Dear A.I.G., I Quit!

An interesting OpEd in today's Times

The following is a letter sent on Tuesday by Jake DeSantis, an executive vice president of the American International Group’s financial products unit, to Edward M. Liddy, the chief executive of A.I.G.

DEAR Mr. Liddy,

It is with deep regret that I submit my notice of resignation from A.I.G. Financial Products. I hope you take the time to read this entire letter. Before describing the details of my decision, I want to offer some context:

I am proud of everything I have done for the commodity and equity divisions of A.I.G.-F.P. I was in no way involved in — or responsible for — the credit default swap transactions that have hamstrung A.I.G. Nor were more than a handful of the 400 current employees of A.I.G.-F.P. Most of those responsible have left the company and have conspicuously escaped the public outrage.

After 12 months of hard work dismantling the company — during which A.I.G. reassured us many times we would be rewarded in March 2009 — we in the financial products unit have been betrayed by A.I.G. and are being unfairly persecuted by elected officials. In response to this, I will now leave the company and donate my entire post-tax retention payment to those suffering from the global economic downturn. My intent is to keep none of the money myself.

I take this action after 11 years of dedicated, honorable service to A.I.G. I can no longer effectively perform my duties in this dysfunctional environment, nor am I being paid to do so. Like you, I was asked to work for an annual salary of $1, and I agreed out of a sense of duty to the company and to the public officials who have come to its aid. Having now been let down by both, I can no longer justify spending 10, 12, 14 hours a day away from my family for the benefit of those who have let me down.

Read more at NYTimes.com.

CONTINUE READING...

A.I.G. Sues Government for Return of $306 Million in Tax Payments

Are you KIDDING ME???

While the American International Group comes under fire from Congress over executive bonuses, it is quietly fighting the federal government for the return of $306 million in tax payments, some related to deals that were conducted through offshore tax havens.

Read more at NYTimes.com.

CONTINUE READING...

The Next AIG Scandal?

uh oh.

Thomas Gober, a former Mississippi state insurance examiner who has tracked fraud in the industry for 23 years and served previously as a consultant to the FBI and the Department of Justice, says he believes AIG's supposedly solvent insurance business may be at least as troubled as its reckless financial-products unit. Far from being 'healthy,' as state insurance regulators, ratings agencies and other experts have repeatedly described the insurance side, Gober calls it 'a house of cards.' Citing numerous documents he has obtained from state insurance regulators and obscure data buried in AIG's own 300-page annual reports, Gober argues that AIG's 71 interlocking domestic U.S. insurance subsidiaries are in hock to each other to an astonishing degree.

Most of this as-yet-undiscovered problem, Gober says, lies in the area of reinsurance, whereby one insurance company insures the liabilities of another so that the latter doesn't have to carry all the risk on its books. Most major insurance companies use outside firms to reinsure, but the vast majority of AIG's reinsurance contracts are negotiated internally among its affiliates, Gober says, and these internal balance sheets don't add up. The annual report of one major AIG subsidiary, American Home Assurance, shows that it owes $25 billion to another AIG affiliate, National Union Fire, Gober maintains. But American has only $22 billion of total invested assets on its balance sheet, he says, and it has issued another $22 billion in guarantees to the other companies. "The American Home assets and liquidity raise serious questions about their ability to make good on their promise to National Union Fire," says Gober, who has a consulting business devoted to protecting policyholders. Gober says there are numerous other examples of "cooked books" between AIG subsidiaries. Based on the state insurance regulators' own reports detailing unanswered questions, the tally in losses could be hundreds of billions of dollars more than AIG is now acknowledging.

Read more at Newsweek.com

CONTINUE READING...

What $165 million could have bought instead

Those AIG bonuses amounted to $165 million. I've heard a lot of talk about how it was just a drop in the bucket out of the billions AIG got in bailout money -- why should we be so concerned about it?

While it's true that it's several orders of magnitude smaller than the price tags we've been looking at for bailing out failed institutions, $165 million is still a lot of money. What could we have bought for America instead?

• National Endowment for the Arts budget for FY 2008 : $144.7 million
• Allow the New York City Department of Education to develop 200 schools: $150 million
• Improving Health care in rural areas under the president's new plan: $73 million
• Mars Polar Lander: $120 million
• Chesapeake Bay Watershed Conservation Program: $165 million
• TriPoint Medical Center, a state-of-the-art health care facility in Ohio: $150 million

• Absolute total idiocy: Priceless.

CONTINUE READING...

AIG asks execs to return bonuses

This morning's word...

AIG asks execs to return bonuses - Mar. 18, 2009: "Liddy, saying he knew the public's patience is 'wearing thin,' said some employees have decided on their own to return their entire bonus to the company.

'It was distasteful to make these payments,' Liddy told members of the House Financial Services subcommittee. 'This morning, I've asked the employees of AIG Financial Products to step up and do the right thing. Specifically, I've asked those who received retention payments in excess of $100,000 or more to return at least half of those payments.'"

CONTINUE READING...

I Can't Believe It's Not Insurance

Watching the AIG hearings this morning.

My favorite line so far is comes from New York's Gary Ackerman speaking before the Edward Liddy panel even started. He noted that there's a great product called "I Can't Believe It's Not Butter," but at least they have the decency to tell you it's not butter... They're calling it "credit default swaps" because if they called it "I Can't Believe It's Not Insurance," he says, maybe no one would buy it.

You can see them live on CSPAN-3 or on the livestream here.

CONTINUE READING...

Those AIG Retention Bonuses: dirty details

Are you freaking kidding me? Andrew Cuomo releases info in a letter to Barney Frank about those AIG bonuses for the brilliant noodniks in AIG's Financial Products division:

• The top recipient received more than $6.4 million;
• The top seven bonus recipients received more than $4 million each;
• The top ten bonus recipients received a combined $42 million;
• 22 individuals received bonuses of $2 million or more, and combined they
received more than $72 million;
• 73 individuals received bonuses of $1 million or more; and
• Eleven of the individuals who received 'retention' bonuses of $1 million
or more are no longer working at AIG, including one who received $4.6
million

Again, these payments were all made to individuals in the subsidiary whose performance led to crushing losses and the near failure of AIG. Thus, last week, AIG made more than 73
millionaires in the unit which lost so much money that it brought the firm to its knees, forcing taxpayer bailout. Something is deeply wrong with this outcome. I hope the Committee will address it head on."

Read more of this irritating stuff at HuffPo.

CONTINUE READING...

AIG Execs Who Ruined Company To Get $165 Million In Bonuses

Retention pay" Are you freakin' kidding me? Who needs to retain these people?

The large bulk of the payments at issue cover AIG Financial Products, the unit of the company that sold credit default swaps, the risky contracts that caused massive losses for the insurer.

A white paper prepared by the company says that AIG is contractually obligated to pay a total of about $165 million of previously awarded 'retention pay' to employees in this unit by Sunday, March 15. The document says that another $55 million in retention pay has already been distributed to about 400 AIG Financial Products employees.

Right. Sure. As Christine Pelosi says, Let's see you in court. I wanna hear what you think you did to deserve this payment. I want to know who you are!
Read more at HuffPo.

CONTINUE READING...

AIG Falling

More on the AIG bonus debacle. Honest-to-freakin-Murgatroyd, everything was just going to business as usual for these CEOS? Didn't ANYone think, "Hey, maybe it would look better if I said I was going to take that bonus and GIVE IT BACK TO THE COMPANY?"

President Barack Obama declared Monday that insurance giant American International Group is in financial straits because of 'recklessness and greed' and said he intends to stop it from paying out millions in executive bonuses.

'It's hard to understand how derivative traders at AIG warranted any bonuses, much less $165 million in extra pay,' Obama said at the outset of an appearance to announce help for small businesses hurt by the deep recession.

Obama spoke out in the wake of reports that surfaced over the weekend saying that financially strapped American International Group Inc. was paying substantial bonuses to executives.

Noting that AIG has "received substantial sums" of federal aid from the federal government, Obama said he has asked Treasury Secretary Timothy Geithner "to use that leverage and pursue every legal avenue to block these bonuses and make the American taxpayers whole."

A White House official told the Wall Street Journal that the Treasury Department will "use a planned $30 billion infusion into AIG to compel the company to repay the bonuses promised to employees of its financial-products group, which is responsible for selling the exotic financial instruments that brought the company to near-collapse."

...

In a letter to Geithner dated Saturday, [AIG Chairman Edward] Liddy said outside lawyers had informed the company that AIG had contractual obligations to make the bonus payments and could face lawsuits if it did not do so.

More here at HuffPo.

CONTINUE READING...

Financial world watchers

Thanks to Betty for sending this jaw-dropping item along: AIG is apparently rapidly careening through the $123 BILLION (that would be $123 thousand millions) in taxpayer dollars that it got in the bailout plan, but funny thing...: " A.I.G. has declined to provide a detailed account of how it has used the Fed's money...The internal auditor resigned and is now in seclusion, according to a former colleague. His account, from a prepared text, was read by Representative Henry A. Waxman, Democrat of California and chairman of the House Committee on Oversight and Government Reform, in a hearing this month." Oh, honey buns, you can RUN, but you can't HIDE.

CONTINUE READING...

Financial Crisis Update

You thought I'd given up on the financial crisis, didn't you?

The Dow dropping AGAIN by the hundreds hardly even seems like new anymore. "It all took place one year to the day after the Dow closed at its record high of 14,164. Since that day, frozen credit, record foreclosures, cascading job losses and outright fear have seized the market and sapped 39 percent of its value.Paper losses for the year add up to an staggering $8.3 trillion, according to figures measured by the Dow Jones Wilshire 5000 Composite Index, which tracks 5,000 U.S.-based companies representing almost all stocks traded in America."

A friend of mine confided that her husband finally bit the bullet and looked into their 401(k). They hadn't had a lot in the account-- just $7500, but it was down to around $3000.

Here we go, new ways to parse the phrase "Nationalizing banks": "The Bush administration is considering taking ownership stakes in a number of U.S. banks as one option it might use to deal with a serious credit crisis, an administration official said Wednesday. This official, who spoke late Wednesday on condition of anonymity because no decision has been made, said the $700 billion rescue package passed by Congress last week allows the Treasury Department to inject fresh capital into financial institutions and get ownership shares in return....Asked about the British approach, Treasury Secretary Henry Paulson did not reject the idea but said he did not want to speculate on which of the new powers would be employed. 'We have a broad range of authorities and tools,' Paulson told reporters. 'We've emphasized the purchase of liquid assets, but we have a broad range of authorities. And I'm confident we have the authorities we need to work with going forward.'"

Bet that sent a cold chill through Cindy McCain's cold heart.

And after AIG execs took a relaxing spa trip to the St. Regis in Monarch Beach, The Fed decided to bestow another $38 billion on AIG beyond the $85 billion they already got. They were going to have another "va-cay" to celebrate in Moss Beach, but, decided against it. I guess the manicures are so recent that they're still holding anyway.

In a continuation of the crazy up-is-down month, Iceland is going down. But Spain is going up thanks to Banco Santander's shrewd banking regulations. There's that word again. "Regulations." "Analysts are praising the role that Spain's regulators have played. After a financial crisis in the 1970s and another in the 1990s, Spain's central bank encouraged lenders to build up reserves and warned them away from high-risk assets. Currently 70 percent of Banco Santander's loans are backed by its own customers' deposits, but Spanish banks are still feeling the squeeze, says Manuel Romera, a finance professor at Madrid's IE business school. 'It's not that Spanish banks are doing well; it's just things are worse for those American and European banks that are in trouble,' Romera says. 'The priority now is that customers continue having faith in the banking system.' In a videocast to a meeting of international bankers in London this summer, the 74-year-old chairman explained how Santander stayed out of the subprime mess.'If you don't fully understand an instrument, don't buy it,' Emilio Botin said. 'If you will not buy for yourself a specific product, don't try to sell it. If you don't know very well your customers, don't lend them any money. If you do all these three things, you will be a better banker, my son.'"

In the mean time, GM stock is down to $5.42, its lowest point since 1950, Christopher Hitchens (Hitchens of all folks!) dubs the US a "Banana Republic." And now, Minorities to blame for the financial crisis? "Let me get this straight. Investment banks and insurance companies run by centimillionaires blow up, and it's the fault of Jimmy Carter, Bill Clinton, and poor minorities?" Daniel Gross at Newsweek sets the record straight. Jeez, people.

By the way, if you;'d like to take another stab at understanding Credit Default Swaps, Paul Solman at the Lehrer Newshour has explanations -- along with cartoons for you. "As of last year, according to an industry group, there were not $62 million, not $62 billion, but $62 trillion worth of credit default swaps out there. That's more than four times as much as the GDP of the entire U.S. economy.But what are these things? In essence, they're just insurance contracts that pay off in the event of a disaster, a credit default..."

CONTINUE READING...

Presidential Character

"If you will think about what you ought to do for other people, your character will take care of itself. Character is a by-product, and any man who devotes himself to its cultivation in his own case will become a selfish prig."

--Woodrow Wilson

The qualities of a great man are "vision, integrity, courage, understanding, the power of articulation, and profundity of character."

--Dwight D. Eisenhower

The Kindness of Strangers

I thought it interesting that, for a man who really had seen and done so much, in Eisenhower's quote above, he doesn't mention "experience" or even "wisdom." And the Woodrow Wilson quote makes the perfect lead-in to this NICE story, which I include because these days, I find myself a little beaten down by the negative turn in the campaigns.

Several bloggers are carrying this little item, which first appeared in the Norwegian daily newspaper Verdens Gang or VG. (You can get a rough idea from the Google Translator here.) It sounds a bit like the all those all-too-heartwarming email forwards, but VG is a well-known newspaper with a circulation of 1 -1.5 million throughout Norway.

Anyway, here's the story: It seems that back in 1988, then newlywed 31-year old Mary Andersen was in the Miami airport, on her way to joining her husband in Norway. She had all of her prized possessions in two suitcases, but because they were overweight, the airline representative told her she would have to pay $103 in luggage surcharges. Mary unfortunately had no money, and her husband had travelled on ahead of her, so she had no one to call. I was completely desperate and tried to think through which of the things I could do without. But the bags were filled with my most prized possessions, "says Mary.

"As tears streamed down her face, she heard a 'kind and friendly voice' behind her saying, 'That's okay, I'll pay for her.' Mary turned around to see a tall man whom she had never seen before.

"She was thrilled to be able to bring both her suitcases to Norway and assured the stranger that he would get his money back. The man wrote his name and address on a piece of paper which he gave to Mary. She thanked him repeatedly. When she finally walked off towards the security checkpoint, he waved goodbye to her.

The name on the piece of paper was "Barack Obama."

A grateful Andersen paid him back the day she got to Norway. Years later, Andersen heard Obama was thinking about running for president and Mary's parents decided to write to Obama supporting him and to thank him for helping their daughter 18 years earlier.

Obama replied in a letter to Mary's parents dated May 4th, 2006 and stamped 'United States Senate, Washington DC':

'I want to thank you for the lovely things you wrote about me and for reminding me of what happened at Miami airport. I'm happy I could help back then, and I'm delighted to hear that your daughter is happy in Norway. Please send her my best wishes. Sincerely,

Barack Obama,
United States senator'.

Mary says that when her friends and associates talk about the election, especially when race relations is the heated subject, she relates the story of the kind man who helped out a stranger-in-need over twenty years ago, years before he had even thought about running for higher office.

In the PBS website for their 1996 TV special on what constitutes Presidential Character, they cite a quote from Dear Abby, "The best index to a person's character is (a) how he treats people who can't do him any good, and (b) how he treats people who can't fight back."

==================================
And now, the news
Dear me, the Dow is down AGAIN today. 800 points. Perhaps we're still gripped by an Olympic fever, because we're just all about setting new records these days. The DJIA dipped below 10,000, which apparently hasn't happened since October 22, 2004. Hmmmm, just before the LAST presidential election. My Fellow Americans, does suffering through a presidential campaign depress you?

But I guess we're not the only ones. World markets are coming along for the ride too. You know, this whole "failed bailout" thing kinda puts a fresh perspective on the Germanically snarky article, "The End of Arrogance," which Betty sent me from Der Spiegel, "The Americans are now paying the price for their pride. Gone are the days when the US could go into debt with abandon, without considering who would end up footing the bill. And gone are the days when it could impose its economic rules of engagement on the rest of the world, rules that emphasized profit above all else -- without ever considering that such returns cannot be achieved by doing business in a respectable way." Oh, wait, what's this in the Wall Street Journal? "In tandem with its surprise move to protect deposits, the government of Germany, Europe's largest economy, arranged a bailout for Hypo Real Estate Holding AG, a giant property lender that came close to collapsing after private lenders pulled out of an earlier €35 billion ($48.2 billion) aid plan last week."

$48.2 billion? Pshaw. Hey, Angela Merkel, take that-- we still LEAD, even in Global Thermonuclear Economic Flameouts after ridiculously high-priced bailout plans! Yeah.

If you've got time, play around with the Google chart for the Dow. Via the links on the top of the chart, you can "Zoom" and show how much the Dow has grown since 1970, or just examine how much it's fallen in the last month.

Folks, take some cash--not all of it, just some-- and break it into small bills. Place those bills under your mattress. (Okay, maybe not literally under your mattress.) But you get my point. I have a lot of faith in the resiliency of the world economy, but I also know that there are places in this world with nice people who have woken up one morning to discover that they have no access to cash, and no way of getting access, and therefore no way of eating. I'm just sayin'. Also.

And not only that, it's going to be a cold winter. I get nasty chills just thinking about this report from the AP that thousands of Americans have had their power shut off because they couldn't afford to pay their utility bills. "Shut-offs have been running 17 percent higher than last year among customers of New York state's major utilities, and 22 percent higher in economically hard-hit Michigan. They are up in all or part of dozens of other states, including Pennsylvania, Florida and California, according to an Associated Press check of regulators and energy companies." And here comes winter. My God, this is turning into a Dickens novel

Sidebar: Did we just strike inside Pakistan? Just like John McCain said we should never do??? From WaPo "The attack is apparently the latest in an escalating U.S. campaign of strikes originating across the border in Afghanistan and aimed at al-Qaeda and Taliban targets in the rugged tribal lands of Pakistan. The attacks have generated a substantial backlash in Pakistan, where insurgents have used the strikes as a tool for rallying public opposition to U.S. anti-terrorism efforts."

Pre-Debate Mood

Refresh my memory, folks, was it like this in the last election in 2004? I don't remember having quite this much energy about the candidates before...Even Roger Ebert is voicing political opinions: "I do not like you, John McCain. My feeling has nothing to do with issues. It has to do with common courtesy. During the debate, you refused to look Barack Obama in the eye. Indeed, you refused to look at him at all. Even when the two of you shook hands at the start, you used your eyes only to locate his hand, and then gazed past him as you shook it." (Thanks Mary Ann for the link!)

Rolling Stone comes out with a devastating portrayal of "the real John McCain."

"In its broad strokes, McCain's life story is oddly similar to that of the current occupant of the White House. John Sidney McCain III and George Walker Bush both represent the third generation of American dynasties. Both were born into positions of privilege against which they rebelled into mediocrity. Both developed an uncanny social intelligence that allowed them to skate by with a minimum of mental exertion. Both struggled with booze and loutish behavior. At each step, with the aid of their fathers' powerful friends, both failed upward. And both shed their skins as Episcopalian members of the Washington elite to build political careers as self-styled, ranch-inhabiting Westerners who pray to Jesus in their wives' evangelical churches. In one vital respect, however, the comparison is deeply unfair to the current president: George W. Bush was a much better pilot."

Politico reports that the Obama campaign is ready to roll on the attack (Did I not bring up McCain's history as a member of the notorious Keating Five and his "Bahama Mama" vacations weeks ago? Just checking.) : "Pushing back against what it calls McCain's "guilt-by-association" tactics, the Obama campaign is e-mailing millions of supporters a link to a website, KeatingEconomics.com, which will have a 13-minute documentary on the scandal beginning at noon Eastern time on Monday. The overnight e-mails urge recipients to pass the link on to friends." Here's the movie on YouTube.com, but visit the site too, for some interesting archives of articles about McCain's unethical involvement with Charles Keating and Lincoln Savings and Loan.

Hey, at least when Obama attacks, it's about something completely relevant to the ECONOMIC CRISIS AT HAND! It's not about radicals from the 1960s who have nothing to do with how the world is falling to small bits these days. By the way, do take a moment to check out John Wilson's comprehensive "Thirty Lies Refuted about Obama and Ayers."

And more in the negativity report: in an interview with Bill Kristol for his column in the NY Times, Palin unveils her latest attack --on Obama's connection to Reverend Jeremiah Wright. Kristol asks her "if Ayers is a legitimate issue, what about Reverend Wright? She didn't hesitate:

"To tell you the truth, Bill, I don't know why that association isn't discussed more, because those were appalling things that that pastor had said about our great country, and to have sat in the pews for 20 years and listened to that — with, I don't know, a sense of condoning it, I guess, because he didn't get up and leave — to me, that does say something about character. But, you know, I guess that would be a John McCain call on whether he wants to bring that up."

Which I think is *just RICH* coming from the woman who was once a member of the Pentecostal Wasilla Assembly of God, led by a pastor, Ed Kalnins, who "has also preached that critics of President Bush will be banished to hell; questioned whether people who voted for Sen. John Kerry in 2004 would be accepted to heaven; charged that the 9/11 terrorist attacks and war in Iraq were part of a war 'contending for your faith;' and said that Jesus 'operated from that position of war mode.'" Palin is on YouTube, addressing the WAG (I love using the acronym), and talking about how thrilled she is to have gotten a "laying on of hands" from the Pastor Thomas Muthee, an African evangelist and WITCH-HUNTER (???), who in his own words, wages "spiritual warfare." She's also immortalized on YouTube (I love YouTube) asking members of the Pentecostal church to pray for an oil pipeline, "I think God's will has to be done in unifying people and companies to get that gas line built, so pray for that," she said. Palin's CURRENT church is the Wasilla Bible Church, which recently promoted attendance at a conference to "Pray Away the Gay."

(Do you think Jesus is up there someplace saying, "Stop asking me for stupid things like oil pipelines and 'pray away the gay'-- what about asking for BROTHERLY LOVE AND WORLD PEACE??")

And aw, geez, Palin was actually just here in San Francisco. (What? WHAT did she think she could accomplish in San Francisco? Oh, right.. praying away the gay... I got it.) Whilst here, she bestowed an extra- special Palin Gaffe-awe upon our fair city. '"They are also building schools for the Afghan children so that there is hope and opportunity in our neighboring country of Afghanistan,' she told several hundred supporters at a fundraising event in San Francisco."

Um...question in the back? Can you see Afghanistan from Alaska too? Well,doggone it, they keep on moving those little country-thingies on the map-ey-whatsits.

Oh, wait! It's all coming clear to me! OBVIOUSLY, when the Soviets invaded Afghanistan in the 1970s, they had to go through Alaska! Look where it is!
PLUS, Afghanistan...is just south of Alaska...where they want to put the TransAfghanistan pipeline... that everyone prayed for in church! It all makes sense now!

Wow. Gosh. Gee-whillickers. THIS is why Sarah Palin is such an expert in Russia/Oil relations also!

==============================

But seriously, folks. Today's topic is:

The Fog of Deregulation

I'm struck these days by all the talk from McCain on more regulating (but less government? He and Palin should really try to align their world-views on this...). Maybe John McCain doesn't remember, maybe it's the Alzheimers? But he's actually been a FAN of deregulation--like, um, all of his life? Oh, until last month.

Here are a few key highlights from Johnny Mac's Wonderful World of Deregulation:

• 

  1980's- as noted above and on the new website KeatingEconomics.com, McCain was a key figure in deregulating the savings and loan industry. McCain parlayed it into highly profitable graft for himself. In the Keating Five scandal which followed the collapse of the savings and loan industry, McCain was reprimanded for his role in asking Federal regulators to back off closing down Charles Keating's Lincoln Savings and Loan.
  
• In early 1995, after Republicans had taken control of Congress, Mr. McCain promoted a moratorium on federal regulations of all kinds. He was quoted as saying that excessive regulations were "destroying the American family, the American dream" and voters "want these regulations stopped." The moratorium measure was unsuccessful.
• In 1996, one of McCain's chief responsibilities on the Commerce Committee was overseeing the Telecommunications Act of 1996. "The act removed or set conditions for the removal of the walls that had separated different parts of telecommunications. Its sponsors claimed that the act would encourage competition in the telephone, cable, and broadcast industries and lead to lower prices for consumers.... It has encouraged a spate of gigantic mergers. SBC Communications and Bell Atlantic, having gobbled up their competitors, now control two-thirds of local telephone lines. AT&T and TCI own 60 percent of cable lines. Cable rates, which were deregulated, have gone up 23 percent since 1996, three times faster than inflation. Hourly rates for phone users have declined, but access charges and other fees have skyrocketed. While large businesses are paying less for phone service, most consumers are paying more—about $2 billion more annually than three years ago." Ultimately, McCain was one of only five senators to oppose a comprehensive telecommunications act, but only, he says, because it did not go far enough in deregulating the industry.
• In 1999, McCain voted for the Gramm-Leach-Bliley Act, which essentially repealed the 1933 Glass-Steagall Act's prohibition on bank holding companies from owning other financial firms. The deregulation bill loosened restrictions on the activities of banks, brokerage houses, and insurance companies. McCain had joined with other Republicans to push through landmark legislation sponsored by then-Sen. Phil Gramm (Tex.), who is now an economic adviser to his campaign. "The Gramm-Leach-Bliley Act aimed to make the country's financial institutions competitive by removing the Depression-era walls between banking, investment and insurance companies. That bill allowed AIG to participate in the gold rush of a rapidly expanding global banking and investment market. But the legislation also helped pave the way for companies such as AIG and Lehman Brothers to become behemoths laden with bad loans and investments. McCain now condemns the executives at those companies for pursuing the ambitions that the Gramm-Leach-Bliley Act made possible, saying that 'in an endless quest for easy money, they dreamed up investment schemes that they themselves don't even understand.'"

• 

  McCain's economic guru, Phil Gramm, slipped the "Enron Loophole"--which exempts most over-the-counter energy trades and trading on electronic energy commodity markets from government regulation-- into legislation in the year 2000. This deregulatory loophole was used by that infamous company to game the electricity markets so egregiously that it led to Enron's own collapse. Since then, McCain has blocked every effort to close the loophole which is now being used by energy traders to game gasoline prices.
• In 2002 he did vote for some regulatory reforms in the Sarbanes-Oxley Act, which was introduced after the accounting scandals involving Enron and other major firms and which passed the Senate without opposition. In 2007, he told a group of bloggers on a conference call that he regretted his vote in favor of Sarbanes-Oxley, which strengthened financial reporting requirements for publicly held companies but which has been the subject of complaints from businesses.
  
• In Sept, 2002, McCain introduced Senate Bill 2863. Consumer Broadband Deregulation Act of 2002, intended to deregulate the broadband Internet market. Most residential broadband Internet users currently connect over cable systems, but the local phone companies dominate the business market. The bill was intended to increase the power of the Baby Bells to offer their services to American homes. Federal regulations then prevented this from happening until the Baby Bells opened their own historical local calling areas to competitors. "The potential for government interference with market forces is not limited to federal regulation. State and local governments are also capable of obstructing the deployment of broadband," said McCain during the introduction of his measure, The McCain measure also called for a study within two years to determine whether state regulation is necessary to protect consumers, as well as a study on the government's role in facilitating wireless broadband. It did not pass.
  
• In 2008, McCain expressed approval of the results of financial deregulation by pointing to it as a model for health care policy, writing: "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."

It makes no difference whether a good man has defrauded a bad man, or a bad man defrauded a good man, or whether a good or bad man has committed adultery: the law can look only to the amount of damage done.

--Aristotle
******************************************

News from SurveyUSA, which reports that in new polls, Obama is not only leading handily in Virginia (13 electoral votes) 53%-43%, he's stomping McCain. "McCain no longer leads in any region of the state. In Northeastern VA, which includes the DC suburbs, Obama leads by 24 points. In Central Virginia, home of the Confederate White House, the Museum of the Confederacy and Appomattox, Obama today leads by 8. In Southeastern Virginia, Obama leads by 11. In the Shenandoah, where John McCain led by 24 points one month ago, Obama and McCain today tie." Dude, you just blew my mind. I guess Jim Webb was right. Scots-Irish Populism works all the way, even in Appalachia.
The Ballot Ballet
Clock is ticking...Only 29 days to the election, people!

For new registrations, time has already run out in many states (Today was the deadline for Arizona, Arkansas, Colorado, DC, Florida, Georgia, Hawaii, Indiana, Kentucky, Louisiana, Michigan, Mississippi, Montana, Ohio, Pennsylvania, Tennessee, Texas, Virginia). RockTheVote's list of voter registration deadlines. Here are some upcoming dates--forward this on to your friends in the appropriate states (swing states in bold).

• Tuesday, Oct 7: Illinois, New Mexico
• Wednesday, Oct 8: Missouri
• Friday, Oct 10: New York, North Carolina, Oklahoma
  
• Saturday, Oct 11: Delaware
  
• Tuesday, Oct 14: Maryland, New Jersey, Oregon
  
• Wednesday, Oct 15: Massachusetts, West Virginia, Wisconsin

Shenanigan Watch

I've already passed this on to many of you, but here it is again: news today that hundreds of thousands of people in the United States who filed registration applications but were not put on the voter rolls because of actual or alleged defects in their applications. Electoral-vote.com notes that "Unbeknownst to them, thousands of people have been purged from the voter rolls. Project Vote lists the names and addresses of purged voters in Colorado, Florida, Indiana, Missouri, Nevada, New Mexico, North Carolina, Ohio, Pennsylvania and Texas (so far). If you live in one of these states, check the list TODAY to see if you have been purged and also check for friends, relatives, and neighbors." If you find yourself or someone you know on one of these lists, they may be able to protest being removed from the rolls.

CHECK THE VOTER REGISTRATION LISTS TODAY and check for your friends!!

Some of you may be wondering, is there really any reason to worry? I've got my ID, so no one can turn me away, can they? But thanks to Leslie (sending word via Lisa) who compiles this sobering list of reminders:

• From USA Today: "Five years after passage of a federal law to create electronic registration databases to deter voter fraud, the new technology is posing hurdles that could disenfranchise thousands of legal voters, a USA TODAY examination finds.From Florida to Washington, voters have been challenged because names or numbers on their registration forms did not exactly match other government databases, such as Social Security and motor vehicle agencies. 'We know that eligible people have been thrown off the rolls,' says Justin Levitt, a lawyer with the Brennan Center for Justice at New York University School of Law."
• From the Nation: As reported in the Michigan Messenger, Republicans intended to use foreclosure lists to challenge voters at the polls. In a conference call with reporters, Mark Brewer, chairman of the Michigan Democratic Party, said that the McCain campaign "wants to add insult to injury by denying those residents their right to vote." Bob Bauer, general counsel for the Obama campaign, called the GOP plan "a new and especially repellent version of caging." (Caging is a technique used to challenge voters by taking a list of addresses, mailing letters to them marked "do not forward" and then claiming that those voters whose letters were returned no longer live at the addresses at which they are registered and thus are ineligible to vote.)
• From Demos: "In 2000, thousands of legal voters were purged from Florida's voter rolls. One list sent to Florida officials erroneously included the names of 8,000 Florida residents who had committed misdemeanors -- not felonies -- in Texas. In 2004, despite Florida's sizable Hispanic population, the state's purge list contained only 61 Hispanic surnames, and also mistakenly included thousands who had had their voting rights restored. After these and other errors were publicized, the state withdrew its felon purge list. But under Florida law, county election officials may still purge voters based on their own, locally generated lists."

I'd also like to remind people that there's more than one way to rig an election. No one paid much attention to this item that appeared in Wired a year ago, but we might want to notice, when those Ohio results start coming in: Researchers commissioned by the Ohio Secretary of State's Office "found that a voter or poll worker with a Palm Pilot and no more than a minute's access to a voting machine could surreptitiously re-calibrate the touch-screen so that it would prevent voters from voting for specific candidates or cause the machine to secretly record a voter's vote for a different candidate than the one the voter chose. Access to the screen calibration function requires no password, and the attacker's actions, the researchers say, would be indistinguishable from the normal behavior of a voter in front of a machine or of a pollworker starting up a machine in the morning." (Full report here in PDF format)

Yep, this is me, the absolute paranoic who sees conspiracy theories around every corner. But just because I'm paranoid doesn't mean they're not out to get us.

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If you're voting absentee, you may have to get your ballot in weeks before the Nov 4th Election date. Declare Yourself has links to each state's voter information page where you can find out how to get your absentee ballot.

Also, in many states, you may vote EARLY, before Nov 4, to avoid the long lines. Reed College has compiled lists of which states offer early voting/absentee balloting options.

And remember, tomorrow TUESDAY October 7, 2008 at 9pm EDT, 6pm (PDT), is the next Presidential Debate, from Belmont University's Curb Event Center in Nashville, Tennessee, moderated by Tom Brokaw, special correspondent for NBC News. This debate will have a town-hall meeting format.

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Debatable

'It's a poor sort of memory that only works backwards.'
--The White Queen, Through The Looking Glass


Pity poor Jim Lehrer. He had been promised a debate and the McCain camp kept that up in the air until this morning. He'd been promised a particular format--candidates fighting each other with him watching-- and they kept throwing their punches through Jim.

First off, in case you didn't see it or your DVR was "on the McCain"--I mean "on the fritz"-- Mississippi Presidential Debate transcript and video in that cool interactive feature on the New York Times.
Nielsen estimates 57 million viewers took in the event.

In case you're interested, Obama's campaign liveblogged factchecks throughout the debate, but more fun is Think Progress' liveblog of the debate, which includes a few fabulous "Let's go to the videotape" YouTube links. McCain's camp reportedly did send out email "factchecks" throughout the night, though I didn't receive any. Hmmm, I wonder if they know that I'm secretly a liberal...

Yeah, alright. You got me--I'm in the tank for Obama. But if you want my personal take, 36+ hours later my impression of the debate is of a nice calm, cool guy debating an angry, old grouch. If I actually worked for McCain [shudder], I'd tell him to lay off the aggressive tactics and try to look more like a kindly, wise grandpa. Throughout the debate, his stand-offish body language and stiff posture all suggest defensiveness to me. But as I don't work for him, don't tell him. Frivolous video for today: McCain's song and dance.

The upshot from Politico (with additions from Arianna Huffington and moi):

Number of times Sen. McCain referred to Sen. Obama as "Barack": zero
Number of times Sen. Obama referred to Sen. McCain as "John": 23

McCain zingers: "Sen. Obama has the most liberal voting record in the United States Senate. It's hard to reach across the aisle from that far to the left. … I'm not going to set the White House visitors schedule before I'm president of the United States. I don't even have a seal yet."
Arianna adds: "For McCain, it was his line about Putin ("I looked into his eyes and saw three letters: KGB), and his mocking line about sitting down with Ahmadinejad."

Obama zingers: "Coming from you, who, you know, in the past has threatened extinction for North Korea and, you know, sung songs about bombing Iran, I don't know, you know, how credible that is. … I've got a bracelet, too, from Sergeant — from the mother of Sergeant Ryan David Jopek, given to me in Green Bay. … John mentioned me being wildly liberal — mostly that's just me opposing George Bush's policies." "John, you like to pretend the war began in 2007."
Arianna: "For Obama, it was his run on Iraq, his "muddle through" riff ("you don't muddle through Osama... you don't muddle through the Taliban"), and his reminder of McCain's gaffe about not meeting with the prime minister of Spain."

Best Obama sound bite: "You said we knew where the weapons of mass destruction were. You were wrong. You said that we were going to be greeted as liberators. You were wrong. You said that there was no history of violence between Shiite and Sunni. And you were wrong."

Best McCain sound bite: "We've seen this stubbornness before in this administration — [for Obama] to cling to a belief that somehow the surge has not succeeded, and failing to acknowledge that he was wrong about the surge is — shows to me that we … need more flexibility in a president of the United States than that."

Arianna adds: Did John McCain really try to reclaim the high ground on torture after having caved on the issue earlier in the year? And did he really profess his love for veterans after having fought against the new GI Bill?
ME adds: Did Mr. "I Don't-Need-Any-On-The-Job-Training" McCain actually call Pakistan's president Kadari? Um, his name is Zardari. And I guess he should have practiced saying Ahmadinejad more. Even Sarah Palin managed it better. (A waggish commentator notes that McCain could just practice by saying "I may need a job.")

Declared Obama the winner (ME's editorial details in parentheses): ABC's George Stephanopoulos, pollster Frank Luntz on Fox, Slate's John Dickerson, Time magazine's Mark Halperin (Obama A-, McCain B-), pollster and Clinton adviser Dick Morris, CBS News instant poll (40% Obama - 22% McCain - 38% tie) and CNN post-debate poll (51% Obama-38% McCain). Also, Independents in the MediaCurves focus group "gave the debate to Obama 61-39. They also think he won every individual segment." More poll results.
Arianna gives style points to Obama, "who came across as relaxed and gracious (too gracious; enough with the repeated claims that "John is right"). McCain looked like he forgot to take his Metamucil."

Declared McCain the winner: Politico's Roger Simon: "The Mac is back", Fortune magazine's Nina Easton, The Weekly Standard's William Kristol and Fred Barnes, Fox News Texting Poll and Drudge online poll.

Tie: Republican strategist Mike Murphy, who said on MSNBC: "No game-changer, and we're going to have a rematch."

Huffpo rounds up some more post-debate commentary from editorial boards. And an observation from ThinkProgress: "ABC's Charlie Gibson and PBS's David Brooks and Mark Shields note that McCain never looked at Obama during the debate."

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Palinista Update

By the way, we saw an awful lot of Joe Biden after the debate, commenting on how Barack Obama did. Where was Governor Palin weighing in with her commentary on her running mate's performance ? Oh yeah, they can't let her out without a teleprompter. The National Review's blog "The Stump" quotes Wolf Blitzer on CNN: "We've been getting some emails from viewers out there wondering why we spent some time interviewing Joe Biden, the Democratic vice presidential nominee and not Sarah Palin, the Republican vice presidential nominee. We would have loved to interview--we'd still love to interview Sarah Palin. Unfortunately we asked, we didn't get that interview...We're hoping that Sarah Palin will join us at some point down the road."

Maybe she was working on a "do-over" of her interview with Katie Couric. Tina Fey strikes again with another pitch perfect "Sarah Palin" in an interview with Katie Couric. The wacky thing is that she's not really parodying Sarah Palin, she's just quoting her. "Like every American I'm speaking with, we're ill about this. We're saying, 'Hey, why bail out Fanny and Freddie and not me?' But ultimately what the bailout does is, help those that are concerned about the healthcare reform that is needed to help shore up our economy to help...uh...it's gotta be all about job creation, too. Also, too, shoring up our economy and putting Fannie and Freddy back on the right track and so healthcare reform and reducing taxes and reigning in spending...'cause Barack Obama, y'know...has got to accompany tax reductions and tax relief for Americans, also, having a dollar value meal at restaurants. That's gonna help. But one in five jobs being created today under the umbrella of job creation. That, you know...Also."

Even the National Review's Kathleen Parker, once "in the tank" (What the heck does that mean anyhow??) for Sarah Palin, now says, "As we've seen and heard more from John McCain's running mate, it is increasingly clear that Palin is a problem. Quick study or not, she doesn't know enough about economics and foreign policy to make Americans comfortable with a President Palin should conditions warrant her promotion."

Oh, and in case you're not outraged enough about Palin's utter insensitivity as a human being, note that while Palin was mayor in Wasilla, the town began charging rape victims for the costs of their own rape kits. Classy, real classy.

1-800-CASH4JUNK

Well, looks like we're buying it, folks. Details are in the NY TImes article, but I somehow keep missing this piece of info: which companies exactly are we buying junk from? Just anybody who applies?

To the right, a humorous juxtaposition of articles that I noticed this morning on Politico.

The New York Times has an interesting assessment of the real reasons why AIG (too big to fail) got a government bailout deal when Lehman (Let the market decide) got the "Go Fish!": "As the group, led by Treasury Secretary Henry M. Paulson Jr., pondered the collapse of one of America's oldest investment banks, Lehman Brothers, a more dangerous threat emerged: American International Group, the world's largest insurer, was teetering. A.I.G. needed billions of dollars to right itself and had suddenly begged for help.The only Wall Street chief executive participating in the meeting was Lloyd C. Blankfein of Goldman Sachs, Mr. Paulson's former firm. Mr. Blankfein had particular reason for concern. Although it was not widely known, Goldman, a Wall Street stalwart that had seemed immune to its rivals' woes, was A.I.G.'s largest trading partner, according to six people close to the insurer who requested anonymity because of confidentiality agreements. A collapse of the insurer threatened to leave a hole of as much as $20 billion in Goldman's side, several of these people said."

He Came, He Saw, He Screwed it Up

"The Republican source, with direct knowledge of the negotiations, said that GOPers and McCain were 'scared about the press perception' that they were at fault for 'blowing the thing up.' The takeover of Washington Mutual on Thursday combined with the continued downturn in the futures and credit markets "also scared them," to the point that a bailout deal seemed within the realm of possibility 'over the weekend.'"

And although you might expect that (with the "right" bailout plan being so all-fire important and all) that after the debate was done, John McCain would race to Nancy Pelosi's office to be there in person, all night, at the negotiating table in Washington. After the debate, he was on the Hill Saturday for about 90 minutes according to the Washington Post (who also deliciously describes "chaos" in the McCain camp during pre-debate preparations): "McCain did not go to Capitol Hill, preferring to make calls from his headquarters. 'He can effectively do what he needs to do by phone,' [McCain adviser Mark] Salter said. 'He's calling members on both sides, talking to people in the administration, helping out as he can.'" Oh. He can do it "by phone," can he? You don't say.

Maybe after dinner? Politico reports that Saturday night, McCain was at the very chic DC restaurant CityZen. Check out their $110 tasting menu. I guess, since his "services are no longer required after he um, achieved bipartisanship last Thursday, he can settle into a nice "Sweet Onion Chiboust with a Sarawak Pepper Sable and English Thyme Broth...." (Maybe I should check it out if I can ever afford fine-dining again...) Hey, John, "arugula-eating" is cheaper.

So what do people think about McNuts' Mc-neuvering last week? Even conservatives are saying: Whuh-HUH? "It just proves his campaign is governed by tactics and not ideology," said Republican consultant Craig Shirley, who advised McCain earlier in this cycle.

Hmmm...Instant poll: is it better to govern with:
a) Tactics
b) ideology
c) NONE OF THE ABOVE
US News and World Report's John Farrell assesses Obama's handling of the "Political Circus comes to town" as Presidential, whereas..."Given the Republican nominee's untethered (there's that word again) performance in the last three weeks, during which he has swung wildly from Oblivious to Panicky by way of Blurt and Bluster, McCain's performance comes as no surprise."

The Post is no more sympathetic: "John McCain's sudden intervention in Washington's deliberations over the Wall Street bailout could not have been more out of sync with what was actually happening...McCain's boisterous intervention -- and particularly his grandstanding on the debate -- was less a presidential act than the tactical ploy of a man worried that his chances of becoming president might be slipping away."

Of course, there's always the nutcase. Steve Huntley says in the Chicago Sun-Times: "What we are talking about here is leadership in a time of crisis...Be it campaign finance regulation, immigration reform or climate change, he has never hesitated to take a leadership position on an issue he sees as critical to the country..." Hmmm, who is Huntley? I seem to remember that name... Oh yeah, he was Robert Novak's editor, the one who let Novak publish the column that leaked Valerie Plame's identity. Oh. Him.

And what is with McCain's constant lies? Is it self-delusion? Jonathan Chait at the New Republic has some interesting perspectives: "McCain has contempt for anybody who stands between him and the presidency. McCain views himself as the ultimate patriot. He loves his country so much that he cannot let it fall into the hands of an unworthy rival. (They all turn out to be unworthy.) Viewed in this way, doing whatever it takes to win is not an act of selfishness but an act of patriotism."

From the NY Times this morning, hints of NEW! FRESH! headaches for the McCain campaign: "Mr. McCain portrays himself as a Washington maverick unswayed by special interests, referring recently to lobbyists as "birds of prey." Yet in his current campaign, more than 40 fund-raisers and top advisers have lobbied or worked for an array of gambling interests — including tribal and Las Vegas casinos, lottery companies and online poker purveyors." The Times also has a graphic with a dizzying array of McCain connections to the gambling lobby.

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Stupid Human Tricks

And in a good old classic run on the bank, WaMu customers went in this morning to demand their $10 back. Following the largest US bank failure in history. JP Morgan Chase acquired WaMu after the bank was seized Thursday night, and all operations continued as normal on Friday morning, even though depositors pulled $17 billion from the bank. (I don't know why those instant stock quotes embedded in text of the above article bother me so much. Makes me a little panicky frankly.)

Thanks to Betty for tracking the Dealbook blog's moment-to-moment coverage: Do you have money in Wachovia-- which may be "Citi-chovia Traveling Group" by the time I get done typing this sentence? A scorecard in case you've lost track of who lost what and who bought what in the last, oh, week and a half.

By the way, David Lazarus in the LA Times notes that : "As our friends in the financial sector were passing the hat among taxpayers last week for $700 billion in bailouts to cover their crappy mortgage investments, they were simultaneously condemning the House of Representatives' passage of a "Credit Cardholders' Bill of Rights," which aims to crack down on some of the industry's more troublesome practices."

A look at the Argentinian Financial Crisis in the early 2000's. Hmmm. Hints of what's ahead?

German police arrested suspected terrorists on a KLM flight: "German police raided a plane in Cologne just before it was taking off Friday and arrested two ethnic Somalis, saying they found a suicide note that claimed the men wanted to fight a holy war and die in a terror attack." Have a good flight.

CBS execs were reportedly upset that Dave Letterman patched into internal video feeds to show John McCain getting a makeup job while chatting with Katie Couric when he was supposed to be on Dave's show. Who cares? It was great TV.
Day 2: Dave still on McCain about ditching him. "McCain spokeswoman Nicole Wallace said Thursday that the campaign 'felt this wasn't a night for comedy...We deeply regret offending Mr. Letterman, but our candidate's priority at this moment is to focus on this crisis,' Wallace said on NBC's 'Today' show."

And in case you didn't see it, watch a pretty savvy Chris Rock on Larry King. (Part 1, Part 2, Part 3) "The choice isn't Republican or Democrat. The choice is you got a guy that's worth $150 million with 12 houses against a guy who's worth a million dollars with one house.The guy with one house really cares about losing a house, because he is homeless. The other guy can lose five houses and still got a bunch of houses. Does this make any sense? Am I the only one that sees this?" I must ask again, why is it that the comedians are the ones with the clear-eyed view of what's really going on in the political process?

On the Road again

The campaign marches on. Obama and Biden stood in the pouring rain to talk with 26,000 Virginians.

Gallup Daily had Obama up three points Saturday. and by this morning, he was up by EIGHT points. I know it's meaningless, but it make me feel better. The Electoral Vote shift has been more pronounced though. Enjoy the trending...

37 days to the election! Reminder again that time is running out--for many states, you must register to vote well in advance of the elections. RockTheVote's list of voter registration deadlines. And if you're voting absentee, you may have to get your ballot in weeks before the Nov 4th Election date. Declare Yourself has links to each state's voter information page where you can find out how to get your absentee ballot. Get those friends of yours in Colorado, New Mexico, Pennsylvania, Ohio, Virginia, New Hampshire (WTF?), Wisconsin, Michigan, Indiana, Minnesota, Missouri, North Carolina and Florida (YES! FLORIDA!) to get out there and vote!

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