So Senate Republicans invoked the threat of a filibuster. And the ‘centrist’ group has leveraged that threat to add more tax cuts that won’t accomplish anything and cut out a lot of spending that would.
One of the interesting side lights to the Stimulus Bill fight is that it’s given John McCain an angle to get his ego and anger engaged again in the political fray. McCain went on the floor today with a harsh response to President Obama’s speech yesterday before the House Democrats.
President Obama gives his support to the new stimulus bill, declaring that “perfect should not be the enemy of the absolutely necessary.” Meanwhile, the Republican leadership lines up to indicate that they will still oppose it. That and other political news in today’s TPMDC Saturday Roundup.
From WaPo …
Michael S. Steele, the newly elected chairman of the Republican National Committee, arranged for his 2006 Senate campaign to pay a defunct company run by his sister for services that were never performed, his finance chairman from that campaign has told federal prosecutors.
GOP opposition gets louder as passage of a stimulus compromise becomes more likely. That and other political news in today’s TPMDC Sunday Roundup.
A lot of readers see what Collins, Nelson, Specter et al. are doing in the worst light. Nelson as a turncoat. And Collins, Snowe and Specter diluting the Stimulus Bill to no good end. On the policy merits, I completely agree. As many others with greater grasps of the budgetary and economics particulars have argued, the list of cuts they’ve pushed through follow no coherent approach to the package — and build up the least effective parts of the package at the expense of the most. They follow a logic of political grandstanding.
But one of the biggest outside, labor-liberal groups pushing this bill, Americans United for Change, is out in these states running new ads this weekend in support of Collins, Specter, Snowe and Nelson.
My mother-in-law mentioned this story to me today. But I hadn’t heard about it. ABC has put together a major piece on a woman who ran an escort service servicing Wall Street, much as the late DC Madam did down in DC. And just they did in the earlier case, Brian Ross’s investigative unit at ABC has gotten the women — who’s now out after serving three months in prison — to share her book of addresses and names of clients.
Back in that earlier case, beside netting the oafish Sen. David Vitter (R-LA), the list never really yielded the kind of names people thought it might. But the hints from Ross suggest the catch in this case might be quite a bit larger.
Now, what private individuals do with their own money is one thing. But in this case, the MO seems to have involved serious tax fraud, because the extra benefit with this escort service was that they’d bill it to you as various sorts of business expenses — construction, cleaning, accounting, etc. So basically you could give the taxpayer the same treatment as the escort.
I found this video of one of the segments on youtube …
On Friday we interviewed Nobel prize-winning economist Joe Stiglitz for an upcoming episode of TPMtv. It was very clarifying on a numbers of topics. And it confirmed for me everything I’d thought to this point about the first and
now (soon-to-be-announced) second bank bailouts. It now seems like we’re going to go the ‘bad bank’ route. Only instead of buying the crappy assets at inflated values (to absorb the bank’s loses for them), we’re going insure the assets so we can absorb the losses dribbled out over time.
Many, perhaps most, of these big banks are insolvent. But they refuse to recognize it. They insist that these ‘toxic assets’ are worth much more than anyone is willing to pay for them. Stiglitz’s argument is that this is really a zero sum game over who picks up this tab — the banks, their shareholders and bondholders or the taxpayers. A far better approach is take these banks through some sort of structured reorganization, something like bankruptcy, though probably it would need to be customized in some ways given the scale of the institutions and the larger issues involved. Feds take over the bank (just like they routinely do when little banks fail), run it until things stabilize, then sell it to new investors.
That’s ‘nationalization’, I guess. But it’s really not any different from what we did with IndyMac. And that worked out okay. We even found some people to sell it to.
Taxpayers are already providing these banks with far more dollars than the markets say they’re worth. So there’s really no way to get a good deal for the taxpayers without owning the institutions more or less outright. The math just doesn’t work. So we get more and more convoluted ways of structuring bad deals for the taxpayer to avoid temporary public ownership. As Krugman put it a few days ago, “the Obama administration appears to be tying itself in knots to avoid this outcome.”
What’s as troubling as the big rip-off of taxpayer money is that what Obama’s attempting on the side of rebuilding the real economy could founder on the public backlash against what looks like a very misguided way to get a handle on the banking crisis.
We’ll be bringing you the Stiglitz interview soon.
Not unlike some of our venerated financial institutions, the Council on Foreign Relations seems to have gone long on right-wing cranks just as the market for them has plummeted.