Lou Dobbs Over-the-Line

Lou Dobbs' rant about Treasury Secretary Paulson yesterday was way over-the-line. He did more than challenge Paulson's policies and proposals, he attacked him personally with some of the most condescending and insulting language I have heard from a host on CNN. Here's a transcript of Dobb's rant:

DOBBS: Well this Treasury secretary is the same buffoon who said a week ago there wasn't a problem, two weeks ago wasn't a problem, three weeks ago and really we don't care what he wants. He is nothing more than an empty suit parading around as the leader of this administration's economic team.

So Mr. Paulson, get over yourself. Either we straighten out the corruption and the excess on Wall Street and indeed in every aspect of this economy or we're going to have continuing, continuing crises, so get over your bad self, Henry Paulson.

You're hardly a genius and you're in no position to even utter a word as to what you would prefer. Shut up, get on with the job and listen to the people for a change. You have no -- absolutely no right to a view on this at all in my opinion. Thank you very much, Kitty. Kitty Pilgrim.

Well it's the subject of our poll tonight. As you might guess, Secretary Paulson I find to be an incompetent jerk. But we would like to get your opinion. Should Wall Street executives who oversaw the biggest market meltdown in American history be paid a dime of taxpayer-funded bonus money? Yes or no? Cast your votes at loudobbs.com. We'll have the results here later in the broadcast.

And yes, I said Henry Paulson, Treasury secretary, is absolutely an incompetent in a parading preening popinjay right now in the midst of crisis, not a lot of help.

I am not a fan of Henry Paulson. I am not a fan of the Bush administration. I am not a fan of Wall Street and I am certainly no fan of Wall Street executives, but everyone who holds office in this country deserves a modicum of respect.

I happen to agree with the point that Dobbs was raising. The compensation of Wall Street executives certainly needs to be reduced if the federal government steps in to bail out the finance industry.

Dobbs could have made his point without the name calling and the insulting personal attacks. We need to clean up more than the sleaze and greed on Wall Street. We also need to clean up the sleazy demagoguery in the mainstream media.

On McCain's Economic Prescription

Listening to John McCain's speech about the economic crisis this morning was difficult for me. I recall that McCain trusts Phil Gramm for economic advice more than anyone else.

Gramm was the co-chair of McCain's re-election campaign until he resigned just two months ago for the distraction he caused McCain's campaign when he said that the U.S. is only in a "mental recession" and "we have become sort of a nation of whiners."

Gramm was my congressman when I attended seminary. When he first ran he was a Democrat, but his economic philosophy was more palatable to Republicans and he changed parties.

More than anyone else in Congress, Gramm was the force behind the deregulation of the finance industry that led us into our current financial mess. He got plenty of help from his wife, Wendy, who sat on the board of Enron.

McCain's solution to the economic crisis is to fire the head of the Security and Exchange Commission and prosecute Wall Street executives for doing what Phil Gramm's legislation authorized them to do. Without saying so explicitly, McCain indicated he would also undo the effects of Gramm's legislation.

I wonder whether McCain realizes that Phil Gramm's policies -- policies that he supported -- are at the root of our current economic crisis?

I not sure McCain gets it yet.

America's Three Wise Men?

Today's Washington Post has published an article about the three key leaders guiding our country and the world through the current economic crisis. A crisis that some say may dwarf the Great Depression. Here is some basic information about America's three wise men:

Paulson, 62, is an investment banker who rose through the ranks of Goldman Sachs to lead the firm. A lanky former Dartmouth College offensive tackle and an intense workaholic, he said he agreed in 2006 to become the Bush administration's third Treasury secretary to prepare the government for a possible market crisis.

Bernanke, 54 and calm of demeanor, is one of the foremost scholars of financial crises, especially the Great Depression. Before being named Fed chairman in 2006, the largest organization he had run was Princeton University's economics department.

Geithner, 47, was a career staff member at the Treasury Department when Lawrence Summers, then a Treasury undersecretary, plucked him from obscurity in the early 1990s. He became a key member of the group that guided the Clinton administration's response to the international financial crises in the 1990s and has been honing his knowledge of Wall Street since taking over the New York Fed in 2003.

The key thing to note is that both Paulson and Bernanke took their jobs in 2006 with full knowledge that they would be dealing with the current economic crisis. It didn't come as a surprise to them or to many other people in this country.

Few in positions of leadership or in the mainstream media would listen to warnings about the housing bubble that the Bush administration created to prop up the economy while we went to war in Iraq. If you weren't afraid of listening to "liberal" voices on the internet (-- the only place they could find a voice), you could find repeated warnings that this would be the result of neo-conservative policies.

Thieves in High Places

The Economic Policy Institute has published information revealing the extent to which middle class working families have lost economic ground since the turn of the millenium.

When adjusted for inflation, median salaries have fallen by $2,000, while the average output per hour has increased by 18%. And these figures don't include the skyrocketing inflation numbers for 2008. When 2008 is added on, the line on the chart will look like it has fallen off a cliff.

If trickle down economics makes any sense (and I'm not sure that it does), it only makes sense when the people in charge are honest and conscientious. When crooks and thieves are in charge, the working classes get robbed.

End of the American Empire?

In September 2006, when the U.S. economy was booming, Dr. Nouriel Roubini, an economics professor at New York University, predicted an impending housing bust, credit crisis, oil shock and deep recession.

Then, he was ridiculed as a pessimist. Today, some consider him an economic "prophet."

In an recent interview with Stephen Mihm, Roubini warns people not to be deceived by those who think the crisis in our "sub-prime financial system" is coming to an end. Instead, he says we might be witnessing the end of the American empire:

But most important, in Roubini's opinion, is to realize that the problem is deeper than the housing crisis. "Reckless people have deluded themselves that this was a subprime crisis," he told me. "But we have problems with credit-card debt, student-loan debt, auto loans, commercial real estate loans, home-equity loans, corporate debt and loans that financed leveraged buyouts." All of these forms of debt, he argues, suffer from some or all of the same traits that first surfaced in the housing market: shoddy underwriting, securitization, negligence on the part of the credit-rating agencies and lax government oversight. "We have a subprime financial system," he said, "not a subprime mortgage market."

Roubini argues that most of the losses from this bad debt have yet to be written off, and the toll from bad commercial real estate loans alone may help send hundreds of local banks into the arms of the Federal Deposit Insurance Corporation. "A good third of the regional banks won't make it," he predicted. In turn, these bailouts will add hundreds of billions of dollars to an already gargantuan federal debt, and someone, somewhere, is going to have to finance that debt, along with all the other debt accumulated by consumers and corporations. "Our biggest financiers are China, Russia and the gulf states," Roubini noted. "These are rivals, not allies."

The United States, Roubini went on, will likely muddle through the crisis but will emerge from it a different nation, with a different place in the world. "Once you run current-account deficits, you depend on the kindness of strangers," he said, pausing to let out a resigned sigh. "This might be the beginning of the end of the American empire."

On The Great Deflation

William Greider, author of The Soul of Capitalism, pens some sobering words in an essay about our current financial crisis.  Here's a quote:

We are witnessing a momentous event -- the great deflation of Wall Street -- and it is far from over. The crash of IndyMac is just the beginning. More banks will fail, so will many more debtors. The crisis has the potential to transform American politics because, first it destroys a generation of ideological bromides about free markets, and, second, because it makes visible the ugly power realities of our deformed democracy. Democrats and Republicans are bipartisan in this crisis because they have colluded all along over thirty years in creating the unregulated financial system and mammoth mega-banks that produced the phony valuations and deceitful assurances. The federal government protects the most powerful interests from the consequences of their plundering. It prescribes "market justice" for everyone else.

His entire essay deserves a thoughtful reading. Here's a link.

IMF to Review U.S. Financial System

Der Spiegel is reporting that the International Monetary Fund is beginning a review of the U.S. financial system. Here's a quote:

Officials with the International Monetary Fund (IMF) have informed Bernanke about a plan that would have been unheard-of in the past: a general examination of the US financial system. The IMF's board of directors has ruled that a so-called Financial Sector Assessment Program (FSAP) is to be carried out in the United States. It is nothing less than an X-ray of the entire US financial system.

As part of the assessment, the Fed, the Securities and Exchange Commission (SEC), the major investment banks, mortgage banks and hedge funds will be asked to hand over confidential documents to the IMF team. They will be required to answer the questions they are asked during interviews. Their databases will be subjected to so-called stress tests -- worst-case scenarios designed to simulate the broader effects of failures of other major financial institutions or a continuing decline of the dollar.

Under its bylaws, the IMF is charged with the supervision of the international monetary system. Roughly two-thirds of IMF members -- but never the United States -- have already endured this painful procedure.

Susan Pace Hamill on Regressive Taxation

Susan Pace Hamill's speech at the Baptist Center for Ethics (BCE) luncheon in Memphis on June 19, 2008. Hamill talks about the nationwide system of regressive taxation that inordinately, unbiblically and unethically burdens the poor.

Robert Parham, Director of BCE and pictured above, introduces Hamill. Note: There are a few seconds without sound at the beginning.

Susan Pace Hamill on Transparent State Budgets

3 minute video of Susan Pace Hamill, Professor of Law at the University of Alabama, responding to a question at the Baptist Center for Ethics luncheon at Memphis, TN today. Hamill talks about the need to have state budget information available to the public on the internet.

I'll post higher quality video of her entire speech next week.