FedUpUSA

directly on Obama’s nose….

I passed up the obvious title: “Heckuva Job Larry!” That was the moment of President Obama’s appearance on The Daily Show with Jon Stewart that set all Americans cringing. Yes, he really said that Summers “did a heckuva job.” The candidate that was gifted the opportunity to run against the legacy of one of the worst presidents in U.S. history has, as president, used Bush as his role model to continue many disastrous policies. It was strangely fitting that he would channel Bush’s infamous praise (“Heckuva job Brownie”) for the FEMA chief who failed New Orleans so badly in the hurricane.

….

President Obama’s appointment of Summers as his chief economic advisor made the administration’s overall response to the crisis predictable. (Robert Kuttner gives a detailed explanation of the policies that Rubin’s protégés championed in his new book, A Presidency in Peril.) The response would follow the disastrous Japanese model that has harmed their economy and damaged their integrity. The dominant characteristics can be summarized quickly: (1) the government would act for the benefit of the largest financial firms and their CEOs, even when they directed massive frauds, by (2) engineering a cover up of the banks’ losses and the CEO’s misconduct; (3) the administration would use the fictional reports generated to conduct the cover up to declare victory (due to their brilliance); and (4) the same strategy would impair the recovery. (For more on the cover up, see here and here.)

Yep.

And worse, the losses are still there.  They’re just being hidden under the rug, but just like shoveling rotting fish under the carpet, it doesn’t make it stink less – it just makes it hard to see them – for a while.

There was no silver bullet. The administration made the losses disappear the old-fashioned way — with fictional accounting. I have already explained how the administration allowed the Chamber of Commerce, American Bankers Association, and the Fed to enlist the Congress to extort FASB to pervert the accounting rules so that most of the SDIs’ losses disappeared. The Fed also took over a trillion dollars in toxic, largely fraudulent collateral — and carefully avoided conducting due diligence to discover either the value or the fraud incidence of the collateral. In essence, the Fed took the toxic stuff off the balance sheets.

Extort is the correct word too.  And the ugly part of it is that a loan that has a loss embedded in it when made only gets worse over time.  That is, the recovery value always deteriorates in the general sense, as each month’s payment is not made.  This is why “the first loss is the best loss” when it comes to these issues; there’s no way out of the box other than to admit to what happened and swallow.

Third, integrity is important. I really shouldn’t have to explain this. It depresses me that I have to argue that it is wrong to lie. Our democracy, our economy, our society, and our souls depend on restoring our integrity and the rule of law. Randy Wray and I have proposed a step that would demonstrate the president’s complete repudiation of Summers’ strategy and a return to the rule of law: Place Bank of America in receivership for its tens of billions of dollars in fraudulent loans and its multitude of foreclosure frauds. Don’t talk about doing the right thing — do it — and do it to a major contributor. Don’t do it because it’s a contributor, but because a bank that commits tens of thousands of frauds should immediately be placed in receivership.

Yep.

But integrity never matters to Washington DC Bill.  Nor does it matter to Wall Street. 

Only money matters to both, which is obvious from the market reaction since the extortive act against FASB was committed – and that, it is clear, is what “turned the stock market” in 2009.

It wasn’t a “recovering economy” – there has been no meaningful recovery.  It certainly wasn’t anything in the employment situation, nor in the common weal.

Rather, it was that theft and fraud were ratified as a “legitimate” business enterprise – so said Washington – and whether Obama like it or not, it was his Administration that did it.

Good stuff over at HuffPo from Bill Black – and well worth a read.

Remember when you go to the polls folks – if you think you’re voting to “stop” The Republicans from “allowing” the fraud to happen again, you’re not. 

You’re just voting for which of the two bank robbers you like being assaulted by more – the guy with the red ski mask or the one with the black one.

What a complete and utter load of crap:

President Obama and congressional Democrats are blaming their trillion-dollar budget deficits on the Bush tax cuts of 2001 and 2003. Letting these tax cuts expire is their answer. Yet the data flatly contradict this “tax cuts caused the deficits” narrative.

Well, perhaps Obama is running that line of crap, but I’m not – and never have been.  But let’s look at what’s being “identified” by the CBO:

The bulk of the swing resulted from economic and technical revisions (33%) [We lied and the economy was being pumped with excessive debt], other new spending (32%) [Medicare Part D anyone?], net interest on the debt (12%) [What, you mean I have to pay that credit card?!], the 2009 stimulus (6%) and other tax cuts (3%). Specifically, the tax cuts for those earning more than $250,000 are responsible for just 4% of the swing. If there were no Bush tax cuts, runaway spending and economic factors would have guaranteed more than $4 trillion in deficits over the decade and kept the budget in deficit every year except 2007.

Right.  But notice the above.  And notice who was responsible for all of it.  Who signed Medicare Part D again?  Who pumped credit following 9/11?  Who directed his DOJ to interfere with state regulation of predatory lending – that is, knowingly fraudulent credit creation?

The Democrats might get the “cause” wrong but they sure as hell didn’t misidentify the responsible jackass.  His name was George W. Bush and he was (up until Obama took office!) the undisputed KING of Ponzi Economics in the history of America.

Not that this should surprise.  You might want to look into what sort of businessman he was before he came to the White House.  Being one of his “investors” would have been great – if you liked turning large fortunes into small ones.

First, the wars, tax cuts and the prescription drug program were implemented in the early 2000s, yet by 2007 the deficit stood at only $161 billion. How could these stable policies have suddenly caused trillion-dollar deficits beginning in 2009? (Obviously what happened was collapsing revenues from the recession along with stimulus spending.)

Now THAT is a damned lie:

Have a look for yourself, specifically, that blue line.  Or if you prefer, let’s just do it in numbers instead of percentages, so we can see just how big a liar this jackass really is!

How is this possible?

Simple, really.  George Bush, like all the Presidents before him in recent history, stole the surplus from FICA and Medicare and spent it.

Note that Herr Clinton never managed to get a negative number in that chart either. 

Let me repeat: President Clinton never ran a surplus. 

That too is a damned lie.

These aren’t my numbers, they’re Treasury’s.  I didn’t come up with them independently.  They are official public records.  They’re correct, and they’re reality whether you want to accept them or not.  You, or anyone else, can independently verify them.  Go ahead.  Don’t believe me.  I don’t want you to – I want you to prove up the figures on your own.

Yes, the problem is spending, not tax cuts (or increases.)  And incidentally, it has never been true in the United States that the government can manage to siphon off more than about 20% of GDP via taxes.  This means we either address the problem on the spending side of the balance sheet or we will hit the wall – with certainty.

Putting this together, the budget deficit, historically 2.3% of GDP, is projected to leap to 8.3% of GDP by 2020 under current policies

Utter and complete horseshit.

Look at that top graph again – the blue line is the actual deficit run by the Federal Government.  It is the amount of increase in borrowed money by Treasury as a percentage of GDP.  That’s the number that matters, not the intentionally fraudulent reporting that is done by both government and the mainstream media.

If I reported financial results how government does in a private company I would go to prison for fraud.

The above numbers say that President Clinton ran deficits of about 4% until 1997, at which point he managed to slowly decrease them to nearly zero (NOT to surplus.)

George W. Bush ran deficits that, following 9/11, ran between 4-5% of GDP continually, each and every year, from 2002 onward until the end of 2007.  In his last year in office (2008) he ran a ten percent deficit referenced to GDP.

President Obama has managed to “better” that, ramping it to nearly 12% last year and, on a run-rate basis, just over 12% so far this year.

Those are facts, and while the problem is spending, not taxes, there has been no President in the modern era who has been serious about doing anything about it, and neither side of the aisle has shown any indication about being willing to face this reality.

The first step toward resolving a problem is truthfully identifying and confronting it.  Sadly it appears that you won’t find any such honest analysis in the mainstream rags such as The Wall Street Journal.

The Market-Ticker