Worshippers at Church of Free Market suffer crisis of faith

In this season of spiritual introspection, there are true believers suffering a real crisis of faith. They have been worshipping at the Church of the Free Market, and their doubts run deeper than stock brokers not answering prayers, or returning calls.

For decades, their prophets have preached economic markets function best when left to themselves, unfettered by government regulation or oversight.

Businesses, investors and traditional market forces would self-regulate, self-correct and self-enforce. Oops.

The collapse of the housing and stock markets trace their way back to decisions and choices made at the highest levels of government and commerce. The rest of us get swept along for the ride, both up and down, and suffer the consequences of hubris, incompetence and criminality.

To hear the humbled apostles for markets free of disclosure and rules begin to mumble about the need for government regulation is extraordinary. Still-tender bruises from a battered 401(k) make it hurt to laugh out loud.

Chief among the apostates is former Federal Reserve Chairman Alan Greenspan, who humbly confessed his wonderment at mortgage-lending practices to a congressional committee:

"Those of us who have looked to the self-interest of lending institutions to protect shareholders' equity, myself included, are in a state of shocked disbelief."

He was reminded he had the authority to prevent the lending practices behind the subprime mortgage crisis — was advised to do so — and refused to act. Greenspan is contrite. Millions more are in foreclosure.

Help was available through a 1994 law called the Homeowner Equity Protection Act. The New York Times reports fewer than 1 percent of mortgages were subjected to the restrictions under the law.

Three years ago, a handful of regulators were waving red flags about hedge funds and credit derivatives. Lightly regulated exemptions from most rules, they placed enormous bets — literally — around the planet. Dense and esoteric, these trillion-dollar segments of the markets seemed pretty remote until ordinary mutual funds — yours and mine — began investing in them.

The effects of deregulation and unenforced regulation were cumulative. In 1994, the Financial Accounting Standards Board changed its rule that stock options must be treated as a company expense. We are living with the hyperventilation of executive compensation and inflation of stock values.

A year later, Congress limited the rights of investors to sue, let accounting firms off the hook in fraud cases and fudged reporting practices. In 1999, the repeal of lessons-learned regulations from the Depression fuzzed the lines between retail banking and investment banks.

Every opportunity to push the limit was taken, as allowed or ignored by law. Industry lobbyists on Washington, D.C.'s K Street had their back.

My favorite bit of apostasy revealed itself ever so quietly in a New York Times column by Ben Stein, a lawyer, writer, actor and economist. And cheerleader. For Stein, the resilient economy was always peachy keen!

Two weeks ago, reality set in for Stein. At the back of a column about fear and foolishness, he slipped in a hope that President-elect Barack Obama will put meaningful regulation in place — maybe even repeal the private securities law against suing companies. Oh, and maybe inspire a more vigilant Federal Reserve.

Dare I say, there has been an epiphany. People who understand the complexities and see the connections acknowledge how precarious economic conditions truly are.

Resistance to change usually means things are not bad enough yet. We are there.

Otherwise, we are left with the wisdom of a faux person-in-the-street interview from The Onion's satirical review of the 2008 economy:

"C'mon, I've seen this happen a thousand times. The stock market crashes, and then 20 years and a world war later, everything's fine."

The exclamation point on the arrogance of the times is the refusal by banks to tell regulators and taxpayers where billions in bailout money went.

Consider it a revelation of change to come

Use Our Knack for Innovation to Get Us Out of the Fiscal Doldrums

Most Americans are despondent about our economic mess. But if we pull back and try to rise above the clouds, there are real reasons for hope.
The combination of a new administration headed to the White House, along with our country's established leadership in innovation, has us standing at the crest of a trail that could ensure we never enter this chasm again. Let's get back on our feet and remember what we are made of.
America is the world's leading innovator in medicine, energy, information technology and almost every discipline. Our research, patents, startups and venture capital all show a country driven to innovate, to create and to dream the big dream for a better future.
United States' innovation drives our everyday lives. The light bulb. The transistor. The PC. The Internet. The human genome. An innovator's spirit cannot be doused by a few rain showers, and thrives on adversity. We are amazed by modern daydreamers and historic visionaries, including Thomas Edison, Jonas Salk, Steve Jobs, Bill Gates and others. They, like most Americans, possessed an innate disrespect for the status quo. They defied conventional wisdom and created new industries.
America succeeds where others fail because we value creativity over conformity. We respect the hope and naiveté of the young, because sometimes they are right. We seek risk, because it makes us stretch and break new ground. We support a free market for all good ideas and welcome the best and brightest from distant shores.
We learn from failure and don't punish it automatically, but we do not tolerate poor performance either. We reward the risk-takers.
Try that in Germany or Japan or China.
We must stay on the trail of innovation in spite of adversity. Be aware that the trail is prone to mudslides, flooding and more. We can allow our science and education system to continue to slide. We can cease to be the beacon in the world for the best ideas and people. We can accidentally suppress our innovation machine with overregulation and bureaucracy. We can try to protect what we have instead of embracing the challenges of a global economy.
If we slip off the trail, the America we each have been blessed enough to grow up in will die. Our productivity will fall. Foreign powers will dominate our economy.
But now we have a window of opportunity to implement energy independence, protect our homeland and create better health care. This is the moment in time to use our strengths to solve our own problems. Let's harness innovation to solve the world's woes, create jobs and stay competitive.
President-elect Barack Obama has it right. Stabilize the financial markets and economy, and then focus on solving the energy emergency. Then move to disease detection and prevention, and to the fundamentals of education and research. He is standing at the crest of the trail, ready to lead us.
Obama must rally the American innovation culture and must define the challenges. He must harness the patriotic spirit and get Americans to ask themselves how they can help, just like Kennedy articulated in his vision to reach into space.
We need to depend on ourselves for our energy solutions. We must attract the best scientists and entrepreneurs. Give government managers and universities freedom and incentives to take risks. Enlist private sector to help set the goals and execute the plan and create "green" jobs.
Let's double basic science funding to fuel the engine of innovation. We should take steps to reward, not tax, the risk takers who solve our problems. Let's appoint a chief technology officer for the United States who can make sure the bureaucracy does not get in the way of real solutions.
We must restore global confidence in American economic leadership, and reach out to the best and the brightest who want to innovate here on our shores. Let innovation become our olive branch to restore the world's respect. We will lead the world by offering solutions to the major problems of our day — energy, homeland security and disease prevention.
Let's keep on the trail of innovation. Let's take this adversity as a challenge, as our forefathers did. Let's use our strengths to seize the moment and create unprecedented change. At the end of that trail is an economically recharged America that is cleaner, healthier and stronger.

President Elect Obama

If President-elect Obama can solve all of the problems this nation has, both foreign and domestic, I will be happy to say I am sorry that I didn't vote for him. I will miss Tina Fey though.

New Dollar Bill

I received one of these in change yesterday and wondered if they are real.

Mourning a Country Long Ago

Meanwhile, back at the War on Terror ...
You remember the War on Terror, don't you? It was in all the papers. Back before presidential politics sucked the air from the room and your 401(k) shrank till it was worth maybe dinner and a movie, it was considered quite the important news story. Abu Ghraib? Extraordinary renditions? Fight 'em over there so we don't have to fight 'em over here? Surely, you recall.
I ask only because of a news story that broke last week to a yawn of media disinterest. The Washington Post reported on two secret White House memos explicitly endorsing the use of waterboarding — simulated drowning — on so-called high-value terrorism suspects. This is, says the Post, the first time the still-classified memos have been disclosed. They were written in response to requests from then-CIA Director George Tenet, who worried his agents might be hung out to dry if the practice were discovered and the people or their representatives demanded someone's head.
According to the Post, the White House issued written authorizations in 2003 and 2004. Yet in 2006, President Bush told the nation, "The United States does not torture. It's against our laws, and it's against our values. I have not authorized it — and I will not authorize it."
Which was, of course, a lie.
You'd think the latest proof of that lie — yet another smoking gun to stack with all the others — would merit attention. But a computer search Thursday turned up only seven newspaper stories mentioning the memos. Searches of the CNN and Fox News Web sites also came up dry, though the story did appear on MSNBC's site.
If you think my point is that the media missed an important story, it isn't. No, the point is that normal is not where we thought it would be.
You remember how it was just after Sept. 11, 2001, right? Some of us vowed we would never enter a skyscraper again. Some of us didn't want to leave our houses again. The minutiae of popular culture became staggeringly unimportant. Humorists like David Letterman Dave Barry wondered if they could ever return to the business of laughter.
We were scared dry. And some of us said: Get used to it. This was the new normal.
But skyscrapers did not close from lack of use. We did not become a nation of agoraphobics. We did not lose our interest in singers and movie stars. Letterman and Barry went back to work.
Fear, which had cut through us like a hot poker, became instead a low-grade fever, ambient noise, wallpaper, something you feel without feeling, hear without hearing, see without seeing.
Then you look up one day and realize how profoundly that fear has changed your world. People are imprisoned without charges or access to attorneys, and it's routine. People are surveilled, their reading habits studied, their telephone usage logged, and it's commonplace. People, including children, end up on a secret list of those who are not allowed to fly, nobody will tell you why, there is no appeal, and it's ordinary. We swallow lies like candy, nod sagely at babblespeak, and it's unexceptional.
Torture is inflicted with White House approval, the president lies about it and it's just another Tuesday.
Once upon a time, Americans were fond of looking upon backward nations, upon places where law was whatever the king said it was, and noting with pride that we do things differently in our country. But that was a day long ago and a country long gone.
If we miss the one or mourn the other, you'd never know it to look at us. We live through what feels evermore like a Joe McCarthy fever dream. We feel without feeling, hear without hearing, see without seeing and do not protest what we have become.
Because this is normal now.

545 People

This is circulating the internet. Most of you will probably receive it 30 times(if you haven't already). But it is too good not to post.

Politicians are the only people in the world who create problems and then campaign against them.

Have you ever wondered why, if both the Democrats and the Republicans are against deficits, WHY do we have deficits?

Have you ever wondered why, if all the politicians are against inflation and high taxes, WHY do we have inflation and high taxes?

You and I don't propose a federal budget. The president does.

You and I don't have the Constitutional authority to vote on appropriations. The House of Representatives does.

You and I don't write the tax code, Congress does.

You and I don't set fiscal policy, Congress does.

You and I don't control monetary policy, the Federal Reserve Bank does.

One hundred senators, 435 congressmen, one president, and nine Supreme Court justices - 545 human beings out of the 300 million are directly, legally, morally, and individually responsible for the domestic problems that plague this country.I excluded the members of the Federal Reserve Board because that problem was created by the Congress. In 1913, Congress delegated its Constitutional duty to provide a sound currency to a federally chartered, but private, central bank.

I excluded all the special interests and lobbyists for a sound reason. They have no legal authority. They have no ability to coerce a senator, a congressman, or a president to do one cotton-picking thing. I don't care if they offer a politician $1 million dollars in cash. The politician has the power to accept or reject it. No matter what the lobbyist promises, it is the legislator's responsibility to determine how he votes.

Those 545 human beings spend much of their energy convincing you that what they did is not their fault. They cooperate in this common con regardless of party.

What separates a politician from a normal human being is an excessive amount of gall. No normal human being would have the gall of a Speaker, who stood up and criticized the President for creating deficits. The president can only propose a budget. He cannot force the Congress to accept it.

The Constitution, which is the supreme law of the land, gives sole responsibility to the House of Representatives for originating and approving appropriations and taxes. Who is the speaker of the House? Nancy Pelosi She is the leader of the majority party. She and fellow House members, not the president, can approve any budget they want. If the president vetoes it, they can pass it over his veto if they agree to.It seems inconceivable to me that a nation of 300 million can not replace 545 people who stand convicted -- by present facts -- of incompetence and irresponsibility.

Ican't think of a single domestic problem that is not traceable directly to those 545 people. When you fully grasp the plain truth that 545 people exercise the power of the federal government, then it must follow that what exists is what they want to exist.

If the tax code is unfair, it's because they want it unfair.

If the budget is in the red, it's because they want it in the red .

If the Army & Marines are in IRAQ , it's because they want them in IRAQ.

If they do not receive social security but are on an elite retirement plan not available to the people, it's because they want it that way.

There are no insoluble government problems.

Do not let these 545 people shift the blame to bureaucrats, whom they hire and whose jobs they can abolish; to lobbyists, whose gifts and advice they can reject; to regulators, to whom they give the power to regulate and from whom they can take this power.

Above all, do not let them con you into the belief that there exists disembodied mystical forces like 'the economy,' 'inflation,' or 'politics' that prevent them from doing what they take an oath to do.

Those 545 people and they alone, are responsible.

They and they alone, have the power.

They and they alone, should be held accountable by the people who are their bosses.Provided the voters have the gumption to manage their own employees.

We should vote all of them out of office and clean up their mess!

Charlie Reese is a former columnist of the Orlando Sentinel Newspaper.

Capitalism Trumps Democracy

The marriage of American capitalism and democracy has always been a Pamela Anderson and Tommy Lee affair — stormy and erratic since its hasty wedding. But during the debate over a Wall Street bailout last week, we watched that matrimonial knot unwind into a tangled tale of terror.
As a financial crisis became a political panic, capitalism murdered democracy (ironically, while pursuing a vaguely socialist bailout). Only, unlike a typical horror story, the dead body wasn't hidden, it was dumped in the nation's public square.
The fiasco started, like most, with unreasonable demands. Under threat of financial meltdown, capitalism's corporate lobbyists asked our democracy to forsake its usual deliberations and hand over $700 billion of taxpayer money in less than a week.
Many were surprised when democracy responded with such valiant defiance. As television screens split between the floors of the stock exchange and the House of Representatives, lawmakers initially voted with their constituents and against the bailout.
That's when this husband-and-wife argument escalated into a grisly crime of passion.
CNN's Ali Velshi frothed that "the banks and the companies don't care about the intricacies" of democratic deliberations. A CEO angrily told CNN that "the money is being held hostage to the political process" — as if government resources are rightfully Wall Street's. And as the Dow tanked, the Chamber of Commerce threatened retribution against recalcitrant lawmakers.
The final deathblow came from TINA, shorthand for "There Is No Alternative" — the motto that Margaret Thatcher used to peddle her corporatism, and that Washington and Wall Street used to promote theirs.
Whether it was a Barclays Capital executive telling reporters "there is no choice" or Rep. Joe Crowley, D-N.Y., insisting that "this needs to be done and it needs to be done right away," responsibly democratic prescriptions were pulverized by capitalism's deranged mantra of inevitability and urgency.
To even mention, as economist Dean Baker did, that the taxpayer giveaway could exacerbate the crisis was to risk flogging by columnists like Tom Friedman. The sycophantic flat-earther vilified bailout opponents (i.e., most Americans) as mentally incapacitated deadbeats who "can't balance their own checkbooks."
By the time the fight hit Congress' upper chamber, senatorial morticians were embalming democracy's corpse. Sen. Harry Reid, D-Nev., permitted consideration of just one alternative, and he rigged parliamentary procedure to guarantee its defeat.
Yet, if capitalism took democracy's life through a perverse legislative process, then it robbed its grave with the bailout bill's substance.
American democracy is defined by vesting government power in systems and rules, not in individuals and whims. We have been, as John Adams wrote, "an empire of laws, and not of men" — until now.
Instead of responding to this meltdown by updating regulatory institutions or investing in job-creating infrastructure, the bailout gives one unelected appointee — the Treasury secretary — complete authority to dole out $700 billion to bank executives, with little oversight. And here's the scary part: That lurch toward dictatorship was motivated not just by crony corruption, but also by a deeper ideological shift.
We now face market forces uninhibited by democratic governance — Chinese dictators and Saudi princes can move trillions of dollars without so much as a news release. Thisbailout, marketed as a speed enhancer, is an aggressive attempt to discard democracy's checks and balances and pantomime that kind of autocracy.
While our political culture still required a public sales job (thus, the fearmongering), the bill's czarism aims to permanently euthanize democracy in the name of improving our capitalism's global agility. In that sense, last week's spousal killing wasn't random. It was the beginning of a systematic assault on our Constitution and a radical departure from Franklin Roosevelt's original covenant — a dangerous "new deal" we should have said "no deal" to.

Will Rogers Speaks to Bankers

I ran across this today and it is just too good not to share. This is a recording of a Will Rogers talk given to a national bankers convention in 1924. It was on a 78 record. If the United States Congress would be as straight forward in dealing with the banking industry as Will Rogers was, maybe this mess can be solved. Just click on the link below.

MP3: Will Rogers Talks to the Bankers, VICTOR_45374-A (1924)

Bush: U.S. Citizens to Welcome Our 51st State

Although it cost more than the Louisiana Purchase and the Alaska purchase combined and offers far less acreage, President George Bush today said he thinks “U.S. citizens will welcome our 51 state with open arms.”
The announcement that the financial realm collectively known as “Wall Street” had applied for statehood follows a week in which the federal government took control of mortgage giants Fannie Mae and Freddie Mac, and insurance megalith AIG. It also comes as news breaks that the U.S. plans to spend up to a $1 trillion to “rescue” other foundering financial firms.
President Bush noted that the newest state is not so much a geographical swath of land as it is “a state of mind.”
“Once the statehood process is complete,” the president said, “We will find that the people of Wall State are just like those in the rest of our great nation. They’re hard-working, industrious and patriotically-dependent upon the centralized government to insulate them from the consequences of their own actions.”

Political Insanity by the Numbers

• $20 billion: the amount 300,000 federal employees spent in 2006 using government credit cards
• $2 million: amount spent on items including laptops, iPods and digital cameras, which could not be accounted for, according to a GAO report
• $360: amount spent by a State Department employee at the Seduccion Boutique in Ecuador to buy "women's underwear/lingerie for use during jungle training by trainees of a drug enforcement program."
• $13,500: amount postal service employees spent on a dinner at a Ruth's Chris Steak House, which included over 200 appetizers and more than $3,000 of alcohol
• $1,100: amount spent by a postal service employee for subscrptions to various Internet dating services
• $6,350: the amount the University of California at Davis is threatening to refer to a collection agency after the Clinton campaign failed to pay the bill for Bill Clinton's visit to the campus in January
• 37: Barack Obama's bowling score during his widely ridiculed performance in Pennsylvania
• 1: number of bowling pins Hillary Clinton knocked down after two attempts on the Ellen Degeneres show