OMG! It Turns Out That NO ONE Qualifies For A Loan!

MeanMesa sympathizes with the President as he points out what America's banksters (half bankers and half gangsters) have done to divert the Recovery Act money into nothing more than the latest layer of cash in their money bins.

"Hey guys!  The idea was to start lending to small businesses who need credit!"

Senate Republican "Closet" for TARP and Recovery Act  Dollars

!  Image source

Well, Short Current Essays has already been there.  This self-serving, bankster  phenomenon did not begin last week! 

Take a moment to visit an old posting from January, 2009.  Unofficially dubbed "The Winnebago Solution," you can visit the old post here

Otherwise, spend a few minutes with this re-printed version.

Gee, mom, did God make Banks?

January 23, 2009 - MeanMesa

Everything that is "extra, extra complicated" really is "extra, extra complicated."
How to selectively avoid understanding almost anything.

Oh darn. That $300 Billion bail out was supposed to help get credit started back up again, whatever that means. (For the numerically challenged, 300 billion is 300,000,000,000.) Gosh, we put the money into the “thing” at just the right places, but there are still all sorts of folks who can’t borrow anything. Nothing. Certainly not enough to keep business going and jobs in place.

Well, most of the most important people who could have signed off on those bail out checks, have. They are okay. They have enough money to last them through the disaster the rest of the country is facing. After what’s left straggles back to its feet, they can start the “trickle down.” Again.

“Trickle down” means that their banks will finally start loaning the money businesses need to keep going. Just before these "trickle down" folks start “trickling down,” most businesses will be in a failure state. They will be on their last legs. or, perhaps, on their backs. You know, “for sale” at a really cheap price. If the neo-con wet dream has come true by this point, it will be a shopping extravaganza if you have any money.

Gosh darn it, no one seems to have any money, though. Wait! There’s still the “trickle down” folks wandering around with what’s left of their $300,000,000,000! After all, they certainly haven’t lent much of it to anyone. Maybe, out of the goodness of their hearts and their great love of our country, they might be inclined to take a risk here and there, buy a few American businesses at bargain basement prices, and try to start the economy again.

That would be something new. Once again, they would wind up owning everything, strangling the rest of us not by “innovation,” “invention” or “competition,” but by good old fashioned business sense, funded with the tax dollars they took from us back in 2008. This next chapter of the “American Dream” just happened to have fallen into their laps by extraordinary good fortune!

They will have solved the labor problem, too. Labor problem? That means excessive wages and benefits will have been curtailed just in time for prosperity! The American worker's race to the bottom will be well under way by this time. No business means no jobs. No jobs means extra, extra low wages and plenty of desperate workers ready to gobble up any job (and any wage) they can get. It will be paradise! You know, just like "the good old days."

Captains of Industry. Maybe Dick Cheney will feel well enough to be President for a while. You know, well enough to “git ‘er did!”

Solution-wise this travesty makes the black hole of Calcutta look like a Sunday school social. Turn on your television. The man in the suit will explain everything. There is no solution. We just have to pump as much money as possible into these banks and then patiently wait and see if they start making loans again. Sort of like pushing a lobster through a key hole. It might work....

The reason it is all so complicated is because we just have to wait for these frightened bankers to get themselves into a little better frame of mind. They must be reassured. Right now, they are so freaked out with the prospect of being poor, they won’t even loan money to each other! The television man will provide you with 97 reasons why that is the case and another 231 reasons why this insanity is the only chance we have to get the lobster through the key hole.

Well, there is another solution.

A surprisingly American solution.

Here’s the plan. Split off a few billion of the bailout money and convert it to cash. (Bushie’s old Iraqi viceroy knows how to do this. And how! He was tossing around pallet loads of bundled U.S. hundreds to everyone who would stand still!)

Next, buy two or three thousand used Winnebagos. It’s okay. Gas is cheap right now, and we’ll be done with them before the price can get back to $4/gallon. Put a cot and a coffee maker in each one. Pack the back half of each Winnebago with cash.

Hire ten thousand bankers. There are plenty of unemployed bankers running around loose right now. Loan officers would be good.

Divide the bankers into three groups. Make them all Federal employees. The first group will go in the Winnebagos to make loans. The second group will be in charge of bookkeeping. The third group will be in charge of catching bankers from the first two groups when they cheat.

Next, park the Winnebagos in every city where the banks have not started loaning money, put out a sign, open the door and start making loans. I have to suspect that business will be good.

Pretty soon all those frightened bankers will get over their fright. Oh, whatever. In any event, they might stop buying each other, paying stock dividends and huge executive bonuses with our bail out money and start making loans again.

Total cost? $30 billion ought to get things rolling right along. Bailout money going to banks ($300 billion) hasn’t done much yet. Bailout money to businesses who need it and qualify might accomplish quite a bit.

God, is this ever complicated.

For a quick review of the journey of bail out money so far:
http://money.cnn.com/news/specials/storysupplement/bailout_scorecard/

A Chit Chat with Republicans About the Stimulus

A Primer About Obama's Recovery Plan85

It has become very intellectually chic to chuck pot shots at the Recovery Program of President Obama. Of course, we expected the really “trailer park” fizzle from the vacuous, foaming mouths of the neo-cons. One female host, Tammy Bruce, actually called Michelle Obama “trash” on a network interview last week.

However, once we exclude the “drug addled gas bag,” the whining “pretty little mama’s boy,” and the ultra pious, self-appointed, "stalwart defender of The Church," we are still left with some unsettling whimpers arising from unexpected quarters -- quarters we had always previously assumed to be more rational.

There are comments that Treasury Secretary Tim Geithner and Director of the White House's National Economic Council, Larry Summers, should be fired for lack of purity and effectiveness. That would be “lack of purity” from having been a Fed Bank President during the Bush bailout in Geithner’s case and from having been a Clinton advisor in Summers’ case, that would have been before he was President of Harvard University. All these comments can be immediately discharged because they are founded on the premise that what we are doing right now is, somehow, logically similar to something we have done before. Any hope of that happy serendipity betrays a frenzied dash for the refuge of history, hardly a behavior we would expect from the brave knights we have sent to kill the dragon.

The Treasury Secretary is a frighteningly intelligent man who has been seriously cautioned by the Obama White House to try to “de-accelerate” his speech enough so it can be captured on an ordinary, modern video camera during his interviews. Naturally, neo-cons -- being allergic to leadership of any type thanks to their toxic, soul consuming cynicism -- are quite uncomfortable with a man who constantly needs to concentrate on speaking more slowly so the rest of us can possibly follow him. Neo-cons like slow drawls so Southern that most Americans either won’t listen to them or can’t understand what is said. You know, ... southern ... coach ... pastor ... You know.

But some modern liberal pundits seem to be put off because they can’t understand it either. They think that the reason they can’t understand it is because what Geithner is saying isn’t even remotely similar to anything they have heard before, the lingering, predictably desperate test of validity for those who have found themselves unable to think. The most limited, self promoted, modern progressives don’t believe that anything can be progressive now if it hasn’t already been progressive before. Those talkative folks identify themselves by providing endless explanations of exactly who was at fault for almost everything that threatens their pretend, historical, progressive "status quo."

But this post is all about having a chit chat with Republicans. There are actually a few of them still visible who are so inebriated on the Kool Aid and so head strong that they continue to claim a tiny, forgotten patch of Bush Jr.’s, medieval fear mongering “high ground.”

If you have had a creepy, out of focus feeling while talking to these Republicans and other aging reactionaries about Obama’s plan, don’t blame yourself! The person standing before you in those conversations isn’t actually saying anything. What you are hearing are talking points! The actual words being uttered in such conversations have been “piped” down to eager repeaters by their “thought masters,” repeaters who, when considered generously, have nothing else to say besides more road weary talking points about the Stimulus Package, Socialism, abortion, gun control -- well, you already know the list of topics they prefer.

On to the water cooler.

Although MeanMesa usually avoids inserted diagrams and charts, please consider this following exception. Perhaps we can spend just a minute with this National Debt record as an introduction to a few points which might “flesh out” your conversational repartees.

click to enlarge

The large block of red at the far right of the diagram is an estimate of the accumulated deficit of the Bush Jr. autocracy. Politically unpopular spending such as the war in Iraq is, of course, omitted. However, the total of the eight year deficit since the Supreme Court appointed Bush Jr. amounts to roughly three trillion dollars. What might have been a rather lack luster disaster was converted into the present calamity by two large tax cuts which directed vast windfalls to the very richest Americans, and the utterly outrageous PHARMA written Medicaid Prescription Drug Plan, designed to channel boat loads of tax money to the “pill masters” of the pharmaceutical lobbyists. The PHARMA bill was passed at 3 AM in the House. The tie vote in the Senate was broken when the Vice President Pretender voted in favor.

An often overlooked aspect of the trillions which disappeared into pockets of Bush cronies has to do with the rest of the economy, you know, the part where we live. After the extraction, that sudden, purloined flatulence among the rich and mischievous found itself stranded with nowhere to go. When we speak of financial instruments such as securitized toxic mortgages, incredibly leveraged, shadow assets on the profit and loss books of all the investment banks we are presently rescuing, and other Wall Street Casino speculative doodads, we see the “new home” all these suddenly wealthy “businessmen” found for their less than legitimate good fortune.

What might have been expected as “risks” associated with such a move were gleefully buried under the cover of a dysfunctional Justice Department, a conveniently blind Security Exchange Commission (Remember Madoff? Enron?), ruthless gangs of well paid Federal Appointees and an overly protective Executive (Autocrat) who had already hit his management high point bankrupting professional ball teams and oil companies his father gave him.

The Independent Senator from Vermont noted this unusual development:
Not everyone has had a hard time during the Bush years: “The top 400 richest Americans have seen their personal wealth increase by $630,000,000,000 - $630 BILLION - since George W. Bush was appointed President by the Supreme Court in 2000.” (Sen. Bernie Sanders, Sept. 18, 2008)

The point? When this much of the economy’s liquid money was effectively removed, it caused a bit of a shortage. After that initial insult to the economy, when the reckless schemes which had absorbed all these dollars fell apart, it created even more of a shortage. The spending which normally fuels the US economy ground to a halt. No one had any money, and no one could borrow any.

Yes, of course, all these “genius investors” immediately started bellowing for a bail out from the Bush Jr. -- Paulson crime family, but they were able to loot only a paltry $350 billion before their sponsoring syndicate was run out of Washington. That left them hungry for more. Their eyes, naturally, turned greedily toward the Obama Stimulus Plan. If that legislation could be converted to even more tax cuts, then looted as it straggled through the Congress, they could be made whole by the tax payers, a veritable wet dream for any self-respecting neo-con.

The Obama plan replaces all that “missing” spending with Federal spending. It is clear that such a bold move is probably the only chance still on the table to avoid a repeat of the World Wide Great Depression of the FDR days. The amount of spending in that spending bill is, unhappily, astronomical. That would make it roughly the same size as the take that Bush Jr.’s fellow looters snatched during the eight years when frenzied high crimes were the constant currency of the day. The economy was supposed to tank after the Bush crime family was safely back in Texas, just in time to blame Obama for everything, but, as is usually the case for everything Bush Jr. dreamed up, it exploded prematurely.

When your Republican starts off with complaints about too much spending and out of control deficits, show him the chart. Agree with him -- in a condescending way -- that it really is too much spending and that the deficit it will cause really is too high. Tell him -- compassionately -- that we have already paid off the neo-con extortionists once while they were gang raping us the first time, but that we are willing to pay again to save the country.

Then walk away.

For a comprehensive explanation of the contents of the 2009 Stimulus Bill,
http://en.wikipedia.org/wiki/American_Recovery_and_Reinvestment_Act_of_2009
and for an overview of the President's 2010 Budget, submitted to Congres in 2009,
http://www.gpoaccess.gov/usbudget/

Gee, mom, did God make Banks?

Everything that is "extra, extra complicated" really is "extra, extra complicated."
How to selectively avoid understanding almost anything.73

Oh darn. That $300 Billion bail out was supposed to help get credit started back up again, whatever that means. (For the numerically challenged, 300 billion is 300,000,000,000.) Gosh, we put the money into the “thing” at just the right places, but there are still all sorts of folks who can’t borrow anything. Nothing. Certainly not enough to keep business going and jobs in place.

Well, most of the most important people who could have signed off on those bail out checks, have. They are okay. They have enough money to last them through the disaster the rest of the country is facing. After what’s left straggles back to its feet, they can start the “trickle down.” Again.

“Trickle down” means that their banks will finally start loaning the money businesses need to keep going. Just before these "trickle down" folks start “trickling down,” most businesses will be in a failure state. They will be on their last legs. or, perhaps, on their backs. You know, “for sale” at a really cheap price. If the neo-con wet dream has come true by this point, it will be a shopping extravaganza if you have any money.

Gosh darn it, no one seems to have any money, though. Wait! There’s still the “trickle down” folks wandering around with what’s left of their $300,000,000,000! After all, they certainly haven’t lent much of it to anyone. Maybe, out of the goodness of their hearts and their great love of our country, they might be inclined to take a risk here and there, buy a few American businesses at bargain basement prices, and try to start the economy again.

That would be something new. Once again, they would wind up owning everything, strangling the rest of us not by “innovation,” “invention” or “competition,” but by good old fashioned business sense, funded with the tax dollars they took from us back in 2008. This next chapter of the “American Dream” just happened to have fallen into their laps by extraordinary good fortune!

They will have solved the labor problem, too. Labor problem? That means excessive wages and benefits will have been curtailed just in time for prosperity! The American worker's race to the bottom will be well under way by this time. No business means no jobs. No jobs means extra, extra low wages and plenty of desperate workers ready to gobble up any job (and any wage) they can get. It will be paradise! You know, just like "the good old days."

Captains of Industry. Maybe Dick Cheney will feel well enough to be President for a while. You know, well enough to “git ‘er did!”

Solution-wise this travesty makes the black hole of Calcutta look like a Sunday school social. Turn on your television. The man in the suit will explain everything. There is no solution. We just have to pump as much money as possible into these banks and then patiently wait and see if they start making loans again. Sort of like pushing a lobster through a key hole. It might work....

The reason it is all so complicated is because we just have to wait for these frightened bankers to get themselves into a little better frame of mind. They must be reassured. Right now, they are so freaked out with the prospect of being poor, they won’t even loan money to each other! The television man will provide you with 97 reasons why that is the case and another 231 reasons why this insanity is the only chance we have to get the lobster through the key hole.

Well, there is another solution.

A surprisingly American solution.

Here’s the plan. Split off a few billion of the bailout money and convert it to cash. (Bushie’s old Iraqi viceroy knows how to do this. And how! He was tossing around pallet loads of bundled U.S. hundreds to everyone who would stand still!)

Next, buy two or three thousand used Winnebagos. It’s okay. Gas is cheap right now, and we’ll be done with them before the price can get back to $4/gallon. Put a cot and a coffee maker in each one. Pack the back half of each Winnebago with cash.

Hire ten thousand bankers. There are plenty of unemployed bankers running around loose right now. Loan officers would be good.

Divide the bankers into three groups. Make them all Federal employees. The first group will go in the Winnebagos to make loans. The second group will be in charge of bookkeeping. The third group will be in charge of catching bankers from the first two groups when they cheat.

Next, park the Winnebagos in every city where the banks have not started loaning money, put out a sign, open the door and start making loans. I have to suspect that business will be good.

Pretty soon all those frightened bankers will get over their fright. Oh, whatever. In any event, they might stop buying each other, paying stock dividends and huge executive bonuses with our bail out money and start making loans again.

Total cost? $30 billion ought to get things rolling right along. Bailout money going to banks ($300 billion) hasn’t done much yet. Bailout money to businesses who need it and qualify might accomplish quite a bit.

God, is this ever complicated.

For a quick review of the journey of bail out money so far:
http://money.cnn.com/news/specials/storysupplement/bailout_scorecard/

Revisiting Unthinkable Presumptions

A Glimpse at Re-Birth Instead of Melt-Down

Are we “man-enough” to turn around and walk away? 74

George Bush (GWB) (Oh hell, why not both of them...?) has always done his very best “work” when he paints his pitch with the direst urgency. Texas style, hair on fire, save America urgency. Recalling what may be the most calamitous deceptions he has “sold” to the American public, we are impressed with the sinister alacrity always present.

A breathless pharmaceutical bill passed a 3 AM half by exhausted, threatened senators and half by others wildly drunk on avarice, a panicked Patriot Act recklessly perched on choreographed “facts,” an emergency $300 billion dollar Christmas present to an unnamed “black hole” filled with “special bankers,” the only ones who could be trusted to save the country from “special bankers” who had just finished looting it -- all these are but a few of the more public outrages.

“Gee whiz, they all seemed to make sense for a little while!” Is anyone else getting tired of listening to this endless toothache of, well, emergency emergencies?

Now it’s hangover time. There’s simply nothing to do but have another drink.

We don't even know who got our money. We don't even know what who ever got it, did with it! Sure, we asked, but those in charge told us to "Shut up." They told us we didn't know enough about such things to even ask questions like that one, let alone expect that we could understand the answers. "Just keep paying." "Otherwise, melt down! Whatever we decide that is, it will be lots worse than this!" "Just keep paying."

Sorry, maybe not. What exactly happens if we bravely turn our backs on this whole collection of vipers? What exactly happens if we just lean back, relax and let the whole financial “whatever it actually is” demolish itself? It’s pretty clear that the hardest part of fixing things is finding anyone to trust long enough to do the work.

Maybe these fun loving opportunists need a stake through the heart. Yeah, their movie making machine is running full steam with yet another saga of precisely how awful things would get if we don’t keep paying. Yeah, they’ve managed to recruit some otherwise credible voices to join their well paid choir of impending disaster. The economic charts and graphs are flowing like a river at flood stage, every one of them portraying something akin to a Biblical disaster.

There is even a short hesitation generously injected to attempt to educate us about the difference between “financial” and “economic” disaster. The “financial” disaster is the one to be suffered by our road weary billionaires if the bail out should so much as pause in its progress. You know, billionaires. The people who make campaign contributions because they love our country so much that it hurts.

The “economic” disaster, I suppose, is the one we will be feeling. The story line says that the billionaires must always be considered first. Something like the instructions to the mother on the air line. “Put the oxygen mask on yourself before the baby.” We have been artfully convinced that the billionaires are the ones who will need to keep breathing if the rest of us are going to make it. An interesting coincidence when, not long ago, they were the ones in favor of "drowning the government in a bath tub."

Owning the media, lock, stock and barrel, comes in handy for stuff like that.

Well, if these old banks fall apart, isn’t it the American way to expect new banks to rise up out of the ashes? If the stock brokers take the hit they are always claiming to be ready to take, why not let them take it? If the dottering bigots in the Congress cut loose with their practiced screams about “good Southern ideology” and “American ideals” and “founding fathers” and the like, what happens if we don’t dance?

Wouldn’t honest, hard working Americans recreate the stock market if it turned out to be something we needed? Wouldn’t American voters realize what kind of crooks we had been electing if we saw, first hand, the damage they had inflicted all these years while they were convincing us they were actually doing something else? Something honest? Something American?

Could the United States somehow just dump all this crud and start over? We started from scratch more than once before. The wealth of the country remains. The old owners are such toothless whiners we start to suspect they never really owned everything anyway. We start to suspect that our indebted servitude to them doesn’t actually amount to much more than hot air, the rancid stench of something dead in their over burdened digestive tracts.

These "old owners” have now perfected their endless ranting about the sanctity of capitalism, at least capitalism as they have always promoted it. Leaving them on a street corner with their fancy paper and their shrill voices doesn’t really seem like such a bad idea.

Time for a realization. They aren’t capitalists. These unquestionably elite "Captains of Industry" haven’t “competed” or "invented" for decades. This sacred economy that we are being told that we must save -- for them -- is about as capitalistic as a bunch of over weight oligarchic pigs with trust funds squawking with screams of desperate urgency in a belching contest. They bought all these politicians, judges, media corporations. They dreamed up all the “financial doo dads" that they lost their shirts selling to each other.

So? Let’s honor our traditional ideas about “private property” and let these clowns keep all these expensive folks they’ve bought. We can elect new politicians. If it turns out that we need to, we can create a new stock market based on capital that actually exists. We’ve already started the replacement of their crooked, worthless media machines. (You’re reading this blog right now! Ain’t it great? No newsprint!)

Oh gee. What about all those honest foreigners who lent us all that money? They shouldn’t have to take a bath just because they tried to help us out with a few trillion. They only had our best interests at heart. They only wanted to take a small, honest advantage of our great capitalist system. Right. None of us has ever even seen anything that money bought! It certainly doesn’t seem to have bought anything for us. We don't even know where in hell it went.

If we walk away, we will be standing there without any hope that these hard working billionaires and their honest, compassionate "foreign friend" billionaires are going to “help” us any longer. We would just have to look after ourselves.

We could start looking after ourselves with whatever is left in the treasury.

I think we could make it.

One of our founders said that democracy needed to be covered with the blood of patriots every decade or so. He was close. Our democracy needs to be covered with the blood of crooks and cheats, their professional liars and their private collection of “bought and paid for" politicians.

Time to clean house, take our lumps and get this thing back on the tracks.

Gosh. Did I tip my hand?

For more insight concerning the"Extra, extra complicated" melt down picture, the following explores the question, "How many different directions can a room full of bankers point their fingers?"
http://www.latimes.com/news/opinion/editorials/la-ed-cra25-2008oct25,0,394443.story

Sheer Paranoia: Outrageous but Entertaining

A Meeting in the back room of the White House. 60

Karl Rove barks at the administrative attendant (A G-12 Civil Servant): “Hey, boob queen! Fetch me another cup of coffee! Now!”

Treasury Secretary Paulson hurriedly enters and seats himself at the table, still completely consumed reading the papers he carried into the room. He looks frightened.

The Chief of Staff is placing copies of the agenda around the conference table. Two or three other Presidential Advisors are speaking secretively in the background.

Suddenly, the door is opened again. Two Secret Service agents quickly take their places on either side, suspiciously glancing around the meeting room. One, holding the door open, states in a loud voice, “The Vice President.” Dick Cheney skulks into the room to take his seat. It is suddenly silent.

“Where the hell is Georgie boy? Get his ass in here. We’ve got some work for him to do -- some stuff for him to say. I haven’t got all day!” Cheney grouches. A staff member rushes frantically out of the room, reappearing moments later with a disheveled George Bush.

“This is your chair, Mr. President.” the staffer offers politely as he pulls out the President’s seat.

“Hey! Texas! Are you tellin’ me that you don’t have time to get to my meeting on schedule? What a loser! God!” Cheney booms at the President, disgusted.

Addressing everyone at the table, the Vice President begins. “Okay. It’s no surprise, but we’re dumping old what’s-his-name. Hasn’t got a chance. Recoup all the money we can out of his campaign coffers.” glaring at Josh Bolton, the Chief of Staff. “You got that?”

“Yes, sir. I’ll get people right on it, sir.” The Chief of Staff makes a note in his day planner.

The President, seeming confused, interrupts Cheney. “Uh, does that mean I won’t get to give more speeches? You know, campaign stuff for McCain?”

Cheney fires back. “Just do as you’re told. If they tell you to give a speech, give one. Now, shut up. We’ve got important business here.”

The Vice President turns to Henry Paulson, Secretary of the Treasure. “Hank, how far down are you today with your Goldman Sachs' paper?”

Paulson, still looking bewildered, mumbles, “Another 55 million, Dick. This sucks. I thought the market wasn’t supposed to tank until just after the election!” He continued, “I’m getting phone calls. The one percenters don’t like this. They don’t like this one damned bit! You know what that means.”

Cheney booms back. “Don’t threaten me, you bookie! It’s your job to keep the billionaires happy! You can just get your ass on the phone and quiet ‘em down.” The Vice President glares at the National Security Advisor, then turns to Karl Rove. “You said you had a new plan. Something about the Treasury.”

Karl Rove stood, organizing a few sheets of notes in his hands. “We can still turn this disaster to our advantage. This place is going to be crawling with Democrats in another couple of months, so if we’re going to strike back, we need to do it now.”

“Yeah, we’re going to be sliding out of power, but there’s still time to gut this bastard before we lose George Bush’s legal cover.” He turns to Attorney General Mukasey. “I assume that the Justice Department is still with us? I sent you a list of Republican nobodies you can prosecute if you have to prosecute someone.”

“Dick is right when he says we may as well dump McCain. That whole campaign is self-destructing as we watch. But that means we have to walk away from all the schemes we had for the next four years, no more no-bid contracts and K Street is going to get castrated by these populist do-gooders. That means no more free money for favors.”

“We’ve got to get what we can while the gettin’ is good. That’s where my plan comes in. We can resurrect the same ‘scare team’ we used for Iraq, only this time the new threat will be another Great Depression. I think if we hammer the public into a state of terror for a couple of weeks while Congress is paralyzed, we can ramrod a huge bail out scheme through and be done with it before the election.”

Secretary of Defense Gates offered to help. “I can stop all the expenditures for new military procurement. That will leave a few billion in the defense budget for a snack.”

Cheney responds in a short tone. “Yeah, yeah. Tidbits like that are okay, but we have to think big. We’re going to have to last through the next term on what we can get right now. A few billion defense dollars would normally be interesting, but we have to go for the big one this time.”

President Bush looked more and more confused, but remained silent.

Rove continues. “We can jam a $700 billion dollar bail out through in a couple of weeks. We’ll keep going public with the idea that the details are too complicated to explain, ratchet up the fear card with Depression talk ‘till the public is crazy. We can even throw in some patriotism crap or something. We can contract the Wall Streeters to administer the whole thing. They will be able to loot enough dough from that to stay loyal to us until we’re ready to come back.”

“Plus, this plan has another bonus. If we bankrupt the Treasury and the Federal Reserve, that Democrat son-of-a-bitch won’t have any cash to pay for all of his promises.”

“Face it, gentlemen. We have lost power. We can either stand here and let the poor people get all this money for their goddamned roads and schools and crap or we can funnel it into some pockets that know how to help us later, pockets with good memories of who gave them what.” Rove pauses for effect.

“Dick has decided that we’re going to do this. He expects all of you to tow the line. Yes, there is a little risk once the Democrats have a new Attorney General, but, if everything goes according to plan, we'll be sitting somewhere else with our take before they can do anything about it.”

“Page six of the agenda is a list of countries without extradition agreements along with the names of some banks. I suggest that you make arrangements for travel and moving right away, get your families ready.” He went on, joking. “Don’t steal any famous art, either!”

“This doesn’t have to be the beginning of the end for us. Dick and I like to think that this will be the end of the beginning.”

“President Bush. Anything to add?” Rove turned, condescending, to face the President.

Cheney suddenly stands, gathering his notes as he prepares to leave. The Secret Service agents, still at their stations, swing open the conference room door for his departure.

What the Bail Out Looks Like When It Saves Homeowners.

Is this the way it’s supposed to work? 60

The following fiction is a conversation between a foreclosing homeowner, Mr. Smith, and an agent from the newly created Federal Mortgage Correction Agency, FMC, Agent Brown.

“Mr. Smith, I’m from the Federal Mortgage Correction. I understand that you’re considering foreclosure for your home here. Maybe, if we review your situation, we can offer you an attractive alternative. Let’s see. The property in question is this house, 423 Elm Street, right?” FMC field agent Brown asked.

“That’s right. Ellen and I bought this place in August of 2005. I’m pretty sure that our adjustable rate mortgage can almost be considered a sub-prime at this point.” replied the homeowner, Mr. Smith.

“That’s actually not too important, Mr. Smith. The FMC is totally directed at the future. What we are trying to do is to help you and your family keep this house.” the FMC man answered reassuringly.

“But, aren’t all the banks wrecked after the President’s bail out got shafted by Congress?” Mr. Smith responded, dejectedly.

“No, a good number of the shakier ones went down, but there are a lot of good banks that are still in business. Along with you and your house, part of our job is to get this thing working again. That includes the responsible banks that were able to go through the meltdown and stay open. We can help them, too.”

“In fact, Mr. Smith, if we can get your mortgage repaired here, just about everyone will benefit.” FMC Agent Brown answered.

“Even if the outfit that lent us the money is one of the ones than went belly up?” Mr. Smith asked.

“Let’s talk about your mortgage. You originally financed through Nationwide Mortgage Finance, here in River City, right?” Agent Brown began.

“That’s right, but they went out of business.” Mr. Smith continued.

“I know. But your mortgage wasn’t really in Nationwide, Mr. Smith. It had been ‘bundled’ and sold to a finance firm in Arlington. They packed it up and securitized it and a lot of other mortgages, then sold them to a company called Shelby and Barsh. S and B is out of business, but they weren’t holding your mortgage when they failed. Most of their assets, including your mortgage, were sold on ahead to an investment banking company called Mazzara which was held by a sovereign wealth trust in the UAE. That is where your mortgage is right now.” Agent Brown explained.

“They pretty much told me that when I spoke to the Mortgage Help Line, but they didn’t know the details. Our problem got started when we tried to refinance.” Mr. Smith complained. "We listed it for sale, but that went nowhere."

“Right, Mr. Smith. That is where we come in. I have our records of the history of that first mortgage here. Let’s go over the numbers and make sure that they are accurate.”

“You purchased the home at its appraised value in August of 2005 for $229,500. You made a $14,500 down payment. Your mortgage for the balance of $215,000 ran 48 months at 5.25% until it reset at 6.75% this year. Your mortgage payments at 5.25% were $1966 a month. You have a good record of making those payments until just recently.”

“When your rate reset, you were looking at $2430 a month, and you tried to refinance. The appraisal on your refinance dropped to $188,000 so the best loan you could get was going to short your mortgage payment around $500 a month. I assume that is when you decided to foreclose.” Agent Brown offered, checking his file.

“That’s right. We pretty much went from owning a $229,000 house at 5.25% to owning a $188,000 house with a 6.75% rate on a $215,000 mortgage. We made those payments for four months through the summer, but we just couldn’t keep up. It seems like everything else went up at the same time.” Mr. Smith explained.

“Is the Federal Mortgage Correction going to buy this house for us? I mean, how does that work? Ellen and I have thought about every possible way we could keep this house, but we came up with nothing.” Smith asked.

“Well, Mr. Smith, FMC isn’t going to buy your house for you. That isn’t exactly how the bailout works. What we can do is make it so you can stay in it with a mortgage payment you can afford. To accomplish that we can offer a two pronged solution.

“First, we can take some of the $700 billion, track down whoever holds your mortgage and make them an offer. Naturally, they would like to get all $215,000 that was financed in the first place. That is not going to happen. They are going to get to start talking to us at the current $188,000 appraisal, but from there, they will have to decide what it’s worth to them to not wind up owning your foreclosed house. I would estimate that this mortgage can be purchased from them for around $165,000 or so.”

“After we obtain the house, you and the FMC will have to arrive at a new mortgage agreement. That is the second prong. We never wanted to be in the mortgage business, so we’re already out of our comfort zone. The interest on your new mortgage is going to have to compensate us for our investment and our trouble. In our favor, we can make a little money. In your favor, you can have a solid thirty year mortgage at market rates -- a mortgage with a payment you can live with -- but you’re not going to get the money your mortgage holder lost getting out of your foreclosure. We’re the ones who did the heavy lifting on that account, and we will get that money. Your new mortgage will make it possible for you to pay for the house and settle with us.”

“Our purchasing muscle and the foreclosure threat knocked $23,000 off the appraised value you were trying to refinance. Your new mortgage with us will be for the appraised value of $188,000 and that figure will determine your mortgage payments. The outfit in UAE will have purchased a discounted copy of your $215,000 original mortgage and wound up with $165,000. Compared to worthless, toxic paper, which is what it was before we bought it, they will probably feel like they did the best they could have expected.”

“All the details of this agreement will have to wait until you get through the mortgage application process, but they will probably wind up looking about like what we have discussed. Can we make this deal?” the Federal Mortgage Correction agent asked, smiling.

What in the world could be better than bailing out bankers?

Melt-Down?

The Non-Economic Analysis of What Just Happened.

The endless story of the primary and secondary models? 59

If you are George Bush, you have presented the primary model which argues that the national economy is going to meltdown any moment. You have also produced a secondary model which should propel the primary model to your desired results. The secondary model was the first dismal failure. Its increasing odor has now drawn the primary model into the swamp with it.

I have watched this unfold with the other politics wonks on my favorite web site. Comments and posts which had previously only infrequently amounted to more than a few paragraphs now present multipage quotations about who did what, when they did it and what the results were. The least interesting but probably the most educational are accounts of past legislation, particularly Senator McCain’s endless penchant for deregulation following his rehabilitation to the neo-cons after the Keating Five problem.

Rest easy, dear visitor. This post is all about models not history. Those energized web posters mentioned above can either establish a compelling argument for the culprit in this mess, or at least, wall paper the entire affair with their too-easily-copied-and-pasted quotations. (If you still have an appetite for more of that stuff, visit my favorite after you finish here.

http://www.thomhartmann.com

and on to the forums “Domestic Politics” and “Economics.” It’s all there waiting there for you.)

Now to the models. A quick description might be in order. The primary model of any communication defines the essence of it, the question, the answer etc. The secondary model defines the mechanism of its transmission. In a sense, the primary model is the message; the secondary model is the massage.

Primary models have the foundational quality of being about something. Secondary models, on the other hand, deal entirely with the business of communicating the primary model. Both are critically important aspects of communication’s effectivity as one of the pillars of human affairs.

Concerning the proposition of Mr. Bush’s inflammatory warning about the economy, no one I’ve encountered can confidently say whether or not the threat he describes is real. That state of affairs, for example, decries his track record of secondary models in rather harsh terms. Yes, we know what his initial proposition contains, however, the secondary model he employed to manipulate us into action is, frankly, insulting. As such, it is nothing new.

So, what exactly is this secondary model we are looking at here? That is, of course, the secondary model as we see it, not the “lipstick” version rolling around the House Committee Hearings.

It’s suspiciously intriguing that, like the last one, this one began on 9/11.

The Secondary Model:

The President approaches the nation breathlessly communicating an immense threat. No one has any particular way of knowing any more about the threat than they did the last time he did this Once more, we only seem to know what he and his cabinet appointees are telling us about it. Now come the questions.

Do we trust this man? Has he told us the truth before? Has he always acted sincerely in our interests? Does it turn out that our idea about his judgment could bear the facts that came out later? Like last time?

Did he tell us the truth about the threat? Did he know about it earlier than when he told us about it? Is he telling us everything he knows now? Is he telling us enough so we can make a reasonably good decision about what to do? Or, is it like last time?

The “when” became a rather “pregnant” issue with the last threat he told us about. Did this new threat of his just “pop up out of the blue” without warning? Like last time?

The President has told us that we must act fast, and by “act” he means that we should do what he suggests we do, fast. Like the Patriot Act. Like the Military Force Authorization. Like the pharmaceutical bill. Right away, please! We have to do everything right away or face the dire consequences? Of course. It’s urgent. If we are foolish enough to wait, to think about it, all will be lost!

We can think about it later. This is a lot of our money. We’ll have time to think about it while we are paying it back.

Do we trust this man with even more of our money? Has he done a good job with the money we have given over to him in the past? Has he told us what he bought with it? Who got it? Where it is now?

Then, of course, there are the experts. They are the ones who know all abut this. Why it is urgent. Why it is worth so much. What happens if they don’t get it. Have we had good results with his experts in the past? With Donald Rumsfeld? With Carl Rove? With House Speaker DeLay? Does this President show us his good judgment in picking his experts? Do we think that, somehow, he has started to do better? Did we trust those people? Should we have trusted them? Like last time?

The expert here is Treasury Secretary Paulson. The company that is getting discussed as the next corporate fatality of this mess is called Goldman Sachs. Treasury Secretary Paulson used to be the CEO of Goldman Sachs. He apparently has $630 million dollars worth of Goldman Sachs stock in his personal fortune.

Should we trust him? Has he always done a “good job” in the past? Was he as surprised as the President when this just suddenly happened? Would he have come up with the same plan if Goldman Sachs weren’t tanking with the other investment banks?

All of this is the secondary model. These unfortunate men have started this sales effort with utterly derelict credibility. The taxpayers they are trying to convince are already exhausted, injured and, deservedly, suspicious. They are afraid. The first issue of this secondary model was to frighten them further. Like last time?

Does anybody else worry that this might not be what it is presented to be? I guess we are pretty much done with George Bush’s judgment. That leaves us stranded in an unpleasant place where we have been before, stranded with only our judgment -- our intuition. Since we have no facts, we can only try to do better than we did last time.