Taken from the except in the The Atlantic:
From this confluence of campaign finance, personal connections, and ideology there flowed, in just the past decade, a river of deregulatory policies that is, in hindsight, astonishing:
• insistence on free movement of capital across borders;
• the repeal of Depression-era regulations separating commercial and investment banking;
• a congressional ban on the regulation of credit-default swaps;
• major increases in the amount of leverage allowed to investment banks;
• a light (dare I say invisible?) hand at the Securities and Exchange Commission in its regulatory enforcement;
• an international agreement to allow banks to measure their own riskiness;
• and an intentional failure to update regulations so as to keep up with the tremendous pace of financial innovation.
The mood that accompanied these measures in Washington seemed to swing between nonchalance and outright celebration: finance unleashed, it was thought, would continue to propel the economy to greater heights.
Saturday, March 28, 2009
Friday, March 27, 2009
The 12 Steps to Financial Catastrophe
Everything a direct Quote from Wall street Watch
Financial deregulation led directly to the current economic meltdown. For the last three decades, government regulators, Congress and the executive branch, on a bipartisan basis, steadily eroded the regulatory system that restrained the financial sector from acting on its own worst tendencies. "Sold Out" details a dozen key steps to financial meltdown, revealing how industry pressure led to these deregulatory moves and their consequences:
1. 1. In 1999, Congress repealed the Glass-Steagall Act, which had prohibited the merger of commercial banking and investment banking.
2. Regulatory rules permitted off-balance sheet accounting -- tricks that enabled banks to hide their liabilities.
3. The Clinton administration blocked the Commodity Futures Trading Commission from regulating financial derivatives -- which became the basis for massive speculation.
4. Congress in 2000 prohibited regulation of financial derivatives when it passed the Commodity Futures Modernization Act.
5. The Securities and Exchange Commission in 2004 adopted a voluntary regulation scheme for investment banks that enabled them to incur much higher levels of debt.
6. Rules adopted by global regulators at the behest of the financial industry would enable commercial banks to determine their own capital reserve requirements, based on their internal "risk-assessment models."
7. Federal regulators refused to block widespread predatory lending practices earlier in this decade, failing to either issue appropriate regulations or even enforce existing ones.
8. Federal bank regulators claimed the power to supersede state consumer protection laws that could have diminished predatory lending and other abusive practices.
9. Federal rules prevent victims of abusive loans from suing firms that bought their loans from the banks that issued the original loan.
10. Fannie Mae and Freddie Mac expanded beyond their traditional scope of business and entered the subprime market, ultimately costing taxpayers hundreds of billions of dollars.
11. The abandonment of antitrust and related regulatory principles enabled the creation of too-big-to-fail megabanks, which engaged in much riskier practices than smaller banks.
12. Beset by conflicts of interest, private credit rating companies incorrectly assessed the quality of mortgage-backed securities; a 2006 law handcuffed the SEC from properly regulating the firms.
Financial Sector Political Money and 3000 Lobbyists Dictated Washington Policy
During the period 1998-2008:
* Commercial banks spent more than $154 million on campaign contributions, while investing $363 million in officially registered lobbying:
* Accounting firms spent $68 million on campaign contributions and $115 million on lobbying;
* Insurance companies donated more than $218 million and spent more than $1.1 billion on lobbying;
* Securities firms invested more than $504 million in campaign contributions, and an additional $576 million in lobbying. Included in this total: private equity firms contributed $56 million to federal candidates and spent $33 million on lobbying; and hedge funds spent $32 million on campaign contributions (about half in the 2008 election cycle).
The betrayal was bipartisan: about 55 percent of the political donations went to Republicans and 45 percent to Democrats, primarily reflecting the balance of power over the decade. Democrats took just more than half of the financial sector's 2008 election cycle contributions.
Financial deregulation led directly to the current economic meltdown. For the last three decades, government regulators, Congress and the executive branch, on a bipartisan basis, steadily eroded the regulatory system that restrained the financial sector from acting on its own worst tendencies. "Sold Out" details a dozen key steps to financial meltdown, revealing how industry pressure led to these deregulatory moves and their consequences:
1. 1. In 1999, Congress repealed the Glass-Steagall Act, which had prohibited the merger of commercial banking and investment banking.
2. Regulatory rules permitted off-balance sheet accounting -- tricks that enabled banks to hide their liabilities.
3. The Clinton administration blocked the Commodity Futures Trading Commission from regulating financial derivatives -- which became the basis for massive speculation.
4. Congress in 2000 prohibited regulation of financial derivatives when it passed the Commodity Futures Modernization Act.
5. The Securities and Exchange Commission in 2004 adopted a voluntary regulation scheme for investment banks that enabled them to incur much higher levels of debt.
6. Rules adopted by global regulators at the behest of the financial industry would enable commercial banks to determine their own capital reserve requirements, based on their internal "risk-assessment models."
7. Federal regulators refused to block widespread predatory lending practices earlier in this decade, failing to either issue appropriate regulations or even enforce existing ones.
8. Federal bank regulators claimed the power to supersede state consumer protection laws that could have diminished predatory lending and other abusive practices.
9. Federal rules prevent victims of abusive loans from suing firms that bought their loans from the banks that issued the original loan.
10. Fannie Mae and Freddie Mac expanded beyond their traditional scope of business and entered the subprime market, ultimately costing taxpayers hundreds of billions of dollars.
11. The abandonment of antitrust and related regulatory principles enabled the creation of too-big-to-fail megabanks, which engaged in much riskier practices than smaller banks.
12. Beset by conflicts of interest, private credit rating companies incorrectly assessed the quality of mortgage-backed securities; a 2006 law handcuffed the SEC from properly regulating the firms.
Financial Sector Political Money and 3000 Lobbyists Dictated Washington Policy
During the period 1998-2008:
* Commercial banks spent more than $154 million on campaign contributions, while investing $363 million in officially registered lobbying:
* Accounting firms spent $68 million on campaign contributions and $115 million on lobbying;
* Insurance companies donated more than $218 million and spent more than $1.1 billion on lobbying;
* Securities firms invested more than $504 million in campaign contributions, and an additional $576 million in lobbying. Included in this total: private equity firms contributed $56 million to federal candidates and spent $33 million on lobbying; and hedge funds spent $32 million on campaign contributions (about half in the 2008 election cycle).
The betrayal was bipartisan: about 55 percent of the political donations went to Republicans and 45 percent to Democrats, primarily reflecting the balance of power over the decade. Democrats took just more than half of the financial sector's 2008 election cycle contributions.
Wade Hampton - No Surrender
After Lee's surrender on April 12th 1865, Joe Johnston, commander of the Army of Tennessee, requested permission to enter into negotiations with Sherman to end the war. Wade Hampton saw the terms and wrote the following letter to Davis. I admire Hampton's fighting spirit - but given the reality of the situation he comes off as a little crazy:
Hillsborough, April 19, 1865. His Excellency President Davis:
My Dear Sir: Having seen the terms upon which it is proposed to negotiate, 1 trust that I may be pardoned for writing to you in relation to them. Most of our officers look only at the military side of the picture at present, but you will regard it in other aspects also. The military situation is very gloomy, I admit, [to say the least -RC] but it is by no means desperate, and endurance and determination will produce a change.
There are large numbers of the Army of Northern Virginia who have escaped, and of these many will return to our standard if they are allowed to enter the cavalry service. Many of the cavalry who escaped will also join us if they find that we are still making head against the enemy. There are now not less than 40,000 to 50,000 men in arms on this side of the Mississippi; on the other there lire as many more. Now the question presents itself, shall we disband these men at once, or shall we endeavor [to] concentrate them ? If we disband we give up at once and forever all hope of foreign intervention. Europe will say, and say justly, " Why should we interfere if you choose tore-enter the Union?" But if we keep any organization, however small, in the field, we give Europe the opportunity of aiding us. [Crazy talk- why would Europe Intervene after being neutral for 4 years? -RC]
The main reason urged for negotiation is to spare the infliction of any further suffering on the people. Nothing can be more fallacious than this reasoning. No suffering which can be inflicted by the passage over our country of the Yankee armies can equal what would fall on us if we return to the Union. In this latter event I look for a war between the United States and England and France, when we of the South, under a more rigorous conscription than has yet obtained here, shall be forced to fight by the side of our own negroes and under Yankee officers. [Even more crazy talk - why would England/France go to war with USA? -RC] We shall have to pay the debts incurred by the United States in this war, and we shall live under a base and vulgar tyranny.
No sacrifice would be too great to escape this train of horrors, [all imaginary -RC] and I think it far better for us to fight to the extreme limits of our country rather than to reconstruct the Union upon any terms. If we cannot use our infantry here, let it disband, calling upon them for volunteers for the cavalry, collect all our mounted force, and move toward the Mississippi. When we cross that river [how? The Mississippi was controlled by Union Gunboats -RC] we can get large accessions to the cavalry, [why would Texans join the cavalry when the other 10 states had surrendered? -RC] and we can hold Texas. As soon as forces can be organized and equipped, [Equipped with what and by whom?-RC] send this heavy cavalry force into the country of the enemy, and they will soon show that we are not conquered.[into what Enemy country? New Mexico? -RC]
If I had 20,000 mounted men here I could force Sherman to retreat in twenty days. [Johnson's whole army was only 20,000 -RC] Give me a good force of cavalry and I will take them safely across the Mississippi, and if you desire to go in that direction it will give me great pleasure to escort you. [Yes a thousand miles through NC,SC, Georgia, Mississippi - against the Union Calvary of 40,000 -RC]
My own mind is made up as to my course. I shall fight as long as my Government remains in existence; when that ceases to live I shall seek some other country, for I shall never take the "oath of allegiance." I am sorry that I've paused to negotiate, for to my apprehension no evil can equal that of a return to the Union. [He didn't leave the USA - but became Gov of SC and lived till 1902 -RC]
I write to you, my dear sir, that you may know the feelings which actuate many of the officers of my command. They are not subdued, nor do they despair. For myself I beg to express my heartfelt sympathy with you, and to give you the assurance that my confidence in your patriotism has never been shaken. If you will allow me to do so, I can bring to your support many strong arms and brave hearts—men who will light to Texas, and who, if forced from that State, will seek refuge in Mexico rather than in the Union. With my best wishes, I am, very respectfully and truly, yours,
WADE HAMPTON.
Thursday, March 19, 2009
Matt Y - stupid Libertarians
In response to this moronic libertarian comment from Baum (Bloomberg Columnist):
Matt Yglesias writes:
The government needs Liddy and Citigroup’s Vikram Pandit and Bank of America’s Ken Lewis to continue working to restore their firms to prosperity in the same way the looters in Rand’s novel need Hank Reardon and Francisco d’Anconia and Dagny Taggart, respectively, to run their steel mills, copper mines and railroad.
Matt Yglesias writes:
Atlas Shrugged is a stupid book, Ayn Rand is a stupid woman, and John Galt’s ideas are stupid. That said, none of them are nearly this stupid. Rand’s novel isn’t about a world in which executives who build companies based on a lot of incorrect decisions, then pay themselves millions of dollars while bankrupting their firms, then come to the government hat-in-hand asking for bailouts, then find that the bailers-out want to attach some strings to their hundreds of billions of dollars in public funds and then go to hide out in Galt’s Gulch. That doesn’t make any sense at all.
If the folks running Citigroup and Bank of America and AIG were good at their jobs, we wouldn’t be in this situation in the first place. That’s the point. But they weren’t good. They lost staggering sums of money. Their companies went broke. They had to beg for taxpayer dollars. You don’t get to do that and then turn around and “go Galt.”
Monday, March 02, 2009
Women In Combat - Civil War
I read this on a blog:
"Women before the perfection of firearms in the fifteenth century were were not on the battlefield. They were simply too weak. This fact was seldom noted because it was so obvious. Women since the fifteenth century have been able to hold their own against men - if they are packing heat."
Eh, not really. The truth is that as late the Civil War, the average woman was incapable of being on the battlefield. The average CW soldier had to march 15-40 miles a day with 10 lbs. musket, and 20-50 lbs. of food and equipment. This of course was on dirt roads and paths, in mud, rain, and snow. Your typical Civil war soldier had to tote the following"
1) Musket - 10 Lbs.
2) Bayonet - 2 lbs
3) 50 rounds ammunition - 5 lbs.
4) Water and Canteen - 3 lbs.
5) 3 Days Rations - 6 lbs
6) Overcoat - 1 lbs
7) Wool Blanket - 1 lbs
8) Mess Kit - 1 lbs.
9) Change of Clothing & Misc. - 4 lbs.
This is a minimum. Sometimes troops had to march with 50 lbs. of gear.
Its doubtful many women could do this**. The very act of firing a musket in combat took a great deal of upper body endurance, since it entailed loading, lifting and firing a 10 lbs. musket 2 times a minute for long periods of time. Further, the Colt Revolver, the cost common handgun was 14 inches long and weighed almost 3 lbs. Many smaller women would have trouble loading and firing it, let alone aiming and shooting with accuracy.
There were of course women who disguised themselves and fought. But these exceptions don't prove the rule. Certainly, I woman could disguise herself and fight as a drummer boy, rear echelon type, or a member of an artillery crew. I doubt many, except of few Amazons could have fought in the Calvary or Infantry.
And the amount of hand-to-hand combat is often underestimated. Every battle had "melee's" where the two lines of combatants would merge into a mass of swinging muskets, bayonet thrusts, and grappling foes.
It should be remembered that Pike Men were found on the battlefield until 1700, and the flintlock pistol and musket were so inaccurate and unreliable that a sword and bayonet were used constantly.
** Yes, I know many women go hiking with 40 lbs. packs. But they don't march 12 hours a day, day after day, in all kinds of weather, while eating corn meal and bacon and sleeping on the bare ground without cover.
"Women before the perfection of firearms in the fifteenth century were were not on the battlefield. They were simply too weak. This fact was seldom noted because it was so obvious. Women since the fifteenth century have been able to hold their own against men - if they are packing heat."
Eh, not really. The truth is that as late the Civil War, the average woman was incapable of being on the battlefield. The average CW soldier had to march 15-40 miles a day with 10 lbs. musket, and 20-50 lbs. of food and equipment. This of course was on dirt roads and paths, in mud, rain, and snow. Your typical Civil war soldier had to tote the following"
1) Musket - 10 Lbs.
2) Bayonet - 2 lbs
3) 50 rounds ammunition - 5 lbs.
4) Water and Canteen - 3 lbs.
5) 3 Days Rations - 6 lbs
6) Overcoat - 1 lbs
7) Wool Blanket - 1 lbs
8) Mess Kit - 1 lbs.
9) Change of Clothing & Misc. - 4 lbs.
This is a minimum. Sometimes troops had to march with 50 lbs. of gear.
Its doubtful many women could do this**. The very act of firing a musket in combat took a great deal of upper body endurance, since it entailed loading, lifting and firing a 10 lbs. musket 2 times a minute for long periods of time. Further, the Colt Revolver, the cost common handgun was 14 inches long and weighed almost 3 lbs. Many smaller women would have trouble loading and firing it, let alone aiming and shooting with accuracy.
There were of course women who disguised themselves and fought. But these exceptions don't prove the rule. Certainly, I woman could disguise herself and fight as a drummer boy, rear echelon type, or a member of an artillery crew. I doubt many, except of few Amazons could have fought in the Calvary or Infantry.
And the amount of hand-to-hand combat is often underestimated. Every battle had "melee's" where the two lines of combatants would merge into a mass of swinging muskets, bayonet thrusts, and grappling foes.
It should be remembered that Pike Men were found on the battlefield until 1700, and the flintlock pistol and musket were so inaccurate and unreliable that a sword and bayonet were used constantly.
** Yes, I know many women go hiking with 40 lbs. packs. But they don't march 12 hours a day, day after day, in all kinds of weather, while eating corn meal and bacon and sleeping on the bare ground without cover.
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