Copyright 2006 by Rules |
According to the gurus over at Wikipedia, “A wooden nickel, in the United States, iswood token coin, which are usually issued by a merchant or bank as a promotion,sometimes redeemable for a specific item such as a drink. Wooden nickels weremost commonly issued in the US in the 1930s, after the Great Depression.”Which is fine (as far as it goes), although in thesense of the current bailout of fraudulent and specious investment vehicles, itseems the wooden nickel is upon us almost before the fact. We have beensnookered out of our underwear before the game began. 
Investment ‘vehicles’ arewell named, invented as they are to drive off with your money. In case youmissed the point of the failure in the House of Representatives to pass HankPaulson’s giveaway to his former partners in crime over at Goldman Sachs, itwas to provide political cover for the coming election, while allowing theSenate to unashamedly lard the legislation.Seldom does the Senate step in ahead of the House,but paid-off Senators were well paid and only a third of them are standing forreelection. Thus are leaders made. Such is the power of a corrupt two-party system that badly needs aviable third party to disrupt partisanship where stalemate and power-plays haveall but replaced representative government. Hope for a future lies in meaningful coalition governance.What we have allowed in Washington simply will not suffice. Consider what Nancy Pelosi (rhymes with Bela Lugosi)has given us for this month’s monster under the bed;(Rescue Sweetened With Tax Incentives,by Cecilia Kang, Washington Post)TheHouse of Representatives yesterday approved $107 billion in tax breaks forbusinesses and consumers as part of a sweeping financial rescue packagedesigned to stave the credit crisis.Saddledonto the 450-page bill is a provision to shield as many as 25 million Americansfrom the alternative minimum tax and $18 billion in tax credit extensions forwind and solar energy production.Yetto appease lawmakers and make the bill more attractive, several more prosaictax provisions are included, according to a government budgetary watchdoggroup.Saddled. Well chosen metaphor. Indeed, the nation’seconomic horse very nearly sank to its knees under the load. Any vague hopethat “the best Congress money can buy”would seek anything other than its own unending grip on Democratic dominance(under an Obama administration) sank as well. 
Pelosi, who has an absolute majority in the House,said, “We were dealt a bad hand; we madethe most of it.” This witless Speaker of the House has made nothing butexcuses for the deplorable job she has done since the 2006 mid-term electiongave her what she wanted and cannot find a way to use—control. In the week that was, last week’s $700 billionrefusal became this week’s acceptance--larded with an additional $150 billionin earmarks and other buried treasures. Republicans have been watching all year, like catsat a mouse hole, for a bill that could not be refused to which they couldattach pet legislation. They got it this week on a platter, thanks to thePelosi-Reid dumbo combo. Less able 'leadership' has seldom haunted the halls of Congress. Republicans are not always civic-minded, by by god they are able and showed it by their expansive mood. (TimeMagazine) Paulson's original request was barely three pages long, whereas thebill passed today runs well over 400 pages.Pork, of course, is not exactly speech-writing, but it does take language and languagetakes pages. Fortunately, that language was at the ready, loaded, primed and parsed,eager to be fired so everyone could go home and leave the mess to Obama orMcCain. With change like this, who really cares who occupies the White House?(WashingtonPost again) NASCAR will be able to write off racetrack costs over 7 years andmanufacturers of wooden arrows for children will be shielded from an excise taxapplied to other shafts. The NASCAR provision was introduced by Rep. MikeThompson (D-Calif.), who voted in favor of the bill.
Nice job, Mike. That certainly bails out theauto-racing industry, which grosses more than any other organized sport and isawash in profits. A friend of mine, just today, sent me a pretty good idea--that those in Congress be required to wear NASCAR-like uniforms, so we could readily see their sponsorship. I don't know the attribution, it's not original with him, but it's pretty accurate and (would be) funny if it didn't cleave so close to the bone.Thebailout package also provides tax rebates on rum imported from Puerto Rico andthe Virgin Islands and tax credits for economic development on the island ofAmerican Samoa."Inthe midst of a debate over a historic bailout package, Senate pulled out an oldbag of tricks: piling billions of dollars of unrelated legislative provisionsinto the package and daring the House to reject the bailout again," saidRyan Alexander, president of Taxpayers for Common Sense. "Many of theseprovisions are tax extenders that have been waiting in the wings for months,hoping for a legislative train to leave the station."Thebill passed the House yesterday 263 to 171. It was a last-ditch effort of sortsfor proponents of renewable energy to get tax provisions extended before theywere set to expire by the end of the year. Those extensions, estimated at $18billion, had repeatedly failed to pass legislative muster in both the Senateand House over the past year.Thetax breaks in the legislation total $149 billion over 10 years, and are offsetby $42 billion in tax increases. The hikes include a new levy on hedge-fundmanagers who avoid taxes by transferring income offshore, a provision thatwould raise $25 billion over 10 years.It was an absolutely bi-partisan effort. Everyone gottheir hand in the till, regardless of race, creed, gender or politicalaffiliation. No cause was too large ($150 billion in tax breaks) or too small (39cents on wooden arrows).(Bloomberg)Senators attached a provision repealing a 39-cent excise tax on wooden arrowsdesigned for children to an historic $700 billion financial-markets rescue thatpassed tonight by a vote of 74-25. The provision, originally proposed by Oregonsenators Ron Wyden [D] and Gordon Smith [R], will save manufacturers such asRose City Archery in Myrtle Point, Oregon, about $200,000 a year.Senators Widen and Smith can’t get any more bi-partisan than that.(Wikipedia)It was during this (depression era) decade that some banks and chambers ofcommerce in the United States issued wooden nickels with expiration dates tomitigate difficulties faced by merchants in making change at times ofinstability.Wooden arrows—wooden nickels—guess we’ve now seenthe closing of the circle. We can hope, but not be assured, that the circle isnot a noose in disguise.__________________________________________________Media comment:Houston Chronicle-Equal treatmentBoston Globe-Benevolence amid an orgyNational Post-Canada-Bailout bill more about shafts than building confidenceGuardian-UK-Now Wall Street may shun $700bn bail-outThe Australian-Australia-Paulson bailout won't impress sceptics Posted by Jim Freeman in Business and Economy, Conservative Politics, Liberal Politics, Taking My Country Personally, Things That Make Me Nuts, Washington at Work | Permalink | Comments (0) | TrackBack (0) 
It’s our cravingsthat are at fault, the fraudsters on Wall Street bray. Consumers demanded cheap credit and we just didn’tknow what to do except provide it—even at the personal cost of having to takethose hundred million dollar salaries. Theymade us do it, with their lifestyle demands. Wal-Mart wasn’t a scheme towreck Main Streets across America, centralize all the purchasing in the Waltonfamily private coffers—it was the cry ofmanic consumer demand for Chinese TVs and toxic toys for the kids.
We had a gun at our head to create credit default swaps out of the wholecloth that used to be collateralized lending. Remember when you went to yourbank for a loan? In those creaky old horse-and-buggy days, the banker wantedsome reasonable idea you were going to pay him back. He cared about suchthings, because it was your (and his) neighbors’ money he was lending. Yourreputation might count for something back then, because he knew your reputation. But every month at the loan committeemeeting, you were smiled or frowned upon.I never cravedcheap credit, worthless goods or seven credit cards. Credit cards weren’t evenin common use until Visa and MasterCard rolled out in the sixties. Oh yeah, youmight have carried a Texaco or Standard Oil card for buying gas, maybe had adepartment store charge account, but the swiping of card-readers came with theusury-friendly 18% interest rates for unpaid balances.
Texaco, Standard Oil or the department store merelygot angry with you, cancelled the card and hounded you into court. Visa,MasterCard and the other big guys made a profit out of a great new businessopportunity. Why make 5% warehousing, transporting and selling a sofa, when youcan make three times that loaning out the money and the Congress of the UnitedStates will enable the process.You can’t get a more prominent enabler than that.Everyone jumped on the band-wagon of marketing and consuming because they had made the actual manufacture of goods apauper’s business. No longer able to invent and build, the world’s mostsuccessful nation of inventors and builders turned to selling each other cheapcrap and calling it the new economy.In a scant forty years, the core values of a nation were cored like apples. 
So, the race was on and in four decades that raceessentially boarded up the Main Streets of small towns, outsourced our jobs tothe cheapest offshore producer, transformed us from the world’s largest lenderto the world’s biggest debtor, put college educations out of common reach,changed the relationship between worker productivity and reward, busted theunions, set off an advertising based feeding-frenzy of consumption and—now thatit has busted the bank—hands us both the bill and the blame.
Unlike your friendly neighborhood bank of fortyyears ago, the new-age swindlers who arranged a home mortgage or line of creditfor the un-creditworthy, needed a place to offload the offal. Bingo,derivatives were invented—not regulated, but invented—the not regulated partwas just another low and outside curve-ball lobbed to a well-fed andwell-paid-off Congress.Derivatives were a hedge-fund invention, a way towhistle up large fees and churn the money pump, essentially hiding rotten applesat the bottom of otherwise shining and radiant barrels of produce. The languagein these shell-game contracts was so arcane as to be un-understandable to thosewho took their cut, closed their eyes, held their nose and shoveled them on down the line. 
Rating agencies knew ofthe stink and approved them AAA in spite of it, for (what else) money. Mortgagebankers, investment bankers, rating agencies and insurers—essentially all theguys looking for bailouts now—knew and collaborated and stirred theconspiracy-pot for a classic RICO indictment.Instead, Henry Paulson is Santa Claus to save the financial markets. (TARP—YourMoney at Work) those unregulated derivative contracts that allow investorsto bet on a debt issuer’s financial prospects, loomed so big on balance sheetsthat they now drive every bailout decision.. . . “The last eight years have been aboutpermitting derivatives to explode, knowing they were unregulated,” said Eric R.Dinallo, New York’s superintendent of insurance. “It’s about what thegovernment chose not to regulate, measured in dollars. And that is what shookthe world.”Don’t bother tosave the co-conspirators, Henry. Rhett Butler nailed it when he looked deepinto Scarlett’s eyes and said, “Frankly, my dear, I don’t give a damn.” As ataxpayer, I’m still reeling from the $11 trillion we’ve accumulated in nationaldebt since Ronnie Reagan (the communicator) deregulated me out of my underwear.Now you guys have come after the underwear.______________________________________________________Media comment:Bloomberg-Treasury Seeks Asset-Buying Power Unchecked by Courts Guardian-UK-US Treasury takes on the house in high-stakes gameWall Street Journal-Paulson Presses Congress to Act On $700 Billion Bailout Plan Reuters-Treasury plan lacks taxpayer protection: Sen.SchumerBoston Globe-Can America afford it? Posted by Jim Freeman in Business and Economy, Conservative Politics, Current Affairs, Taking My Country Personally, Things That Make Me Nuts, Washington at Work | Permalink | Comments (0) | TrackBack (0) Next » 
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