Pay Your Money, Take Your Chances

--Lalo Alcarez

Ranger Question of the Day:
USAToday headline --
"Deportation Tears Families Apart";
Don't endless wars tear families apart, too?
How about relentless financial insecurity?

This sector of the world about which
science could not utter a single word
was nothing less than this:
what it is like to be an individual living
in the United States in the twentieth century
--Diagnosing The Modern Malaise,
Walker Percy
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Take your pick: What is the greater threat to welfare of the average taxpaying U.S. citizen -- Terrorism, or Wall Street?

Hundreds of billions of dollars were lost or stolen by the denizens of the large corporate banks. To date there have been no criminal prosecutions of these thieves.

Contrast this white collar crime with that of a piddling player like Jose Pimenthal, recently arrested on terrorism charges in the town that brought us the sub-prime debacle. Pimenthal is a pathetic wannabe devoid of any operational terrorist skills and who -- like all the other poor zhlubs -- will be convicted of terrorist activity and will spend the rest of his sorry life in a maximum security prison.

Pimenthal's poverty of thought should have been evident in his misplaced decision to go from being Hispanic to Hispanic-Muslim, and plotting bomb attacks against the United States Postal Service, and entity imploding nicely without any two-bit help from another bomber manque with a WMD (weapon of minor destruction).

Weigh the harm caused by a Pimenthal against that perpetrated by the respected investment bankers on Wall Street. The ineffective pipe bomb that Pimenthal was allegedly trying to build would have been as effective as flatus in a windstorm; the fallout from the financial meltdown is still cycling the globe.

We need some perspective on the reality of our lives.

Like the news show host says, The Answer: Bankers are more dangerous than domestic terrorists.

Passing the Buck

A man with a briefcase can steal millions
more than any man with a gun
--Don Henley

The best, first stimulus may be money policy
--Paul O'Neil
________________

Ranger is not an economist -- that is only one aspect of modern America he does not understand -- but he really does not understand the interest-only mortgages that were so popular and which helped fuel the subprime mortgage meltdown.

The subprime mortgages were a Ponzi scheme enacted by bankers and facilitated by government encouragment and negligence. The mortgagee could not afford a prime mortgage or saw fit not to use one (flipping) based upon the assumption that holding the property for a short period would ride the spiralling market to a big paper profit. Money for nothing.

It was part of a New America where profits grew on mortgages that one could not afford, yet felt entitled to. Those with interest-only mortgages were making money with funds they didn't have on certificates they could not pay when the imaginary profits failed to materialize. The only way they could pay is if they "flipped" the property, continuing their small part in the pyramid project.

This was all done with government concurrence and sponsorship. The same government that recently indicted Mr. Madoff for doing the very same thing.

When it was reported A.I.G. would pay $165 million in bonuses to executives in the financial products division -- the unit that brought the company to the brink of collapse last year -- Edward M. Liddy, the government-appointed chairman of A.I.G., said "at least some bonuses were needed to keep the most skilled executives" (AIG Bonuses).

Liddy wrote Treasury secretary Geithner, “We cannot attract and retain the best and the brightest talent to lead and staff the A.I.G. businesses — which are now being operated principally on behalf of American taxpayers — if employees believe their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury”

One could substitute "slimiest weasels" for best and brightest. (The financial products division "wrote trillions of dollars’ worth of credit-default swaps that protected investors from defaults on bonds backed in many cases by subprime mortgages.") Maybe we need to let the rats jump ship.

Yet America hopes not to rock the boat too much. It had a great scheme going for a while, until they didn't. Richard Cohen wrote in the WaPo, "The financial instruments that Wall Street firms were both peddling and buying are the functional equivalent of particle physics. To this day, no one knows their true worth" (Don't Blame Jim Cramer).

Many would like to build the same house up again. However, like so many children's building blocks, they are destined to tumble down again.

It seems to Ranger that the stimulus package and bailouts are exactly the same thing as interest-free loans to private borrowers. Our elected leaders are attempting to build or salvage a national economy with money that we do not have on businesses which have already failed, hoping that when the note comes due the people will be able to absorb the note.

We do not have the money to finance the stimulus program, nor does it appear that any thought is being given to the pay-off on the note -- the looming balloon payment. The printing presses roll on, the national debt increases, and we cannot even pay off the interest.

The U.S. is operating as the citizen who finds himself at the Payday Loan Office, or signing that interest-only mortgage.

What is left to cover the balance due? Politicians always pass the bill, and accountability remains for some down the road moment. This is why Madoff went to jail; his scam caught up with him.

Our national financial policy is like the interest-only mortgage. The $787 Billion is not correcting the core problem. It pays the interest on a loan we cannot amortize.

How do our politicians differ from the infamous Mr. Madoff?

Too Much, Too Little, Too Late

Look here, Mr. Hoover, it's see what you done
You went off a-fishin', let the country go to ruin.
Now he's gone, I'm glad he's gone.
--White House Blues (1932)

Why are we here? Where are we going?

It's time that we found out

We're not here to stay;

we're on a short holiday

--Life is Just a Bowl of Cherries,

Brown/Henderson (1931)

Once in khaki suits, gee we looked swell,

Full of that Yankee Doodly Dum,

Half a million boots went slogging through Hell,

And I was the kid with the drum!

--Brother, can You Spare a Dime?,

Harburg/Gorney (1931)

______________

The banking behemoth Citigroup lost billions this last quarter. . .despite $45 billion in bailout monies. The $700 billion TARP (Troubled Asset Relief Program") is looking like it's a day late and a dollar short.

Throwing good money after bad is how they used to say it. People who had been through The Great Depression coined all kinds of quaint monetary phrases to help keep one's financial house neat -- "penny wise, pound foolish, "A stitch in time saves nine," "A penny saved is a penny earned." It amounts being thrifty, but not miserly. They could form the nucleus of a good introductory finance course for college business students.

If change is what we are after, why not implement the economic stimulus in reverse? Give the money to the lower echelons of the societal food chain. We know they would spend the money on consumer goods, and not try to buy banks with it.

Instead, we are giving 100's of billions to the wealthy and it is not trickling down. Why not try a "trickle-up"? Senator Tom Harkin (IA) sees the only solution to the economic crisis as getting Americans back to work and insured. He doubts that, "If we just put it in at the top, it’s going to trickle down.” As coulumnist Bob Herbert wrote, "Been there. Done that. Didn’t work" (Obama's Biggest Challenge.)

However, the highly entitled top of the economic food chain will not allow anything but the old paradigm. Sorry Mr. Bentham, but we are not a nation of the greatest good for the greatest number, though it makes us feel righteous to think so. We are a nation that shovels $100's of billions to the very banks and corporations that cause the problems, thus passing for a solution in the "greatest democracy" in the world.

NYT Economist Paul Krugman says pshaw to talk of "jump-starting" the economy via business and payroll tax cuts. Reviving the economy will be long-haul business.

"Money not squandered on ineffective tax cuts could be used to provide further relief to Americans in distress — enhanced unemployment benefits, expanded Medicaid and more. And why not get an early start on the insurance subsidies — probably running at $100 billion or more per year — that will be essential if we’re going to achieve universal health care? (Ideas for Obama.)"

Krugman quotes a report released by Obama's future head of the Council of Economic Advisers and the vice president’s chief economist who wrote, “a dollar of infrastructure spending is more effective in creating jobs than a dollar of tax cuts.”

Democracy in America is a Wall Street orchestrated Ponzi scheme.

Knife to the Throat

It's a lesson too late for the learnin'
Made of sand, made of sand
--The Last Thing on My Mind, Tom Paxton

Well poor boy spent all he had,
famine come in the land
--Prodigal Son, Rolling Stones

I hear the train a comin'
It's rollin' 'round the bend,
And I ain't seen the sunshine,
Since, I don't know when
--Folsom Prison Blues, Johnny Cash

breaking into Fort Knox,
stealing our intentions,
hangars sitting gripped in oil
Crying FREEDOM!
--B.Y.O.B, S.O.A.D.
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Ranger has been on the road for a month now, thinking, driving and avoiding getting lost. He has been a modern day Jimmy Appleseed, sowing his thoughts -- welcome or not -- throughout his travels.

Yesterday we toured Cleveland, Ranger's stomping grounds. Save for the gentrified downtown, the ubiquitous urban decay of Cleveland reflected that seen in Buffalo, Erie, Toledo, and every other city outside of the Maine, Vermont and New Hampshire leg of the tour.

Eastside Cleveland is a garbage dump, an absolute scab on the wound that that is the current U.S. of A. Everywhere, extreme wealth abutted by the more ubiquitous extreme poverty. Our loathing for the Phony War on Terror (PWOT ©) intensifies and solidifies. Let us rebuild our shit hole cities before we rebuild foreign shit hole cities. We do not have the money to do both.

Our corroded financial reality is now an open scab for all to see, even the ordinarily clueless George Bush. Though one hopes for decisive corrective action, overheard last night in an Ohio restaurant from a table of retirees was the following: "Things may be bad, but they'll be worse if Obama gets in and tries to nigger-rig things."

Happy for the moment they were in their presumed posture of smug superiority and willful blindness. They refused to recognize the people who actually have placed their retirements in jeopardy. These people are in the bag for McCain and Palin, who can can be dumb as logs as far as they are concerned. They will not vote for Obama. This indicts the foolishness of the Democratic voters as strongly as it does the pathetic bigotry of many citizens.

We met a 30-year firefighter earlier in the day and discussed the event of 9-11, with which he had some relationship. Ranger asked why he thought the people in the first plane didn't take action when the hijackers cut the stewardess's throat.

The answer is the U.S. public is lulled into a sense of security. Someone, somewhere, will know what is going down, and will talk the hijackers down to the tarmac, where most passengers will then be allowed to disembark. That is the way this scenario usually played out, but not this time. However, the learning curve was sharp and the third flight saw a passenger rebellion.

The people can yet summon outrage. But they must first acknowledge and assign responsibility. This economic "crisis" has been a long time in the coming; the train's lights have been bearing down the tunnel a long while. Hardly an unforeseen crisis. It now diverts attention from foreign policy, and it will earn BushCheney's minions a final Big Blowout before the elections. It does nothing for the solid, vanishing middle class citizen on whose backs this nation rides.

Both parties promise tax breaks (Obama caters to the middle class with an $85 billion a year plan; McCain pledges to continue Bush's ill-advised breaks, estimated at $1.5 trillion over 10 years.) The current $650 billion+ U.S. defense budget excludes secret funding and non-emergency bailouts, yet we are promised tax reductions?

Do the taxpaying American people (and that includes members of Congress) actually believe taxes can be cut while federal spending is increased? Did money start growing on the blighted birch trees of the Green Mountains?

Such magical thinking has gotten us into this mess. Both parties propose initiatives which cost money. The solution? Lower taxes. Yet everyone has eyes to see. Biden even mentioned the blight in his home area in tonight's debate.

The inner city blight across America is something that neither Obama nor McCain address, save in the vaguest terms. Last month Thomas Friedman wrote about the primacy of need in the U.S. state of Georgia, while the U.S. government pledged aid to the Caucasus Republic of Georgia, albeit a mere $1 billion (Georgia on My Mind.)

Friedman wrote, "Wow, I thought. That’s great: $1 billion to fix Georgia’s roads and schools. But as I read on, I quickly realized that I had the wrong Georgia."

This is where the outrage should lie.