Ironic that yesterday, NY Times columnist Charles Blow, certainly an Obama cheerleader from way back, penned a column entitled Obama’s to Fix, in which he cautions the President to stop blaming George Bush for the “mess” he inherited. Clearly, our President, far from undoing such a mess, is daily making a bigger one of his own. Mr. Blow begins with this ominous phrase:

What a difference a year makes.

In October 2008, the candidate Barack Obama delivered a major economic speech in Toledo, Ohio. In it he said: “Right now, we face an immediate economic emergency, and that requires urgent action. We can’t wait to help workers and families and communities who are struggling right now — who don’t know if their job or their retirement will be there tomorrow; who don’t know if next week’s paycheck will cover this month’s bills. … We need to pass an economic rescue plan for the middle-class, and we need to do it not five years from now, not next year, we need to do it right now.

“So today I’m proposing a number of steps that we should take immediately to stabilize our financial system, provide relief to families and communities and help struggling homeowners. It’s a plan that begins with one word that’s on everybody’s mind, and it’s easy to spell: J-O-B-S.”

“Right now,” “immediate economic emergency,” “requires urgent action,” “can’t wait.” Wow! He gave the impression that job creation would be his top priority, that action would be swift and effective, that his solutions would not only stanch the hemorrhaging, but reverse the trend.

He has not made jobs his top priority. This health care debacle, bailing out Wall Street, getting into the car business and generally putting money into the pockets of everyone except those who need it have all taken priority over putting Americans back to work. And, no, putting an extra $13 a week into people’s paychecks is not going to do the trick when as Mr. Blow points out the new official labor statistics have us at 10.2 unemployment, which is an increase of “more than 50 percent from the time Obama gave that speech.”

“(By the way, the underemployment rate, which includes part-time workers who want to work full time and those who’ve given up searching, is a staggering 17.5 percent.)”

I am still at a loss to understand why there was such a great urgency to pass health care legislation that is not supposed to go into effect for more than three years. Someone on another blog made the observation that Obama and Pelosi et al are using the economic crisis and joblessness as a weapon to pass their agenda. As people are panicked at losing their jobs and their healthcare, they are more likely to look to government to bail them out – and more amenable. As Rahm Emanuel said, “never waste a good crisis.” What better time to ram this through. Mr. Blow continues:

Job creation has dropped from top priority to one of many, and President Obama has been remanded to pandering for patience and offering excuses. On the one hand, he argues the tortured rationale that there is good news in the awful numbers: Things are still getting worse but at a slower pace. On the other, he incessantly reminds us that he inherited the crisis. The implication: Don’t blame me, blame Bush.

But this president can’t keep deflecting to the last one. Pain is presently felt. The crisis that took form on Bush’s watch is being experienced on Obama’s. Fair or not, finger-pointing is not effective policy.

This is now Obama’s crisis, and it carries political consequences. During Tuesday’s gubernatorial races in New Jersey and Virginia, nearly 9 in 10 voters said that they were worried about the direction of the nation’s economy in the next year. And the majority of those who held that view voted for the Republican candidates. This could portend a flashback to 1994.

It isn’t President Obama’s fault that he inherited this mess, but it is his to fix, and he must make haste. To paraphrase his Toledo prelection: you need to do it not five years from now, not next year, you need to do it right now. J-O-B-S.

There were many options to put people back to work this year if that was really the priority. Clearly it was not. This President spent almost a billion dollars to get his job. I don’t want to hear complaints now. Obviously, he inherited a mess, which he has made worse with reckless spending. No one expects him to fix everything in the space of a year, but I thought his “good judgment” meant he knew how to prioritize. We need leadership and part of that involves sacrificing one’s ego to help those who need it most. That is far more important than pushing legislation just for the purpose of putting a check mark next to one’s name. You don’t not spend billions, even trillions, you don’t have at a time like this. Since this bunch so miscalculated on their $787 billion stimulus package, I am not inclined to trust them now by handing over 1/6 of the economy to their stewardship.

It is interesting that Mr. Blow, who played the race card on Mr. Obama’s behalf last year, is now joining the ever increasing number of his pundit supporters who are having problems with his endless campaigning, blaming and wrongheaded focus.

As to the health care debate, I called my Congressman’s office Friday morning to complain about the bill and his assistant debated the merits with me. At least she took the time to do so. It was a shame she was wrong on the facts. I told her to go back and read the thing. Now we have a 2,000 page beast that the Senate must contend with and we are told it will never pass in its current form. So why the rush? Why wouldn’t this Administration be in the same kind of rush to help get people back to work?

There are 237 millionaires in Congress. Perhaps that explains why they have difficulty relating to the urgent need to put millions of Americans back of work, instead manufacturing an urgent need to pass labrynthian legislation for the mere purpose of saying “Mission Accomplished.”

Hmm. Where have we heard that phrase before?

Florida Democratic Congressman Alan Grayson, the man who stood on the floor of the House and said ‘Republicans want you to die’ just got himself into a little tepid water for making saying that:

Linda Robertson, an adviser to Federal Reserve Chairman Ben Bernanke, [is] “a K Street whore.”

Bret Baier of FOX News reports that Democrats Rip One of Their Own for His Language. But frankly, the ripping is rather mild in my view.

New Jersey Democrat Bill Pascrell tells the Politico: “There’s no call for that language… that’s absurd.”

New York Democrat Anthony Weiner says: “Is this news to you that this guy’s one fry short of a Happy Meal?”

And Nevada Democrat Dina Titus dubbed Grayson’s remarks, “a bit extreme and rather sexist.”

That’s the best they can do?

Rather sexist? He called the woman a whore. If this man is a Democrat, he is someone the party can certainly do without. But after the grotesque sexist slurs of the 2008 election cycle directed at both Hillary Clinton and Sarah Palin, nothing would surprise. While I am glad a few in the party bothered to actually say something, where is Nancy Pelosi, the Democratic speaker of the house? Why is she not censuring him for this behavior?

Grayson heeded the criticism, and apologized late in the day, saying in a statement: “I offer my sincere apology to Linda Robertson… I did not intend to use a term that is often, and correctly, seen as disrespectful of women.”

A term that is often seen as disrespectful to women? Often? You mean there are times when calling a woman a whore is OK? Who are these people? To make matters worse. Baier reports the following:

Despite the outcry from Democrats, the White House is not rushing to distance itself from Grayson. At a Monday night fundraiser, President Obama called Grayson an “outstanding member of Congress.”

I would hope the President would chastise this man for these filthy words. Democrats can no longer claim to be the party of women’s rights if they don’t stand up, as one, and declare that this behavior by one of their own is outrageous and not to be tolerated.

Nope, I am not talking about Anita Dunn this time. Ron Bloom is the latest Obama Czar (Manufacturing) to quote Mao as an authority. And just wait to see which quote he uses from Mao. Oh, and he disses that whole free market thing, too. See for yourself:

You may recall that Ron Bloom was a negotiator with the United Steel Workers, and apparently known for being a bit of a potty mouth while he was at it. Oh, and naturally, like so many of the people with whom Obama surrounds himself, has ties to the SEIU, which was co-created by Wade Rathke of ACORN fame. Yep, he surely does.

Remarkable, isn’t it? When Obama keeps trying to claim he doesn’t know all that much about ACORN and their doings? Yeah, right. But I digress.

You know, it makes sense, though, really. As Obama takes over private enterprise as well as banks with our dollars (more on this below), and attempts to destroy any media that isn’t favorable to it, I think we are well on our way to an, um, less than Democratic union. And we have Czars like Anita Dunn and Ron Bloom to lead the way, not to mention Obama himself, a card-carrying member of the Socialist New Party (and don’t forget Van Jones, who had to resign). Ain’t that something?

Remember when our friends and families scoffed at us and ridiculed us for making these claims about Obama and his associates? Uh huh. Dontcha just HATE it when you know you’re right and people treat you like your nuts? I wonder how they feel now? Oh, right – they’re probably all singing their “Mmmm mmmm mmm” song while our once democratic nation goes by the boards…

By the way, the Bailout Watchdog had this to say about the TARP program – OUR taxpaying dollars at work:

But even as the administration aimed to refocus the massive Troubled Asset Relief Program on small businesses and homeowners, Barofsky said in his report that the effort to save the nation’s financial sector came at great cost to taxpayers, to the integrity of the financial system and to the public’s perception of the federal government.

“Despite the aspects of TARP that could reasonably be viewed as a substantial success,” he wrote, “Treasury’s actions in this regard have contributed to damage the credibility of the program and of the government itself, and the anger, cynicism and distrust created must be chalked up as one of the substantial, albeit unnecessary, costs of TARP.”

Barofsky said public suspicion was fed by Treasury’s decision not to require banks to report how they used their rescue money and its “less-than-accurate” statements describing the financial condition of nine large banks that benefited from large infusions of aid. The TARP program began under the administration of President George W. Bush and has expanded under Obama.

And now the Obama Administration has taken on the U.S. Chamber of Commerce. I’m not kidding. The All Stars had an excellent discussion on this last night, and included the overarching issues of both the Chamber of Commerce AND the attacks by Anita Dunn on Fox News. It provides a good overview of the direction the Obama Administration is heading:

You know, if things continue down this path with the people Obama has surrounded himself, I think we can expect to have this painting in the White House:

Replaced with this one:

Hey, it could happen! And the chances of that seem to be increasing with every day…

Many Americans were duped by financial practices and products emanating from Wall Street. Where was Washington? I would assess Washington’s involvement and responses in the following fashion:

1. At worst, Washington was complicit given a wide array of failed public policy programs, especially in housing. These public policies were largely ‘greased’ by lobbying dollars and campaign contributions.

2. To a large extent, Washington was negligent in terms of oversight, especially on the financial regulatory front.

3. At best, Washington was naive given a general lack of understanding of markets and finance.

The American public is now responding in appropriate fashion. How so? In increasing numbers, they are choosing not to play the Wall Street game. What game is that? Active trading and investing. While the numbers of pure day traders may have increased, the American population at large is focused elsewhere. Where is that focus? On the economy at large and on their individual pocket books.

Washington’s focus on Wall Street and its selling of the market rebound as reflective of a return towards prosperity is a product that will not fly . . . try as they might. Why?

It’s the economy, stupid! Reports this morning indicate that wages will likely show the greatest decline since 1991. Even in the face of declining wages, consumers’ purchasing power is being further eroded by the continuing decline in the value of the dollar. That decline is inflationary which hurts consumers but it continues to present a very cheap funding vehicle for those who want to use the greenback to employ leverage in the markets. Who has the advantage in that process? The large banks. Do they spread that wealth in terms of increased credit and higher savings rates? Now why would they do that?

The American saver and consumer shouldered the cost of the bank bailouts in 2008. They are now shouldering the cost of the wealth transfer to the banks in 2009. While Washington would like to sell this dynamic differently, the American public gets it.

Washington will continue to sell this dynamic at its peril.

LD

Well, the answer is pretty much divided based on who you believe is willing and able to fix these problems.

The MSM like to portray this disagreement as a political divide between Democrats and Republicans. Others see this as a economic divide between the wealthy and the poor. But there is another, deepening divide that cuts across both party politics and personal wealth and that is the divide between those who believe President Obama and the current congress can or will fix things, and a growing group of those who don’t.

And the most telling portion of this latter group are some very knowledgeable Obama supporters who have lost their belief in “Hope and Change” and are now becoming increasingly vocal as to why our financial system is still broken.

A recent Bill Moyer’s Journal discussion with Rep. Marcy Kaptur and Simon Johnson on the near collapse of the US financial system, and where we stand and what we’ve learned – one year later was a perfect example. For 30 minute Kaptur and Johnson detailed together the dysfunction of Washington and Wall Street, but Moyer’s final question drew attention to this surprising divide:

From Bill Moyer’s Journal transcript:

BILL MOYERS: Does President Obama get it?

MARCY KAPTUR: I don’t think President Obama has the right people around him. The poor man inherited a total mess, globally and domestically. I think some of the people that he trusted haven’t delivered. I urge him to get new generals. It’s time.

SIMON JOHNSON: Louis the Fourteenth of France, a very powerful monarch, was famous for having many bad things, you know, happen under his rule. And people would always say, ‘If only Louis the Fourteenth knew. I’m sure he doesn’t know. If we could just tell him, he’d sort it out.’ You know. I’m skeptical.

Mr. Johnson with co-author James Kwak sounds more than skeptical about the Sun King in It’s Crunch Time: The Fight to Fix the Financial System Comes Down to This .

During the reign of Louis XIV, when the common people complained of some oppressive government policy, they would say, “If only the king knew . . . .” Occasionally people will make similar statements about Barack Obama, blaming the policies they don’t like on his lieutenants.

But Barack Obama, like Louis XIV before him, knows exactly what is going on. Now is the time for him to show what his priorities are and how hard he is willing to fight for them. Elections have consequences, people used to say. This election brought in a popular Democratic president with reasonably large majorities in both houses of Congress. The financial crisis exposed the worst side of the financial services industry to the bright light of day. If we cannot get meaningful financial regulatory reform this year, we can’t blame it all on the banking lobby.

And least anyone thinks Mr. Johnson should be discounted as a partisan, here is more from the Moyer interview.

SIMON JOHNSON: I think the opportunity, the short term opportunity, was missed. There was an opportunity that the Obama Administration had. President Obama campaigned on a message of change. I voted for him. I supported him. And I believed in this message. And I thought that the time for change, for the financial sector, was absolutely upon us. This was abundantly apparent by the inauguration in January of this year.

SIMON JOHNSON: And Rahm Emanuel, the President’s Chief of Staff has a saying. He’s widely known for saying, ‘Never let a good crisis go to waste’. Well, the crisis is over, Bill. The crisis in the financial sector, not for people who own homes, but the crisis for the big banks is substantially over. And it was completely wasted. The Administration refused to break the power of the big banks, when they had the opportunity, earlier this year. And the regulatory reforms they are now pursuing will turn out to be, in my opinion, and I do follow this day to day, you know. These reforms will turn out to be essentially meaningless.

Johnson discusses further impediments to changes in our financial system with Wall Street’s “mind control” and placement of a “inside man” in Tim Geithners Small Circle of Confidants

Over the past 30 years Wall Street captured the thinking of official Washington, persuading policymakers on both sides of the aisle not to regulate (derivatives), to deregulate (Gramm-Leach-Bliley), to not enforce existing safety and soundness regulations (VaR), and to stand idly by while millions of consumers were misled into life-ruining financial decisions (Alan Greenspan).

This was pervasive cultural capture or, to be blunter, mind control…

Geithner’s defenders insist that his specific contacts while President of the NY Fed were a function of that position; “he was only doing his job.”

But today’s AP report, based on looking at Geithner’s phone records, from the inauguration through July, suggest something else. …

Geithner’s phone calls were primarily to and from people he knew well already–who had cultivated a relationship with him over the years, shared nonprofit board memberships, and participated in the same social activities. These are close professional colleagues and in some cases, presumably, friends.

The Obama administration had to rescue large parts of the financial sector, given the situation they inherited. But it absolutely did not have to run the rescue in this exact fashion–bending over backwards to be nice to leading bankers and allowing their banks to become even larger. Saving top executives’ jobs under such circumstances is not best practice, it’s not what the U.S. advises to other countries, it’s not what the U.S. tells the IMF to implement when it helps clean up failed banking systems, and it’s not what the FDIC implements for failed banks under its auspices.

The idea that you could leave big U.S. bank bosses in place (or let them get stronger politically) and do meaningful regulatory reform later has always seemed illusory–and this strategy now appears to be in serious trouble. But presumably Mr. Geithner’s financial advisers told him this was the right thing to do.

And as Simon Johnson points out, we’ve now gone from “too big to fail” to “too big to regulate”.

The problems before us now are not limited to the financial sector. Just as Brandeis argued, beginning with a piece entitled “Our Financial Oligarchy” in Harper’s Weekly, November 1913, we have allowed other parts of our economy to become “too big to regulate”. Any company that can set its own rules and then behave in a reckless fashion is potentially very damaging to both prosperity and democracy.

Teddy Roosevelt thought you could regulate and control monopolies, and his idea that “big corporate” could be controlled by “big government” was taken forward with some success by FDR, the reforms of the 1930s, and the way our system operated for 30-40 years after World War II. But the complete breakdown of financial regulation under great political pressure in the 1980s and 1990s should serve as a wake-up call, both with regard to banking and much more broadly.

We need to go back to Brandeis who, with his extensive experience on the interface between politics and law, thought that breaking up big firms was essential: “We believe that no methods of regulation ever have been or can be devised to remove the menace inherent in private monopoly and overweening commercial power” (Urofsky, p.346).

Maybe I am reading too much into all this, but to me Simon Johnson sounds like a man who has given up on “Hope and Change”.

The American Idol president is running his own reality show and we are picking up the tab. Mr. Obama seems to think that he and his wife are the most fascinating part of the American narrative. Last Friday, the IOC clarified the butter for the Obamas. In the past months, we have published many articles reporting on Kool Aid drinkers who have lifted their heads from the pink trough, dazed and confused, wondering where the “Change” is. The list is long: Peggy Noonan, Frank Rich, Susan Estrich, Andrew Sullivan, Camille Paglia, Robert Reich. Feel free to add your own. Today I add three more to that growing list.

First WaPo’s Richard Cohen complains Obama Doesn’t Seem Ready to Lead:

Barack Obama’s trip to Copenhagen to pitch Chicago for the Olympics would have been a dumb move whatever the outcome. But as it turned out (an airy dismissal would not be an unfair description), it poses some questions about his presidency that are way more important than the proper venue for synchronized swimming. The first, and to my mind most important, is whether Obama knows who he is.

This business of self-knowledge is no minor issue. It bears greatly on the single most crucial issue facing this young and untested president: Afghanistan. Already, we have his choice for Afghanistan commander, Gen. Stanley A. McChrystal, taking the measure of his commander in chief and publicly telling him what to do. This MacArthuresque star turn called for a Trumanesque response, but Obama offered nothing of the kind. Instead, he used McChrystal as a prop, adding a bit of four-star gravitas to that silly trip to Copenhagen by having the general meet with him there.

Mr. Cohen is blaming Gen. McChrystal for someone else leaking his report to the President. The more important point is, as Gen. Wes Clark or anyone else who’s actually been in this position will tell you (and as he did say in an interview this weekend), you’d better listen to your commanders on the ground. Cohen is right that the 25 minute meeting with McChrystal on Friday was merely a photo op. He’s still deliberating. How many more months of ‘deliberating” are required while our soldiers are dying in Afghanistan?

This is the president we now have: He inspires lots of affection but not a lot of awe. It is the latter, though, that matters most in international affairs, where the greatest and most gut-wrenching tests await Obama. If he remains consistent to his own rhetoric of just last August, he will send more troops to Afghanistan and more of them will die. “This is not a war of choice,” he said. “This is a war of necessity. Those who attacked America on 9/11 are plotting to do so again. If left unchecked, the Taliban insurgency will mean an even larger safe haven from which al-Qaeda would plot to kill more Americans.”

President Obama has the disastrous example of Iraq where Bush’s Generals told him from the outset that an overwhelming force was needed. They did not get it. You saw the result. Obama himself admitted that the belated 2007 surge was wildly successful. How much more evidence does he need? Define the mission, and either send the forces in to get the job done or pull all our men and women out of there. Choose. Lead. That’s the job description. Date night I don’t care about. Dog walking I don’t care about.

Cohen concludes:

But the ultimate in realism is for the president to gauge himself and who he is: Does he have the stomach and commitment for what is likely to be an unpopular war? Will he send additional troops, but hedge by not sending enough — so that the dying will be in vain? What does he believe, and will he ask Americans to die for it? Only he knows the answers to these questions. But based on his zigzagging so far and the suggestion from the Copenhagen trip that the somber seriousness of the presidency has yet to sink in, we have reason to wonder.

Has the seriousness of the presidency sunk in? Now there’s a question.

You may be surprised to note that NY Times columnist Bob Herbert is wondering the same thing. A huge cheerleader for Obama, Herbert cried racism and even saw phallic symbols in the leaning tower of Pisa in a misguided attempt to defend his chosen hero last year. Now he wonders Does Obama Get It? Well, Mr. Herbert, don’t feel bad. This question has been keeping me up nights, too. He states:

The big question on the domestic front right now is whether President Obama understands the gravity of the employment crisis facing the country. Does he get it? The signals coming out of the White House have not been encouraging.

Clearly Mr. Herbert, if you have to ask, then Obama does not understand the gravity of the situation. Where is his good judgment? How can one not understand 9.8 unemployment – in reality it is a much higher number when one includes Americans out of work for so long they have fallen off the rolls.

The Beltway crowd and the Einsteins of high finance who never saw this economic collapse coming are now telling us with their usual breezy arrogance that the Great Recession is probably over. Their focus, of course, is on data, abstractions like the gross domestic product, not the continued suffering of living, breathing human beings struggling with the nightmare of joblessness.

Even Mr. Obama, in an interview with The Times, gave short shrift to the idea of an additional economic stimulus package, telling John Harwood a few weeks ago that the economy had likely turned a corner. “As you know,” the president said, “jobs tend to be a lagging indicator; they come last.”

The view of most American families is somewhat less blasé. …

Nearly one in four American families has suffered a job loss over the past year, according to a survey released by the Economic Policy Institute. Nearly 1 in 10 Americans is officially unemployed, and the real-world jobless rate is worse.

It is a nightmare. No one is blasé when they are worried how they are going to feed their families. What about the porkulus package? Is this administration waiting to release most of the funds in 2010 to help them at the polls? If that is the case, shame on them.

Why should Obama understand when he isn’t spending his own money? Half million dollar pizza parties, an obscene amount spent on the inauguration and several million on this reckless Copenhagen junket show a frightening disconnect between Obama’s priorities and his fiduciary responsibility to the American people. Herbert continues:

The Obama administration seems hamstrung by the unemployment crisis. No big ideas have emerged. No dramatically creative initiatives. While devoting enormous amounts of energy to health care, and trying now to decide what to do about Afghanistan, the president has not even conveyed the sense of urgency that the crisis in employment warrants.

If that does not change, these staggering levels of joblessness have the potential to cripple not just the well-being of millions of American families, but any real prospects for sustained economic recovery and the political prospects of the president as well. An unemployed electorate is an unhappy electorate.

Mr. Herbert, they are already crippled, but instead of addressing the urgency of the economy and Afghanistan head on, we get what George Will calls The Obamas’ Narcissism on Display. Speaking of Mr. and Mrs. Obama’s speeches before the IOC last week,

…Their separate speeches to the International Olympic Committee were so dreadful, and in such a characteristic way, that they might be symptomatic of something that has serious implications for American governance.

Both Obamas gave heartfelt speeches about … themselves. Although the working of the committee’s mind is murky, it could reasonably have rejected Chicago’s bid for the 2016 games on aesthetic grounds — unless narcissism has suddenly become an Olympic sport.

George Will suggested that since the Obamas used so many “I” and “me” references in their speeches, Obama’s genius speechwriters (Favreau et al) should have substituted the words I and me with “sauerkraut” to underscore the ‘antic nature of their excessive appearances.’ Someone needs to tell the Obamas that what is compelling about America is all Americans – all colors of the rainbow, all states, all social strata – together. All of us. Not just the two of them. And all of us are hurting out here. Our soldiers are hurting, too.

Will also points to Obama’s excessive use of cliché:

“At this defining moment,” a moment “when the fate of each nation is inextricably linked to the fate of all nations” in “this ever-shrinking world,” he aspires to “forge new partnerships with the nations and the peoples of the world.”
…
Does our Cicero even glance at his speeches before reading them in public?

All this is indicative of a man not connected to his words or not caring enough about either his audience or the subject at hand to come up with anything better than patented brand phrases that some focus group told him “resonate” with the public.

Our soldiers and our economy need a coherent plan. Now. He has had ample time to figure this out, as has Congress. Too much energy is focused on infighting for a health care plan that is such an incoherent monstrosity that they should trash it and start over. This is not even supposed to take effect until 2013, after the next election. Hmmm I wonder why. All things considered, that leaves health care the least urgent issue of the three.

On Afghanistan and the economy, pressing matters where lives, jobs and homes are on the line – where is the president? Will concludes:

Unhappy will be a president whose defining adjective is “vain.”

In keeping with the vanity of this man’s administration, we also see that nothing President Obama does is his own fault. This is the job he wanted. And a majority of the electorate voted him in to do it. What is he waiting for? There is no one else to blame if he hems and haws so long that Afghanistan is lost. There is no one else to blame if he insists on focusing on parts of an agenda that are not helping put the American people back to work. This is his presidency now. So I’ll ask again.

Mr. President, why did you want this job?

Since Neil Barofsky, Special Inspector General for the (TARP) Troubled Asset Relief Program and Elizabeth Warren, Chair of the Congressional Oversight Panel of the (TARP) Troubled Asset Relief Program were guest witnesses, it seemed a good time to get some answers to the $700 billion dollar questions of how well is TARP working and how stable has our economy become.

And, well, you might want to hold off on the champagne.

From SIG Neil Barofsky:

“I think we may be in a far more dangerous place today than we were a year ago,” he said.

As Ms. Warren points out in her testimony:

EESA [Emergency Economic Stabilization Act] listed five specific objectives for TARP: to restore financial stability, protect home values and family savings, promote jobs and economic growth, maximize returns to taxpayers, and provide public accountability.

——

Since EESA was enacted one year ago, the apprehension that pervaded this country has turned into something else: frustration and anger. Taxpayers have committed over $531 billion through TARP, and although there is no doubt that the financial system has begun to stabilize, families are still feeling the pain of rising unemployment, rampant foreclosures, higher bank fees, and limited access to credit.

Today’s fragile stability has come at an enormous cost to the American people. Taxpayers have a right to expect full clarity, full transparency, and full accountability in Treasury’s use of their money. They also have a right to know what has fundamentally changed to prevent this crisis from ever happening again….

From Mr. Barofsky testimony:
On Maximizing Returns to Taxpayers

The progress on meeting the goal of “maximiz[ing] overall returns to the taxpayer” is unclear. While several TARP recipients have repaid funds for what has widely been reported as a 17% profit, it is extremely unlikely that the taxpayer will see a full return on its TARP investment. For example, certain TARP programs, such as the mortgage modification program which is scheduled to use $50 billion of TARP funds, will yield no direct return, and for others, including the extraordinary assistance programs to AIG and the auto companies, full recovery is far from certain.

Similarly, Treasury’s original stated goal of increasing lending has not yet occurred, although, as SIGTARP’s recently issued audit on TARP recipients’ use of funds indicates, it is likely that lending from TARP recipients would have decreased far more in the absence of TARP funding.

On Protecting Home Values and Family Savings;
On Promoting Jobs and Economic Growth

…the goals of “preserving homeownership,” “promot[ing] jobs and economic growth” have not yet been met, and the ultimate success of meeting these policy goals will depend on programs that are just now reaching the implementation stage, such as the TARP’s mortgage modification program and the public-private investment funds. In the meantime, the risk of foreclosure continues to affect too many Americans; unemployment continues its rise to levels that Treasury has characterized as “unacceptable”; the so-called “toxic” assets that helped cause this crisis for the most part remain right where they were last fall – on the banks’ balance sheets; and it is becoming more and more clear that the commercial real estate market might be the next proverbial shoe to drop, threatening to increase the pressure on banks and small business alike yet again.

On Providing Public Accountability

“Treasury’s default position should always be to require more disclosure rather than less and to provide the investors in TARP — the American taxpayers — as much information about what is being done with their money as possible. …TARP largely remains a program in which taxpayers are not being told what most of the TARP recipients are doing with their money and will not be told the full details of how their money is being invested.”

More from Ms. Warren:
On Restoring Financial Stability

“The toxic assets remain on the books of the banks. The commercial real estate mortgages are a coming crisis. Small banks are continuing to fail. We were talking a year ago about too big to fail. We are now facing an industry that’s more concentrated than it was a year ago and too big to fail is up on us now in a much larger sense.”

“Until we get down to dirt, to something that’s solid, that we can put our feet on, our financial institutions are standing in a secure place, we can’t rebuild and know that we are safely past this crisis”

“The question about how we’re going to get these toxic assets out of here at a time when the real estate mortgage market is still in trouble and the commercial real estate mortgage market may be getting into more and more trouble – I’m not hearing the plan.”

Then again, the way our government has been working of late, maybe it is a good thing if they don’t have a plan for this.

And I have another number for you: 400. Yes, Saturday marks an inauspicious milestone. 400 is the number of Service Members who have been discharged under DADT during Obama’s Administration. 400 men and women whose lives were changed simply because of whom they love. 400 men and women who were willing to serve their country, to put themselves in harm’s way for us, for the U.S.A, and they have now been fired.

And here’s another number for you: $56,400. That is the average, approximate cost to train a service member for their first duty station by one estimate. $56,400 each for enlisted personnel, not officers, including when they first visit a Recruiter (these are 2006 figures, so it might be more now).

The average cost to train an officer? That number is: 120,772. If that officer happens to be a fighter pilot, you can go ahead and round that number up to: $1,450,000. Remember, these are just averages. The cost to train Lt. Col. Victor Fehrenbach was $25,000,000. Fehrenbach, a decorated war hero, was fired from the Air Force under DADT.

And one last number for you: 9/11. Many people in this country were moved to do some kind of service to and for their country as a result of the attacks on 9/11, GLBT people included. Obama has been pushing this huge call to Service, including on 9/11/09. Secretary Clinton gave a speech on the Commemoration of the First Annual National Day of Service And Remembrance on 9/11. Presumably, the ability to serve one’s country should be open to ALL of its citizens.

Yet today, that ability is not. As of today, 400 Americans have been told their willingness to serve their country, to put themselves in harm’s way on her behalf, is neither desired nor accepted. 400 Americans have been told that the National Day of Service does not apply to them. 400.

How about those numbers?

What a difference a month makes! When my last controversial column posted on Salon in the second week of August, most Democrats seemed frozen in suspended animation, not daring to criticize the Obama administration’s bungling of healthcare reform lest it give aid and comfort to the GOP. Well, that ice dam sure broke with a roar. Dissident Democrats found their voices, and by late August even the liberal lemmings of the mainstream media, from CBS to CNN, had drastically altered their tone of reportage, from priggish disdain of the town hall insurgency to frank admission of serious problems in the healthcare bills as well as of Obama’s declining national support.

…As an Obama supporter and contributor, I am outraged at the slowness with which the standing army of Democratic consultants and commentators publicly expressed discontent with the administration’s strategic missteps this year. … from week one after the inauguration, when Obama went flat as a rug in letting Congress pass that obscenely bloated stimulus package. Had more Democrats protested, the administration would have felt less arrogantly emboldened to jam through a cap-and-trade bill whose costs have made it virtually impossible for an alarmed public to accept the gargantuan expenses of national healthcare reform. (Who is naive enough to believe that Obama’s plan would be deficit-neutral? Or that major cuts could be achieved without drastic rationing?)

Due respect to Ms. Paglia, she might ask herself why she bought into any of this before the election. We did not. Their disastrous spending plans: using the cover of the economic crisis to push through pet projects under the phony label of stimulus, offering bailouts of Wall St., not Main Street. People are without jobs, losing their homes and they are playing games with our money? Most readers at NQ sensed where Obama’s allegiance would be 18 months ago. I find precious little satisfaction in yet another prominent Obama supporter expressing disgust. The stakes are too high and we are now stuck.

I am grateful, however, that a respected voice is calling the arrogant Dem leadership out on its despicable characterizations of American citizens, who are rightfully outraged at this mess:

By foolishly trying to reduce all objections to healthcare reform to the malevolence of obstructionist Republicans, Democrats have managed to destroy the national coalition that elected Obama and that is unlikely to be repaired. If Obama fails to win reelection, let the blame be first laid at the door of Speaker of the House Nancy Pelosi, who at a pivotal point threw gasoline on the flames by comparing angry American citizens to Nazis.

Pelosi needs to lose her seat for that one. Disgraceful.

Paglia seems to think Obama might turn it around with a great speech, but wonders if too much damage has already been done. She has written the Dems off is 2012, unless Republicans nominate someone dead from the neck up – entirely possible. Paglia says she “has been calling for heads to roll at the White House from the get-go”:

…Thankfully, they do seem to be falling faster — as witness the middle-of-the-night bum’s rush given to “green jobs” czar Van Jones last week — but there’s a long way to go. An example of the provincial amateurism of current White House operations was the way the president’s innocuous back-to-school pep talk got sandbagged by imbecilic support materials soliciting students to write fantasy letters to “help” the president (a coercive directive quickly withdrawn under pressure). Even worse, the entire project was stupidly scheduled to conflict with the busy opening days of class this week, when harried teachers already have their hands full. Comically, some major school districts, including New York City, were not even open yet. And this is the gang who wants to revamp national healthcare?

Why did it take so long for Democrats to realize that this year’s tea party and town hall uprisings were a genuine barometer of widespread public discontent and not simply a staged scenario by kooks and conspirators?

Ms. Paglia still betrays a trusting naiveté here, thinking that Democrats were too insulated to know the protests were genuine. Not so. The Obama Administration simply continued the same techniques of the Obama campaign – demonize any opponents in order to silence them. She acknowledges that network and cable TV are not the central forums for debate any longer. They just play out more junk politics, backing their respective brands. Ms. Paglia notes…

…the truly transformative political energy is coming from talk radio and the Web — both of which Democrat-sponsored proposals have threatened to stifle, in defiance of freedom of speech guarantees in the Bill of Rights. …[O]n talk radio, which I have resumed monitoring around the clock because of the healthcare fiasco … I heard the passionate voices of callers coming directly from the town hall meetings. Hence I was alerted to the depth and intensity of national sentiment long before others who were simply watching staged, manipulated TV shows.

While she concludes her column giving the Republicans some well deserved slaps as well (and I encourage you to read the rest of her piece for yourself), most of it is devoted to pointing out Democratic Party arrogance. This is what the Clinton wing of the party, cruelly cast aside along with Hillary after the primaries, have noted as well. Ms. Paglia asks questions many here would find familiar:

Why has the Democratic Party become so arrogantly detached from ordinary Americans? Though they claim to speak for the poor and dispossessed, Democrats have increasingly become the party of an upper-middle-class professional elite, top-heavy with journalists, academics and lawyers (one reason for the hypocritical absence of tort reform in the healthcare bills). Weirdly, given their worship of highly individualistic, secularized self-actualization, such professionals are as a whole amazingly credulous these days about big-government solutions to every social problem. They see no danger in expanding government authority and intrusive, wasteful bureaucracy. This is, I submit, a stunning turn away from the anti-authority and anti-establishment principles of authentic 1960s leftism.

But affluent middle-class Democrats now seem to be complacently servile toward authority and automatically believe everything party leaders tell them. …Independent thought and logical analysis of argument are no longer taught. Elite education in the U.S. has become a frenetic assembly line of competitive college application to schools where ideological brainwashing is so pandemic that it’s invisible.

If any of Obama’s supporters had been capable of critical thought last year, they would have seen through his ridiculous promises and contradictory policy statements and had the sense to turn away. As this article is a prelude to President Obama’s big speech on healthcare this evening, Ms. Paglia’s next comments reveal the shortcomings of a compliant media and congress…

Throughout this fractious summer, I was dismayed not just at the self-defeating silence of Democrats at the gaping holes or evasions in the healthcare bills but also at the fogginess or insipidity of articles and Op-Eds about the controversy emanating from liberal mainstream media and Web sources. By a proportion of something like 10-to-1, negative articles by conservatives were vastly more detailed, specific and practical about the proposals than were supportive articles by Democrats, which often made gestures rather than arguments and brimmed with emotion and sneers. There was a glaring inability in most Democratic commentary to think ahead and forecast what would or could be the actual snarled consequences — in terms of delays, denial of services, errors, miscommunications and gross invasions of privacy — of a massive single-payer overhaul of the healthcare system in a nation as large and populous as ours. It was as if Democrats live in a utopian dream world, divorced from the daily demands and realities of organization and management.

Yes, the party in power does seem oddly divorced from reality as if wishing at the foot of President Obama’s HOPE poster would make their rosy predictions about the effects of their reckless leglislation come true. This past week, other columnists have pointed out that dissent and disagreement are a value to any President. Blank stares and idol worship will not make this Administration better. For the sake of our country, it would be refreshing change indeed if someone in the White House showed actual concern for the needs of Americans and went back to doing the people’s business. I think that may only happen if left, right and center keep speaking out and keep the pressure on. Only fear of the voters might have any effect whatsoever. And I’m not even sure of that.

Ms. Paglia, for one, worries it’s too late for Obama to turn it around…

Additionally, analysts also discount the fact that the FDIC fund to cover depositors of failed institutions is close to zero. This fund can be replenished by the FDIC imposing an assessment on remaining banks or, if need be, tapping an emergency line of credit at the U.S. Treasury.

What will be the real impact of bank failures? In my opinion, American consumer confidence and small business owners will bear the brunt of the pain from the bank failures. Why?

>> The reality of further job losses at these banks and those they support within local economies.

>> The psychological impact of seeing small and community banks fail.

>> The lack of credit availability to consumers and small business owners in communities across America.

What are the plans to stem the tide and plug the holes created by bank failures?

1. Have larger banks take over these institutions. What are the risks in this transition? Many of these banks are already filled with underperforming and delinquent loans. The acquiring banks typically want the cheap deposit base of the failed banks and little more.

2. Private equity buyers will have the opportunity to purchase failed banks. What are the risks in this process? The private equity buyers will have to maintain higher capital ratios. Another risk is that the private equity buyers may utilize the cheap deposit base as a pool of liquidity and capital for higher return undertakings than traditional lending in the local communities.

In my opinion, the gap dividing Wall Street and Main Street is only going to grow wider in the midst of these bank failures. The party on Wall Street has little appreciation for this reality on Main Street.

John Kanas, the former chairman and CEO of North Fork Bank, and his private equity firm purchased BankUnited in Florida this past May. Kanas addresses these topics in an interview on CNBC.

LD

If you have bought in to the false hope that the economy has hit bottom and has turned a corner then think again. I had a chat this week with a banker friend who works for Wachovia. Wachovia, in case you forgot, was taken over by Wells Fargo. My friend told me that a spate of firings are coming up in the next two weeks. Several mid-level and senior bankers at Wachovia are going to lose their jobs. Their current jobs are basically duplicates of positions at Wells Fargo and, as the saying goes, “to the victor belongs the spoils.”

This is not an isolated instance. Remember the Colonial Bank take over?

Here’s what the Financial Times reported today on that bank collapse:

A consolation of failure should be lessons learnt from the experience. So it is troubling that bank collapses in this cycle are proving more expensive than in the past. Big bank busts, as a rule, cost relatively less than small ones. Estimated losses, say, from last week’s failure of Colonial, the Alabama-based lender with $25bn in assets, were unusually low at 11 per cent of assets. Its sale also included the first “clawback”, allowing the Federal Deposit Insurance Corporation to share in a buyer’s potential gains.

Yet analysis from Ely & Company, industry consultants, shows that across all failures in the past two years, the FDIC estimated its losses at a quarter of failed banks’ assets. That is much higher than between 1980 and 1995, when failures cost an average 11 per cent.

Regulators are at fault. The fact that banks are in such a sorry state by the time they fail suggests intervention should be occurring earlier – especially where soaring brokered deposits indicated rapid growth in low-quality assets. Meanwhile, drawn-out sales – such as that of Guaranty Financial, with $16bn assets – risk hurting the underlying business. Fears that the FDIC’s fund, which protects depositors, may run out are unfounded. True, its balance fell to $13bn at the end of March, or just 0.27 per cent of insured deposits – well below the statutory minimum. But that understates the funds available to absorb losses. The FDIC also had $28.5bn set aside for future bank failures. More important, it has a Treasury credit facility, increased to $500bn during this crisis. The deposit insurance fund is not a pot of cash that can be exhausted, but a way of keeping track of the premiums paid by banks versus the costs of failures.

Then there is the commercial real estate market. That shoe still has not dropped and when it does? Bye-bye more jobs. The USA Today offered this sobering analysis in Tuesday’s paper:

The commercial real estate downturn is deepening, threatening to slow the economic recovery.
To try to contain the damage, the Federal Reserve said Monday that it will extend into 2010 a program to help investors buy commercial property loans. But some say that will have limited impact.

“We seem to be nearing the end of the recession but the situation in the commercial real estate market is getting worse,” says Patrick Newport, an analyst at IHS Global Insight.

About $83 billion of office, retail, industrial and apartment properties have fallen into default, foreclosure or bankruptcy this year, says research firm Real Capital Analytics. The default rate for commercial mortgages jumped from 1.62% to 2.25% in the first quarter and should hit 4.1% by the end of the year, says Sam Chandan, president of Real Estate Econometrics. The carnage will likely cut half a percentage point off economic growth this year and in 2010, Newport says.

Fueled by easy credit, developers built too many shopping malls and office buildings from 2004 to 2007. As the economy soured, vacancy rates rose. Property values are down about 40% from their 2007 peak, Deutsch Bank says, and loans for commercial properties have come to a virtual standstill.

Hundreds of smaller regional banks, which are heavily exposed to commercial mortgages, could go bankrupt the next two years, Newport says.

If you think this means “good” news then you know nothing about economics. Sad thing is that the so-called “stimulus” package does nothing for this sector. Until this implosion ends the economy will continue a downward death spiral.

Even some of Obama’s financial gurus are starting to sweat the implications of Obama-nomics. Did you catch Warren Buffet’s piece in the NY Times:

IN nature, every action has consequences, a phenomenon called the butterfly effect. These consequences, moreover, are not necessarily proportional. For example, doubling the carbon dioxide we belch into the atmosphere may far more than double the subsequent problems for society. Realizing this, the world properly worries about greenhouse emissions.

The butterfly effect reaches into the financial world as well. Here, the United States is spewing a potentially damaging substance into our economy — greenback emissions.

To be sure, we’ve been doing this for a reason I resoundingly applaud. Last fall, our financial system stood on the brink of a collapse that threatened a depression. The crisis required our government to display wisdom, courage and decisiveness. Fortunately, the Federal Reserve and key economic officials in both the Bush and Obama administrations responded more than ably to the need.

They made mistakes, of course. How could it have been otherwise when supposedly indestructible pillars of our economic structure were tumbling all around them? A meltdown, though, was avoided, with a gusher of federal money playing an essential role in the rescue.

The United States economy is now out of the emergency room and appears to be on a slow path to recovery. But enormous dosages of monetary medicine continue to be administered and, before long, we will need to deal with their side effects. For now, most of those effects are invisible and could indeed remain latent for a long time. Still, their threat may be as ominous as that posed by the financial crisis itself.

To understand this threat, we need to look at where we stand historically. If we leave aside the war-impacted years of 1942 to 1946, the largest annual deficit the United States has incurred since 1920 was 6 percent of gross domestic product. This fiscal year, though, the deficit will rise to about 13 percent of G.D.P., more than twice the non-wartime record. In dollars, that equates to a staggering $1.8 trillion. Fiscally, we are in uncharted territory.

Because of this gigantic deficit, our country’s “net debt” (that is, the amount held publicly) is mushrooming. During this fiscal year, it will increase more than one percentage point per month, climbing to about 56 percent of G.D.P. from 41 percent. Admittedly, other countries, like Japan and Italy, have far higher ratios and no one can know the precise level of net debt to G.D.P. at which the United States will lose its reputation for financial integrity. But a few more years like this one and we will find out.

An increase in federal debt can be financed in three ways: borrowing from foreigners, borrowing from our own citizens or, through a roundabout process, printing money. Let’s look at the prospects for each individually — and in combination.

Warren can’t bring himself to admit that Obama has screwed the pooch but here’s the reality. If Obama-care goes forward and the so-called stimulus bill is not recalled the mad spending spree is going to accelerate and our nation’s plunge into uncharted debt waters will accelerate. Warren senses the danger but is still having trouble blowing the whistle on the Messiah’s gross incompetence when it comes to economic policy.

UPDATE:
Here’s the latest from Saskia Scholtes at the Financial Times:

More than one in eight US mortgage borrowers were behind on payments or facing foreclosure at the end of the second quarter as rising unemployment aggravated the housing crisis, the Mortgage Bankers Association said yesterday.

The percentage of loans in foreclosure or with at least one payment past due rose to 13.16 per cent, the highest since the MBA began records in 1972 and a jump of more than a percentage point since the first quarter.

Jay Brinkmann, chief economist at the MBA, said signs were growing that mortgage performance was being affected more by unemployment than by risky underwriting. It indicates a new stage in the foreclosure crisis that may not be easily addressed by government loan modification programmes.

“There has been a shift in the problem from one driven by the types of loans to one driven by macro problems in the economy and drops in house prices,” Mr Brinkmann said.

“It’s unlikely we will see meaningful reductions in the foreclosure and delinquency rates until the employment situation improves.”

He expected the peak in foreclosures to trail behind the jobless peak by about six months.

Saskia wrote on Thursday that the credit crunch for consumers was getting worse as well:

Banks reduced access to revolving loans such as credit cards and home equity lines of credit for about one in five US borrowers in the six months to April, according to a new study from Fico, the credit scoring group.

The study shows that as banks cut credit lines for a larger share of US consumers than they had in the previous six months, they also became more aggressive in their cuts. The average decrease to a consumer’s credit line was $5,100, or 15 per cent of average total revolving credit, more than double the $2,200 average reduction in the six months to October 2008.

Big lenders such as Bank of America, Citigroup and American Express have reacted to the economic crisis and rising defaults on consumer loans by raising interest rates, closing inactive accounts and paring credit lines. By reducing their potential exposure to consumer credit, banks are hoping to free up regulatory capital.

Consumer groups and some analysts have expressed concerns that wholesale reductions in credit lines could exacerbate the consumer credit crisis by pushing struggling borrowers closer to the brink.

I don’t want to see the economy continue to go down. It has a terrible human cost. People lose jobs, homes and ultimately families. This is real. The Washington Post had this awful story today:

Wallis and Julie Fay said life seemed to be closing in on them. They lost the Prince William County home, where they lived for more than 15 years, to foreclosure. Eviction was looming. And on Tuesday, Wallis Fay learned that the job transfer he was counting on had fallen through.

“He said: ‘I don’t know what to do. I’m at my last straw,’ ” said Bernice Fortune, a neighbor who answered a call from a shaken Wallis Fay just before 10 p.m. Tuesday. “I said: ‘Hold on to your faith. Hand it over to God.’ ”

Fortune, who was at a prayer group at a nearby IHOP, promised to call when she got home. There was no answer at the Fays a half-hour later. Assuming they had gone to sleep, Fortune left a prayer on their answering machine.

But by then, Fortune said, the couple might have been dead.

Ben Bernake’s happy talk is intended to persuade investors and bankers to hang in there. Hope for the best. But deluding ourselves that we’ve turned the corner when the real fundamentals continue to stink is not helpful. Trapped people do desperate, horrible things.

Citigroup Inc. is instituting annual fees on some current credit-card accounts in an attempt to offset strict new legislation that could dent its profits.

The move comes on the heels of several warnings from the banking industry, which has said that issuers would be forced to rewrite the playbook on plastic because new credit-card laws would take a bite out of their income.

Rates of between 20% and 30% aren’t sufficient for income purposes? The fact is, current card holders are paying for the undisciplined lending practices of the bank over the last 5 years.

These laws include new limits on interest-rate increases on existing balances and greater disclosures.

The legislation was written to prevent abusive practices on the part of the banks. The fact that it allows for the implementation of practices such as these paints the legislation as the equivalent of a ’show trial.’

Typically, annual fees are associated only with cards that offer generous rewards programs. In recent years, few issuers have risked losing market share by charging annual fees across the board.

Now, Citigroup’s attempt to charge annual fees—perhaps the first time a large card lender has used such fees in response to the legislation—will be watched closely by competitors.

Card lenders are seeking ways not only to offset the effect of the legislation, but also to cope with growing losses stemming from souring credit-card loans.

Card issuers have been raising interest rates and fees, tweaking rewards programs, reducing credit lines and closing accounts.

“We have adjusted pricing and card terms for some customers as part of our regular account reviews,” said Samuel Wang, a Citigroup spokesman. “These changes also reflect the dramatically higher cost of doing business in our industry as we work to preserve the broad availability of credit. As part of this change in terms, a small number of Citi customers may be notified of an annual fee.”

Higher cost of doing business? What? Borrowing from the Fed at between 0-.25% is too high? These types of statements take a special type of gall. Wow!

The fee increase was reported earlier by blogs such as Bargaineering.com, and American Banker.

In one instance, a Citi cardholder was informed, in a mailer, of a $30 annual fee. This fee may be waived if at least $2,400 in spending is racked up on the card in a year.

Citigroup is experimenting with a range of annual fees, some in excess of $30.

Cardholders notified of these annual fees have two months to opt out, paying off their balances under current rates and terms over the rest of their contract.

Peter Garuccio, a spokesman at the American Bankers Association, an industry trade group, said, “Annual fees are one way that card issuers can reconfigure their card portfolios and reprice their products” following the credit-card legislation.

The new legislation, the bulk of which will be implemented in February 2010, aims to limit fluctuating interest rates and fees, and arm consumers with more information about their debts.

Given that the legislation goes into effect in February 2010, the banks are clearly trying to get all of these income generating, beat-the-consumer maneuvers in place well before then. Thanks Wall Street and Washington.

What a joke. Problem is, once again, the joke is on the American consumer.

LD

Related Sense on Cents Commentary:
    Uncle Sam Just Winked at Citi’s Credit Card Rate Increase (July 1, 2009)
    Banks Build Better Mousetrap (July 9, 2009)

As many recent townhall meetings have shown, the American people are dealing with a few issues of trust in regards to their government. So I thought it might be fun to take a look at two very different videos on Money and what it can do.

________

__________

In this video from a June forum on the banking industry, William Black discusses our current financial meltdown in which a single bank, IndyMac, lost more money than was lost during the entire Savings and Loan crisis. He examines the industry structures and political failures behind this economic disaster, including a pretty scathing analysis of the key players and current FOG’s, Friends of Goldman, in charge of our economic recovery. And he explains the massive fraud as well as the vast transfer of wealth from the poor and middle class that took place and continues as the federal government bails out the reckless, and quite possibly the criminal.

Warning, this video is 98 minutes long, but well worth the time.

William Black was litigation director of the Federal Home Loan Bank Board, deputy director of the FSLIC, SVP and General Counsel of the Federal Home Loan Bank of San Francisco, and Senior Deputy Chief Counsel, Office of Thrift Supervision. He was deputy director of the National Commission on Financial Institution Reform, Recovery and Enforcement.

He currently teaches White-Collar Crime, Public Finance, Antitrust, Law & Economics (all joint, multidisciplinary classes for economics and law students), and Latin American Development at University of Missouri-Kansas City School of Law.

In his book, The Best Way to Rob a Bank is to Own One (University of Texas Press 2005) Mr. Black presents a history of the savings-and-loan industry scandals of the early 1980s and lays out how dishonest CEOs, crony directors, and corrupt middlemen can systematically defeat market discipline and conceal deliberate fraud for a long time — enough to create massive damage.

Sound familiar?

The larger fear is that Obama might be just another corporatist, punking voters much as the Republicans do when they claim to be all for the common guy.

Congratulations, Mr. Rich. With all your education, it has taken you two years longer than most of the people on this site to arrive at this conclusion. Obama is a corporatist. Or, as noted on HillaryIs44, an opportunist. He doesn’t care about the little guy or gal. Further, by his use of signing statements, a disturbing echo of the Bush Administration, he is on the road to becoming a “Unitary Executive.” I wonder if Mr. Rich feels ‘punked’ over that as well.

Let’s take a look at some of Mr. Rich’s observations leading him down disillusionment alley:

… [T]here is real reason for longer-term worry in the form of a persistent, anecdotal drift toward disillusionment among some of the president’s supporters. And not merely those on the left. This concern was perhaps best articulated by an Obama voter, a real estate agent in Virginia, featured on the front page of The Washington Post last week. “Nothing’s changed for the common guy,” she said. “I feel like I’ve been punked.” She cited in particular the billions of dollars in bailouts given to banks that still “act like they’re broke.”

But this mood isn’t just about the banks, Public Enemy No. 1. What the Great Recession has crystallized is a larger syndrome that Obama tapped into during the campaign. It’s the sinking sensation that the American game is rigged — that, as the president typically put it a month after his inauguration, the system is in hock to “the interests of powerful lobbyists or the wealthiest few” who have “run Washington far too long.” He promised to smite them.

…What disturbs Americans of all ideological persuasions is the fear that almost everything, not just government, is fixed or manipulated by some powerful hidden hand, from commercial transactions as trivial as the sales of prime concert tickets to cultural forces as pervasive as the news media.

Come on, Mr. Rich, it’s not such a long walk to realize why Wall Street has been protected with endless bailouts. Mr. Obama got more money from Wall St. than any other candidate. Rich must give Obama credit that he is doing some of the “rigging.” Rich still tries to pretend that Obama just can’t fight ‘the man.’ loathe to acknowledge that Obama is ‘the man.’ Certainly, he was elected by ‘the man.’

Where Rich tries halfheartedly to assail Republicans for disruptive town hall meetings, he must admit Democrats have unclean hands as well:

As Democrats have pointed out, the angry hecklers disrupting town-hall meetings convened by members of Congress are not always ordinary citizens engaging in spontaneous grass-roots protests or even G.O.P. operatives, but proxies for corporate lobbyists. (snip)

But the Democratic members of Congress those hecklers assailed can hardly claim the moral high ground. Their ties to health care interests are merely more discreet and insidious. As Congressional Quarterly reported last week, industry groups contributed almost $1.8 million in the first six months of 2009 alone to the 18 House members of both parties supervising health care reform, Nancy Pelosi and Steny Hoyer among them.

Then there are the 52 conservative Blue Dog Democrats, who have balked at the public option for health insurance. Their cash intake from insurers and drug companies outpaces their Democratic peers by an average of 25 percent, according to The Post. And let’s not forget the Democratic Senate Campaign Committee, which has raked in nearly $500,000 from a single doctor-owned hospital in McAllen, Tex. — the very one that Obama has cited as a symbol of runaway medical costs ever since it was profiled in The New Yorker this spring.

Finally, Rich has a hallelujah moment when he points out that (D) or (R) after one’s name means less and less. It’s the character, stupid!

In this maze of powerful moneyed interests, it’s not clear who any American in either party should or could root for. The bipartisan nature of the beast can be encapsulated by the remarkable progress of Billy Tauzin, the former Louisiana congressman. Tauzin was a founding member of the Blue Dog Democrats in 1994. A year later, he bolted to the Republicans. Now he is chief of PhRMA, the biggest pharmaceutical trade group. In the 2008 campaign, Obama ran a television ad pillorying Tauzin for his role in preventing Medicare from negotiating for lower drug prices. Last week The Los Angeles Times reported — and The New York Times confirmed — that Tauzin, an active player in White House health care negotiations, had secured a behind-closed-doors flip-flop, enlisting the administration to push for continued protection of drug prices. Now we know why the president has ducked his campaign pledge to broadcast such negotiations on C-Span.

The making of legislative sausage is never pretty. The White House has to give to get. But the cynicism being whipped up among voters is justified. Unlike Hillary Clinton, whose chief presidential campaign strategist unapologetically did double duty as a high-powered corporate flack, Obama promised change we could actually believe in.

Rich cannot miss an opportunity to trash Hillary Clinton to the bargain. I was waiting for him to find some inane reason to drag her name into this, even though Obama has proven himself to be in bed with corporate interests ten times over. We’d be lucky to have her as President right now. No matter what, I can assure you he would not feel ‘punked.’

Still, Mr. Rich cannot hide from the truth although he does try to soft pedal it:

[Obama’s] first questionable post-victory step was to assemble an old boys’ club of Robert Rubin protégés and Goldman-Citi alumni as the White House economic team, including a Treasury secretary, Timothy Geithner, who failed in his watchdog role at the New York Fed as Wall Street’s latest bubble first inflated and then burst. The questions about Geithner’s role in adjudicating the subsequent bailouts aren’t going away, and neither is the angry public sense that the fix is still in. We just learned that nine of those bailed-out banks — which in total received $175 billion of taxpayers’ money, but as yet have repaid only $50 billion — are awarding a total of $32.6 billion in bonuses for 2009.

It’s in this context that Obama can’t afford a defeat on health care. A bill will pass in a Democrat-controlled Congress. What matters is what’s in it. The final result will be a CAT scan of those powerful Washington interests he campaigned against, revealing which have been removed from the body politic (or at least reduced) and which continue to metastasize. The Wall Street regulatory reform package Obama pushes through, or doesn’t, may render even more of a verdict on his success in changing the system he sought the White House to reform.

President Obama has shown no signs that he wants corporate control to stop metastasizing. The advisors and moneyed interests with whom he surrounds himself offer ample evidence of that, which even Mr. Rich now admits.

Despite this Administration’s expending significant resources on smoke and mirrors, the realities that Mr. Rich alludes to are getting more and more attention. Change We Can Believe In has now been substituted with The Fix Is In.

Some of us knew that a long time ago.

Yesterday I was appalled to watch the Speaker of the House comment on Press Secretary Robert Gibbs’ assertion that the anger at these town halls over health care reform is “manufactured”. The reporter asked, “Do you think there is legitimate grassroots opposition going on out there?”

Nancy Pelosi made the following statement:

“I think they’re Astroturf…you be the judge. They are carrying swastikas and symbols like that to a town meeting on health care.”

How dare she? I have heard of bullying tactics but this is beyond the pale. She is cherrypicking a couple of extreme protesters, if indeed they exist, in order to deride the whole as an angry mob. My husband and I were Democrats for thirty years and we have questions and concerns about this overhaul as well. Here’s a hot flash, Ms. Pelosi, my Dad was used as slave labor by people who wore swastikas so I don’t appreciate being grouped in with them.

Average citizens who daily watch our leadership trade places in the clown car have a reason to be worried. Until Ms. Pelosi and every other elitist in Congress, on both sides of the aisle, is willing to be subject to the exact same health care plan, and use it on their own mother, their children and themselves, they have no business sticking it to the rest of us. “Okay for thee but not for me” is not going to cut it.

There is no doubt that both sides “astroturf.” President Obama’s svengali, David Axelrod, is known for this behavior. There will always be groups left or right who will try to bank on to a legitimate protest for their own ends. Yet I have no doubt that the majority of these protesters are legitimate. We are talking about a 1,000 page monstrosity that no one can explain.

Pelosi is talking about overhauling one sixth of our nation’s economy when they have just laid an egg with the stimulus package and $60 billion dollar car bailouts.

Last year I watched the DNC insult anyone who did not buy the “cool” candidate they chose to put on their spaghetti jar. Their bullying tactics drove me away. As brilliant WaPo columnist Marie Cocco put it, their “deafening silence” on what looked to be the media lynching of Hillary Clinton didn’t help either.

People get mad when you question them for one of two reasons. Either they don’t have the answer and don’t want be made to look bad, or they know they are trying to pull a fast one and don’t want you to get a peek behind the curtain. Which is it? If the policy cannot be explained coherently and simply, that means they don’t have it working yet. Pardon my dust, but I thought the ultimate goal was to craft a policy that is better than what we have now.

I do not appreciate being bullied or blown off. People are angry and they are scared. Unemployment is in double digits in my state. My Congressman has been ensconced in his position for 25 years. He runs unopposed so I assure you, he isn’t bothering to have a town hall meeting on health care otherwise I’d be there shouting, too.

We pay their salaries. I do not wish to be told to shut up and sit down by the likes of Ms. Pelosi, who sees fit to negatively classify the opposition because she does not feel like being countermanded.

I can appreciate the President wishes to put forth an ambitious agenda, but this White House is tone deaf. We have moved beyond ego here. I am not concerned with someone racking up “accomplishments” just so they can say they did. We have severe problems in our economy and trying to do all this at once without first making sure you’ve got the right formula is like trying to paint a house in a hurricane.

Nancy Pelosi needs to apologize to the American people for the disrespect she has shown them. We are dealing with the worst economic crisis since the Great Depression and we have every right to have all our questions answered.

We can do without the name calling and disrespect from our elected representatives. That is not the way to earn anyone’s trust.