The New Depression

Martin Jacques
Published 12 February 2009

The business and political elite are flying blind. This is the mother of all economic crises. It has barely started and remains completely out of control.

We are living through a crisis which, from the collapse of Northern Rock and the first intimations of the credit crunch, nobody has been able to understand, let alone grasp its potential ramifications. Each attempt to deal with the crisis has rapidly been consumed by an irresistible and ever-worsening reality. So it was with Northern Rock. So it was with the attempt to recapitalise the banks. And so it will be with the latest gamut of measures. The British government – like every other government – is perpetually on the back foot, constantly running to catch up. There are two reasons. First, the underlying scale of the crisis is so great and so unfamiliar – and, furthermore, often concealed within the balance sheets of the banks and other financial institutions. Second, the crisis has undermined all the ideological assumptions that have underpinned government policy and political discourse over the past 30 years. As a result, the political and business elite are flying blind. This is the mother of all postwar crises, which has barely started and remains out of control. Its end – the timing and the complexion – is unknown.

Obama and Liberals: A Counter-Productive Relationship

By Glenn Greenwald, Salon
Posted on February 13, 2009, Printed on February 14, 2009
http://www.alternet.org/story/126867/

Published on Friday, February 13, 2009 by Salon.com

The New Republic's John Judis today has an excellent analysis of the politics behind the stimulus package -- one which applies equally to most other political controversies. Judis argues that the stimulus package ended up being far inferior to what it could have been and points to this reason why that happened:

But I think the main reason that Obama is having trouble is that there is not a popular left movement that is agitating for him to go well beyond where he would even ideally like to go. Sure, there are leftwing intellectuals like Paul Krugman who are beating the drums for nationalizing the banks and for a $1 trillion-plus stimulus. But I am not referring to intellectuals, but to movements that stir up trouble among voters and get people really angry. Instead, what exists of a popular left is either incapable of action or in Obama's pocket. . . .

This Isn't Your Grandfather's Recession

Tax cuts won't solve our current economic woes.

By Daniel GrossPosted Thursday, Feb. 12, 2009, at 6:16 PM ET

The congressional debate over the stimulus package may be over, but the larger debate isn't. Many critics of the bill, which contains a mix of tax cuts and government spending, believe that the government spending part just won't work. Thirty-six of the 41 members of the Republican Senate minority voted for an amendment by Sen. Jim DeMint of South Carolina that called for a stimulus package consisting only of tax cuts. Economists whose sympathies lie with the Republicans have backed up the cut-taxes/don't-spend approach. Robert Barro of Harvard, speaking to the Atlantic, called the stimulus package "probably the worst bill that has been put forward since the 1930s." The government spending proposed wouldn't work as intended, he argued. Instead, we should cut tax rates. Harvard economist Greg Mankiw, a former Bush adviser, expressed his preference for a stimulus that would immediately and permanently end payroll taxes, to be offset by an increase in gas taxes.

Mass media often failing in its coverage of global warming, says climate researcher

Stephen Schneider also calls for academics to help by doing outreach and says developed nations must get their own greenhouse gas emissions under control if they expect developing nations to do so.

"Business managers of media organizations, you are screwing up your responsibility by firing science and environment reporters who are frankly the only ones competent to do this," said climate researcher and policy analyst Stephen Schneider, in assessing the current state of media coverage of global warming and related issues.

Schneider, a coordinating lead author of chapter 19 in the report of the Intergovernmental Panel on Climate Change published in 2007, is calling for the news media to employ trained reporters in covering global warming. He will be discussing this and other issues in the symposium "Hot and Hotter: Media Coverage of Climate-Change Impacts, Policies, and Politics," which runs from 10:30 a.m. to 12:00 p.m. CT Friday, Feb. 13, 2009 at the annual meeting of the American Association for the Advancement of Science in Chicago.

Paul Krugman: Failure to Rise

By any normal political standards, this week’s Congressional agreement on an economic stimulus package was a great victory for President Obama. He got more or less what he asked for: almost $800 billion to rescue the economy, with most of the money allocated to spending rather than tax cuts. Break out the Champagne!

Or maybe not. These aren’t normal times, so normal political standards don’t apply: Mr. Obama’s victory feels more than a bit like defeat. The stimulus bill looks helpful but inadequate, especially when combined with a disappointing plan for rescuing the banks. And the politics of the stimulus fight have made nonsense of Mr. Obama’s postpartisan dreams.

Looting Social Security

By William Greider
February 11, 2009

Governing elites in Washington and Wall Street have devised a fiendishly clever "grand bargain" they want President Obama to embrace in the name of "fiscal responsibility." The government, they argue, having spent billions on bailing out the banks, can recover its costs by looting the Social Security system. They are also targeting Medicare and Medicaid. The pitch sounds preposterous to millions of ordinary working people anxious about their economic security and worried about their retirement years. But an impressive armada is lined up to push the idea--Washington's leading think tanks, the prestige media, tax-exempt foundations, skillful propagandists posing as economic experts and a self-righteous billionaire spending his fortune to save the nation from the elderly.

These players are promoting a tricky way to whack Social Security benefits, but to do it behind closed doors so the public cannot see what's happening or figure out which politicians to blame. The essential transaction would amount to misappropriating the trillions in Social Security taxes that workers have paid to finance their retirement benefits. This swindle is portrayed as "fiscal reform." In fact, it's the political equivalent of bait-and-switch fraud.

Cut the Military Budget--II

By Barney Frank

This article appeared in the March 2, 2009 edition of The Nation.

February 11, 2009

I am a great believer in freedom of expression and am proud of those times when I have been one of a few members of Congress to oppose censorship. I still hold close to an absolutist position, but I have been tempted recently to make an exception, not by banning speech but by requiring it. I would be very happy if there was some way to make it a misdemeanor for people to talk about reducing the budget deficit without including a recommendation that we substantially cut military spending.

Sadly, self-described centrist and even liberal organizations often talk about the need to curtail deficits by cutting Social Security, Medicare, Medicaid and other programs that have a benign social purpose, but they fail to talk about one area where substantial budget reductions would have the doubly beneficial effect of cutting the deficit and diminishing expenditures that often do more harm than good. Obviously people should be concerned about the $700 billion Congress voted for this past fall to deal with the credit crisis. But even if none of that money were to be paid back--and most of it will be--it would involve a smaller drain on taxpayer dollars than the Iraq War will have cost us by the time it is concluded, and it is roughly equivalent to the $651 billion we will spend on all defense in this fiscal year.

Bleak forecast on fishery stocks

By James Morgan
Science reporter, BBC News, Chicago

The world's fish stocks will soon suffer major upheaval due to climate change, scientists have warned.

Changing ocean temperatures and currents will force thousands of species to migrate polewards, including cod, herring, plaice and prawns.

By 2050, US fishermen may see a 50% reduction in Atlantic cod populations.

Questioning Authority: A Rethinking of the Infamous Milgram Experiments

By Liliana Segura, AlterNet
Posted on February 12, 2009, Printed on February 13, 2009
http://www.alternet.org/story/126492/

Between 1963 and 1974, Dr. Stanley Milgram conducted a series of experiments that would become one of the most famous social psychology studies of the 20th century. His focus was how average people respond to authority, and what he revealed stunned and disturbed people the world over.

Under the pretense of an experiment on "learning" and "memory," Milgram placed test subjects in a lab rigged with fake gadgetry, where a man in a lab coat instructed them to administer electrical shocks to a fellow test subject (actually an actor) seated in another room in "a kind of miniature electric chair."

How Banks Are Worsening the Foreclosure Crisis

By Brian Grow, Keith Epstein and Robert Berner
Fri Feb 13, 8:08 am ET

The bad mortgages that got the current financial crisis started have produced a terrifying wave of home foreclosures. Unless the foreclosure surge eases, even the most extravagant federal stimulus spending won't spur an economic recovery.

The Obama Administration is expected within the next few weeks to announce an initiative of $50 billion or more to help strapped homeowners. But with 1 million residences having fallen into foreclosure since 2006, and an additional 5.9 million expected over the next four years, the Obama plan -- whatever its details -- can't possibly do the job by itself. Lenders and investors will have to acknowledge huge losses and figure out how to keep recession-wracked borrowers making at least some monthly payments.

End times for Milton Friedman?

After World War II, laissez-faire economists had a big intellectual problem: the Great Depression. How could you argue for dismantling the post-WW II social insurance states and returning to the small-government laissez-faire of the past when that past contained the Great Depression? Some argued that the real problem was that the laissez of the past had not been faire enough: that everyone since Lord Salisbury and William McKinley had been too pinko and too interventionist, and thus the Great Depression was in no way the fault of believers in the free-market economy. This was not terribly convincing. So advocates of a smaller government sector needed another, more convincing argument.

It was provided by Milton Friedman.

Obama, Social Security and the Diamond-Orszag Plan

By: Jane Hamsher
Thursday February 12, 2009 9:30 am

Ben Smith says today that the left is "silent on Social Security reform" even as the administration considers it, and quotes Blue Dog Jim Cooper who says Obama is "in a honeymoon phase, and many liberals are afraid to express concerns."

Atrios calls it trolling. Perhaps it is, but there have been signs that serious Social Security reform is in the works, and people who have been briefed on the administration's plans indicate that things like raising the retirement age and cutting benefits are under consideration.

Blue Dogs Bark

February 11, 2009

NEIL SHAPIRO

The House of Representatives is a body that produces few stars, but Jim Cooper of Tennessee is a household name inside the Beltway. David Brooks has called him "one of the most thoughtful, cordial and well-prepared members of the House." He is viewed by the well-funded budget-hawk constituency as one of its most articulate advocates. Among his colleagues he has a reputation as a wonk and an intellectual--he even teaches a class at Vanderbilt University on health policy--and as the philosopher for the caucus of forty-nine conservative House Democrats known as the Blue Dogs. He gives off the slightly martyred air of someone who believes himself to be smarter than the people he works with.

Economist James Galbraith: Bailed-Out Banks Should Be Declared Insolvent

With estimates of the cost of addressing the financial crisis exceeding $9.7 trillion, we speak with economist and University of Texas professor James Galbraith, author of The Predator State: How Conservatives Abandoned the Free Market and Why Liberals Should Too. Galbraith says rather than pouring billions into propping up troubled giant banks, the government should declare them insolvent.

Unredacted documents reveal prisoners tortured to death

The American Civil Liberties Union has released previously classified excerpts of a government report on harsh interrogation techniques used in Iraq, Afghanistan and Guantanamo Bay. These previously unreported pages detail repeated use of "abusive" behavior, even to the point of prisoner deaths.

The documents, obtained by the ACLU under a Freedom of Information Act request, contain a report by Vice Admiral Albert T. Church, who was tapped to conduct a comprehensive review of Defense Department interrogation operations. Church specifically calls out interrogations at Bagram Air base in Afghanistan as "clearly abusive, and clearly not in keeping with any approved interrogation policy or guidance."

Nationalize Insolvent Banks

by Nouriel Roubini

A year ago I predicted that losses by U.S. financial institutions would be at least $1 trillion and possibly as high as $2 trillion.

At that time, the consensus was that such estimates were gross exaggerations--the naïve optimists had in mind about $200 billion of expected subprime mortgage losses. But, as I pointed out, losses would rapidly mount well beyond subprime mortgages as the U.S. and global economy spun into a severe financial crisis and ugly recession.

I argued that we would see rising losses on subprime, near-prime and prime mortgages; commercial real estate; credit cards, auto loans and student loans; industrial and commercial loans; corporate bonds, sovereign bonds and state and local government bonds; and massive losses on all of the assets--collateralized debt obligations (CDOs), collateralized loan obligations, asset-backed securities and the entire alphabet of credit derivatives--that had securitized such loans.

Firing Back on the Obama Recovery Package -- Again

By Sara Robinson

Created 02/12/2009 - 12:00pm

My God -- they're still at it. Two weeks ago, I wrote a ten-point takedown [1] of some of the biggest lies conservatives are telling about the stimulus bill. You can tell just how terrified they are: if this thing passes -- and especially, God and Alan Greenspan forbid, if it actually works, even a little bit -- it's going to discredit their entire model of how the economic world works. Because the battle over the stimulus package is nothing less than the battle for all the marbles, their Big Lie factory is working overtime, cranking out specious new absurdities on an almost daily basis.

And compared to the last round -- some of which were at least sort of plausible if you squinted at them just right -- this crop is just bizarre. You may also recognize a few of these points as second passes at arguments we covered in the first piece. In some cases, it's because they've reworked their argument to come at it from another direction; in others, it's because on our end, working out new and better comebacks is an ongoing process.

The 'best men' fall - again

By Steve Fraser

"Obtuse" hardly does justice to the social stupidity of our late, unlamented financial overlords. John Thain of Merrill Lynch and Richard Fuld of Lehman Brothers, along with an astonishing number of their fraternity brothers, continue to behave like so many intoxicated toreadors waving their capes at an enraged bull, oblivious even when gored.

Their greed and self-indulgence in the face of an economic cataclysm for which they bear heavy responsibility is, unsurprisingly, inciting anger and contempt, as daily news headlines indicate. It is undermining the last shreds of their once-exalted social status - and, in that regard, they are evidently fated to relive the experience of their predecessors, those Wall Street "lords of creation" who came crashing to earth during the last Great Depression.

Thomas Frank: Wall Street Mocked American Values

Just look at the lifestyles of these überconsumers.

By THOMAS FRANK

The announcement last week that Trader Monthly magazine was ceasing publication was one of those moments when a chance arrow of history scores a perfect bull's eye on a deserving target. The current recession, brought on at least in part by Wall Street's bonus lust, has claimed countless innocent victims. But in this case it has finally delivered a comeuppance to our era's loudest, gaudiest, cockiest champion of Wall Street excess.

Those who still single out former Merrill Lynch CEO John Thain as a symbol of extravagance should take note. Yes, the man once spent over a million dollars having his office remodeled and went on to arrange questionable bonuses for the year in which Merrill lost billions and sold itself to Bank of America.

What "Insolvent" Means

This is a grim bit of analysis from Mike Allen's Playbook:

An oft-quoted investment banker e-mails us: “There is no capital in the entire global financial system. None. When I say ‘financial,’ I mean banks, hedge funds, private equity funds, homeowners and other leveraged players. There is some capital among the ‘real money’ players such as sovereign wealth funds and central banks. And the U.S. can ‘print’ some. But that's it. …

Borrowers to Keep Legal Rights Under Foreclosure Plan

Fannie, Freddie Requirement That Forced Mortgage Holders to Sign Legal Waivers Eliminated

By Mary Kane 2/10/09 5:29 PM

Now that Treasury Secretary Timothy Geithner has unveiled his bank rescue plan, the Obama administration says it will turn next to setting up a fast-track way to stop the foreclosure crisis with national standards for loan modifications. The new standards - which will expand on a program launched by the government late last year - won’t be announced for a week or two. But one thing appears settled: They aren’t going to require borrowers to give up some of their legal rights in order to qualify for a loan modification.

Waivers requiring homeowners to sign away their rights to sue, in order to get their loan payments restructured on more affordable terms, were included in a streamlined loan modification program started by mortgage giants Fannie Mae and Freddie Mac in December. TWI first reported that the waivers were part of the agreements, buried in a long list of requirements for a modification. These waivers could mean that borrowers would have to give up all legal claims related to their mortgage, not just to the loan modification, even in cases where the borrowers were victims of predatory lenders.

More Gloom, Please

The economic and financial crises are even worse than Obama admits.

By Daniel Gross
Posted Tuesday, Feb. 10, 2009, at 3:38 PM ET

---

In the past week, the stock market reacted erratically to two huge government actions intended to shore up economic confidence. As this five-day chart of the Dow Jones industrial average shows, stocks rallied last Thursday and Friday as a deal over fiscal stimulus crystallized. The mere anticipation of the passage of an $800 billion-plus stimulus package was enough to get people whistling "Happy Days Are Here Again." But on Tuesday, stocks surrendered most of those gains after Treasury Secretary Tim Geithner laid out the latest plan to stabilize the faltering financial industry.

What accounts for bipolar response? These were twin, aggressive efforts to deal with the woes affecting the whole economy and the pathetic financial sector. Why would Geithner's Treasury plan worry Wall Street while the stimulus plan didn't? As a public speaker, Geithner is no Obama. Geithner could learn to be more upbeat, but that wouldn't be useful. Investors have lost faith in the financial system precisely because policymakers and executives engaged in the classic post-bubble reaction of promising a swift return to profitability. (In my forthcoming e-book, Dumb Money, I dub the realization that the titans of finance were a bunch of clueless oafs "The Slow Unmasking.")

Grass Strips Help Curb Erosion, Herbicide Transport

ScienceDaily (Feb. 11, 2009) — Grass filter strips placed in riparian zones not only curb soil erosion, but can help block and degrade the widely used herbicide atrazine, Agricultural Research Service (ARS) scientists report.

Atrazine has been used extensively to suppress weeds in corn production for decades, but because it's applied directly to soil it's especially prone to losses in surface runoff. The contamination of surface water by atrazine and its less-toxic breakdown components has raised ecological concerns.

Suspicion mounts about 'burrowing' Bush appointees

Stephen C. Webster
Published: Tuesday February 10, 2009

Some liberals are beginning to suspect Bush loyalists in career government positions are doing their best to try to deflate and hinder President Obama's agenda.

When the New York Times published a story on a former Guantanamo detainee who allegedly joined Al Qaeda in Yemen after his release, the timing struck Huffington Post reporter Sam Stein as "suspicious." The paper published its report just one day after President Obama ordered the prison closed.

Fox passes off GOP press release as its own research -- typo and all

Summary: In purporting to "take a look back" at how the economic recovery plan "grew, and grew, and grew," Fox News' Jon Scott referenced seven dates, as on-screen graphics cited various news sources from those time periods -- all of which came directly from a Senate Republican Communications Center press release. A Fox News on-screen graphic even reproduced a typo contained in the Republican press release.

New bank bailout fails to address core economic problems

By Kevin G. Hall | McClatchy Newspapers

WASHINGTON — The financial rescue plan unveiled Tuesday offers important moves to spur consumer lending, experts said, but it fails to answer key questions about how it would attack fundamental causes of the deepening economic crisis.

Drawing praise is an expansion of a program announced last December to have the Federal Reserve backstop loans to consumers. The Fed and Treasury Department will provide up to $100 billion in loans to private investors willing to purchase pools of loans for cars, students, credit cards, small business and nonresidential mortgages

Even elderly are facing eviction

Complaints on rise of nursing homes forcing out residents

By VANESSA HO
P-I REPORTER

For two years, Irene Henderer lived at the West Woods boarding home in Olympia, where she was known for her lively stories and sharp wit. But in November 2007, the home gave Henderer an eviction notice, along with 20 other Medicaid residents.

Henderer, 89, grew depressed and refused to leave her room for meals. As her move approached, she quietly asked her guardian: "Why can't I just die here?"

Obama Delivers Ideological Knockout to GOP at Press Conference

By Matthew Rothschild, February 10, 2009

This was Barack Obama at his best.

Thoughtful, serious, intelligent, agile, indignant, persuasive.

At his press conference Monday, he shredded Republican arguments against the stimulus package and made the best case by a President in decades for affirmative government intervention in the economy.

Is the Stimulus Package Too Watered Down to Get Us Anywhere?

By John Nichols, TheNation.com
Posted on February 11, 2009, Printed on February 11, 2009
http://www.alternet.org/story/126320/

Skeptical citizens might inquire: How does a Senate stimulus bill that was trimmed to eliminate "waste" (like school construction money that would create jobs in communities across the country) and "pork" (like funding to prepare for a pandemic that would bring a sputtering economy to a complete halt) end up costing almost $20 billion more than a supposedly spendthrift House plan?

The answer, of course, is that the tepid stimulus plan passed Tuesday by the Senate with a "bipartisan" 61-37 majority was not trimmed down to hold the line on spending. It was restructured to cut stimulus allocations by $108 million while dramatically increasing tax cuts -- at the behest of Republican Senators Susan Collins and Olympia Snowe of Maine and Arlen Specter of Pennsylvania and the Democrats with whom these alleged moderates cut a deal to pass the stalled bill.

A new tone as Clinton comes calling

By Nehginpao Kipgen

Hillary Clinton is soon to begin her maiden overseas trip to East Asia as the 67th secretary of state of the United States of America. The week-long trip starting on February 15 includes stops in Indonesia, Japan, South Korea and China.

Four fundamental issues are expected to dominate the visit. First, reshaping America's image in the Muslim world; second, the ongoing global financial crisis; third, global warming; and fourth, tensions surrounding the two Koreas and Pyongyang's nuclear program.

Two-step chemical process turns raw biomass into biofuel

Taking a chemical approach, researchers at the University of Wisconsin-Madison have developed a two-step method to convert the cellulose in raw biomass into a promising biofuel. The process, which is described in the Wednesday, Feb. 11 issue of the Journal of the American Chemical Society, is unprecedented in its use of untreated, inedible biomass as the starting material.

"Know This If Nothing Else: This Was A Hate Crime"

By Sara Robinson

Created 02/10/2009 - 2:12pm

Summary:

Progressives around the country can breathe a little easier today: James Adkisson has been sentenced to life behind bars for the deaths of Greg McKendry and Linda Kraeger, the Unitarian Universalist martyrs who died during his assault on their church in Knoxville, Tenn.,[1] last July. Progressives should take three lessons away from Knoxville.

Progressives around the country can breathe a little easier today: James Adkisson has been sentenced to life behind bars for the deaths of Greg McKendry and Linda Kraeger, the Unitarian Universalist martyrs who died during his assault on their church in Knoxville, Tenn.,[1] last July.

'This is the worst recession for over 100 years'

Ed Balls, the PM's closest ally, warns that downturn is ferocious and says impact will last 15 years

By Nigel Morris, Deputy Political Editor, and Sean O'Grady, Economics Editor

Tuesday, 10 February 2009

Britain is facing its worst financial crisis for more than a century, surpassing even the Great Depression of the 1930s, one of Gordon Brown's most senior ministers and confidants has admitted.

In an extraordinary admission about the severity of the economic downturn, Ed Balls even predicted that its effects would still be felt 15 years from now. The Schools Secretary's comments carry added weight because he is a former chief economic adviser to the Treasury and regarded as one of the Prime Ministers's closest allies.

The Early Reviews on Geithner’s Bank Rescue Plan: Fiasco!

Treasury Secretary Timothy Geithner is just now announcing the details of the administration’s bank bailout plan, but Naked Capitalism already has a verdict - Fiasco!

Here we have another scowling Treasury secretary, with a bit more hair than his predecessor, serving up the same fatally flawed approach as before: let’s just throw money at the banks and hope they get better. This is tantamount to using antibiotics to treat gangrene. You waste good medicine and the progression of the rot threatens to kill the patient.

Well, let’s not mince words.

Treasury outlines bank rescue plan, but Wall Street frowns

Kevin G. Hall | McClatchy Newspapers

last updated: February 10, 2009 05:31:36 PM

WASHINGTON — Treasury Secretary Timothy Geithner unveiled an ambitious and comprehensive plan Tuesday to revive the struggling banking sector, thaw the credit markets, spark more lending to consumers and reverse a nationwide housing slump.

Geithner took the wraps off the Obama administration's bank rescue plan shortly before the Senate passed an $838 billion economic stimulus plan. President Barack Obama is counting on both efforts to halt the worst economic downturn since the Great Depression.

We'll Never Be Happy Consumers Again -- No Stimulus Package Can Bring That Back

By James Howard Kunstler, Kunstler.com
Posted on February 10, 2009, Printed on February 10, 2009
http://www.alternet.org/story/126104/

Venturing out each day into this land of strip malls, freeways, office parks, and McHousing pods, one can't help but be impressed at how America looks the same as it did a few years ago, while seemingly overnight we have become another country. All the old mechanisms that enabled our way of life are broken, especially endless revolving credit, at every level, from household to business to the banks to the US Treasury.

Peak energy has combined with the diminishing returns of over-investments in complexity to pull the "kill switch" on our vaunted "way of life" -- the set of arrangements that we won't apologize for or negotiate. So, the big question before the nation is: do we try to re-start the whole smoking, creaking hopeless, futureless machine? Or do we start behaving differently?

Economic Stimulus on The Cheap

For US senators, decreasing the size of the stimulus package may be clever politics. But it's not smart economics

by Dean Baker

The moderates in the Senate of both parties are very proud of themselves for having negotiated a slimmed down version of the stimulus package. They apparently knocked out more than $100bn in spending, trimming the package to less than $400bn a year.

This led to a round of self-congratulations at what this crew considered a major accomplishment. Those of us who were not a party to the negotiations, and who don't share the peculiar thought processes of the moderate clique, see the primary outcome of this effort as having taken one million jobs out of the stimulus.

Quiet Countrywide Bailout Serves as Warning for Congress

Consequences Continue From the Failed Effort to Prop Up the Mortgage Giant

By Mary Kane 2/9/09 6:00 AM

As the Obama administration launches a new bank rescue plan and prepares to overhaul the financial regulatory system, lawmakers will look closely at the lending practices of major banks and mortgage firms. But some think they also should probe the government-chartered Federal Home Loan Banks, which served as lenders of last resort as the credit crunch intensified - propping up the very banks that made the kind of risky mortgages that led to the housing crisis in the first place.

With credit tightening in 2007, the Federal Home Loan Banks played a crucial role in the economy, helping Countywide Financial Corp. and failed subprime lenders IndyMac Bancorp. and Washington Mutual stay alive longer by lending them money when no one else would. The sharp expansion lending, which went mostly unnoticed at the time, was one of many emergency measures used by the government and the private sector to keep the financial system from collapsing.

Limbaugh, Hannity, and the GOP: an iron triangle of stimulus misinformation

On any given day during the current congressional debate over the economic recovery plan, chances are good that Rush Limbaugh or Sean Hannity will say something false about the administration's or congressional Democrats' efforts to pass a bill. And they do not promote these falsehoods in isolation; they are often promoted concurrently with each other and with Republican members of Congress.

Conservative Women’s Group Cites Small Petrodictatorship as Ideal Form of Government

Jeff Madrick from the Economic Policy Institute has written a book called The Case for Big Government which is dedicated to explaining how an active and capable state sector is a necessary precondition for economic growth. David Kusnets gave it a positive review in The New York Times Book Review. Donna Wiesner Keese, from the Independent Women’s Forum, a conservative anti-feminist group, objected:

Madrick’s statement, quoted by the reviewer, that “there really is no example of small government among rich nations,” is unsupported nonsense. Think Dubai, free and rich.

Bill Moyers Journal: Greenwald and Rosen

BILL MOYERS: Welcome to the JOURNAL.

This week at the White House there was a quick shift to Plan B. President Obama was all set to cheerlead his economic stimulus plan with a lightning round of network interviews when the news hit. Former Senate Majority Leader Tom Daschle, laden with tax problems and charges of influence peddling, took himself out of the running for Secretary of Health and Human Services. Quick as a flash, the president had lost control of his message. So, he changed his tune to a medley of mea culpas.

PRESIDENT BARACK OBAMA: You know ultimately, I take responsibility for the situation that we're in. I'm here on television saying I screwed up. I don't want my administration to be sending a message that there are two sets of rules.

BILL MOYERS: Message: I care and I'm really sorry, too. Contrition, of course, is rare in Washington; presidents almost never say, "I blew it." So here's how it was interpreted by cable and network news.

Paul Krugman: The Destructive Center

What do you call someone who eliminates hundreds of thousands of American jobs, deprives millions of adequate health care and nutrition, undermines schools, but offers a $15,000 bonus to affluent people who flip their houses?

A proud centrist. For that is what the senators who ended up calling the tune on the stimulus bill just accomplished.

Even if the original Obama plan — around $800 billion in stimulus, with a substantial fraction of that total given over to ineffective tax cuts — had been enacted, it wouldn’t have been enough to fill the looming hole in the U.S. economy, which the Congressional Budget Office estimates will amount to $2.9 trillion over the next three years.

Yet the centrists did their best to make the plan weaker and worse.

Can Crazy Techno Schemes Actually Save Us from Climate Change?

By Gwen Schantz, AlterNet
Posted on February 9, 2009, Printed on February 9, 2009
http://www.alternet.org/story/125741/

Temperatures are rising, ice caps are melting, seas are swelling and if we don't do something soon (yesterday?), we're sure to find ourselves huddled together on a mountaintop in Utah, a little place we will lovingly refer to as "dry land."

As much as we all love island living, most of us would rather see our planet and civilization saved from the man-made catastrophe called global warming. There is no dearth of ideas floating around with regards to how to make this happen.

US Treasury to prop up housing under revamped bank bailout

by Jitendra Joshi Jitendra Joshi
Sun Feb 8, 3:56 pm ET

WASHINGTON (AFP) – President Barack Obama's administration will Tuesday unveil a new plan for the frozen banking sector including at least 50 billion dollars to shore up the housing market, officials said Sunday.

National Economic Council director Larry Summers said the plan to be announced by Treasury Secretary Timothy Geithner would help stabilize banks and encourage them to resume lending.

"There will be support for the credit markets more generally," he told ABC's "This Week" program.

Media Matters: Fundamentally flawed stimulus coverage

by Jamison Foser

If there's one fact that should be made clear in every news report about the stimulus package working its way through Congress, it is this: Government spending is stimulative.

That's a basic principle of economics, and understanding it is essential to assessing any stimulus package. So it should be an underlying premise of the media's coverage of the stimulus debate. Unfortunately, that hasn't been the case. Indeed, reporters routinely suggest that spending is not stimulative.

What is behind criticism of Iraq deaths estimate?

17:19 06 February 2009 by Debora MacKenzie

As the US starts down the long road to military withdrawal from Iraq, the row over how many deaths were caused by the invasion has reignited.

Gilbert Burnham, of Johns Hopkins University in Baltimore, calculated in 2006 that there had been between 400,000 and 950,000 "excess" deaths of Iraqis - those that would not have occurred had there been no war - since the US-led invasion of 2003.

Global warming studies often depend on average citizens

By Les Blumenthal | McClatchy Newspapers

As scientists track global warming, they're using sometimes centuries-old data to assess its impact on plants, animals, insects, fish, reptiles and amphibians. Increasingly, they're discovering that it can take only one seemingly insignificant change to disrupt an entire ecosystem. And to spot those changes, researchers are turning more and more to citizen scientists for help.

Frank Rich: Slumdogs Unite! SOMEDAY historians may look back at Tom Daschle’s flameout as a minor one-car (and chauffeur) accident. But that will dep

SOMEDAY historians may look back at Tom Daschle’s flameout as a minor one-car (and chauffeur) accident. But that will depend on whether or not it’s followed by a multi-vehicle pileup that still could come. Even as President Obama refreshingly took responsibility for having “screwed up,” it’s not clear that he fully understands the huge forces that hit his young administration last week.

The tsunami of populist rage coursing through America is bigger than Daschle’s overdue tax bill, bigger than John Thain’s trash can, bigger than any bailed-out C.E.O.’s bonus. It’s even bigger than the Obama phenomenon itself. It could maim the president’s best-laid plans and what remains of our economy if he doesn’t get in front of the mounting public anger.