Bush: "Wall St. got drunk"

I heard about this on Today this morning, so I had to post it - a rare moment of candor when we get to see President Bush's inner-frat boy. I'm sure his handlers would have preferred that he NOT say this.

Wall St. got "drunk," huh, Mr. President? (I'll resist the temptation to poke fun at his own issues with alcohol. Oops. As the saying goes, It takes one to know one.) How about a lack of oversight and regulation, two hallmarks of the Bush Presidency. The anti-government regulation sect of the GOP (which pretty much encompasses the whole party, actually) has to take some of the blame here, without question. It's certainly an oversimplification and unfair to blame the Bush administration for the entire mess the mortgage industry is in, but it certainly must take some of the blame.

One valuable lesson that we've learned during the Bush years, that I hope America and the Democrats don't forget, is that when regulation is left up to corporations policing themselves, in the end the working men and women of this country get screwed. We've seen it with the mortgage industry, the power industry, cable TV, many aspects of the media, the commodities markets (President Clinton must share in the blame there as well), etc. It's the unregulated commodities markets that are partially responsible for screwing Americans at the pump. (Despite John McCain's laughably absurd new TV ad blaming high oil prices on Barack Obama [and presumably, other Democrats] for opposing drilling on the OCS and in ANWR.)

Bush has screwed up so much, the next president is going to have to spend his first term cleaning up Bush's considerable messes, and take many political hits in the process.

Much more to come later today, including a comparison between the McCain and Obama tax plans (There is a great deal of misinformation out there), and much more, so please stop back this afternoon.

Bushed: IEDs & corporate welfare

Here is another great version of Countdown's ongoing series, Bushed - this one hosted by Air America host Rachel Maddow. I love her show on Air America, and she has a great presence on television as well (are you listening, MSNBC execs?).

This edition is pretty damning, led off by some revelations about the IEDs that have been cutting out soldiers to pieces for five years now. Looks as if Our National Embarrassment's War on Terror isn't keeping us safer after all, despite what Dick Cheney and the rest of Bush's cronies would have you believe. As Maddow points out, over 600 IEDs have exploded in Iraq, but even more troubling - the number of IEDs detonated elsewhere around the world had increased for the third consecutive year, at over 300. It looks like the U.S. military's occupation presence in Iraq has tragically created the world's largest terrorism training school. I can almost hear the "school's" slogan now: iHate, iTrain, iBomb, iRaq.

The IED story is easily the most outrageous, but it should surprise no one that corporate America is making quite an outrageous money grab in the midst of the mortgage crisis. The Housing Bill being debated right now in the U.S. Senate is proposing $3.3 billion go to tax relief of homeowners, but about $12 billion is going to help out the companies involved. This should outrage every taxpayer in this country. Why in the world is the government bailing out companies who have made predatory loans in the first place. So let me get this straight - if homeowners make bad decisions by signing a high-risk mortgages because, heaven forbid, they want to achieve the American dream of buying a home, and they can't pay, they lose their money, and their homes. In other words, they pay for the mistake for a looong time in the form of destroyed credit, not to mention the loss of their homes.

If corporations and banks making these idiotic loans make bad decisions and have to foreclose on these homes, the government bails them out. I guess there really is no downside in the mortgage business. I really need to open my own bank. And we all need to contact our reps and senators in Congress to let them know how outraged we are. Click Here to find out who your reps and senators are, or you can call the Congressional Switchboard directly at (202) 225-3121 and an operator will connect you to your representative or senator(s).

Of course, Senate Majority Leader Harry Reid (D-NV) had this to say about the bill:

"We helped Wall Street. We're all glad that Bear Stearns was taken care of," said Reid on Wednesday. "But now it's our opportunity to take care of people on Main Street."

No Senator, we are not all glad that Bear Sterns is raping the taxpayer. Maybe you are, but I know I'm not. Reid has been little short of a total disaster as Democratic Majority Leader in the Senate. If the Democrats retain control of the Senate, they had better consider another leader, because Reid is a joke.

The last piece is quite a story about Rep. Patrick McHenry (R-NC) being outraged that he couldn't use a gym for a workout while on a trip to Baghdad because he didn't have the proper credentials. McHenry called the guard a "two-bit security guard" in anger. Yet another elected politician who thinks he's God's gift, and who doesn't like being told the word "no." Maddow picks it up from here:

Just so you know, the gym McHenry wanted to use? It was in the Green Zone, in Baghdad. [Emphasis hers] The "two-bit security guard" McHenry derided was an American soldier in harm's way, protecting visiting Americans, like Congressman McHenry. And because this soldier followed proper procedure and refused special treatment to a big shot like Congressman McHenry, his reward? Did he get to go home, like McHenry did? No, this "two-bit security guard" stayed behind in Baghdad to fight McHenry's war for him. Congressman, you feel a little apology coming on?

Don't hold your breath, Rachel.

h/t Crooks & Liars for the links & video

MSNBC's Race For the White House debut: ho-hum

Here is a little bit of footage from the debut of MSNBC's Race for the White House. To me, there wasn't anything too special about it - seems to me it's just another political talk show where people shout at each other. But, sometimes I like that - we need some disagreements and heated discussion about many things that ail America today.

I have to say this about Joe Scarborough - I run hot and cold with him. Sometimes he's sensible and offers up commentary I agree with, and at other times you'd think he put on a Bill O'Reilly mask.

The discussion above highlights one of the stark contrasts between the world view of Democrats and Republicans.

According to Scarborough's world, regulations are the enemy - the housing crisis is the result of people who "gambled and lost." That's a dramatic and oversimplified explanation of what really happened. I read Scarborough's comments as this: that people who couldn't afford a mortgage got one anyway when they shouldn't have. But, that begs the question - who made that credit available?

I grow so tired of businesses taking advantage of people with predatory practices, and when the cards come crashing down, the consumer gets blamed.

Rachel Maddow brought up a good point - there is going to be a tremendously expensive bailout for the lending industry, and it has already begun with the government's $30 billion bailout of Bear Sterns, which makes me want to start a bank. Hey, if it is successful and it fails, no worries, matey - the government will come to my rescue.

Unreal.

On another note, I'm not so sure about Race for the White House, but I'll give it a fair shot. I do like David Gregory, so I think if he keeps having on guests with a variety of views, it has a good shot to last.

Spitzer & the mortgage crisis: linked?

I've got five bucks Euros (the bet should have value, at least) that this story gets virtually no play in the national, mainstream media.

Noted journalist & author Greg Palast has a take on deposed New York Governor Eliot Spitzer that's getting virtually no play at all; the short of it is that Spitzer's fall and the mortgage crisis are directly linked. (Two of Palast's books are well-known - Armed Madhouse: From Baghdad to New Orleans--Sordid Secrets and Strange Tales of a White House Gone Wild and The Best Democracy Money Can Buy; the former is sitting on one of my bookshelves, waiting for me to read it.)

His latest column, entitled Eliot's Mess: The $200 billion bail-out for predator banks and Spitzer charges are intimately linked is on his Website and appears in today's Baltimore Chronicle. Some excerpts (my comments follow):

While New York Governor Eliot Spitzer was paying an "escort" $4,300 in a hotel room in Washington, just down the road, George Bush's new Federal Reserve Board Chairman, Ben Bernanke, was secretly handing over $200 billion in a tryst with mortgage bank industry speculators.

Both acts were wanton, wicked and lewd. But there's a BIG difference. The governor was using his own checkbook. Bush's man Bernanke was using ours.

This week, Bernanke's Fed, for the first time in its history, loaned a selected coterie of banks one-fifth of a trillion dollars to guarantee these banks' mortgage-backed junk bonds. The deluge of public loot was an eye-popping windfall to the very banking predators who have brought two million families to the brink of foreclosure.

Up until Wednesday, there was one single, lonely politician who stood in the way of this creepy little assignation at the bankers' bordello: Eliot Spitzer.

Who are they kidding? Spitzer's lynching and the bankers' enriching are intimately tied.

How? Follow the money.

The press has swallowed Wall Street's line that millions of U.S. families are about to lose their homes because they bought homes they couldn't afford or took loans too big for their wallets. Ba-LON-ey. That's blaming the victim.

Here's what happened. Since the Bush regime came to power, a new species of loan became the norm, the "sub-prime" mortgage and it's variants including loans with teeny "introductory" interest rates. From out of nowhere, a company called Countrywide became America's top mortgage lender, accounting for one in five home loans, a large chunk of these "sub-prime."

Here's how it worked: The Grinning Family, with U.S. average household income, gets a $200,000 mortgage at 4% for two years. Their $955 a month payment is 25% of their income. No problem. Their banker promises them a new mortgage, again at the cheap rate, in two years. But in two years, the promise ain't worth a can of Spam and the Grinnings are told to scram - because their house is now worth less than the mortgage. Now, the mortgage hits 9% or $1,609 plus fees to recover the "discount" they had for two years. Suddenly, payments equal 42% to 50% of pre-tax income. Grinnings move into their Toyota.

Now, what kind of American is "sub-prime"? Guess. No peeking. Here's a hint: 73% of HIGH INCOME Black and Hispanic borrowers were given sub-prime loans, versus 17% of similar-income Whites. Dark-skinned borrowers aren't stupid – they had no choice. They were "steered," as it's called in the mortgage sharking business.

"Steering," sub-prime loans with usurious kickers, fake inducements to over-borrow, called "fraudulent conveyance" or "predatory lending" under U.S. law, were almost completely forbidden in the olden days (Clinton administration and earlier) by federal regulators and state laws as nothing more than fancy loan-sharking.

But when the Bush regime took over, Countrywide and its banking brethren were told to party hardy – it was OK now to steer'm, fake'm, charge'm and take'm.

But there was this annoying party-pooper. The Attorney General of New York, Eliot Spitzer, who sued these guys to a fare-thee-well. Or tried to.

[Snip]

It was the night of February 13 when Spitzer made the bone-headed choice to order take-out in his Washington hotel room. He had just finished signing these words for the Washington Post about predatory loans:

"Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which he federal government was turning a blind eye."

Bush, said Spitzer right in the headline, was the "Predator Lenders' Partner in Crime." The president, said Spitzer, was a fugitive from justice. And Spitzer was in Washington to launch a campaign to take on the Bush regime and the biggest financial powers on the planet.

Spitzer wrote, "When history tells the story of the sub-prime lending crisis and recounts its devastating effects on the lives of so many innocent homeowners the Bush administration will not be judged favorably."

I really wonder when the American people (or at least the moderates, who in recent history are largely determining the outcome of elections) will every truly "get it," and by that I mean that Republicans are so anti-government, it makes little sense to put them in charge of something they are determined to minimize and dismantle at every opportunity.

President Reagan, whose debilitating, deliberate oversimplification of our federal government, "Government is the problem," or the closely related and ever popular "The nine most terrifying words of the federal government are 'I'm from the government, and I'm here to help,'" have really come home to roost during Dubya's administration run amok.

In the last 25-30 years, just about every industry that has been deregulated has done two things: it has enriched the companies via Wall St. (and of course their government-sponsored backers), and it has screwed the consumer. A few examples:

1. The Airline Industry (Actually, President Carter deregulated them, I know, and that has proven disastrous on a number of fronts, so Repubes get a pass here. But, I don't mind bringing up in the spirit of partisanship that Reagan fired the air traffic controllers, and this idiotic and drastic decision's effects are still felt today. Am I the only one who finds it ironic that one of Washington, D.C.'s airports is named after him? But, I digress.)

2. Cable TV - Quickly now, this is not a trick question - has your cable bill gone down or up in the past 15 years? If you are one of the few who have realized a decrease for the same services, then run, don't walk, to your local gas station or convenience store and buy a lottery ticket.

3. The Power Industry - I've got one word - Enron. Anyone remember the faux California Energy Crisis? (I never tire of reminding people that Kenneth Lay's ties to Bush were indeed very close - he donated $500k to Bush's first coronation inaugural ball. As for Big Coal and Big Oil, forget it - their respective claws are dug so deep into our political system, and in these two cases, the Republican Party, the full extent may never be known.

4. The Telecommunications Industry - fewer and fewer telecomms now own more and more. I'm yet to read an adequate explanation as to why this is good for anyone, except for rich corporate investors. Hey, look at the bright side, though - pretty soon there will be one cell phone company left, and one cable news channel, Fox News.

I remember in years' past, when the government used to break up monopolies, while actually giving a damn about the American consumer (what a concept!). The break-up of the Bell System (finally took place under Reagan, but the initial lawsuits began in the 1970s) and the government's case vs. Microsoft for its monopolistic practices are the two most notorious examples of how these high-profile cases in the end benefited consumers.

And that brings us back to the mortgage industry. I wonder when this crisis finally hits bottom (which, evidence says, has not happened yet) if the true story will every come out. I firmly believe that predatory business practices and piss-poor government regulation are a pretty big part of the problem, exacerbated by the "hands off" approach by the Bush administration, as its wont to do in just about any federal regulatory situation, except when it can line the pockets of its donors.

Government regulation and intervention are both not always the best course of action, but they can often protect the consumer.

Could be the best This Modern World EVER

[Click for larger image]

Just about every week, I heap praise on Tom Tomorrow for his point-on political cartoon, This Modern World. But, I read this one over the weekend, and it has to go in the TMW Hall of Fame as one of his best ever. The last two panels literally had me laughing out loud, but then I realized that the whole farce of the Iraq War is nothing to laugh at, nor is the mortgage/real estate crisis that this administration seems almost indifferent to solving.