How to solve the toxic asset problem: give them to bank executives as bonuses

From James Kwak:

Why not say that all bank compensation above a baseline amount - say, $150,000 in annual salary - has to be paid in toxic assets off the bank’s balance sheet? Instead of getting a check for $10,000, the employee would get $10,000 in toxic assets, at their current book value. A federal regulator can decide which assets to pay compensation in; if they were all fairly valued, then it wouldn’t matter which ones the regulator chose. That would get the assets off the bank’s balance sheet, and into the hands of the people responsible for putting them there - at the value that they insist they are worth. Of course, the average employee does not get to set the balance sheet value of the assets, and may not have been involved in creating or buying those particular assets. But think about the incentives: talented people will flow to the companies that are valuing their assets the most realistically (since inflated valuations translate directly into lower compensation), which will give companies the incentive to be realistic in their valuations. (Banks could inflate their nominal compensation amounts to compensate for their overvalued assets, but then they would have to take larger losses on their income statements.)

We can dream, can’t we?

Lemon Socialism

“lemon socialism”: taxpayers bear the cost if things go wrong, but stockholders and executives get the benefits if things go right.

From Paul Krugman

Dogbert Explains Fox News

Full pic.

September Madness: Sports and the Economy

Click for the big version.

Lil' Bill O'Reilly

Funny! The Kid's pretty good...

Words and Politics: Count the Words from the Conventions

Click to see

Kucinich @ DNC: Wake up America!

I like the energy. We need more of that.

Swedes Won't Allow Teaching Religion as Truth in Schools

The Swedish government has announced plans to clamp down hard on religious education. It will soon become illegal even for private faith schools to teach religious doctrines as if they were true. In an interesting twist on the American experience, prayer will remain legal in schools - after all, it has no truth value. But everything that takes place on the curriculum's time will have to be secular. "Pupils must be protected from every sort of fundamentalism," said the minister for schools, Jan Björklund.

Creationism and ID are explicitly banned but so is proselytising even in religious education classes. The Qur'an may not be taught as if it is true even in Muslim independent schools, nor may the Bible in Christian schools. The decision looks like a really startling attack on the right of parents to have their children taught what they would like. Of course it does not go so far as the Dawkins policy of prohibiting parents from trying to pass on their doctrines even in their own families - and, if it did, it would certainly run foul of the European convention on human rights. It does not even go as far as Nyamko Sabuni, the minister for integration - herself born in Burundi - would like: she wanted to ban all religious schools altogether. But it is still a pretty drastic measure from an English perspective.

In the background to these announcements comes the release of a frightening documentary film on Swedish jihadis, which follows young men over a period of two years on their slow conversion to homicidal lunacy.

IMNSHO, I think this is pretty sensible. As I've said before, the opposite of radical extremism from one religion is NOT radical extremism from another religion -- it's critical thinking.

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Federal Reserve: Video Documentary

Check out this page with a documentary about the Federal Reserve. Most people are completely unaware about the issue.

Jones Soda: Yes We Can Cola

See Here.

McCain to Drop Out?

When the Republicans choose their candidate on September 4th, there is a very real chance that they could throw the election into an unexpected chaos as they pull a genuine September Surprise.

I think there is every reason to believe John McCain won't be the nominee. Ok, let me say that again. McCain will not be the Republican candidate in November.

Here's how it could happen:

At some point in mid August, John McCain will announce that he has decided that he can not accept his party's nomination for president. The reason will be health-related, and that may turn out to be the truth. Anyone who's seen him on stage these days knows he looks like he's about to keel over. And anyone who's been on a presidential campaign knows the physical demands are grueling and can be a challenge for a young man.

But excuses or facts hardly matters. He won't be accepting his party's nomination.

The reasons are simple. He can't win. Now that Obama is the presumptive Democratic nominee -- the polls all show that McCain's pro-war stance and Bush endorsement make him a lost cause in November. That combined with soft stand on litmus test conservative issues make him an unpopular candidate among the base.

There are a whole list of Republicans who in many ways are more likely to energize the Republican base. One thing is certain -- there are candidates that will play to the core issues in ways that McCain simply can't.

Here's a list of names. Some you know, some you don't. But each of them knows their name is in play. Among them --

Condoleezza Rice (Secretary of State)
Colin Powell (fmr Sec. of State)
Marilyn Musgrave (Colorado Congresswoman)
Mitt Romney (fmr Massachusetts Governor)
Mike Huckabee (fmr Governor of Arkansas)
Charlie Crist (Florida Governor)
Tim Pawlenty (Minnesota Governor)
Bobby Jindal (Louisiana Governor)
Mark Sanford: (Governor of South Carolina)
John Thune (Senator from South Dakota)
Dick Lugar (Senator from Indiana)
Chuck Hagel (Senator from Nebraska)
MIchael Bloomberg (NYC Mayor)

More.

Supreme Court Justices Rule Terror Suspects Can Appeal in Civilian Courts

Foreign terrorism suspects held at the Guantánamo Bay naval base in Cuba have constitutional rights to challenge their detention there in United States courts, the Supreme Court ruled, 5 to 4, on Thursday in a historic decision on the balance between personal liberties and national security.

“The laws and Constitution are designed to survive, and remain in force, in extraordinary times,” Justice Anthony M. Kennedy wrote for the court.

The justices rejected the administration’s argument that the individual protections provided by the Detainee Treatment Act of 2005 and the Military Commissions Act of 2006 were more than adequate.

“The costs of delay can no longer be borne by those who are held in custody,” Justice Kennedy wrote, assuming the pivotal rule that some court-watchers had foreseen.

Joining Justice Kennedy’s opinion were Justices John Paul Stevens, Stephen G. Breyer, Ruth Bader Ginsburg and David H. Souter.

The dissenters were Chief Justice John G. Roberts Jr. and Justices Samuel A. Alito Jr., Antonin Scalia and Clarence Thomas, generally considered the conservative wing on the court.

More.

WTF? Rupert Murdoch Just Short of Endorses Obama

Rupert Murdoch -- Chairman of News Corp, new WSJ owner, and longtime torchbearer for conservative politics -- said this about Barack Obama: "He is a rock star. It's fantastic" "I love what he is saying about education." "I don't think he will win Florida.....but he will win in Ohio and the election". "I am anxious to meet him." "I want to see if he will walk the walk."

About the presumptive Republican nominee, Murdoch said, "McCain is a friend of mine. He's a patriot. But he's unpredicatble. Doesn't seem to know much about the economy. He has been in Congress a long time, and you have to make a lot of compromises. So what's he really stand for?... I think he has a lot of problems."

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Robert F. Kennedy Jr. speaks out

George Bush Sr's corrupt idiot son is elevated to the White House where he has succeeded in doing more damage to America than any external enemy in its history.

Meanwhile, the deeply informed, insightful, patriotic son of Robert F. Kennedy is all but banned from the airwaves.

This tells you everything you need to know about why America is where is is today and what track it's on.

"we know more about kate and tom than global warming"
"that has profound implications for our democracy... a democracy cannot function for long without an informed public"
"80% of Republicans are Democracts who don't know what's going on"
"there's not a values deficit, but an information deficit"

More here.

Estimate: 362,000 Votes for Clinton Come from McCain Supporters

(...)and over the past month, one out of every ten votes for Hillary Clinton has come from a John McCain supporter.

These McCainiacs for Clinton vote for Clinton in the Democratic primary, but in the general election they say they will choose John McCain -- even if Clinton wins the Democratic nomination.

I don't know whether these voters are part of Rush Limbaugh's Operation Chaos or if they are acting on their own initiative, but it doesn't matter. They will not support Clinton in the fall, a fact that must be taken into account by undeclared superdelegates as they assess Clinton's flimsy popular vote argument.

My numbers come from a question in the exit poll survey which asks all voters to say who they would vote for in both a McCain-Clinton contest and in a McCain-Obama contests. Based on the answers to those questions, the exit poll data shows Clinton received the following votes in each state (rounded to the nearest 500):

* Pennsylvania: 71,500 (6% of her total)
* Indiana: 83,500 (13% of her total)
* North Carolina: 106,000 (16% of her total)
* West Virginia: 24,500 (10% of her total)
* Kentucky: 61,500 (13% of her total)
* Oregon: 14,500 (4% of her total)

In all, Clinton's total of 362,000 votes from McCain supporters easily dwarfed the 120,000 votes Barack Obama received.

What this means is that over the past month alone, John McCain's supporters have helped Hillary Clinton narrow Barack Obama's overall "popular vote" lead by nearly a quarter-million voters.

Read details here.

People want to do nation-building... in America

People want to do nation-building. They really do. But they want to do nation-building in America.

Our president’s latest energy initiative was to go to Saudi Arabia and beg King Abdullah to give us a little relief on gasoline prices. I guess there was some justice in that. When you, the president, after 9/11, tell the country to go shopping instead of buckling down to break our addiction to oil, it ends with you, the president, shopping the world for discount gasoline.

A few weeks ago, my wife and I flew from New York’s Kennedy Airport to Singapore. In J.F.K.’s waiting lounge we could barely find a place to sit. Eighteen hours later, we landed at Singapore’s ultramodern airport, with free Internet portals and children’s play zones throughout. We felt, as we have before, like we had just flown from the Flintstones to the Jetsons. If all Americans could compare Berlin’s luxurious central train station today with the grimy, decrepit Penn Station in New York City, they would swear we were the ones who lost World War II.

How could this be? We are a great power. How could we be borrowing money from Singapore? Maybe it’s because Singapore is investing billions of dollars, from its own savings, into infrastructure and scientific research to attract the world’s best talent — including Americans.

And us? Harvard’s president, Drew Faust, just told a Senate hearing that cutbacks in government research funds were resulting in “downsized labs, layoffs of post docs, slipping morale and more conservative science that shies away from the big research questions.” Today, she added, “China, India, Singapore ... have adopted biomedical research and the building of biotechnology clusters as national goals. Suddenly, those who train in America have significant options elsewhere.”

Who will tell the people? We are not who we think we are. We are living on borrowed time and borrowed dimes. We still have all the potential for greatness, but only if we get back to work on our country.

More.

Profiteering from the 'War on Terror'

Editor’s Note: One of George W. Bush’s long-lasting legacies may be what President Dwight Eisenhower might have called the “terror-industrial complex,” a vast web of interlocking corporations, government agencies and consultancies that have turned the shock of 9/11 into a blank check against the U.S. Treasury.

In this guest essay, the Independent Institute’s Ian S. Lustick looks at the ever-expanding size of this leviathan that is devouring tax dollars and American liberties.

In 2004, I attended a lecture given by the official in charge of encouraging scientists to shift their research activities in this direction. We were told that no matter what topics we worked on, and whether we were natural scientists or behavioral scientists, our work likely could help in the fight against terrorism.

The official strongly encouraged us to submit grant proposals for projects based on “outside the box” thinking because, he said, there was plenty of money available.

Officially, the terrorist threat level is always and everywhere no less than elevated. The threat is constantly dangled before us: ports, border crossings, the milk supply, cattle herds, liquid natural gas tankers, nuclear power plants, drinking water, tunnels, bridges, subways.

The result: continued support for ever-increasing funding.

Within little more than half a decade America adjusted psychologically, politically and militarily to the Soviet enemy and its capacity to incinerate our cities on a moment’s notice.

We came to know the Soviet enemy very well and were able to adopt prudent, realistic and successful policies in the face of genuine threats of national destruction posed by Moscow’s nuclear arsenal.

Rather than let our fears and anxieties of Muslim fanatics drive policy, we need the same sober approach to the real but lesser threat posed by terrorists.

Very interesting article, worth the read. Click Here.

Olbermann Fact Checks the Bush Recession

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The Long Term Plan to Steal Elections

Jim Crow has returned to American elections, only in the twenty-first century, instead of men in white robes or a barrel-chested sheriff menacingly patrolling voting precincts, we are more likely to see a lawyer carrying a folder filled with briefing papers and proposed legislation about "voter fraud" and other measures to supposedly protect the sanctity of the vote.

Since the 2004 election, activist lawyers with ties to the Republican Party and its presidential campaigns, Republican legislators, and even the Supreme Court -- in a largely unnoticed ruling in 2006 -- have been aggressively regulating most aspects of the voting process. Collectively, these efforts are undoing the gains of the civil rights era that brought voting rights to minorities and the poor, groups that tend to support Democrats.

In addition, the Department of Justice (DOJ), which for decades had fought to ensure that all eligible citizens could vote, now encourages states to take steps in the opposite direction. Political appointees who advocate for stringent requirements before ballots are cast and votes are counted have driven much of the DOJ's Voting Section's recent agenda. As a result, the Department has pushed states to purge voter lists, and to adopt newly restrictive voter ID and provisional ballot laws. In addition, during most of George W. Bush's tenure, the DOJ has stopped enforcing federal laws designed to aid registration, such as the requirement that state welfare offices offer public aid recipients the opportunity to register to vote.

Scary.
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Socialism Is OK for Rich White Guys, But Not the Rest of Us

From Alternet:

Universal Health Care is socialism! Somewhere a white guy is complaining about welfare queens, and our $12 billion a month occupation is a battle against a foe so dangerous they always lose (especially upper management) yet can never be defeated. Because freedom rocks, and capitalism rolls.

Unless, of course, you are the archetype of capitalism, then socialism is awesome!

From the Washington Post:

Never do I want to hear again from my conservative friends about how brilliant capitalists are, how much they deserve their seven-figure salaries and how government should keep its hands off the private economy.

The Wall Street titans have turned into a bunch of welfare clients. They are desperate to be bailed out by government from their own incompetence, and from the deregulatory regime for which they lobbied so hard. They have lost "confidence" in each other, you see, because none of these oh-so-wise captains of the universe have any idea what kinds of devalued securities sit in one another's portfolios.

So they have stopped investing. The biggest, most respected investment firms threaten to come crashing down. You can't have that. It's just fine to make it harder for the average Joe to file for bankruptcy, as did that wretched bankruptcy bill passed by Congress in 2005 at the request of the credit card industry. But the big guys are "too big to fail," because they could bring us all down with them.

Enter the federal government, the institution to which the wealthy are not supposed to pay capital gains or inheritance taxes. Good God, you don't expect these people to trade in their BMWs for Saturns, do you?

In a deal that the New York Times described as "shocking," J.P. Morgan Chase agreed over the weekend to pay $2 a share to buy all of Bear Stearns, one of the brand names of finance capitalism. The Federal Reserve approved a $30 billion -- that's with a "b" -- line of credit to make the deal work.
...
So now the bailouts begin, and Wall Street usefully might feel a bit of gratitude, perhaps by being willing to have the wealthy foot some of the bill or to acknowledge that while its denizens were getting rich, a lot of Americans were losing jobs and health insurance. I'm waiting.