What's It All About, Albert (Bandura)? Weekend Economists Explore Social Cognitive Theory July 22-24

[Demeter]

Well, as promised, last week's winner picked our topic, of which I expect to learn a lot this weekend.
(Thanks a lot, plumbob)


Albert Bandura

Albert Bandura was born on December 4, 1925 in the province of Alberta, Canada. His parents were Polish wheat farmers. He went to a small high school with only 20 students and 2 teachers. In 1949 Bandura received his B.A. from the University of British Columbia. Bandura then went on to the University of Iowa where he obtained his doctorate in 1952. Upon graduation Bandura did a clinical internship at the Wichita Kansas Guidance Center. The following year, in 1953, Bandura accepted a teaching position at Stanford where he continues to teach today. While at the University of Iowa Bandura's interests in learning and behaviorism began to grow.

Bandura has done a great deal of work on social learning throughout his career and is famous for his "Social Learning Theory" which he has recently renamed, "Social Cognitive Theory". Bandura is seen by many as a cognitive psychologist because of his focus on motivational factors and self-regulatory mechanisms that contribute to a person's behavior, rather than just environmental factors. This focus on cognition is what differentiates social cognitive theory from Skinner's purely behavioristic viewpoint.

Albert Bandura focuses on the acquisition of behaviors. He believes that people acquire behaviors through the observation of others, then imitate what they have observed. Several studies involving television commercials and videos containing violent scenes have supported this theory of modeling.

In 1986 Bandura wrote Social Foundations of Thought and Action which provides a framework of his social cognitive theory. In addition he has written many articles and a total of nine books on various topics in psychology. Bandura has made important contributions to the field of psychology, as seen in the many honors and awards he has received. Bandura has received several honorary degrees from universities all over the world. This year (1998) he will receive the Thorndike Award for Distinguished Contributions of Psychology to Education from the American Psychological Association.

(HAS HE EVER MET AUTISTIC PEOPLE? THIS IS SOMETHING THEY FIND EXTREMELY DIFICULT.)

Theory

Bandura has conducted many studies involving observational learning, or modeling. The modeling process includes several steps:

1) Attention- In order for an individual to learn anything, he or she must pay attention to the features of the modeled behavior. Many factors contribute to the amount of attention one pays to the modeled activities, such as the characteristics of both the observer and the person being observed and competing stimuli.

2) Retention- If an individual is to be influenced by observing behaviors he or she needs to remember the activities that were modeled at one time or another. Imagery and language aid in this process of retaining information. Humans store the behaviors they observe in the form of mental images or verbal descriptions, and are then able to recall the image or description later to reproduce the activity with their own behavior.

3) Reproduction- Reproduction involves converting symbolic representations into appropriate actions. Behavioral reproduction is accomplished by organizing one's own responses in accordance with the modeled pattern. A person's ability to reproduce a behavior improves with practice.

4) Motivation- To imitate a behavior, the person must have some motivating factor behind it, such as incentives that a person envisions. These imagined incentives act as reinforcers. Negative reinforcers discourage the continuation of the modeled activity.

Albert Bandura combines both behavioral and cognitive philosophies to form this theory of modeling, or observational learning. He sees the human personality as an interaction between the environment and a person's psychological processes. Bandura says that humans are able to control their behavior through a process known as self regulation. This process involves three steps:

1) Self observation- Humans look at themselves and their behavior and keep track of their actions.

2) Judgment- Humans compare these observations with standards. These standards can be rules set by society, or standards that the individual sets for him or herself.

3) Self response- If, after judging himself or herself, the person does well in comparison with the set standards, he or she will give him or her- self a rewarding self-response. If the person does poorly he or she then administers a punishing self-response to him or herself.
Self regulation has been incorporated into self control therapy which has been very successful in dealing with problems such as smoking.

One of Bandura's more famous experiments dealing with modeling is his study with Bobo dolls. In one particular experiment Bandura showed a video to children in which an adult beat up on a doll, called it names, etc. Bandura divided the children into three groups, and each group watched a video with a different ending. graph The first video showed the adult being rewarded for his behavior, the second video showed the adult being punished for his behavior, and the third video showed no consequences for the behavior. He then studied the differences between how male children and female children reacted to this video in regard to whether they imitated the observed behavior or not. The results are shown to the left. This graph represents the number of imitative responses by males and females after observing one of the three different videos. The results show that males in all cases imitated the viewed behavior more so than females. The results also show that the children who watched the video in which the person was rewarded for his actions duplicated the behaviors more so than when the person was punished or did not receive either a punishment or reward. This was consistent in both male and female children, supporting Bandura's argument that people learn from observing others.

http://www.muskingum.edu/~psych/psycweb/history/bandura.htm

TODAY'S FEATURED COMPOSER: BURT BACHARACH song writer extraordinaire

Born in 1928 and still going strong, Burt Bacharach studied for a time with the composer Darius Milhaud (one of "Les Six"), played in Jazz Bands in the 1940s and was then to turn towards composing and song-writing. He holds a unique place in songwriting of the 20th Century. His surname is not an adopted one but it sounds like a groovy form of Bach so perhaps it was inevitable that Bacharach would be remembered for his groovy music. Among his best-known songs are "Magic Moments" (sung by Perry Como), "Anyone Who Had a Heart", "Walk on By", "Do You Know the Way to San Jose?", "I'll Never Fall in Love again", "That's what Friends are for", "Always Someone there to Remind me", "I Say a Little Prayer", "What the World Needs Now is Love, Sweet Love" and "Close to You" (sung by the Carpenters). His songs are so well known that the UK TV programme called "Pop Idols" had a "Burt Bacharach" night where each contestant sang one of his songs. As a songwriter he has worked with a number of people, but it was his partnership with the lyricist Hal David that was to prove most fruitful in terms of their prodigious output of songs recognised the world over, and for a good proportion of that time it was Dionne Warwick who realised their songs beautifully. The writing partnership was also to produce the musical "Promises Promises". Bacharach was married for a time to Carole Bayer Sager with whom he also wrote numerous songs.

http://www.mfiles.co.uk/composers/Burt-Bacharach.htm

WHAT'S IT ALL ABOUT, ALFIE?
http://www.youtube.com/watch?v=48oLsDImC5A

[Demeter]

1. WEATHER REPORT

IT'S 80 AND 80, AT 7:30 EDT. With any luck, it will go down to the 60's again like last night. We had one brief downpour, very welcome, but too short. Know why it rained? I watered the flowers this morning. I'll have to do that more often...

[Demeter]

2. THREE BANKS FAILED ALREADY

American Momentum Bank, Tampa, Florida, acquired the banking operations, including all the deposits, of Southshore Community Bank, Apollo Beach, Florida, and LandMark Bank of Florida, Sarasota. The two banks were closed today by the Florida Office of Financial Regulation, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with American Momentum Bank.

Southshore Community Bank had two branches, and LandMark Bank of Florida had six branches. All eight branches of the two closed banks will reopen during normal business hours beginning Saturday as branches of American Momentum Bank...As of March 31, 2011, Southshore Community Bank had approximately $46.3 million in total assets and $45.3 million in total deposits; and LandMark Bank of Florida had total assets of $275.0 million and total deposits of $246.7 million. In addition to assuming all of the deposits of the two Florida banks, American Momentum Bank agreed to purchase essentially all of their assets...The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) for Southshore Community Bank will be $8.3 million and for LandMark Bank of Florida, $34.4 million. Compared to other alternatives, American Momentum Bank's acquisition of the two institutions was the least costly resolution for the FDIC's DIF.

The closings are the 56th and 57th FDIC-insured institutions to fail in the nation so far this year and the eighth and ninth in Florida. The last FDIC-insured institution closed in the state was First Peoples Bank, Port Saint Lucie, on July 15, 2011.


Bank of Choice, Greeley, Colorado, was closed today by the Colorado Division of Banking, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Bank Midwest, National Association, Kansas City, Missouri, to assume all of the deposits of Bank of Choice.

The 17 branches of Bank of Choice will reopen during their normal business hours beginning Saturday as branches of Bank Midwest, N.A...As of March 31, 2011, Bank of Choice had approximately $1.07 billion in total assets and $924.9 million in total deposits. In addition to assuming all of the deposits, Bank Midwest, N.A. agreed to purchase approximately $853.0 million of the failed bank's assets...As part of this transaction, the FDIC will acquire a value appreciation instrument. This instrument serves as additional consideration for the transaction.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $213.6 million. Compared to other alternatives, Bank Midwest, N.A.'s acquisition was the least costly resolution for the FDIC's DIF. Bank of Choice is the 58th FDIC-insured institution to fail in the nation this year, and the fifth in Colorado. The last FDIC-insured institution closed in the state was Signature Bank, Windsor, on July 8, 2011.

[Demeter]

111. TOTAL LOSS: $256.3M

An average weekend...

[Demeter]

3. Oliphant's medical diagnosis

http://cdn.svcs.c2.uclick.com/c2/bfbb3b50963d012e2f8100163e41dd5b?width=750.0

[DemReadingDU]

55. too funny!

[Demeter]

4. Four indicted on helping US taxpayers hide assets

http://www.google.com/hostednews/afp/article/ALeqM5hiO_jQu_tSrScX5huOfk_0jdj34A?docId=CNG.bd5fc592df044e02e92b3ac83ab64f59.c91

The US Justice Department Thursday charged three former Credit Suisse bankers and a Swiss trust company founder with helping wealthy Americans evade US taxes by keeping money in secret Swiss bank accounts. The indictment did not mention Credit Suisse by name, since it was the individual bankers, not the bank itself, who were indicted. But Credit Suisse announced last week that it was the target of a US Justice Department investigation, which is typically a prelude to an indictment, and media reports indicate that Credit Suisse is the bank in question.

Those charged are Markus Walder, the former head of Credit Suisse's North America Offshore Banking, Susanne D. Ruegg Meier, a former manager at the bank, Andreas Bachmann, a former banker at a Credit Suisse subsidiary, and Josef Dorig, the founder of a Swiss trust company. According to the indictment, the four bankers "engaged in illegal cross-border banking that was designed to assist US customers evade their income taxes by opening and maintaining secret bank accounts at the bank and other Swiss banks."

The US Justice Department, which announced the charges, said that as of late 2008, the bank maintained thousands of secret accounts for US customers with as much as $3 billion in total assets under management...Thursday's Justice Department statement noted that the conspiracy to help US citizens evade taxes dated back to 1953, and involved "two generations of US tax evaders including US customers who inherited secret accounts at the international bank." Four other Credit Suisse bankers -- Marco Parenti Adami, Emanuel Agustino, Michele Bergantino and Roger Schaerer -- were charged in a similar indictment in February...According to the indictment against the former Credit Suisse bankers, the bank's employees destroyed statements and other account records sent by email or fax to its office in New York "so that records regarding the undeclared accounts would not be maintained in the United States." They also advised their US customers to make their withdrawals in amounts less than $10,000 in order to try to hide the secret bank accounts and transactions from US authorities. If convicted, each defendant could face up to five years in prison and a maximum fine of $250,000.

...The indictments against the former Credit Suisse bankers come after another damaging case against rival Swiss bank UBS. Not only was UBS made to pay a $780 million fine, but the Swiss government was also forced to ease the country's banking secrecy rules to allow the bank to hand over 4,000 case files on US clients suspected of tax evasion.

[DemReadingDU]

59. Someone needs to go after the bankers of U.S. banks too

[Demeter]

5. Selling oneself short

http://www.economist.com/blogs/freeexchange/2011/07/european-sovereign-debt

INVESTMENT bankers do not often advocate bigger government, but UBS’ Stephane Deo has an interesting paper arguing that wholesale privatisation is not the answer to European sovereign-debt problems. The potential revenues are significant—between them euro-zone governments own financial assets worth €2.35 trillion (or 26% of euro zone GDP), while UBS estimates non-financial assets such as property are worth double that. But Mr Deo suggests three alternatives to privatisation.

First, the likes of Greece may be able to return to the bond market earlier if they pledge revenue from state-owned assets as security against new bonds. Second, leasing state-owned property rather than selling it would provide consistent deficit-reducing revenue year after year, rather than a one-off debt reduction. Finally, rather than privatising state-owned enterprises, why not impose market discipline, while retaining ownership of the subsequent profits?

We too have argued that privatisation, in Greece in particular, should proceed more cautiously than currently planned. Proper regulation should be developed before state-owned utilities such as railways and electricity providers are sold off, to ensure sufficient competition to restrain price rises. But that is very different from avoiding privatisation altogether.

Mr Deo says his proposals would lead governments to manage assets efficiently without sacrificing ownership: the more property a government can make available for rent, the more revenue it will raise, the higher the value of government-owned shares, the more bonds can be guaranteed against them. However few governments have been able to pull off the trick of fully exploiting assets, even when financial incentives to do so exist. This wider argument about whether governments can be effective managers is inevitably subjective, but could Mr Deo’s alternatives more effectively raise short-term revenue? ...

MORE AT LINK...HMMMM

[Demeter]

6. Brazilian President Rousseff's first semester marred by battles with Congress, scandal

http://www.csmonitor.com/World/Americas/Latin-America-Monitor/2011/0721/Brazilian-President-Rousseff-s-first-semester-marred-by-battles-with-Congress-scandal

Although she has kept Brazil's economy buoyant in her first six months, the president has lost four ministers to corruption scandals and has been unable to keep her congressional allies in line....To her credit, the president has kept the economy buoyant while Europe and the US tank, and she has added continuity to former President Luiz Inácio Lula da Silva’s achievements by expanding and inventing new social programs, such as the new Program to Fight Extreme Misery (Programa de Combate à Miseria Extrema). But apart from these significant bright spots, the president’s policy performance has been halting at best and weak at worst. Overall, the clearest trend has been to privilege the unity of her legislative coalition at the cost of policy priorities, ultimately making a success of neither.

The Coalitional Problem

Notwithstanding the largest majority coalition in Brazil’s democratic history, the president has had extreme difficulty ensuring Congress’s support. Supposed allies have disobeyed and blackmailed Rousseff, weakening or delaying governmental policy priorities, particularly those critical to Brazil’s future sustainability and stability: Forestry Legislation (Código Forestal), the establishment of a Truth Commission, and the passage of a Freedom of Information Law, among others.

On the other hand, Congress has merrily passed measures to increase opacity in budgetary accounting, as was the case with decree 527/11, ostensibly designed to expedite contracting for the 2014 World Cup and 2016 Olympics. One of the few members of the congressional opposition, PSDB (Brazilian Social Democracy Party) leader Aecio Neves, commented:

In all, absolutely all modern societies, transparency or the advance of transparency is seen as an instrument to defend the rights of society. Here we are taking a contrary path, employing the argument that we’re in a hurry, as if we had just now discovered, over the last couple of months, that we would host the World Cup and the Olympics....

[Demeter]

7. Job Search Stretches Past a Year for Millions

http://online.wsj.com/article/SB10001424053111904233404576460171662228698.html?mod=dist_smartbrief

HEY, EVERYBODY UNEMPLOYED! YOU MADE THE WSJ!

More than one in three of the unemployed workers in several of the largest U.S. states have been out of a job for more than a full year.

Across the country, long periods of unemployment have been more prevalent recently than during previous recoveries going back to the 1940s. During 2010, long-term unemployment was disproportionately a problem in New Jersey, Georgia, Michigan, South Carolina, North Carolina, Illinois and Florida, according to Labor Department data expected to be released later this month.

Nationally, 30% of the unemployed, or 4.4 million job seekers, were out of work for more than a year in June 2011, up from 29% of the unemployed in June 2010. "I don't want us to say this is the new normal and move on," said Betsey Stevenson, the Labor Department's chief economist. "It really is going to take a concentrated effort of employers to give people a chance who haven't worked in a while."

In Rhode Island, nearly 31% of the unemployed have been out of work for a year or more...

[AnneD]

21. That is the start of a third party.....

Or a very large angry mob.

What will it be?

[Demeter]

24. When will it be?

Burt Bacharach - Raindrops Keep Falling On My Head

http://www.youtube.com/watch?v=xbYWkegobTU

[Demeter]

110. SEE POST 108, BELOW--IT'S STARTING

I don't like the fact that a hedge fund is running it, but beggars can't be choosers.

[Demeter]

8. Copper falls on signs of manufacturing slowdown

http://www.google.com/hostednews/ap/article/ALeqM5jvDMJLw1f5OyGDsWU_6jWshLwN4g?docId=cfaa5a9e72244587827d680031e4548f

Copper prices are falling on more signs of a manufacturing slowdown in China and Europe. Copper for September delivery fell 5.25 cents to settle at $4.3835 a pound, its second day of losses. Other commodities were mixed as investors monitored debt negotiations in Europe and the United States...Investors worried that the news could mean demand for copper and other industrial metals may diminish in the months ahead, RBC Capital Markets analysts told clients in a research note...


A new survey showed China's manufacturing production fell in July for the first time in a year after the government implemented measures to slow the country's rapid economic growth and curb inflation. HSBC Corp.'s Flash China Manufacturing Purchasing Managers' Index fell to a 28-month low.

...Investors are concerned that a failure to solve the debt problems on either continent could slow demand for many commodities including oil, copper and grains. August gold fell $9.90 to settle at $1,587 an ounce, September silver dropped 61.1 cents to $38.947 an ounce, October platinum rose $11.70 to $1,787.80 an ounce and September palladium gained $15.35 to $809 an ounce.

In other trading, corn futures have been volatile as a heat wave threatens the U.S. crop. Light, scattered rain forecast for this weekend in Iowa, Illinois and Indiana, but more hot weather is expected next week. Mike Zuzolo, president of Global Commodity Analytics & Consulting LLC, speculated that the crop will show more deterioration in the weekly report due Monday from the U.S. Agriculture Department. He said that likely will send corn prices higher. Corn for December delivery fell 4.75 cents to $6.73 a bushel....Wheat prices fell on news that the Ukraine expects to produce more of the crop than anticipated, Zuzolo said. September wheat dropped 19.75 cents to $6.7725 a bushel and November soybeans rose 4 cents to $13.88 a bushel....Energy products were mostly lower. Benchmark crude for September delivery rose 73 cents to settle at $99.13 a barrel on the New York Mercantile Exchange after hitting a high of $100.16 per barrel in earlier trading. In other Nymex contracts, heating oil fell 1.92 cents to settle at $3.0992 per gallon, gasoline fell 4.75 cents to $3.0995 per gallon and natural gas fell 10.7 cents to $4.362 per 1,000 cubic feet.

[Demeter]

9. Tumble in Cotton Prices, New Wrinkle for Apparel Makers

http://online.wsj.com/article/SB10001424053111903554904576458270983393048.html?mod=dist_smartbrief

Cotton prices, which surged to historic highs this spring, have plunged 38% so far this month, roiling mill owners and apparel makers.

It's a reversal for clothing makers that spent the last year grappling with higher costs and how much, if any, could be passed along to consumers. Now, retailers are wondering if lower cotton prices, off 53% since their March 4 peak, will last or if the roller-coaster ride will continue.

"There's never been this kind of volatility in cotton—ever," Eric Wiseman, chief executive of VF Corp., the world's largest apparel company, said in an interview on Thursday.

Lower cotton prices won't show up in merchandise on store shelves until late spring of next year. But over the next few months, clothing companies will have to decide whether they can continue to charge more for their T-shirts and denim jeans, allowing them to widen profit margins, or to pull back and give consumers a break...

[Po_d Mainiac]

11. YoY the price is still up 25%

Currently $99.30
1 Year ago $80.00

1 month ago $150.00

3 months ago $300.00

6 months ago $140.00

9 months ago $115.00

IMHO, when this years crop falls short due to the flooding and/or drought, last years jeans will seam (sp?) like a bargain

[Po_d Mainiac]

12. Think grizzly

As in Plymouth Rock rooster saddles.

What was a $35 patch of skin and feathers 2 months ago will top $900 today...Not as fly tying material, but to stick in your hair. If you got this stuff, dump it while the price is hot. There are a shit load of birds that will skun in 6-8 weeks.

[hamerfan]

19. Gets my hackles up!

This is absolutely nuts, and is a microcosm of the world's economy today.
Crazy times, folks, or as one who was much better at words than me put it, Strange Days Indeed.

http://www.youtube.com/watch?v=EImWL_ppAXM

[AnneD]

22. Great video......

There are some things I really miss....like John Lennon, George Carlin to name a few.

[hamerfan]

23. Yes!

Lennon, Carlin, and to me the inimitable Sam Kinison!

http://www.youtube.com/watch?v=qPuRTroOE9c

[Po_d Mainiac]

57. What the fox shared

Probably 20 plus springs ago, a fox is heading for her den dragging a rooster that likely out weighted her by a couple pounds. The den was under a rock pile just off the road a few hundred yards from the end of our driveway.

The rooster was a Plymouth Rock, the bird breed that is naturally decked out in grizzly hackles. I ain't the proud type, and have lots of tying materials (and have had more than a few meals) that have come from the ditch.

It took a few seconds to get her to abandon the bird long enough for me to skin off the cape and saddle. While doing so, she only backed off a few yards, and was letting me know how ripped she was. Coarse she's thinking I might be stealing her kits groceries. My blade never touched the meat, but with the feathers gone, her life was made easier, but she was un-aware of that at the time. No harm, no foul..I left the meat. She and her kits got their meal.

There were only 3 houses within a half mile, and none of us had Rock fowl, so where her trek with the bird had originated, I have no clue. As for the strange travels of the saddle feathers since, here's the saga:

After salting both patches with borax, I used a bunch of the neck hackles for dry flies, but never plucked many off the saddle. 20 of those feathers just sold for $31 (eBay) and are enroute to Scottsdale to go in somebodies hair as extensions..There are at least a hundred hackles left.

Who'd a thunked it..Strange indeed.

[Demeter]

65. You are the Embodiment of Yankee Ingenuity

not to mention, the Yankee trader spirit lives on in you....How is it in NE?

Looks like the heat wave is broken, and we have another chance at rain...

[Po_d Mainiac]

86. The momma fox thought of me as a piece of shit scavanger.

The last few days have been hotter than the friggin hinges to Hell. Pumping water twice a day just to keep the groceries in the ground, and the arial garden alive.

I ain't that big on being a seller. 25 yrs owning a retail outlet sucked out the energy to deal with the public. But the prices feathers are commanding is just too good to pass up. The teenager down the road (good kid) is looking to support his driving habit and pack some bucks away for college. I'm going to let him do the eBay postings and we'll split the net. If the price holds, and he can get the stuff loaded fast enough, the dead chicken parts I got stashed away should draw/gross well over $5K.

Plus the lad now has several complete peacock tails, a box of emu shucks, macaw/cockatoo tails (natural molts/drops--the birds are still alive and well) to put up for a farm that rehabilitates tropicals...Me bride is playing grandma in So. Fl and I've turned her house into a feather studio. The lad and self have two weeks to get most of this stuff gone, or I'll be camping out in the barn for the forseeable future.

Last night I was scanning the "wig-extensions" category on the bay, and was cracked up by the seller names peddling feathers. 'Deer-Slayer' 'Trout Guy' 'Togue Troller' (just to name a few)......Most likely not the handles commonly seen in "Woman's Cosmetics" :rofl:

[Demeter]

90. OMG

You better get it cleaned up before the wife returns...

[Po_d Mainiac]

96. So this PM I'm working on the new barn addition

I got the doors and most of the windows to the house open...Mother Nature finally decides to stir the air around after 4 days of stagflation....

Feathers + wind = sucked to be me

[DemReadingDU]

74. good story

it is amazing the things people buy and sell on ebay

[westerebus]

78. SO..

You'd be a purveyor of trinkets, bobbles and body parts ???

:evilgrin:

[Po_d Mainiac]

89. The body parts thing wood be a big 10-4

the trinkets....nope....Simply a supplier of trinket parts

Since my head is full of feather knowledge, and there is little room for much else at the present, I'll let you come up with an appropriate title/job description.:rofl:

[Tansy_Gold]

98. Oh, dear. If his head is full of feathers, what does that make mine?

[westerebus]

102. A pleasure to behold.

;-)

[Po_d Mainiac]

143. Mdme Gold does great work...ayuh

May be best that self has been pointed down the fowl road....which only leads to a feather brain ....had I shared TG's passion, they'd likely state I had rocks in me head...hmmmmm

[Demeter]

108. FOR TANSY AND US ALL: Make Way for the Radical Center By THOMAS L. FRIEDMAN

http://www.nytimes.com/2011/07/24/opinion/sunday/24friedman.html


...Thanks to a quiet political start-up that is now ready to show its hand, a viable, centrist, third presidential ticket, elected by an Internet convention, is going to emerge in 2012. I know it sounds gimmicky — an Internet convention — but an impressive group of frustrated Democrats, Republicans and independents, called Americans Elect, is really serious, and they have thought out this process well. In a few days, Americans Elect will formally submit the 1.6 million signatures it has gathered to get on the presidential ballot in California as part of its unfolding national effort to get on the ballots of all 50 states for 2012.

The goal of Americans Elect is to take a presidential nominating process now monopolized by the Republican and Democratic parties, which are beholden to their special interests, and blow it wide open — guaranteeing that a credible third choice, nominated independently, will not only be on the ballot in every state but be able to take part in every presidential debate and challenge both parties from the middle with the best ideas on how deal with the debt, education and jobs. “Our goal is to open up what has been an anticompetitive process to people in the middle who are unsatisfied with the choices of the two parties,” said Kahlil Byrd, the C.E.O. of Americans Elect, speaking from its swank offices, financed with some serious hedge-fund money, a stone’s throw from the White House.

As the group explains on its Web site, www.americanselect.org: “Americans Elect is the first-ever open nominating process. We’re using the Internet to give every single voter — Democrat, Republican or independent — the power to nominate a presidential ticket in 2012. The people will choose the issues. The people will choose the candidates. And in a secure, online convention next June, the people will make history by putting their choice on the ballot in every state.” Here is how it will work, explains Elliot Ackerman, an Iraq war veteran with a Silver Star, who serves as the chief operating officer of Americans Elect, and whose father, Peter, a successful investor, has been a prime engine behind the group. First, anyone interested in becoming a delegate goes to the Americans Elect Web site and registers. As part of that process, you will be asked to fill in a questionnaire about your political priorities: education, foreign policy, the economy, etc. This enables Americans Elect to put you in contact with others who share your views so you can discuss them and organize together. Then you will be invited to draft a candidate or support one who has already been drafted and to contribute to the list of questions that anyone running on the Americans Elect platform will have to answer on the site. “The questions, the priorities, the nominations and the rules will all come from the community, not from two entrenched parties,” said Ackerman.

Any presidential nominee must conform to all the Constitutional requirements, as well as be considered someone of similar stature to our previous presidents. That means no Lady Gaga allowed. Every candidate will have to post in words or video his or her answers to the platform questions produced by the Americans Elect delegates. In April 2012, the candidate pool will be reduced to six through three rounds of voting. The six, assuming they all want to run, will then have to name their running mates. The only rule is that a Democrat must run with a Republican or independent, and a Republican with a Democrat or independent...

[Tansy_Gold]

136. What Friedman calls a "center" is what we used to call "solid right."

Any "Democrat" who is willing to run with a "Republican" or vice versa is neither. What AE wants is a nice neat little compromise, but "the middle" isn't going to get it. You know that, and I know that.


THERE CAN BE NO COMPROMISE WITH REPUBLICANS.

AE is stupid.



Tansy Gold, is not

[DemReadingDU]

139. Republicans - The party of no

[DemReadingDU]

138. Gorgeous!

[Tansy_Gold]

142. :blush:

It's what I do in my spare time.

top is a natural amethyst crystal, probably from Brazil
middle is a chalcedony "desert rose" with druzy quartz crystals found in Arizona
bottom is hand polished (by me) cabochon of natural chrysocolla from near Hummingbird Springs, Arizona.

I do the wire work.

[AnneD]

144. Pod Maine, One of my favorite job titles in the poultry business...

Chicken sexer. On some birds, it is impossible to tell the sex of some birds ( emu, ostriches, etc) unless you stick your hand up the animals cavity to feel for the chloeca, the egg laying business end.

If you feel a certain shape, it will determine whether it is a male or female. I don't know if this is one of the jobs that Americans don't want or what.

[Demeter]

10. GAO audit opens Fed to fresh criticism

http://thehill.com/blogs/on-the-money/801-economy/172727-gao-audit-opens-fed-to-fresh-criticism

The Federal Reserve had more than $1 trillion in loans out to a wide range of financial institutions during the financial crisis, according to a new audit of the central bank.

The Government Accountability Office (GAO) released its top-to-bottom audit of the Fed Thursday, opening the central bank to fresh criticism from the lawmaker that had pushed for the audit in the first place. The GAO was directed to conduct the audit by a provision in the Dodd-Frank financial reform law pushed by liberal Sen. Bernie Sanders (I-Vt.). He was quick to blast the Fed for its far-reaching activity during the peak of the financial crisis.

"As a result of this audit, we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world," he said. "This is a clear case of socialism for the rich and rugged, you're-on-your-own individualism for everyone else."

The GAO found that the Fed awarded $659.4 million of contracts to private parties during the crisis to help facilitate those emergency moves. Eight of the 10 largest contracts were awarded on a noncompetitive basis. While such a "no-bid" contract is consistent with the Fed's policies, the GAO said those policies could be improved to pursue competition whenever possible and limit the length of any noncompetitive agreements....The GAO also found that while the Fed had policies in place to avoid conflicts of interests for its employees, those could also be improved. In particular, the new roles taken on by the Federal Reserve Bank of New York and its employees during the crisis increased the chance for potential conflicts that were not addressed in existing policies...The government watchdog also recommended that the Fed strengthen its risk management practices for future crisis lending. In particular, Sanders was highly critical of the Fed making emergency loans to foreign banks and corporations, which he said was an abuse of the Fed's power..."No agency of the United States government should be allowed to bail out a foreign bank or corporation without the direct approval of Congress and the president," he said. Sanders went on to criticize the Fed for its policies regarding conflicts of interest, saying that waivers provided to employees allowed them to keep investments in financial institutions and companies that received Fed loans. As a prominent example, he pointed out that the chief executive officer of JPMorgan Chase was on the New York Fed's board of directors at the same time the firm was receiving more than $390 billion in Fed assistance. The firm also helped clear loans for the Fed during its emergency lending.

"No one who works for a firm receiving direct financial assistance from the Fed should be allowed to sit on the Fed's board of directors or be employed by the Fed," said Sanders.

[Demeter]

13. Audit of Fed finds conflict-of-interest weakness

http://www.marketwatch.com/story/audit-of-fed-finds-conflict-of-interest-weakness-2011-07-21?pagenumber=1

A long-awaited audit of the Federal Reserve’s emergency lending programs on Thursday urged several reforms, including an overhaul of the central bank’s conflict-of-interest policies.

The Government Accountability Office found that many employees and contractors of the New York Fed were allowed to keep investments in companies that received Fed assistance.

William Dudley, the current president of the New York Fed but at the time the head of its open-markets group, was granted a waiver to let him retain his shares in American International Group Inc. AIG and General Electric GE ...

[Demeter]

14. Always something there to remind me

http://www.youtube.com/watch?v=KysD1mPg1is&feature=list_related&playnext=1&list=PL39CB08324B96FBA9

[Demeter]

15. Social cognitive theory ---Wikipedia

Social Cognitive Theory, used in psychology, education, and communication, posits that portions of an individual's knowledge acquisition can be directly related to observing others within the context of social interactions, experiences, and outside media influences.

History

Social Cognitive Theory stemmed out of work in the area of social learning theory proposed by N.E. Miller and J. Dollard in 1941. Their proposition posits that if one were motivated to learn a particular behavior, then that particular behavior would be learned through clear observations. By imitating these observed actions the individual observer would solidify that learned action and would be rewarded with positive reinforcement. The proposition of social learning was expanded upon and theorized by Canadian psychologist Albert Bandura from 1962 until the present.

The theorists most commonly associated with social cognitive theory are Albert Bandura and Walter Mischel.

Overview

Social cognitive theory is a learning theory based on the ideas that people learn by watching what others do and that human thought processes are central to understanding personality. While social cognitists agree that there is a fair amount of influence on development generated by learned behavior displayed in the environment in which one grows up, they believe that the individual person (and therefore cognition) is just as important in determining moral development.

People learn by observing others, with the environment, behavior, and cognition all as the chief factors in influencing development. These three factors are not static or independent; rather, they are all reciprocal. For example, each behavior witnessed can change a person's way of thinking (cognition). Similarly, the environment one is raised in may influence later behaviors, just as a father's mindset (also cognition) will determine the environment in which his children are raised.

Morality


Social cognitive theory emphasizes a large difference between an individual's ability to be morally competent and morally performing. Moral competence involves having the ability to perform a moral behavior, whereas moral performance indicates actually following one's idea of moral behavior in a specific situation. Moral competencies include:

• what an individual is capable of
  
• what an individual knows
  
• what an individual's skills are
  
• an individual's awareness of moral rules and regulations
  
• an individual's cognitive ability to construct behaviors

As far as an individual's development is concerned, moral competence is the growth of cognitive-sensory processes; simply put, being aware of what is considered right and wrong. By comparison, moral performance is influenced by the possible rewards and incentives to act a certain way. For example, a person's moral competence might tell them that stealing is wrong and frowned upon by society; however, if the reward for stealing is a substantial sum, their moral performance might indicate a different line of thought. Therein lies the core of social cognitive theory.

[Demeter]

16. Bedtime--Catch you all in the morning

[Hugin]

17. ((( hugs to all of my friends everywhere )))

Especially, those in Norway.

:grouphug:

[Tansy_Gold]

18. .

:grouphug:

[AnneD]

20. Best use of a Burt Bacharach song in a film....

http://m.youtube.com/index?desktop_uri=%2F&gl=US#/watch?v=53KUQAfIymM

That is Italian I think, with a smattering of French. Music is, after all, universal.

[Demeter]

25. link isn't working, AnneD

[AnneD]

32. I don't understand why....

I use my iPad and the link works on it (I double checked), it was from My Best Friend's Wedding--I Say A Little Prayer the Italian dubbed version, but the song was in English.

[Demeter]

39. I FOUND THIS ONE

http://www.youtube.com/watch?v=lUyFZUKo6u8

[Demeter]

26. Bill Bonner A Positive Approach to a US Government Default

http://dailyreckoning.com/a-positive-approach-to-a-us-government-default/

And here at The Daily Reckoning, we stand with the Tea Party and the Germans. We’d like to see the US government default. Why?

• Because the feds have already done enough damage with their borrowing; it’s time they lived within their means...
  
  
• Because we already have enough zombies, supported by borrowed funds...
  
  
• Because it will be less painful to stop the debt build up now than later...
  
  
• And because we just want to see what happens when the zombies run out of fresh meat.

I'M INCLINED TO AGREE WITH THE SECOND AND FOURTH POINTS, PLUS THE HOPE THAT WAR FUNDING STOPS DEAD...

[Demeter]

27. Debt vs. Gold: The Hidden Link Explained By Ben Traynor

http://dailyreckoning.com/debt-vs-gold-the-hidden-link-explained/

...measured in terms of gold bullion – the nemesis of Uncle Sam’s debt, apparently – US national debt has actually fallen for the last ten years:



Put another way, the average annual Dollar gold price has risen faster than Uncle Sam has been able to write his IOUs. Which is no mean feat!

The US now only owes the equivalent of 340,000 tonnes of gold – still more than the total sum of gold ever mined (twice as much, in fact, according to best estimates) and way above the 8,113.5 tonnes the United States Treasury says it holds between Fort Knox and the New York Fed.

But why would gold demand rise – pushing the gold price higher – in response to the growth of national debt? Like money itself, debt – whether a personal loan or the kind racked up on our behalf by our elected representatives – represents a claim on resources, otherwise known as wealth. At some point in the future, the debtor is expected to hand some wealth back to his or her creditor, ideally the principal plus some level of profit. Trouble is, debtors don’t always follow the script.

Now, when it comes to resolving its national debt, the US government has five options:

• #1. Economic growth – The economy produces more real wealth. The government, through taxes, takes a slice of this growing pie, and pays back the bondholders from whom it has borrowed in the past;
  
  
• #2. Raise taxes – The economic pie doesn’t need to grow. Uncle Sam could simply raise the rate of taxation, and use that bigger sum of cash to repay its debt;
  
  
• #3. More borrowing – As interest or debt repayments fall due, the Treasury simply goes back to the bond market and borrows from Peter to pay Paul;
  
  
• #4. Default – Just don’t pay. Tell the creditors to get lost;
  
  
• #5. Pretend to pay – The US Dollar is the world’s No.1 reserve currency, giving foreign central banks (especially in fast-growing Asia) little choice for where they might store their burgeoning savings. The US Treasury borrows in Dollars. The Federal Reserve has the power to create Dollars. The more Dollars there are, the less each one is worth – but when you’re handing them over to someone else, who cares?
  

[Demeter]

28. The Gold-Oil Ratio and Other Reasons Gold is Still a Buy By Addison Wiggin

“Don’t believe what you read about record-high gold prices,” advises our friend Frank Holmes not a moment too soon. “Yes, gold hit a high in nominal terms, but the price is more than 30% below the 1980 peak of $2,400 an ounce if you adjust for inflation...Gold is about to get even more attractive because we are heading into the fall and winter gift-giving season,” Frank continues. “This is the time of year when gold jewelers typically do their biggest business. The kickoff is the Muslim holy month of Ramadan, which starts next month and ends with generous gift giving in early September.”

As with recent years, the drivers of this seasonal strength are China and India:



Rising Incomes in India and China and the Gold Price from 2000-2010

“Back when the average per capita income in China and India was well below $1,000 a year,” says Frank, “gold prices hovered just above $200 an ounce. As average incomes have approached $3,000 a year over the past decade, gold prices have followed...With the long-term outlook for wages in both these economies rather rosy, gold demand should continue to feel the trickle-down effect.”

Another indication gold is still a good buy: the gold-oil ratio is still three points below its historic average....The gold-oil ratio measures the number of barrels of Brent crude it would take to equal one ounce of gold. Citing research from Capital Daily, Frank points out the ratio is currently 13.5. Since 1970, the average has been around 16.

“Gold prices would need to rise to $1,870 an ounce,” Mr. Holmes calculates, “in order to reach historical ratio levels with $117 per barrel Brent crude oil.”

Read more: The Gold-Oil Ratio and Other Reasons Gold is Still a Buy http://dailyreckoning.com/the-gold-oil-ratio-and-other-reasons-gold-is-still-a-buy/#ixzz1SvJUt7Pg

[Demeter]

29. Devastating Portrait of a US Government Default By Rocky Vega

In a recent article, Simon Johnson, a former IMF chief economist and senior fellow at the Peterson Institute for International Economics, paints an revealing picture of how he envisions a debt default devastating the US economy.

The portrait is that of a series of ever more destructive dominoes toppling over — with ruined US Treasuries swiftly leading to broken money-market funds and corrupted bank balance sheets — combining to result in an unparalleled run into cash and the evisceration of corporate credit.

From Project Syndicate:

“The reason is simple: a government default would destroy the credit system as we know it. The fundamental benchmark interest rates in modern financial markets are the so-called “risk-free” rates on government bonds. Removing this pillar of the system – or creating a high degree of risk around US Treasuries – would disrupt many private contracts and all kinds of transactions.

“In addition, many people and firms hold their “rainy day money” in the form of US Treasuries. The money-market funds that are perceived to be the safest, for example, are those that hold only US government debt. If the US government defaults, however, all of them will “break the buck,” meaning that they will be unable to maintain the principal value of the money that has been placed with them.

“The result would be capital flight – but to where? Many banks would have a similar problem: a collapse in US Treasury prices (the counterpart of higher interest rates, as bond prices and interest rates move in opposite directions) would destroy their balance sheets.

“There is no company in the US that would be unaffected by a government default – and no bank or other financial institution that could provide a secure haven for savings. There would be a massive run into cash, on an order not seen since the Great Depression, with long lines of people at ATMs and teller windows withdrawing as much as possible.”

Alongside the worst outcomes, Johnson also highlights the likelihood that a default would perversely increase the relative size of government as compared to what would become the rapidly shrinking private sector of the US economy. You can read more details in the Project Syndicate post on how the nation could end up defaulting to big government: http://www.project-syndicate.org/commentary/johnson22/English

Read more: Devastating Portrait of a US Government Default http://dailyreckoning.com/devastating-portrait-of-a-us-government-default/#ixzz1SvKiNngR

SO, FROM THE IMF TO THE PETERSON PIRATE....JUST A HEADS UP ON THIS INTERESTING POINT OF VIEW

[Demeter]

30. BY THE WAY--THE COUNTRY HAS WALKED OFF THE DEFAULT CLIFF

We just haven't hit bottom, yet.

According to Tyler Durden, there had to be a bill on Obama's desk Friday night in order to make the default possibility go away. We are now reduced to hoping that lightning strikes Congress, and they just cleanly raise the debt ceiling, or the Fed destroys their balance sheet by burning up the $1.7T in T Bills they hold....

http://www.zerohedge.com/article/several-inconvenient-truths-about-debt-ceiling-and-deficit-reduction

[Demeter]

31. “You may not know this, but the U.S. has actually defaulted a number of times already,”

http://dailyreckoning.com/the-path-to-debt-in-america/

“You may not know this, but the U.S. has actually defaulted a number of times already,” writes Chris Mayer this morning. He cites five instances:

• 1779: The government was unable to redeem the continental currency issued during the Revolutionary War
• 1782: The Colonies defaulted on the debt they took out to pay for the war
• 1862: During the Civil War, the Union failed to redeem dollars for gold at terms stated by the debt contracts
• 1934: FDR defaults on the debt issued to finance World War I, refusing to redeem it in gold. The dollar is devalued 40% against gold
• 1979: A bureaucratic snafu results in interest going unpaid on some small bills.

“With the exception of 1979,” Chris says, “which was mostly due to administrative confusion — the U.S. simply ran out of money each time. The end result was the dollar had to be devalued. Meaning it lost significant purchasing power.

“My guess is that the U.S. will default again. It may not technically be called that, but the only way for the U.S. to meet its financial obligations is to print a lot of money.”

Read more: The Path to Debt in America http://dailyreckoning.com/the-path-to-debt-in-america/#ixzz1SvNeSlKk


YEAH, BUT NEVER WITH THE ENTIRE WORLD ECONOMY BALANCED ON TOP OF IT

[westerebus]

82. Once a pirate, always a pirate.

Very clean cut and presentable mind you, pirate none the less.

Voted most likely to impress the independents that there is and never was collusion among those who rule. IMHO.

[Po_d Mainiac]

97. Ya heard it from me first......over a year ago

A 1960 quarter was worth a gallon of gas when minted

That it's worth about two gallons today, could indicate more 'pain at the pump' in the future.
YMMV

[Demeter]

33. Save the Gambling Bankers By Michael Hudson VIDEO

http://michael-hudson.com/2011/07/save-the-gambling-bankers/

[Demeter]

67. Is Bank of America At Risk of a Death Spiral?

http://www.nakedcapitalism.com/2011/07/is-bank-of-america-at-risk-of-a-death-spiral.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

Bloomberg’s Jonathan Weil took a look at Bank of America’s stock price, which is trading at less than half of the Charlotte bank’s book value, and discussed whether the bank is at risk of a serious crisis. If a levered financial firm’s stock trades at a severe discount from book value, it is not attractive to raise equity via selling shares (the dilutive impact on existing shareholders is punitive). Yet the steep discount is a sign that the market doubts the strength of the concern’s equity base. If those worries persist, and the company is not able to shore up its balance sheet via earnings (ie, either its profits are impaired or they are offset by writeoffs), first long term and eventually short-term lenders will start to demand higher interest rates. Once that happens, it is easy for confidence to vanish and a death spiral to start.

Weil enumerates the reasons for doubt. First, the bank has been overly optimistic. It refused to write down $4.4 billion of goodwill from Countrywide until late last year, and maintained it would only suffer $4.4 billion (yes, the same number) in mortgage-related losses, then wrote off $19.2 billion more last quarter. Second, the bank appears to be in denial...

...Both Citi and BofA were at risk of failure in early 2009. Citi at least was forced to divest many of its operations (note that isn’t an adequate remedy, since the bank is still too big to fail, but at least it is easier for managers and regulators to oversee). Bank of America, by contrast, was allowed to soldier on. The authorities have grossly underestimated the severity of the housing crisis and are still refusing to confront some of its key elements, such as the broken servicing model and chain of title problems.

And let us tell you a dirty secret: while Bank of America, thanks to Countrywide, is patient zero of the housing mess, Wells is next in line. Residential real estate is proportionately even bigger relative to the bank’s earnings and balance sheet, its accounting has been somewhere between aggressive and misleading, and despite its pious claims otherwise, it is no better than any of the other big banks. Stay tuned.

[Demeter]

34. States negotiating immunity for banks over foreclosures

http://www.reuters.com/article/2011/07/20/us-foreclosure-banks-immunity-idUSTRE76J7J820110720

State attorneys general are negotiating to give major banks wide immunity over irregularities in handling foreclosures, even as evidence has emerged that banks are continuing to file questionable documents...

READ IT AND WEEP

....State and federal officials declined to say if any form of immunity from criminal prosecution also is under discussion. The banks involved in the talks are Bank of America, Wells Fargo, CitiGroup, JPMorgan Chase and Ally Financial....

OH, THAT MAKES ME FEEL SO MUCH BETTER!

[Demeter]

48. Should You Get Only $7000 if Wells Stole Your House?

http://www.nakedcapitalism.com/2011/07/should-you-get-only-7000-if-a-bank-steals-your-house.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

If you are a too big to fail bank like Wells Fargo, the wages of crime look awfully good. RIp off as many as 10,000 people to the point where they lose their homes and your good friend the Fed will let you off the hook for somewhere between $1000 and $20,000 per house. And as we’ll discuss in due course, this deal isn’t just bad for the abused homeowners, it’s also bad for investors and sets a terrible precedent, which means its impact extends well beyond the perhaps 10,000 immediate casualties....DETAILS AT LINK

[Demeter]

35. Koch, Exxon Mobil Among Corporations Helping Write State Laws

http://www.bloomberg.com/news/2011-07-21/koch-exxon-mobil-among-corporations-helping-write-state-laws.html

Koch Industries Inc. and Exxon Mobil Corp. (XOM) are among companies that would benefit from almost identical energy legislation introduced in state capitals from Oregon to New Mexico to New Hampshire -- and that’s by design.

The energy companies helped write the legislation at a meeting organized by a group they finance, the American Legislative Exchange Council, a Washington-based policy institute known as ALEC.

The corporations, both ALEC members, took a seat at the legislative drafting table beside elected officials and policy analysts by paying a fee between $3,000 and $10,000, according to documents obtained by Bloomberg News.

The opportunity for corporations to become co-authors of state laws legally through ALEC covers a wide range of issues from energy to taxes to agriculture. The price for participation is an ALEC membership fee of as much as $25,000 -- and the few extra thousands to join one of the group’s legislative-writing task forces. Once the “model legislation” is complete, it’s up to ALEC’s legislator members to shepherd it into law...The financing and internal operations of ALEC, which was founded in 1973, aren’t well known...ALEC was founded by the late Representative Henry Hyde of Illinois, a Republican who served in the U.S. Congress for 22 years, and the late political activist Paul Weyrich, who co- founded the Heritage Foundation, a policy and research organization in Washington that says its mission is to formulate and promote conservative policies.

[Demeter]

36. Elizabeth Warren Makes It Personal

http://www.theatlantic.com/politics/archive/2011/07/elizabeth-warren-makes-it-personal/242201/

Elizabeth Warren is ready to name and shame. After 10 long months spent crafting a brand-new federal agency in her image and likeness, years before that willing the institution into statutory existence, only to be passed over on Sunday in favor of Richard Cordray just as the new Consumer Financial Protection Bureau is moving out of beta, Warren, on a press call late yesterday afternoon, was eager to share her clarity on who's to blame for the especially precarious position the new federal-friend-to-the-American-consumer now finds itself in...

[Demeter]

66. Scott Brown Beats Elizabeth Warren by 25 Points in Recent Poll

http://www.nakedcapitalism.com/2011/07/scott-brown-beats-elizabeth-warren-by-25-points-in-recent-poll.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

THE DLC NEEDS TO FIND A REAL FOOL FOR THIS FOOL'S ERRAND...AND ELIZABETH IS NOBODY'S FOOL.

We argued yesterday that the Senate was not a good vehicle for advancing Elizabeth Warren’s aims of helping middle class families, since she would have no more, and arguably less power than she has now, and would be expected to defend Democrat/Obama policies, many of which are affirmatively destructive to middle class interests (just less so than what the Republicans would put in place).

A poll conducted in late June by Scott Brown and the Republican National Committee raises an even more basic question: whether she even has a shot at winning. We pointed out an obvious flaw: Warren would not get much if any big corporate sponsorship, and big warchests are usually necessary to buy enough airtime to unseat incumbents.

The poll shows a 25 point gap, which is a massive hurdle, and also indicates that Brown is seen by many voters as not being a Republican stalwart (as in he is perceived to vote for the state’s, not the party’s, interest). A 25 point gap is a near insurmountable hurdle and shows that Warren’s reputation does not carry as far as the Democratic party hackocracy would like her fans to believe. But there’s no reason not to get this pesky woman to take up what is likely to be a poisoned chalice. If she wins, she’s unlikely to get on any important committees, given the Democratic party pay to play system, and will be boxed in by the practical requirements of having to make nice to the party and support Obama positions a meaningful portion of the time. And if she runs and loses, it would be taken as proof that her middle class agenda really doesn’t resonate with voters, which will give the corporocrats free rein (if you can’t sell a liberal agenda in a borderline Communist state like Massachusetts, it won’t play in Peoria either).

[plumbob]

72. "I have become con-tro-ver-see-uhl," she says, "which I think is code for getting something done."

About the best take I've seen.


Sorry I'm late this morning - my oldest son is moving, and his help ran out on his 160 gallon aquarium, so he called last night about 8. We finished at 4 am, so I'm taking a quick look. THANK YOU for starting with Bandura! I think his explanations make much more sense than wondering why people don't always obey the ten commandments and just writing it off to demonic possession.

I use him in my teaching career all the time.

I'll be back up in a while, and thanks again!

[DemReadingDU]

77. Thanks for suggesting the Bandura topic

I've not studied much psychology, nor Bandura, but I've instinctively believed that one should be a good role model in your behavior and actions so young children see and do what is appropriate. I'm in my early 60s now.

However, in the past 25-30 years or so, something has changed to where many people feel entitled to say and do whatever they want, irregardless of impressionable young children. As a result, there are many children nowadays who say and do whatever they please, because to me, that is what they have observed.

great topic today!

[bread_and_roses]

75. So she's giving "the rotting corpse" of the D Party a pass?

I just scanned the article - I have great admiration for Warren, but it does us no good to give the Ds a pass. It's like the feeble squeaks that Labor makes. In the end, all it does is justify the quisling Ds scraps and bones "compromises." You can't compromise with the Devil.

[Demeter]

79. I wouldn't say that

Instead of wasting her assets on a hopeless bid for a job she doesn't want, E Warren is looking to maximize her effect on policy.

I think she should primary Obama. That wouldn't be a waste, no matter which way it turns out.

And after that, she can be our seed for a third party.

[Demeter]

37. Dodd-Frank Backers Clash With Regulator

http://www.nytimes.com/2011/07/23/business/economy/dodd-frank-backers-clash-with-currency-chief-walsh.html?_r=1&ref=business

John Walsh voiced the frustrations of many bankers when he warned in a speech last month that federal regulators were not paying attention to the cumulative impact of new rules and restrictions, jeopardizing the ability of banks to support economic growth. “I might have titled these remarks, ‘Beware of the Pendulum,’ ” he said. “To put it plainly, my view is that we are in danger of trying to squeeze too much risk and complexity out of banking.”

What made the speech unusual was that Mr. Walsh is a federal regulator. In fact, he is responsible for overseeing most of the nation’s large banks. And as the text of his remarks ricocheted across the electronic landscape of official Washington, it drew a furious reaction from advocates of increased regulation, who called on the White House to replace him.

The uproar brought into public view the increasingly contentious relationship between the authors and supporters of the Dodd-Frank Act, the law passed last year to overhaul financial regulation, and Mr. Walsh, the acting comptroller of the currency, a crucial player in the work of translating the law into practice. His agency is seeking to soften a wide range of provisions, in areas ranging from the bread-and-butter of consumer protection to the esoteric details of how much money banks can borrow. Democrats and consumer advocates are particularly infuriated because Mr. Walsh, who stepped in as acting director in August, could be replaced by the White House at any time.

“The O.C.C. is acting as if there was never a financial crisis,” said Dennis Kelleher, president of Better Markets, a nonprofit group that advocates for increased regulation of the financial industry. “It’s just an utterly indefensible abdication of its responsibility to the American people.”

[Demeter]

46. Matt Stoller: Dodd-Frank Made No Structural Changes to Banking System

http://www.nakedcapitalism.com/2011/07/matt-stoller-dodd-frank-made-no-structural-changes-to-banking-system.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

THIS LEGISLATION IS A YEAR OLD THIS WEEK--STILL HASN'T BEEN IMPLEMENTED--AND LOOKS LIKE IT NEVER WILL BE...

I was a staffer on the Dodd-Frank legislative package, and the whole process seemed odd from the very beginning. There was no attempt initially to ask the question, “what happened and what should we do about it?” There was no examination of the purpose of a banking system, and how to rebuild a system that aligns the public with the financial industry. There was no attempt to build legitimacy through a public education campaign about what Congress and the administration was doing, and why. Instead, legislators and very serious men in suits started throwing around terms like “systemic risk regulator” and “resolution authority”, and then used the idea of a Consumer Financial Protection Bureau as a palliative for liberals.

My specific focus on the bill was the provision to audit the Federal Reserve, which was one of the bright spots (another could be the Consumer Financial Protection Bureau). This provision opened up the Fed’s emergency lending facilities and its discount window to the spotlight, allowing for the beginning of a real debate over our monetary system. But overall, the Dodd-Frank bill was significant for its lack of significance.

In retrospect, this was by design. Congress created a panel — the Financial Crisis Inquiry Commission — to examine the cause of the financial crisis. But this panel had a mandate to deliver its recommendations after the passage of Dodd-Frank. In other words, Congress and the administration did not design Dodd-Frank to prevent another financial crisis. So what was the purpose of the bill? I suspect this can only be answered by looking at the overall policy thrust of the government since the beginning of the financial crisis.

The clearest explanation is by Roosevelt Institute Fellows Tom Ferguson and Rob Johnson in their series on the Paulson Put. While a shadow bailout took place through the Federal Home Loan banks and the Federal Reserve from 2007 onward, eventually a fiscal and regulatory solution would become necessary. The first significant legislation in this thrust was the famous Bazooka bill (or Housing and Economic Recovery Act) signed in June 2008 that allowed Treasury Secretary Hank Paulson to take over and pump unlimited sums into Fannie and Freddie. The second was the TARP. Both of these bills were pivotal to providing the government with enough firepower to overcome the solvency crisis...

[Demeter]

68. The Shameful Murder of Dodd Frank BY Robert Reich

http://robertreich.org/post/7843866058

...Treasury Secretary Tim Geithner says the financial system is “on more solid ground” than prior to the 2008 crisis, but I don’t know what ground he’s looking at...Much of Dodd-Frank is still on the drawing boards, courtesy of the Street. The law as written included loopholes big enough to drive bankers’ Lamborghini’s through — which they’re now doing....

In the wake of global finance’s near meltdown, Europe has been more aggressive than the United States in clamping down on banks headquartered there. Britain is requiring its banks to have higher capital reserves than are so far contemplated in the United States. In fact, senior Wall Street executives have warned European leaders their tighter bank regulations will cause Wall Street to move more of its business out of Europe...The real reason Wall Street has spent the last year bludgeoning Dodd-Frank into meaninglessness is the vast sums of money it can make if Dodd-Frank is out of the way. If you took the greed out of Wall Street all you’d have left is pavement...Wall Street is the richest and most powerful industry in America with the closest ties to the federal government – routinely supplying Treasury secretaries and economic advisors who share its world view and its financial interests, and routinely bankrolling congressional kingpins.

How else can you explain why the Street was bailed out with no strings attached? Or why no criminal charges have been brought against any major Wall Street figure – despite the effluvium of frauds, deceptions, malfeasance and nonfeasance in the years leading up to the crash and subsequent bailout? Or why Dodd-Frank has been eviscerated? As a result of consolidations brought on by the bailout, the biggest banks are bigger and have more clout than ever. They and their clients know with certainty they will be bailed out if they get into trouble, which gives them a financial advantage over smaller competitors whose capital doesn’t come with such a guarantee. So they’re becoming even more powerful.

Face it: The only answer is to break up the giant banks. The Sherman Antitrust Act of 1890 was designed not only to improve economic efficiency by reducing the market power of economic giants like the railroads and oil companies but also to prevent companies from becoming so large that their political power would undermine democracy...The sad lesson of Dodd-Frank is Wall Street is too powerful to allow effective regulation of it. We should have learned that lesson in 2008 as the Street brought the rest of the economy – and much of the world – to its knees. Now we’re still on our knees but the Street is back on top. Its leviathans do not generate benefits to society proportional to their size and influence. To the contrary, they represent a clear and present danger to our economy and our democracy. They should be broken up, and their size must be capped. Congress won’t do it, obviously. So we’ll need to rely on the nation’s two antitrust agencies — the Federal Trade Commission and the Antitrust Division of the Justice Department. The trust-busters are now investigating Google. They should be turning their sights onto JPMorgan Chase, Citigroup, and Goldman Sachs instead.

[Demeter]

38. U.S. House Stops Voting for Week With No Action to Keep FAA Operating

http://www.bloomberg.com/news/2011-07-22/u-s-house-stops-voting-for-week-with-no-action-to-keep-faa-operating.html

IS THIS A SUBTLE WAY TO CLOSE THE BORDERS, TO TRAP THE PEOPLE IN THIS COUNTRY? PARANOIA--IT'S WHAT KEEPS ME GOING.

[Demeter]

40. CNN Poll: Drop in liberal support pushes Obama approval rating down

HE NOTICED! THAT EXPLAINS FRIDAY NIGHT'S BACKING AND FILLING SPEECH...YES, THE OVAL OFFICE BUBBLE HAS FINALLY BROKEN, JUST AS THE MASSIVE SHADOW-BANKING BUBBLE IS GOING INTO CRASH AND BURN MODE BY THE WAY, IF YOU HAPPENED TO BE LISTENING, AS I WAS, WERE YOU STRUCK BY HIS INCOHERENT DELIVERY? EITHER HE WAS CHOKING ON HIS RAGE THAT PEONS ARE NOT DAZZLED BY HIS OBAMA-NESS, OR ON THE LIES HE WAS TRYING TO SELL...

http://politicalticker.blogs.cnn.com/2011/07/22/cnn-poll-drop-in-liberal-support-pushes-obama-approval-rating-down/

President Barack Obama's approval rating is down to 45 percent, driven in part by growing dissatisfaction on the left with the president's track record in office, according to a new national survey...A CNN/ORC International Poll also indicates that the Republican "brand" is taking a beating in the minds of Americans....The survey's Friday release comes as the Obama administration and top congressional officials continue talks on a potential deal tying roughly $3 trillion in new savings over the next decade to an increase in the nation's debt ceiling. If Congress and the President fail to raise the country's $14.3 trillion limit by August 2, Americans could face rising interest rates, a declining dollar and increasingly jittery financial markets, among other problems...According to the poll, the president's 45 percent approval rating is down three points from June. Fifty-four percent of people questioned disapprove of how Obama's handling his duties, up six points from last month. His 54 percent disapproval rating ties the all-time high in CNN polling that the president initially reached just before last year's midterm elections.

"But drill down into that number and you'll see signs of a stirring discontent on the left," says CNN Polling Director Keating Holland. "Thirty-eight percent say they disapprove because President Obama has been too liberal, but 13 percent say they disapprove of Obama because he has not been liberal enough - nearly double what it was in May, when the question was last asked, and the first time that number has hit double digits in Obama's presidency." Looking at that figure another way, roughly one in four Americans who disapprove of the president say they feel that way because he's not been liberal enough. Obama's approval rating among liberals has dropped to 71 percent, the lowest point in his presidency. And the number of Democrats who want the party to renominate Obama next year, now at 77 percent, is relatively robust by historical standards but is also down a bit since June. "It's likely that this is a reaction to some of Obama's recent actions, including his willingness to discuss major changes in Social Security and Medicare as part of the debt ceiling negotiations," adds Holland.

Some congressional Democrats appeared to be on the verge of open revolt against their own president Thursday night after hearing some of the details in the $3 trillion plan - a package many of them contend does not do nearly enough to ensure wealthier Americans share in the burden of stemming the tide of Washington's red ink. Those Democrats are desperately trying to protect some of their party's primary legacies - entitlements such as Social Security and Medicare, programs forged at the height of the New Deal and Great Society.

On the other side of the negotiating table, the poll indicates that GOP is also not faring all that well. Fifty-five percent say they have an unfavorable view of the Republican party, a seven-point increase since March. The Democratic party's favorable rating is not much better, but it has held steady. And only 37 percent say the policies of the Republican leaders in Congress would move the country in the right direction - a nine-point drop since the start of the year, when the GOP took over control of the House of Representatives. "Although most Americans say that Obama is not doing enough to cooperate with the GOP, even more say that the Republicans need to cooperate more with the president," says Holland.

******************************************************************

The poll was conducted for CNN by ORC International on July 18-20, with 1,009 adult Americans questioned by telephone. The survey's overall sampling error is plus or minus three percentage points. Read full results (pdf): http://i2.cdn.turner.com/cnn/2011/images/07/22/obama.aproval.pdf

[Demeter]

41. Financial Sector Helps Barack Obama Score Big Money for Re-election Fight

FINE! THEY CAN SUPPLY ALL THE VOTES, TOO.

http://www.opensecrets.org/news/2011/07/financial-sector-helps-barack-obama.html?utm_source=CRP+Mail+List&utm_campaign=0eaabb6817-NewsAlert7_22_117_22_2011&utm_medium=email

President Barack Obama has relied more on well-connected Wall Street figures to fund his re-election than he did four years ago when he campaigned as an outsider and an underdog.

One-third of the money Obama's elite fund-raising corps has raised on behalf of his re-election has come from the financial sector, according to a new Center for Responsive Politics analysis.

Individuals who work in the finance, insurance and real estate sector are responsible for raising at least $11.8 million for Obama's campaign and the Democratic National Committee, according to the Center's research. All of Obama's bundlers have raised a minimum of $34.95 million, as OpenSecrets Blog previously reported.

During his entire 2008 presidential bid, bundlers who worked in the finance, insurance and real estate sector were responsible for a minimum of $16.1 million, according to the Center's research. That's about 21 percent of the $76.5 million estimated minimum amount that these top fund-raisers brought in for Obama's presidential campaign...

[Demeter]

42. It's so gratifying to leave you wallowing in the mess you've made

I JUST LIKE THE HEADLINE...

http://one-salient-oversight.blogspot.com/2011/07/it-so-gratifying-to-leave-you-wallowing.html

[Demeter]

63. Democrats in ‘volcanic’ mood

http://www.ft.com/intl/cms/s/0/49c57a12-b3b5-11e0-855b-00144feabdc0.html#axzz1Sw50Q31W

ANOTHER GOOD HEADLINE...WE WILL SEE IF THERE'S ANY FIRE BEHIND THAT SMOKE...

[Demeter]

64. The Fed Audit BERNIE SANDERS US Senator for Vermont

http://sanders.senate.gov/newsroom/news/?id=9e2a4ea8-6e73-4be2-a753-62060dcbb3c3

The first top-to-bottom audit of the Federal Reserve uncovered eye-popping new details about how the U.S. provided a whopping $16 trillion in secret loans to bail out American and foreign banks and businesses during the worst economic crisis since the Great Depression. An amendment by Sen. Bernie Sanders to the Wall Street reform law passed one year ago this week directed the Government Accountability Office to conduct the study. "As a result of this audit, we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world," said Sanders. "This is a clear case of socialism for the rich and rugged, you're-on-your-own individualism for everyone else."

Among the investigation's key findings is that the Fed unilaterally provided trillions of dollars in financial assistance to foreign banks and corporations from South Korea to Scotland, according to the GAO report. "No agency of the United States government should be allowed to bailout a foreign bank or corporation without the direct approval of Congress and the president," Sanders said.

The non-partisan, investigative arm of Congress also determined that the Fed lacks a comprehensive system to deal with conflicts of interest, despite the serious potential for abuse. In fact, according to the report, the Fed provided conflict of interest waivers to employees and private contractors so they could keep investments in the same financial institutions and corporations that were given emergency loans.

For example, the CEO of JP Morgan Chase served on the New York Fed's board of directors at the same time that his bank received more than $390 billion in financial assistance from the Fed. Moreover, JP Morgan Chase served as one of the clearing banks for the Fed's emergency lending programs.

In another disturbing finding, the GAO said that on Sept. 19, 2008, William Dudley, who is now the New York Fed president, was granted a waiver to let him keep investments in AIG and General Electric at the same time AIG and GE were given bailout funds. One reason the Fed did not make Dudley sell his holdings, according to the audit, was that it might have created the appearance of a conflict of interest.

To Sanders, the conclusion is simple. "No one who works for a firm receiving direct financial assistance from the Fed should be allowed to sit on the Fed's board of directors or be employed by the Fed," he said.

The investigation also revealed that the Fed outsourced most of its emergency lending programs to private contractors, many of which also were recipients of extremely low-interest and then-secret loans.

The Fed outsourced virtually all of the operations of their emergency lending programs to private contractors like JP Morgan Chase, Morgan Stanley, and Wells Fargo. The same firms also received trillions of dollars in Fed loans at near-zero interest rates. Altogether some two-thirds of the contracts that the Fed awarded to manage its emergency lending programs were no-bid contracts. Morgan Stanley was given the largest no-bid contract worth $108.4 million to help manage the Fed bailout of AIG.

A more detailed GAO investigation into potential conflicts of interest at the Fed is due on Oct. 18, but Sanders said one thing already is abundantly clear. "The Federal Reserve must be reformed to serve the needs of working families, not just CEOs on Wall Street."

[bread_and_roses]

81. + 1000 on the votes comment (n/t)

[Demeter]

43. The euro crisis will give Germany the empire it’s always dreamed of

http://blogs.telegraph.co.uk/news/peteroborne/100098260/this-crisis-will-give-germany-the-empire-its-always-dreamed-of/

Many of the biggest losers from the Wall Street Crash were not those greedy speculators who bought at the very top of the market. There was also a category of investor who recognised that stocks had become badly overvalued, sold their shares in the summer or autumn of 1928, then waited patiently as the market surged onwards to ever more improbable highs....When the crash came in October 1929, they felt thoroughly vindicated, and waited for the dust to settle. The following spring, when share prices had consolidated at around a third lower than the all-time high reached the previous year, they reinvested the family savings, probably feeling a bit smug. Then, on April 17, 1930, the market embarked on a second and even more shattering period of decline, by the end of which shares were worth barely 10 per cent of their value at their peak. Those prudent investors who had seen the Wall Street Crash coming were wiped out.

There was one crucial message from yesterday’s shambolic and panicky eurozone summit: today’s predicament contains terrifying parallels with the situation that prevailed 80 years ago, although the problem lies (at this stage, at least) with the debt rather than the equity markets...After the catastrophe of 2008, many believed and argued – as others did in 1929 – that it was a one-off event, which could readily be put right by the ingenuity of experts. The truth is sadly different. The aftermath of that financial debacle, like the economic downturn after 1929, falls into a special category. Most recessions are part of the normal, healthy functioning of any market economy – a good example is the downturn of the late 1980s. But in rare cases, they are far more sinister, because their underlying cause is a structural imbalance which cannot be solved by conventional means.

Such recessions, which tend to associated with catastrophic financial events, are dangerous because they herald a long period of economic dislocation and collapse. Their consequences stretch deep into the realm of politics and social life. Indeed, the 1929 crash sparked a decade of economic failure around much of the world, helping bring the Weimar Republic to its knees and easing the way for the rise of German fascism.

So we live in a very troubling period. The situation is very bad in the United States, where ratings agencies are threatening the once unimaginable step of downgrading Treasury bonds, and Congress is consumed by partisan wrangling over raising the nation’s debt limit. But it is desperate in Europe, because the situation has been exacerbated by a piece of economic dogma...

[Demeter]

44. The Price is...ummm....errrr.... Wrong (Part 2) TODAY'S MUST READ

COMPARISON OF HEALTH CARE IN US AND EUROPE...

http://nihoncassandra.blogspot.com/2011/07/price-isummmerrrr-wrong-part-2.html

[Demeter]

45. Willem Buiter: The EU must increase the size of its bailout fund

VIDEO AT LINK

http://www.creditwritedowns.com/2011/07/willem-buiter-on-eu-bailout-fund.html

[Demeter]

47. A Report from Greece

http://www.nakedcapitalism.com/2011/07/a-report-from-greece.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

... There is clear videotaped evidence showing certain apparently violent individuals doing things like happily entering police stations, and receiving clubs while hanging out with the police.

The Greek and international media have been successfully portraying the protests as the violence of hoodlums.

That video you posted from Clusterstock today (the policeman walks up and strikes the protester down with a club) is much more provocative if you understand Greek. Just before the protester is whacked, he cries out, “Don’t hit me!” Then random rubbish is thrown at the police – but then loud shouts are heard from the protesters, “Don’t throw anything at them!” ...


....The level of political awareness here is far higher than in America, but it will be interesting to see if people are able to change what the authorities have planned for them. I suspect that Greece is a small rehearsal for what will be coming to the US eventually, in one form or another.....

[Demeter]

58. Euro Statement Translated

http://macro-man.blogspot.com/2011/07/euro-statement-translated.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+MacroMan+%28Macro+Man%29

BITTER AS GALL, FUNNY IF YOU LIKE THAT KIND OF HUMOR....

[Demeter]

60. EU agreement on Greece – no solution at all

http://bilbo.economicoutlook.net/blog/?p=15363

...I read the Statement by the Heads of State or Government of the euro area and EU institutions somewhat differently.

The 16-point statement suggests that the leaders still don’t fully get it at all....a national treasury that seeks to advance public purpose would never impose pro-cyclical fiscal policy onto a “state” which pushed unemployment up into the stratosphere (for example, Greece over 15 per cent, Spain over 20 per cent). That is totally contrary to what a national treasury should be doing at a time when “its states” are experiencing harsh asymmetric demand failures...

Conclusion

If I was the EU bosses I would announce an end to the SGP and immediately instruct the ECB to purchase massive quantities of goods from Greek food manufacturers and ship the food to Northern Africa.

That would be better for everyone.

[Demeter]

61. George Marshall turns in his grave Posted by Delusional Economics

http://macrobusiness.com.au/2011/07/george-marshall-turns-in-his-grave/

Unless you have been living under an economic rock you have probably heard by now that the Euro-elite is once again trying to convince the economic world that they have got a solution to the Greece driven debt crisis in Europe. A leaked draft statement from the summit can be found AT LINK.

The Guardian UK reports:

European leaders are poised to take a quantum leap to safeguard the future of the euro and rescue Greece from insolvency by turning the eurozone’s 15-month-old bailout fund into a much more ambitious instrument resembling an embryonic European monetary fund.

The deal being hatched at an emergency summit of eurozone leaders also looked certain to entail haircuts – losses – for Athens’ private investors, increasing the likelihood that Greece will become the first eurozone country deemed to be in some form of default on its sovereign debt.

A 15-point draft agreement being negotiated provided for a vast expansion in the role and powers of the €440bn bailout fund established in May last year. If finally agreed, the package would be the biggest eurozone move since it created the bailout fund, following months of acrimony and dithering that prompted bitter criticism of EU leaders, particularly Chancellor Angela Merkel of Germany.

Currently the fund can only be used as a last resort to rescue a eurozone country whose plight jeopardises the stability of the euro as a whole. Under the radical plan, the fund would be able to intervene on the secondary markets to buy up the bonds of struggling debtor countries, to take pre-emptive or “precautionary” action to nip a debt crisis in the bud by, for example, agreeing lines of credit, to supply loans to struggling eurozone countries which would then use the money to shore up and recapitalise their banks. Such aid would apply, unlike at present, to countries not already in bailout programmes.

The transformation of the bailout fund was directed not so much at Greece as at containing the threat of contagion to other vulnerable eurozone countries, an attempt to curb market uncertainty over the fate of the euro.

If agreed, the rules governing the use of the bailout fund would need to be rewritten, throwing up political problems mainly in Germany and the Netherlands. Senior German government sources, however, said the new regime was acceptable to Merkel who would push it through the German parliament.

As part of a new three-year rescue package for Greece, the summit appeared willing to countenance an effective Greek default, however temporarily and however “selectively” in order to satisfy German, Dutch and Finnish insistence that the country’s private creditors had to bear some of the costs of the new bailout by taking losses on their investments.

The draft statement did not put a figure on the investors’ losses, but said: “The financial sector has indicated its willingness to support Greece on a voluntary basis through a menu of options (bond exchange, roll-over, and buyback) at lending conditions comparable to public support with credit enhancement.”

…The eurozone loans would be provided at interest rates of 3.5%, two points lower than currently, while the maturity of loans to Greece would be more than doubled to at least 15 years. There was also good news for Ireland and Portugal whose borrowing costs for their eurozone bailouts would also fall to 3.5%.

As well as bailout funds, on top of the €110bn granted to Greece last year, the blueprint was also expected to entail a buyback of Greek bonds.

Taken together, the lower borrowing costs, longer maturities, investor losses, buyback and bailout money were all aimed at reducing Greece’s debt burden of €340bn, making the debt sustainable and improving the prospects of Greek economic and financial recovery.

On estimates from the European Commission, the package could cut Greece’s debt levels by €90bn.

The Eurozone has couched this as a “Marshall Plan” for Greece, after the post WWII plan of European reconstruction orchestrated by the US. In that plan, the US donated large sums of money to European nations for infrastructure reconstruction which the Europeans spent on US manufactures, and Bretton Woods pegged European currencies to the dollar at a competitive rate.

Although there is some “aid” for Greece in the form a selective default (debt forgiveness I suppose you might call it), there is no new infrastructure to boost producitivity and obviously no lowered currency. In other words, there is nothing new to rebuild Greece, which I would have thought was a prerequisite for the package to be vaguely Marshall-like.

Greece remains trapped in an overvalued currency that crushes its competiveness and must keep borrowing from Germany, probably to buy its manufactures. Worse, Marshall Plan 2.0 imposes austerity that will continue to lower its real industrial output and increase its overall debt position. European spin doctors need a history lesson....In truth, Europe has taken another step towards fiscal unity, without taking a step towards fiscal unity. It looks as if the potential losses of the ECB and the banking system will be shifted to the EFSF by incentivising private entities to accept the deal with some sweeteners...

[DemReadingDU]

84. rehearsal for what will be coming to the US

Oh yeh, it's coming. But it is rare to see anyone around me who is paying any attention. I am told...it's over there, not here. Why would that affect us here?

And when I start to explain, they roll their eyes indicating they don't believe anything I say.

[Demeter]

49. Get Ready for TARP 2.0

http://www.nakedcapitalism.com/2011/07/get-ready-for-tarp-2-0.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

Washington DC appears to be readying itself for a repeat of the TARP, namely, the passage of unpopular legislation to appease the Market Gods (and transfer even more income from ordinary Americans to the Masters of the Universe). It isn’t yet clear whether this drama will be played out via generating bona fide financial market upheaval or mere threat-mongering (the Treasury market seems pretty confident that well-trained Congresscritters will fall into line). But unlike the TARP, which was a classic example of well-placed interests finding opportunity in the midst of upheaval, this reprise is a far more calculated affair.

The latest episode of brinksmanship is the breakdown in talks between Obama and John Boehner Friday afternoon. Boehner claims Obama retraded the deal, asking for more tax increases; Obama, in an unusually incoherent press conference, says he bent over backwards and the Republicans just won’t be satisfied. Obama demanded talks resume on Saturday.

The presumed deadline for reaching the outline of a deal is Monday, given the need to finalize language. But that assumes that the shortfall hits August 2. Barclays and Normura reports claim that internal Treasury forecasts indicate the crunch probably does not start until the 9th or 10th.

Let’s review how we got here. Obama made it clear before he took office (hat tip reader Hugh) that he intended to go after Social Security and Medicare. As we discussed, shortly after he took office, Obama was privately reassuring conservatives that he’d curtail entitlements once the economy was on a better footing. Clearly, he’s been willing to settle for “better” being tantamount to “not in imminent danger of falling off a cliff.” And if you had any doubts, Obama made his intentions abundantly clear (to use that Nixonianism) by creating a Deficit Reduction Commission and staffing it with enemies of Social Security, former Clinton chief of staff Erskine Bowles and Senator Alan Simpson. ....MORE

[Demeter]

50. SELECTED COMMENT FROM ABOVE ARTICLE

Reading Yves consistently excellent posting and your comment make me think that this version of Tarp will allow all the super rich to get out of bonds and leaving the pension funds, local government and few unlucky schmucks twisting slowly in the wind.

[Demeter]

51. The Lesser Depression By PAUL KRUGMAN

http://www.nytimes.com/2011/07/22/opinion/22krugman.html?hp

These are interesting times — and I mean that in the worst way. Right now we’re looking at not one but two looming crises, either of which could produce a global disaster. In the United States, right-wing fanatics in Congress may block a necessary rise in the debt ceiling, potentially wreaking havoc in world financial markets. Meanwhile, if the plan just agreed to by European heads of state fails to calm markets, we could see falling dominoes all across southern Europe — which would also wreak havoc in world financial markets.

We can only hope that the politicians huddled in Washington and Brussels succeed in averting these threats. But here’s the thing: Even if we manage to avoid immediate catastrophe, the deals being struck on both sides of the Atlantic are almost guaranteed to make the broader economic slump worse. In fact, policy makers seem determined to perpetuate what I’ve taken to calling the Lesser Depression, the prolonged era of high unemployment that began with the Great Recession of 2007-2009 and continues to this day, more than two years after the recession supposedly ended.

Let’s talk for a moment about why our economies are (still) so depressed...The great housing bubble of the last decade, which was both an American and a European phenomenon, was accompanied by a huge rise in household debt. When the bubble burst, home construction plunged, and so did consumer spending as debt-burdened families cut back. Everything might still have been O.K. if other major economic players had stepped up their spending, filling the gap left by the housing plunge and the consumer pullback. But nobody did. In particular, cash-rich corporations see no reason to invest that cash in the face of weak consumer demand...Nor did governments do much to help. Some governments — those of weaker nations in Europe, and state and local governments here — were actually forced to slash spending in the face of falling revenues. And the modest efforts of stronger governments — including, yes, the Obama stimulus plan — were, at best, barely enough to offset this forced austerity.

So we have depressed economies. What are policy makers proposing to do about it? Less than nothing. The disappearance of unemployment from elite policy discourse and its replacement by deficit panic has been truly remarkable. It’s not a response to public opinion. In a recent CBS News/New York Times poll, 53 percent of the public named the economy and jobs as the most important problem we face, while only 7 percent named the deficit. Nor is it a response to market pressure. Interest rates on U.S. debt remain near historic lows. Yet the conversations in Washington and Brussels are all about spending cuts (and maybe tax increases, I mean revisions). That’s obviously true about the various proposals being floated to resolve the debt-ceiling crisis here. But it’s equally true in Europe...For those who know their 1930s history, this is all too familiar. If either of the current debt negotiations fails, we could be about to replay 1931, the global banking collapse that made the Great Depression great. But, if the negotiations succeed, we will be set to replay the great mistake of 1937: the premature turn to fiscal contraction that derailed economic recovery and ensured that the Depression would last until World War II finally provided the boost the economy needed...

[Demeter]

52. Understanding the Federal "Debt Crisis" By SAM PIZZIGATI

PIZZIGATI

Once upon a time in America, back a century ago, our nation's rich paid virtually nothing in taxes to the federal government. And that same federal government did virtually nothing to better the lives of average Americans. But those average Americans would do battle, over the next half century, to rein in the rich and the corporations that made them ever richer. And that struggle would prove remarkably successful. By the 1950s, America's rich and the corporations they ran were paying significant chunks of their annual incomes in taxes — and the federal projects and programs these taxes helped finance were actually improving average American lives...America's wealthy, predictably, counterattacked — and, by the 1980s, they were scoring successes of their own. Today, the rich and their corporations no longer bear anything close to their rightful share of the nation's tax burden. The federal government, given this revenue shortfall, is having a harder and harder time funding initiatives that help average working families. The result: a "debt crisis."

This "debt crisis" in no way had to happen. No natural disaster, no tsunami, has suddenly pounded the United States out of fiscal balance. We have simply suffered a colossal political failure. Our powers that be, by feeding the rich and their corporations one massive tax break after another, have thrown a monkey wrench into our national finances...If corporations and households amassing $1 million or more in income each year were now paying taxes at the same annual rates as they did in 1961, the IPS researchers found, the federal treasury would be collecting an additional $716 billion a year. In other words, if the federal government started taxing the wealthy and their corporations at the same rates in effect a half-century ago, the federal debt to investors would almost totally disappear over the next decade.

...In the face of these billions, should the rest of us, America's vast non-rich majority, just throw in the towel and give up? Our counterparts a century ago certainly didn't. They challenged their rich, on every front imaginable. They eventually sheared their rich down to democratic size.

We can do the same.

Sam Pizzigati, a veteran labor journalist, edits Too Much, the Institute for Policy Studies weekly newsletter on excess and inequality. To keep updated on the growing pushback against that inequality, sign up to receive Too Much in your email inbox and check Inequality.Org for more background on the groups working to narrow the economic gaps that divide us.

[Demeter]

70. So What Might Happen if We Get to August 3 With No Deficit Deal?

http://www.nakedcapitalism.com/2011/07/so-what-might-happen-if-we-get-to-august-3-with-no-deficit-deal.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

...A good deal can change in the next few days, but the window of opportunity narrows as time passes. And that is why the Treasury’s apparent refusal to consider options for working around the debt ceiling looks colossally irresponsible. This is similar to the behavior of the financial regulators pre-Lehman: they placed all their chips on one outcome, that of a private sector bailout, and failed even to find out what a bankruptcy would look like (at a minimum, if Lehman had prepared a longer-form filing, the implosion would have been less disruptive).

But this “all in” strategy is by design. Obama has long wanted entitlement “reform,” as in gutting; Paul Jay of Real News Network pointed out to me today that Obama told conservatives at a dinner hosted by George Will in the first week after his inauguration that he planned to turn to it once he got the economy in better shape. So this is a variant of a negotiating strategy famously used by J.P. Morgan: lock people in a room until they come up with a deal. But the J.P. Morgan approach used time to his advantage; here the fixed time frame makes this more like a form of Russian roulette with more than one cylinder loaded.

It is also worth noting that what starts happening on August 3, assuming no deal, is “selective” default. It isn’t clear if and when Treasuries would be at risk of having payments skipped, and I would assume Social Security would also get high priority. But with Treasuries, the bigger risk is not a missed payment (which would certainly be made up later) but a downgrade, which is expected to force certain types of investors who are limited to AAA securities to dump their holdings....this event is focusing enough minds that a lot of parties are looking at ways to get waivers or other variances to allow them to continue to hold Treasuries even in the event of a downgrade or delayed payment...the New York Times reported yesterday that some hedge funds are moving into cash to buy up Treasuries in case other investors dump them. I’ve even heard of retail investors planning the same move. That does not mean the volume of buyers will be enough to offset forced sales, but it does say that fundamentally oriented investors would see this event as an opportunity, not a cause for panic.

...I was working for Sumitomo Bank (and the only gaijin hired into the Japanese hierarchy) and was in Japan during and shortly after the 1987 crash. Initially, the reaction in Japan was one of horrified fascination, of watching a neighbor’s house burn down. It then began to occur to them that their house might burn down too...The volume of margin calls on Black Monday and Tuesday were putting serious pressure on the Treasury market, which was beginning to seize up. On top of that, bank were understandably loath to extend credit to clearinghouses and exchanges (as we’ve discussed elsewhere, the Merc almost failed to open and would have collapsed if the head of Continental Illinois had not approved an emergency extension of credit after a $400 million failure to pay by a major customer. Had the Merc failed, the NYSE would not have opened, and its then CEO John Phelan has said it too might have failed). So keeping the Treasury markets liquid was a key priority in stabilizing the markets....Japan is a military protectorate of the US. The Fed called the Bank of Japan and told it to support the Treasury market. The BoJ called the Japanese banks and told them to buy Treasuries. Sumitomo and the other Japanese banks complied. I could see the same phone call being made again in the event of a default or downgrade. First, the yen is already at 78 and change, which is nosebleed territory from the Japanese perspective. The BoJ intervened once in the recent past when the yen got slightly above this level. Purchases of Treasuries is a purchase of dollars, and done on big enough scale would help lower the yen. Second, if you buy the hedgie view, buying in the face of forced (as in AAA mandate driven) and not economically motivated selling means this trade would have near term upside.

Is this scenario likely? I have no idea. Is it possible? Absolutely.

[bread_and_roses]

76. And THOSE crisis pale beside the environmental armaggedon

we are facing.

[Demeter]

80. The two are intimately entwined

and a real solution will take both of these problems and put them on the way to resolution.

[bread_and_roses]

88. No quarrel with that here

remember "Small is Beautiful?"

Both hinge on sustainability. And sustainability hinges on size and locale.

[Demeter]

53. Demeter Commentary

During the spring thaw, there comes a time when the ice on a pond suddenly collapses, and the water in the pond "turns over".

As the ice melts in late winter or early spring, that 4 degree Celsius less dense water warms to above 4 degrees. When this happens it is more dense or heavier than the warm bottom water. What then occurs is called Turnover. The heavier water is on top and all of a sudden will (fall) to the bottom and the warm water will do just the opposite and rise to the top. This mixes up the entire water column and the pond will typically look dirty with suspended debris. http://www.gotalgae.com/temperature_solutions.htm

I think we are experiencing the political equivalent. The ice in which our society was frozen, the order and regulation we grew up with, has melted, the pond is turning over any minute now.

Will it lead to a massive fish kill (and we are those fish), or a rejuvenation of the life of the pond?

Will the total lack of oxygen be relieved, so we can breathe again?

Or, is this the fall turnover?

With fall comes cooler temperatures. The pond water will begin to cool throughout fall. The cooler temperatures will continue to cool the water until the water above the thermocline is actually colder than the bottom water. Now you have a situation where turnover could occur. The quicker turnover occurs, the more severe the effects. A cool fall rain or cold front with lots of wind can quickly cool the surface water and cause a rapid turnover. Once the cooler surface water becomes denser than the bottom water, it will sink and displace the warm bottom water. Again, the water column will be mixed and look dirty with suspended debris.

Fall Turnover is much more severe than Spring Turnover. As discussed earlier, the thermocline separates warm water from cold water and the bottom water does not have as much dissolved oxygen because it has not been in contact with the air all spring and summer. During turnover, the closer the thermocline is to the surface, the worse the effects will be on the pond. If there is a large volume of water below the thermocline that has very little or no oxygen when turnover occurs, the low oxygen water gets mixed with the rest of the pond, thus decreasing the dissolved oxygen throughout the entire water column. Also, the chances of turnover are greater in fall due to common fall rains and cold fronts. This decrease can be drastic enough to cause massive fish die offs as in the picture at the top.

I'm hoping for spring. I am afraid we are facing a long, cold winter.

[Demeter]

54. There's no lack of news showing this

but duty calls. I'll see you later!



Barbra Streisand & Burt Bacharach - Close to you (1971)

http://www.youtube.com/watch?v=52jkbJrTwBw

[DemReadingDU]

85. me too

:(

[Demeter]

56. Is There Something Worse than Despicable?

http://www.correntewire.com/is_there_something_worse_than_despicable

I'm running out of words to describe the low-lifes in Washington who continue to outdo themselves when it comes to devising ways to separate us from our money. The latest comes from the Social Security Administration, in conjunction with the Treasury Department. My neighbor just got her social security check in the mail and asked me to help her figure out the flyer that came with it. The flyer reads, "Be prepared to stop receiving a paper check. All federal benefits will be paid electronically.... Sign up for electronic payments NOW!" My neighbor is quite old, in her 80s probably. She has a computer and gets email, but that's it -- no online banking, shopping, etc. She has memory problems, and it's hard for her to cope with anything more complicated than logging onto AOL. Plus, she doesn't really trust the internet with her money.

So we went to the website on the flyer, to see if there was a way to opt out. There is not. Everyone receiving federal benefits (including Social Security and Supplemental Security Income (SSI) payments, Veterans Affairs (VA), Railroad Retirement Board, Office of Personnel Management and Department of Labor (Black Lung), is going to go direct deposit. This new payment method will affect millions of people, including the 18 million Baby Boomers retiring in the next five years. As far as I can tell from the website, if you don't like or want electronic payments, too bad! But that's not the most odious aspect of this new plan. If you click on the "About the Direct Express Card" link, the second paragraph says:

There are no sign-up fees, monthly fees or overdraft charges. No bank account or credit check is required to enroll. Cardholders can make purchases, pay bills and get cash at thousands of ATMs and retail locations.

So far, so good. But here's the last sentence in that paragraph:

Some fees for optional services may apply.

Oh, some fees -- okay! Now scroll down a bit and check out the fine print (which is probably too fine for a lot of older people to read). You're allowed one (as in ONE!) free ATM cash withdrawal for every payment you receive each month. After that, you will pay 90 cents per withdrawal.

But wait ... there's more. Even the first "free" withdrawal is only free if you use "one of the more than 50,000 surcharge-free network ATMs." And that's just the tip of the iceberg. There are other fees for everything from requesting a paper statement (75 cents) to transferring your own money to your own bank account ($1.50).

Maybe direct deposit is a good thing. Less paper used, fewer stolen checks, etc. And the Treasury Department says direct deposit will save $1 billion during the next 10 years. A lot of money, but as we all know, our government is fine with pissing away billions as long as none of it makes anyone's life better. And clearly saving this billion will not be very helpful for millions of people...My poor neighbor is very upset right now. Like most people on Social Security, she doesn't get that much money each month to begin with. And soon, she's going to have even less, thanks to all the various fees they're imposing. Plus, she has to figure out internet banking to some extent. She was beside herself when I left, so multiply her situation times tens of millions and it's not pretty -- millions of elderly and disabled people getting ripped off (again) by their own government and the banks that own it.

Maybe I'm overreacting or maybe there's some bright spot I'm not seeing that someone can point out. But I'm so disgusted with what's happening in this country right now that I'm having trouble finding words to express it. I just keep wondering what kind of scum is okay with taking nickels and dimes from people who really need them and giving the money to people who are already obscenely wealthy. That's just despicable.

[Po_d Mainiac]

95. IIRC This scenario does suck, but only applies if you are not able to supply a routing #

[Demeter]

99. The thing is, the generation before us is not tech-oriented at all

My client asked me to mail her utility payments--and I did at the first opportunity. But I forgot the stamps. I've paid everything on line for maybe 15 years now. Fortunately, the mail lady opened the box and let me put the stamps on...

[xchrom]

62. World ecomonic slowdown: The lesser depression

http://economictimes.indiatimes.com/opinion/comments-analysis/why-economies-of-us-and-eu-are-still-depressed/articleshow/9331212.cms

These are interesting times - and I mean that in the worst way. Right now we're looking at not one but two looming crises, either of which could produce a global disaster. In the US, right-wing fanatics in Congress may block a necessary rise in the debt ceiling, potentially wreaking havoc in world financial markets. Meanwhile, if the plan just agreed to by European heads of state fails to calm markets, we could see falling dominoes all across southern Europe - which would also wreak havoc in world financial markets.

We can only hope that the politicians huddled in Washington and Brussels succeed in averting these threats. But here's the thing: Even if we manage to avoid immediate catastrophe, the deals being stuck on both sides of the Atlantic are almost guaranteed to make the broader economic slump worse.

In fact, policymakers seem determined to perpetuate what I've taken to calling the Lesser Depression, the prolonged era of high unemployment that began with the Great Recession of 2007-2009 and continues to this day, more than two years after the recession supposedly ended.

Let's talk for a moment about why our economies are (still) so depressed. The great housing bubble of the last decade, which was both an American and a European phenomenon, was accompanied by a huge rise in household debt. When the bubble burst, home construction plunged, and so did consumer spending as debt-burdened families cut back.

[Fuddnik]

69. Kick and Rec!

[Demeter]

71. Corporate Tax Holiday in Debt Ceiling Deal: Where's the Uproar? MATT TAIBBI

http://www.rollingstone.com/politics/blogs/taibblog/holiday-in-scambodia-20110720

Have been meaning to write about this, but I’m increasingly amazed at the overall lack of an uproar about the possibility of the government approving another corporate tax repatriation holiday.

I’ve been in and out of DC a few times in recent weeks and one thing I keep hearing is that there is a growing, and real, possibility that a second “one-time tax holiday” will be approved for corporations as part of whatever sordid deal emerges from the debt-ceiling negotiations.

I passed it off as a bad joke when I first saw news of this a few weeks ago, when it was reported that Wall Street whipping boy Chuck Schumer was seriously considering the idea. Then I read later on that other Senators were jumping on the bandwagon, including North Carolina’s Kay Hagan....For those who don’t know about it, tax repatriation is one of the all-time long cons and also one of the most supremely evil achievements of the Washington lobbying community, which has perhaps told more shameless lies about this one topic than about any other in modern history – which is saying a lot, considering the many absurd things that are said and done by lobbyists in our nation’s capital.

Here’s how it works: the tax laws say that companies can avoid paying taxes as long as they keep their profits overseas. Whenever that money comes back to the U.S., the companies have to pay taxes on it. Think of it as a gigantic global IRA. Companies that put their profits in the offshore IRA can leave them there indefinitely with no tax consequence. Then, when they cash out, they pay the tax. Only there’s a catch. In 2004, the corporate lobby got together and major employers like Cisco and Apple and GE begged congress to give them a “one-time” tax holiday, arguing that they would use the savings to create jobs. Congress, shamefully, relented, and a tax holiday was declared. Now companies paid about 5 percent in taxes, instead of 35-40 percent...Money streamed back into America. But the companies did not use the savings to create jobs. Instead, they mostly just turned it into executive bonuses and ate the extra cash. Some of those companies promising waves of new hires have already committed to massive layoffs...It was bad enough when lobbyists managed to pull this trick off once, in 2004. But in one of the worst-kept secrets in Washington, companies immediately started to systematically “offshore” their profits right after the 2004 holiday with the expectation that somewhere down the road, and probably sooner rather than later, they would get another holiday...We’re seriously talking about defaulting on our debt, and cutting Medicare and Social Security, so that Google can keep paying its current 2.4 percent effective tax rate and GE, a company that received a $140 billion bailout en route to worldwide 2010 profits of $14 billion, can not only keep paying no taxes at all , but receive a $3.2 billion tax credit from the federal government. And nobody appears to give a shit. What the hell is wrong with people? Have we all lost our minds?

[Demeter]

73. Soliciting Nominations for the FEMA Awards for Exceptional Financial Crisis Management

http://www.nakedcapitalism.com/2011/07/soliciting-nominations-for-the-fema-awards-for-exceptional-financial-crisis-management.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

We are in the process of seeking recommendations for our inaugural FEMA Awards for Exceptional Financial Crisis Management. We must thank our reader Swedish Lex for providing the inspiration for establishing these prizes.We are looking for nominees in each category. We have provided some illustrative candidates for specific prizes. Readers are also encouraged to suggest additional categories if they feel we have overlooked noteworthy types of crisis behavior that are worthy of recognition.

Our initial categories:

• “Heck of a job, Brownie” Award for the most extreme example of chief executive praise of a failed performance.
  
  
• Excellence in Banker Fellation Award. It may be hard to beat Barack Obama defense of Jamie Dimon’s and Lloyd Blankfein’s 2009 bonuses (which were due in large measure to the munificence of the Fed as well as Timothy Geithner’s no-stress stress tests and related cheerleading): “I know both those guys; they are very savvy businessmen…I, like most of the American people, don’t begrudge people success or wealth. That is part of the free- market system.”
  
  
• Playing Russian Roulette With All Cylinders Loaded Award. A candidate-rich category. Those using this strategy optimistically expected similar happy outcomes:
  
  
• Leadership in Unforced Errors Award. This should go to the nation or the political block that is fastest in dismantling hard gained strategic geopolitical advantages vis-à-vis competitors like China and Russia for no obvious short-term gain.
  
  
• Spinning Founding Fathers in Their Grave Award. Sure to be hard fought, given entrants like the US Citizens United decision assuring rule by banksters versus the Greek Parliament agreeing to sell the Parthenon.
  
  
• Dead Horse Flogging Award. The Fed’s efforts to blame the crisis on the Chinese (aka the “savings glut” theory) rather than letting the inmates run the asylum goes here.
  
  
• World Cup in Kicking the Can Down The Road Award. Contenders include the numerous rescue plans for Greece, the ostrich approach to chain of title issues in the US, extend and pretend on US second lien valuations, and QEs 1-Omega to prop up US asset prices.
  
  
• “What We Do in Life Echoes in Eternity” Award. The single most damaging decision. Remember General Maximus also directed his troops to “unleash hell”.
  
  
• And finally, a grand prize of sorts: Greatest Ineptitude Under Fire

Reader input welcome!

[bread_and_roses]

83. "Why It All Sounds Like 'Blah, Blah, Blah'" - cause it's just another wringer cycle for us...

http://www.commondreams.org/view/2011/07/22

Why It All Sounds Like 'Blah, Blah, Blah'
by Donna Smith

... Our elected officials ... haggle about what is the greater good and propose action based on their own best outcomes not ours. So why should we listen? It should be no wonder that we turn off the news and turn to other more interesting life activities. Our interests are not served by most of them in most situations anyway, so why torture ourselves with the blah, blah, blah.

...If you all want to engage me, do something that makes my life better, more promising – secure future opportunity for my children and grandchildren. Protect the economy for all of us not just your campaign contributors. And for goodness sakes, stop assuming working families should make time for your concerns and arguments when you’ve sold us out so many times already. We wanted a cleaner, safer, environment and a sounder, more sane fiscal policy and a more humane healthcare system. What we got was the never ending cycle of political wrangling that is boring and unchanging – blah, blah, blah.

Our quisling Pres ought to think about that before he calls for volunteers for his re-election bid.

[Demeter]

92. The Lies are Out for All to See

The US will default, and Obama will not be re-elected. Not sure if anyone will be President again...but my gift of prophecy only goes so far...

[DemReadingDU]

87. A Brevard woman disappeared, but never left home

7/23/11 A Brevard, Florida, woman disappeared, but never left home

The call to the sheriff's office came on Nov. 18, 2010, just before noon. The townhouse, deputies learned, had belonged to a woman named Kathryn Norris, and the 1987 silver Chevy Nova was registered to her, too. She had used a normal amount of electricity in July 2009 and much less in August and none after that. She had paid her mortgage in August and then stopped. Her head was on the floor and her feet were on the seat. The corpse, deputies wrote in their report, was wearing a dress.

Television trucks showed up. Local reporters talked to her neighbors.

The neighbors said they seldom saw her but that for more than a year they hadn't seen her at all. One called her "a little strange." Another said she "just disappeared."

How could a woman die a block from the beach, surrounded by her neighbors, and not be found for almost 16 months?

How could a woman go missing inside her own home?

more...
http://www.tampabay.com/news/humaninterest/a-brevard-woman-disappeared-but-never-left-home/1181888


edit: Ohio connection. She was born, and buried, in Ohio, appx 25 miles from where I live. Not heard about this story until today.
http://www.legacy.com/obituaries/floridatoday/obituary.aspx?n=kathryn-sue-norris&pid=151988269

[Demeter]

91. Because she isolated herself

I was afraid, when my cat was dying, that she would crawl into the deepest part of the closet, which was her favorite haunt, and I would have not only no clue, but a ghastly mess to clean up...I put her in the cat carrier and kept her on my bed, so I would be able to respond when she mewed for water.

In order to prevent my father from falling and dying alone, my sister has moved him into her house. He doesn't need to die, not right now. His genes could give him 15-20 more years. But he won't accept any medical care. Sis thought she could manipulate him into getting hip replacements, to stop the pain and enable him to move, to actually live. He's so debilitated now, I doubt that even with his complete compliance he could regain mobility...even if he wanted to.

One of my clients, 80 and crippled with arthritis and scoliosis, suffered a spontaneous fracture June 24th. She called for help, crawling on her elbows to the phone, and lay in the Catholic hospital until the Tuesday--4 days--with a broken hip in pain, because the surgeon wasn't available. This is unconscionable. This is metro Detroit, Ann Arbor is surrounded by doctors and surgeons and hospitals.

I didn't hear from her for a week or better, when she finally recovered enough to call me, and I've been running errands and visiting since. Because she wouldn't comply with the doctor's demand that she stop smoking for 2 months, she didn't get elective replacement surgery and could barely stagger with a walker, sit, or sleep for nearly a year. She couldn't get into the tub. But now she is in rehab with a new joint, but her physical condition is so poor due to her long time totally crippled, that her rehab. is going to take a lot longer than the 1-2 months that is normal for people who take advantage of modern medicine. Her frustration level is incredibly high, and she talks all the time about Kevorkian and such...but she's still eating and trying and paying bills...

Living is not for the squeamish, nor the faint of heart. Mistakes can be deadly. I wish our financiers had the capacity to understand what they are doing, and to care enough about consequences not to do it. But since they don't, we should deal with them appropriately.

[plumbob]

105. Curing social isolation is one of the goals of Bandura.

http://des.emory.edu/mfp/self-efficacy.html


If you want to learn about Prof. Bandura's social cognitive theory, you probably ought not rely on the (often flawed) translations and brief theoretical soundbites provided by others. If you don't have time for the magnus opus, read the Professor's own article below. You'll be glad you did.

Social cognitive theory: An agentic perspective, by Prof. Bandura, 2001, Annual Review of Psychology.Good stuff
In html format here from Annual Review Psychology (requires edu domain).
Swimming against the mainstream: The early years from chilly tributary to transformative mainstream, by Prof. Bandura, 2004, Behaviour Research and Therapy. Learn about how social cognitive theory and self-efficacy were born.
Overview of social cognitive theory and of self-efficacy
Articles/chapters from Prof. Bandura available on-line. Really
Social cognitive theory and self-efficacy University of Cologne. Entries in English.
Read about how social cognitive theory is making a difference around the globe.
The Theory Heard 'Round the World, from the APA Monitor, October 2002.
Also here (with great photo).
Changing Behavior Through TV Heroes, from the APA Monitor, October 2004.
Read How Soap Operas Can Change the World (from the New Yorker).
Bandura interviewed on this issue on BBC Radio's program Mind Changers. Also here.
Graphic model of Reciprocal Determinism, from Longman's Visuals for Learning.
Albert Bandura's Personality Theory. From ThinkQuest, a site created by high school students.
Early Bandura - social learning theory, aggression studies (and the Bobo doll )
Transmission of Aggression Through Imitation of Aggressive Models,
by Bandura, Ross, and Ross (1961). From the Journal of Abnormal and Social Psychology.
From Classics in the History of Psychology.
Observational learning, from Funderstanding.
Sites explaining social learning theory. From the Theory into Practice Database. From Theory at a Glance (scroll down). From FSU's Criminology Department (has cute pictures of the Bobo doll). From McGraw-Hill Higher Education Imprints. A flawed description of Bandura's social cognitive theory (Bandura is not a cognitive behaviorist - see Simon above). Lecture notes on social learning theory from Victor Daniels, Sonoma State.
Self-Efficacy: Helping Students Believe in Themselves, from Carleton College's On the Cutting Edge.

lots more links at the link.


Fitting in and becoming fit are so important, and the loss in human terms is staggering when we allow folks to give in to learned helplessness.

[bread_and_roses]

93. wondering if "The Tipping Point" fits into this narrative?

I haven't read it but know the outlines - seems as if it would. And I call it a "narrative" because I am firmly convinced that we know far less about the workings of the human mind than we do about the most distant stars.

[kickysnana]

94. Xpost "Entitlements" by italiangirl

President Obama,

First, I am an 80-year old senior and I am no fool. I am old enough to be your mother and it's time for a scolding.. You have struck the fear of God into the hearts of every senior and working poor by considering the "Gang of Six" proposal to reduce the deficit. Your stewardship is shocking beyond belief for the voters who put you in office. What I make on SS and 2 small pensions to live on for one month is walking-around money for them in one day. During your campaign you said that Social Security was solvent, all we had to do was raise the cap. What happened to that promise? You speak so eloquently about the plight of seniors and working poor while at the same time pulling the rug from under the most vulnerable by making deals with The Gang of Six. They are all millionaires and don't have any concept of human value, they just know how to crunch numbers. I believe you were too quick to compromise the Entitlements before getting any concessions from the Republicans. Talk about triangulating. You have spent your presidency always threading the needle. When will you ever understand the Republicans want your head ton a silver platter and want to cause embarrassment to your presidency? They want your job! Trust and compromise is something that is not in their DNA. Why are you ignoring that 80% of the country does not want the entitlements touched?

I hope you are not banking on your base by believing "Where are they going to go." I'll tell you where I am going to go, I am staying home if you follow this course attacking the entitlements. You are causing your own demise. I was a street fighter and a contributing factor for your election. You are dismantling everything the Democratic Party stands for because of your illusions of grandeur. Quoting Senator Reid: "There is a basic lack of trust with this President."

With all due respect, your leadership has been discouraging. You are not the person I voted and worked for. The backlash from your actions on Social Security, Medicare and Medicaid will be profound and I pray that you will do some soul-searching before you act. I think you should resign yourself that there is the possibility for you to become a one-term president.

By-the-way: "Eat your peas" was very insulting.

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=4932958&mesg_id=4932976

[Demeter]

100. What the World Needs Now

http://www.youtube.com/watch?v=tTrmYakCWGM

[Pale Blue Dot]

101. Layoffs, Layoffs Everywhere You Look There Are Layoffs

The competition for jobs in the United States is absolutely brutal right now, and it is about to get worse. A new wave of layoffs is sweeping across America. During tough economic times, Wall Street favors companies that are able to cut costs, and the fastest way to "cut costs" is to eliminate employees. After a period of relative stability, the employment picture in the U.S. is starting to get bleaker again. New applications for unemployment benefits have now been above 400,000 for 15 straight weeks. Finding a good job is kind of like winning the lottery in this economy. Our federal government and the state governments have made it incredibly complicated and extremely expensive to have employees on the payroll. It is getting harder and harder to get a large enough return to justify the time and expense that hiring employees requires. So many firms now find themselves trying to do more with the employees that they already have. Other companies are turning to temp agencies as a way to reduce costs and increase workplace flexibility. A lot of the big corporations are sending as much work as they can overseas where the wages are far lower and where the regulatory environment is much simpler. All of this is really bad news for American workers that just want good jobs that will enable them to provide for their families.

When we first started seeing huge numbers of layoffs a few years ago, I encouraged people to look into government jobs because I thought that they would be a lot more stable in this economic environment.

But today that is no longer true. In fact, state and local governments all over the United States are responding to massive budget problems by slashing payrolls in an unprecedented fashion.

Sadly, the reality is that the number of "secure jobs" is rapidly declining in America. If you have a "job" ("just over broke") right now, you might not have it for long. That is one reason why everyone should be trying to become more independent of the system.

http://theeconomiccollapseblog.com/archives/layoffs-layoffs-everywhere-you-look-there-are-layoffs

There's a comprehensive list at the link. It's getting scary out there.

[plumbob]

104. Yep, in August, 100,000 Texas teachers will receive their final

paychecks in the biggest downsizing in at least Texas history.

10,000 state employees will also be jobless at the end of August.

Let's see what those numbers do the the unemployment figures.

[AnneD]

145. There but for the grace of God....

And my union rep, go I. I reported this in April. Look for increases in unemployment in Texas. Between the state budget cuts and the reprocussions on the local level as cities wrestle with short falls, the numbers will shoot up.

This will make Perry's run for GOP nomination problematic. He lied about the budget shortfall during his re-election, gave his buddies tax breaks, and stuck us with the bill. But gee doesn't his hair look great. And that prayer for rain thingie really worked well.....NOT!

Take it from someone that never voted for a Bush....stay away from Perry.

[plumbob]

147. Yes, I stayed on as well, but with no step increase or raise the next

two years, a $130/month increase in our insurance coverage, and increased class load.

Could be worse, all right. I have never voted for any Republican for any office, ever. My grandparents saw to that.

[Demeter]

106. We are the ants at the Elite Picnic

and here comes the insecticide...

[plumbob]

103. Soap operas are increasing self-efficacy south of us. Practical use of the good dr.

http://des.emory.edu/mfp/NewYorkerJune2006.pdf

broadcast
to as many as a million listeners.
The first “soap operas for social
change,” as these programs are loosely
known, were developed by Miguel Sabido,
a Mexican television producer, in
the late seventies. Dramas produced according
to the “Sabido method...

change how they behave.”
One of Sabido’s favorite experts is
the psychologist Albert Bandura, of
Stanford University, whom he described
as “the greatest American since Benjamin
Franklin.” Bandura’s “Bobo doll
studies,” conducted in the late nineteen fifties and the sixties, showed that
children, observing adults in violent
forms of play, mimicked those behaviors.

The best way to teach new behaviors,
Bandura found, was to give people
models that they could bond with and
who could guide them through concrete,
realistic steps. Sabido visited Bandura
at Stanford to discuss plot ideas.

In a Sabido soap opera,
there is always one positive,
aspirational character, usually
someone whose social status
is slightly higher than that
of the typical viewer. At the
other end of the spectrum is a
negative character—a superstitious
mother-in-law or a
thuggish husband. The most
important member of the cast is the “transitional”
figure—the fallible character
who struggles to behave decently.

much more at link

I teach adolescents, and getting rid of their learned helplessness is vital.

[Demeter]

107. Such Ideas Could Put An End to American TV

which would be a really good idea.

That's why I don't have cable...I have an impressionable disabled child living here...and I can't stand the stupidity, grossness, and immorality, myself.

[Demeter]

109. Republicans, Zealots and Our Security By NICHOLAS D. KRISTOF (REALLY, IT'S ECONOMICS)

http://www.nytimes.com/2011/07/24/opinion/24kristof.html

IF China or Iran threatened our national credit rating and tried to drive up our interest rates, or if they sought to damage our education system, we would erupt in outrage. Well, wake up to the national security threat. Only it’s not coming from abroad, but from our own domestic extremists. We tend to think of national security narrowly as the risk of a military or terrorist attack. But national security is about protecting our people and our national strength — and the blunt truth is that the biggest threat to America’s national security this summer doesn’t come from China, Iran or any other foreign power. It comes from budget machinations, and budget maniacs, at home.

House Republicans start from a legitimate concern about rising long-term debt. Politicians are usually focused only on short-term issues, so it would be commendable to see the Tea Party wing of the Republican Party seriously focused on containing long-term debt. But on this issue, many House Republicans aren’t serious, they’re just obsessive in a destructive way. The upshot is that in their effort to protect the American economy from debt, some of them are willing to drag it over the cliff of default.

It is not exactly true that this would be our first default. We defaulted in 1790. By some definitions, we defaulted on certain gold obligations in 1933. And in 1979, the United States had trouble managing payouts to some individual investors on time (partly because of a failure of word processing equipment) and thus was in technical default. Yet even that brief lapse in 1979 raised interest payments in the United States. Terry L. Zivney, a finance professor at Ball State University and co-author of a scholarly paper about the episode, says the 1979 default increased American government borrowing costs by 0.6 of a percentage point indefinitely. Any deliberate and sustained interruption this year could have a greater impact. We would see higher interest rates on mortgages, car loans, business loans and credit cards.


...More broadly, a default would leave America a global laughingstock. Our “soft power,” our promotion of democracy around the world, and our influence would all take a hit. The spectacle of paralysis in the world’s largest economy is already bewildering to many countries. If there is awe for our military prowess and delight in our movies and music, there is scorn for our political/economic management...While one danger to national security comes from the risk of default, another comes from overzealous budget cuts — especially in education, at the local, state and national levels. When we cut to the education bone, we’re not preserving our future but undermining it. It should be a national disgrace that the United States government has eliminated spending for major literacy programs in the last few months, with scarcely a murmur of dissent...Education programs like these aren’t quick fixes, and the relation between spending and outcomes is uncertain and complex. Nurturing reading skills is a slog rather than a sprint — but without universal literacy we have no hope of spreading opportunity, fighting crime or chipping away at poverty...So let’s remember not only the national security risks posed by Iran and Al Qaeda. Let’s also focus on the risks, however unintentional, from domestic zealots.

[Demeter]

112. To Add to Bandura's Thesis: Is monogamy essential to democracy?

http://www.salon.com/life/feature/2011/07/23/monogamy/index.html

In a 64-page affidavit, the University of British Columbia professor used his areas of expertise -- psychology, anthropology and economics -- to demonstrate the social harm associated with men taking multiple wives. Implicit in his argument was an endorsement of monogamy, which, he wrote, "seems to redirect male motivations in ways that generate lower crime rates, greater GDP per capita, and better outcomes for children." His interest isn't in the individual, emotional experience of sexual and romantic exclusivity so much as the evolution of cultural norms and how they impact society...

...it has been argued by historians that monogamy precedes, and then seems to go along with, the emergence of democratic ideals. In the Western tradition, the earliest we can trace laws about monogamy is actually to Athens when the first notions of democracy began to be instituted. The argument is that it's meant to create equality among citizens so that, essentially, there'll be wives available to all Athenian men, rather than having all the rich men take many wives. Although, men were still allowed to have slave concubines just so as long as they were non-Athenian women.

You can think of it as a first kind of effort to level the playing field. By saying that both the king and the peasant can only have one wife each, it's the first step toward saying that all men were created equal....

...There are these groups in South America where people believe that the fetus is formed by ejaculations from multiple males, so the kids can have multiple fathers. You improve the survival of your child by getting him or her a second father. So when women first get pregnant, they'll seek out sexual liaisons with other men because then those men believe they have a fatherly responsibility to the child. Social norms in this case say that the husband, the primary father, cannot get upset about it, that it's perfectly OK for the woman to go out and seek these other mates -- but the ethnography suggests that these guys are really grumpy about it. You have an innate jealous reaction that's stamped down by local social norms....

SO MUCH MORE AT LINK---TODAY'S MUST READ!

[Demeter]

113. THIS WEEK'S CARTOONING ALL ABOUT ECONOMICS

http://politicalhumor.about.com/od/politicalcartoons/ig/Political-Cartoons/

[Demeter]

114. Dionne Warwick - Walk On By (Stereo)

http://www.youtube.com/watch?v=AO073fekFfA&feature=related

Dionne Warwick's singing is intimately connected to the composer's music--can't imagine one without the other...


AND BY THE WAY, I'D LIKE TO DEDICATE THIS NUMBER TO BARACK OBAMA, AKA PRESIDENT PETER PETTIGREW, FOR ALL HE'S DONE TO US.

[Demeter]

116. I'll never fall in love again - Dionne Warwick SIMILAR DEDICATION

http://www.youtube.com/watch?v=FzQBOBoPg04&NR=1

[Demeter]

122. Dionne Warwick - Do You Know the Way to San Jose

http://www.youtube.com/watch?v=uiB02XWTwI4&NR=1

[Demeter]

115. Federal Home Loan Banks Challenge BofA Settlement, Say They May Be Owed a Lot More

http://www.nakedcapitalism.com/2011/07/federal-home-loan-banks-challenge-bofa-settlement-say-they-are-owed-a-lot-more.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

...being unhappy is one thing, actually taking concrete steps to oppose the $8.5 billion deal (which heinously also included a broad release for chain of title liability) is quite another. While a group of investors who had pursued their own objections were quick to file a petition objecting to the settlement, they are small fry and their protest in isolation would probably be rejected by the judge.

The equation changed today with several Federal Home Loan Banks effectively saying they had been kept out of the loop and have reason to think the settlement is inadequate. While this falls short of a an effort to block the deal, the FHLBs have demanded more information. What they uncover may confirm their argument, that the settlement amount really should be much higher, with their estimate in the range of $22 to $27.5 billion, if not higher.

At a minimum, this move throws a spanner in the works and puts some heavyweight names who can’t be easily dismissed on the other side of the table from BofA and the conflict-ridden trustee, Bank of New York. In addition, New York attorney general Eric Schneiderman has taken a keen interest and may well raise objections to the deal....

[Demeter]

117. Matt Stoller: Elizabeth Warren Versus Barack Obama on Leadership

http://www.nakedcapitalism.com/2011/07/matt-stoller-elizabeth-warren-versus-barack-obama-on-leadership.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

Last week, I caught some of the grilling of Elizabeth Warren by GOP Congressmen during the House Oversight Reform Hearing. At one point, a Republican Congressmen asked Warren if she was “running a campaign” to convince people of the validity of the Consumer Financial Protection Bureau she is in the midst of setting up. The two of them went back and forth, because she didn’t really understand the question. He was trying to peg her as overtly political, using government resources to travel the country and do advocacy. Suddenly, she got the nature of the question, and turned to him and said, pointedly, “I always try to convince people that I’m right.”

There was some laughter in the room, but she wasn’t kidding. Warren believes that consumer protection is necessary for a just society, and spends a great deal of time trying to persuade the public of the necessity and legitimacy of government. Imagine that – a public servant who thinks that communicating with and persuading the public of the merits of their ideas.

Contrast this with Barack Obama, a person who never fails to wrap his true agenda in gauzy opaque process jargon. Obama won’t back his own NLRB or Boeing workers, or even Boeing itself; he thinks that neither side should waste time in court. He won’t announce Social Security or Medicare cuts, he wants it to be part of a Grand Bargain for whom no one has to take responsibility. He demands an end to earmarks, or something, but we need an infrastructure bank or something. As a result, the Democratic Party is enmeshed right now in a guessing game about the true goals of their leader, paralyzed and unable to govern. When Warren is present, by contrast, the Republicans are able to argue strongly that they do not believe in government as an agent of good, while Democrats are able to articulate the opposite. It’s a real, open, honest debate. There’s no sliding around with 11 dimensional chess nonsense, it’s straight up democracy.

The books written by Warren and Obama reveal their differing styles. I spent some time reading Warren’s The Two Income Trap, which she co-authored with her daughter, and it’s remarkable pre-crisis work. She wrestled with the guts of our society, with debt and bankruptcy, with how America treats you not when everything works well, but when everything fails. She tells the story of how Hillary Clinton stopped the bankruptcy bill when she was in the White House, but voted for it when she was in the Senate because of campaign contributions (Update: As first lady, Mrs. Clinton worked against the bill. She helped kill one version of it, then another version passed, which her husband vetoed. As a senator, in 2001, she voted for it, but it did not pass. When it came up again in 2005, she missed the vote because her husband was in the hospital, although she indicated she would have opposed it.). She talks about the problems of the housing bubble in the context of a failing education system, and the flip side of the Reagan revolution – the economic persecution of women and families. She named names, but more than that, she grounded her book in real data and the pain of millions of people she tried to protect. It is this research that led her to note that the stimulus, absent debt restructuring, would not work....

[Demeter]

118. SMASHING CONCLUSION

It is important to remember what real leadership can look like, which is why Elizabeth Warren can be a pivotal figure. After all, we may need real leaders one day.

[Demeter]

119. The Blame for Fannie and Freddie Written by Dean Baker

http://www.cepr.net/index.php/blogs/cepr-blog/the-blame-for-fannie-and-freddie

It is entertaining to see all the folks who missed the housing bubble try to apportion blame after the fact. Tyler Cowan is the latest entrant, pronouncing Fannie and Freddie at least partially responsible. While his indictment is impressive, the real question should be, “what is the charge?” Of course Fannie and Freddie are at least partially responsible, they purchased hundreds of billions of dollars of loans that were used to buy properties at what they should have recognized as bubble-inflated prices. If they had refused to buy such loans, it almost certainly would have brought the irrational exuberance of the housing bubble to a quick halt.

Fannie and Freddie could have adopted a policy of requiring appraisals of rent, and refused to purchase any loan for a purchase price that exceeded a 15 to 1 ratio to rent (adjusted by metro area). This policy would almost certainly have required many buyers and lenders to give more serious thought to their purchase price. Since housing is all that Fannie and Freddie do, it is reasonable to expect that they would have recognized the bubble and taken steps to counter it and protect themselves. . Instead, they continued to throw money into the housing market even as prices grew ever more out of line with fundamentals.

However, giving the primary blame to Fannie and Freddie and the government policy of promoting homeownership ignores the fact that the worst subprime loans were sold to Merrill Lynch, Citigroup and other private investment banks. These banks do not have any pretense of having a mission of promoting homeownership; they are there to make money. And, in the peak years of the housing bubble, they were booking huge profits on the loans that they repackaged into mortgage backed securities and more complex financial instruments.

If the moral of the story is supposed to be that financial institutions don’t make reckless and often fraudulent loans without the prodding of the government, no one can make this case with a straight face. Angelo Mozillo’s Countrywide and Robert Rubin’s Citigroup issued and securitized bad mortgages because it was profitable. No government bureaucrat forced them to do it to advance homeownership. In fact, the main motive of Fannie and Freddie in this period was also almost certainly profit, which allowed their top executives to pocket tens of millions in compensation that they still hold...Unfortunately, the main lesson seems to be that crime pays. With few exceptions, the evils doers are doing just fine – in fact much better than almost anyone who doesn’t break the law for a living. And, we also seem to have learned nothing about pushing homeownership, as some community groups are now devoting their efforts to ensure nothing is done that could raise the interest rate on higher risk, low down payment loans...There is one final point that is worth noting on Tyler Cowan's scorekeeping between the banks and Fannie and Freddie. The banks got far more generous bailout terms than Fannie and Freddie, getting loans and loan guarantees at way below market rates. (In keeping to their deference to Wall Street, almost no economists are so rude as to point out that below market loans and guarantees involve massive subsidies. This allows people like Timothy Geithner to claim that we actually made money on the TARP, even though every card carrying economist knows this is nonsense.)


*******************************
comments
...
written by Carolyn Burns, July 17, 2011 10:26 AM
You can't unpop the bubble.

[Demeter]

124. The Banks Still Want a Waiver By GRETCHEN MORGENSON

http://www.nytimes.com/2011/07/24/business/bank-settlement-in-mortgage-mess-may-hinge-on-mers.html?ref=business

HOW should banks atone for those foreclosure abuses — all the robo-signing and shoddy recordkeeping that jettisoned so many people from their homes? It has been four months since a deal to remedy this mess was floated. Not much has happened since — at least not publicly...Last week, banking executives and state attorneys general met in Washington to try to settle their differences. At issue was how much banks should pay, and how and to whom, to make this all go away. The initial terms, which emerged in March, were said to carry a $20 billion price tag. But here is a crucial question: to what extent would such a settlement protect banks from future liability? Will the attorneys general strike a deal that effectively prevents them from bringing new, unrelated lawsuits against the banks? If the releases in any settlement are broad, there will be joy in Bankville. If they are narrow, the banks will probably face more litigation, something they would rather avoid.

A looming issue relates to the potential liability stemming from the Mortgage Electronic Registry Systems, or MERS. This company, owned by the major banks, was set up in the mid-1990s by the Mortgage Bankers Association, Fannie Mae and Freddie Mac. Its goal was to expedite the home loan process. By eliminating the need to record changes in property ownership in local land records, MERS ramped up profits for lenders. In 2007, MERS calculated that it had saved the industry $1 billion over 10 years. An estimated 60 percent of all home loans were registered to MERS. But the MERS machine started to sputter during the foreclosure crisis. Lawyers challenged MERS’s ability to bring foreclosure proceedings because the system does not technically own the security or note underlying properties, as required. While some courts have not objected to MERS’s foreclosing in place of banks, others have.

New York courts, for instance, have been increasingly hostile to MERS. In a February 2011 opinion, Robert E. Grossman, a federal judge on in Long Island, wrote: “This court does not accept the argument that because MERS may be involved with 50 percent of all residential mortgages in the country, that is reason enough for this court to turn a blind eye to the fact that this process does not comply with the law.” Equally troubling for MERS is the fact that its officials have filed questionable documents with courts attesting to ownership of the notes and other significant matters. These practices have consequences, as described by R. K. Arnold, MERS’s former president, in a 2006 deposition. “We are heavily at risk as far as, you know, having to follow the rules of the court and enforcing our rules that our members must go by,” he said. “We also have jeopardy as far as if we were to fail in the foreclosure realm.”...David Pelligrinelli, president of AFX Title, a title search company, said MERS contributed to the problem of thousands of mortgages lacking a complete ownership chain. “You can’t go back and redocument all these things, because some of the companies aren’t around anymore,” he said. “Even if they are, the charters for these companies don’t allow for backdating of assignments.”...

Lawyers who have examined this issue say it would be unprecedented to grant a broad release from liability to the banks that own MERS from claims that have not been investigated...A broad release would vastly diminish the possibility of an in-depth investigation. Such a release might also make it harder for borrowers to argue that MERS has no right, or standing, to foreclose on them. The United States Trustee has supported this view in a number of recent cases, but exempting banks from future lawsuits on this issue would send a message that questioning MERS’s standing is of no interest to top state officials. And if the banks are insulated from future state lawsuits, responsibility for any abusive acts by MERS would be pushed onto law firms that did the system’s work. With few assets, these law firms are virtually judgment-proof. The unit of MERS that held title to the mortgages also has few assets and was set up in such a way that lawsuits against it would probably reap little for plaintiffs....MERS has begun to clean up its practices and paperwork. Officials are furiously assigning mortgages out of MERS’s name and into the banks’ names. One borrower in Pierce County, Wash., combed through records from April 1, 2011, to July 18, and found 1,956 assignments of deeds of trust executed from MERS to banks that service the loans or trustees that oversee mortgage pools.

[Demeter]

129. Nevada Supreme Court: You Gotta Prove Chain of Title

http://www.creditslips.org/creditslips/2011/07/you_gotta_prove_chain_of_title.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+creditslips/feed+%28Credit+Slips%29&utm_content=Google+Reader

A pair of very interesting foreclosure rulings were handed down today by the Nevada Supreme Court. They provide further evidence that documentation problems are rife in the mortgage industry, including documents showing chain of title. They also provide another example of a state supreme court demanding proof of valid chain of title before permitting foreclosure.

Both cases arise from Nevada's foreclosure mediation program. In one case, Pasillas v. HSBC Bank USA, the Nevada Supreme Court ordered sanctions against HSBC for failing to mediate in good faith. What was the failure? HSBC failed to show up at the mediation with the required loan documentation, namely two pages of the mortgage note were missing, the assignment to HSBC was incomplete, a BPO rather than an appraisal was provided. Moreover, HSBC didn't show up at the mediation with authority to settle because it still required "investor approval." The foreclosure mediator refused on these ground to authorize the foreclosure. The district court ordered the foreclosure to proceed, but the Nevada Supreme Court reversed the ruling and remanded with instructions for the district court to determine appropriate sanctions.

Three things are of note in this case. First, it shows that the Nevada Supreme Court takes a very serious view of enforcing the requirements of the state's foreclosure mediation program. This was a unanimous decision. Second, it's another illustratation of the mortgage documentation SNAFU. And third, there's a very long footnote discussing and endorsing the Massachusetts Supreme Judicial Court's ruling in Ibanez v US Bank: "We agree with the rationale that valid assignments are needed when the beneficiary of a deed of trust seeks to foreclose on a property." That's now two states Supreme Courts now that are making clear that there's got to be good chain of title. We can add to that the NC Court of Appeals and arguably New Jersey.

All of this brings us to the second case, Levya v. National Default Servicing, Inc., another unanimous decision. Again, this case arose from a foreclosure mediation. At the mediation, Wells Fargo produced a certified original copy of the note and deed of trust naming another entity as the lender. Wells did not produce any assignments, just a notarized statement that it was in possession of the original note and DOT and any assignments thereto. (Gosh, I wonder if that employee had personal knowledge of the fact or not... Do you really think the employee looked at the physical paper?). The mediator found that Wells Fargo hadn't met the statutory requirements for the mediation, but didn't make a finding of bad faith. The homeowner petitioned the district court for review, arguing that Wells Fargo acted in bad faith and should be sanctioned. The district court concluded that there was no bad faith. The Nevada Supreme Court reversed on appeal...

[plumbob]

141. Good for Nevada!

More like this, please.

[Demeter]

120. Why Fair Bosses Fall Behind

http://hbr.org/2011/07/why-fair-bosses-fall-behind/ar/1?cm_sp=most_widget-_-hbr_articles-_-Why%20Fair%20Bosses%20Fall%20Behind

In management, fairness is a virtue. Numerous academic studies have shown that the most effective leaders are generally those who give employees a voice, treat them with dignity and consistency, and base decisions on accurate and complete information. But there’s a hidden cost to this behavior. We’ve found that although fair managers earn respect, they’re seen as less powerful than other managers—less in control of resources, less able to reward and punish—and that may hurt their odds of attaining certain key, contentious leadership roles....

Consider Hank McKinnell and Karen Katen, two rising stars at Pfizer during the 1990s. McKinnell, who’d served as CFO and run the company’s overseas businesses, was known for his assertive negotiating style and no-nonsense, occasionally abrasive manner. Katen’s performance had also won her numerous promotions, and she headed Pfizer’s primary operating unit. She treated subordinates and colleagues with respect and was respected in turn. In 2001, when it came time for a new CEO, the two were among the top candidates. McKinnell was chosen. One analyst told Bloomberg, “Hank is the right guy for the job...he’s got a toughness about him.”...We heard this attitude expressed in a range of industries. Decisions about high-level promotions most often center on perceptions of power, not of fairness....Although this appears to be the more rational choice, it’s not always the correct one—and it poses big risks for organizations. At Pfizer, a cohort of promising executives associated with Katen resigned after McKinnell took over. He himself was pushed into retirement by the board in 2006 because of the company’s disappointing performance. Shareholder outrage over his rich retirement package followed.

Companies can benefit from placing more value on fairness when assessing managerial performance. Our early follow-up research suggests that managers whose style is based on respect can gain power. Their path upward may be difficult, but it’s one worth taking, for their company’s sake as well as their own.

When Can Fair Bosses Get Ahead?

Managers whose style is based on fairness can still gain power under the following circumstances:

• When they cultivate a reputation for ethics and morality

• When the organizational culture is highly cooperative

• When they are going for positions that are relatively uncontentious and that draw on their mentoring and collaborative skills

[Demeter]

121. More American Exceptionalism: Government Revenues (WONKY BUT SIGNIFICANT)

http://www.asymptosis.com/more-american-exceptionalism-government-revenues.html

Let’s adopt the unpresuming assumptions that:

1. A prosperous, modern economy needs a certain amount of government (taxing, spending) to become and remain prosperous. And that government has to be paid for via taxes and other government revenues. Simple enough.

2. Either too much or too little government in a country results in a poor economy, forcing the country to alter its taxing and spending policies.

So you won’t see any countries outside the workable range, because they’ll be forced back into it.

Now look at this:



Update: this is local, state, and federal taxes combined.

The first thing to notice: U.S. government revenues (local/state/federal combined) have been flat (with some short- and long-term wiggles) for 45 years. The notion of rampant increases is a myth.

Next: Note that the higher-taxing countries, in aggregate, have been seen long-term growth that’s basically equivalent to ours.

Let’s look at the other countries that are down there near us.

• Australia. They’ve been doing pretty well, but if Steve Keen is right (his arguments are darned compelling), they’ve been living on credit — especially housing credit (sound familiar?) — and they’re riding for a fall.

• Japan. ‘nuf said.

• Switzerland. It’s really amazing what a whole lot of international banks will do for the economy of a small country…

• Canada. As you can see, their average taxation rate has been way above ours for decades. Their rank here is an anomaly.

• Greece. Ahem.

• Spain. Ahem some more.

• New Zealand. I know bubkis about New Zealand’s economy.

• Portugal. Ahem ahem.

I don’t think it’s crazy to suggest that since 1980 we’ve been teetering at the bottom edge of the range where a prosperous, modern economy can thrive. Eventually, we fell off the cliff.

[Demeter]

123. DeCristofer, Mozillo, and Power in America Mozillo, and Power in America By Abigail Caplovitz Field

http://abigailcfield.com/?p=156

You know Angelo Mozillo. He founded Countrywide and ultimately turned it into a massive securitization machine, processing as many mortgages as possible regardless of how grossly inflated the value of the home or how blindingly obvious it was that the mortgages would not be repaid. Countrywide was instrumental in inflating the housing bubble; by early 2008 it was the biggest mortgage originator. According to lawsuits, Mozillo and others at Countrywide knew the mortgages were junk but kept making and securitizing them anyway, hurting homebuyers and investors. Mozillo apparently used his insider awareness of how lousy the loans were to cash out stock at the most opportune time: before the bubble burst and Countrywide was still a high priced stock. Mozillo took home nearly $400 million in five years. Almost everyone else has been deeply hurt by the recession the burst housing bubble caused. And Mozillo’s not yet done damaging people and our economy: Countrywide’s bad acts may yet bankrupt Bank of America.

Have you heard of Tim DeChristopher? Most people haven’t. Tim is a 28 year old college student who is passionate about America. About our land, our energy policies, and our climate. And he’s passionate about achieving justice through nonviolent civil disobedience...When the Bureau of Land Management held an auction to lease oil and gas drilling rights on public lands, Tim showed up and bid $1.8 million he didn’t have, winning the auction on 14 parcels, and driving up the prices on others. He derailed the auction and 22,000 acres were not leased.

Tim bid as political protest, getting in the way of the powers that be doing something to his country that he deeply objected to.Tim acted his conscience nonviolently and effectively denied oil companies the ability to lease 22,000 acres of public land they wanted to drill. That was his crime: preventing oil companies from acquiring property they wanted—drilling rights on public land that Tim believed was supposed to be off-limits. Tim committed a property crime to stop a property crime.

Tim acted knowing he could get in trouble; knowing he probably would. It’s called disobedience for a reason. And looking at Tim’s actions, it’s called civil for a reason too.

Law enforcement doesn’t call what Tim did civil disobedience. Prosecutors called it making a false statement and violating the law of oil leasing. Both are felonies. They pursued the charges despite two important facts: Tim made good, and he was right on the merits.

Within days of the auction Tim organized a fundraiser that generated the initial payment he was required to make. The Bush administration refused the money. When the Obama administration came in, Secretary Salazar invalidated the auction, finding that a lot of land that had been up for leasing should have been off limits as wilderness. Most of it has since been protected.

In an abusive use of prosecutorial discretion, the Obama administration’s justice department brought the case to trial earlier this year. At trial, the judge decided that Tim couldn’t argue a “necessity defense” to the jury. Tim couldn’t claim he was legally innocent because he had no choice but to break the law to stop the invalid auction...From that ruling flowed others. The judge didn’t let Tim tell the jury he’d proffered the initial payment. Nor could Tim tell the jury the auction he’d disrupted had later been invalidated and the land protected. The judge decided both facts were relevant only in the context of the prohibited necessity defense. The court would not allow this political prisoner to speak his mind in public. No risk of jury nullification would be tolerated.

This prosecution makes obvious whose interests really matter to our government. The full force of our government defended the oil companies’ sacred interest in bidding on drilling rights without interference, and prosecuted a citizen’s conscious act of nonviolent civil disobedience. And this privileging of corporate interests is no right wing conspiracy; the Obama administration convicted Tim.

On Tuesday, Tim is scheduled to be sentenced. He’s facing 10 years and a $750,000 fine. In their sentencing memo, the prosecutors tell the judge: “A significant prison term will promote respect for the law… deter others from entering a path of criminal behavior.” Apparently, Tim’s ordeal to date and two felony convictions isn’t enough. Judge, prosecutors are saying, Tim is so dangerous we’ve got to make an example of him. We don’t want anyone else getting uppity and interfering with oil companies’ use of public property for private profit.

Reality Check: Our government prosecuted Tim DeChristopher to the fullest extent of the law. Angelo Mozillo? We didn’t even arrest him.

THIS WORK IS NOT COVERED BY COPYRIGHT

[Demeter]

125. Taliban to Bail-Out Obama From Debt Crisis Mullah Omar lectures President Obama on "How to wage war

Mullah Omar lectures President Obama on "How to wage war and still make a profit."

http://kabulpress.org/my/spip.php?article74415

According to reliable sources, negotiations are underway which would have Mullah Muhammad Omar loan President Barack Obama enough money so that the United States does not default on its financial obligations. During the secret debt relief talks Mullah Omar reportedly lectured President Obama on: “How to wage war and still make a profit.”

The Taliban have no debt and do not need any debt limit increases as they are flush with millions in opium revenues and “acquired” U.S./NATO aid funds. The massive diversion of Afghan aid funds to the Taliban is detailed in the Kabul Press’ April 17, 2011, investigative report: “Petraeus Fired Admiral Who Tried To Stop Taliban Funding.”
Taliban to Bail-Out Obama From Debt Crisis


Under the debt relief deal, the Taliban would dispatch a Financial Aid and Assistance Team (FAAT) to help train Obama Administration officials in financial responsibility. Some of the FAAT’s preliminary findings are:

1. The U.S. State Department’s budget is bloated by as much as $25 billion and can be safely cut.

2. American diplomats are poorly trained, overpaid and ineffective and should all be sent home.

3. USAID development aid has primarily benefited a small group of politically connected Afghan families and should be terminated. USAID should instead focus exclusively on humanitarian aid (food and health assistance).

4. U.S. security contractors (i.e., mercenaries) are a blight on America’s image and reputation (in addition to being excessively expensive) and should all be disbanded. The State Department should return to the use of U.S. Marines as Embassy security guards.

5. Due to the current 25% annual desertion rate, Afghan Army and police training is not cost effective and new ideas need to be explored, including a much smaller and more professional force, perhaps capped at 100,000.

6. The massive American war effort in Afghanistan has generated huge volumes of trash, oils, spent munitions and hazardous waste. Its operations have also caused extensive damage to the forests, deserts, groundwater and other natural resources of Afghanistan. It is estimated that as much as $100 billion will be needed to excavate and remove all this waste from Afghanistan and to restore the countryside. The U.S. Government needs to begin budgeting for these costs (see the April/May 2010, three-part Kabul Press series which analyzed this $100 billion).


AS GOD IS MY WITNESS, I CANNOT TELL IF THIS IS SATIRE OR NOT

[Demeter]

126. Scientists Retract Report on Predicting Longevity

Scientists who asserted last year that they could predict with 77 percent accuracy who would live past 100 have retracted their report in the journal Science, yet say they are right anyway.

http://www.nytimes.com/2011/07/23/science/23retract.html?src=recg

[Demeter]

127. More Shades of TARP: Latest Deficit Ceiling Plan to Establish Extra-Constitutional Legislative Proce

http://www.nakedcapitalism.com/2011/07/more-shades-of-tarp-latest-deficit-ceiling-plan-to-establish-extra-constitutional-legislative-process.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

ANOTHER FASCIST, EXECUTIVE-OFFICE POWER GRAB IN THE MAKING...

[Demeter]

128. Scott Fullwiler: QE3, Treasury Style—Go Around, Not Over the Debt Ceiling Limit

http://www.nakedcapitalism.com/2011/07/scott-fullwiller-qe3-treasury-style%E2%80%94go-around-not-over-the-debt-ceiling-limit.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

...the debt ceiling debate could be ended right now given that the US Constitution bestows upon the US Treasury the authority to mint coins (particularly platinum ones). Further, this simple change would lift the veil on how current monetary operations work and thereby demonstrate clearly that a currency-issuing government under flexible exchange rates cannot be forced into default against its will and is not beholden to “vigilante” bond markets. As Beowulf explains in a later comment, “The anomaly it addresses is that the US Govt has a debt limit yet an agency of the US Govt (the Federal Reserve) does not have a debt limit. Clearly this is a structural defect.”

The following is a description of how the process would work and the implications for monetary operations:

1. The Treasury mints a $1 trillion coin, or whatever amount is desired.

2. The Treasury deposits the coin into the Treasury’s account at the Fed. The Fed’s assets (coin) and liabilities (Treasury’s account) increase by the same amount. As Beowulf notes later in a comment to the same post from Cullen, were the Fed to resist, the Federal Reserve Act clearly states that “wherever any power vested by this Act in the Board of Governors of the Federal Reserve System or the Federal reserve agent appears to conflict with the powers of the Secretary of the Treasury, such powers shall be exercised subject to the supervision and control of the Secretary.” The Fed is legally an agency operating at the pleasure of the government, not vice versa. Regardless, the actions I describe here and below by the Treasury in no way interfere with the normal operations of monetary policy (explained in various places below).

3. The Treasury buys back bonds (thereby retiring them) until total market value purchased is equal to the dollar value of the newly minted coin. The result is a decrease in the Treasury’s account at Fed and an increase in bank reserve balances held at the Fed.

4. Total debt service for the Treasury falls, too, as higher interest earning bonds are replaced with reserve balances earning 0.25%. Effective debt service on purchased bonds now is 0.25% since interest on reserve balances reduces the Fed’s profits that are returned to Treasury each year.

5. The retirement of bonds is an asset swap, no different from QE2, except that the Treasury has purchased the bonds instead of the Fed. But since the Treasury’s account is on the Fed’s balance sheet, there is no operational difference. That is, this is effectively “QE3, Treasury Style.” As with QE2, no net financial assets have been created for the non-government sector. The net effect, like QE2, is to reduce the term structure of US debt held by private investors, as bonds have been replaced with reserve balances.

6. The increase in reserve balances is not inflationary, as Credit Easing 1.0, QE 1.0, and QE 2.0 already have shown. Banks can’t “do” anything with all the extra reserve balances. Loans create deposits—reserve balances don’t finance lending or add any “fuel” to the economy. Banks don’t lend reserve balances except in the federal funds market, and in that case the Fed always provides sufficient quantities to keep the federal funds rate at its target—that’s what it means to set an interest rate target. Widespread belief that reserve balances add “fuel” to bank lending is flawed, as I explained here over two years ago.

7. Non-bank sellers of the bonds purchased by the Treasury now have deposits earning essentially 0%. Again, this is not inflationary. There are three points to make in explaining why...

[Demeter]

132. Manufacturing deficit fear

http://www.guardian.co.uk/commentisfree/cifamerica/2011/jul/11/social-security-debt-ceiling-talks

The conventional wisdom among the current generation of school reformers is that bad teachers are to blame for the failure of many of our children to learn. Applying this logic to the current debates over the budget and the economy, we should be pointing a big finger of blame at the media...As survey after survey shows, the vast majority of the public are incredibly ignorant of the most basic facts about the budget and the economy. If we treated their teachers in the media the way the educational reformers treat public school teachers, few economics and budget reporters would have jobs.

One needs only to pick up a newspaper or turn on the television to get examples of thoroughly awful reporting. When we hear pledges to reduce the projected deficits over the next 12 years by $2tn or $4tn, how many people have any clue how large these reductions – on which the current debt ceiling talks between President Obama and House speaker John Boehner turn – are, relative to projected spending or projected GDP over this period? (The $4tn figure is 8.7% of projected spending and 3.7% of GDP.) How about that $14.3tn figure for the debt ceiling? That's a really big number, really scary. So is just about every number connected with the United States budget. We are a huge country with a huge economy. Competent reporters would focus on this being about 90% of US GDP.

Is that big? Well, the debt to GDP ratio was over 110% after the second world war. The United Kingdom had debt to GDP ratios of more than 100% for much of the 19th century, as it was establishing itself as the world's pre-eminent industrial power. Japan has a debt to GDP ratio of more than 220% of GDP and can still borrow in financial markets long-term at interest rates of less than 1.5%.

So, what's the problem? The politicians who want to cut social security and Medicare obviously want the public to believe that there is a huge problem and – due to the incompetence of the media – they have managed to instill fear throughout the nation about this massive non-problem....If politicians knew that they would pay a political price for making things up about the budget and the economy, then they would be less likely to do it. But we aren't likely to get competent reporters until it is as easy to fire incompetent ones as it is to fire incompetent school teachers.

[Demeter]

133. Sheila Bair blames Geithner, Paulson and Bernanke for the credit crisis

http://www.creditwritedowns.com/2011/07/sheila-bair-blames-geithner-paulson-and-bernanke-for-the-credit-crisis.html


Former FDIC chair Sheila Bair’s departure from government has been unusual for a number of reasons. First, she is not getting on the gravy train in the private sector that former officials usually do. What’s more is she allowed the New York Times Joe Nocera to pen an exit interview with Bair that was scathing in its condemnation of both the Bush and Obama Administrations in which she served. More compellingly, she has now gone on the record with an Op-Ed in the Washington Post writing those same sharp criticisms herself....air is too diplomatic to name names. But she is as blunt and direct as you can be without doing so. While no names were named it is abundantly clear from the Nocera piece at whom she points a disapproving finger: Paulson, Summers, Geithner, Bernanke, Greenspan. In fact, looking through the Credit Writedowns archives I see myself using the same language as Bair, pointing at the same characters.

...So clearly, when she says “some of us did see this coming”, it is true, some of us did see this coming. And what we are saying now is that we are headed for another crisis in short order. And I suspect when this is over, that’s when people will start taking her view more seriously.

[Demeter]

130. Will the AGs Turn the US into a Banktocracy?

http://www.ritholtz.com/blog/2011/07/will-the-ags-turn-the-us-into-a-banktocracy/

...You call that an investigation?

Why on earth would the AGs settle if they have not done any serious sort of work into the underlying crimes ?

To start getting towards that answer, have a go at tonight’s must read muckraking via Shahien Nasiripour...

[Demeter]

131. Tom Jones - What's New Pussycat (YUP, IT'S BURT'S)

http://www.youtube.com/watch?v=VBdSqk78nHw&feature=related

[Demeter]

134. Doug Smith: The Maximum Wage

http://www.nakedcapitalism.com/2011/07/doug-smith-the-maximum-wage.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

By Douglas K. Smith, author of On Value and Values: Thinking Differently About We In An Age Of Me

We face severe and growing income inequality with negative effects on people and the economy. Yet, no surprise, the ‘can’t do’ right wing continues a scorched earth campaign against the minimum wage. These self-promoting haters actually prefer no wages and indentured servitude – for example using prisoners to replace employees and cheerfully promoting ‘internships’ for the unemployed.

They glory in income inequality and wish it to expand instead of contract. Enough of that. They are destroyers of the American Dream...But people who seek to shrink income inequality — to insure life, liberty and the pursuit of happiness for all and not just some — must now focus as much on the maximum wage as the minimum wage.

So, be it proposed:

“That any enterprise receiving taxpayer funds shall not compensate that enterprise’s highest paid person in an amount greater than twenty-five times what the lowest compensated person receives.”

First, note that this proposal would not apply to enterprises that do not receive any taxpayer funds.

For those, however, receiving bailouts, deposit insurance, government guarantees, tax breaks, tax credits, other forms of public financing, government contracts of any sort – and so on – the top paid person cannot receive more than twenty-five times the bottom paid person. This ratio, by the way, is what business visionary Peter Drucker recommended as most effective for organization performance as well as society. It also echoes Jim Collins who, in his book Good To Great, found that the most effective top leaders are paid more modestly than unsuccessful ones. And, critically, it is a ratio that is in line with various European and other nations that have dramatically lower income inequality than the United States.

Note, second, that this identifies the top paid person – not the CEO. Even though outrageous CEO pay and its ill effects on severe income inequality is much in the news, CEOs are not always the highest paid person.

Third, the proposal uses a ratio – 25-to-1 – instead of an absolute dollar figure. If a taxpayer funded enterprise wishes to pay the top person, say, $50 million, they can do so: just as long as the lowest paid person receives $2 million. In other words, instead of today’s limitless top wage being supported by taxpayer money – that is, socialism for the rich and only the rich — this proposal is equitable toward all.

Fourth, the choice of compensation is made by the enterprise – not by government officials.

Fifth, this approach to the maximum wage dramatically benefits the economy through some blend of more job-creating investment by the enterprise (through deploying higher retained earnings), and/or more consumer spending, savings and investment because of increased take home pay (and/or shareholder dividends) for the many instead of the few. It would, for example, immediately provide stimulus to restart our heavily consumer-driven economy.

Sixth, this proposal is competitively neutral: all enterprises using taxpayer funds must abide by the same 25-to-1 ratio of top-to-bottom compensation. In most industries, competitors respond to opportunities similarly; that is, if there are government opportunities, all try to take them and, if there are no such arrangements, none do. Nothing changes except the uses to which taxpayer funds get deployed as compensation. The new maximum wage rule levels the playing field for all competitors.

Nor, seventh, would this proposal have any adverse effect on the market for talent. Again, all enterprises are subject to the same rules. Moreover, there’s never been any – zero, zilch, nada – evidence that top pay correlates with sustained enterprise performance. Indeed, quite the reverse. Which, again, is why Drucker, Collins and others all note that talent and performance are not correlated to income inequality-levels of executive pay. The more likely result is the opposite: the maximum wage ratio will put enterprises using taxpayer funds on a better, sounder path to performance than those who don’t use taxpayer funds!! Meaning, of course, that such enterprises will attract the talent they need – not the talent they do not need.

Eighth, this proposal can and should be enacted by all federal, state and local jurisdictions that provide taxpayer funds to enterprise. And, of course, with the appropriate inclusive definitions of ‘compensation’ (salary, wages, bonuses etc) and “person’ to avoid cheating and evasion.

Ninth, enforcement will be inexpensive. Enterprises would be required to submit just two numbers to the appropriate tax authority: the highest and lowest compensation figures. If the ratio is in excess of 25-to-1, the offending enterprise will be given a simple choice: claw back the top earner’s compensation to the appropriate level; or, within, say, 30 to 45 days, pay all of the lowest earners the required amount; or, a combination of the same steps needed to bring the enterprise in line with the maximum wage rule. (If deemed necessary, generous rewards to anonymous whistleblowers could support monitoring and compliance efforts).

Tenth, and finally, remember that we’re talking about OUR MONEY. It’s not the ‘government’s money”. It’s OUR MONEY. And we insist that enterprises wishing to be funded and/or compensated and/or insured and/or tax advantaged with OUR MONEY abide by the maximum wage in order to reduce destructive, economy killing and unhealthy income inequality. When publicly funded companies operate within the 25-to1 maximum wage band, we all benefit.

It is the free choice of free enterprise whether or not to use OUR MONEY. If you are part of an enterprise and wish to pay anyone, including yourself, more than today’s all-too typical extreme, greater than 300 times the lowest wage earner, go ahead.

But do not use OUR MONEY.

[Demeter]

135. Memo to Obama: Creat More Jobs or Resign (From Bad to Worse) By MIKE WHITNEY

MIKE WHITNEY

Abysmal.

That's the only way to describe the latest jobs report. The whole thing stunk. And, on top of that, the unemployment rate has been heading higher for the last 3 months. It's now at 9.2 percent a full two years into the recovery. That's unprecedented. Where are the jobs, that's what everyone wants to know. This is beyond disappointing. The stock market has regained most of the ground it lost since it touched bottom in March 2009, but the real economy is still stuck in the mud. Just look at the data. Here's a clip from economist Tim Duy who sums it up perfectly:

"...the labor force fell, the participation rate fell, the employment to population ratio fell, the number of employed plummeted, and the number of unemployed climbed. Private nonfarm payrolls gains a paltry 57k, and the drag from government cutbacks pulled the overall jobs gain to just 18k. Far short of the numbers needed to even hold unemployment steady." ("Grim", Tim Duy, Fed Watch)

Get the picture? It's all bad. And guess what? Those "18,000 new jobs" falls within the Labor Depts margin for error, so there could actually be "no new jobs". Will that wake up Obama? Probably not. How do you light a fire under Washington, that's the question? Is Congress even aware that we're undergoing a major jobs crisis or are they too busy bickering over tax cuts for fatcats or how much money they can divert from Social Security to Wall Street? Look; unemployment is over 9% and rising. The states are firing tens of thousands of teachers and public employees every month because they need to balance their budgets and they're not taking in enough revenue. The stimulus is dwindling (which means that fiscal policy is actually contractionary in real terms) And the 10-year Treasury has dipped below 3 percent (as of Monday morning.) In other words, the bond market is signalling "recession", even while the dope in the White House is doing his utmost to slice $4 trillion off the deficits.

Does that make any sense?

Maybe if you're Herbert Hoover, it does. But it makes no sense at all if you were elected with a mandate to "change" the way Washington operates and put the country back to work. Obama is just making a bad situation worse by gadding about in his golf togs blabbering about belt tightening. It's enough to make you sick. Get with the program, Barry, or resign. That would be even better. Then maybe we can find someone who's serious about running the country.

Just think of the message Obama is sending our trading partners. By refusing to spend more on stimulus, Obama is announcing to the world that his administration will do nothing to rebuild the middle class and shore up flagging global demand. They've got to love that in China! Instead, he wants to make increase the pain, by cutting off the bloodflow of Federal spending while households are still are still digging out from the losses they sustained after the housing bubble burst. That will just make it harder for people to patch their balance sheets and get back to normal. Doesn't Obama know that?...Do you know what it's going take to find jobs for all the people who want them? According to economist Gary Burtless from the Brookings Institution, "To bring the adult employment rate back to its pre-recession level, we would need to add about 11 million new jobs. At the pace of job growth we have seen since the start of the year, that task may take decades."

And here's more from the New York Times:

"The economy needs to add about 150,000 jobs a month just to keep up with normal population growth. The protracted stretch of weak-to-moderate job creation over the last two years has left many of the people who lost jobs during the recession increasingly desperate. There are now 14.1 million unemployed, with 6.3 million of them having searched for work for six months or longer. Including those who are working part time because they cannot find full-time work and those who have stopped looking, the broader unemployment rate is now 16.2 percent, its highest level since December 2010." ("Job Growth Falters Badly, Clouding Hope for Recovery", New York Times)

...If Obama thinks he can slash spending and have a strong recovery at the same time, he's in for a big surprise.

Mike Whitney lives in Washington state and cvan be reached at [e-mail]

[Demeter]

137. ONE THING ABOUT HEAT WAVES

I get through a lot of email!

Burt Bacharach's songlist is 10 pages at this link:

http://songwritershalloffame.org/index.php/songs/C40/

Enjoy!

I have a barbecue to run...so that's a wrap, unless insomnia drives me back into this thread...

Let's hope for a week of miracles, not Miracles(tm) and LESS HEAT!

[DemReadingDU]

140. Lots of good reads, Thanks!

[AnneD]

146. Speaking of Burt.....

He was once married to Angie Dickerson. She hung around with Sinatra, Martin, and the rest of the Rat Pack.