Welcome to the Corporate States of America

The Supreme Court's five conservative justices have just driven a stake through the heart of American democracy by opening the floodgates of corporate funding for politics.  Check out these reports and be afraid.  Be very afraid.

First up, Rachel explains the radical overthrow of a century of law restraining corporate power over the political system, and Barney Frank goes ballistic in his inimitable way:

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Next, Obama finally - please God - takes off his Mr. Rogers sweater and gets ready to rumble with Wall Street and the banking gang, so he says:

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And finally, Olbermann paints a chilling picture of what to expect in the new whorehouse of American politics resulting from this, the Dred Scott decision of our time:

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Andrew Sullivan, in a post entitled "Now Fight!":

The seismic events of the last few days ends, in some respects, the phony war of the first year of Obama's presidency. As is the case in truly fracturing democracies, the opposition simply does not and cannot accept the fact that it is out of power. The incoherence of the opposition to Obama - that he is both Jimmy Carter and Adolf Hitler, as Stephen Colbert pointed out last night - reveals the irrationality of the hate. It began immediately on the FNC/RNC right. And the ferocity of the campaign against Obama, the sheer dickishness of the GOP and its acolytes, the total oppositionism to everything he has done and indeed anything he might do... suggests that any hope for some kind of cooperation from this rump is impossible.

But the truth is that these forces have also been so passionate, so extreme, and so energized that in a country reeling from a recession, the narrative - a false, paranoid, nutty narrative - has taken root in the minds of some independents. Obama, under-estimating the extremism of his opponents, has focused on actually addressing the problems we face. And the rest of us, crucially, have sat back and watched and complained and carped when we didn't get everything we want. We can keep on carping if we want to. But it seems to me that continuing that - as HuffPo et al. appear to be doing - is objectively siding with the forces of profound reaction right now.

Don't get me wrong. Criticism is still vital. I'm not going to give up on advocating marriage equality or a carbon tax, rather than cap and trade, or for an independent investigation of Bush era war crimes. I think pushing Obama to a more populist position on banks is well and good. But given the alternative, I am going to step up my support of this president in the face of what he is confronting, even when he is not exactly doing everything I want. In my view, you should too.

Look at what we are facing right now: a take-no-prisoners right, empowered by a massive new wave of corporate money unleashed by the Supreme Court, able to wield a 41 seat minority to oppose anything Obama wants, setting up a cycle of failure for a president whom they can then pillory at the polls, and unrepentant about near-dictatorial powers for the presidency, and the routinization of torture in the American government. These forces cannot be appeased. They simply have to be confronted. . . .

But I have come around to thinking that the one huge mistake right now would be to surrender the Senate health reform bill. . . .  This is about more than health reform and we have to see it in that context. This is about a cynical nihilist attempt to break this presidency before it has had a chance to do what we elected it to do by a landslide vote. It is an attempt to destroy a majority's morale, to break a president's foreign policy autonomy, to prevent engagement in the Middle East peace process, to stop action on climate change, to restore torture, to increase tensions with the Muslim world, to launch a war on Iran. We cannot delude ourselves that if Obama fails, this is not the alternative. It is. . . .

So fight, Mr President. And to the House Democrats who won't go along with the only way to salvage health reform: this is the only sure-fire way you will lose in November. If you pass this bill, you may also go down in this climate. But you will have done something you can be proud of. Politics cannot always be about narrow self-interest. If it always is, nothing important can get done.

Do your duty. And grow some. Fight back. Explain why you're right. Tell the liberals they can always come back later to reform the bill. Just get this passed.

Bash back, Mr. President.  As Barney said, this might be your Waterloo, for which the Republicans and the bigots are devoutly praying - but by God, you can man up and go down fighting.

And as Winston Churchill said, even when overwhelmed and outnumbered by the enemy, and facing certain death:  "You can always take one with you."

Fight, goddammit.

What the hell goes on here?

Both liberals and conservatives are waking up and smelling the bullshit, according to Peter S. Goodman in the New York Times, "Experts See a Need for Punitive Action in Bailout" :

“This administration is asking for a $700 billion blank check to be put in the hands of Henry Paulson, a guy who totally missed this, and has been wrong about almost everything,” said Dean Baker, co-director of the liberal Center for Economic and Policy Research in Washington. “It’s almost amazing they can do this with a straight face. There is clearly skepticism and anger at the idea that we’d give this money to these guys, no questions asked.”

Mr. Paulson has argued that the powers he seeks are necessary to chase away the wolf howling at the door: a potentially swift shredding of the American financial system. That would be catastrophic for everyone, he argues, not only banks, but also ordinary Americans who depend on their finances to buy homes and cars, and to pay for college.

Some are suspicious of Mr. Paulson’s characterizations, finding in his warnings and demands for extraordinary powers a parallel with the way the Bush administration gained authority for the war in Iraq. Then, the White House suggested that mushroom clouds could accompany Congress’s failure to act. This time, it is financial Armageddon supposedly on the doorstep.

“This is scare tactics to try to do something that’s in the private but not the public interest,” said Allan Meltzer, a former economic adviser to President Reagan, and an expert on monetary policy at the Carnegie Mellon Tepper School of Business. “It’s terrible.” . . .

The financial system got to its dangerous perch by betting extravagantly on real estate. When housing prices began plummeting and borrowers stopped making payments, financial institutions found themselves with huge inventories of bad loans. Not simple loans, but complex investments created by pooling millions of mortgages together and then slicing them into pieces. These were the investments that Wall Street bought, sold and borrowed against in cooking up the money it poured into housing.

The trouble is that these investments are so intertwined and complex that no one seems able to figure out what they are worth. So no one has been willing to buy them. This is why banks have been in lockdown mode: with mystery enshrouding both the value of their assets and their future losses, banks have held tight to their remaining dollars, depriving the economy of capital. Now, the Treasury aims to clear the fog by buying up these investments. But their value is as mysterious as ever.

“There’s a tendency for people to think these are stocks and bonds and you know what the price is,” said Bruce Bartlett, a former White House economist under President Reagan. “The problem is people are operating in a world in which nobody knows what the hell is going on. There’s some naïve assumptions about how this would function.”

If Mr. Paulson pays the market rate — whatever that is — that presumably would not be enough to persuade banks to sell. Otherwise, they would have sold already. For the plan to work, Treasury has to pay a premium.

“It’s a straight subsidy to financial institutions,” said Martin Baily, a former chairman of the Council of Economic Advisers in the Clinton administration, and now a senior fellow at the Brookings Institution. “You’re essentially giving them money.”

Mr. Baily favors the basics of the Paulson plan, albeit with some mechanism that would give the government a slice of any resulting profits. And yet he remains troubled by the dearth of information combined with the abundance of zeroes in the bailout request.

“I’d like a clearer statement of what we were afraid was going to happen that requires $700 billion,” Mr. Baily said. “Maybe they don’t want to talk about it because it would scare everybody, but it’s a bit much to ask.”

It's too scary to tell the truth?? Even for 700 billion dollars? Oh hell, what kind of damn con game is that?

Answer: the same scare-the-shit-out-of-you tactic that the Bush Administration has used on the public from day one. Is anybody really going to fall for this putrid, unconstitutional bullshit another time?

Obscene, naked power grab

Andrew Ross Sorkin writes in the New York Times, "A Bailout Above the Law" :

The passage is stunning.

“Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency,” the original draft of the proposed bill says.

And with those words, the Treasury secretary — whoever that may be in a few months — will be with vested with perhaps the most incredible powers ever bestowed on one person over the economic and financial life of the nation. It is the financial equivalent of the Patriot Act.

Treasury Secretary Henry M. Paulson Jr.’s $700 billion proposal to bail out Wall Street is both the biggest rescue and the most amazing power grab in the history of the American economy.

In many ways, it is classic Wall Street: a big, bold roll of the dice that one trade can save the day. But at the same time, the hypocrisy is thick. The lack of transparency and oversight that got our financial system in trouble in the first place seems written directly into the proposed bill, known as TARP, or the Troubled Asset Relief Program.

Just take a look at the original draft: “The Secretary is authorized to take such actions as the Secretary deems necessary to carry out the authorities in this act,” the proposed bill read when it was first presented to Congress, “without regard to any other provision of law regarding public contracts.”

It goes on to say, “Any funds expended for actions authorized by this Act, including the payment of administrative expenses, shall be deemed appropriated at the time of such expenditure.”

Slowly but surely, as new versions of the bill are making the rounds in Washington, some legislators are pressing to include new language to give them at least a modicum of oversight. Democrats have complained that the bill gives the Treasury Department “a blank check” — and they’re right.

But given the rush to push the bill through, even if Congress cobbles together some oversight language, it will almost surely be inadequate. Joshua Rosner, a managing director at Graham Fisher & Company, says TARP should stand for “Total Abdication of Responsibility to the Public.” He says it is “a clear abdication of all Congressional oversight and fiscal authorities to a secretary of Treasury that has bungled this crisis from the beginning.”

He argues that the bill grants “greater powers to the secretary of the Treasury than even the president enjoys.”

The bigger issue is that the bill effectively creates protections not just for the Treasury, but for the executives on Wall Street who created this near Armageddon. Mr. Rosner says that the draft bill “prevents judicial review that could allow the protection of decisions that create false marks, hide prior marks, or could be used to prevent civil or criminal prosecution in situations where a management knowingly provided false marks that aided the growth of this crisis of confidence.”

False marks — using mark-to-market accounting to hide the true value of security, rather than disclose it honestly — has a lot to do with why Jeffrey Skilling, the former Enron chief executive, is in jail. . . .

In other words, if the government drives a hard bargain — as it should — the banks don’t have to take write-downs based on the price the feds pay to take junk off their balance sheets.

Watching Wall Street double-dip makes even some in the industry’s top tier cringe.

“Maybe I should move to Russia,” one titan of finance said to me. “It’s obscene, the whole thing. I’m embarrassed for myself.”

If even the Wall Street fat cats are ashamed of the deal, what should we the people be feeling at this breathtaking grab by "King Henry"--so very, very typical of the fuck-the-peasants Bush Administration--for unlimited, un-Constitutional power?

The $700 billion pinata

"Lobbyists, bankers and Wall Street types are already hopping up and down like over-excited children, ready to burst into the government’s $700 billion piñata." So says columnist Bob Herbert in the New York Times.

Does anyone think it’s just a little weird to be stampeded into a $700 billion solution to the worst financial crisis since the Great Depression by the very people who brought us the worst financial crisis since the Great Depression?

How about a second opinion?

Everything needs much closer scrutiny in these troubled times because no one even knows who is in charge, much less what is going on. Have you ever seen a president who was more irrelevant than George W. Bush is right now?

The treasury secretary, Henry Paulson — heralded as King Henry on the cover of Newsweek — has been handed the reins of government, and he’s galloping through the taxpayers’ money like a hard-charging driver in a runaway chariot race.

“We need this legislation in a week,” he said on Sunday, referring to the authorization from Congress to implement his hastily assembled plan to bail out the wildly profligate U.S. financial industry. The plan stands at $700 billion as proposed, but could go to a trillion dollars or more. . . .

The sky was falling, he seemed to be saying, and if the taxpayers didn’t pony up $700 billion in the next few days, all would be lost. No time to look at the fine print. Hurry, hurry, said the treasury secretary.

His eyes, as he hopped from one network camera to another, said, as salesmen have been saying since the dawn of time: “Trust me.”

With all due respect to Mr. Paulson, who is widely regarded as a smart and fine man, we need to slow this process down. We got into this mess by handing out mortgages like lollipops to people who paid too little attention to the fine print, who in many cases didn’t understand it or didn’t care about it. . . .

Time is indeed short, but alternative voices desperately need to be heard because the people who have been running the economy for so long — who have ruined it — cannot be expected to make things right again in 48 or 96 hours.

Mr. Paulson himself was telling us during the summer that the economy was sound, that its long-term fundamentals were “strong,” that growth would rebound by the end of the year, when most of the slump in housing prices would be over.

He has been wrong every step of the way, right up until early last week, about the severity of the economic crisis. As for President Bush, the less said the better.

The free-market madmen who treated the American economy like a giant casino have had their day. It’s time to drag them away from the tables and into the sunlight of reality.

I am still searching for a news article or analysis that explains the crisis in depth but in layman's terms that I can understand. But even though I don't quite understand it all, as a Texan I can sure recognize bullshit when I smell it.

"King Henry" may or may not know what he's doing; but seems like a might big stink drifting across the country from Wall Street right now. Just hand over 700 billion, no questions asked? Aw, hell. You know that money will never been seen again, don't you?