More Subprime Loans, Now!

Why the world needs cheap loans at insanely high interest rates.

By Daniel Gross
Updated Friday, Sept. 19, 2008, at 5:10 PM ET

What the world needs right now is more subprime lending—a lot more of it. Yes, I know that in the public imagination, subprime lending is the scourge responsible for crippling the U.S. financial system. The massive extension of credit to people who lacked extensive credit histories and documented wages seems, in hindsight, supremely stupid. But far from the madding, depressed crowds of Wall Street, billions of people are starving for credit.

Lending tiny sums to people who live on a few dollars a day—street vendors in New Delhi, goatherds in Kenya—doesn't carry the glamour or financial rewards of haute banque. And compared with efforts to vaccinate children or build dams, it seems like an exercise comparable to shooting pellets at a runaway rhinoceros. But in an era when a great deal of foreign aid has been wasted or has fallen into the hands of corrupt officials, microlending has built a track record of effective poverty relief. Microcredit pioneer Muhammad Yunus, who founded Bangladesh's Grameen Bank in 1983, won the 2006 Nobel Peace Prize. And microfinance, which now touches the lives of more than 100 million people, is one of the few bright spots in the troubled financial sector. "We've helped about 80,000 entrepreneurs, and the repayment rate is about 98 percent, which is a better performance than consumer credit-card portfolios in the U.S.," says Premal Shah, president of Kiva.org, an online microcredit organization that allows computer programmers in Seattle to lend sums as low as $25 directly to small-scale grocers in Uganda.

A Nation of Village Idiots

Don't let them tell you this economic meltdown is a complicated mess. It's not. Our national financial crisis is readily understood by anyone who has seen greed and hypocrisy. But we are now witnessing them on a profound, monumental scale.

Conservative Republicans always want the government to stay out of business and avoid regulation as long as they are making lots of money. When their greed, however, gets them into a fix, they are the first to cry out for rules and laws and taxpayer money to bail out their businesses. Obviously, Republicans are socialists. The Bush administration has decided to socialize the debt of the big Wall Street Firms. Taxpayers didn't get to enjoy any of the big money profits on the phony financial instruments like derivatives or bundled sub-prime paper, but we get the privilege of paying for their debt and failures.

Florida admits it let crooked mortgage brokers run wild

By Matthew Haggman and Rob Barry | Miami Herald

TALLAHASSEE — In a stinging critique of the state's oversight of the mortgage industry, top Florida investigators found that state regulators failed to alert police agencies to crooked mortgage brokerages, ignored citizen complaints and allowed hundreds of people with criminal histories to peddle loans.

The report released Tuesday to Gov. Charlie Crist and the Cabinet criticized the Office of Financial Regulation, saying the agency broke down in key areas, including screening brokers and shutting down shoddy operations, while the state grappled with the nation's worst home loan fraud crisis.

Amy Goodman: Wall Street Socialists

The financial crisis gripping the U.S. has the largest banks and insurance companies begging for massive government bailouts. The banking, investment, finance and insurance industries, long the foes of taxation, now need money from working-class taxpayers to stay alive. Taxpayers should be in the driver’s seat now. Instead, decisions that will cost people for decades are being made behind closed doors, by the wealthy, by the regulators and by those they have failed to regulate.

Tuesday, the Federal Reserve and the U.S. Treasury Department agreed to a massive, $85-billion bailout of AIG, the insurance giant. This follows the abrupt bankruptcy of Lehman Brothers, the 158-year-old investment bank; the distressed sale of Merrill Lynch to Bank of America; the bailout of both Fannie Mae and Freddie Mac; the collapse of retail bank IndyMac; and the federally guaranteed buyout of Bear Stearns by JPMorgan Chase. AIG was deemed “too big to fail,” with 103,000 employees and more than $1 trillion in assets. According to regulators, an unruly collapse could cause global financial turmoil. U.S. taxpayers now own close to 80 percent of AIG, so the orderly sale of AIG will allow the taxpayers to recoup their money, the theory goes.

Hello? If McCain Had His Way, That'd Be Our Social Security Money Wall Street is Losing

What do we democrats have to say about the mess on Wall Street?

Today Obama said it proves that the Republican economic philosophy has failed, and I heard him mock McCain for calling for a commission because "we know how we got into this mess." Now some people think about things like "economic philosophy" a lot, and many have at least a general notion of how we got into this mess. But even though everybody cares how much money ends up in their pockets, most people are understandably a little fuzzy about all the policies and philosophies and market forces behind our very complex economy. To further confuse the issue, McCain is also saying something about reform, and taking on "fat cats," and accusing Obama of being just as cozy with these Wall Streeters as anyone else. And at this point, slightly more voters trust John McCain to handle the economy than trust Barack Obama.

McCain and the Zigzag Express

In this crisis, the GOP candidate has swerved all over the road.

Jonathan Alter
NEWSWEEK

John McCain's whole campaign is based on the idea that Barack Obama is risky, untested and can't be trusted to protect the nation in a crisis. But this week it was McCain who seemed unpresidential, as his Zigzag Express swerved back and forth across the median strip. His approach to the greatest financial crisis since 1933 was erratic and off-key. Would his presidency be any different?

McCain's first reaction to the climactic events of Sunday, Sept. 14, when Lehman Brothers fell, Merrill Lynch was sold and AIG began to totter, was to repeat his longstanding sound bite that "the fundamentals of the economy are strong." When Obama predictably leapt on this clueless comment with a TV ad, McCain quickly backtracked by saying that he was merely talking about the strength of "the American worker" and anyone who disagreed obviously had a problem understanding the importance of working people. He told the morning shows that he was a Republican in the mold of Teddy Roosevelt, though his true views on free-market economics are more in tune with Herbert Hoover.

Historic Market Bailout Set in Motion

President Cites Urgent Need For Sweeping Intervention

by David Cho and Binyamin Appelbaum
Washington Post Staff Writers
Saturday, September 20, 2008; Page A01

The Bush administration yesterday proposed a historic $500 billion bailout of financial firms that would let the government rather than the cold judgment of the marketplace decide the winners and losers from the crisis that has shaken the U.S. economy for the past year.

The plan, which would be the most sweeping government intervention in the markets since the Great Depression, calls for the Treasury to buy the troubled mortgage securities that have been toppling major financial firms and are at the heart of Wall Street's turmoil.

Van Jones: We Can't Drill Our Way Out of Our Energy Problems

The following speech was given at Netroots Nation 2008 in Austin, Texas.

I have a little bit of whiplash. Thirty-six hours ago I was in the Arctic with Jimmy Carter. This is not a joke, you all. (Laughter) It sounds like a joke, right? You hear about the black guy in the Arctic with Jimmy Carter? No, I was really ... (Laughter)

I was really in the Arctic, man, the abominable snow Negro. No, I was really there. (Laughter) And the reason, so I'm a little bit jet-lagged, but I want you to know, if you didn't know, it was kind of kept quiet until it was over. But a number of people, huge dignitaries, all got on a boat and went to the Arctic. We spent eight days. Jimmy Carter was there. Madeline Albright. Tom Daschle. Larry Page from Google. But not just liberals and progressives; the head of DuPont was there, eight days on a boat, to look and see if what's happening with climate change is real. The head of Monsanto was there. We had Republicans and Democrats, young people, old people, state leaders, Catholics, evangelicals.

Hard Truths About the Bailout

The fifth major federal bailout this year — after Bear Stearns, Fannie Mae, Freddie Mac and the American International Group — is now in the works. Taxpayers have every right to be alarmed and angry. The latest plan is not necessarily a bad one, and officials had to move quickly to prevent credit markets from seizing up.

But make no mistake, this crisis could have been avoided if regulators had enforced rules and officials had dared to question risky lending and other dubious practices.

If done right, this bailout could succeed where the others have failed and remove the threat of a systemwide financial collapse. But the upfront cost will be enormous. So will the risk of losses in the long run — on top of the risks already incurred.

Paul Krugman: Crisis Endgame

Correction Appended

On Sunday, Henry Paulson, the Treasury secretary, tried to draw a line in the sand against further bailouts of failing financial institutions; four days later, faced with a crisis spinning out of control, much of Washington appears to have decided that government isn’t the problem, it’s the solution. The unthinkable — a government buyout of much of the private sector’s bad debt — has become the inevitable.

The story so far: the real shock after the feds failed to bail out Lehman Brothers wasn’t the plunge in the Dow, it was the reaction of the credit markets. Basically, lenders went on strike: U.S. government debt, which is still perceived as the safest of all investments — if the government goes bust, what is anything else worth? — was snapped up even though it paid essentially nothing, while would-be private borrowers were frozen out.

Is McCain More the Populist than Obama?

Is John McCain out-populisting Barack Obama?

On Friday morning, McCain, at a rally in Green Bay, Wisconsin, delivered a speech on the financial crisis. He tore into Wall Street and Washington, proclaiming, "The crisis on Wall Street started in the Washington culture of lobbying and influence peddling."

[...]

Forget for a moment all of McCain's connections to the current crisis. (He seems to do so easily enough.) Forget that his pal and adviser Phil Gramm helped create this mess. That his top advisers and campaign staffers lobbied for Fannie Mae and Freddie Mac. And that over 80 lobbyists for top financial industry firms--including AIG, Lehman Brothers, Merrill Lynch, and Washington Mutual--have worked for McCain's campaign. McCain is showing anger, vowing to knock heads together (on Wall Street and Washington), and, by the way, tying Obama to the mess. McCain is no William Jennings Bryan. But for a Republican, he's coming on like a populist gangbuster. Given his track record as a deregulator, this is faux populism.

Congressional Leaders Stunned by Warnings

By DAVID M. HERSZENHORN

WASHINGTON — It was a room full of people who rarely hold their tongues. But as the Fed chairman, Ben S. Bernanke, laid out the potentially devastating ramifications of the financial crisis before congressional leaders on Thursday night, there was a stunned silence at first.

Mr. Bernanke and Treasury Secretary Henry M. Paulson Jr. had made an urgent and unusual evening visit to Capitol Hill, and they were gathered around a conference table in the offices of House Speaker Nancy Pelosi.

“When you listened to him describe it you gulped," said Senator Charles E. Schumer, Democrat of New York.

Incredible Documentary Footage of Mass Arrest in St. Paul

Now that we've had a few weeks to settle, a look back at Labor Day in the Twin Cities. Labor Day was of course also Day One of the Republican National Convention. Video was released today of an apparent mass arrest of utterly peaceful concert goers at the SEIU Labor Day concert.

My personal favorite moment in the tape is an off-camera exchange. Police in riot gear have surrounded loungers in a waterfront park. They announce, "Ladies and Gentlemen, You're Under Arrest" and you hear one young woman say incredulously "Are you serious?"

The end of a gilded age

By Steve Fraser

What is Washington to do as the financial system collapses? Clearly, stark differences in approach as well as in public policy have already emerged. Bail-out Bear Stearns and pump up the brokerage and investment business with new lines of credit. Nationalize Fannie Mae and Freddie Mac on the backs of the taxpayer - but let Lehman drown.

Tell the financial community to save itself, after which Bank of America salutes and buys Merrill Lynch. Then, the Federal Reserve gets cold feet and decides it can't let an institution the size of the insurance giant AIG go under as well. Washington is left staring into the abyss. The old rules no longer apply.

'We blew her to pieces': Winter Soldier: Iraq and Afghanistan

Reviewed by Dahr Jamail

Aside from the Iraqi people, nobody knows what the United States military is doing in Iraq better than the soldiers themselves. A new book gives readers vivid and detailed accounts of the devastation the US occupation has brought to Iraq, in the soldiers' own words.
Winter Soldier Iraq and Afghanistan is a gut-wrenching, historic chronicle of what the US military has done to Iraq, as well as its own soldiers.

Authored by Iraq Veterans Against the War (IVAW) and journalist Aaron Glantz, the book is a reader for hearings that took place in Silver Spring, Maryland, between March 13-16, 2008, at the National Labor College.

Michael Kinsley: Politicians Lie, Numbers Don't

And the numbers show that Democrats are better for the economy than Republicans.

By Michael Kinsley
Posted Tuesday, Sept. 16, 2008, at 1:49 PM ET

If you're wondering why a formerly honorable man like John McCain would build his presidential campaign around issues that are simultaneously beside-the-point, trivial, and dishonest (sex education for kindergartners, lipstick on pigs), the numbers presented here may help to solve that mystery. Since the conventions ended, McCain has mired the presidential race in dishonest trivia because he doesn't want it to focus on what voters say is the most important issue this year: the economy.

There is no secret about any of this. The figures below are all from the annual Economic Report of the President, and the analysis is primitive. Nevertheless, what these numbers show almost beyond doubt is that Democrats are better at virtually every economic task that is important to Republicans.

MnIndy interview: Doug Henwood on Lehman, AIG, Gray Monday, and the economy

After Monday’s dramatic tumble in the financial markets–led by dire announcements about Lehman Brothers (bound for bankruptcy court), Merrill Lynch (absorbed by Bank of America) and insurance giant AIG (desperately seeking bridge loans)–I got in touch with Doug Henwood for some help in sorting out these latest developments and what they augur for the US economy on Main Street.

In a 20-minute interview taped Tuesday afternoon, Henwood–the publisher of the invaluable Left Business Observer newsletter and perhaps our most plainspoken economics journalist–took the measure of “Gray Monday” and the arc of the US economy.

Can He Stop 'Troopergate'?

A McCain lawyer scrambles to block a Palin ethics inquiry.

Michael Isikoff
Newsweek Web Exclusive
Sep 16, 2008 | Updated: 7:15 p.m. ET Sep 16, 2008

A former top Justice Department prosecutor now working for John McCain's presidential campaign has been helping to direct an aggressive legal strategy aimed at shutting down a pre-election ethics investigation into Alaska Gov. Sarah Palin.

The growing role of Edward O'Callaghan, who until six weeks ago served as co-chief of the terrorism and national security unit of the U.S. attorney's office in New York, illustrates just how seriously the McCain campaign is taking the so-called "troopergate" inquiry into Palin's firing last summer of Walt Monegan, Alaska's Public Safety Commissioner.

McCain Secretly Plans New Tax on Middle Class

September 16th, 2008

John McCain should not be traveling in a bus called the Straight Talk Express. No, that equivocating multimillionaire who kowtows constantly to the wealthy should be riding in one of those private, gilded railroad cars.

That would be symbolically appropriate as well since he is trying to railroad the middle class on taxes.

He is actually proposing a brand new tax on the middle class.

Thomas Frank: Get Your Class War On

Now comes the fall culture-war offensive, catching the Democrats by surprise as it always does and spreading panic and desperation among their ranks. As the depth of the Republican breakthrough becomes apparent to Democrats, they launch the same feeble counterattacks that failed them last time, prudishly correcting misleading GOP advertisements and crying for the recess monitor when the other side plays dirty.

And none of this works.

Things would go better for Democrats if they recognized the culture war for what it is: a debased form of class war, a false populism in which an "authentic" America rises up against its would-be masters, an effete bunch of arugula-eaters who say "Happy Holidays" instead of "Merry Christmas." But a visceral feeling of class conflict is what lies at the core of the whole thing: a righteous grievance against wrongful, pedantic rulers. It is so attractive emotionally that I often wish I could sign up for it myself.

Obama: The Price of Being Black

By Andrew Hacker

Restoring the Right to Vote

by Erika Wood

Brennan Center for Justice, 34 pp., available at www.brennancenter.org

Crawford v. Marion County [Indiana] Election Board

US Supreme Court, April 28, 2008

Florida State Conference of the NAACP v. Browning

US Court of Appeals, 11th Circuit, April 3, 2008

In May, Hillary Clinton described many of her core supporters as "hard-working Americans, white Americans." Primary voting in Pennsylvania, Ohio, and West Virginia confirmed her surmise. Her remark seemed, without saying so, to claim an advantage over Obama that was due to his race. But there's more we need to know. We can see how being a farmer or a bond trader or a gun collector might influence your vote. And we understand why black Americans would want a person of their race in the Oval Office. But just what is there about being white that might incline someone toward one candidate instead of another?

Senator Clinton implied that this identity was salient for some voters and that she could appeal to it. Polls showed that some 15 to 20 percent of white voters in those three states said that "race" was a factor in their vote, and we are left to wonder just how much of a factor and how many more would have said the same if they had been frank with the interviewer. People are uneasy talking about the subject of race, but the feeling persists that Obama's half-ancestry could tip the scales on November 4.

Commentary: How to prevent the next Wall Street crisis

By Joseph Stiglitz
Special to CNN

Editor's note: Joseph E. Stiglitz, professor at Columbia University, was awarded the Nobel Prize in Economics in 2001 for his work on the economics of information and was on the climate change panel that shared the Nobel Peace Prize in 2008. Stiglitz, a supporter of Barack Obama, was a member and later chairman of the Council of Economic Advisers during the Clinton administration before joining the World Bank as chief economist and senior vice president. He is the co-author with Linda Bilmes of the "Three Trillion Dollar War: The True Costs of the Iraq Conflict."

NEW YORK (CNN) -- Many seem taken aback by the depth and severity of the current financial turmoil. I was among several economists who saw it coming and warned about the risks.

There is ample blame to be shared; but the purpose of parsing out blame is to figure out how to make a recurrence less likely.

How 6,700 Tons of Radioactive Sand from Kuwait Ended Up in Idaho

By Penny Coleman, AlterNet
Posted on September 17, 2008, Printed on September 18, 2008
http://www.alternet.org/story/98950/

On April 26, 2008, the BBC Alabama arrived in Longview, Wash., carrying 6,700 tons of Kuwaiti sand. The sand had become contaminated with depleted uranium when U.S. military vehicles and munitions caught fire at Doha Army base in Kuwait during the 1991 Gulf War. The depleted uranium was being repatriated. The sand was a gift of the Kuwaiti government.

So was the cost of repatriation. Neither government will discuss just how much the tab was.

Crash Course in Economics

by Larry Beinhart

The first time I was in a car crash, I was six or seven years old.

[...]

As I read the economics news, I'm having that exact same sensation, that we're in a slow motion crash.

Each week, sometimes daily, we slide by a new warning sign, by another wreck that's already off the road.

Glenn Greenwald: What Illegal 'Things' Was the Government Doing in 2001-2004?

For the second consecutive day, The Washington Post has published an excerpt from reporter Barton Gellman's new book on the Cheney Vice Presidency, and it provides still more details on the intense confrontation in March, 2004 between the Bush Justice Department and the Cheney-led White House over the DOJ's refusal to certify the legality of the NSA's domestic spying activities. As has been known ever since Deputy Attorney General James Comey testified before the Senate in May, 2007, all of the top-level DOJ officials -- including Attorney General John Ashcroft, Comey and FBI Director Robert Mueller -- told President Bush they would resign immediately because Bush ordered the NSA surveillance program to continue even after his own Justice Department told him it was patently illegal. Comey drafted his resignation letter, calling Bush's spying activities "an apocalyptic situation" because he had "been asked to be a part of something that is fundamentally wrong."

Such an en masse resignation in the middle of an election year was averted only when Bush finally agreed to change certain aspects of the surveillance program in order to persuade these DOJ officials to endorse its legality. The illegal NSA spying program revealed by The New York Times in December, 2005 that created so much political controversy -- whereby the Bush administration was spying on Americans without the warrants required by law -- was a program that was actually endorsed and authorized by these same DOJ officials. The program we learned about was the "compromise" program that Bush implemented in 2004 in order to avoid their resignation. That's how extreme -- what right-wing, executive-power-loving ideologues -- these DOJ officials are: they are the ones who authorized and endorsed the illegal NSA program that we came to learn about.

A Taste of the Glass-Steagall Lash for Lehman

A reformed Wall Streeter on unreformed Washington.

by Nomi Prins

Now that Lehman Brothers, formerly the fourth largest investment bank in the United States, is first largest in American bankruptcies, it's time to again ask: When will Washington get it? It should never have been the Fed's responsibility, or the government's, to back investment bank speculation. Instilling stability in the financial system should have been goal enough. Unfortunately, neither the Federal Reserve, nor the government, nor the presidential candidates (nor, not that it matters, the president) know how to meet that goal, and piecemeal fixes won't do the trick. Only a bout of sweeping and decisive regulation could work.

There's precedent: The last time the banking system stood at the brink of implosion was in 1932, three years after the 1929 stock market crash. Franklin Delano Roosevelt zoomed past Herbert Hoover into the White House, and FDR stood up to the unrestrained power of Wall Street and contained it. The resultant New Deal included a stoplight at the heavy intersection of financial capital and unregulated greed, called the Glass-Steagall Act of 1933.

The fruit of hypocrisy

Dishonesty in the finance sector dragged us here, and Washington looks ill-equipped to guide us out.

by Joseph Stiglitz
The Guardian
Tuesday September 16 2008

Houses of cards, chickens coming home to roost - pick your cliche. The new low in the financial crisis, which has prompted comparisons with the 1929 Wall Street crash, is the fruit of a pattern of dishonesty on the part of financial institutions, and incompetence on the part of policymakers.

We had become accustomed to the hypocrisy. The banks reject any suggestion they should face regulation, rebuff any move towards anti-trust measures - yet when trouble strikes, all of a sudden they demand state intervention: they must be bailed out; they are too big, too important to be allowed to fail.

New Carbon Material Shows Promise of Storing Large Quantities of Renewable Electrical Energy

September 16, 2008

AUSTIN, Texas — Engineers and scientists at The University of Texas at Austin have achieved a breakthrough in the use of a one-atom thick structure called "graphene" as a new carbon-based material for storing electrical charge in ultracapacitor devices, perhaps paving the way for the massive installation of renewable energies such as wind and solar power.

The researchers believe their breakthrough shows promise that graphene (a form of carbon) could eventually double the capacity of existing ultracapacitors, which are manufactured using an entirely different form of carbon.

Accuracy, efficacy and ethics of abstinence-only programs questioned by public health experts

Special journal issue examines scientific misinformation, human rights and other concerns with abstinence-only curricula

September 16, 2008— Studies published in a special issue of the online journal Sexuality Research and Social Policy by the University of California Press reveal that abstinence-only-until-marriage sex education programs fail to change sexual behavior in teenagers, provide inaccurate information about condoms, and violate human rights principles. Edited by John S. Santelli, MD, MPH, professor and chair of the Heilbrunn Department of Family and Population Health and Leslie M. Kantor, MPH, assistant professor of clinical Population and Family Health at the Columbia University Mailman School of Public Health, the theme issue examines scientific and ethical implications of federal abstinence-only policies and programs. To access the articles in this issue: http://caliber.ucpress.net/toc/srsp/5/3

In sum, the articles show that abstinence-only programs contain medical inaccuracies, fail to help young people to change behavior, and conflict with ethical standards. Abstinence-only programs violate young people's right to accurate information—and also teachers' and health educators' rights to answer questions and provide medically accurate information. Many states have now refused to participate in the federal program (25 states as of August 2008) citing concerns about efficacy and accuracy of abstinence-only programs. The federal program provides funding for abstinence-only education and restricts information about contraception and other aspects of human sexuality.

Paulson admits regulatory errors

The impact of the global credit crunch could have been minimised by better regulation of US banks, US Treasury Secretary has admitted.

Henry Paulson denied the regulatory system had "failed" but acknowledged that it could have "performed better".

He told the BBC his main focus was limiting the "spillover" from the banking crisis to the US economy.

Collins: George speaks, badly

NEW YORK: George speaks, badly

Watching George W. Bush address the New York financial community on Friday brought back many memories. Unfortunately, they were about his speech right after Hurricane Katrina, the one when he said: "America will be a stronger place for it."

"You've helped make our country really in many ways the economic envy of the world," he told the Economic Club of New York.

You could almost see the thought-bubble forming over the audience: Not this week, kiddo.

Daily Kos: Pastor: Palin Was Part of Abortion Clinic Disruptions

by huntsu

Mon Sep 15, 2008 at 03:30:26 AM PDT

There's a new article in Salon.com on the Reverend Howard Bess, a Baptist minister from outside Sarah Palin's Wasilla compound who regularly fought Palin and her right wing church. He wrote a book, "Pastor: I am Gay," that reports say Palin tried to ban from the local library.

Buried in the article is a little nugget. Palin was involved in an effort to take over the local hospital board and block all abortions in the facility. This forced any woman -- including women who were raped and had to pay for their own rape kit -- who even wanted counseling on abortion to travel to Seattle.

Locals sued the hospital and won an injunction from the state Supreme Court that required the hospital to provide the option, and the local religious right went nuts. They held a picket line to block access to the clinic. And on the picket line?

Stocks volatile amid uncertainty

Stock markets were volatile on Tuesday after the key US investment bank Lehman Brothers filed for bankruptcy.

The Dow Jones industrial average shed 100 points after the US Federal Reserve left interest rates unchanged at 2% but later closed 141 points higher.

Traders saw the central bank's move as a sign that the economy was in better shape than they feared.

What Makes People Vote Republican?

By Jonathan Haidt, Edge
Posted on September 16, 2008, Printed on September 16, 2008
http://www.alternet.org/story/98902/

What makes people vote Republican? Why in particular do working class and rural Americans usually vote for pro-business Republicans when their economic interests would seem better served by Democratic policies? We psychologists have been examining the origins of ideology ever since Hitler sent us Germany's best psychologists, and we long ago reported that strict parenting and a variety of personal insecurities work together to turn people against liberalism, diversity, and progress. But now that we can map the brains, genes, and unconscious attitudes of conservatives, we have refined our diagnosis: conservatism is a partially heritable personality trait that predisposes some people to be cognitively inflexible, fond of hierarchy, and inordinately afraid of uncertainty, change, and death. People vote Republican because Republicans offer "moral clarity" -- a simple vision of good and evil that activates deep seated fears in much of the electorate. Democrats, in contrast, appeal to reason with their long-winded explorations of policy options for a complex world.

Diagnosis is a pleasure. It is a thrill to solve a mystery from scattered clues, and it is empowering to know what makes others tick. In the psychological community, where almost all of us are politically liberal, our diagnosis of conservatism gives us the additional pleasure of shared righteous anger. We can explain how Republicans exploit frames, phrases, and fears to trick Americans into supporting policies (such as the "war on terror" and repeal of the "death tax") that damage the national interest for partisan advantage.

Big Banks Go Bust: America's Financial System in Crisis

By , The Nation and Campaign for America's Future
Posted on September 16, 2008, Printed on September 16, 2008
http://www.alternet.org/story/98863/

Below are two key articles for understanding the current financial crisis:

William Greider: "Creative Destruction"
The Nation

Dean Baker: "Time to Reform Wall Street"
Campaign for America's Future.

Creative Destruction

The epic deflation of Wall Street rolls forward like a blood-spattered steamroller, claiming more important victims. It takes down noble old names like Merrill and Lehman Brothers, destroys the savings of large pension funds and mom-and-pop investors, throws tens of thousands of financial workers out of jobs.

But let's not dwell on the downside. This is the process Joseph A. Schumpeter famously described as "creative destruction" -- capitalism's way of clearing away debris from the past so that new flowers may bloom. In this drama, what is being swept away is the monumental arrogance of celebrated financiers, also the fraudulent gimmicks that created lots of new billionaires by selling bad paper to the world's investors. A great bubble of wealth grew in the canyons of Wall Street -- a run-up of falsified financial assets that lasted for roughly twenty-five years. Now the air is rushing out of that balloon with no way to stop it.

Paul Krugman: Financial Russian Roulette

Will the U.S. financial system collapse today, or maybe over the next few days? I don’t think so — but I’m nowhere near certain. You see, Lehman Brothers, a major investment bank, is apparently about to go under. And nobody knows what will happen next.

To understand the problem, you need to know that the old world of banking, in which institutions housed in big marble buildings accepted deposits and lent the money out to long-term clients, has largely vanished, replaced by what is widely called the “shadow banking system.” Depository banks, the guys in the marble buildings, now play only a minor role in channeling funds from savers to borrowers; most of the business of finance is carried out through complex deals arranged by “nondepository” institutions, institutions like the late lamented Bear Stearns — and Lehman.

Thomas Frank: Warning: Wrecking Crew at Work

The story seems designed to repel your attention, like the wrong end of a magnet; the story is, at the same time, exactly what this election ought to be about. It is a perfectly formed artifact of conservative misrule, a little gem of market-based merde.

It seems that, over the years, an obscure Federal agency called the Minerals Management Service--a public agency, remember, that supposedly serves you and me--grew quite chummy with the private businesses it dealt with. Specifically, these private businesses were oil companies; the MMS's job was to collect royalties from them when they drilled on public land; and the oil industry's natural inclination was to pay as little as they could.

False Idols

By Colin Kahl

As a result of Bob Woodward's new book, "The War Within", a narrative is emerging that paints President Bush as a valiant hero who stood up to his Generals and insisted on the surge. In doing so, Bush fans argue, the president's "extraordinary decision" snatched victory from the jaws of ignominious defeat. As my Center for a New American Security colleague Derek Chollet suggests, it is possible that Woodward is simply being spun by the White House.

But even if Woodward's account is right, Bush hardly comes off as a hero.

Greenspan Says Crisis May Be `Once in Century' Event

By Vivien Lou Chen

Sept. 14 (Bloomberg) -- Former Federal Reserve Chairman Alan Greenspan said the financial crisis that began with the collapse of the subprime-mortgage market last year ``is probably a once in a century event'' that will lead to the failure of more firms.

``There's no question that this is in the process of outstripping anything I've seen, and it is still not resolved,'' Greenspan said in an interview today on ABC's ``This Week with George Stephanopoulos.'' Greenspan, 82, retired from the Fed in January 2006 after serving for 18 years as chairman.

Flat-out lies finding a receptive audience in voters seeking denial

By PIERRE TRISTAM
ESSAYS

At the White House in 1983, Ronald Reagan told a visiting Israeli prime minister that he'd been among the first American photographers to take pictures of the liberated victims of Nazi death camps in Poland at the end of World War II. Reagan, whose presidency was an analgesic of tall tales that have gotten taller since, was lying: His military service during the war was as a cameraman for the Army Air Corp's First Motion Picture Unit on Hollywood lots, beyond which he never strayed much. Lyndon Johnson lied to U.S. troops in Korea when he told them that his great-great grandfather had fought and died at the Alamo, although the guy had been a real estate broker who'd never fought a day in his life. Bill Clinton lied on television about not having sex with Monica Lewinsky. In 1988 Joe Biden lied his way through an entire speech about his humble beginnings -- a speech mostly cribbed from a TV ad for a British politician.

None of the lies was of any consequence, including Clinton's about sex. I subscribe to the Talmud's exemptions from truthfulness when it comes to sex and hospitality, but not to the juvenile proposition that every lie is a matter of state -- or worse, of "character." Otherwise the likes of Thomas Jefferson, who technically raped Sally Hemmings, and Franklin Roosevelt, who not so technically cheated on his wife with Lucy Page-Rutherfurd until the day he died (when Lucy, not Eleanor, was at his bedside), should be booted off their memorials' pedestals. For the current generation of inquisitors, our experience with the last two presidents settles the issue: The adulterer takes Mount Rushmore compared to the bible-thumping teetotaler who's losing three wars, ruined the economy and reaped global ridicule.

Oil drops $4 on financial turmoil, Ike

By Matthew Robinson
Mon Sep 15, 1:04 PM ET

Oil plunged $4 on Monday as investors fled to safer havens due to turmoil in the U.S. financial system and on early signs Hurricane Ike had spared key U.S. energy infrastructure.

Lehman Brothers' (LEH.N) filing for bankruptcy protection and Bank of America's (BAC.N) agreement to buy Merrill Lynch (MER.N) stirred concerns that mounting global economic problems would slow energy demand further, sending investors out of oil.

U.S. crude dropped $4.36 to $96.82 barrel at 12:30 p.m. EDT, after hitting a seven-month low of $94.13 earlier, extending a 34 percent slide from peaks in mid-July amid mounting evidence of slowing fuel demand.

Stocks tumble amid new Wall Street landscape

By TIM PARADIS, AP Business Writer
1 hour, 18 minutes ago

A stunning makeover of the Wall Street landscape sent stocks falling precipitously Monday, with the Dow Jones industrials losing 500 points in their worst slide since the September 2001 terrorist attacks. Investors recoiled after a shakeup of the financial industry that took out two storied names: Lehman Brothers Holdings Inc. and Merrill Lynch & Co.

The pullback, which erased about $700 billion in shareholder wealth, occurred across much of the globe as investors absorbed Lehman's bankruptcy filing and what was essentially a forced sale of Merrill Lynch to Bank of America for $50 billion in stock. While those companies' situations had reached some resolution, the market remained anxious about American International Group Inc., which is seeking funding to shore up its balance sheet. A faltering of the world's largest insurance company likely would have implications far beyond that of Lehman, already the largest U.S. bankruptcy in terms of assets.

Daily Kos: Small Town Values

by Devilstower
Sun Sep 14, 2008 at 06:00:05 AM PDT

It's a joke that probably goes back to the folks who settled outside that upstart new city of Ur. Some city slicker -- one of those Euphrates coast elitists -- comes out to farm country and thinks he's going to pull one over on the locals. Two hours later, the fast-talking urbanite finds himself standing out in a field hunting the rare Mesopotamian snipe while the rural folks gather around a barrel of ale to laugh.

Having come from a small town, I can tell you that these jokes have lost none of their appeal to folks who live away from the bright-lights, big-city centers. Heck, there's a big chunk of our national culture built around these ideas. It's been the backbone of television shows and movies from Green Acres to Doc Hollywood. And small town folks are not without some justification in rolling their eyes over their antics of their city neighbors.

Daily Kos: I Am a Rich Liberal

by bohemian darling
Wed Sep 10, 2008 at 01:19:00 AM PDT

I consider myself lucky to have a wonderful assortment of extremely intelligent, educated friends, about half of whom are liberals, the other half of whom are conservatives. I've recently begun to engage many of them, from all across the political spectrum, in unity, as fellow Americans, in a discussion of every issue you can imagine, via email. It's been at times enlightening and frequently frustrating, but I've managed to find at least occasional solidarity with the folks from the "other side," more often than most people would imagine, and I frequently mention Barack Obama's stance that liberals and conservatives have more in common than we realize.

GOP campaign downplays Palin book-banning inquiry

McCain campaign seeks to downplay Palin's book incident, hoping to nip online controversy

GARANCE BURKE
AP News
Sep 12, 2008 04:21 EST

The McCain campaign is defending Alaska Gov. Sarah Palin's much-criticized inquiry into banning books at her hometown library, saying her questions were only hypothetical.

Shortly after taking office in 1996 as mayor of Wasilla, a city of about 7,000 people, Palin asked the city's head librarian about banning books. Later, the librarian was notified by Palin that she was being fired, although Palin backed off under pressure.

Newspapers Deliver Millions of 'Terror' DVDs to Subscribers -- In 'Swing States'

By Greg Mitchell and Joe Strupp

Published: September 13, 2008 2:00 PM ET
NEW YORK The arrival of tens of millions of DVDs of a controversial DVD on doorsteps around the nation -- but almost exclusively in election "swing states" -- via newspaper home delivery continues this weekend, with explanatory articles and subscriber feedback appearing on some of the papers' Web sites.

The DVDs of the 60-minute film, made in 2005, and titled "Obsession: Radical Islam's War Against the West," arrived today with, among other papers, the Charlotte Observer and the News & Observer in Raleigh, with delivery with the Miami Herald and other papers set for Sunday. (To watch a clip see link below.)

Once Elected, Palin Hired Friends and Lashed Foes

By JO BECKER, PETER S. GOODMAN and MICHAEL POWELL

This article is by Jo Becker, Peter S. Goodman and Michael Powell.

WASILLA, Alaska — Gov. Sarah Palin lives by the maxim that all politics is local, not to mention personal.

So when there was a vacancy at the top of the State Division of Agriculture, she appointed a high school classmate, Franci Havemeister, to the $95,000-a-year directorship. A former real estate agent, Ms. Havemeister cited her childhood love of cows as a qualification for running the roughly $2 million agency.

Ms. Havemeister was one of at least five schoolmates Ms. Palin hired, often at salaries far exceeding their private sector wages.

When Ms. Palin had to cut her first state budget, she avoided the legion of frustrated legislators and mayors. Instead, she huddled with her budget director and her husband, Todd, an oil field worker who is not a state employee, and vetoed millions of dollars of legislative projects.

Andover law school convenes Bush War Crimes Conference

Saturday morning, the dean of Massachusetts School of Law at Andover will convene a two day planning session with a single focus: To arrest, put to trial and carry out sentence on criminals in the Bush Administration.

The conference, arranged by Lawrence Vevel, cofounder of the Andover school, will focus on which of Bush's officials and members of Congress could be charged with war crimes. The plan also calls for "necessary organizational structures" to be established, with the purpose of pursuing the guilty "to the ends of the Earth."

YouTube censors documentary on Palin's churches

Palin was baptized at Wasilla Assembly of God and attended the church for over two and a half decades, and she has been publicly blessed by a number of pastors and religious leaders employed by and associated with that church.

Last Sunday our research team released a video, a ten-minute mini-documentary, focusing on the Wasilla Assemblies of God and the video seemed on the verge of a massive "viral" breakthrough when YouTube pulled it down, citing "inappropriate content".

Frank Rich: The Palin-Whatshisname Ticket

WITH all due deference to lipstick, let’s advance the story. A week ago the question was: Is Sarah Palin qualified to be a heartbeat away from the presidency? The question today: What kind of president would Sarah Palin be?

It’s an urgent matter, because if we’ve learned anything from the G.O.P. convention and its aftermath, it’s that the 2008 edition of John McCain is too weak to serve as America’s chief executive. This unmentionable truth, more than race, is now the real elephant in the room of this election.

No longer able to remember his principles any better than he can distinguish between Sunnis and Shia, McCain stands revealed as a guy who can be easily rolled by anyone who sells him a plan for “victory,” whether in Iraq or in Michigan. A McCain victory on Election Day will usher in a Palin presidency, with McCain serving as a transitional front man, an even weaker Bush to her Cheney.