Give Due Credit

The Card Game

Be Happy

QUOTES
Success-related happiness is a very short term state.

You have to treat acute suffering before you treat lack of happiness...you put the biggest fire out first.

Neutral (state of the brain), generally speaking, is mildly exploratory, mildly positive...if your basic needs are met and you're satiated, you're going to be mildly curious about your surrounding.

We're too focused on happy...We want the outcome but we don't wish to undergo the process for getting there.

The root to happiness is to be maximally resposive to everything that happens in your life - the good, the bad, the blah - the everything.

Why do we need to be this ideal? No one is perfect.

There are lots of pathologies associated with excessive positive emotion. Mania, for example, is a disease of positive emotion.

Cocaine is unhealthy happy.

People can adapt to environments that are incresingly stressful so that after awhile they can live and survive within those environments.

We can train ourselves to be more present in the moment.

It's a notion that's dying that the brain is set in stone after a certain time.

Stimuli that indicate you're making progress produce positive emotions.

Mindfulness can bring their attention back to the present and help them see the beauty and value of things that are immediately in front of them and that's not trivial.

People are very fragile.

Our nervous systems are tilted to protect us.

There are people that need meds...but they're not everything.

We're starting to see this type of mindfulness practices and contemplative practices being put into the curriculum of K through 12 and it's inevitable now that we're going to start using this type of therapy as a way of developing the mental muscle.

You don't want to limit the options that are available to people who are suffering.

The advantage to the mindfulness training is that it's a non-drug option and because it involves learning it's likely to be more permanent. Also the probability that it's going to produce negative side effects is very low which is something you can't necessarily say about medications.

Play is great.

The Deficit

US Debt [wikipedia.org]

David Leonhardt of The New York Times

America's Sea of Red Ink Was Years in the Making
by David Leonhardt
[The New York Times - Jne.09]

There are two basic truths about the enormous deficits that the federal government will run in the coming years.

The first is that President Obama’s agenda, ambitious as it may be, is responsible for only a sliver of the deficits, despite what many of his Republican critics are saying. The second is that Mr. Obama does not have a realistic plan for eliminating the deficit, despite what his advisers have suggested.

The New York Times analyzed Congressional Budget Office reports going back almost a decade, with the aim of understanding how the federal government came to be far deeper in debt than it has been since the years just after World War II. This debt will constrain the country’s choices for years and could end up doing serious economic damage if foreign lenders become unwilling to finance it.

Mr. Obama — responding to recent signs of skittishness among those lenders — met with 40 members of Congress at the White House on Tuesday and called for the re-enactment of pay-as-you-go rules, requiring Congress to pay for any new programs it passes.

The story of today’s deficits starts in January 2001, as President Bill Clinton was leaving office. The Congressional Budget Office estimated then that the government would run an average annual surplus of more than $800 billion a year from 2009 to 2012. Today, the government is expected to run a $1.2 trillion annual deficit in those years.

You can think of that roughly $2 trillion swing as coming from four broad categories: the business cycle, President George W. Bush’s policies, policies from the Bush years that are scheduled to expire but that Mr. Obama has chosen to extend, and new policies proposed by Mr. Obama.

The first category — the business cycle — accounts for 37 percent of the $2 trillion swing. It’s a reflection of the fact that both the 2001 recession and the current one reduced tax revenue, required more spending on safety-net programs and changed economists’ assumptions about how much in taxes the government would collect in future years.

About 33 percent of the swing stems from new legislation signed by Mr. Bush. That legislation, like his tax cuts and the Medicare prescription drug benefit, not only continue to cost the government but have also increased interest payments on the national debt.

Mr. Obama’s main contribution to the deficit is his extension of several Bush policies, like the Iraq war and tax cuts for households making less than $250,000. Such policies — together with the Wall Street bailout, which was signed by Mr. Bush and supported by Mr. Obama — account for 20 percent of the swing.

About 7 percent comes from the stimulus bill that Mr. Obama signed in February. And only 3 percent comes from Mr. Obama’s agenda on health care, education, energy and other areas.

If the analysis is extended further into the future, well beyond 2012, the Obama agenda accounts for only a slightly higher share of the projected deficits.

How can that be? Some of his proposals, like a plan to put a price on carbon emissions, don’t cost the government any money. Others would be partly offset by proposed tax increases on the affluent and spending cuts. Congressional and White House aides agree that no large new programs, like an expansion of health insurance, are likely to pass unless they are paid for.

Alan Auerbach, an economist at the University of California, Berkeley, and an author of a widely cited study on the dangers of the current deficits, describes the situation like so: “Bush behaved incredibly irresponsibly for eight years. On the one hand, it might seem unfair for people to blame Obama for not fixing it. On the other hand, he’s not fixing it.”

“And,” he added, “not fixing it is, in a sense, making it worse.”

When challenged about the deficit, Mr. Obama and his advisers generally start talking about health care. “There is no way you can put the nation on a sound fiscal course without wringing inefficiencies out of health care,” Peter Orszag, the White House budget director, told me.

Outside economists agree. The Medicare budget really is the linchpin of deficit reduction. But there are two problems with leaving the discussion there.

First, even if a health overhaul does pass, it may not include the tough measures needed to bring down spending. Ultimately, the only way to do so is to take money from doctors, drug makers and insurers, and it isn’t clear whether Mr. Obama and Congress have the stomach for that fight. So far, they have focused on ideas like preventive care that would do little to cut costs.

Second, even serious health care reform won’t be enough. Obama advisers acknowledge as much. They say that changes to the system would probably have a big effect on health spending starting in five or 10 years. The national debt, however, will grow dangerously large much sooner.

Mr. Orszag says the president is committed to a deficit equal to no more than 3 percent of gross domestic product within five to 10 years. The Congressional Budget Office projects a deficit of at least 4 percent for most of the next decade. Even that may turn out to be optimistic, since the government usually ends up spending more than it says it will. So Mr. Obama isn’t on course to meet his target.

But Congressional Republicans aren’t, either. Judd Gregg recently held up a chart on the Senate floor showing that Mr. Obama would increase the deficit — but failed to mention that much of the increase stemmed from extending Bush policies. In fact, unlike Mr. Obama, Republicans favor extending all the Bush tax cuts, which will send the deficit higher.

Republican leaders in the House, meanwhile, announced a plan last week to cut spending by $75 billion a year. But they made specific suggestions adding up to meager $5 billion. The remaining $70 billion was left vague. “The G.O.P. is not serious about cutting down spending,” the conservative Cato Institute concluded.

What, then, will happen?

“Things will get worse gradually,” Mr. Auerbach predicts, “unless they get worse quickly.” Either a solution will be put off, or foreign lenders, spooked by the rising debt, will send interest rates higher and create a crisis.

The solution, though, is no mystery. It will involve some combination of tax increases and spending cuts. And it won’t be limited to pay-as-you-go rules, tax increases on somebody else, or a crackdown on waste, fraud and abuse. Your taxes will probably go up, and some government programs you favor will become less generous.

That is the legacy of our trillion-dollar deficits. Erasing them will be one of the great political issues of the coming decade.

E-mail: Leonhardt@nytimes.com

COMMENTS
Allocating blame is interesting media churning, but we need a credible game plan...and that is the essence of the President's responsibility. I know you love the guy, but when is the heat going to be applied?

No mention of the defense budget. Don't we all wonder why European countries can afford such generous social benefits? Because we're paying for their defense.
There's a huge chunk of savings to be had if we could just stop playing World Policeman. Of course defense company lobbyists will never let that happen.

I'm pretty certain that any type of 'meaningful' healthcare reform is going to take a lot more than a quick technical fix.
How about starting things off by deprogramming all the physicians out there who have built up some ridiculous sense of entitlement?

Republicans do not want to acknowledge their role over the last decade in creating this fiscal mess. If you look at states with Republican governors and legislatures you would see that they are performing worse than their democratic counterparts as well. Florida, Nevada, California and Georgia lead the nation in bankruptcies, foreclosures and unemployment. And they have one thing in common: Republican governors.

Maybe it's time to start questioning why the US spends more on "defense" than all the other countries of the world COMBINED. Are we really so threatened everywhere, by everyone, that we need over 700 military bases around the world? Are billion dollar bombers really needed to defeat a bunch of guys living in caves (al Qaeda)? Or has "defense" become the biggest welfare program of all, always looking for new enemies to justify its existence?
Maybe if we only had maybe 400 military bases around the world and a few less high tech systems we could afford to provide basic healthcare for all our citizens for free. Just a thought.

Its frequently asked, " When will the foreigners decide to stop funding our debt?". At which point we will be on our own and forced to live with the decisions we have made.
But here's another one: At what point will the next generation say ' I am not funding the baby boomers retirement'? Or 'I am not having my kids pay for someone else's retirement'?

The reason we are fighting wars in three different countries and bailing out billionaires all the while being broke is not because of the right or left; it is because of the right AND left! As long America continues to mindlessly categorize itself politically as either a Republican or Democrat nothing of true substance will change. Bankers will continue getting bailouts, the poor will be the sacrificial lambs of our military while Lockheed and the like rake in record profits, and the rest of us will watch as our government robs us blind by funding the aforementioned.

It was Herbert Hoover who said: "You know, the only trouble with capitalism is capitalists. They're too damn greedy."

I guess Republicans are not the fiscal conservatives they claim to be considering they controlled both houses of Congress most of the Bush years.
__________________________________________

A Conversation About the Growing Fiscal Deficit
QUOTES
NOT to put too nice a word on it, the long-term prospects just look horrendous, just terrible. And we’re going to have to make some major fiscal adjustments so that those projections never come true.

THE very large deficits we’re running in the short run are going to bring the long
run closer to us a lot faster than we had thought.

IF we don’t act very soon, the capital markets are going to make us act.

IT turns out those Clinton era forecasts were just too optimistic.

THERE isn’t much stomach among either members of Congress or, quite frankly, the
American public, I don’t think, for this kind of serious deficit reduction.

BOTH Democrats and Republicans in Congress have rejected relatively small
attempts to raise revenue coming from the White House. And so, Congress seems even less serious about this than the administration does.

THEY were taking little baby steps, and Congress was saying, no, no, no, we like this program too much.

THE real way to reform health care is to put stuff in place that says, you know what, these services you’re providing aren’t actually making people healthier. We’re going to stop paying for them.

WHEN you see Republicans in Congress holding up charts saying that Obama would increase the deficit by this huge amount, what they’re often not saying is that most of the increase in that deficit is in policies that Republicans themselves support.

THE kind of deficit that you see year to year doesn’t fully capture the extent of this problem.

HE (Obama) sort of backed himself into a corner with this whole notion that he will not raise taxes for people making less than $250,000 a year, which is a huge portion of the population, and that’s going to make it very hard to raise taxes in a way that will help pay for these Medicare and Social Security promises.

THE real conundrum we face is, by the time they finally realize that we need to do something about the problem, the time to do something about the problem will have passed. We’ll then be in a crisis, and our options will be limited and the changes we make will be very painful.

I THINK it’s the politics more than the economics that is keeping them from acting on it (the deficit).

WE don’t want to actually have tax increases or large spending cuts now. But start laying the ground work for these things to occur, starting in a few years. There is certainly nothing wrong with that. I think that would actually have a positive effect on the state of the economy right now.

Liars' Loans

Charles Keating: "get Black - kill him dead."

The financial industry brought the economy to its knees, but how did they get away with it? With the nation wondering how to hold the bankers accountable, Bill Moyers sits down with William K. Black, the former senior regulator who cracked down on banks during the savings and loan crisis of the 1980s. Black offers his analysis of what went wrong and his critique of the bailout

[Transcript]
BILL MOYERS: Welcome to the Journal.

For months now, revelations of the wholesale greed and blatant transgressions of Wall Street have reminded us that "The Best Way to Rob a Bank Is to Own One." In fact, the man you're about to meet wrote a book with just that title. It was based upon his experience as a tough regulator during one of the darkest chapters in our financial history: the savings and loan scandal in the late 1980s.

WILLIAM K. BLACK: These numbers as large as they are, vastly understate the problem of fraud.

BILL MOYERS: Bill Black was in New York this week for a conference at the John Jay College of Criminal Justice where scholars and journalists gathered to ask the question, "How do they get away with it?" Well, no one has asked that question more often than Bill Black.
The former Director of the Institute for Fraud Prevention now teaches Economics and Law at the University of Missouri, Kansas City. During the savings and loan crisis, it was Black who accused then-house speaker Jim Wright and five US Senators, including John Glenn and John McCain, of doing favors for the S&L's in exchange for contributions and other perks. The senators got off with a slap on the wrist, but so enraged was one of those bankers, Charles Keating — after whom the senate's so-called "Keating Five" were named — he sent a memo that read, in part, "get Black — kill him dead." Metaphorically, of course. Of course.
Now Black is focused on an even greater scandal, and he spares no one — not even the President he worked hard to elect, Barack Obama. But his main targets are the Wall Street barons, heirs of an earlier generation whose scandalous rip-offs of wealth back in the 1930s earned them comparison to Al Capone and the mob, and the nickname "banksters."
Bill Black, welcome to the Journal.

WILLIAM K. BLACK: Thank you.

BILL MOYERS: I was taken with your candor at the conference here in New York to hear you say that this crisis we're going through, this economic and financial meltdown is driven by fraud. What's your definition of fraud?

WILLIAM K. BLACK: Fraud is deceit. And the essence of fraud is, "I create trust in you, and then I betray that trust, and get you to give me something of value." And as a result, there's no more effective acid against trust than fraud, especially fraud by top elites, and that's what we have.

BILL MOYERS: In your book, you make it clear that calculated dishonesty by people in charge is at the heart of most large corporate failures and scandals, including, of course, the S&L, but is that true? Is that what you're saying here, that it was in the boardrooms and the CEO offices where this fraud began?

WILLIAM K. BLACK: Absolutely.

BILL MOYERS: How did they do it? What do you mean?

WILLIAM K. BLACK: Well, the way that you do it is to make really bad loans, because they pay better. Then you grow extremely rapidly, in other words, you're a Ponzi-like scheme. And the third thing you do is we call it leverage. That just means borrowing a lot of money, and the combination creates a situation where you have guaranteed record profits in the early years. That makes you rich, through the bonuses that modern executive compensation has produced. It also makes it inevitable that there's going to be a disaster down the road.

BILL MOYERS: So you're suggesting, saying that CEOs of some of these banks and mortgage firms in order to increase their own personal income, deliberately set out to make bad loans?

WILLIAM K. BLACK: Yes.

BILL MOYERS: How do they get away with it? I mean, what about their own checks and balances in the company? What about their accounting divisions?

WILLIAM K. BLACK: All of those checks and balances report to the CEO, so if the CEO goes bad, all of the checks and balances are easily overcome. And the art form is not simply to defeat those internal controls, but to suborn them, to turn them into your greatest allies. And the bonus programs are exactly how you do that.

BILL MOYERS: If I wanted to go looking for the parties to this, with a good bird dog, where would you send me?

WILLIAM K. BLACK: Well, that's exactly what hasn't happened. We haven't looked, all right? The Bush Administration essentially got rid of regulation, so if nobody was looking, you were able to do this with impunity and that's exactly what happened. Where would you look? You'd look at the specialty lenders. The lenders that did almost all of their work in the sub-prime and what's called Alt-A, liars' loans.

BILL MOYERS: Yeah. Liars' loans--

WILLIAM K. BLACK: Liars' loans.

BILL MOYERS: Why did they call them liars' loans?

WILLIAM K. BLACK: Because they were liars' loans.

BILL MOYERS: And they knew it?

WILLIAM K. BLACK: They knew it. They knew that they were frauds.

WILLIAM K. BLACK: Liars' loans mean that we don't check. You tell us what your income is. You tell us what your job is. You tell us what your assets are, and we agree to believe you. We won't check on any of those things. And by the way, you get a better deal if you inflate your income and your job history and your assets.

BILL MOYERS: You think they really said that to borrowers?

WILLIAM K. BLACK: We know that they said that to borrowers. In fact, they were also called, in the trade, ninja loans.

BILL MOYERS: Ninja?

WILLIAM K. BLACK: Yeah, because no income verification, no job verification, no asset verification.

BILL MOYERS: You're talking about significant American companies.

WILLIAM K. BLACK: Huge! One company produced as many losses as the entire Savings and Loan debacle.

BILL MOYERS: Which company?

WILLIAM K. BLACK: IndyMac specialized in making liars' loans. In 2006 alone, it sold $80 billion dollars of liars' loans to other companies. $80 billion.

BILL MOYERS: And was this happening exclusively in this sub-prime mortgage business?

WILLIAM K. BLACK: No, and that's a big part of the story as well. Even prime loans began to have non-verification. Even Ronald Reagan, you know, said, "Trust, but verify." They just gutted the verification process. We know that will produce enormous fraud, under economic theory, criminology theory, and two thousand years of life experience.

BILL MOYERS: Is it possible that these complex instruments were deliberately created so swindlers could exploit them?

WILLIAM K. BLACK: Oh, absolutely. This stuff, the exotic stuff that you're talking about was created out of things like liars' loans, that were known to be extraordinarily bad. And now it was getting triple-A ratings. Now a triple-A rating is supposed to mean there is zero credit risk. So you take something that not only has significant, it has crushing risk. That's why it's toxic. And you create this fiction that it has zero risk. That itself, of course, is a fraudulent exercise. And again, there was nobody looking, during the Bush years. So finally, only a year ago, we started to have a Congressional investigation of some of these rating agencies, and it's scandalous what came out. What we know now is that the rating agencies never looked at a single loan file. When they finally did look, after the markets had completely collapsed, they found, and I'm quoting Fitch, the smallest of the rating agencies, "the results were disconcerting, in that there was the appearance of fraud in nearly every file we examined."

BILL MOYERS: So if your assumption is correct, your evidence is sound, the bank, the lending company, created a fraud. And the ratings agency that is supposed to test the value of these assets knowingly entered into the fraud. Both parties are committing fraud by intention.

WILLIAM K. BLACK: Right, and the investment banker that — we call it pooling — puts together these bad mortgages, these liars' loans, and creates the toxic waste of these derivatives. All of them do that. And then they sell it to the world and the world just thinks because it has a triple-A rating it must actually be safe. Well, instead, there are 60 and 80 percent losses on these things, because of course they, in reality, are toxic waste.

BILL MOYERS: You're describing what Bernie Madoff did to a limited number of people. But you're saying it's systemic, a systemic Ponzi scheme.

WILLIAM K. BLACK: Oh, Bernie was a piker. He doesn't even get into the front ranks of a Ponzi scheme...

BILL MOYERS: But you're saying our system became a Ponzi scheme.

WILLIAM K. BLACK: Our system...

BILL MOYERS: Our financial system...

WILLIAM K. BLACK: Became a Ponzi scheme. Everybody was buying a pig in the poke. But they were buying a pig in the poke with a pretty pink ribbon, and the pink ribbon said, "Triple-A."

BILL MOYERS: Is there a law against liars' loans?

WILLIAM K. BLACK: Not directly, but there, of course, many laws against fraud, and liars' loans are fraudulent.

BILL MOYERS: Because...

WILLIAM K. BLACK: Because they're not going to be repaid and because they had false representations. They involve deceit, which is the essence of fraud.

BILL MOYERS: Why is it so hard to prosecute? Why hasn't anyone been brought to justice over this?

WILLIAM K. BLACK: Because they didn't even begin to investigate the major lenders until the market had actually collapsed, which is completely contrary to what we did successfully in the Savings and Loan crisis, right? Even while the institutions were reporting they were the most profitable savings and loan in America, we knew they were frauds. And we were moving to close them down. Here, the Justice Department, even though it very appropriately warned, in 2004, that there was an epidemic...

BILL MOYERS: Who did?

WILLIAM K. BLACK: The FBI publicly warned, in September 2004 that there was an epidemic of mortgage fraud, that if it was allowed to continue it would produce a crisis at least as large as the Savings and Loan debacle. And that they were going to make sure that they didn't let that happen. So what goes wrong? After 9/11, the attacks, the Justice Department transfers 500 white-collar specialists in the FBI to national terrorism. Well, we can all understand that. But then, the Bush administration refused to replace the missing 500 agents. So even today, again, as you say, this crisis is 1000 times worse, perhaps, certainly 100 times worse, than the Savings and Loan crisis. There are one-fifth as many FBI agents as worked the Savings and Loan crisis.

BILL MOYERS: You talk about the Bush administration. Of course, there's that famous photograph of some of the regulators in 2003, who come to a press conference with a chainsaw suggesting that they're going to slash, cut business loose from regulation, right?

WILLIAM K. BLACK: Well, they succeeded. And in that picture, by the way, the other — three of the other guys with pruning shears are the...

BILL MOYERS: That's right.

WILLIAM K. BLACK: They're the trade representatives. They're the lobbyists for the bankers. And everybody's grinning. The government's working together with the industry to destroy regulation. Well, we now know what happens when you destroy regulation. You get the biggest financial calamity of anybody under the age of 80.

BILL MOYERS: But I can point you to statements by Larry Summers, who was then Bill Clinton's Secretary of the Treasury, or the other Clinton Secretary of the Treasury, Rubin. I can point you to suspects in both parties, right?

WILLIAM K. BLACK: There were two really big things, under the Clinton administration. One, they got rid of the law that came out of the real-world disasters of the Great Depression. We learned a lot of things in the Great Depression. And one is we had to separate what's called commercial banking from investment banking. That's the Glass-Steagall law. But we thought we were much smarter, supposedly. So we got rid of that law, and that was bipartisan. And the other thing is we passed a law, because there was a very good regulator, Brooksley Born, that everybody should know about and probably doesn't. She tried to do the right thing to regulate one of these exotic derivatives that you're talking about. We call them CDFs. And Summers, Rubin, and Phil Gramm came together to say not only will we block this particular regulation. We will pass a law that says you can't regulate. And it's this type of derivative that is most involved in the AIG scandal. AIG all by itself, cost the same as the entire Savings and Loan debacle.

BILL MOYERS: What did AIG contribute? What did they do wrong?

WILLIAM K. BLACK: They made bad loans. Their type of loan was to sell a guarantee, right? And they charged a lot of fees up front. So, they booked a lot of income. Paid enormous bonuses. The bonuses we're thinking about now, they're much smaller than these bonuses that were also the product of accounting fraud. And they got very, very rich. But, of course, then they had guaranteed this toxic waste. These liars' loans. Well, we've just gone through why those toxic waste, those liars' loans, are going to have enormous losses. And so, you have to pay the guarantee on those enormous losses. And you go bankrupt. Except that you don't in the modern world, because you've come to the United States, and the taxpayers play the fool. Under Secretary Geithner and under Secretary Paulson before him... we took $5 billion dollars, for example, in U.S. taxpayer money. And sent it to a huge Swiss Bank called UBS. At the same time that that bank was defrauding the taxpayers of America. And we were bringing a criminal case against them. We eventually get them to pay a $780 million fine, but wait, we gave them $5 billion. So, the taxpayers of America paid the fine of a Swiss Bank. And why are we bailing out somebody who that is defrauding us?

BILL MOYERS: And why...

WILLIAM K. BLACK: How mad is this?

BILL MOYERS: What is your explanation for why the bankers who created this mess are still calling the shots?

WILLIAM K. BLACK: Well, that, especially after what's just happened at G.M., that's... it's scandalous.

BILL MOYERS: Why are they firing the president of G.M. and not firing the head of all these banks that are involved?

WILLIAM K. BLACK: There are two reasons. One, they're much closer to the bankers. These are people from the banking industry. And they have a lot more sympathy. In fact, they're outright hostile to autoworkers, as you can see. They want to bash all of their contracts. But when they get to banking, they say, 'contracts, sacred.' But the other element of your question is we don't want to change the bankers, because if we do, if we put honest people in, who didn't cause the problem, their first job would be to find the scope of the problem. And that would destroy the cover up.

BILL MOYERS: The cover up?

WILLIAM K. BLACK: Sure. The cover up.

BILL MOYERS: That's a serious charge.

WILLIAM K. BLACK: Of course.

BILL MOYERS: Who's covering up?

WILLIAM K. BLACK: Geithner is charging, is covering up. Just like Paulson did before him. Geithner is publicly saying that it's going to take $2 trillion — a trillion is a thousand billion — $2 trillion taxpayer dollars to deal with this problem. But they're allowing all the banks to report that they're not only solvent, but fully capitalized. Both statements can't be true. It can't be that they need $2 trillion, because they have massive losses, and that they're fine.
These are all people who have failed. Paulson failed, Geithner failed. They were all promoted because they failed, not because...

BILL MOYERS: What do you mean?

WILLIAM K. BLACK: Well, Geithner has, was one of our nation's top regulators, during the entire subprime scandal, that I just described. He took absolutely no effective action. He gave no warning. He did nothing in response to the FBI warning that there was an epidemic of fraud. All this pig in the poke stuff happened under him. So, in his phrase about legacy assets. Well he's a failed legacy regulator.

BILL MOYERS: But he denies that he was a regulator. Let me show you some of his testimony before Congress. Take a look at this.

TIMOTHY GEITHNER:I've never been a regulator, for better or worse. And I think you're right to say that we have to be very skeptical that regulation can solve all of these problems. We have parts of our system that are overwhelmed by regulation.
Overwhelmed by regulation! It wasn't the absence of regulation that was the problem, it was despite the presence of regulation you've got huge risks that build up.

WILLIAM K. BLACK: Well, he may be right that he never regulated, but his job was to regulate. That was his mission statement.

BILL MOYERS: As?

WILLIAM K. BLACK: As president of the Federal Reserve Bank of New York, which is responsible for regulating most of the largest bank holding companies in America. And he's completely wrong that we had too much regulation in some of these areas. I mean, he gives no details, obviously. But that's just plain wrong.

BILL MOYERS: How is this happening? I mean why is it happening?

WILLIAM K. BLACK: Until you get the facts, it's harder to blow all this up. And, of course, the entire strategy is to keep people from getting the facts.

BILL MOYERS: What facts?

WILLIAM K. BLACK: The facts about how bad the condition of the banks is. So, as long as I keep the old CEO who caused the problems, is he going to go vigorously around finding the problems? Finding the frauds?

BILL MOYERS: You--

WILLIAM K. BLACK: Taking away people's bonuses?

BILL MOYERS: To hear you say this is unusual because you supported Barack Obama, during the campaign. But you're seeming disillusioned now.

WILLIAM K. BLACK: Well, certainly in the financial sphere, I am. I think, first, the policies are substantively bad. Second, I think they completely lack integrity. Third, they violate the rule of law. This is being done just like Secretary Paulson did it. In violation of the law. We adopted a law after the Savings and Loan crisis, called the Prompt Corrective Action Law. And it requires them to close these institutions. And they're refusing to obey the law.

BILL MOYERS: In other words, they could have closed these banks without nationalizing them?

WILLIAM K. BLACK: Well, you do a receivership. No one -- Ronald Reagan did receiverships. Nobody called it nationalization.

BILL MOYERS: And that's a law?

WILLIAM K. BLACK: That's the law.

BILL MOYERS: So, Paulson could have done this? Geithner could do this?

WILLIAM K. BLACK: Not could. Was mandated--

BILL MOYERS: By the law.

WILLIAM K. BLACK: By the law.

BILL MOYERS: This law, you're talking about.

WILLIAM K. BLACK: Yes.

BILL MOYERS: What's the reason they give for not doing it?

WILLIAM K. BLACK: They ignore it. And nobody calls them on it.

BILL MOYERS: Well, where's Congress? Where's the press? Where--

WILLIAM K. BLACK: Well, where's the Pecora investigation?

BILL MOYERS: The what?

WILLIAM K. BLACK: The Pecora investigation. The Great Depression, we said, "Hey, we have to learn the facts. What caused this disaster, so that we can take steps, like pass the Glass-Steagall law, that will prevent future disasters?" Where's our investigation?
What would happen if after a plane crashes, we said, "Oh, we don't want to look in the past. We want to be forward looking. Many people might have been, you know, we don't want to pass blame. No. We have a nonpartisan, skilled inquiry. We spend lots of money on, get really bright people. And we find out, to the best of our ability, what caused every single major plane crash in America. And because of that, aviation has an extraordinarily good safety record. We ought to follow the same policies in the financial sphere. We have to find out what caused the disasters, or we will keep reliving them. And here, we've got a double tragedy. It isn't just that we are failing to learn from the mistakes of the past. We're failing to learn from the successes of the past.

BILL MOYERS: What do you mean?

WILLIAM K. BLACK: In the Savings and Loan debacle, we developed excellent ways for dealing with the frauds, and for dealing with the failed institutions. And for 15 years after the Savings and Loan crisis, didn't matter which party was in power, the U.S. Treasury Secretary would fly over to Tokyo and tell the Japanese, "You ought to do things the way we did in the Savings and Loan crisis, because it worked really well. Instead you're covering up the bank losses, because you know, you say you need confidence. And so, we have to lie to the people to create confidence. And it doesn't work. You will cause your recession to continue and continue." And the Japanese call it the Lost Decade. That was the result. So, now we get in trouble, and what do we do? We adopt the Japanese approach of lying about the assets. And you know what? It's working just as well as it did in Japan.

BILL MOYERS: Yeah. Are you saying that Timothy Geithner, the Secretary of the Treasury, and others in the administration, with the banks, are engaged in a cover up to keep us from knowing what went wrong?

WILLIAM K. BLACK: Absolutely.

BILL MOYERS: You are.

WILLIAM K. BLACK: Absolutely, because they are scared to death. All right? They're scared to death of a collapse. They're afraid that if they admit the truth, that many of the large banks are insolvent. They think Americans are a bunch of cowards, and that we'll run screaming to the exits. And we won't rely on deposit insurance. And, by the way, you can rely on deposit insurance. And it's foolishness. All right? Now, it may be worse than that. You can impute more cynical motives. But I think they are sincerely just panicked about, "We just can't let the big banks fail." That's wrong.

BILL MOYERS: But what might happen, at this point, if in fact they keep from us the true health of the banks?

WILLIAM K. BLACK: Well, then the banks will, as they did in Japan, either stay enormously weak, or Treasury will be forced to increasingly absurd giveaways of taxpayer money. We've seen how horrific AIG -- and remember, they kept secrets from everyone.

BILL MOYERS: A.I.G. did?

WILLIAM K. BLACK: What we're doing with -- no, Treasury and both administrations. The Bush administration and now the Obama administration kept secret from us what was being done with AIG. AIG was being used secretly to bail out favored banks like UBS and like Goldman Sachs. Secretary Paulson's firm, that he had come from being CEO. It got the largest amount of money. $12.9 billion. And they didn't want us to know that. And it was only Congressional pressure, and not Congressional pressure, by the way, on Geithner, but Congressional pressure on AIG.
Where Congress said, "We will not give you a single penny more unless we know who received the money." And, you know, when he was Treasury Secretary, Paulson created a recommendation group to tell Treasury what they ought to do with AIG. And he put Goldman Sachs on it.

BILL MOYERS: Even though Goldman Sachs had a big vested stake.

WILLIAM K. BLACK: Massive stake. And even though he had just been CEO of Goldman Sachs before becoming Treasury Secretary. Now, in most stages in American history, that would be a scandal of such proportions that he wouldn't be allowed in civilized society.

BILL MOYERS: Yeah, like a conflict of interest, it seems.

WILLIAM K. BLACK: Massive conflict of interests.

BILL MOYERS: So, how did he get away with it?

WILLIAM K. BLACK: I don't know whether we've lost our capability of outrage. Or whether the cover up has been so successful that people just don't have the facts to react to it.

BILL MOYERS: Who's going to get the facts?

WILLIAM K. BLACK: We need some chairmen or chairwomen--

BILL MOYERS: In Congress.

WILLIAM K. BLACK: --in Congress, to hold the necessary hearings. And we can blast this out. But if you leave the failed CEOs in place, it isn't just that they're terrible business people, though they are. It isn't just that they lack integrity, though they do. Because they were engaged in these frauds. But they're not going to disclose the truth about the assets.

BILL MOYERS: And we have to know that, in order to know what?

WILLIAM K. BLACK: To know everything. To know who committed the frauds. Whose bonuses we should recover. How much the assets are worth. How much they should be sold for. Is the bank insolvent, such that we should resolve it in this way? It's the predicate, right? You need to know the facts to make intelligent decisions. And they're deliberately leaving in place the people that caused the problem, because they don't want the facts. And this is not new. The Reagan Administration's central priority, at all times, during the Savings and Loan crisis, was covering up the losses.

BILL MOYERS: So, you're saying that people in power, political power, and financial power, act in concert when their own behinds are in the ringer, right?

WILLIAM K. BLACK: That's right. And it's particularly a crisis that brings this out, because then the class of the banker says, "You've got to keep the information away from the public or everything will collapse. If they understand how bad it is, they'll run for the exits."

BILL MOYERS: Yeah, and this week in New York, at this conference, you described this as more than a financial crisis. You called it a moral crisis.

WILLIAM K. BLACK: Yes.

BILL MOYERS: Why?

WILLIAM K. BLACK: Because it is a fundamental lack of integrity. But also because, if you look back at crises, an economist who is also a presidential appointee, as a regulator in the Savings and Loan industry, right here in New York, Larry White, wrote a book about the Savings and Loan crisis. And he said, you know, one of the most interesting questions is why so few people engaged in fraud? Because objectively, you could have gotten away with it. But only about ten percent of the CEOs, engaged in fraud. So, 90 percent of them were restrained by ethics and integrity. So, far more than law or by F.B.I. agents, it's our integrity that often prevents the greatest abuses. And what we had in this crisis, instead of the Savings and Loan, is the most elite institutions in America engaging or facilitating fraud.

BILL MOYERS: This wound that you say has been inflicted on American life. The loss of worker's income. And security and pensions and future happened, because of the misconduct of a relatively few, very well-heeled people, in very well-decorated corporate suites, right?

WILLIAM K. BLACK: Right.

BILL MOYERS: It was relatively a handful of people.

WILLIAM K. BLACK: And their ideologies, which swept away regulation. So, in the example, regulation means that cheaters don't prosper. So, instead of being bad for capitalism, it's what saves capitalism. "Honest purveyors prosper" is what we want. And you need regulation and law enforcement to be able to do this. The tragedy of this crisis is it didn't need to happen at all.

BILL MOYERS: When you wake in the middle of the night, thinking about your work, what do you make of that? What do you tell yourself?

WILLIAM K. BLACK: There's a saying that we took great comfort in. It's actually by the Dutch, who were fighting this impossible war for independence against what was then the most powerful nation in the world, Spain. And their motto was, "It is not necessary to hope in order to persevere."
Now, going forward, get rid of the people that have caused the problems. That's a pretty straightforward thing, as well. Why would we keep CEOs and CFOs and other senior officers, that caused the problems? That's facially nuts. That's our current system.
So stop that current system. We're hiding the losses, instead of trying to find out the real losses. Stop that, because you need good information to make good decisions, right? Follow what works instead of what's failed. Start appointing people who have records of success, instead of records of failure. That would be another nice place to start. There are lots of things we can do. Even today, as late as it is. Even though they've had a terrible start to the administration. They could change, and they could change within weeks. And by the way, the folks who are the better regulators, they paid their taxes. So, you can get them through the vetting process a lot quicker.

BILL MOYERS: William Black, thank you very much for being with me on the Journal.

WILLIAM K. BLACK: Thank you so much.

Ten Trillion and Counting

Ten Trillion and Counting

"Let's imagine a scenario where the politicians would love to keep the government going, but they can't because no one will lend us money." -Greg Ip

"I was happy to be fired at the end of November, 2002. I didn't want to be a part of something that I thought was fundamentally wrong." -Paul O'Neill

"We borrowed money from China, to give tax cuts to the best off people in our society and leave our kids paying the bill for a war we chose to fight - that was really unprecedented." -Matt Miller

"One of the largest tax cuts in American history was passed with Dick Cheney casting the deciding vote."

"The prescription drug benefit will go on forever; in the end, it's more expensive than the war in Iraq."

"During his first five years as president, George Bush never vetoed a spending bill."

"Fiscal conservatives in his (George Bush's) own party accused him of being the biggest spender since World War II."

"The future is clouded by one inescapable fact: more Americans are living longer and as they age, the government is obligated by law to spend more and more."

"The national debt will double in 8 years."

"You can get away with over-borrowing and saving nothing for decades, but then when it goes wrong, you're in trouble - big trouble - very quickly, and it's hard to get out of." -Clive Crook

"Meanwhile, in the first 3 months of this year, the US government has borrowed another $493 billion dollars."

Debt and the Bush Years
David Wessel (The Wall Street Journal):
President Bush got a lot of ridicule for saying what everybody should do after 9/11 is go shopping. I'm a little less harsh on that than some people, because I think one of the things that he was saying is we have to lead a normal life; we can't let the terrorists scare us into hiding under our beds.
But in retrospect, it was one of those signals to Americans that you can spend your way out of everything. Go get your credit card, go get another mortgage, and go and spend and spend and spend. There was never any attempt during the Bush presidency to slow that down.
The president declared, for instance, that it was his goal that every American should own a house. Well, every American shouldn't own a house. Some people don't make enough money to pay a mortgage and maintain a house, and they should rent. And they shouldn't be made to feel that there's something un-American about not having a mortgage.
But the pressure to lend and to get a mortgage was so great that we ended up lending to a lot of people who couldn't afford the mortgages. And they couldn't pay them back, and now they lost their house.

Blogging the Stimulus Bill by Steve Coll

ShovelWatch
Tracking the stimulus from bills to building.

The Tyranny of Dead Ideas
From Publishers Weekly:
If Fortune columnist Matt Miller's eerily prophetic book had come out earlier, it could have served as a wakeup call for Wall Street leaders and Washington, D.C. lawmakers before the failure of several venerable financial institutions required government bailouts. The author's prescient observations make a persuasive case for how an American attitude of entitlement and outdated beliefs about government, education, taxes, business, corporate excess and health care threaten our national well-being and our position as a world leader. The author denounces such cherished and longstanding beliefs as Your Company Should Take Care of You, and The Kids Will Earn More than We Do, and examines their historical provenances—for example, he traces the adoption of pensions to the early 20th century, when employers like Proctor and Gamble and G.E. acted as feudal lords offering benefits to recruit and retain employees—strategies that are now strangling these same corporations at the expense of global competitiveness. Rather than a petulant indictment of our political and economic myopia, this book offers a fair-handed critique.

Max Keiser

Interviews on Al Jazeera English
Sept.08

The American Dollar is Dead

American Dollar = Toilet Paper


QUOTES

The Indian people could be the richest people in the world when this crisis is over.

Hank Paulson is a financial terrorist.

These guys will stop at nothing to keep their dirty laundry a secret.

What auditing companies?!?

These guys are wholesale thieving of trillions of dollars.

The US dollar is the only tether between the rest of the world & this criminal syndicate on Wall Street headed up by Hank Paulson.

Hank Paulson is taking the entire US economy into oblivion.

They're not going to stick around in the US when the Americans are going to have their pitchforks ready to go in & take back their country.

Under the Constitution, Hank Paulson qualifies as a tyrant.


Interview by Press TV (transcript)
Sept.20-08
US Dollar 'Backed by Bananas'
"The problems are here but the people who created this nightmare are gone. Cheney has already got his Halliburton corporation headquartered in Dubai. He's already out of the picture. All these crooks are going to be leaving this country. They're not going to stay for all of the rioting there's going to be in America."

Who's Max Keiser?

Kevin Phillips

Interviewed on Bill Moyers Journal
re: The Economic Crisis
Sept.08

Part 1

Part 2

Part 3


QUOTES

This is going to be a big one.

Ordinary Americans don't have much of a role in this.

This is the denouement of a 25-year debt buildup which was undertaken mostly by the financial sector putting themselves on steroids to get bigger & bigger & bigger.

Moyers: You say it's the greatest story never told.

They (the financial sector) are the economy at this point.

The middle class is shrinking.

The financial sector has hijacked the American economy.

Finance has been preferred as the sector that got government support.

The rise of the financial sector is the rise of the debt industry.

Greenspan would do nothing to disturb finance...basically he gave finance what they wanted.

The people who were the arsonists are now racing to show up in fireman hats saying "We're going to solve it."

We're about halfway through.

Finance can bet on anything...they have figured out new ways to gamble.

I think it's (the economic crisis) another variation but on par with the '30s.

I don't think we have a sound economy at all. Not remotely, at this point.

He (Obama) doesn't seem to have anything very specific to say - that's part of the problem.

I'm sick of Washington.

We are on the wrong track.

Couple of decades coming up which are going to be very difficult for Americans.

A lot of people in the financial community that want to get rid of it (Social Security).

A lot of Democrats in the labour movement are very nervous about Obama. They see that the flesh of The Democratic Party carries a lunchbox but the new soul wears a pinstripe suit.

Who's rescuing the laid off worker? Nobody's rescuing them.

You don't rock the boat. You pretend it's a sound economy.

mafiaboy

As a 15 year old, Michael Calce aka "mafiaboy" made history when he shut down CNN, Yahoo, Amazon & ebay.

The Hour interview
cbc.ca/thehour/videos.html?id=882780325

How I Cracked the Internet & Why it's Still Broken
amazon.ca/Mafiaboy-Cracked-Internet-Still-Broken/dp/0670067482/ref=pd_bbs_sr_1?ie=UTF8&s=books&qid=1224230768&sr=8-1

Book's site
mafiaboybook.com/

Dragon's Den

WIN
youtube.com/watch?v=BFTJ0i0lT8s&feature=related

WIN
youtube.com/watch?v=cYcS6v589eI

FAIL
youtube.com/watch?v=HDczbpIO85g

Dragon's Den
cbc.ca/dragonsden/

Dragon's Den UK
bbc.co.uk/dragonsden/

thestar.com feature
thestar.com/columnists/article/263075
"At the end, it's you who does the work & takes the fame or blame, not others. You're the one."

The Glenn Beck Program

Economy in Crisis
CNN
Oct.6-2008
europac.net/Schiff-CNN-10-6-08_lg.asp


QUOTES

Gold is money. Gold has intrinsic value. -Peter Schiff

The number one problem is how many jobs we keep or lose. -Ali Velshi

America: buckle up. It's going to be a very bumpy ride. -Glenn Beck

In Washington, there's no Plan B. -Stephen Moore

That's the danger of any bailout: it rewards behaviour that isn't responsible. -AV

We've learned nothing. -PS

It's the wrong dream we've been pushing. -AV

Stop listening to the lies. -GB

Buy silver. It's actually used in more applications than gold. -AV

(The government is) the only sector of the economy that's been growing jobs. -SM

C'mon. You're not going to get it (Social Security). -GB

It's dangerous for a country of this size to be economically vulnerable. -AV

Make no mistake, America. Washington has sold you down the river. And they've done it for power. -GB

You couldn't not see this tragedy coming. -GB

He (Barack Obama) wants to put the economy back on track. The problem is, the track is leading to a brick wall. -PS

Those numbers are all phoney. Unemployment is probably a lot higher, as is inflation. -PS

We're at the early stages of this (the financial crisis). We'll see how it is in 3 or 4 years. -PS

Greed is normally balanced by fear. -PS

The real crisis is when people all around the world - Japan, China & Saudi Arabia - no longer want to hold our dollars & then the dollar really goes down & prices just go through the roof. -PS

GB: Are people going to be able to get a student loan in the next 12 months?
Bob O'Brien: No.
GB: So what's going to happen to college tuitions? Are they going to plummet?
BO'B: Yes.

How do we get more savings when we punish savers & encourage borrowing? -PS

The only way you're going to be able to sell your house is if you dramatically lower the price. -PS

The economy is down on the ground, flat on its back, but what this bill does is kick it in the groin. -PS

The federal government is the only one with the printing press. -PS

Chances are good you're about 30% less rich than you were in October of last year. -BO'B

In Washington, we reward vice & punish virtue. -SM

Nobody's going to get a tax cut (under Barack Obama). We're spending trillions of dollars - where's that money going to come from? -PS

Oil prices are going to go a lot higher because Russia can't afford to have them this low. -GB

Transcript: transcripts.cnn.com/TRANSCRIPTS/0810/06/gb.01.html