of logic.

Not enough irony in his wingnuttery diet? But for funnies, roll tape.

Yglesias: How Important Are "Safe Havens" ?...

The head of the Pakistani Taliban, Beitullah Massoud, has threatened to strike Washington, DC with a terrorist attack. But while everyone takes Massoud’s threat to the stability of the Greater Hindu Kush area seriously, nobody seems to take his threat to do this very seriously. As Spencer Ackerman says “It’s difficult to see how Beitullah Massoud, the leader of the Pakistani Taliban, has the capability to launch attacks against the U.S.”

So that’s the good news. The bad news is that this points to what I think is a serious conceptual flaw in the administration’s thinking—this heavy emphasis on the idea that we need to deny al-Qaeda a “safe haven” in Afghanistan or Pakistan. As Andrew Exum observes, it’s not at all clear that a “safe haven” is necessary to carry out a terrorist attack: [....]

TMV: Change In Cuba Policy Long Over Due...

lawmakers, business and trade representatives held a press conference in Washington announcing bipartisan legislation ending the travel embargo. The travel embargo, said Sen. Byron Dorgan, D-N.D., is a “failed policy that has failed for 50 years.”

[The bill] would prevent the president from stopping travel to Cuba except in cases of war, imminent danger to public health or threats to the physical safety of U.S. travelers. Reps. Bill Delahunt, D-Mass., and Jeff Flake, R-Ariz., have an identical bill in the House with 120 co-sponsors.

Sen. Robert Menendez, D-N.J., the son of Cuban immigrants, slowed confirmation of several administration officials and passage of a major spending bill because that bill contained the changes in rules on Cuban-American travel.

Cuban-born Sen. Mel Martinez, R-Fla., said he would continue to oppose the legislation. “This is the time to support pro-democracy activists in Cuba, not provide the Castro regime with a resource windfall.”