A Bankrupt Bankruptcy System

Mitt Romney talks a lot about being a "job creator," but he's destroyed a lot of jobs in his career as a private equity capitalist. A recent article in the New York Times details his adventures with Dade International, a Florida medical company.

Bain Capital bought Dade International  in 1994 with mostly borrowed money. They then bought two competitors, including a German company, and laid off more than 1700 American employees.

After mucking around with Dade for five years, closing plants, relocating workers to other plants and then closing those, eliminating the pension plan, and so on, Bain decided to cash out:

Bain settled on a common tactic in private equity: In April 1999, it pushed Dade to borrow hundreds of millions of dollars to buy half of Bain’s shares in the company — and half of those of its investment partners. 

Bain pocketed the $242 million. Goldman received $121 million. Top Dade executives got $55 million, records show. The total payout to shareholders reached $420 million — nearly as much as the purchase price for Dade.

Romney and Bain essentially milked Dade for hundreds of millions of dollars, saddling Dade with billions in debt. Then interest rates rose, the euro's value slid, and Dade got into trouble.

Creditors, unsettled by deteriorating finances and high debts, began to pounce. More layoffs followed. And in August of 2002, Dade filed for bankruptcy protection.

The creditors threatened litigation against Bain and its investment partners, accusing them of “professional negligence” and “unjust enrichment,” according to bankruptcy documents. 

Bain and the other investors argued that the claims were baseless, but agreed to forgo about $68 million owed to them by Dade. And seven years after buying the company, Bain forfeited its remaining ownership stake. 

Dade emerged from bankruptcy two months later and the stock soon began trading publicly.
Over the next four years, its revenues and share price surged, and in 2007, Siemens, the German conglomerate, paid $7 billion to buy Dade Behring. The Dade name disappeared, but the company survived.

Romney and Bain drove Dade into bankruptcy. They essentially stole money from Dade's creditors, laundering it through Dade and the bankruptcy court. (Romney had already ditched Bain to work on the Olympic Games when Dade went belly up, but he profited handsomely from the deal.)

In 2005 the Republican Congress passed a new bankruptcy law making it much harder for consumers to declare bankruptcy. This was supposed to reduce interest rates because creditors would have fewer losses. That didn't pan out, but credit card company profits have soared. More money is flowing to fewer people.

On the one hand wealthy people like Romney and Bain are able to use the bankruptcy system to make big scores by forcing acquired companies to fail. On the other hand, when regular folks got into trouble, giant credit card companies snapped their fingers and George Bush and the Republican Congress did their bidding to make it harder for the little people to get out of financial hardship.

When corporations go bankrupt there are really no consequences for the guys who are at fault. The entire purpose of a corporation is to remove any kind of personal liability for their actions. Unless they commit actual crimes, they don't have to pay for their mistakes. None of their personal property is at risk, and all the cash they ripped off -- excuse me, their lavish salaries and profits from stock sold before the company nosedived -- is untouchable. If they use borrowed money, like Romney and Bain did with Dade, there are almost no financial consequences for them. But the people who loaned them the money, for example, pension funds or 401K funds, lose everything.

When regular folks go bankrupt they are completely hosed. They lose their house, car, life savings, child's college funds, stereo, TV. Everything that can be sold off for cash is lost. And one of the most common causes of bankruptcy is medical costs, which means these people are often sick and can't work, so it's impossible to get back on their feet and get medical insurance again.

In the worst case, takeover artists who've bankrupted a company like Dade themselves have to declare bankruptcy. But then they can incorporate under a new name, buy up another company, force production into foreign countries, trash the American subsidiary, then milk the company for all it's worth and bail, leaving another few thousand Americans out of work.

This double standard of rich vs. poor in the bankruptcy system is yet another example of class warfare being waged on the poor and middle class.

They Really Said That?

If we re-elect Barack Obama, Iran will get a nuclear weapon. If we elect Mitt Romney, Iran will not.---------GOP Contender Mitt Romney.

The ‘Great Society’ has not worked and it’s put us into the modern welfare state. If you look at China, they don’t have food stamps. If you look at China, they’re in a very different situation. They save for their own retirement security…They don’t have the modern welfare state and China’s growing. And so what I would do is look at the programs that LBJ gave us with the Great Society and they’d be gone.-------GOP Contender Michele Bachmann

Regarding the first quote, I'm please to see that Mitt is not resorting to fear mongering.

Regarding the second quote, I...well...there's nothing else I could add to it really, right?

Humbled

Once in a while, I'll read something that humbles me to the point of bowing my head in shame. The recent piece in the Washington Post by Thomas Day, an Iraq War veteran, Penn State Graduate and product of the Second Mile Foundation (the organization started by accused child molester Jerry Sandusky) has done that at a level I didn't think possible.

His voice perfectly summarizes the last decade in this country and how all of us that are older have failed him. Sure, he points the finger at a few very specific people but it's really the elders as a whole that have destroyed his faith. Even though I don't know Thomas Day, as an educator of the next generation, I'm still responsible. His words are damning, as well they should be, and we must heed them.

Why Can't More Americans Be Like These Folks?

All of the debate about the role of government would be null and void if more Americans were like this guy. And these folks.

Truly amazing stories and great examples of how the little guy does actually have some power if they dedicate some time and patience to this stuff. But this brings up a larger issue.

Certainly, the right wing media industrial complex would applaud these individuals for assuming responsibility for themselves and their circumstances and getting the job done. I'm wondering why they aren't that way with the Occupy Wall Street Movement? Up to this point, the right has largely painted the OWS folks as socialist hippies who want the government to run everything. Yet, this movement has essentially been saying the same thing as the Tea Party and, like Patrick Rodgers, Wayne Nyerges, and Maureen Collier have taken it upon themselves to work outside of the government and stick it to the banks.

In the past month, 650,000 people have transferred their money from the big banks that the OWS movement are protesting to smaller banks and credit unions. Part of this is due to the new fees that banks have been adding but the other part is due to the OWS movement. Early estimates indicate that the banks have taken a couple of billion dollar hit from this change. This isn't a large amount when you consider all their transactions but it's not chump change either.

So, I'm wondering...what's the problem? Pastor Ed and Doctor Sean were absolutely apoplectic about the OWS movement calling for people to transfer their money. "Our economy will collapse!!!" they both screamed at me last weekend at the gum. I don't get it. The government wasn't forcing anyone to do anything. This is simply a movement of people exercising free will and participating in a free market choice.

Why Can't More Americans Be Like These Folks?

We Will Never Forget Your Sacrifice

So Long, Joe

Yesteday Penn State fired Joe Paterno. Last night Penn State students rioted. They damaged public and private property and assaulted police.

The most common sentiment was that Joe "didn't do anything." On the contrary: he participated in a coverup of the rape of a child. This conspiracy of silence allowed the perpetrator to escape detection and go on to assault other children.

I can understand why some nobody, like the assistant who actually found Sandusky in flagrante delicto with the kid in the shower, would report the incident to higher-ups and let them deal with the police. But Paterno was Sandusky's boss and the symbol of the football program. He was the one with the moral authority -- he always claimed morality and ethics were an integral part of his program -- to make sure that Penn State football wasn't sullied by the actions of one scumbag. But he just kicked the report up the chain and buttoned his lip.

Joe Paterno doesn't deny any of the facts. He helped a felon escape justice. By his own moral and ethical compass, he knew he had to go. That's why he announced he would retire after this season. But the board knew that wasn't good enough and made Joe play by his own rules.

Had this incident occurred at some no-name Division III track program there would be absolutely no question that the parties involved would be fired, and that everyone would agree it was the right decision. But because this is football and Joe Paterno is the figurehead of an iconic institution, a lot of angry students think he should get a pass.

What the angry mob doesn't understand is that their idolizing of Parterno and Penn State football caused this. Putting people and institutions on pedestals fills them with hubris and lets them think that they are above the law. They come to think of themselves and their program as more important than the rights of individuals, and if some little people are hurt to preserve the image of the leader and the program it's justified because the leader and the program are so moral and ethical. Which, when you think of it that way, makes it seem even more corrupt and self-serving than it already does.

If you still think Paterno was wronged, try replacing "Joe Paterno" with "archbishop" and "Penn State" with "Catholic Church." I mean, some people do claim Penn State football as their religion but this is carrying a little too far.

Let Them Eat Cake

I've been talking for quite awhile on here about the one percent of this country and how they really seem to be tone deaf when it comes to the other 99 percent. Worse are the folks who scream about socialist revolutions and yet shit all over the people (the president, many Democrats in Congress) trying to prevent such an uprising.

But I never thought that the wealthy of this country would stoop to a level as low as this. Take a look at these photos.

These images are from a Halloween Party last year at the law firm of Steven J. Baum in New York. Party goers dressed up like people who have had their homes foreclosed amid a "tent city" that was set up in the office for people to go flap to flap and trick or treat. Baum represents banks and mortgage servicers in their foreclosure proceedings. It is the largest firm in New York and represents Citigroup, JPMorgan Chase, Bank of America and Wells Fargo.

At first, I simply couldn't believe that people would be this heartless. Then I realized that this these modern day Marie Antoinettes are really that fucking awful. And clueless. Who the fuck do they think caused all of this to begin with? THEIR clients. If anything, they should be dressing up as bankers and financial sector "whizes" who busted our country out like the mafia.

I guess the capacity to blame the victim is infinite.

Open Season on the Poor

Every time anyone talks about raising taxes on the rich, people like Rush Limbaugh and Ann Coulter start screaming "class warfare" at the top of their lungs. The thing is, the rich have been waging class warfare on the poor for years. Here's the latest example of the trend, which has the distinct possibility of blowing up like the housing bubble.

A recent story in the LA Times reports on a chain of used car dealerships called "Buy Here Pay Here." They specialize in selling junker cars to poor people at exorbitant interest rates. Until recently, responsible investors wouldn't touch these outfits with a ten-foot pole: a quarter of the loans go into default. But in May the private equity firm Altamount Capital Partners in Palo Alto bought the J. D. Byrider chain of used car dealerships for $50 million.

Private equity firms in California used to invest in computer companies, bio-tech firms, Internet startups and other high-tech ventures that would create completely new industries and more jobs. But they've moved on to greener pastures. From the LA Times article:

The dealerships make an average profit of 38% on each sale, according to the National Alliance of Buy Here Pay Here Dealers. That's more than double the profit margin of conventional retail car chains like AutoNation Inc. 

"The amount of return from these loans you can't get on Wall Street. You can't get it anywhere," said Michael Diaz, national sales manager for Small Dealers Assistance Inc. in Atlanta, which buys loans originated by Buy Here Pay Here dealers. "It's the gift that keeps giving."

Although they're backed mainly by installment contracts signed by people who can't even qualify for a credit card, most of these bonds have been rated investment grade. Many have received the highest rating: AAA.

That's because rating firms believe that with tens of thousands of loans lumped together, the securities are safe even if some of the loans prove worthless.

Where have we heard this scam before?

Buy Here Pay Here is also being boosted by one of the sophisticated financial strategies that drove the nation's recent housing boom and bust: securitization. Loans on decade-old clunkers are being bundled into securities, just as subprime mortgages were a few years ago. In the last two years, investors have bought more than $15 billion in subprime auto securities.

So, just like at the beginning of the housing bubble, we have big banks and investors figuring out a new way to take money away from people who don't have any and then passing the bad loans on to someone else. But this scam is even worse, because the interest rates on these loans can be just about anything. For example, one Buy Here Pay Here dealership charges 14.9% interest.

Now, that's a really high interest rate. You can generally get home mortgages -- if you can qualify -- for 2.5 to 4%. For comparison, if you get a certificate of deposit from a bank a typical return is currently 1% for one-year CD to 2.5% for a five-year CD. But Buy Here Pay Car Lots doesn't shrink from the fact that they're screwing you. They brag about it:

So, are interest rates high at buy here pay here car lots? Well, what do you call high? We charge 14.9%. That’s more than you’ll pay on your mortgage–if you can still get one. It’s very likely what you’ll pay on a credit card balance–with one huge difference. The card issuer would love to see you stretch out payments forever. Any buy here pay here dealer that I know wants you to pay off in a couple of years at most. What’s that mean? Well, compare the following two loans. 

 $5,000 credit card balance at 14.9% over 10 years. 

Payment = $80.36 a month, but total interest paid over the life of the loan is $4,643.39. 

$5,000 car loan at 14.9% over 2 years. 

Payment = $242.20 a month, but total interest paid over the life of the loan is $812.70.

Seriously. Who is really milking the consumer here, you[r] local car dealer, or Citibank?

Of course they can't stretch the loan out over 10 years. The junkers they sell don't last 10 years, so they have to pry the money out of your hands right now or they'll wind up repoing a useless heap when it breaks down and you stop repaying them.

What these Buy Here Pay Here companies don't tell you is that if your credit rating is good enough to get the right kind of credit card, you can pay off your balance in two years or one year, or six months, or one month, with no penalty and even no interest. But they neglect to mention that their car loan contracts usually have prepayment penalties.

Their rationale for charging high interest rates is essentially: "The big banks are screwing you, so we're going to screw you too. We're just screwing you faster: instead of a long, leisurely weekend dalliance, we give you quickie in the backseat of your car."

You can just see how this will play out when this house of cards collapses and some big bank goes bust when these "AAA" securities fail. Limbaugh and Coulter will blame those worthless scumbags and leeches for taking out loans that they can't pay, and the rest of us have to suffer for it. But the real leeches are the loan sharks making loans to poor people that they fully expect will default on the loan?

In the olden days the local used car dealer or loan shark profited from your misery. Now that these BHPH dealerships are being bought up as by venture capitalists and their loans are being repackaged as Wall Street investment instruments, Citibank or some other giant out-of-state investment firm is getting your money. That raises another issue: out-of-state banks don't have to abide by state interest rate limits.

Many states used to have limits on interest rates (in Minnesota's case it was 12%). Marquette National Bank of Minneapolis sued First National of Omaha when FNO started offering cards in Minnesota at a higher interest rate. In 1978 the Supreme Court decided against Marquette, preventing states from imposing interest rate limits on national banks. Which is why so many banks moved their credit card operations to North Dakota, and interest rates have often been as high as 18 and 21%.

What about states' rights? Local control? Christians should be outraged by this: usury is condemned by the Bible as immoral. The First Council of Nicaea and subsequent ecumenical councils forbade usury and charging interest greater than 1% per month. If we want our state to abide by Christian precepts dating back to the founding of the Church, the big bad federal government steps in and stops us.

This is just one more example where more and more money is flowing into fewer and fewer hands, most notably the hands of Wall Street bankers. The people who can least afford it wind up paying more for everything: from cashing their paychecks, to buying groceries, to car loans, to furniture, the poor wind up paying more money for less value in every instance. They can't even put their money into a bank because of the fees.

This is why the poor can't pull themselves up by their bootstraps. The ways rich or middle-class people save money are unavailable to the poor. As the old saw goes, it takes money to make money. How much money can you save if your life consists of working three part-time minimum wage jobs 60 hours a week for $25K a year, driving a BHPH-financed junker that keeps breaking down, living in an overpriced and underheated roach-infested apartment, getting your kids' beds and the living room couch and the TV from the RentaCenter down the street for three times their actual value, buying the kids Fruit Loops at the the local convenience store for twice what the Publix in the suburbs charges, having to pay a couple hundred bucks out of pocket (because you've got no health insurance) every time your kids start puking their guts out or screaming bloody murder because of an ear infection?

If the poor were getting hammered by just one of these problems they might be able to find a way out. But every way they turn they're getting nickeled and dimed to death by people who make a lot more money than they do. What's worse, more and more middle class people are losing their jobs, and they're being pushed down the same hole that the working poor have been living in for decades. And the guys at the top keep raking more and more money in, concentrating it in fewer and fewer hands.

Nope, Limbaugh and Coulter are right when they say they aren't engaging in class warfare. Warfare implies some kind of roughly symmetrical conflict. The wealthy have simply declared open season the poor.

Her Ignorance Is As Good As My Knowledge

The most horrifying part of this video is when she talks about brainwashing. Heaven help us...

My Wife Shrugs

My wife just finished reading Atlas Shrugged by Ayn Rand. It was given to her by my brother-in-law who considers it "his Bible." I asked her what she thought about it and this was our conversation.

"Are there actually people out there that think these characters are real?" she asked me.
"Which characters"
"The ones that make up most of society in this book...Rand's users and the mooches who take advantage of all the creative innovators."
"Uh...yeah."
"You mean that's how people who post on your site view people who collect Social Security?"
"Yep."
"Good Lord..."

The expression on her face made me realize how truly deluded the perception is of far too many people in this country. They actually think that people who are participate in government programs are dragging down our society. It also helped me to understand why blue collar folks are conservative. They are all under the horribly mistaken impression that our government is driving away innovators when, in fact, the exact opposite is true.

Just ask Bill Gates, Steve Jobs, and Mark Zuckerberg.

Remember This?

A 500 percent tax? Oh, I see...yet another bullshit lie.

But I do love how the owner of the gun shop kept using the word "scared" over and over again. Ah, the free market at work:)

Any of you folks who rushed out to buy guns feel foolish right now? We're almost three years into Obama's presidency and he's allowed states to do what they want. In addition, he's actually increased gun owner's rights by signing the credit card protection bill which contained a clause in it to allow people to carry loaded guns into national parks and wildlife refuges. So, all that fret and worry was for absolutely nothing.

I wonder if some of the other things they froth at the mouth about will also amount to one gigantic nothing like this did. Hmmm....

They Don't Have Any

We saw some good economic news this week as GDP grew 2.5 percent in the third quarter of 2011 and around 100,000 jobs were added bringing the unemployment rate down to 9.0 percent. Certainly, neither number is thrilling. The reason?

Ideally, those trends could signal stronger growth, followed by more hiring. Yet until consumers consistently spend more, businesses are unlikely to hire enough to drive down unemployment.

What's that again, you say?

Many employers are hesitant to step up hiring until they see steady demand from consumers.

So it's not some phantom uncertainty that's being caused by President Obama's policies but the simple fact that consumer spending (70 percent of our economy) isn't where it should be for any real improvement. Why aren't they spending money?

They don't have any.

The Empire Strikes Out

Bank of America has struck out with its controversial plan to charge debit card customers $5 a month just to use their money. When customers complained and started to cancel their BoA accounts, many in favor of local credit unions, Bank of America dropped the plan.

Bank of America had to do this, they insisted, because of a law Congress passed that limits "swipe fees," the fees the banks charge retailers when you use your debit card. The regulation limits the swipe fee to 21 cents; swipe fees had averaged 44 cents before the regulation went into effect last month. (The original proposal was a 12-cent swipe fee, but regulators were convinced that was too low.)

I can remember a time when banks actually paid me to keep my money there. These days interest rates are essentially zero and the banks have fees for every imaginable thing -- depositing money, withdrawing money, talking to a teller, using ATMs, having a checking account, and on and on. (Banks are charging more fees because they're not making money the way they used to, by making loans.) Most of these fees can be avoided by maintaining minimum balances that can range up to tens of thousands of dollars. But that means people who don't have a lot of money wind up spending a lot of money just to have access to a bank account.

People who can't afford a bank account often have to pay companies just to cash their paychecks. These outfits frequently charge a lot for the privilege, and often make shady pay-day loans at exorbitant interest rates. For all the bad things Wal-Mart has done, this is one area where they may well have helped people out: they charge just $3.00 for cashing payroll checks.

Fortunately, most local not-for-profit credit unions have some form of a free checking account. Credit unions are basically customer-owned banks. They're often formed for employees of big corporations, union members, or government employees, but many allow anyone to join.

Some critics of the Dodd-Frank bill, whose provisions resulted in the swipe fee regulation, are trumpeting BoA's backtracking on the debit card fee as a victory for the free market. It is, no doubt about it. But this free market win is a direct result of the swipe fee regulation -- without that law, the big banks would have continued to silently charge retailers more than twice as much as they're charging now. That's money that we wind up paying in higher prices at the grocery store, gas station and shopping mall. Money that goes not to the retailer, but to some big bank.

The free market can work very well, but only when customers are aware of what's really going on. When banks make their profits in ways that aren't apparent to their customers, their customers can't make informed decisions about which bank provides the best service for the lowest price. The high swipe fees were essentially an extortion racket that allowed the big banks to use their monopoly position to gouge local merchants for providing a convenience option to their customers. This caused invisible price hikes on everything you buy with your debit card. (People who pay cash get socked the worst, but that's a separate issue.)

BoA figured it was their right to maintain their current profit margin by charging their customers directly for something that they had been making money on through transactions hidden from their customers. Their customers disagreed.

In the short run we probably won't see any price cuts at the checkout counter. But in the long haul the cost of doing business will be lower for merchants and that will ultimately result in more money staying local, resulting in healthier local businesses and more local hiring. Which seems better than sending all that extra money off to the banks so that they can give their execs more outrageous bonuses.

Nice

The Turning Tide

I saw this recently and just about fell out of my chair.

A new survey from Spectrem Group found that 68% of millionaires (those with investments of $1 million or more) support raising taxes on those with $1 million or more in income. Fully 61% of those with net worths of $5 million or more support the tax on million-plus earners.

Holy Shee-aht! My initial shock was that it was even published at all in the Wall Street Journal. After that wore off, I was pleasantly surprised to see that two thirds of the wealthy now think that raising taxes is a good thing. But why do they support this?

Explains George Walper of Spectrem: “What this tells us is that there are a number of wealthy folks who said: ‘Gee, we need to increase taxes to stimulate the economy. No one likes to be taxed more, but the reality is maybe it has to be done.’ ”

Yep.

Here are some of the comments from the supporters of this increase.

“When you have someone who made four and a half billion pay fifteen percent, and because it’s a hedge fund, I have a problem with that.”

“Quite frankly if Warren Buffett gets taxed an extra fifty thousand dollars or your typical investor of two hundred and fifty [thousand] or larger has to pay an extra thousand dollars in tax; It’s not gonna change his lifestyle. Whatever he or she was gonna buy, he or she is gonna buy.”

I have to say that I am fairly elated that wealthy people in this country are saying things like this. The tide is turning, folks, and it honestly can't happen too soon.

What is Exactly Wrong With This Country

Who Cares??!!!???

With all the problems we have in this country currently, does anyone really care what Herman Cain said to two women 20 years ago? I know I don't. A sex scandal? Really??!!? I'm more interested in debating his 9-9-9 plan than hearing about "harassment." I put that last word in quotes because I tend to take a decidedly anti-PC stance when it comes to this phenomenon.

I'm sure that there are people out there who are seriously harassed in one way or another but with all the new company rules and policies in place these days, most people don't get out of line. Thus, the cases we do see (and especially the ones from 20 years ago) largely originate from people who need to take a fucking chill pill. If you are that weak kneed about stuff like this, how on earth are you going to get anywhere in this world?

I'm hoping that this ends soon but the media has sadly begun their frenzy and fascination with a bright shiny object. Imagine where we would be if they put this much energy into education.

Get To Work

"Men with guns will come to your house and take you to jail."

Between Pastor Ed and Doctor Sean at the gym as well as several of my regular commenters, this line has been beaten to death of late so I decided to dedicate a post to it and clear up some very serious misconceptions and (surprise surprise) childish dishonesty.

The whole thing really started with these verses from the Bible (2 Corinthians 9, 6-12).

Remember this: Whoever sows sparingly will also reap sparingly, and whoever sows generously will also reap generously. Each of you should give what you have decided in your heart to give, not reluctantly or under compulsion, for God loves a cheerful giver. And God is able to bless you abundantly, so that in all things at all times, having all that you need, you will abound in every good work. As it is written: "They have freely scattered their gifts to the poor; their righteousness endures forever."

Now he who supplies seed to the sower and bread for food will also supply and increase your store of seed and will enlarge the harvest of your righteousness. You will be enriched in every way so that you can be generous on every occasion, and through us your generosity will result in thanksgiving to God.

This service that you perform is not only supplying the needs of the Lord’s people but is also overflowing in many expressions of thanks to God.

These verses are pretty plain to me: share your wealth and God will reward you. It's basically up to all of us to engage in one, gigantic wealth redistribution system. This simple instruction flies directly in the face of Ayn Rand's enlightened self interest bull shit so I say that any of you who embrace Rand and Jesus have a serious ideological dichotomy to overcome.

The part of this verse that seems to cause all the frothing at the mouth is this one:

Each of you should give what you have decided in your heart to give, not reluctantly or under compulsion, for God loves a cheerful giver.

Clearly, this means under compulsion from God, not the government. This jibes with everything else JC because it's all about coming to the Lord under your own free will, not being forced. But, as they often do, the right has made this there Biblical evidence for having very little or no taxes. This is especially true of (gasp!, horror of horrors) Social Security and Medicare taxes which help people every day.

Let's assume that Paul, who wrote 2 Corinthians, was also talking about the government. He wasn't but I'm going to say that he was for the sake of this discussion. At first glance, it does indeed seem like we have no choice. Those taxes come out without our permission and we are not cheerful givers. We are being forced to pay them and men with guns will come to our use and take us away if we don't. As is usually the case with right, they don't look beyond that first glance, tap into their inner rage, and create a fantasy world in which Mom and Dad (the government) won't let them stay out past midnight...give them the keys to the car...do what they want to do...blah blah blah...

Because when you start to look honestly at how taxes and social programs started, the majority of this country are, in fact, cheerful givers. The 16th Amendment was ratified by the requisite number of states. Social Security and Medicare were passed by our elected representatives (see: TAXATION WITH REPRESENTATION) and enjoy the support of the majority of Americans today. In fact, 57 percent of Americans think their taxes are fair while 43 percent and 4 percent consider the amount right or too low. Interestingly, 50 percent think their taxes are too high but many of these still think their taxes are fair and nearly two thirds want taxes raised to cover Social Security and Medicare which clearly illustrates the overwhelming support for both of those programs.

At worst, all of this shows that half of the country has no problem with taxes being taken out of their check. At best, closer to two thirds support this type of taxation. They continue to support elected representatives that would continue to collect all of these taxes. When they cast their vote, it means that they are all now cheerful givers. That includes myself. When I vote for Democrats, I am essentially saying that I want money removed from my check for federal taxes and social programs.

This still leaves a good chunk of people that do not support this type of taxation and bitch about it constantly. Adding insult to injury, they lost (and continue to lose) this debate (see: the worst ever, man!) hence the reason why they froth at the mouth about men with guns forcing them to do things and whine about their freedom being inhibited. My message to you is the same one I give to lazy teenagers:

Get off your ass and do something about it.

Your vote and, more importantly, the time you invest in support of a candidate with your views and getting like minded individuals to vote with you, means that you can change the situation so that no one is forcing you to do anything. By sitting on your ass, the majority ruled and you lost so I guess you'll have to lump it. The history of this country is filled with examples of people that worked hard to change the way things were done if they didn't like the status quo. They pulled themselves up by the bootstraps (hee hee:)) and put people in office that would govern differently.

This is what we have seen in the last couple of years with the Tea Party. I'm certain that anyone who complains about taxes can work with these groups locally to change how the system works. You may end up not getting enough support but, hey, that's how our country works. If you're not happy with it, you are always welcome to leave. Or redouble your efforts.

Rather than wasting your time arguing with me on this site, devote time to ending men with guns coming to your house and forcing you to fork over the fruits of your labors. Democrats have done it throughout history. They passed Social Security, Medicare, and the Civil Rights Act. It wasn't easy but they used their power of voting to elect people who would pass these laws. Don't be a lazy teenager who gripes about the rules from the comfort of your parent's basement. In short,

GET TO WORK.

A Deficiency of Judgment

Since the real estate bubble burst, millions of people have lost their homes to foreclosure. Putting people through foreclosure is bad enough, but for some banks that just isn't enough.

After Ben and Lori Jensen lost their home in Idaho to foreclosure, the bank sued them for $140,000. You would think that giving the house back to the bank should settle the score. After all, the bank agreed that the house was worth that much by issuing the loan. If the bank didn't think it was worth that much, it should have never issued the loan. Right? As long as the house is in the same condition that it was in when the buyer bought it, giving the bank the house should be the end of it. Right? The bank knew it was taking a risk when it gave the loan, that's why banks get interest. Right?

Except in most states foreclosure isn't the end of the story. Banks can sue you for the amount they lost if the sale price is less than the loan. This is called a deficiency judgment. After they get your house, the banks can garnishee your wages go after your other stuff.

In normal circumstances this would not be unreasonable. If someone buys a house, trashes it and skips out on the loan, the bank should have every right to go after them. But the real estate bubble was not normal. By issuing loans to just about everyone regardless of ability to pay, banks either intentionally or unintentionally inflated the price of housing. Many people, especially in Florida and Nevada, were the victims of house flippers who sold houses back and forth between straw buyers to jack up the value, and then sold it to a sucker at some crazy price.

There's no question that banks should have detected these kinds of scams, but they were too busy raking in closing fees and selling the loans to mortgage bundlers. If the banks had done their due diligence on the thousands of scams, the excess demand in the market would have been eliminated and prevented the bubble from getting so totally out of control. Reducing demand by even a few percent when an economic system is running at full capacity can stop inflation cold.

The question is, why are banks bothering to go after people who lost their homes? Most of these people don't have any money: that's why they lost their homes in the first place. Are the banks just getting their jollies by forcing these people into bankruptcy?

Nope, they're trying to turn their deficiency judgments into a profit center. According to Terri Pickens, a private practice attorney in Boise, lenders are selling deficiency claims. "I do know some private investors who are coming in and purchasing up bank loan packages and have been paying literally pennies on the dollar; just sitting on the paper, waiting for the right time to collect on it."

This can be as long as 20 years in some states. That means that if you've lost your house to foreclosure, some collection agency could jump out of the shadows in 10 or 15 years and grab your next house, or your car, or your child's college education fund.

But despite the scary sounding numbers, some people do manage to come to some kind of reasonable agreement:

In the Jensens' case, their attorney was able to work out a settlement. They turned over their savings and agreed to pay $75 each month for three years. They say it doesn't make sense to them that the bank went through so much effort to recover a total of about $8,000, prolonging the nightmare of their foreclosure.

That means the bank got less than 6% of the $140,000 they originally sued the Jensens for. But if you figure the amount of money they spent on lawyers and filing fees, it's hard to see how the bank could have broken even.

Which begs the question: how much would the bank would have gotten if they had renegotiated the loan with the Jensens instead of foreclosing?

At this point it seems pretty obvious that everyone -- banks, homeowners, the construction industry, and the economy in general -- would have been far better off if the banks had all just renegotiated all those loans down to reasonable values three years ago.

Yeah, everyone would have taken a minor hit, and some freeloaders would have gotten off. But now everyone is suffering. Oh, except for all those Wall Street bankers who are still pulling down those big bonuses for sticking it to the Jensens and the millions of other people just like them.

So why are people still arguing against Obama's mortgage refinance program, and why are banks stubbornly refusing to make deals with people who are stretched to the breaking point? Call it a deficiency of judgment.

Whatever you did not do for one of the least of these...

"They also will answer, 'Lord, when did we see you hungry or thirsty or a stranger or needing clothes or sick or in prison, and did not help you?' "He will reply, 'Truly I tell you, whatever you did not do for one of the least of these, you did not do for me.'

Meet the 99 Percent (Part 1 of Many)

Now that the Occupy Wall Street is getting national attention and support from a substantial number of Americans, it's time for the douche bag propaganda machine to go to work. The 99 percenters are violent drug dealing fornicators bent on redistributing income and creating a socialist regime that will send us all to reeducation camps.

In reality, they are this.

ATLANTA
Oliver Beinlich, 29 | Unemployed

"There are a lot of issues in this country that need to be addressed. This is one way of voicing our concerns - there are many interests represented here, but I think the overarching message here is that we want to get our country back from the overwhelming power that corporations have."

Far more than they should, Oliver.

Well, Now We Know

It's always been a mystery how Mitt Romney can be so popular when no one actually likes him. Well, now we know why. He's buying them all off, at least in New Hampshire:

In September 2010, Mitt Romney invited all of the Republican candidates for the New Hampshire Senate to lunch in a conference room in Concord. He thanked them for running for office, then gave each of them a $1,000 check made out to their campaigns. “He did it in a very personal manner. It wasn’t an impersonal, get-the-check-in-the-mail type of thing,” recalls Jim Rausch, one of the candidates. “I appreciated it.”

Will this make any difference to the voters? It's hard to say. But people generally like their own representatives, even when they hate legislatures and Congress in general. When they give Romney a personal endorsement paid for by Romney's contributions to their campaigns will it get their constituents to vote for Romney?

Most Excellent Quote

Conservatives always love to quote H.L. Mencken yet, given their penchant towards simplicity, I doubt they would like this one.

For every complex problem there is an answer that is clear, simple, and wrong.

No shit. I think the Democrats should use this in 2012 in simply (:)) describing the GOP platform.

Good News and Bad News

Today brings a mixed bag of news, good and bad.

The good news is that the economy grew at a rate of 2.5 percent in the third quarter. This quarter of growth marks the ninth straight quarter of growth since July of 2009 when the president's policies began to take serious effect. The main reason for this growth is consumer spending and confidence which may give us an indicator that things are getting better.

The other reason cited made me laugh out loud.

A measure of business investment plans rose in September for the second straight month and by the most in six months, according to a government report Wednesday on orders for longer-lasting manufactured goods.

Wait...what? I thought there was all this uncertainty. Ah well, folks who were saying this will probably admit they were wrong and just be happy, right? :)

I'm happy to be somewhat wrong about consumer spending. I say "somewhat" because my initial glee at seeing that consumer spending was up was tampered by this:

Economists believe that growth in consumer spending, which accounts for 70 percent of economic activity, will be restrained until incomes start growing at healthier levels, which is unlikely until hiring picks up.

This brings us to the bad news. The CBO just released a report titled, "TRENDS IN THE DISTRIBUTION OF HOUSEHOLD INCOME BETWEEN 1979 AND 2007." It is yet another example of the detrimental inequality in this country. Here are some of the bullet points.

• 275 percent for the top 1 percent of households,
• 65 percent for the next 19 percent,
• Just under 40 percent for the next 60 percent, and
• 18 percent for the bottom 20 percent.

275 percent? With 70 percent of this economy consumer spending, this is simply ridiculous.

• The top fifth of the population saw a 10-percentage-point increase in their share of after-tax income.
• Most of that growth went to the top 1 percent of the population.
• All other groups saw their shares decline by 2 to 3 percentage points.

Again, with consumer spending making up 70 percent of this economy, these facts present a very clear picture as to why our economy is still not growing as it should. The IMF agrees..

Somewhat surprisingly, income inequality stood out for the strength and robustness of its relationship with the duration of growth spells: a 10 percentile decrease in inequality (represented by a change in the Gini coefficient from 40 to 37) increases the expected length of a growth spell by 50 percent.

My enormous frustration lies in the fact that as soon as something like this is pointed out, screams of "Socialism!" are usually not far behind. This, from the very same people who claim to want to make more money and have more efficient economies. Defining the principle units of an economy (consumer spending being the main one) and working to improve those units functionality should be the goal towards which all of us strive, right?

We no longer have time to manage theological fantasies. If we want to fan the flames of this recent good news of growth, we need to tackle the issue of inequality. Now. Me being me thinks that this should fall to our elected representatives on a local, state and federal level. If you ask an Occupier, though, the government isn't going to help.

It's going to be up to us.

You Can't Squeeze Oil out of a Burning Turnip

Most of the Republican candidates for president are now criticizing President Obama for withdrawing our troops from Iraq. The gist of their argument is that by removing our troops from Iraq we will strengthen Iran's hand. Michele Bachmann even said:

The United States needed a working democratic partnership in Iraq and we should have demanded that Iraq repay the full cost of liberating them given their rich oil revenues.

So, we should just take their money if they don't think they should pay us for invading their country, destroying its infrastructure, sparking a civil war and killing a hundred thousand Iraqis?

To begin with, former President Bush is the one who signed the agreement with the Iraqis to withdraw troops from Iraq by the end of this year. Obama has tried to modify the agreement to extend the stay of some American troops, but since our primary demand is that Americans who commit crimes in Iraq can't be charged under Iraqi law, the Iraqis won't agree. Could anyone blame them, given the history of Blackwater "contractors?"

The reason Iran is in a position to exert so much influence in Iraq in the first place is that President Bush invaded Iraq and removed Saddam Hussein and his fellow Sunnis from power. These people were opposed to (and repressed) the majority Iraqi Shiites, who are now in power and are much more sympathetic to Iran, which is also a majority Shiite country.


When the allegations that Saddam was involved in 9/11 and had huge stockpiles of WMDs were revealed to be false, Bush changed his tune about why we needed to invade. He said we needed to liberate Iraq, depose a dictator and establish a beachhead for democracy.

The people of Iraq have now legally elected a government run by Shiites, who are the majority. It is a democracy, however imperfect, and the United States doesn't invade democracies. Our troops are guests of one of our erstwhile allies, and we remain only at their request. And they're not asking us to stay.

When Bush and Cheney pushed the invasion of Iraq they claimed it would be a cakewalk and we would be welcomed as liberators. They made this claim because the Iraqi National Congress, headed by Ahmed Chalabi, told them this would be so. It wasn't, and the war lasted years instead of weeks as Cheney and Rumsfeld promised. It now appears that Chalabi was actually an agent for the Iranians, something also alleged in a FOX News editorial from 2004, after the US had a falling out with Chalabi. It's now clear that Chalabi and the Iranians used Bush and Cheney's lust for revenge and oil to get rid of Saddam for them. Bush's invasion of Iraq is what actually strengthened Iran's hand. Bush has left Obama with empty coffers and a very poor poker hand.

Because the United States and the rest of the Middle East had long relied on Saddam and Iraq as a bulwark against Shiite Persian influence George H. W. Bush stopped short of invading Iraq after ejecting Saddam from Kuwait in the Gulf War. Allowing a dictator to stay on to fight our enemies is somewhat cynical and self-serving, it is true, but such is the calculus of Republican administrations. But then W and Cheney fell into the trap that HW and Cheney had avoided a decade earlier.

Iran and Iraq fought a long and bloody war in the 80s, during which the United States publicly backed Iraq, providing intelligence and weapons. In 1987 the USS Stark was hit by two Iraqi Exocet missiles, killing 37 Americans. There were no repercussions for Saddam. The Reagan administration removed Iraq from the list of terrorist sponsoring countries, allowing Saddam to obtain the chemical precursors for poison gas WMDs. These were ultimately used for nerve gas attacks against Iranian troops and Iraqi civilians in Halabja in 1988 (though at the time the Reagan administration tried to blame Iran). This crime against humanity was one of the charges that ultimately led to Saddam's execution. After the Gulf War we destroyed all those WMDs, scouring the country for years.

Earlier in the Iran-Iraq war, the Reagan administration sold TOW and Hawk missiles to Iran in exchange for Hezbollah releasing some hostages, using Israel as an intermediary. This was what Ron Paul was talking about when he shocked everyone in the last debate by saying that Reagan cut deals with terrorists. The Reagan administration then used that money to fund right-wing death squads in Central America. Oliver North went to jail because of this, but the higher-ups were all pardoned by George H. W. Bush while the case was still being investigated.

Finally, there have been credible allegations from a former National Security Council member and a Reagan White House staffer that Reagan had dealings with Iran as long ago as 1980, even before he was elected. To improve his chances of election, Reagan's minions worked to prevent the release of Americans taken hostage at the American embassy in Tehran so that Jimmy Carter would look bad. The Israelis sent equipment to Iran after William Casey (Reagan's eventual CIA director) cut a deal with the Iranians. Perhaps the most telling point was that Iran released the hostages on Reagan's inauguration day.

The Republicans have a long history of cutting deals with the Iranians or being duped by them. The current crop of Republican candidates -- with the exception of Ron Paul -- is either willfully ignorant of history, or lying about it. They have demonstrated that they would make exactly the same kinds of mistakes that Republicans have made on Iraq and Iran all the way back to the 1950s.

We've already spent a trillion dollars on Iraq. If we overstay our invitation to extract Bachmann's price from Iraq, the whole place will erupt in fire and war again. But you can't squeeze oil out of a burning turnip.

William The Eloquent

Bill is really snarky and mean most of the time but he's quite eloquent here in describing exactly what most Americans now feel. His slides at the end of this piece ARE Americans. As Bill says (and I agree completely),

They don't hate capitalism. They hate what's been done to it.

Me too, Bill. Me too.

The Cheese is Slipping

The right seems to have an extra layer of froth on their mouth these days and I think I know why. Take a look at this poll. Here are some of the questions and responses.

Q11. IN THE PAST FEW DAYS, A GROUP OF PROTESTORS HAS BEEN GATHERING ON WALL STREET IN NEW YORK CITY AND SOME OTHER CITIES TO PROTEST POLICIES WHICH THEY SAY FAVOR THE RICH, THE GOVERNMENT’S BANK BAILOUT, AND THE INFLUENCE OF MONEY IN OUR POLITICAL SYSTEM. IS YOUR OPINION OF THESE PROTESTS VERY FAVORABLE, SOMEWHAT FAVORABLE, SOMEWHAT UNFAVORABLE, VERY UNFAVORABLE, OR DON’T YOU KNOW ENOUGH ABOUT THE PROTESTS TO HAVE AN OPINION?

VERY FAVORABLE 25%

SOMEWHAT FAVORABLE 29%

SOMEWHAT UNFAVORABLE 10%

VERY UNFAVORABLE 13%

DON’T KNOW ENOUGH 23%

NO ANSWER/DON’T KNOW 1%

That's over half with a favorable view and less than a quarter with an unfavorable view. But here are the real interesting results.

Q12. DO YOU AGREE OR DISAGREE WITH THAT POSITION?

A. WALL STREET AND ITS LOBBYISTS HAVE TOO MUCH INFLUENCE IN WASHINGTON

BASE: FAMILIAR WITH PROTESTS (787)

AGREE 86%

DISAGREE 11%

NO ANSWER/DON’T KNOW 4%

Q12. DO YOU AGREE OR DISAGREE WITH THAT POSITION?

B. THE GAP BETWEEN RICH AND POOR IN THE UNITED STATES HAS GROWN TOO LARGE

BASE: FAMILIAR WITH PROTESTS (787)

AGREE 79%

DISAGREE 17%

NO ANSWER/DON’T KNOW 3%

Q12. DO YOU AGREE OR DISAGREE WITH THAT POSITION?

C. EXECUTIVES OF FINANCIAL INSTITUTIONS RESPONSIBLE FOR THE FINANCIAL MELTDOWN IN 2008 SHOULD BE PROSECUTED

BASE: FAMILIAR WITH PROTESTS (787)

AGREE 71%

DISAGREE 23%

NO ANSWER/DON’T KNOW 6%

Q12. DO YOU AGREE OR DISAGREE WITH THAT POSITION?

D. THE RICH SHOULD PAY MORE TAXES

BASE: FAMILIAR WITH PROTESTS (787)

AGREE 68%

DISAGREE 28%

NO ANSWER/DON’T KNOW 4%

Overwhelming majorities with all of these questions. What that tells me is the OWS movement is resonating with the majority of the public. Of course, this was the inevitable outcome because they are addressing the actual problem. People seem to be succumbing less to fear and anger while pursuing the real perpetrators of our economic woes. It's about time. It's also inevitable that the Tea Party message would erode with people. It worked in an off election year when the base cranked up their turnout and most Americans were absorbed in their daily lives. But now, with a presidential election a year away? Not so much. They simply don't have the numbers to go up against this. Thus, the desperate scramble to paint the occupiers as hippes/communists/fascists or whatever. Remember Alinksy's words in 1972?

The middle class actually feels more defeated and lost today on a wide range of issues than the poor do. And this creates a situation that's supercharged with both opportunity and danger. There's a second revolution seething beneath the surface of middle-class America -- the revolution of a bewildered, frightened and as-yet-inarticulate group of desperate people groping for alternatives -- for hope.

Their fears and their frustrations over their impotence can turn into political paranoia and demonize them, driving them to the right, making them ripe for the plucking by some guy on horseback promising a return to the vanished verities of yesterday. The right would give them scapegoats for their misery -- blacks, hippies, Communists -- and if it wins, this country will become the first totalitarian state with a national anthem celebrating "the land of the free and the home of the brave."

We may be seeing the beginning of the shift away from that now in Zuccotti Park. This is why my comments section is becoming Bircher on Lysergic acid diethylamide. Expect it to get worse.

Maybe the Tea Party IS Different From OWS....hmmm...

Koch-Funded Researcher No Longer Climate Skeptic

Two years ago Richard Muller was a climate skeptic. He began a study, funded by the Koch brothers, to examine temperature data in a new way. The study is now complete, and Muller is no longer skeptical: he believes the the earth is warming as a result of human activity, pretty much exactly as other climate scientists have said it has.

Muller explains the reasons for his original skepticism in an article in the Wall Street Journal. Basically, he didn't feel that the data were of sufficiently high quality to support the kind of statements that climate scientists had been making about global warming. He thought the accuracy of the weather stations and their locations were not giving an accurate picture of temperature changes. Many weather stations had once been in rural areas, which had become urban areas. Cities retain more heat because they are paved with asphalt, have concrete buildings and lack trees (the "heat island" effect). He felt there was too much bad data, and didn't think the climate scientists had taken enough precautions to make sure that bad data didn't give the wrong conclusions.

Muller's new analysis, which hasn't yet been published in peer-reviewed journals, uses different statistical techniques to correct for errors he felt existed in previous studies. And he comes up with almost exactly the same results as his predecessors did, leading him to conclude that they had in fact taken the necessary steps to ensure the accuracy of their results.

Will this study change anyone's mind? That's highly doubtful. Muller never questioned the validity of the physics behind the carbon dioxide greenhouse effect, the mechanism causing anthropogenic climate change. He doubted the effect was real because many of the weather stations had margins of error greater than the amount of warming measured. Also, about a third of stations measured temperature decreases, while two-thirds measured increases.

That's completely in line with climate change predictions, because the theory predicts shifts in temperature in both directions. Some areas will dry out and get hotter, while other areas will get socked with more rain and snow and get cooler. But it's a possible indication of a huge problem with the theory if the data isn't accurate. Basically, if the area drying out and heating up is larger than the area getting wetter and cooler, there is net global warming. Muller's study finds that to be the case.

Human-caused global warming is no longer a scientific issue -- it's settled science. The concentration of CO2 in the atmosphere is going up about 0.5% every year because 7 billion people are burning billions of tons of coal, gas and oil, and deforesting huge swaths of six continents. But the right has made climate change into a political wedge, mostly because acknowledging its truth would mean significant costs for the moneybags that fund the Republican Party.

In 20 or 30 years Florida's coast will be seriously eroded by rising seas, Texas will be well on its way to becoming a fire-scorched desert, Arizona and Nevada will be a barren wasteland in the throes of a decades-long drought. On the plus side, we will probably have burned all the economically accessible oil and moved on to other sources of energy. I only hope that we manage to survive the drought, famine and wars that severe climate change has always caused.

Yeah, Pretty Much

It Didn't Work Then Either!

The Birthers are Back

I bet you thought those crazy birthers were over. Well, think again. But this time they're attacking Republicans.

Last week the Washington Post reported that Marco Rubio "embellished" his family history, misrepresenting the actual date they emigrated to the United States from Cuba in his public speeches. His standard narrative had been that they came to the US in 1959. In reality, they arrived in 1956. They weren't political refugees fleeing Castro's communist revolution, they were economic refugees from a country that was run by a corrupt right-wing dictator named Fulgencio Batista who had seized power in a coup.

Rubio's parents arrived in the US on May 27, 1956. His father got a Social Security number in New York that same year. Fidel Castro had been preparing for revolution, training in Mexico and raising money in the United States at that time. He didn't arrive in Cuba for his revolution until Dec. 2, 1956, and the revolution took years to complete.

According to the Post's story, Rubio's parents went back and forth between the US and Cuba several times, having extended stays in Cuba until as late as March, 1961. Rubio was born in 1971. His parents didn't petition for naturalization until 1975.

Nothing about this history is anything for Rubio to be ashamed of. The only thing he's guilty of is obscuring the facts that his parents weren't people who fled Castro's communist revolution; they actually tried returning to Cuba and just didn't like it.

[Rubio] said of his parents: “They were from Cuba. They wanted to live in Cuba again. They tried to live in Cuba again, and the reality of what it was made that impossible.”

In 2006, on the eve of his rise to speaker of the Florida House, Rubio told an audience that “in January of 1959, a thug named Fidel Castro took power in Cuba and countless Cubans were forced to flee and come here, many — most — here to America. When they arrived, they were welcomed by the most compassionate people on all the Earth.” 

Now, I can see why Rubio wouldn't be really proud of the fact that his parents waffled for five years about whether they really wanted to live in the United States. According to the Post:

In Florida, being connected to the post-revolution exile community gives a politician cachet that could never be achieved by someone identified with the pre-Castro exodus, a group sometimes viewed with suspicion.

Why with suspicion? Perhaps because people who would eventually support Castro were leaving then were hounded by a right-wing thug named Fulgencio Batista. In turn, many of the people who fled Castro's revolution had been allied with Batista, who by all accounts was no better than Castro.

But the birthers think this disqualifies Marco Rubio from the presidency. He was born in the USA, but since his parents weren't citizens they believe he's not "natural born." Compare that to Barack Obama, who was born in Hawaii of an American mother and a Kenyan father. Or John McCain, who was born in Panama of American parents. Or Donald Trump, who was born of an American father and a Scottish mother. Or my father, who was born in Wisconsin of a Norwegian father who never became a US citizen and an American-born mother, whose Norwegian parents were unnaturalized immigrants. (My dad is a died-in-the-wool birther.)

The birthers think that Trump is a real American because his mother was naturalized before Trump was born. But was his mother naturalized just because she married an American? Does that really count?

Obviously all of these men are natural-born citizens, since they're all born in the USA or born of American parents and claimed the United States as their only country of citizenship.

The relevant clause in the Constitution reads:

No Person except a natural born Citizen, or a Citizen of the United States, at the time of the Adoption of this Constitution, shall be eligible to the Office of President; neither shall any person be eligible to that Office who shall not have attained to the Age of thirty five Years, and been fourteen Years a Resident within the United States.

The purpose of this clause is to make sure that the president is a "real" American and not some foreign pretender. But look at how lax the requirement is. The Constitution was adopted in 1789. That means that a British sleeper agent who emigrated to New York in 1775 and became a citizen in 1788 could have become president. If "natural born" was so important to the founders, the Constitution would have left it at that.

All of the men above have a far better claim of being a "real" American than someone who'd just been a resident for 14 years in 1789. Obviously, the birthers are ascribing much more rigor to "natural born" than the founders intended.

Section 8 of the Constitution also gives Congress the authority to pass certain laws:

To establish an uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States;

The birthers bicker about what "natural born" means, insisting that it has to mean what founders might have meant two centuries ago (as if all the founders agreed on everything). But laws passed by Congress and precedents set by the courts have ruled that all of these men are US citizens and eligible to be president.

The "original intent" of the framers is now a moot point. They gave Congress the authority to pass laws and the courts to rule on them. If they had intended for there to be no changes to any of these notions, they wouldn't have bothered to create a mechanism for passing new legislation and for courts to judge them.

After all, the original intent of the founders was that white men should be able to hold black slaves. Or do the birthers want to bring that back too?

Like Children

Anyone catch the GOP debate in Tuesday night? What a colossal embarrassment.I don't think I've seen a finer example of the childish behavior that summarizes the right today. No wonder conservatives want other people to jump in the race. The president may have approval ratings in the low 40s but compare him to this lot and, even with a crappy economy, he's the better candidate. And that's true for the folks that aren't all that happy with him.

What's even more heartening for the president's supporters is his continued calls to pass the Jobs Act are having an effect on the national conversation in that he (as opposed to the Republicans) is actually driving it. Clearly, Boehner and McConnell are not happy about this and have been whining "no fair" to the president for the last week. Maybe if the two of them had some new ideas and were less concerned with making Obama a one term president, things would be going better for them. Oh well...

Ding, Dong, Qaddafi's Dead

Today Libyan rebels killed Muammar Qaddafi, the Libyan dictator. This was the guy behind the bombing of Pan Am Flight 103, which crashed in Lockerbie, Scotland, in 1988. Ronald Reagan tried to get Qaddafi a couple of times. Once was in 1986, when Qaddafi's compound was bombed and Qaddafi claimed that his infant daughter was killed. As it turns out, she is still alive and became a doctor.

Qaddafi cozied up to George Bush in 2006. It was the only concrete positive result that Bush could claim from the Iraq war: he "forced" Qaddafi to abandon his nuclear program by the threat of invasion (as if we could have afforded to start another massive war in 2006).

The Lockerbie bomber was captured, tried and imprisoned in Britain, but was released in 2009 for "humanitarian" reasons (they thought he had terminal cancer). This rankled a lot of people. Well, he was still alive earlier this month, but predicted he only had days, weeks or moths to live.

The unrest in the Arab spring spread from Tunisia, to Egypt, to Yemen, to Syria and to Libya, where it grew into an armed rebellion. After 40 years of dictatorship a lot of Libyans were unhappy with his eccentric rule, and many soldiers and insiders joined the rebels.

After calling anyone who objected to Bush's calamitous invasion of Iraq a traitor, pretty much every Republican blasted President Obama when he agreed for NATO to provide air support for the rebels. One wing of the Republican party called the strategy weak-kneed and demanded a full-court press as in Iraq. Another wing of Republicans said we shouldn't help them at all, we should keep our noses out of other countries' business. Other Republicans didn't want us to do anything that might possibly help any Muslims at all because they're apparently our mortal enemies.

The victory in Libya belongs to the Libyan people, not NATO or President Obama. It can still end badly if the elections don't materialize on schedule and internecine warfare erupts. If things go right Libya will become a democracy with a Muslim majority like Turkey, but not a Muslim republic. Qaddafi might have been a nut case, but he wasn't a rabid jihadist Muslim in the mold of bin Laden. Even though Libya was practically a prison with torturers and spies everywhere, the people of Libya have become accustomed to being a modern country with modern social norms, free from the dictates of imams. It seems unlikely they will embrace the rigid social hierarchy that Al Qaeda has been pushing across the Middle East. And because we provided material help in the battle against Qaddafi, the United States and Europe were finally on the people's side in a war in the Middle East. Even if Libya does melt down, they won't be blaming us for their problems; they'll be pointing their fingers at each other.

In the end George Bush's plan to eliminate Saddam Hussein will have cost us a trillion dollars. Obama eliminated Osama bin Laden and Muammar Qaddafi using techniques that cost us a mere fraction of that price, in both dollars and lives. After a few months and a few billion dollars spent on providing air cover for the Libyan rebels, Qaddafi is gone. Unlike Iraq, we have no presence on the ground and no ongoing expenses for the indefinite future. That's a bargain by any measure.

Some people will say that George Bush's invasion of Iraq paved the way for the Arab Spring. That's balderdash. The invasion strengthened the notion that the Arab people were just pawns in an argument between the Arab world and the west, collateral damage in a contest of wills between two egomaniacs. It made Arabs feel we wanted to destroy them, and much Republican rhetoric reinforces that idea to this day. The good will most of the world showered upon us after 9/11 evaporated when George Bush invaded Iraq based on lies.

The real impetus for the Arab Spring was the suicide of Mohamed Bouazizi, the Tunisian who was harassed and humiliated by municipal officials. He inspired Tunisians to turn out their corrupt leaders. That uprising, and the one in Egypt, showed that the people can take power into their own hands. They don't need to wait for the United States to come and save them.

Obama walked a fine line in the Libyan conflict. Had we pushed too hard we would been perceived as taking over another Arab country. But by letting himself be dragged reluctantly into the conflict, Obama allowed the Libyan rebels to maintain their own identity and not be perceived as US puppets.

Libya might not be Obama's victory. But he made all the right calls. And it's good to see a president do that for once.

Still Not Getting It

I've been chuckling and shaking my head over the last few days as I watch the right continually not get the Occupy Wall Street movement. CNN has a pretty good take on all of this. It reminds me of an elderly person trying to work their new iPhone that their grandson got them.

What's truly hilarious is how similar this movement is to the nascence of the Tea Party. Both groups bitched about government bailouts and cronies in DC. The right (for whatever reason) can't see that this group of people have given up on the government just like they have. In fact, the Occupiers have called for citizens to voluntarily move their back accounts from big banks to credit unions and local banks. They aren't asking the government to do anything and have declared vehemently that it's up to the people. Why does the right have a problem with this? Can't a group of people decide on their own what to do?

More importantly, this is the first concrete demand followed by action that we have seen from the group. It's going to be interesting to see what happens as a result of this. Will the big banks bleed?

Naturally, there is a ton of anti-Occupy propaganda out there now. Take a look at this photo.

If anyone has seen this photo in their friend's status updates, as I have recently in several, kindly ask them any or all of the following questions.

1. What is the source for this photo? (You won't be surprised when you find out)

2. How accurate is the math? (Check it, it's not)

3. Where does scholarship money come from?

4. Why does such a large group of people in this country persist in blaming the victims of the Collapse of 2008 and give the actual perpetrators a free pass?

5. Did the United States build itself into an economic superpower, unlike any this world has ever seen, by being a nation of rugged individualist libertarians? Or did we do so with much higher taxes and actual regulation?

Then show them these photos.

The derision that is floating around out there (courtesy largely of the right wing blogsphere) isn't working. There are too many people that identify with this movement and it has now gone global. The Tea Party can't even boast that.

I think the right needs to be very, very careful their commentary on this movement. They've got a pretty good hold in the House that will be hard to erode in the 2012 election. They have a real chance at picking up some more Senate seats. But if they ally themselves with Wall Street, they will have forgotten what mobilized resources on their side back in 2009. The public could see them as very pro corporation and they will lose some of their populist base.

What Herman Cain Doesn't Want Us to Know

Tonight there's another Republican debate, and since Herman Cain has been rising in the polls everyone expects the other Republicans to begin lynching him.

His 9-9-9 plan has come under heavy attack as being completely insufficient to pay for even the limited government Republicans endorse, with its constantly burgeoning defense budget. Cain may have even gotten the idea for it from SimCity 4, a computer game, though he of course denies this.

But Cain's got some real skeletons in the closet. Besides being a pizza magnate, he was a member of the Kansas City Federal Reserve and a member of the board of Aquila Inc.

Considering that huge swaths of the Republican Party believe that the Fed is the devil, this should put Cain on the seventh level of hell.

Aquila is more interesting, and much more telling. Aquila was basically Enron's envious little brother, right down to the pension scandal. Cain was on its board and endorsed employees investing their pension money in Aquila stock even as it was falling. Aquila pulled the same kind of gimmicks Enron did to inflate its stock price: selling electricity to a subsidiary, which then sold it right back to itself to inflate sales numbers. They also used the "ricochet" gimmick, buying power in California at a capped price, moving it out of state, then selling it back to California at an inflated price.

Cain also chaired the compensation committee at Aquila, which gave out $30 million in bonuses to the top five execs at Aquila in 2002, while the stock price was plummeting.


Aquila employees filed a class action against the company, naming Cain and other board members in the suit. The company settled for $10 million in 2007. Cain left the board in 2008.

Herman Cain is not an outsider or a small-business-friendly entrepreneur. He's worked for giant companies like Coca Cola, Pillsbury, Burger King and Godfather's Pizza. He never started a business of his own, he's always been a hired gun and part of the old boys' network. He's been on the boards of companies like Nabisco, Whirlpool and Aquila. He has always been in bed with self-dealing CEOs who think ever-soaring salaries are theirs by the divine right of kings.

Cain is the kind of guy that got us into the mess we're in today, with the salaries of regular folks dropping like rocks while CEOs who screw the pooch get richer and richer.

Tea Party Carjacking

A lot of comparisons are being made between the Tea Party and the Occupy Wall Street movements. Both started from a sense of outrage over the bailout of the bankers who caused the collapse, while the rest of the country is sinking into a mire.

The right says that Occupy Wall Street is just a bunch of fruit cakes. But the Tea Party started out pretty much the same way. Instead of camping in the parks, though, they brought semi-automatic weapons to town hall meetings, or screamed bloody hell about keeping the government's grubby hands off Social Security and Medicare, which they appeared to not realize were government programs in the first place.

But the Tea Party was quickly carjacked by Fox News and the Republican Party, and people like Sarah Palin, Michele Bachmann, the Koch brothers and Clarence Thomas' wife. Fox News even falsified coverage to make Tea Party rallies seem larger than they actually were. Now the Tea Party is mouthing the Republican Party line of less regulation on Wall Street. They blame Barney Frank for somehow forcing banks to lend money to people who couldn't make the payments.

But what really happened was this: loan officers were paid by the head to get suckers into adjustable rate mortgages that started out affordable, but soon were beyond the ability of the borrowers to pay. These weren't just poor black folks. Everyone and their cousin bought houses they couldn't really afford, or bought multiple dwellings as "investments" that they would flip, or took out home equity loans to cash in on their real estate, which in the bubble mentality group-think would always skyrocket in value. In the tight market that ensued, speculators drove prices way up, forcing everyone to take out larger loans for overvalued properties. The guys who wrote the loans took their money and ran, dumping the loans on someone else.

Wall Street took those bad loans, intentionally making false assumptions about the borrowers' ability to repay, and then hid their poor quality by bundling them with good loans into giant packages of investment securities called CDOs. The rating agencies knowingly rubberstamped these as being AAA rated, because they were being paid by the banks to do so.

Then some of those investment banks created hedge funds that bet against the very same faulty securities that they had helped create. When doubt began to spread about these CDOs the whole house of cards began to collapse. Lehman Brothers was allowed to go bankrupt and that caused a real panic, resulting in the bailout and the mess we're in.

It's now at the point where even normally responsible people who are completely capable of repaying loans are just letting them go into default because they owe far more than the property is currently worth, because its value was driven into the stratosphere by speculators and overall economic conditions have deteriorated. Wall Street immorality is now business as usual for the rest of the country.

Under the Bush administration the regulation of Wall Street fell into disrepair and disuse, becoming a muddy, rutted road without any adult supervision. As the bankers' giant limousines race down Wall Street, they soak the average guy with the mud from the bailout and the increased "fees" they charge us just to get our money out of the bank. All the while the bankers sit in those limousines sipping champagne with their girlfriends who are all dolled up with jewelry from Tiffany's, paid for by giant bonuses that come out of our hides.

The Tea Party is now the tail wagging the dog of the Republican Party. But they've forgotten what got them mad in the first place, and have let nonsense like Obama's birth certificate and national health care distract them from the real problem: Wall Street greed and incompetence. Now they're demanding that even the meager regulatory improvements of Dodd-Frank that were made in the wake of the bailout be abolished and Wall Street be free to do it all over again.

But the Occupy Wall Street crowd is still mad at the bankers sneering at them from behind their tinted limousine windows.


Who are the real fruit cakes?