[U]nder the Geithner-Summers plan the loan is precisely designed to be a one-way bet, for the purpose of overpricing the toxic asset in order to bail out the bank’s shareholders at hidden cost to the taxpayers.

People must scream to the high heavens about the the toxic assets plan, not the AIG bonuses. The plan costs incalculably more, and unfairly rewards plutocrats while stealing hard-earned taxes paid by lower- and middle-classes and small businesses (the “underclass”) neglected by 0bama and Geithner.

Readers, this is where YOUR rubber meets the road. Now is the time when we prove if we can get it or, sigh, that we can only comprehend simpleton issues like the AIG bonuses. Populist anger only shakes things up IF it’s focused on what truly matters. You can be sure Obama/Geithner/Summers loved the distracting AIG bonus outrage whilst they launched this far more costly, undemocratic plan to reward their filthy rich pals while further pauperizing the rest of us.

Although the toxic assets plan can require some explanation, you can tell people that:

1) Taxpayers bear the burden and investors carry no risk except their own investment — that even though they get government money six-plus times their own investment, they bear NO responsibility if their venture fails;

2) The toxic assets plan rewards only plutocrats, not the U.S. government or its taxpayers (barring a miracle if toxic assets sell high); and

3) The same long unregulated, irrationally wild gamblers who created our crisis will benefit the most financially.

NOW, here’s another world-famous economics expert, JEFFREY SACHS, who is as correct as Paul Krugman. From today’s Financial Times, in “Obama’s bank plan could rob the taxpayer“:

The Geithner-Summers plan, officially called the public/private investment programme, is a thinly veiled attempt to transfer up to hundreds of billions of dollars of US taxpayer funds to the commercial banks, by buying toxic assets from the banks at far above their market value. It is dressed up as a market transaction but that is a fig-leaf, since the government will put in 90 per cent or more of the funds and the “price discovery” process is not genuine. It is no surprise that stock market capitalisation of the banks has risen about 50 per cent from the lows of two weeks ago. Taxpayers are the losers, even as they stand on the sidelines cheering the rise of the stock market. It is their money fuelling the rally, yet the banks are the beneficiaries.

The plan’s essence is to use government off-budget money to overpay for banks’ toxic assets, perhaps by a factor of two or more. This is done by creating a one-way bet for private-sector bidders for the toxic assets, then cynically calling it “private sector price discovery”. Consider a simple example: a toxic asset with face value of $1m pays off fully with probability of 20 per cent and pays off $200,000 with probability of 80 per cent. A risk-neutral investor would pay $360,000 for this asset.

Along comes the government and says it will finance 90 per cent of the investor’s purchase and, moreover, do so as a non-recourse loan. Non-recourse means the government’s loan is backed only by the collateral value of the toxic asset itself. If the pay-out is low, the loan is defaulted and the government ends up with the low pay-out rather than full repayment of the loan.

Now the investor is prepared to bid $714,000 (with rounding) for the same asset. The investor uses $71,000 of his/her own money and $643,000 of the government loan. If the asset pays off in full, the investor repays the loan, with a profit of $357,000. This happens 20 per cent of the time, so brings an expected profit of $71,000. The other 80 per cent of the time the investor defaults on the loan, and the government ends up with $200,000. The investor just breaks even by bidding $714,000, as we would expect in a competitive auction.

Of course, the investor has systematically overpaid by $354,000 (the bid price of $714,000 minus the market value of $360,000), reflecting the investor’s right to default on the loan in the event of a poor pay-out of the toxic asset. The overpayment equals the expected loss of the government loan. After all, 80 per cent of the time (in this example) the government loses $443,000 (the $643,000 loan minus the $200,000 repayment). The expected loss is 80 per cent of $443,000, equal to $354,000.

The idea of “private sector price discovery” is therefore flim-flam. There would be price discovery if the government’s loan had to be repaid whether or not the asset paid off in full. In that case, the investor would bid $360,000. But under the Geithner-Summers plan the loan is precisely designed to be a one-way bet, for the purpose of overpricing the toxic asset in order to bail out the bank’s shareholders at hidden cost to the taxpayers. …

You must read all of the Financial Times‘s “Obama’s bank plan could rob the taxpayer” by Jeffrey Sachs, director of The Earth Institute at Columbia University.

READ and MEMORIZE this closing paragraph of Sach’s op-ed:

Tim Geithner, Treasury secretary, and Lawrence Summers, director of the White House national economic council, suspect that they cannot go back to Congress to fund their plan and so are raiding the Federal Reserve, the Federal Deposit Insurance Corporation and the remaining Tarp funds, hoping that there will be little public understanding and little or no congressional scrutiny. This is an inappropriate institutional use of the Fed, the FDIC and the Tarp. Mr Geithner and Mr Summers should at the very least explain the true risks of large losses by the government under their plan. Then, a properly informed Congress and public could decide whether to adopt this plan or some better alternative.

We have THREE BRANCHES OF GOVERNMENT for a reason. Duh. One of the reasons is to keep the Executive Branch from calling the shots or from STEALING from taxpayers to REWARD their own friends.

I quibble with Mr. Sachs in that I do not wish to hear Mssrs. Geithner’s and Summers’ explanations that will obfuscate the essential problems with the plan (exposed by Mssrs. Krugman and Sachs) and just end up confusing Americans.

This is why our Forefathers protected the Fourth Estate, through which we occasionally get good, factually- and reality-based information we can use to evaluate our government and its leaders. We all lament the state of the media, but it is still, for now, publishing the likes of Krugman and Sachs who dare to tell us the truth.

Mr. Sachs, you and Paul Krugman have done an outstanding job of explaining this massive and undemocratic theft of the underclasses’ money. NOW it is up to US to all call our Representatives and Senators and demand 1) Hearings, and 2) Legislation to disallow Mssrs. Geithner and Summers from “picking our pockets” and bankrupting the United States of America.

::::::::::::::::::::::

WHO’S WHO:

1) Timothy F. Geithner is the Secretary of the Treasury;
2) Lawrence Summers is the director of the White House national economic council; and
3) Barack Obama is the president of the United States who is working on his bowling game except when he practices with his teleprompter.

“Me love you long, long time,” whisper the prostitutes Geithner, Summers, and Obama — telling us what we want to hear — as they slyly slip a drug in our drinks as they pleasure us with seductive talk and acts, but then empty our wallets while we’re passed out.

UPDATE: Run over to CNN and listen to Senate investment hearing. (C-Span3 is only carrying BO’s live townhall b.s.) BTW: Geithner is testifying before Franks’ House committee, but I can’t find live video. Can you? The WaPo is live-blogging Geithner’s testimony. Here’s Geithner’s prepared testimony.

LD

Don’t believe me. Take a look at this sarcastic woman talk about her New Party. And who “Split us into groups” again?

Here’s Donna telling us all about her “New Party”. Check out her snide face and hear her snide voice. Good luck with that Donna. Paul Begala also warns arrogant Donna that she is going to need all the people she is insulting to win this election. Nobody can deny it. We were told to go to hell. Well we don’t plan on doing that, instead we plan to vote.

So now there’s a recent study discussing the very warning given to arrogant ass Donna Brazile, the one who was going to”Change the Demographics of her “New” Democratic Party. Now she needs us. We’ll be back when people like Donna are no longer in charge, for starters. We are going to take back our party. Again. This is not the first time elite socialist fringe snobs tried to hijack our party. It seems the one thing our party learns from history is how to repeat their mistakes over and over and over again.

The majority of this party is not interested in busting their butts at work and then “sharing” their gains with people who don’t. The majority of this party is not interested in sexism and misogyny. The majority of this party does not belong to MoveOn. The majority of this party is not interested in allowing dependent children, off-the-cliff radicals, old hippies stilll on the bong, left over cranks from the failed AmeriKKKan Socialist, Communist, Marxist and Stalinist parties pick presidents.

And the majority of the Democratic Party will NOT be staying home on November 4, Donna. Get that idea out of your head.

A study surprise! reveals that Barack Obama needs us now. Of course, the Race Card has to be played with respect to the “White Vote”. Once more, my party wants to ignore the impact of PUMA at their own peril. So be it.

But it’s pretty safe to say that playing the Race Card every five minutes hasn’t exactly endeared white people to the Obama candidacy. Threatening people and calling them racist has backfired. Refusing to recognize that there are plenty of reasons why people will never vote for Barack Obama that have little to do with his color. Like sexest piggism and socialism, for starters. His rude, threatening and savage followers would be right up there on the list too. People don’t like to feel threatened. And people don’t like to have real issues ignored and twisted into a “Race Card” discussion. It not only ticks them off, but it’s been done and overdone so much by Obama and his surrogates, that the effect is now just a lot of Eye Rolling when it’s heard again. And again. And again.

There are plenty of reasons why many Democrats aren’t interested in Barack Obama. The report mentions the “White working class”. Those are those Bitter Hicks With Guns. Does anybody really expect them to forgive Barack Obama for his tasteless, snobby, downright ignorant remark about them at a fundraiser at Billionaire’s Row in San Francisco? Really?

Does anyone really expect all Hillary Clinton supporters to forgive Barack Obama for his attempt to destroy her and his coordinated attacks on her because she is a woman? Really? Really? How arrogant can you get?

Does anyone really expect all Jews in America to rush to the polls for Obama when every Jidadist in the Middle East has endorsed him? Really?

Does anyone really expect all of us well-educated Hillary supporters to forget being constantly referred to as “Downscale” and “Low Information”? Really?

Does anyone really expect women to give him their undying support after his disgusting behaviors toward women in this campaign? Really? Really?

Does anyone really expect everyone in America to forget Reverend Wright’s disgusting remarks? Does anyone really expect every Italian-American to vote for a guy whose 20-year pastor calls them Garlic-Noses? Really? Really?

Does anyone really expect that Seniors, who have lived long enough to recognize BS when they see it, are endeared en masse by Barack Obama, whose followers have consistently insulted them as “old people”?

Has anyone heard Barack Obama say one helpful thing to Native Americans?

Does anyone really expect all Latinos in Florida to worship a man who wants to talk to Castro with no pre-conditions? Really?

Does anyone really expect all gays and lesbians to be in love with Barack Obama when he refused to have his photo taken with the Mayor of San Francisco? Really?

If all of these people happen to be white, then the real thing the report reveals is that Barack Obama, his surrogates and his followers have insulted plenty of white people in this election season. In droves. The Democrats might like to continue the “Race Card” with their studies, but the truth is, their loss among Democrats consist of the people they insulted and decided they didn’t need any longer. And that’s not going to go away.

Here’s Politico’s take on the report:

In an election year where Barack Obama pledged to change the electorate, the centrist Democratic Leadership Council has weighed into the debate with a detailed report arguing it will be difficult for Obama to earn enough African American and youth support to compensate for enduring Democratic failures with white voters.

The report, titled “Who are the swing voters,” finds that the party must make historic inroads with working class whites in order to create a sustainable presidential majority.

It’s hardly news that the Democratic Party has struggled with white voters. Democrats have not won a majority of whites since 1964. Since 1980 though, Democrats have struggled to even remain competitive among whites, particularly men, and that has allowed Republicans to dominate the last quarter century of presidential politics.

The DLC set out in its analysis, an early draft of which was provided to Politico, to investigate the most influential swing blocs for Democrats. It concluded that slight but significant gains with working class whites— who constitute four in ten voters and were defined by the DLC as white high school graduates without a four-year college degree—is the best means to enlarge the Democratic coalition.

“There has been so much emphasis on new entrants in the electorate, and this report is historic and not predictive, but history tells us it would be an unusual circumstance if we witnessed a massive shift in the electorate,” the DLC analysis reads.

The report calculates that a 10 percent increase in black voter turnout amounts to a 1-percentage point uptick in the overall electorate, assuming all other groups remain constant.

That means that if the black voting rate rises from 60 percent to 67.2, the level of whites as measured by the Census Bureau, it amounts to 1.7 million votes— less than George W. Bush’s margin of victory in 2004.

“None of this means that the 2008 election could not be decided because of a radical shift in the electorate—by a dramatically increased turnout among critical constituencies or by a sharp shift in party identification, for example,” the report reads, “But historical voting patterns say that would be an unusual occurrence.”

The DLC study looked at the exit polls of the last five presidential elections as well as the 2006 midterm election.

The report, authored by Al From and Victoria Lynch, described black voters, self-identified liberals, and “strongly pro-choice” voters as the most influential legs of the Democratic coalition.

The DLC calculated that about four in ten voters in presidential elections are part of this Democratic base. John Kerry won 80 percent of these voters, meaning Democrats only amounted to about a third of the electorate. That number will likely be higher in 2008 as Democrats enjoy a newfound party identification advantage, though one that multiple polls show lessened in late summer.

The report strongly suggests, however, that it will be difficult for the Obama campaign to win if he does not improve Democrats’ appeal to the white working class.

The report also paints two blocs of working class whites:

“A typical male voter in that category will likely be between 30 and 59 years old, live in a suburb or small town in the South or Midwest, and be married with no children living at home. He’s likely to be a Republican or independent, moderate or conservative, not a member of a labor union, pro-life, and in favor smaller government. Finally, he’s most likely to be Protestant but not a weekly churchgoer.”

GREEN BAY, Wis. — Hoping to shore up support in his suddenly undependable backyard, Democratic presidential nominee Barack Obama flew here Monday to talk about how he’d handle economic crises as president.

Recent polls have shown that Wisconsin — once pretty solidly in Obama’s column — is now a statistical dead heat between Obama and Republican John McCain.

“You all know that you hold this election in your hands,” Sen. Russ Feingold, a Democrat who said he worked on ethics legislation with Obama, told a crowd of about 6,000 cheering Obama fans in the arena next to Lambeau Field. “We just barely won this state for Al Gore in 2000 and we just barely won this state for John Kerry in 2004.”

While it’s true that Obama has had an uptick in national polls over the last week, he is also on the defensive in more blue states. John McCain is locking down states like Ohio and Florida, and is now expanding the map into Pennsylvania, Wisconsin, Michigan, and Minnesota. Obama, it appears, has a small advantage in New Mexico and Colorado.

National Public Radio reports that the battleground states are becoming fewer:

The number of battleground states has shrunk — from 19 to 14 — as Alaska, Georgia, North Dakota and Montana returned to their Republican roots.

In August, Obama led in the 14 states by 3 points. Now McCain leads in those states by 2, and the underlying political landscape has shifted a bit as well.

If national polls swing back to McCain, and there’s no reason to think they won’t, then we should expect McCain to take a small lead in Minnesota, Wisconsin and, perhaps, Pennsylvania.

Kerry beat Bush in Wisconsin by a razor-thin .38% or 11,384 votes of nearly 3 million cast, while Ralph Nader received just over 16,000 votes. The Nader campaign recently announced that Nader will be on the ballot in Wisconsin this year, having collected 3,500 signatures.

Although not as close as Wisconsin, two other swing states are worth watching. In 2004, Kerry beat Bush by 98,319 votes in Minnesota of almost 3 million cast, and in Pennsylvania by 144,248 votes out of 6 million cast, a 2.5% margin.

What is causing Obama such problems in swing states? NPR says it’s The Clinton Factor:

something else is holding Obama back: He still hasn’t won over enough of Hillary Clinton’s voters.

“One thing that Obama tried to do in his convention was unite the Democratic vote behind him, and it still hasn’t completely happened,” Bolger said. “Our survey found that of the voters who said they voted for Hillary Clinton in the Democratic primary, 20 percent of them are still voting for John McCain.”

One Clinton voter is Louis Brandenburg, a heavy-equipment operator from Avella, Pa. He said he has made up his mind for November.

“Yeah, I guess so: Mr. Obama, I guess. I have no choice,” he said.

Even with little enthusiasm, Brandenburg — a Democrat — is sticking with his party. But plenty of his friends in southwestern Pennsylvania are very enthusiastic about Sarah Palin.

“There’s a lot of them who are going to vote for her and McCain because of the hunting issue,” he said. “I can’t understand what happened to our party; it just seems like the Republican Party is always the ones who back hunters and sportsmen, and all we get from the other one is flack about hunting and guns.”

————————————————————
Photographs of empty seats at the Obama rally in Green Bay, Wisconsin:

According to Jake Tapper of ABC News, “Sen. John McCain, R-Ariz., and Alaska Gov. Sarah Palin packed the house last week in Green Bay, Wis., at the Resch Center.”

Click here to view the embedded video.

I was struck by the high quality of the ad. It tweaks Obama’s celebrity status, and then unleashes a full-throttle class attack on Obama. “Life in the spotlight must be grand,” intones a woman’s voice, dropping her voice off for emphasis, “but for the rest of us times are tough. Obama voted to raise taxes on people making just $42,000.”

Contrast this ad with the lingering image of Obama in Europe, a trip which I think cost him dearly. Obama is trying to stretch his image into that of a statesman; he tried to fill the shoes of real presidents by going on the Euro-Disney tour of historic moments of American presidential history. But these staged events actually make Obama seem smaller, like the scared guy hiding behind a faux presidential seal:

I’ve been thinking about Obama’s missteps since he “secured” the nomination. I think Obama would have been wise to go somewhere he lost big, like West Virginia, leaving behind his entourage and asking working people about their concerns in the streets and cafes of small town America. Instead of puffing himself up to look presidential, Obama should bring himself to the door steps of poor whites in Appalachia, Latinos in Texas, the elderly in Florida. Bill Clinton published a book during the 1992 campaign called “Putting People First,” and his economic message struck a chord. Obama has promised Hope, but he has failed to articulate a compelling economic message. But I suspect that he and his advisers are already intoxicated on their perceived greatness.

Obama’s message is a post-modern, self-referential echo of how great Obama is, because Obama brings you hope and that’s what you’ve been waiting for, in addition to yourself (who you didn’t know you were waiting for). He won’t let you be complacent and he will remind you that you and he are merging into “The Ones we’ve all been waiting for”. And then a light will shine. Our tires will spontaneously inflate. And the earth will begin to heal.

Putting sarcasm aside, take a look at a Bill Clinton ad from 1992. People often complain that politics is all image and no substance. But here we have a candidate who is nearly all substance. He is working at his desk while the names of economists supporting his economic plan scroll across the screen. Obama fills the screen with himself and his adoring crowds, Bill Clinton (like Hillary Clinton) outlined solutions. Working Americans, I suggest, can see the difference.

Click here to view the embedded video.

My neighbor told me today that he’s voting for McCain. The only other time he’s voted Republican was for Nixon in 1972, an ominous warning for Democrats.

If Obama is losing Democrats like my neighbor — white ethnic, life-long Democrat, over 65 years old — he is in deep trouble. Back in April, Anglachel wrote that Obama’s inability to speak the language of the working class would cost the Democrats the election:

Should Obama be the nominee, he can kiss the general election goodbye … the Democratic Party leadership itself is going to be paying for its whole-hearted embrace of reductionist class politics. Some voters will defect to the Republicans, though I think that is going to be limited … I think you see a significant section of the working class simply turn away from participation, depressing turn out and costing the party electoral success. They will stay away until the party offers them candidates who talk to their material interests instead of to the leadership’s fantasy of being modern day Solons.

Obama’s inability to speak to the “forgotten middle class,” as Bill Clinton famously called them, is a primary source of his troubles. His campaign is still running to win the votes of college towns, but now great swaths of working America are starting to pay attention and the candidate speaking to the concerns of the working class, ironically enough, is the Republican nominee.

Obama courts Middle America in attempt to counter ‘antiChrist’ image

If Obama thinks he has problems with us Just Say No Deal Pumas, he’s got much bigger problems with the very same Americans that he put down during the primaries, you know, those bitter, gun toting, bible clinging folks:

The Obama team’s strategy of picking up conservative, evangelical Christian voters has run into unexpectedly strong headwinds. This is especially true among the poor, white and working-class voters of Scots-Irish descent who live in the Appalachian mountain region that stretches across parts of seven states.

Barack Obama may wonder why many people aren’t falling in line behind him, but the truth is, he faces major public relation problems. Many people just don’t trust him to tell the truth about himself. Obama remains a mystery to millions of ordinary Americans. Who is he? What does he believe in? Is he a Christian? And if so, after 20 years in the church run by Jeremiah Wright, what kind of Christian is he? Doyle writes:

Along with Internet claims that he is a Muslim, some evangelical Christians have put it about that Obama may be the Antichrist. Glenda Kinzer, 41, from rural Ohio, believes the end of the world is about to occur. “A lot of people are talking about how Obama fits the description” of the Antichrist. “I always thought he will be from the Middle East.”

Obama is now advertising his Christianity by pushing Bush’s faith-based initiatives. Not long ago, liberal Democrats worried about Bush using religion, and now, Obama, the shape-shifter extraordinaire is hawking the same old wares (this is a new kind of politician?). Not only are these programs designed to replace social programs (and social programs have long been the mission of the Democratic party), even more troubling is that Obama’s plan “blurs the nation’s constitutional separation of church and state”:

Earlier in the week, he unexpectedly took a page from George W. Bush’s political playbook by embracing his controversial “faith-based initiatives.” He told voters in the evangelical heartland of Ohio that as president he would fund religious groups dealing with America’s social problems provided they did not discriminate in who they offer help.

He praises Ronald Reagan and copies George Bush. Yet Obama remains an unknown. Many of us will never vote for him because he is inexperienced, unproven and displays poor judgement. And Obama’s talking points consist of whatever he thinks his audience wants to hear. What are Obama’s positions? As they say about the weather, wait five minutes and they’ll change. Just last week Obama appeared to throw MoveOn under the bus. MoveOn is one of his major contributors, but for the sake of appearances, they went quietly under the bus. Obama’s followers embrace his political position of never allowing values to come in the way of winning:

In the run-up to the July 4th national holiday, Obama has been on a “values” tour of middle America as he seeks to counter Republican attempts to label him as too liberal.

That’s the thing: Obama will say and do anything for the sake of appearances. And the good folks of Middle America are wise to question who he is and to wonder about his motives.