Tuesday, September 30, 2008

Brad DeLong on Nationalization

Time Not for a Bailout, But for Nationalization...


Nationalization has the best chance of avoiding large losses and possibly even making money for the taxpayer. And it is the best way to deal with the moral hazard problem.

It might work like this. Congress:

  • grants the Federal Reserve Board the power to take any financial firm whatsoever with liabilities and capital of more than $25 billion that is not well capitalized into conservatorship

  • requires the Federal Reserve Board to liquidate any financial firm in its conservatorship when it judges that the firm is insolvent (paying off in full or not paying off in full the liabilities of the firm at its discretion), unless

  • the Federal Reserve Board finds that preservation as a going concern is in the interest of the taxpayer, in which case Congress

  • grants the Federal Reserve Board the power to transform equity stakes in the firm into junior preferred stock at par value and then transfer ownership and custody of the firm to the Treasury

  • requires the Federal Reserve to terminate conservatorship if the firm becomes well-capitalized once again.

In addition, Congress:

  • grants the Treasury the power to issue up to $500 billion of troubled asset redemption bonds, the proceeds of which are then to be loaned to the Federal Reserve to be used to cover the liabilities of those liquidated firms that the Federal Reserve judges it is in the interest of the taxpayer to have their liabilities paid off in full.

Paulson had his shot. It's time for the Democrats to pass a nationalization in the taxpayers' interest bill and dare Bush to veto it. If he does, then announce that the congress will pass it again the day after the election. And if he vetoes it again, announce that congress will pass it yet again on January 21, 2009.


Comment: As DeLong notes, we want to avoid doing nothing and allowing fear to freeze liquidity. My only concern is that he doesn't seem to be distinguishing between any of the many types of financial firms. I guess he's seeing them all as a kind of public good no matter their particular stripe.

What I also like about his idea is that is avoids the poison pill as discussed below and regains political clout for those proffering this kind of sensible plan. It could be the Democrats if they have any brains.

::rolls eyes::

Monday, September 29, 2008

Losers Take All

Big Financiers Start Lobbying for Wider Aid


Even as policy makers worked on details of a $700 billion bailout of the financial industry, Wall Street began looking for ways to profit from it.

Financial firms were lobbying to have all manner of troubled investments covered, not just those related to mortgages.

At the same time, investment firms were jockeying to oversee all the assets that Treasury plans to take off the books of financial institutions, a role that could earn them hundreds of millions of dollars a year in fees.

Nobody wants to be left out of Treasury’s proposal to buy up bad assets of financial institutions.


“Is this the United States Congress or the Board of Directors of Goldman Sachs?” Rep. Dennis Kucinich Rejects $700 Billion Bailout


This is a copy of the bill which will provide for a $700 billion bailout of Wall Street. It has provisions in it where it talks about helping homeowners, but when you read the fine print, you see it has language like “may” instead of “shall” and “encouraging” instead of “mandating” help for the millions of homeowners who are worried right now about whether they’re going to lose their home. There’s no help for them in this.
So what we have here is a rescue plan that essentially gives all the speculators a bailout and puts the bad debts in the custody of the government. The president of the Dallas Federal Reserve Bank has said that this plan could create a fiscal chasm, says that the problem isn’t tight monetary policy, it’s the reckless behavior of some of these investors who have now found themselves in a position where a government bailout is going to help reward their bad behavior.
Well, you know, that implies that you would accept the underlying premise. I reject the underlying premise that we needed this bill. And as a matter of fact, that we’re putting this up before an adjournment in an election season shows that Congress is being put under extraordinary pressure to bail out Wall Street. We haven’t looked at any alternatives, Amy. This is—you know, it isn’t as though, if you had a liquidity crisis, that—you know, a real one—that you’d start to look at all the alternatives. We haven’t done that. We have a bill here, a bill of more than a hundred pages, that we haven’t had a single hearing on the bill, you know—on the concept, yes, on what Paulson and Bernanke asked for initially. But, you know, we need to have hearings on this. There’s 400 economists and three Nobel Prize-winning economists who have said, “Whoa, wait a minute! What are you doing? Why are you rushing this?” You know, this thing doesn’t smell right, frankly.
I said we’re the Congress of the United States; we’re not the board of Goldman Sachs. Goldman Sachs is struggling to survive. And, you know, their former chief is now the head of the US Treasury. He’s in a position to be able to direct assets in a way that would help enhance his own financial standing. I mean, that’s a clear conflict of interest. And, you know, that’s something that needs to be said. You know, why are we permitting the person who has essentially been in a position where he’s managed assets that—you know, many of which are now in trouble, and he can come back and help clear the books for a lot of his friends? This is wrong. It’s fundamentally wrong. And, you know, it’s one of the things that adds a degree of stench to this.
Well, there’s many ways that you can stimulate the economy. One is that you can have massive infrastructure spending. You could get that started right away. It would have to go far beyond what Congress passed the other day. If you want to spend money into circulation and move the money in the economy, you can do that through spending on things that are tangible: bridges, water systems, sewer system. You can stimulate the economy by having a national healthcare plan. I mean, that would take a little bit longer to set up, but that would be a huge break for all these businesses that are having difficulties.
Well, you know, the word “oversight” has new meaning here. You know, oversight could mean “I overlooked something.” And frankly, the Securities and Exchange Commission looked the other way while all these—all this fast-paced trading was going in derivatives and derivatives of derivatives. We have about a four—$500 trillion, almost a half a quadrillion dollars of derivatives floating out there that no one really understands how that’s going to affect the underlying economy when some of these things start imploding.
You know, I think that—I think we’re looking at a situation here where it is precisely the lack of regulation and the lack of oversight by the administration that has caused this. Congress is going to have hearings next month, but frankly, we should be having hearings now, before we pass a bill. I mean, it’s just upside-down that you have hearings about the underlying problem after you pass a bill, because you have hearings first, you do the analysis, and then you come up with a fix that can protect investors, strengthen the economy.
We need to challenge again the underlying assumptions about a debt-based economy, about whether or not we should revisit the 1913 Federal Reserve Act, which has an unfortunately privatized monetary system and created a system which includes banks having the ability to create money almost out of thin air with a fractional reserve. We have to look at the implications of that, maybe put the Federal Reserve under the Treasury and have the Treasury really be responsive to the interests of the American people and keeping the economy going.


I see those that want to take and how they will keep taking. Remember how Warren Buffett wanted in on the action? Here is more of the same.

And then I see Kucinich - who is normally derided as a UFO-freak - as one of the few that is making any sense whatever. But his political clout has been completely marginalized. Kucinich's presidential candidacy was of real interest me. So, of course, he didn't have a bloody prayer.

I'm with the seers of moonbeams...

Right-Center-Left. Oh, Wait - there is no left!

You know, I communicate with people from many walks of life via the internet. One of the things that surprises me constantly is the jingoistic adherence to words like "Leftist," or "Marxist" or even phrases like "they hate America." One usually hears this kind of thing from "dittoheads" that listen to the likes of Rush Limbaugh and mistake his brand of entertainment for the facts of things.

Well, I'd like to set the record straight on something about American politics: there is no left. What socialist aspects of American government there are exist as the only checks in a system heavily tilted in favor of wild west style capitalism. And with the bailout being contemplated you can see where that leads: corporate welfare at the highest levels and at the most offensive cost.

The Grand Old Party is certainly the right. Their's is the party of corporate cock-sucking fascism. The Democrats actually take the center position. From an international perspective, I'd say the Democrats were actually just right of center and not the true middle. At the possible left are the many disenfranchised, tiny political groups that represent more progressive viewpoints. Many of these fractious splinter groups maintain what would on an international scale be seen as left positions, but they also do not collectively represent any kind of coherent left. The views of such people are rarely if ever discussed in major media nor are their views any significant part of public debate. In our two party system, with one group at the right and the other group near the center it's absurd to talk about the center group as being the "left." The Democrats are hardly Marxist, socialists, nor do they appear to hate America any more so than the Republicans who have of late been so willing to decimate our Constitutional safeguards.

I mean sure, as compared to the extreme right - anything left of that position is to the left, but that doesn't make it thee left. See what I mean? Simply being left of fascism might be a perfectly reasonable, non-leftist viewpoint.

There is no left in American politics, none that matters at any rate.

What we really have is fascism and near-fascism.

No Deal #2!

This is the bit that interested me most:


Republicans blamed Pelosi's scathing speech near the close of the debate - which attacked Bush's economic policies and a "right-wing ideology of anything goes, no supervision, no discipline, no regulation" of financial markets - for the vote's failure.

"We could have gotten there today had it not been for the partisan speech that the speaker gave on the floor of the House," Minority Leader John Boehner said. Pelosi's words, the Ohio Republican said, "poisoned our conference, caused a number of members that we thought we could get, to go south."

Source: http://news.wired.com/dynamic/stories/F/FINANCIAL_MELTDOWN?SITE=WIRE&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2008-09-29-15-07-56


Comment: So this supposedly monumentally important bailout can be postponed for more political posturing. Is that right? I thought we were in panic mode - that we had to do something right the fuck NOW, as in TODAY!

Remember about what I said about the Rethugs backing away from this as if it were radioactive? They are doing it again - they caused the situation, and now want the Democrats to have to take the blame for the fix.

This was caused by deregulation. "Free markets" have never existed, nor should they. Banks and financial markets must be heavily regulated in the future. Did we learn nothing from the S&L scandal of so many years ago?

WTF, people. Wake up and smell the social democracy!

P.S. The news article I link to above was altered during the time I first saw it and the time I posted about it. I am sticking to my version above.

Kaptur Brings the Pain

I don't know much about her, but I do like her comments in these two videos:

They Want Mama to Make It All Better!

Sounds Like Insider Trading to Me!

Main Street First: The Failure of Our Republic

[Video Link] from ANP:

Doubtless the fix is in. I am hearing that the bill is sure to be passed in some newly revised and newly idiotic form.

The people are getting pissed off. We'll see how long that lasts before the media massages away all fear, uncertainty, and doubt with calming messages about beauty aids, soda pop and other un-foods, sexy blonds and endless sports news.

More later...

Saturday, September 27, 2008

The Law is Class War

In discussing the new bankruptcy laws in 2005, Prez Bush stated the following:

"America is a nation of personal responsibility where people are expected to meet their obligations."

Source: http://www.whitehouse.gov/news/releases/2005/04/20050420-5.html

It's fascinating to consider that statement as we consider the proposed Wall Street bailout plan and the many millionaires and billionaires with their hands out. Despite widespread voter opposition our legislators continue to claim that the proposal will pass in one form or another very shortly. How is this not legalized robbery? If every American is on the hook for a minimum of $2000, how is this not socialism for the highest economic class forced upon the lowest classes by distraint? They have the cages, the implements of steel, the guns, the jar-headed thugs to put you in your place and to force conformity with the prescriptions of the law.

Friday, September 26, 2008

Real Economists Disagree

Chicago area economists lead opposition to bailout

Senator Richard Shelby went to the White House armed with a letter. The letter is signed by 200 economists, including three Nobel Prize winners, and warns Congress not to back the bailout.
Prof. Cochrane says despite what you hear from Wall Street and Washington financial armageddon is not upon us..."Before you go nuclear I think we need to know if there's something really bad out there they're not telling us about," said Cochrane.
Both Sapienza and Cochrane say the Bush administration is hyping the urgency with which Congress needs to act. They believe the markets can hold their own for a week or two or three and give congress time to determine whether such a big bailout is essential.



Yes, actual experts think this may be the wrong solution. In other words:

"Manos Arriba, esto es un robo!"

No Deal!

No Agreement was reached last night despite reports that much had been agreed to in principle. The GOP is deeply divided because Republicans have to distance themselves from Bush's disastrous policies or be tarred with them come election time.

Do you suppose that the people will easily forget this kind of fiasco in just a little over a month?

The Democrats need to step up with economic recommendations that are good for Main Street. They must enact progressive measures or lose their best window of opportunity until next year. They could wait until the election, but who can really say how that will shake out given the state of voter fraud and the number of rigged Diebold machines.

Plan B is certainly to just wait to handle all of this once the next President takes office. I don't see the need to rush into anything dreadfully stupid at this point.

The next President is inheriting the biggest shit sandwich the world has ever seen. That's why I keep thinking we need another FDR, someone with vision that can motivate people in the right direction.

And as I have said before, all of this may take more than one term to correct. It might even take a generation.

History Repeats Itself, Again...


Not to be redundant or anything though...

Thursday, September 25, 2008

"The Poison Pill" @ conceptualguerilla.com


Anyway, the point of this second piece is not the ‘bailout’ itself but the ‘poison pill’ it represents. If the Dems enact this without Republican support, they will be beaten over the head for ‘wasting’ the public’s money.
If they enact it with Republican Support, the ‘party’ will claim that those politicians weren’t ‘true’ Republicans…just like they claim Bush isn’t ‘one of them’.
If the Dems grow a gonad and refuse to pass this legislation…and the economy ‘tanks’ as promised, the Rethugs will claim the Dems ‘blew’ their only chance to ‘save’ the economy.
This is a classic example of a ‘heads I win, tails, you lose!’ sort of proposition.



That's a favorite blog that I often read. Once again, very shrewd commentary on the current "crisis" and the political dynamics at play. The Republicans fuck it up and the Democrats take the fall. Maybe they really are the same party after all.

Do note how GOP members are trying to back away from this thing like it was radioactive.

Bailout Agreement Reached!

There are very few details as of yet. I doubt this is what is good for taxpayers. If it prevents any part of a progressive agenda I will oppose it vehemently.

If there is a case to be made in favor of this bailout I haven't seen it yet. It's all just posturing and empty demands.

Keep contacting your public servants and letting them know payback is coming very shortly if they make the wrong move.

The Time for the Progressive Agenda is Now!

Citizens Dumping Personal Junk on Wall Street to Protest Bailout

"Why should people who made financially imprudent decisions be rewarded?" asks Boyd, who is best known for founding the political protest theater group Billionaires For Bush. "It's our hard-earned tax dollars, and we're being asked to bail these guys out at the same time as this locks out all the things that we want for the future."
They said providing health care for 9 million children, perhaps costing $6 billion a year, was too expensive, but there's evidently no sum of money large enough that will sate the Wall Street pigs. If this passes, forget about any money for environmental protection, to counter global warming, for education, for national healthcare, to rebuild our decaying infrastructure, for alternative energy.



Exactly! This is what they always do. They loot the coffers and saddle future progressive leaders with having to pay back the missing funds. Republicans loot - that's what they do. Progressive Democrats cannot then implement any aspects of their socially democratic agenda. Republicans spend so that Democrats then have to lay on the taxes and tighten the belt.

How could it be otherwise? The money has to come from somewhere.

First it was the S&L scandal so many years ago. Then a long stretch of political and economic austerity. Then there was a boom and Clinton (who was not very progressive-minded in my view) handed them the final touches on the global marketplace. With international money flooding in for investment opportunities that just weren't there we had the makings of the perfect economic swindle.

And we cannot let them get away with it again nor should we have to foot the bill.

Personally, I think this is the precise moment for progressive values to come forward. This is the exact time for rebuilding the nation as a whole and allowing Wall Street to burn. Thank all of you asshole Republicans that have taught me military terminology over the years. Now I can say this:

I am calling for a "scorched earth" Wall Street policy. Let the motherfucker burn!

List of Demands:

1. Universal healthcare
2. Free merit-based education up to PhD & student loan forgiveness
3. Fair bankruptcy laws
4. Sensible free energy based on the sun and wind
5. Strong regulation of future stock markets
6. Strong Regulation of all banking enterprises
7. Progressive taxes on the wealthy
8. Criminal prosecutions for the current financial "crisis"
9. War crimes proceedings against Bush et al
10. The end of the illegal occupations in Iraq and Afghanistan

And I am just getting started here...

The Paulson Plan's WTF Moment

Bad News For The Bailout

"It's not based on any particular data point," a Treasury spokeswoman told Forbes.com Tuesday. "We just wanted to choose a really large number."




They say that this bailout ABSOLUTELY has to happen. And they say it ABSOLUTELY has to happen right now, this week. But when they get questioned over details it's pretty clear that they are pulling all of the supposed "facts" out of their collective asses. This administration has no credibility. And I think Paulson just wasted what credibility he may have had on this bold ruse that has apparently failed.

I am starting to believe that the American people are not only awake but also seriously pissed off! And that's a very good thing. Anger is an energy.

At the same time they are trying to pull off this massive con-job on the taxpayer, we need to step up in turn and start listing the terms of Wall Street's surrender.

More anon...

Wednesday, September 24, 2008

Naomi Klein on the Bailout...

Now is the Time to Resist Wall Street's Shock Doctrine

The best summary of how the right plans to use the economic crisis to push through their policy wish list comes from Former Republican House Speaker Newt Gingrich. On Sunday, Gingrich laid out 18 policy prescriptions for Congress to take in order to "return to a Reagan-Thatcher policy of economic growth through fundamental reforms." In the midst of this economic crisis, he is actually demanding the repeal of the Sarbanes-Oxley Act, which would lead to further deregulation of the financial industry. Gingrich is also calling for reforming the education system to allow "competition" (a.k.a. vouchers), strengthening border enforcement, cutting corporate taxes and his signature move: allowing offshore drilling.



Well, the thesis of my book, what I mean by the “shock doctrine,” is that it is in times of crisis, it is in times when people are panicked, when we’ve seen again and again the right push through radical pro-corporate policies, what they call “free market reforms,” precisely because it is in a crisis where the space for debate rapidly closes, and you can invoke this state of emergency to say we have no choice.

And I think we’re seeing a very dramatic example of this tactic right now with this really extortionist kind of tactics playing out in Washington. You know, “Sign this blank check, or we’re all going down, or Main Street is going down, or taxpayers—you know, the sky will fall in on them.”

I’m also arguing that this is only stage one of the shock doctrine. They’re getting this—they’re lobbying for this huge bailout, obviously, but this bailout is a kind of a time bomb, because it’s all these bad debts, and they are going to explode on the next administration. I mean, we know that the Bush administration has already left the next administration with huge debt and deficit problems. They’ve just exploded those, expanded them. And what that means is that whoever the next president is is going to be inheriting this economic crisis that is being exacerbated by this bailout.

So, in the case of McCain, I think—if he’s the president, then I think we know what he’ll do, because we know he wants to privatize Social Security, which is something that Wall Street’s been wanting for a long time, another bubble. We know he has said in the next—in the first 100 days of his administration he’ll look at every program and either reform it or shut it down. This is really a recipe for economic shock therapy. So, while you have all of these trivial issues being discussed in the election season, I think what we could—what we’re really—you know, under the surface, they’re actually being quite clear. They’re going to take—if they take power, it will be in the midst of an economic emergency. They’ll invoke that emergency to push through very, very radical changes. So, you know, what I’ve been saying is, this is not four more years of Bush; it’s much, much worse in the case of another Republican administration.

But there’s huge problems for Democrats, as well, if they win this election, because, you know, we need to only think back to the situation in which Clinton took power, where he ran an election on an economic populist platform, promising to renegotiate NAFTA. Then there was an economic crisis. Clinton came under intense lobbying by people like Robert Rubin, who’s also advising Obama right now, and by the time he took office, he had embraced economic austerity.

So, people need to understand these tactics, need to put pressure on the candidates, the parties, and reject this tactic. And I’ve actually been really heartened, Amy, that people are onto these shock tactics and aren’t falling for it. And, you know, to the extent that we’re seeing a little bit of spine from the Democrats, it is only, as Chris Dodd said, because they are hearing it from their constituents. So people need to keep up this pressure right now.
Henry Paulson is one of the key people, the top people, responsible for creating the crisis that he is now claiming he will solve,



What can I add? Don't believe the hype. There is an agenda behind these tactics. There are no accidents. This has been planned for months.

There is this ridiculous pretense that Republicans don't overspend and don't raise taxes. Well, that was never true - but it is especially not true of Republicans that have supported the Bush administration in fighting wars on two fronts while simultaneously borrowing money, thereby increasing the national debt while simultaneously cutting back on taxes for the very wealthy. What that means is that whoever wins the presidency has a huge economic mess to clean up and the enormity of that economic challenge will tend to make that president look quite bad - their first term is likely to be one long slog.

It will take a second FDR with a strong socially democratic agenda to fix the troubles we have created in the last few decades. Don't look for quick fixes, they aren't there to be had.

And for fuck's sake, never vote for a Republican ever again.

Vote your own interests.

Crisis or Fraud?

FBI investigating companies at heart of meltdown
By LARA JAKES JORDAN, Associated Press Writer

Two law enforcement officials said Tuesday the FBI is looking at potential fraud by mortgage finance giants Fannie Mae and Freddie Mac, and insurer American International Group Inc. Additionally, a senior law enforcement official said Lehman Brothers Holdings Inc. also is under investigation.

The inquiries will focus on the financial institutions and the individuals that ran them, the senior law enforcement official said.



This is at minimum the kind of thing we should be expecting even as we consider what to do next. You had better believe that crimes were committed and that the people that perpetrated them need to be held accountable.

I'm just not seeing the emergency. That's not the same as saying we should do nothing at all. But first, let's do no further harm.

And I certainly oppose bailing out wealthy bondholders, further enriching the likes of Warren Buffett and Paulson's buddies at Goldman Sachs and in China, and then actually allowing the wizards of Wall Street to profit from their crimes. Not on the back of the taxpayer! Not when ordinary folks and families are actually about to be moved out into the street.

And maybe we need to be rethinking bankruptcy laws and student loan forgiveness. Predatory lending practices victimize people of all walks of life while they are trying to simply eek out a living.

Crisis? What Crisis?

Journalists, start your skepticism.
by David Cay Johnston, Poyntor Forum

Ask this question -- are the credit markets really about to seize up?

If they are then lots of business owners should be eager to tell how their bank is calling their 90-day revolving loans, rejecting new loans and demanding more cash on deposit. I called businessmen I know yesterday and not one of them reported such problems. Indeed, Citibank offered yesterday to lend me tens of thousands of dollars on my signature at 2.99 percent, well below the nearly 5 percent inflation rate. That offer came after I said no last week to a 4.99 percent loan.

If the problem is toxic mortgages then how come they are still being offered all over the Internet? On the main page AOL generates for me there is an ad for a 1.9% loan (which means you pay that interest rate and the rest of the interest is added to your balance due.) Why oh why or why would taxpayers be bailing out banks that are continuing to sell these toxic loans?

How does the proposal help Joe and Mary Sixpack who can afford their current monthly payment, but not the increased interest rate that has been or soon will take effect? Every day bankers work out loans with customers -- so why are taxpayers being asked to act when banks are largely on strike, refusing to negotiate revised deals with many loan customers?

How about interviewing small landlords who were drawn into these toxic loans. Are banks negotiating with them? If not it means more foreclosures and renters who had nothing to do with this being evicted. Ask why banks are refusing (landlords I spoke to said they are) to negotiate with small landlords.

What steps are being taken to take back bonuses, fees and other compensation from the folks who got rich selling toxic mortgages and illiquid investments that Secretary Paulsen claims are threatening the whole system.


Why have both Goldman Sachs and Morgan Stanley made clear that they want IN on this deal? Get skeptical and ask the basic questions -- who benefits, how much and what makes this plan so attractive that Goldman and MS want to participate? Ditto for GE. That they are others want to be included should prompt a great deal of skeptical questioning.



Yes, and just today it seems that Warren Buffett wants to grab some cash with both hands too. Berkshire Hathaway just bought $5 billion of preferred shares from Goldman Sachs with the further option to buy another $5 billion of common stock.

If I had the means to get to the table with that kind of money behind me I would feast long and deep on the delicious giveaway D.C. is preparing for Wall Street. It really is just like Las Vegas. After a hard day's gambling and almost losing your shirt you can still make it the prime rib dinners available all over town.

Greed. It's what's for dinner!

Tuesday, September 23, 2008

The Fake Crisis Hilarious Update

Paulson eyes rescue plan backing

BBC Business Editor Robert Peston said the US Treasury Secretary's proposal to buy bad mortgage debts from banks represented "the mother of all bail-outs".

He said that during the hearing Fed chairman Mr Bernanke disclosed that the Treasury would attempt to buy these debts from banks at close to their "hold-to-maturity" value, not the market value.

"In practice, it means banks who sell their debts to the Treasury would receive cash equivalent to something like twice the value in their books of these poisonous assets," our correspondent said.

"In other words they would book a profit from selling to taxpayers.



You have to admire the sheer chutzpah necessary to make these kinds of deals in the light of day. I don't mean to be vulgar but it's rather as if a perfect stranger walked up to you on the street at noon one day and politely said, "I'm going to anally rape you without lube." And then smiled broadly so that you would know he was serious.

The Fake Crisis Update

These are my favorite links of the day. We're at the point where there is a good possibility that this won't happen after all. People weren't that fooled by the White House demand for an immediate response. See the last link...


An Open Letter to the U.S. Congress Regarding the Current Financial Crisis

As an economist and investment manager, I am concerned that the plan advocated by Treasury is essentially a plan to bail out the bondholders of financial institutions that made bad lending decisions, with little help to homeowners that are actually in financial distress. It is difficult to believe that the U.S. government is contemplating taking on the bad assets of these institutions at probable taxpayer loss and effectively immunizing the bondholders (and shareholders) of these companies.

While it is certainly in the public interest to avoid the dislocations that would result from a disorderly failure of highly interconnected financial institutions, there are better ways for public funds to accomplish this, other than by protecting corporate bondholders while homeowners remain in distress.


There Is No Crisis-Summary

[Summary: Chris Bowers makes some really good points about the lack of a case either to pursue the bailout in the first place and the need to rush into it in the second place. Bush would seem to want to give his corporate buddies one last handout and was just faced down on that very issue.]


German Politicians Wary of US Financial Rescue Plans

A growing chorus of German politicians questioned over the weekend whether the unprecedented US rescue package meant to inject liquidity into the financial system would help to stem the crisis which has sent world markets into a tailspin..."I have doubts whether that method is really the most clever one," Michael Meister, deputy parliamentary leader of Chancellor Merkel's conservative Christian Democratic Party (CDU) told business daily Handelsblatt...Meister suggested that the $700 billion bailout by the US government could lay the fundaments for the next crisis. He compared it to the massive slashing of interest rates by the US Federal Reserve in the aftermath of the terrorist attacks of Sept 11, 2001 which he said had sowed the seeds for the current turbulence in capital markets...Much like Chancellor Angela Merkel, Meister urged more regulation of financial markets. It is important to think about measures such as banning speculation on falling shares rather than using taxpayers' money, Meister said..."I don't think it's appropriate that we use taxpayers' money in Germany to intervene in the markets," he added.


Paulson: I Didn’t Suggest Oversight In The Bailout Plan Because That Would Be ‘Presumptuous’

[Summary: The lying sack of shit, Paulson, argues that his proposal of last week was just a first draft and that he wasn't actually trying to cram unconstitutional shit down the nation's throat. It's as if he imagines the whole nation has forgotten the exact wording of the plan he offered last week.]


House GOP rises up against Cheney

House Republicans rose up en masse against their vice president on Tuesday morning to blast an administration proposal that would grant Treasury historic authority to start buying hundreds of billions of dollars in devalued mortgage-related assets, according to members present.


Dodd Financial Rescue Mark

[Summary: This comes via Brad DeLong's blog on economics and Scribd, this is an alternative plan to the Paulson blank check and absolute authority conjob. I'm not in love with the proposal, but it's far better than Paulson's idiocy.]


The Bailout Plan: Welcome to Economic Shock and Awe

In the course of selling us on buying, the market-worshippers shredded the modern social contract, the hard-fought consensus that had emerged since the New Deal, which ordered our political priorities, and expressed both our communal concern for the most vulnerable members of society and our disapproval of huge inequalities. We were now supposed to believe that all could be left up to the soulless, self-correcting calculus of supply and demand. Government involvement was an anachronism, regulatory oversight an impediment.

The last few weeks have demolished that notion. In the battle over the proper role of government, the forces of the Right, the high priests of the church of the Free Market -- including Bush, Paulson, and the Masters of Wall Street -- have suffered a monumental defeat. So why are we allowing them to dictate the terms of their surrender?


Chris Dodd Stares Down Paulson

So there was "Goldman" Hank, holding a gun on the economy and staring Congress down. "Give me the 700 billion, or the economy gets it!" he threatened. For two days it looked like he was going to get away with it, 700 billion dollars to spend on the Wall Street gang, the boys who'd already shot the economy up so bad it was in danger of bleeding to death.

Then Marshal Dodd came swinging through doors, shotgun in hand, and said "not so fast Hank. Put the gun down, and back away from the economy. We're going to do this my way."

For a moment calm reigned, then from off one side came a high pitched squeak, "you just put down that gun Dodd," said Bush as he leveled his blunderbuss "the Veto" at Dodd, "and you let my good friend Hank walk away with the money or I'll use this gun." He swivelled and instead of aiming it at Dodd, put its muzzle right against the economy's head. "I'll do it. Don't think I won't! I've killed an economy before!"

Hand still on the trigger, Dodd glanced over at Reid. The old man's fighting days, some said, were long gone. Dodd hoped Reid had one big fight left in him. If he didn't, the economy was done, and Paulson would get away, scot-free.

Reverse Robin Hood: Privatizing Gains and Socializing Risk

[N.B. This post is mainly a string of quotes from various sources that I have attempted to weave together into a narrative web of ideas. I wanted to engage this complex material with reputable sources to answer these three main questions: What exactly happened to the economy? How did it start? What do we do now, if anything?]

The claim is that we are faced with both a national and global financial crisis. Before we accept either assertion we need to dig into the history of recent events. Who intends to act upon this crisis and who is taking a "wait and see" approach? As you shall see, things are not what they seem and elsewhere many people seem substantially untroubled by what is taking place. Markets correct themselves. Some people win. Some people lose. We cannot save everyone. Maybe we shouldn't save anyone at all.

It starts with overweening greed and "globalization."

In the year 2000 the total amount of money available for financial transactions was the equivalent of a mere $36 trillion. Globalization and the resulting economic growth of markets doubled that amount of money so that by the year 2006 international investors were looking for ways to invest their now $70 trillion and still make a handsome profit. The problem was that there really wasn't $70 trillion worth of good investments to be had. Unsatisfied with a few paltry percentage points to be made on their money per annum with US Treasury Bonds, the investors wanted yields of 10-15%. 20% if they could get it. Now I don't care what anyone else tells you, but when the returns are that high there is risk and every investor knows that fact. But international investors wanted to be lied to and told that they realistically could be making that kind of return on their money. With that $70 trillion burning holes in pockets all over the world you just know that someone was going to step up and give those greedy bastards exactly what they wanted: a good swindling! Enter a new form of investment: the CDO, mortgage securities, etc. These various financial instruments are basically packaged up versions of bad mortgages, leveraged time and again, until they are made to look like good investments. But you've heard that old cliche: you can't make a silk purse from a sow's ear. What they were doing was taking bad mortgages - desired by greedy and unscrupulous borrowers against the equity in their homes and brokered by greedy and unscrupulous lenders who were lying their asses off in order to cash out their commissions - and selling them off as packaged deals higher up the financial food chain. The claim was that while each mortgage might be bad individually, taken as a whole they would perform very well because the real estate bubble would simply never pop and just keep expanding ad infinitum. Uh huh, that's what they wanted to believe. Sure, they could have made much safer investments but you know how it goes: live fast, spawn, and die. That's the new ethic of the globalized world. But how could anyone get away with selling this toxic waste mortgage manure to someone with the claim that it was as solid an investment as US Treasury Bonds? Isn't that a lie on its face? Yes, it is- but the reason they got away with it is that they used inaccurate data models to support the logic of these doomed to fail investment instruments. You might be wondering how and why these toxic waste mortgages exist in the first place. The answer to that is predictable: overweening greed and deregulation. As it turns out, without step by step regulation and oversight people often succumb to greed and the temptations of fraud. Who knew?! [The above is my own brutal redaction of what you could hear and read at "This American Life."]

Source: http://www.thisamericanlife.org/Radio_Episode.aspx?episode=355
Transcript (PDF): http://www.thisamericanlife.org/extras/radio/355_transcript.pdf

Every industry wants you to believe that they are owed a deregulated environment so that they can operate as they please. The claim is that the extravagantly wealthy upper class creates jobs because of the restaurants they patronize, the various services they use, the houses they buy, the cars they drive, the Manolo Blahnik shoes they buy their mistresses, the roses and jewelry they buy for their wives, and the housekeepers and gardeners that they employ. So, perhaps you want to support the bailout simply because the fallout will displace so many persons in such service and employ. But one's job is only a matter of chance. Everybody that works for Wall Street directly or indirectly would be working somewhere else if it didn't exist. Claiming that their jobs create other jobs may have some truth to it, but that's trickle down economics at its worst and ugliest - you don't get to keep your job after you screw things up, you lose your job! You don't get bailed out and you don't get a raise. Wall Street was significantly deregulated in the late 1990s but instead of creating a robust and healthy economy they have bled it almost dry. Personally, I don't think that such actions merit a reward.

D.C. and Wall Street people have been whining about how important and necessary the bailout is and how it has to happen right now to save the global economy. United States Treasury Secretary Henry Paulson had this to say:

"The credit markets are still very fragile right now and frozen...We need to deal with this and deal with it quickly." Source: http://www.huffingtonpost.com/2008/09/21/paulson-resisting-democra_n_128035.html

Who is this guy Henry Merritt Paulson Jr? He served under John Ehrlichman in the Nixon administration. He's the former chief executive of Goldman Sachs. Could he just be there to enrich his buddies at Goldman Sachs and also his elite pals in China? Did you know that they were planning to enrich foreign banks and investors with the bailout?

"Paulson's Conflicts Of Interest Spark Concern"
"I think that Hank Paulson's corporate...record is very important. While he was a Goldman Sachs, the company was buying up a lot of Chinese banks in particular, and at the time of his nomination, there were very serious questions raised about the conflicts of interest involved, and where his priorities are, and who he really is looking after."...Moreover, as Bloomberg News reported: "Goldman Sachs Group Inc. and Morgan Stanley may be among the biggest beneficiaries of the $700 billion U.S. plan to buy assets from financial companies while many banks see limited aid..."
Source: http://www.huffingtonpost.com/2008/09/22/paulsons-conflicts-of-int_n_128476.html

Treasury Secretary Henry Paulson confirmed the change on ABC's "This Week," telling George Stephanopoulos that coverage of foreign-based banks is "a distinction without a difference to the American people." Source: http://www.politico.com/news/stories/0908/13690.html

Hey, it makes a difference to me! I want to support a way of life similar to my own, not the way of life under the quasi-capitalistic, totalitarian regime of communist China! These gamblers at the tables on Wall Street need to be made to live with the result of their own foolish greed just like all the idiots that go Las Vegas every day. These guys gamble their fortunes away and now want to pass the hat around. And who will join the American people in this show of extravagant largesse to the sad investor class? No one is who:

But there was little appetite to mimic Paulson's scheme to buy up toxic mortgage-related debt from financial firms..."At the moment, I don't think Japan needs to launch a program similar to that of the United States," Japanese Vice Finance Minister Kazuyuki Sugimoto told reporters in Tokyo, echoing similar comments from France, Britain and Germany...The European Union also made it clear that it would not be joining a rescue package. EU Monetary Affairs Commissioner Joaquin Almunia told a conference in Slovakia that individual national governments would have to decide on their own..."It's up to them to consider whether they can follow this initiative," he said. Source: http://www.reuters.com/articlePrint?articleId=USLM62629820080922

We have to go this one alone. So, how much is it going to cost Joe and Jane Sixpack? Oh, you know, not too much...

With the cost of the proposed bailout effort equal to about $2,000 for every man, woman and child in the United States, Democrats began pushing for language in the rescue plan that would steers additional aid to homeowners struggling to stay in their homes and prevent foreclosures. Source: http://www.miamiherald.com/news/politics/AP/story/695587.html

Well, that's an interesting point. But don't these wizards of Wall Street really need the money quite badly?

In 2007, Wall Street's five biggest firms-- Bear Stearns, Goldman Sachs, Lehman Brothers, Merrill Lynch, and Morgan Stanley - paid a record $39 billion in bonuses to themselves...That's $10 billion more than the $29 billion loan taxpayers are making to J.P. Morgan to save Bear Stearns...Those 2007 bonuses were paid even though the shareholders in those firms last year collectively lost about $74 billion in stock declines --their worst year since 2002...If split equally among the approximately 186,000 workers at the former Big Five Houses, that bonus money means an average of $201,500 per person -- more than four times the $48,201 median household income in the U.S. last year. Source: http://blogs.abcnews.com/politicalpunch/2008/09/last-years-big.html

It almost seems as if you could take the bonuses handed out last year to these wizards of Wall Street and pay for parts of the bailout that way, right? Like gamblers at a fantasy high stakes table, these idiots want to gamble with the security of knowing they can't lose. Representative Barney Frank, Democrat of Massachusetts and chairman of the House Financial Services Committee, offered up the following comment on the bailout as from the perspective of one of the Wall Street wizards that put themselves into this mess:

"Heads I win, tails I break even." Source: http://www.nytimes.com/2008/09/21/business/21cong.html?pagewanted=print

Paulson's solution is simply to buy out the private losses with public funds. That is exactly the equivalent of reverse Robin Hood: privatizing gains and socializing risk! Here's more on his solution:

Paulson and the Federal Reserve are trying to replay the bailout approach used in the 1980s for the savings and loan crisis, but this situation is utterly different. The failed S&Ls held real assets--property, houses, shopping centers--that could be readily resold by the Resolution Trust Corporation at bargain prices. This crisis involves ethereal financial instruments of unknowable value--not just the notorious mortgage securities but various derivative contracts and other esoteric deals that may be virtually worthless...Despite what the pols in Washington think, the RTC bailout was also a Wall Street scandal. Many of the financial firms that had financed the S&L industry's reckless lending got to buy back the same properties for pennies from the RTC--profiting on the upside, then again on the downside. Guess who picked up the tab? I suspect Wall Street is envisioning a similar bonanza--the chance to harvest new profit from their own fraud and criminal irresponsibility. Source: http://www.thenation.com/doc/20081006/greider

What Paulson wants is a blank check and absolute authority.

"Dirty Secret Of The Bailout: Thirty-Two Words That None Dare Utter"
Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency. Source: http://www.huffingtonpost.com/2008/09/22/dirty-secret-of-the-bailo_n_128294.html

The rescue plan would give sweeping powers to the U.S. Treasury to buy up toxic mortgage-related debt from financial groups, including U.S. subsidiaries of foreign banks. Source: http://www.reuters.com/articlePrint?articleId=USN1945959820080922

I just love that foreign banks bit. It really makes you wonder who our supposed representatives really represent. If they represented us wouldn't they be taking money from the investors and giving it to us taxpayers to compensate us for all the stuff they have been doing to gut the economy and offshore production? Instead, they would seem to want money from every man, woman and child to help feed the greed of Wall Street and international investors. Does that make any sense to anyone? Barney Frank again:

"I don't want the American taxpayer to get this bad debt and then the guy (whose company once held the bad loans) gets millions of dollars on his way out the door." Source: http://www.huffingtonpost.com/2008/09/21/paulson-resisting-democra_n_128035.html

But...Paulson claims his plan should make the taxpayers whole, once the housing market recovers and the mortgage securities are resold. Source: http://www.miamiherald.com/news/politics/AP/story/695587.html

Resold to whom? Why in all the circles of hell would anyone want to buy up all of those toxic waste mortgages? Right, they wouldn't want to! But if you put a legislative gun to their heads via taxation you can make the American people pay for anything: private oil/resource wars, investment failures, whatever...

These fancy toxic waste mortgage investment instruments are often worth absolutely nothing. I am sure you've been reading about foreclosed homes that are being vandalized and looted of everything inside them. All the valuable appliances are gutted from the houses. Even the copper electrical wires are taken by thieves for their weight as scrap metal. Those houses either have to be torn down or substantially rebuilt! There's hardly any money left in them.

But Paulson doesn't know that. Is that right?

I don't believe that for one moment.

The whole thing is a fraud. At the prices we taxpayer's will pay it's going to be one big con with nearly zero chance that we will ever recovery anything from the transaction. Bush is arguing that the government isn't even going to really take managerial control of these decimated companies - just hand them money and hope for the best. Quick money, no oversight, and hope for the best! That's the keen financial insight of "acting" president Bush for you: garbage in, garbage out.

Chuck Collins at The Nation says we should "Tax the Speculators." Hey, maybe we can wring something good from this great financial evil after all. Here are Collins' main recomendations, but you should go read them in detail too:

1. Institute a Financial Transactions Tax.
2. Impose an Income Tax Surcharge Rate on Incomes Over $5 Million.
3. Eliminate the Tax Preference for Capital Gains.
4. Progressive Inheritance Taxes.
5. Eliminate Taxpayer Subsidies for Excessive CEO Pay.
6. Close Offshore Corporate Tax Havens.
Source: http://www.thenation.com/doc/20081006/collins

You might want to read this one too:
"10 Things You Should Know About Bush's Trillion Dollar Fleecing Plan"
Source: http://www.alternet.org/module/printversion/99876

But I wouldn't hold my breath hoping for those changes. If those things were to ever happen I would think it would have been on the heels of a bloody revolution...

It's all so fucking funny. Everything that "they" do matters so much. If they keep or lose a job it matters. If they profit or go bankrupt it matters so very much. Whole factories close and no one really does much for the workers except offer some early retirement and severance packages. Those jobs go offshore to India, Thailand, Malaysia, China, etc. No one cares. But if a Wall Street gambler loses big we have to bail him out.

Why is that?

This is a great example of the kind of protectionism that our supposedly "free markets" actually operate under. There is no free market anywhere on earth - just one class of people that are very well connected and the many other groups of people that are very not. There is no free enterprise. What we have is socialism of the investor class but not of our society as a whole. The select get protected and the rest of us get the shaft. We don't own the means the means of productions. We don't own anything except our extravagant debts - the debts we hold individually and as the citizens of this once great nation. But that was all before the looting began. Now we shall be forever in debt: taking the financial risks while the wizards of Wall Street make the money. They get bailed out while you can't even declare bankruptcy any longer - it just gets renegotiated over a longer period of time. The investor class gets off the hook while you remain on the hook. And so it goes...

They want a blank check, unlimited authority to unload their debts onto you, no regulation and no oversight.

I recommend that you call and email your elected officials and send them the clear message that this bailout stinks and that you won't stand for it. Even if you support the bailout (yikes!), take a stand on the many important oversight powers that such a deal should entail. Don't let them gloss over the details and hand Wall Street a blank check.

Find your elected officials:


When was the last time you were handed a trillion dollars with no accountability?

Saturday, September 20, 2008

McCain's Reverse Robin Hood Healthcare Plan!

"Opening up the health insurance market to more vigorous nationwide competition, as we have done over the last decade in banking, would provide more choices of innovative products less burdened by the worst excesses of state-based regulation."

"Better Care at Lower Cost for Every American"


Yeah, that's rich - certainly it serves the purposes of the very rich! Can McCain have really have stated something so egregiously stupid?

I guess no one hipped him to the fact that the wonderfully deregulated banking industry has driven our economy straight to the brink and is now set to cost Joe and Jane Sixpack over a trillion borrowed dollars to set things right again. Yup, they will fix the fuck up and then everything will be great again. Except that many are still going to be foreclosed upon. Many borrowers will still be on the hook for what should have been illegal loans. Personal bankruptcy has been made substantially more difficult than ever, and forget about forgiveness for educational loans (even though the many western nations offer free merit-based educations). And not one of the Wall Street fools that has robbed from the middle-class will ever see a single day in jail for fraud.

Yes, what we need more of right now is the kind of Reverse Robin Hood thinking that will put even more money into the hands of those who already have so much they don't even know what to do with it. If the absurd notion of "trickle down" economics should ever have worked, why isn't it working right now? Where's that money trickling down to right now?


Vote Reverse Robin Hood. Vote McCain!

Thursday, September 4, 2008

Redress of Grievances

Why we were falsely arrested

The Democratic and Republican national conventions have become very expensive and protracted acts of political theater, essentially four-day-long advertisements for the major presidential candidates. Outside the fences, they have become major gatherings for grass-roots movements -- for people to come, amidst the banners, bunting, flags and confetti, to express the rights enumerated in the Constitution's First Amendment: "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press, or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances."

Behind all the patriotic hyperbole that accompanies the conventions, and the thousands of journalists and media workers who arrive to cover the staged events, there are serious violations of the basic right of freedom of the press. Here on the streets of St. Paul, the press is free to report on the official proceedings of the RNC, but not to report on the police violence and mass arrests directed at those who have come to petition their government, to protest.

It was Labor Day, and there was an anti-war march, with a huge turnout, with local families, students, veterans and people from around the country gathered to oppose the war. The protesters greatly outnumbered the Republican delegates.

There was a positive, festive feeling, coupled with a growing anxiety about the course that Hurricane Gustav was taking, and whether New Orleans would be devastated anew. Later in the day, there was a splinter march. The police -- clad in full body armor, with helmets, face shields, batons and canisters of pepper spray -- charged. They forced marchers, onlookers and working journalists into a nearby parking lot, then surrounded the people and began handcuffing them.


Sound familiar? How about this one?


A funny thing happened to some folks on their way to making public their disenfranchisement from the then current political establishment in the year 1968.

The police infiltrated their groups (thereby abridging the free exercise of the right to assemble) to gather information. Police actions came to a head when they descended upon unarmed and non-violent demonstrators in riot gear. Once the police's actions triggered an out of control riot situation, many people were arrested including 8 individuals who were tried under federal conspiracy and riot laws: Rennie Davis, Tom Hayden, Abbie Hoffman, Bobby Seale, David Dellinger, John Froines, Lee Weiner, and Jerry Rubin. Many of these people were leaders of the following political movements: the National Mobilization to End the War in Vietnam (MOBE), the Youth International Party (YIPPIES), the Black Panther Party, the Southern Christian Leadership Conference. Amongst the celebrities in attendance were: Phil Ochs, William S. Burroughs, Timothy Leary, Allen Ginsberg, Arlo Guthrie, "Country Joe" McDonald, Pete Seeger, and Judy Collins; many of these would later be called as witnesses for the defense during the ensuing trial.

Interesting trial bits:

1) Black Panther defendant Bobby Seale continuously, and in increasingly angry tones, insisted upon his right either to represent himself or to have the trial continued until his own counsel of choice, Charles Garry (who was hospitalized for gall bladder surgery at the time), could represent him. Seale made frequent and bitter attacks on Judge Hoffman, calling him a "fascist dog," a "pig," and a "racist"; but eventually the judge ordered Seale shackled, bound, and gagged. Seale was made to participate in the trial without counsel of choice and completely unable to defend himself. On November 5, the judge severed Seale from the case and sentenced him to four years in prison for contempt.

2) Defense witness Norman Mailer made the point that, "Left-wingers are incapable of conspiracy because they're all egomaniacs." Abbie Hoffman made a similar point, stating, "Conspiracy? Hell, we couldn't agree on lunch."

3) During jury deliberations, judge Hoffman sentenced each of the defendants and the two defense attorneys, William Kunstler and Leonard Weinglass, to lengthy prison terms on 159 specifications for criminal contempt. One specification for Kunstler concerned an incident on February 3 when he said "I am going to turn back to my seat with the realization that everything I have learned throughout my life has come to naught, that there is no meaning in this court, there is no law in this court." The Seventh Circuit Court of Appeals later reversed all contempt convictions, ruling that contempt convictions resulting in more than six months in prison require jury trials.

4) Prior to his sentencing, Tom Hayden offered the following statement: "we would hardly have been notorious characters if they left us alone on the streets of Chicago," but instead "we became the architects, the masterminds, and the geniuses of a conspiracy to overthrow the government-- we were invented." [Editorial note: many people believe the U.S. justice system is about as effective against crime as would be throwing virgins into active volcanoes to appease the gods -- we have a culture of justice-sacrifice where defendants are often chosen merely to quell public fears about disorder. The actions of the police against Rolando Cruz comes to mind here.]

5) Judge Hoffman sentenced each defendant to five years' imprisonment plus a $5,000 fine.

6) Random juror comments after the trial: a) the defendants "should be convicted for their appearance, their language and their lifestyle.", b)
"These defendants wouldn't even stand up when the judge walked in; when there is no more respect we might as well give up the United States." c) they "should have been shot down by the police." [Obvious Editorial note: not exactly a jury of the defendants' peers, eh?]

7) The Seventh Circuit Court of Appeals reversed all convictions on November 21, 1972. Amongst the determinations made by the court of appeals was that the F.B.I, with the knowledge and complicity of Judge Hoffman and prosecutors, had bugged the offices of the Chicago defense attorneys. The Court of Appeals panel said that it had "little doubt but that the wrongdoing of F.B.I. agents would have required reversal of the convictions on the substantive charges. [Editorial note: does anyone else see the complete breakdown of the system here? Isn't this the Judicial branch of govt. acting in concert with the Executive branch to commit crime? How often has this happened that we didn't hear of it?]

8) Later Abbie Hoffman was said to have opined, "I don't know whether I'm innocent or I'm guilty." The reason for the confusion--as Norman Mailer pointed out--was that the alleged conspirators "understood that you didn't have to attack the fortress anymore." All they had to do was "surround it, make faces at the people inside and let them have nervous breakdowns and destroy themselves." [Note: A similar point is made by William S. Burroughs in his essay "Electronic Revolution."]

Excerpts of the trial can be found here:


Many years ago there was an excellent HBO movie called "Conspiracy: The Trial of the Chicago 8", the great thing about the film is that in addition to having a truly inspired cast there is documentary footage of the events in question and interviews with the actual defendants -- just goes to show how great a film of substance can be despite having an obviously low budget.

You can get a free etext copy of Abbie Hoffman's "Steal This Book" on the internet. Apparently, much of this book was written while Hoffman was in Cook County jail. And if you try you can also find a full download of the recent film about the Chicago incident entitled "Chicago 10."

Abbie would prefer that you illegally download these items, I'm sure.