You are currently browsing the category archive for the ‘slave labor’ category.

This will get lost in 9/11 memories and Syrian controversy.. It is a shame. For in all that madness created by the Obama drones (forever now imprinted by the John Stewart’s Daily Show), this is one true gem of news…

Allowing non union workers to win benefits achieved by the union members in collective bargaining agreements, violates Indiana’s law which requires, no, mandates that compensation must be made for services rendered.

Because the non union employees were getting compensated without paying union dues to the union that won that benefit for them, that clause of the Indiana State Constitution was being violated.

Indiana is a Republican state. This was a Republican court. They even used a basic tenant of Republican philosophy, eliminate Welfare, to come to this decision.

In their eyes, there is no difference within a “right to work” state, between non union workers sitting back on their asses, drinking beer and watching TV on someone else’s effort…. and Welfare Queens, sitting back on their asses, drinking beer and watching TV on someone else’s effort.

Telling words ended their judgment….. “There is no court more loathe to declare an Indiana statute unconstitutional than this one”

“The court has no choice but find the Right To Work Laws violate the Indiana Constitution…”

ALEC’s Right To Work law has suffered defeat… Time to step up pressure in ALL states.

Advertisements

Economic theory, which is basically bullshit, is often coached in mathmatical terms to disguise the fact that it is pure bull.  However there are some very simple concepts which make very good common sense, and if one looks at that, instead of how to use current data to justify one’s action politically, one comes up with obvious surprising results.

Labor Demand < Labor Supply

That is why so many people are out of work.  Now here are the players.

  1. Workforce Market
  2. Corporations
  3. Commodity Market
  4. Foreign Investments
  5. Financial Markets
  6. Households
  7. Government

Government is our last option.

So our workforce if we compare the same counting today as was during the Great Depression, is running at 85% capacity.  Meaning 15% are unemployed.

Going down the list then,

Corporations are at their best ever. Corporate profit the highest percent of GDP ever.

Financial Markets also are at their best ever.  Dow Jones is at record highs.

Commodities are performing well, all indications are of a long term bull market.

Foreign Investment is at an all time high.  Never have we had this much outside money.

Real Household Income is declining.  We are headed downwards and are currently tied with 1994 as it rose out of the 91 recession, and prior to that, tied with 1984 as we were coming out of the 1982 Recession.

====

Bottom line with government out our equation, we have the investment side of our economy all doing spectacularly well, and the household side going down.

===

Proof enough that the free market system, or capitalist system does little for the good of any nation, just as little good it did prior to the legislation that became law after the crash of 1929 when Democrats swept the Federal Government.

===

Government is the great equalizer.  For a fix, government needs to step up and side with We the people (or households), and as a referee would in any sporting event, make the playing field fair.

It can to it in either of two ways. It can impose necessary restrictions upon businesses which increase their demand for labor at the expense of their corporate profits.  For example, pass legislation to imprison CEO’s for malfeasance. Only then in order to keep their heads out of hot water, they hire environmentalists, social engineers, accountants, and other highly trained personnel whose prime function is to make sure the company is not doing anything shady.

It can also split the corporations into multiple smaller ones, each now requiring a new president, several new vice presidents, new HR’s, new financial planners, etc and with one fell swoop, increase the demand for labor.  This too, comes at the expense of corporate profits, which are currently huge primarily due to economies of scale.

And it can indirectly create demand by raising taxes.  When taxes go up on profit- earned, less profit gets earned by design; less “reported” profit, less money handed over in taxes.. Meaning the bulk of that money is now spent being reinvested into the business just so it can’t be taxed.  Building projects, higher wages, more R&D gets spent into the economy,  This too, comes at the expense of corporate profits on the books.

But that is why higher tax rates are actually the best alternative.  Higher tax rates tend to create less taxes, so government still needs to stay small.  The revenue collected is lower for the simple reason that if there was absolutely no tax, all the money earned would belong to me.  But if more of what I earn goes to you, then I will figure out a legal way to keep more for myself, and report less.  So whereas as tax rates go up, total tax revenue comes down;  the net effect is that more money goes into our economy thereby creating more demand.

The demand for labor then gradually rises to equal the supply and if it continues on its upward path, yes, yes, so there are more jobs than workers, then competition begins pushing the individual wage rates higher.

Which adds to the increased demand.

Using tax rates works best for now instead of the government interfering with day to day operations of all businesses, it actually creates an environment where each business can operate independently to its own best interest, and as they do, the demand for labor rises even more…..

====

Anyone who argues for less government input into the economy is in the wrong century and can’t read economic figures that are plain as day.  So how does one interpret the cries for less regulations that are hurting corporate profits?  Easily. One realizes that sooner or later corporate profits have no choice but to fall, so our household income can increase. Loss of corporate profits is a “good thing”.

One should mention in the same breath, that labor’s percent of wages is deteriorating all across the world.  It is a world wide phenomenon.  The answer is simply that deference of all governments over the past decade and a quarter, has been given to those in charge of investment.

Policies favoring Investment must now take a back seat to those which put people back to work, which if done, raise the incomes of all of us… Even those of  the 1% , though not as much as they have been lately been accustomed.  But everyone still benefits.

Raising taxes is where we need to go.

===


Photo Courtesy of Wallops Island

Most people are unaware there are more NASA launch sites other than Cape Carnaveral. But listed as the newest one is the Mid-Atlantic Regional Spaceport (MARS), Delmarva Peninsula, Virginia which is located on Wallops Island in conjunction with NASA’s Goddard Space Center. (Most of you know, Wallops Island is just south of Chincoteague)..

Wallops Island was our nations first space launch site. It was established in 1945 by the Langley Research Center as a pilotless aircraft research station. It was incorporated by NASA in 1959. It has always been the small boy of the three launch sites. In the initial days, is was in hot contestation against Cape Canaveral for the becoming the main launch site. The difference in winter temperatures decided the issue.

As an aside Delawareans should be interested to note, that the first seven Nazi rocket technicians of arrived in the United States at New Castle Army Air Field, just south of Wilmington, Delaware, on September 20, 1945. They were then flown to Boston and taken by boat to the Army Intelligence Service post at Fort Strong in Boston Harbor. Later, with the exception of von Braun, the men were transferred to Aberdeen Proving Ground in Maryland to sort out the Peenemünde (the Nazi Rocket base) documents, enabling the scientists to continue their rocketry experiments.

In 1998, the Virginia Commercial Space Flight Authority, later joined by Maryland, built the Mid-Atlantic Regional Spaceport at Wallops on land leased from NASA. In December 2006, the facility made its first launch. It was from here yesterday’s successful launch occurred…. The launch sets the stage for a second company to begin resupply missions to the International Space Station.

California-based SpaceX became the first private firm to officially resupply the ISS last October. Its Falcon 9 rocket lifted off from Cape Canaveral in Florida carrying a Dragon capsule filled with cargo and science experiments. Today, Antares, built by spaceflight company Orbital Sciences of Dulles, Virginia, lifted off from the Mid-Atlantic Regional Spaceport on Wallops Island, Virginia, at 22.00 GMT (Sunday, April 21, 5 pm)..

This was just a test carrying a dummy payload corresponding to the weight and proportions of its Cygnus payload. But while Dragon can return from its missions loaded with cargo, no Cygnus craft will ever make it back to Earth. These craft will leave the ISS filled with trash and will burn up in Earth’s atmosphere.

The next test is in June, and if all goes well, 8 flights have been contracted to occur over the next 3 years.

Unfortunately even though it is only 130 miles south, it cannot be seen from Delaware during the day, nor heard. However 21 minutes after launch a very low level rumbling of distant sonic booms were alleged to have been heard here in Northern Delaware.

But, of all places… Sleepy Delmarva. How cool is that?

It is time to sanction gay marriage.   Gay marriage is different from civil unions. Gay marriage means much more.  Someone who is gay, who can now be married for life is finally an equal citizen.  Without that certainty the rest of  their rights are meaningless….

“Oh, we’ve got nothing against gays!.  You are equal to the rest of us, except, snicker, snicker, when YOU marry, we will give it a lower second class status and call it a civil union.”

Until Gay Marriage is made legal gays are only second class citizens….

It is interesting that very conservative parents of gay children, see it with open eyes… “Yeah, why can’t they get married?” Senator Portman who was flirted with as Romney’s running mate, and the odious Dick Cheney are both in favor of gay marriage. They credit their openness to learning from their children… every parent wants their child to be happy.

As a nation we’ve been here before.  Blacks were given freedom by the Federal government, but local governments who disagreed, would not allow them to marry whites.  Obviously the signal being sent was no, they weren’t equal after all.  Mexicans in the West, legal and forced to be accepted so by whites, had to deal with local laws disallowing mixed marriages… After all, they “really” weren’t equal, not even close?.”  American Indians, even though there were many interracial lifelong monogamous sexual unions during the exploration of our frontier, those unions were banned by laws intent on maintaining the purity of the Caucasian race, “Indians, equal with the white man?  Get real!”…

All these laws have fallen away, shredded by common sense and common decency.  It it easy to label a group with which we have no connection, as a “they” and say “they” are different, allowing it to be “ok” to treat “them” with disdain……

It is when “they” become part of “us” and we finally realize that treating “them” with disrespect is exactly the same as “us” being disrespectfully treated; we certainly would find that to be unfair. …

It is upon that realization, that discrimination against them…  finally becomes unfair….

Our Constitution and Declaration of Independence are pretty clear…   all humans are equal at birth… and once we widen our perception of what is human, we are forced by our beliefs to accept them into our family as well….

Hard as it was for the South, we finally accepted that slaves were human beings, and therefore agreed they should be afforded the same protection as their owners….

Hard as it was for mankind, we finally accepted that women were human too, and therefore agreed they should be afforded the same protection as their “owners”….

We later had to revisit the treatment of those whose ancestry derived out of our former African slaves, even to the point of guaranteeing them by law, actually making it punishable to treat them with disrespect, in order to drive home this point to Southerners, that…. all people are created equal….

Any baby born within our borders becomes a citizen.  Whether its parents are or not… They were born here; they are equal to the rest of us…  We allow any baby to grow up and marry any other baby who grew up here, unless they are gay.

The overwhelmingly majority of our culture has recently come to the realization that people who are gay, are created that way. They can change it no more easily than one can molt the color of  their skin, or alter the slant of their eyes, or raise or lower their cheek bones…  That is how God makes them…..

For anyone to vote no against Gay marriage in Delaware’s General Assembly, they will have to first  imagine themselves in a Twilight world, one where genes gave dominance to gays, and heterosexuals occurred rather rarely… Being one of those heterosexuals, who had deeply fallen in love with someone of another gender, would you, a Delaware Representative, settle for only having  civil unions for you and your heterosexual spouse, when all the gays around you were getting married and raising families?

Their gay clergy would spout:   “Oh, you are one of those… We can’t let you marry….”

If you  CAN’T  IN  GOOD  CONSCIOUS  agree that you yourself should be discriminated against because you happen to be heterosexual in a gay world, something you were born with and couldn’t change, then you cannot vote AGAINST gay marriage when it comes up for a vote with any good conscious.

Voting against gay marriage, carries the same moral price as did the voting against the freeing of slaves, as did the voting against allowing women to vote, as did the voting against letting blacks finally be allowed to succeed….

Now, since all of those are so much woven into the fabric of our society, we forget today that back then there were people who actually argued vociferously against allowing these citizens to become  equal members of our society… it was just like people argue against gay marriage today.

They arguing were wrong then.  Those same people doing it to gays, are wrong now….

Settling for Civil Unions instead of marriage is a slap in the face.  It has only one point and that it to say:  “Oh, you aren’t as good as us, and never will be.”

Each time in our nation’s past, it took the will of strong people to overcome the strong wills of weak people…. Delaware needs to allow gay marriage, simply because not doing so is the morally wrong thing to do….  Those crying against it with self thought-up platitudes, will come around eventually after the deal is done and the battle is over…

They have to!… One can only argue against what is right, … for so long.

I’m trying to put all your ideas together into one package. So, let me get this right… All you are asking is for, is a country where:

1) There is no universal healthcare.
2) Few entitlement programs.
3) Low Flat Tax System.
4) Faith based Government.
5) A deep reverence for God.
6) Extremely strict rules against abortion.
7) Marriage has already been strictly defined as between man and woman.
8) Homosexuality is a sin, and illegal.
9) Dress Codes are strictly enforced.
10) Tattoos, piercings, baggy pants, are banned.
11) Has the Death Penalty which they aren’t shy about using.
12) Strong private school system with religious focus.
13) Widespread dependency on oil and natural gas drilling.
14) Growing nuclear program
15) Nonexistent environmental nuisances
16) Culture that promotes family and stereotyped roles for men and women.

I’ve endeavored to put all your values on one page. I share your frustration because today, ever since 2008, it seems like America is moving further and further away from these values.

But you don’t have to be frustrated anymore. I have looked far and wide and have discovered a place already in existence that has those values in place, and more. If you sorely long for those values above, it is sincerely a place where you and your family would be very happy.

It is Iran.

You don’t have to pay me. I don’t need any commission. Just glad to help a fellow Delawarean out…. No problem.

Again, lifted from Der Spiegal

The current favorite? He’s a political dinosaur, dishonored and discredited. Or so we thought. Yet just because he studied history and speaks in more complex sentences than his rivals, the US media now reflexively hails him as a “Man of Ideas” (The Washington Post) — even though most of these ideas are lousy if not downright offensive, such as firing unionized school janitors, so poor children could do their jobs.

Pompous and blustering, Gingrich gets away with this humdinger as well as with selling himself as a Washington outsider — despite having made millions of dollars as a lobbyist in Washington. At least the man’s got chutzpah.

The hypocrisy doesn’t end here. Gingrich claims moral authority on issues such as the “sanctity of marriage,” yet he’s been divorced twice. He sprang the divorce on his first wife while she was sick with cancer. (His supporters’ excuse: It’s been 31 years, and she’s still alive.) He cheated on his second wife just as he was pressing ahead with Bill Clinton’s impeachment during the Monica Lewinsky affair, unaware of the irony. The woman he cheated with, by the way, was one of his House aides and 23 years his junior — and is now his perpetually smiling third wife.

Americans have a short memory. They forget, too, that Gingrich was driven out of Congress in disgrace, the first speaker of the house to be disciplined for ethical wrongdoing. Or that he consistently flirts with racism when he speaks of Barack Obama. Or that he enjoyed a $500,000 credit line at Tiffany’s just as his campaign was financially in the toilet and he ranted about the national debt. Chutzpah, indeed.

Yet the US media rewards him with a daily kowtow. And the Republicans reward him too, by having put him on top in the latest polls. Mr. Hypocrisy, the bearer of his party’s hope.

“I think he’s doing well just because he’s thinking,” former President Clinton told the conservative online magazine NewsMax. “People are hungry for ideas that make some sense.” Sense? Apparently it’s not just the Republicans who have lost their minds here.

And what happens in 2012? No, not the end of the world…. but the end of the world as we know it…..

For in 2012, pieces of the Affordable Care act begin to go into effect….. How awesome is that? And in our own lifetimes too?

What to expect…..

In 2012, thanks to the Affordable Care Act, additional benefits for the 150,000 Medicare enrollees in Delaware include lower prescription drug costs through a 50 percent discount on covered brand name drugs in the coverage gap – or “doughnut hole” – as well as wellness checkups and access to certain preventive care with no copayments, a benefit that all Medicare Advantage plans will offer starting in 2012. As a result, Medicare beneficiaries will be able to get free preventive screenings for heart disease, blood pressure, diabetes, Alzheimer’s, and other chronic conditions. In 2011 alone, over 20 million Medicare beneficiaries received an annual wellness checkup or received other preventive services with no deductible or cost sharing.

Thank you President Obama. Thank you Democratic Party of the USA…!!!!!!!!!!!!!!!!!!!!!

How bad would we have been for us if Republicans had stopped this as they tried soooo hard to do?

It’s going to be a great year!!!!!

The global markets lost 1% today… Actually that is pretty good. The losses stemmed over the fact that Republicans won’t allow new revenue to enhance our failing budget…….

Like George Washington, they want to apply more leeches (tax cuts) which eventually will bleed the father of our country dry, and kill him dead.

There are great ideas to get around the impasse……

One was so close last week in which Obama and Boehner had come almost to a 4$ Trillion Deal… It was so, so close. Boehner was about to become the Alexander Hamilton of the 21st Century: Historians would forever know him as the man who brought America back from economic ruin…….

But Boehner’s owner, jerked hard on his leash… cracking Boehner’s trachea. He then spun Boehner to the ground, and applied zip strips to his wrists and ankles. He then tazed Boehner repeatedly. For the first time in his life, Boehner did not cry. He was then strapped to a board, tilted backwards into a tank of water, and held for 45 seconds, over 111 times. He was then blindfolded and pummelled with cans of Pepsi, embedded in old cotton socks, leaving no evidence. He then poked with a tube, in his (you know where) and the other end was attached to a fire hydrant.

The next morning, Boehner said the deal was off; he refused to return Obama’s calls.

Leaks from those working for his owners, tell us the taxes on the wealthy 1% were the sole reason Boehner was given “the treatment”… It’s a damn shame; for a package of $3 trillion in cuts, (yes, includes modifications to SS and Medicare) and a Trillion in tax increases on the top 1%… would shake the dynamics of our economy.

It would spur investment here in America.
It would therefore create jobs.
It would stop the uncertainty where America was financially headed.
It would prevent the immediate loss to our economy of $4 billion a day.
It would reduce the deficit over time, and save money spent paying interest, which could then be used for services.
It would be the proper step at this time in the direction we need to go.

But, if the US defaults on its debt, nothing in the financial markets is sacred, and when nothing is sacred, that… causes panics…

And a panic in 1929… caused the Great Depression. A panic in 2008, caused the mess we’re in right now.

The world’s managed wealth is $122 trillion… A one percent drop.. is $1.2 trillion. That is the amount, that one half, of one third our government,… cost the world today.

They are kids, playing with a live junction box… Sticking a screwdriver in the wrong hole, burns down the entire house……

(At $50,000 a job, today’s loss is the financial equivalent of putting 24 million human beings out of work)

The story goes that Warren Buffet, rather worried about his investments early 2008, wanted to talk to God… God told him to use his phone and he’d send him the bill… He got and paid the $333 million dollar charge. His investments flourished, too… That would be the end of the story, except he was down in Sussex County recently, following up first hand on a corporate case being processed out of Georgetown… once again, he asked God for the right to call, and agreed to accept the charges… When he got his bill, he was fuming… He was only charged 25 cents… “God”, he said, “you ripped me off on that first call, big time!”… God said, “Warren, don’t you get it? In Sussex County, that’s a local call…”

Local call or not, Sussex County is weighing in on whether to say a prayer before County meetings or to not… Here are a few takes on that policy: one, two, three, four……

As someone who grew up where prayers were always said before football games and county meetings, it isn’t a big deal…… That is, as long as everyone agrees it isn’t a big deal. You don’t see prayers before meetings conducted in New York.

Not because New Yorkers are heathens, but because in New York, you have a multiplicity of religions, so praying a prayer from one of them, is a slap in the face for all others…

Why it’s even an issue in Sussex County is because the Positive Growth Alliance, has been building condo’s like ants, and lots of people who did not grow up in Sussex County, now live there. Many have different ideas of religion than those who’ve always been there all their lives…

If everyone believe in the same version of God as does David Anderson, then of course, duh, why are we even arguing about it… Of course we’re going to pray to God to guide us through this meeting.. That’s what He’s for!

Suddenly, thanks to Rich Collins and the Positive Growth Alliance, we have tons of people who do object to having David Anderson’s version of God, one who dislikes Homosexuals, and one who casts pox on Democrats, one who believes married people should have sex only when they have children, one who believes sex between animals is immoral, one who believes taxes are caused by the devil, one who believes that nature was made to bulldoze and pave with a combination of petroleum and gravel. … one who believes that oil companies have the divine right to pollute oceans, one who believes that animals were made for us to kill. … one who believes a national religious holiday should fall on the first day of deer season.. one who believes pick up trucks and baseball caps are proof that homosexuality is a sin,… on who believes killing someone with a gun is not a sin, but taking that gun away for the safety of others is…

(yes, I’m having fun and talking tongue in cheek)…

The point I’m making is that Sussex County is changing; and it is changing mostly thanks to Rich Collins and the Positive Growth Alliance.

Can you make new citizens join the current religion? If so, then by all means, just like the days of old, they will see no qualms in having a tiny prayer before the meeting.

But if they don’t want to join that religion, then, to force one group of religious people to impose their prayers on others, is not American…In fact, it’s kinda creepy…

If in an effort to show fairness, the Sussex County decided they would do prayers from all religions in alphabetical order, when they came to “B” and hit Buddahism, giving an Buddahist prayer before the session, most of those in the audience would be saying WTF! This is our nation, why do we have to listen to such crap…

Which is… exactly what those Buddahists think, who have opened a business in Millsboro, and have come before the county to ask for a variance on something or other that is in their antiqued code….

So… If it is unnatural for a Baptist to suffer a Buddahist prayer, it is equally unnatural for a Buddahist to sit through a Baptist prayer…

It’s not about one religion being right and the other wrong. It’s about who the citizens are that make up Sussex County. If you want to blame anyone over this controversy, the blame solely lies with those who built up Sussex County and brought in all these new people to begin with… Now that they are here, we have to make Sussex County as fair to them as New York, is fair to us, when we take our business up there……

Positive Growth, huh? Depends on your version of positive I guess………….

Duffy is God’s answer to a prayer.. I miss the old days of blogging when we were debating principals instead of people… Duffy has stuck to the old line of debating principals with facts, and that is what makes him special in the eyes of bloggers everywhere…

Since the passing of Steve Newton, he has been the only one to challenge me in any argument, and usually some pretty good stuff comes out of both sides during the exchange… I have respected that.. Cause once again, opinions mean dick. Facts are what we steer by.. It is my hope that in responding to his challenge that an answer may make itself apparent.. Who knows? It may not come from me… But if I’m the catalyst for bringing it out in the open, then… none of this was in vain..

Why I like to debate Duffy is simple.. Neither side, he or I, is concretely set in their opinions… We accept it when the other side makes sense… I usually go into such debates having no idea where they’ll end up… I hope the rest of you enjoy the ride as welI….

That said..

Duffy leads: Wall Street’s problems were caused by Fannie and Freddie loaning money to people they knew couldn’t pay and moreover, forcing banks to lend money to people who couldn’t pay. That was not deregulation but misregulation

kavips rebutt’s:Uh… Mr. President. That’s not entirely accurate.

First off, the Community Reinvestment Act of 1977 was developed for, and locked in on, urban developmental areas and had no part of the subprime boom, which primarily occurred out in western desert regions where owning 4 to 5 investment homes was normal… Those homes were overwhelmingly funded by loan originators NOT SUBJECT to the act… We all know the crises was not because people couldn’t afford a payment on their house. It came about, because with no occupants, people could not afford the payments of 4 to 5 houses….. Instead of one loan per borrower turning up in default; four to five were.
Investment Homes lead forclosures not inner city Residences

Second off, The housing bubble reached its point of maximum inflation in 2005.
The Housing Bubble Starts to Dive in 2005
Courtesy of NYT

Third off, During those exact same years, Fannie and Freddie were sidelined by Congressional pressure, and saw a sharp drop in their share of loans secured by the Feds… Follow the dotted line on the very bottom of the graph…
Freddie and Fannie on the lowest line
Courtesy of NYT

Fourth off; During those exact same years, private secures, like Delaware’s own AIG, grabbed the lions share of the market.
Private, not Public Insurers Caused the Crash
Courtesy of NYT

Remember these graphs for later on when I discuss the results of deregulation, versus regulation… But like it or not, these graphs conclusively show that private insurers, who thanks to Marie Evans, we now know were deregulated by Phil Gramm in the 2000 Omnibus Bill, were the primary cause of the worlds financial collapse.. Probably put best by these words of AIG’s spokesperson, who when asked why they didn’t have sufficient funds to cover losses, said point blank, “We were deregulated. We were no laws requiring us to keep any funds, ..so we spent it…”

Duffy leads: The loosely regulated hedge funds escaped this mess largely unscathed. Why? They can’t count on a bailout like the big banks. The Too Big To Fail banks were counting on a bailout (not unlike the S&L bailouts which started on the Republican’s watch) and they got them.

kavips rebutt’s:Uh… Mr. President. That’s not entirely accurate. I agree that the hedge funds did survive better than the banks. Not because of bailouts, but because they sold short during the crises and made billions while firms closed and people got thrown out of work. There is nothing wrong with that; I did the same. In fact close readers may remember my warnings that the crises was impending almost a year earlier. Very close readers may remember my telling them exactly when to sell, and at what point the stock market would rebound… I must say: I called it rather well. 🙂

“Hedge funds were not in my understanding, at fault in the credit crisis,” said David Ruder, former chairman of the Securities and Exchange Commission. “At the most what they did was to sell securities when some of their investments were declining and they needed to have liquid funds. They were not the architects of these problems.”

De regulated hedge funds are not the issue… De-regulated, excessively leveraged, mortgage securities, are a different story however… They, not the banks that held them, are the cause of the crises…Years from now, when academics search for causes of the stock market crash of 2008, they will focus on the pivotal role of mortgage-backed securities. These exotic financial instruments allowed a downturn in U.S. home prices to morph into a contagion that brought down Bear Stearns a year ago this month – and more recently have brought the global banking system to its knees.

Where you err is when you state that banks too big to fail, assumed they would be bailed out… By implication, you say imply they failed from squandering money, and wanted the bailouts.. But your tax dollars didn’t flow directly to the bottom line.

The roughly $200 billion the Treasury Department has handed out to battered banks was swapped for a special class of stock that pays a 5 percent dividend (rising to 9 percent after five years.) As of April 15, the Treasury had collected about $2.5 billion in dividend payments on its investment.

So in that sense, the bailout money represents an expense for banks. That’s one reason a number of banks have said they want to give the money back as soon as possible.

You say big banks were counting on a bailout, and they got them? That didn’t happen to these banks. New Mexico, Georgia, and Florida each lost a bank just last Friday. That brings to 8, the number of banks failed in June. Unfortunately if a bank is failing, it can’t bet on itself to fail, as can a hedge fund.

Duffy leads: Banks have successfully lobbied to get their losses absorbed by taxpayers and gains are kept private. How nice for them. They felt comfortable making insane gambles because they knew they’d be bailed out. Most of them were right. Also remember that it was Bill Clinton who tore down the wall between retail and investment banking. The idea was to give banks more stability as they typically perform as exact opposites in bull and bear markets. (FWIW, I think that was a good idea and I can tell you first hand that two of the Fortune 100 banks I worked for were carried by retail banking in bear years. They may not have had bonuses those years but they didn’t have layoffs either)

kavips rebutt’s:Uh… Mr. President. That’s not entirely accurate. The idea is that the banks made bad decisions knowing taxpayers would bail them out is the issue that is inaccurate. For the record, I have no qualms that it was the Clinton legacy who tore down the wall between banks and investment banking. Like you, I feel it was a good idea to do so… Again the problem was not primarily with banks making loans to people who could not pay.. Although, it was as late as October 2009, when I was made aware of one private Bank in Denver still exaggerating income to make loans look good enough on paper to get approval of securitization. What caused the collapse was the leveraging of those loans as securities, so that as the housing market became overextended, and the ARM jumped past the low cost opening years, the damage was 100 times worse because of leveraging. What made the collapse criminal, was that the insurance most financial institutions had bought from AIG, to cover such an improbable event, had already spent by that companies executives, out on bonuses to themselves. What made it doubly criminal, was that when they received government dollars through a taxpayer bailout, those same executives assumed it was to first go towards paying their bonuses again. However, very recent events may give some cover to the argument that some collusion was implicit in the bailing out of Goldman Sacs and AIG… Basically, once bailed out, AIG paid Goldman Sacs for shares twice as much as they were worth. The documents also indicate that regulators ignored recommendations from their own advisers to force the banks to accept losses on their A.I.G. deals and instead paid the banks in full for the contracts.