Fresh outrage as Bob Ivry, Bradley Keoun and Phil Kuntz (tough name) break an incredible story about the secrets of the 2008 bailouts. Banks fought to keep these details a secret, but Bloomberg Markets Magazine successfully sued for the truth.Read more if you can.
Here goes:
The Federal Reserve and the big banks fought for more than two years to keep details of the largest bailout in U.S. history a secret. Now, the rest of the world can see what it was missing.
The Fed didn’t tell anyone which banks were in trouble so deep they required a combined $1.2 trillion on Dec. 5, 2008, their single neediest day. Bankers didn’t mention that they took tens of billions of dollars in emergency loans at the same time they were assuring investors their firms were healthy. And no one calculated until now that banks reaped an estimated $13 billion of income by taking advantage of the Fed’s below-market rates, Bloomberg Markets magazine reports in its January issue.
And you can also thank these "smartest guys in the room" for those parasitic zero percent interest rates that are doing such wonders for your savings and retirement prospects.
The borrower says, "I can't pay you back" and then the borrower surrenders his or her claim on any assets that he or she still possesses.Read more.
The lender, meanwhile, sifts through those assets and recoups what he or she can. And in this normal, natural state of affairs, both parties get hurt by the experience, and they go home to nurse their wounds, having learned a harsh lesson that hopefully will help them avoid making similar mistakes in the future.
And that's as it should be.
Because they're both responsible for the mistake.
The borrower borrowed too much. And the lender loaned too much. And they both paid the price for their optimism and/or greed.
Now, note what does NOT happen in this normal, natural "debtor can't pay lender" state of affairs:
The world doesn't freeze up with paroxysms of angst, denial, finger-pointing, can-kicking, moral hazard, and endless bailouts--in which no one is ever forced to acknowledge his or her mistake and learn his or her lesson.
In the US housing market, as in the European sovereign debt market, borrowers borrowed too much and lenders loaned too much.
Both sides had good intentions, but the good intentions didn't work out. And now we're in the age-old situation in which borrowers can't pay. And, as always, both sides bear responsibility for this situation.
No matter how popular it is to bash Wall Street, no one forced American consumers and European countries to borrow money. And no matter how popular it is to rail about deadbeats and the loss of personal responsibility, no one forced Wall Street to make all those dumb-ass loans.
In a simple, fair, and just world, both sides would now pay the price.
And the world would move on, quickly, and put this whole mess behind it.
But instead, we just get denial, empty promises, can-kicking, finger-pointing, and endless bailouts.
The reason we're not getting the simple solution this time, of course, is that so many people borrowed so much and so many people loaned so much that, collectively, they have a lot of power to influence the solution.
And, of course, like anyone else who has made a colossal, painful mistake, they're slow to acknowledge that they made a mistake, and they're doing everything they can to never have to acknowledge that.
But that shouldn't change anything.
The simple, fair, and best solution to the global debt crisis is the same as it ever was:
Let the borrower and lender suffer the consequences for their choices.
It now appears the Joint Select Committee on Deficit Reduction (the “Super Committee”) will deadlock, resulting in automatic spending cuts of $1.2 trillion over the next 10 years. Some are decrying this as a failure; I’m celebrating it as a victory. Clearly, much more must be done to cut federal spending and avert a fiscal crisis. But real spending cuts were never on the table. What was on the table was a disastrous tax hike that would have undermined our economic recovery and given Washington politicians even more money to spend, undermining the goal of cutting spending.
Republican House Leadership reportedly offered as much as $640B in tax hikes in the negotiations, contrary to political posturing from Democrats that Republicans were anti-tax absolutists (which they should have been). Even Senator Pat Toomey and Representative Jeb Hensarling, the most conservative members of the panel, offered $300 billion in net tax hikes, offering to do much more than “pay for” an extension of the Bush tax cuts with an itemized deduction phase-out that would have, among other things, limited the deductibility of charitable contributions and home mortgage interest.The only thing that protected the American people from a large and extremely poorly-timed tax hike was Democrats’ unending hunger for more of our money. They rejected the big tax hikes the Republicans offered because they wanted even bigger tax hikes.
Democrats never intended to do anything about the spending problem. In fact, they insisted on tax hikes of more than the $1.2 trillion deficit reduction mandate so they could increase spending by funding the president’s latest stimulus proposal.Amen and amen, brother Kerpen. There's little time for a victory lap, and still the breakdown of this so called Super Committee---not!---is cause for celebration.
Considering what the offer was on the table, news out of the Super Committee that they won’t report a package is a huge success.
Although it is not nearly enough to solve the impending fiscal disaster, the sequester mechanism is a Washington spending cut, or more precisely a reduction in expected spending increases. It is not the doomsday scenario some on the left (and even some on the right) claim. As economist Dan Mitchell of the Cato Institute has explained, spending will still increase every year under the sequester (although more slowly), including increases in defense spending.
In the end, Democratic intransigence made clear that the only option to even modestly reduce the runaway growth of federal spending was to deadlock and trigger sequestration. Under the circumstances, we should celebrate the outcome. But not for very long, because there is much more work to do to cut federal spending and we need to keep the pressure on.
Eddie Murphy is a complicated man and it’s impossible to know his precise motivations for jettisoning his Oscar hosting gig just a day after the Hollywood P.C. Thought Police took out his friend and creative partner Brett Ratner, but it certainly looks like a rebuke of the repressive “tolerance” mandate that has eroded Hollywood and the art it attempts to create.This isn't really much of a story, but frankly after the last two weeks of focusing on Herman Cain's peccadilloes, it's fresher and a lot more fun to write about. Thanks for keeping it slightly interesting in Hollywood fellas.
Yesterday, Cain’s campaign wouldn’t comment on the specifics of any of the allegations, but has a press conference scheduled for today.
But Kraushaar family members who spoke to The Daily said the only lies were coming from Cain.
“His denial of the whole thing, and his making light of it, seems to me to be more damaging to his character than the initial allegations,” said Karen Kraushaar’s sister-in-law, who asked not to be named. “If he would have just come out and said, ‘This is what happened,’ it would have been so much better for everybody.”
Since Politico broke the story that two women had received cash settlements after filing sexual harassment claims against Cain, various news outlets have declined to identify the women, citing privacy issues. A third woman’s case was disclosed last week, but The Associated Press did not name her.
Tomorrow night #1 ranked Louisiana State University (LSU) will take on 2nd ranked Alabama. As it’s widely assumed that these are by far the two best college football teams in the country, this match up is the latest to have a variation of “Game of the Century” attached to itWhen I comes to most sports, I don't have a strong opinion one way or the other and listen more than I speak. But Tamny makes good sense to me. I'll be watching the game Saturday night with one of the all time big fans of college football. Read the rest of Tamny's piece.
Every few years these games present themselves, some are more exciting than others, but perhaps not commented on enough is how unique they are to college football. Of course, they are unique because quite unlike other college and professional sports, there’s happily no end-of-season playoff that would largely devalue this exciting collision of what for now are the two highest ranked teams.
Despite the excitement that this Saturday holds, much like Groundhog Day college football fans will suffer yet again this year myriad breathy articles from emotional sportswriters about how a playoff must be implemented. To the nearsighted a playoff would be more equitable such that more teams would have a chance to hoist the trophy (those who follow modern economic policy perhaps detect a pattern here…), and better yet they allege, a true champion would be discovered on the field.
Ignored by the hysterics is the simple truth that playoffs don’t always achieve what is presumed. Indeed, does anyone think the 2008 New York Giant Super Bowl Champion team was better than the New England Patriots that they beat?
Herman Cain supporters have accepted his narrative that he is an American success story. The question is, just how much of that "success" did he earn on his own? And is it really the Horatio Alger story we are led to believe?Stephens believes that while Cain has achieved a measure of success which is fine as far as it goes, it's vastly over-rated. He also thinks the candidate long ago became a professional politician rather than the full-time businessman he likes to portray himself as being:
Herman Cain did not build Godfather's Pizza. He was made manager of an existing organization within a large corporation and given staff and a title. The parent company soon spun it off, as big firms often do with subsidiaries that offer modest upside scale potential. Cain did not grow the business while he ran it as a subsidiary or after it was spun off. He made it more profitable by closing restaurants and firing several thousand employees. Cain then used that profitability success as a stepping stone to run for public office -- and quit. That act itself was typical of an employee, not an entrepreneur. In fact, many insiders do not consider Cain key to the turnaround. They tout Ronald Gartlin, who helped build the Godfather's chain before Pillsbury bought it, as key to Cain's efforts to return it to profitability. Gartlin replaced Cain on his departure and continues to run the business today. For the last 20 years Herman Cain has been active in politics. Although he has never won public office, he and his supporters cannot realistically claim he is not a professional politician. He is! Cain was appointed to the Federal Reserve board despite absolutely no credentials in monetary, fiscal, or economic policy that would justify the appointment. His status as a black businessman was likely his most important qualification. I cannot find any transcripts or video interviews of Cain discussing economic issues with any depth or breadth of insight. He talks in generalities. Details that require true knowledge are avoided. Cain is a sound-bite candidate in a sound-bite era. Even so, why is this Federal Reserve experience considered a good thing? Many of our problems in economic mismanagement are directly attributable to board members like Cain rubber-stamping disastrous Federal Reserve policiesStephens continues by bringing up the sexual harassment charges leveled against Cain which he does not believe are true. I disagree and think there's probably a long-standing pattern of Cain being on the make which has had the effect of making female associates he comes in contact with uncomfortable if not downright fearful. I could be wrong, but it certainly now seems so. Cain clearly needs to address this issue and not just deflect it by blaming Perry or anyone else. It's bad politics at its worst.
In Wednesday morning, he raised the paranoia dial another notch. “There are factions trying to destroy me personally, and this campaign,” he announced, revealing this conspiracy to a group of technology executives at the Ritz-Carlton in Tyson’s Corner. At his next stop, a Hilton hotel in Alexandria, the amiable candidate finally blew his stack – and the scene quickly escalated into violence. It began when a reporter asked Cain if he would release his accusers from their confidentiality agreements. “I’m not going to talk about it,” Cain snapped, “so don’t even bother asking me all of these other questions that y’all are curious about. Okay? Don’t even bother.” “It’s a good question,” the reporter pointed out. “Are you concerned?” asked another. Evidently, Cain was. “What did I say?” he hissed at the reporters, then attempted to break through the pack, shouting: “Excuse me. Excuse me! EXCUSE ME!” At that, his bodyguards began throwing elbows and shoving the reporters and photographers. “Stand back! . . . Do not push me! . . . Pushing is against the law!. . . Watch out!. . . Get a grip on yourself!” In the melee, a young boy and his father were shoved up against a wall.The thing that bothers me most about this whole affair is Cain losing his cool today. His anger belies a defensiveness that does not bode well for him to become president. When he lost it, it was ugly. If all that's not enough, Steve Deace, Christian talk show host in Des Moines, Iowa today said Cain made awkward and inappropriate remarks to a female staffer at the station recently .Deace is quoted as saying
"Like awkward/inappropriate things he’s said to two females on my staff, that the fact the guy’s wife is never around…that’s almost always a warning flag to me,” Deace wrote. “But I chose to leave that stuff out [of the opinion piece] and make it about his record and not the personal stuff." Pressed about what exactly Cain said to the employees of his show, Deace responded by describing how he himself treats his staff. “Many a man has been done in by the inability to control his urges,” Deace wrote. “I am no different and just as vulnerable as any other man, which is why I put safeguards around me and hold myself accountable to my wife and other men in my life. Especially since I have very talented employees that happen to be women. I go out of my way to treat them like my sisters. For example, I wouldn’t tell them or any other woman I am not married to nor related to how pretty she is.”Deace is clearly conservative, Christian with higher standards than most people in government. Still it appears Cain's suggestive behavior may be a long-standing pattern which cannot be overcome in time to save his candidacy. The American people are in no mood, no mood---with its extreme concerns for the economy and jobs---to be sidetracked by sexual scandals and innuendos in the White House over the next four years. I defended Cain over the past few days, but now I sadly now do an about face for no other reason than his massive and frightening show of temper at the Hilton today.
SHE'S KNOWN TO PREFER STAYING OUT OF THE SPOTLIGHT and in the shadows behind husband of 43 of years, Herman Cain. Still there are times for a wife to come forward and be in the spotlight. Now--with sexual allegations swirling around her husband--- it seems to be as good a time as any to speak up. Friday night she plans to open up with Greta Van Susteran at Fox News for her first big national interview. It can only do Cain good even as his accuser clamors to tell her side of the story by going public and grabbing the spotlight (she probably already has a book deal in the works!) for her 5 minutes of Anita Hill-like fame:After a lifetime spent in her now-famous husband’s shadow, Gloria Cain will make her public debut on Friday night, when she sits down for her first national interview with Greta Van Susteren of Fox News. The interview will come under less than ideal circumstances: Van Susteren will have to ask Mrs. Cain about the sexual harassment allegations against her husband, and any drip of scandal or innuendo that emerges between now and then.
