Punchy Bishops

With the House debate on health care at its hottest, the U.S. Catholic bishops issued a stunning ultimatum: Impose an absolute ban on tax funds for abortions, or we call for defeat of the Pelosi bill.

Message received. The Stupak Amendment, named for Bart Stupak of Michigan, was promptly passed, to the delight of pro-life Catholics and the astonished outrage of pro-abortion Democrats.

No member was more upset than Patrick Kennedy of Rhode Island, son of Edward Kennedy, who proceeded to bash the Church for imperiling the greatest advance for human rights in a generation.

Rhode Island Bishop Thomas Tobin responded, accusing Kennedy of an unprovoked attack and demanding an apology. Kennedy retorted that Tobin had told him not to receive communion at Mass and ordered his diocesan priests not to give him communion.

False! The bishop fired back.

He had sent Kennedy a private letter in February 2007 saying that he ought not receive communion, as he was scandalizing the Church. But he had not told diocesan priests to deny him communion.

As Rhode Island is our most Catholic state, Kennedy went silent and got this parting shot from Tobin: “Your position is unacceptable to the Church and scandalous to many of our members. It absolutely diminishes your communion with the Church.”

The clash was naturally national news. But Tobin’s public chastisement of a Catholic who carries the most famous name in U.S. and Catholic politics is made more significant because it seems to reflect a new militancy in the hierarchy that has been absent for decades

Archbishop Donald Wuerl of Washington, D.C., just informed the city council that, rather than recognize homosexual marriages and provide gays the rights and benefits of married couples, he will shut down all Catholic social institutions and let the city take them over. Civil disobedience may be in order here.

Archbishop Timothy Dolan of New York sent an op-ed to The New York Times charging the paper with anti-Catholic bigotry and using a moral double standard when judging the Church.

During the “horrible” scandal of priest abuse of children, wrote the archbishop, the Times demanded the “release of names of abusers, rollback of the statute of limitations, external investigations, release of all records and total transparency.”

But when the Times “exposed the sad extent of child sexual abuses in Brooklyn’s Orthodox Jewish Community ... 40 cases of such abuses in this tiny community last year alone,” wrote the archbishop, the district attorney swept the scandal under the rug, and the Times held up the carpet.

Dolan singled out a “scurrilous ... diatribe” by Maureen Dowd “that rightly never would have passed muster with the editors had it so criticized an Islamic, Jewish or African-American” faith.
Dowd, wrote Dolan, “digs deep into the nativist handbook to use every Catholic caricature possible, from the Inquisition to the Holocaust, condoms, obsession with sex, pedophile priests and oppression of women, all the while slashing Pope Benedict XVI for his shoes, his forced conscription ... into the German army, his outreach to former Catholics and his recent welcome to Anglicans.”

Dowd, said Dolan, reads like something out of the Menace, the anti-Catholic Know Nothing newspaper of the 1850s.

The Times’ refusal to publish the op-ed underscores the archbishop’s point.

Nor are these the only signals of a new Church Militant.

The Vatican has reaffirmed that Catholics in interfaith dialogues have a moral right if not a duty to convert Jews, and reaffirmed the doctrine that Christ’s covenant with his church canceled out and supersedes the Old Testament covenant with the Jews.

When Abe Foxman, screech owl of the Anti-Defamation League, railed that this marks a Catholic return to such “odious concepts as ‘supercessionism,’” he was politely ignored.

The new spirit was first manifest last spring, when scores of bishops denounced Notre Dame for inviting Barack Obama, a NARAL icon, to give the commencement address and receive an honorary degree.

Among the motives behind the new militancy is surely the wilding attack on Pope Benedict for reconciling with the Society of St. Pius X, one of whose bishops had questioned the Holocaust. The pope was unaware of this, and the bishop apologized. To no avail. Rising in viciousness, the attacks went on for weeks. Having turned the other cheek, the church got it smacked.

In his May address to the National Catholic Prayer Breakfast, Archbishop Raymond L. Burke said, “In a culture which embraces an agenda of death, Catholics and Catholic institutions are necessarily counter-cultural.”

Exactly. Catholicism is necessarily an adversary faith and culture in an America where a triumphant secularism has captured the heights, from Hollywood to the media, the arts and the academy, and relishes nothing more than insults to and blasphemous mockery of the Church of Rome.

Our new battling bishops may be surprised to find they have a large cheering section among a heretofore silent and sullen faithful who have been desperate to find a few clerical champions.

- Pat Buchanan

The Reinsurance Swindle

Not debacle. Swindle. If you know the size of these reinsurance mega-corporations, you understand this swindle has the potential to cause rioting. At least, if this is born out, I will riot. See the important article linked here, from Institutional Risk Analytics.

More on Obama Stem Cell Deception

And duplicity. This is morally egregious.
The details are here (a good read).

Murder: Error of Intellect, or Error of Will?

Can it be that Bill Clinton and Dr. Gupta (Obama's pick for Surgeon General), don't really know what an embryo is? Watch the clip for yourself. Clinton speaks of embryos as non-fertilized, and said if embryos were ever on their way to being fertilized, they shouldn't be used for experimentation. Surely Dr. Gupta might point out an embryo is an embryo because it has been fertilized, that it is a genetically complete fully fertilized egg. Gupta said nothing.

Could simple ignorance of basic medical science be at the heart of this culture war? Could it be we are seeing mistakes of the intellect, not so much mistakes of the will . . .? Nah. I don't think so either.

Politics in Science: Science in Politics: Politics in Science

Everyone lies: but these lies are about human lives.
Read this for background.

Even better: look at this.
Then go to this site: Stem Cell Research news.

Cultural Issues Cannot Be Solved By Political Means

And this is a good article discussing some cultural issues we keep trying to solve by political means: redefining prosperity.

The Biggest Bubble the World Has Ever Seen

Yet to come. We are bankrupt (the article linked here is absolutely indispensable for those who do not yet understand what has happened; what is happening). Prepare now.

Suckers

Now that the new Administration's economic proposals are trickling out we can add them all up and see who is taking it on the chin, who is getting played for the sucker. The old advice for players at the poker table holds: If you do not know who the sucker at the table is, it is you.

Our economic system runs on voluntary compliance linked to cultural norms, not fear of getting caught and prosecuted. The cultural norms, in pre-PC days, used to be called the Protestant Work Ethic or the like. People who put themselves in position to find work and earn some income, did not over-spend their budget, bought and paid for a home they could afford, saved a bit for their children are the suckers. They will pay for others who did over-spend and saved nothing. They will pay in increased taxes, both in income and estate taxes (and their social security repayments will be means tested), and in inflation (their savings will be eaten up by inflation). Those who voluntarily complied with the rules and lived within their means are the suckers.

Doomed by Myths

Wow. Read; contemplate. This is a powerful essay.

The American economy has gone away. It is not coming back until free trade myths are buried 6 feet under.

America's 20th century economic success was based on two things. Free trade was not one of them. America's economic success was based on protectionism, which was ensured by the union victory in the Civil War, and on British indebtedness, which destroyed the British pound as world reserve currency. Following World War II, the US dollar took the role as reserve currency, a privilege that allows the US to pay its international bills in its own currency.

World War II and socialism together ensured that the US economy dominated the world at the mid-20th century. The economies of the rest of the world had been destroyed by war or were stifled by socialism [in terms of the priorities of the capitalist growth model].

The ascendant position of the US economy caused the US government to be relaxed about giving away American industries, such as textiles, as bribes to other countries for cooperating with America's cold war and foreign policies. For example, Turkey's US textile quotas were increased in exchange for overflight rights in the Gulf War, making lost US textile jobs an off-budget war expense.

In contrast, countries such as Japan and Germany used industrial policy to plot their comebacks. By the late 1970s, Japanese auto makers had the once dominant American auto industry on the ropes. The first economic act of the "free market" Reagan administration in 1981 was to put quotas on the import of Japanese cars in order to protect Detroit and the United Auto Workers.

Eamonn Fingleton, Pat Choate, and others have described how negligence in Washington aided and abetted the erosion of America's economic position. What we didn't give away, the United States let be taken away while preaching a "free trade" doctrine at which the rest of the world scoffed.

Fortunately, the U.S.'s adversaries at the time, the Soviet Union and China, had unworkable economic systems that posed no threat to America's diminishing economic prowess.

This furlough from reality ended when Soviet, Chinese, and Indian socialism surrendered around 1990, to be followed shortly thereafter by the rise of the high speed Internet. Suddenly American and other First World corporations discovered that a massive supply of foreign labor was available at practically free wages.

To get Wall Street analysts and shareholder advocacy groups off their backs, and to boost shareholder returns and management bonuses, American corporations began moving their production for American markets offshore. Products that were made in Peoria are now made in China.

As offshoring spread, American cities and states lost tax base, and families and communities lost jobs. The replacement jobs, such as selling the offshored products at Wal-Mart, brought home less pay.

"Free market economists" covered up the damage done to the US economy by preaching a New Economy based on services and innovation. But it wasn't long before corporations discovered that the high speed Internet let them offshore a wide range of professional service jobs. In America, the hardest hit have been software engineers and information technology (IT) workers.

The American corporations quickly learned that by declaring "shortages" of skilled Americans, they could get from Congress H-1b work visas for lower paid foreigners with whom to replace their American work force. Many US corporations are known for forcing their US employees to train their foreign replacements in exchange for severance pay.

Chasing after shareholder return and "performance bonuses," US corporations deserted their American workforce. The consequences can be seen everywhere. The loss of tax base has threatened the municipal bonds of cities and states and reduced the wealth of individuals who purchased the bonds. The lost jobs with good pay resulted in the expansion of consumer debt in order to maintain consumption. As the offshored goods and services are brought back to America to sell, the US trade deficit has exploded to unimaginable heights, calling into question the US dollar as reserve currency and America’s ability to finance its trade deficit.

As the American economy eroded away bit by bit, "free market" ideologues produced endless reassurances that America had pulled a fast one on China, sending China dirty and grimy manufacturing jobs. Free of these "old economy" jobs, Americans were lulled with promises of riches. In place of dirty fingernails, American efforts would flow into innovation and entrepreneurship. In the meantime, the "service economy" of software and communications would provide a leg up for the work force.

Education was the answer to all challenges. This appeased the academics, and they produced no studies that would contradict the propaganda and, thus, curtail the flow of federal government and corporate grants.

The "free market" economists, who provided the propaganda and disinformation to hide the act of destroying the US economy, were well paid. And as Business Week noted, "outsourcing's inner circle has deep roots in GE (General Electric) and McKinsey," a consulting firm. Indeed, one of McKinsey's main apologists for offshoring of US jobs, Diana Farrell, is now a member of Obama's White House National Economic Council.

The pressure of jobs offshoring, together with vast imports, has destroyed the economic prospects for all Americans, except the CEOs who receive "performance" bonuses for moving American jobs offshore or giving them to H-1b work visa holders. Lowly paid offshored employees, together with H-1b visas, have curtailed employment for older and more experienced American workers. Older workers traditionally receive higher pay. However, when the determining factor is minimizing labor costs for the sake of shareholder returns and management bonuses, older workers are unaffordable. Doing a good job, providing a good service, is no longer the corporation's function. Instead, the goal is to minimize labor costs at all cost.

Thus "free trade" has also destroyed the employment prospects of older workers. Forced out of their careers, they seek employment as shelf stockers for Wal-Mart.

I have read endless tributes to Wal-Mart from "libertarian economists," who sing Wal-Mart's praises for bringing low price goods, 70 per cent of which are made in China, to the American consumer. What these "economists" do not factor into their analysis is the diminution of American family incomes and government tax base from the loss of the goods producing jobs to China. Ladders of upward mobility are being dismantled by offshoring, while California issues IOUs to pay its bills. The shift of production offshore reduces US GDP. When the goods and services are brought back to America to be sold, they increase the trade deficit. As the trade deficit is financed by foreigners acquiring ownership of US assets, this means that profits, dividends, capital gains, interest, rents, and tolls leave American pockets for foreign ones.

The demise of America's productive economy left the US economy dependent on finance, in which the US remained dominant because the dollar is the reserve currency. With the departure of factories, finance went in new directions. Mortgages, which were once held in the portfolios of the issuer, were securitized. Individual mortgage debts were combined into a "security." The next step was to strip out the interest payments to the mortgages and sell them as derivatives, thus creating a third debt instrument based on the original mortgages.

In pursuit of ever more profits, financial institutions began betting on the success and failure of various debt instruments and by implication on firms. They bought and sold collateral debt swaps. A buyer pays a premium to a seller for a swap to guarantee an asset's value. If an asset "insured" by a swap falls in value, the seller of the swap is supposed to make the owner of the swap whole. The purchaser of a swap is not required to own the asset in order to contract for a guarantee of its value. Therefore, as many people could purchase as many swaps as they wished on the same asset. Thus, the total value of the swaps greatly exceeds the value of the assets [see here for an excellent, simple explanation of swap instruments].

The next step is for holders of the swaps to short the asset in order to drive down its value and collect the guarantee. As the issuers of swaps were not required to reserve against them, and as there is no limit to the number of swaps, the payouts could easily exceed the net worth of the issuer.

This was the most shameful and most mindless form of speculation. Gamblers were betting hands that they could not cover. The US regulators fled their posts. The American financial institutions abandoned all integrity. As a consequence, American financial institutions and rating agencies are trusted nowhere on earth.

The US government should never have used billions of taxpayers' dollars to pay off swap bets as it did when it bailed out the insurance company AIG. This was a stunning waste of a vast sum of money. The federal government should declare all swap agreements to be fraudulent contracts, except for a single swap held by the owner of the asset. Simply wiping out these fraudulent contracts would remove the bulk of the vast overhang of "troubled" assets that threaten financial markets.

The billions of taxpayers' dollars spent buying up subprime derivatives were also wasted. The government did not need to spend one dime. All government needed to do was to suspend the mark-to-market rule. This simple act would have removed the solvency threat to financial institutions by allowing them to keep the derivatives at book value until financial institutions could ascertain their true values and write them down over time.

Taxpayers, equity owners, and the credit standing of the US government are being ruined by financial shysters who are manipulating to their own advantage the government's commitment to mark-to-market and to the "sanctity of contracts." Multi-trillion dollar "bailouts" and bank nationalization are the result of the government's inability to respond intelligently.

Two more simple acts would have completed the rescue without costing the taxpayers one dollar: an announcement from the Federal Reserve that it will be lender of last resort to all depository institutions including money market funds, and an announcement reinstating the uptick rule.

The uptick rule was suspended or repealed a couple of years ago in order to permit hedge funds and shyster speculators to ripoff American equity owners. The rule prevented short-selling any stock that did not move up in price during the previous day. In other words, speculators could not make money at others' expense by ganging up on a stock and short-selling it day after day.

As a former Treasury official, I am amazed that the US government, in the midst of the worst financial crises ever, is content for short-selling to drive down the asset prices that the government is trying to support. No bailout or stimulus plan has any hope until the uptick rule is reinstated.

The bald fact is that the combination of ignorance, negligence, and ideology that permitted the crisis to happen still prevails and is blocking any remedy. Either the people in power in Washington and the financial community are total dimwits or they are manipulating an opportunity to redistribute wealth from taxpayers, equity owners and pension funds to the financial sector.

The Bush and Obama plans total 1.6 trillion dollars, every one of which will have to be borrowed, and no one knows from where. This huge sum will compromise the value of the US dollar, its role as reserve currency, the ability of the US government to service its debt, and the price level. These staggering costs are pointless and are to no avail, as not one step has been taken that would alleviate the crisis.

If we add to my simple menu of remedies a ban, punishable by instant death, for short selling any national currency, the world can be rescued from the current crisis without years of suffering, violent upheavals and, perhaps, wars.

According to its hopeful but economically ignorant proponents, globalism was supposed to balance risks across national economies and to offset downturns in one part of the world with upturns in other parts. A global portfolio was a protection against loss, claimed globalism's purveyors. In fact, globalism has concentrated the risks, resulting in Wall Street's greed endangering all the economies of the world. The greed of Wall Street and the negligence of the US government have wrecked the prospects of many nations. Street riots are already occurring in parts of the world. On Sunday February 22, the right-wing TV station, Fox "News," presented a program that predicted riots and disarray in the United States by 2014.

How long will Americans permit "their" government to rip them off for the sake of the financial interests that caused the problem? Obama’s cabinet and National Economic Council are filled with representatives of the interest groups that caused the problem. The Obama administration is not a government capable of preventing a catastrophe.

If truth be known, the "banking problem" is the least of our worries. Our economy faces two much more serious problems. One is that offshoring and H-1b visas have stopped the growth of family incomes, except, of course, for the super rich. To keep the economy going, consumers have gone deeper into debt, maxing out their credit cards and refinancing their homes and spending the equity. Consumers are now so indebted that they cannot increase their spending by taking on more debt. Thus, whether or not the banks resume lending is beside the point.

The other serious problem is the status of the US dollar as reserve currency. This status has allowed the US, now a country heavily dependent on imports just like a third world or lesser-developed country, to pay its international bills in its own currency. We are able to import $800 billion annually more than we produce, because the foreign countries from whom we import are willing to accept paper for their goods and services.

If the dollar loses its reserve currency role, foreigners will not accept dollars in exchange for real things. This event would be immensely disruptive to an economy dependent on imports for its energy, its clothes, its shoes, its manufactured products, and its advanced technology products.

If incompetence in Washington, the type of incompetence that produced the current economic crisis, destroys the dollar as reserve currency, the "unipower" will overnight become a third world country, unable to pay for its imports or to sustain its standard of living.

How long can the US government protect the dollar's value by leasing its gold to bullion dealers who sell it, thereby holding down the gold price? Given the incompetence in Washington and on Wall Street, our best hope is that the rest of the world is even less competent and even in deeper trouble. In this event, the US dollar might survive as the least valueless of the world's fiat currencies.

- Paul Craig Roberts was assistant secretary of the treasury in the Reagan administration.

Nausea

Nausea is a physical malaise to the point of vomiting; it is also a nickname for existential anguish. Both meanings apply when reading Obama's federal budget. This sums it up well.

At least we can feel confident knowing why Hillary was in China: we've opted to run our economy on credit.

Banal Pelosi viz-a-viz Verily Benedict

Speaker of the House Nancy Pelosi recently became the highest-ranking Democrat to meet with the pope since the election of President Obama.

Unfortunately, their 15-minute private meeting did not turn out to be the photo-op she had desired.

Following the meeting, the U.S. Speaker of the House released a banal statement highlighting the positive aspects of the meeting (though ignoring the Pope’s correction of her support for legal abortion):

It is with great joy that my husband, Paul, and I met with His Holiness, Pope Benedict XVI, today. In our conversation, I had the opportunity to praise the Church’s leadership in fighting poverty, hunger, and global warming, as well as the Holy Father’s dedication to religious freedom and his upcoming trip and message to Israel. I was proud to show His Holiness a photograph of my family’s papal visit in the 1950s, as well as a recent picture of our children and grandchildren.

In contrast, here is the statement released by the Holy See:

Following the General Audience, the Holy Father briefly greeted Mrs. Nancy Pelosi, Speaker of the United States House of Representatives, together with her entourage. His Holiness took the opportunity to speak of the requirements of the natural moral law and the Church’s consistent teaching on the dignity of human life from conception until natural death, which enjoin all Catholics, and especially legislators, jurists, and those responsible for the common good of society, to work in cooperation with all men and women of good will in creating a just system of laws capable of protecting human life at all stages of development.

George Weigel is prompted to wonder: "Were they at the same meeting? or even in the same city?":

Charity requires that one concede the possibility that genuine piety was a part of Pelosi’s (rather boorish, and certainly irregular) insistence on being given a private moment with the pope during her current taxpayer-funded junket to Rome. But her office’s statement on today’s meeting makes it clear something else was afoot: that Pelosi, who shamelessly trumpets her “ardent” Catholicism while leading congressional Democrats in a continuing assault on what the Catholic Church regards as the inalienable human rights of the unborn, was trying to recruit Benedict XVI (“Joseph Ratzinger, D., Bavaria”?) to Team Nancy.

His Holiness wasn’t buying it.

And as the National Catholic Reporter's Vaticanist John Allen Jr. observes, "Seen through the lens of Vatican diplomacy, this combination of public welcome and after-the-fact rebuke covered all the bases":

Pope Benedict XVI’s much-awaited encounter this morning with U.S. Speaker of the House Nancy Pelosi, perhaps the most prominent pro-choice Catholic in America, amounted to a classic Vatican “both/and” exercise, striving to balance the demands of external diplomacy and internal church discipline.

By meeting Pelosi, Benedict signaled that he wants lines of communication to remain open with the new American leadership, even if the Vatican has deep differences with its policies on the “life issues.” The Holy See is a sovereign state with diplomatic relations with 177 states around the world, which, among other things, means the pope can’t always act like the head of a special interest group.

Yet by issuing an unusual public statement after the session with Pelosi -- which insisted that all Catholics, including legislators, are obliged to work for the defense of human life from conception to natural death -- the pope also made clear there will no let-up in the pressure on pro-choice Catholic politicians to change their ways. [...]

Not only was it unusual to issue a statement after a meeting with an official who’s not a head of state, routine Vatican declarations after diplomatic meetings also generally sum up the range of issues discussed rather than concentrating on a particular point.

In that sense, the statement can only be read as a rejection of Pelosi’s statements last summer, and, in general, of her argument that it’s acceptable for Catholics in public life to take a pro-choice position.

In August of 2004, Nancy Pelosi attempted a botched "Catholic" defense of her pro-choice position on abortion, provoking public corrections by individual Catholic bishops nationwide and a formal rebuttal from Cardinal Justin F. Rigali, chairman of the U.S. Bishops’ Committee on Pro-Life Activities, and Bishop William E. Lori, chairman of the U.S. Bishops’ Committee on Doctrine of the United States Conference of Catholic Bishops.

Two Weeks: Bank Equity Value

In less than two weeks Obama's inept and outrageously incompetent policy choices have led to the destruction of 1/3 of the equity value of banks in the United States.

US citizens votin' for change: well done, boobs.

Oligarchy USA

Bill Moyers, after catching Simon Johnson’s post on The Baseline Scenario entitled High Noon: Geithner v. The American Oligarchs, invited him for an interview on his PBS television program, Bill Moyers Journal.

Moyers asks Johnson what he is signaling with the use of the term oligarchy. Johnson says America is in the grip of an oligarchy. Oligarchy, simply defined, is a form of government where political power rests with a small elite segment of society who control the state through economic means. Johnson points out that those who currently hold the high government positions and are crafting government policy that is supposed to right this ship are the very people that got us into this mess in the first place when they worked in the financial industry. Essentially, the powers-that-be in government are looking out for their own kind in the private sector. And they think they’ve won.

The video cuts to a clip of James Gorman, Co-President at Morgan Stanley. He is speaking to a group of Morgan Stanley executives and tells them bonuses will be coming, but don’t call them bonuses. Here’s a bit of the exchange that follows between Moyers and Johnson:

SIMON JOHNSON: What he’s basically saying is business as usual. Go about your daily lives. Get the bonuses. Re-brand them as awards. But it really shows you the arrogance, and I think these people think that they’ve won. They think it’s over. They think it’s won. They think that we’re going to pay out ten or 20 percent of GDP to basically make them whole. It’s astonishing.

BILL MOYERS:Why wouldn’t they believe that? I mean, when I watched the eight CEOs testify before Congress at the House Financial Services Committee earlier this week, I had just finished reading a report that almost every member of that Committee had received contributions from those banks last year. I mean in a way that’s like paying the cop on the beat not to arrest you, right?

SIMON JOHNSON: I called up one of my friends on Capitol Hill after that testimony, and that session. I said, “What happened? This was your moment. Why did they pull their punches like that?” And my friend said, “They, the Committee members, know the bankers too well.”

BILL MOYERS: Last year, the securities and investment industry made $146 million in campaign contributions. Commercial banks, another $34 million. I mean, American taxpayers don’t have a flea’s chance on a dog like that, do they?

SIMON JOHNSON: It’s a massive problem, obviously. And I do think, though, the good news there are people in the White House - I think the president himself, is aware of this broader issue. And, obviously, the campaign, the Obama campaign was very good at getting small contributions, and trying to minimize the impact of major donors like that. But, at the same time, these people are throughout the system of government. They are very much at the forefront of the Treasury. The Treasury is apparently calling the shots on their economic policies. This is a decisive moment. Either you break the power or we’re stuck for a long time with this arrangement.

After this, Moyers, shaking his head, simply asks, “Are we chumps?” Johnson says:

We’ll find out. Yes, we may be. Okay. It depends on how we play this politically. It depends on what our political system does. It depends, I think, on the level of reaction. The financial system is playing us for chumps, okay? The bankers think we’re chumps. We’ll find out. We have leadership that can handle this. We’ll find out what they do.

Leadership that can handle this? We have leaders who have received millions in campaign contributions from the banking industry. Did you catch what Johnson implies by his answer here? In response to the question of whether the American people are chumps, Johnson essentially says it depends on whether or not the American people will stand for this kind of hubris.

Well, will we? Consider what is happening in the attempt to make these companies whole:

HT: The Humane Economy.

Innovation Breeds Deflation

So, not all deflation is bad.
Obvious: but seems to need to be repeated.
Read more here.

University of Chicago: Standard Last-Resort Prescription to Avoid a General Deflation a Fallacy Likely to Unleash Massive Economic "Dislocations"

Excellent paper on the stimulus plan and implications by John Cochrane of the University of Chicago. Here's an excerpt:

Sooner or later banks will figure out that borrowing deposits at 4% and holding reserves that pay 0.75% is not a good long-term business model. If the resources are not there to unwind our current operations, to quickly retire at least two trillion dollars of newly created debt, a large inflation will result as people dump government debt. If history is any guide, this outcome will unleash economic dislocations on a scale to make our current troubles look like a pleasant memory.

Fiscal Stimulus, Fiscal Inflation, or Fiscal Fallacies?

"Largest Run on Currency in History"

More good news to ponder: HT naked capitalism.

Wow. What an Idiot

That's what I thought when I read this:

We've all heard how historic it was to have the first African-American elected President back in November. Is it not equally important to have the first African-American ever elected to the position of Chairman of one of our political parties?

Well, umm, no: sure Republicans live in the "real world". It'll be a long wait for that phone call.

Well, It's Been Too Long Since We Had a Meltdown

So why not get Europe in the act again.
It's only $24 trillion after all.

Anyone know a ditty with "insolvency" in the lyrics?

Russia in Bad Shape: China May be Worse

Great: more riots in China feared since more than 20 million out-of-work "migrant workers" continue to create social unrest. I can't think of a better word than "create", though it is hard to see that they are truly creating the mess that is China today.

Have I said it is going to get worse before it gets worse lately?

Thank G-d for, well, G-d.

Has Anyone Else Noticed . . .

. . . that for all the doom that is "just around the corner" we have been continually plodding along? We may still have a technically insolvent federal government, but that doesn't prevent it continuing to operate.

I can't help but point out this would not happen in a (true) monarchy.