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An email to Matt Stoller from a Democratic lawmaker responding to Bush's proposal and giving us a hint at what's being said up on the Hill:

Paulsen and congressional Republicans, or the few that will actually vote for this (most will be unwilling to take responsibility for the consequences of their policies), have said that there can't be any "add ons," or addition provisions. Fuck that. I don't really want to trigger a world wide depression (that's not hyperbole, that's a distinct possibility), but I'm not voting for a blank check for $700 billion for those mother fuckers.

Nancy said she wanted to include the second "stimulus" package that the Bush Administration and congressional Republicans have blocked. I don't want to trade a $700 billion dollar giveaway to the most unsympathetic human beings on the planet for a few fucking bridges. I want reforms of the industry, and I want it to be as punitive as possible.

Henry Waxman has suggested corporate government reforms, including CEO compensation, as the price for this.  Some members have publicly suggested allowing modification of mortgages in bankruptcy, and the House Judiciary Committee staff is also very interested in that.  That's a real possibility.  

We may strip out all the gives to industry in the predatory mortgage lending bill that the House passed last November, which hasn't budged in the Senate, and include that in the bill.  There are other ideas on the table but they are going to be tough to work out before next week.  

I also find myself drawn to provisions that would serve no useful purpose except to insult the industry, like requiring the CEOs, CFOs and the chair of the board of any entity that sells mortgage related securities to the Treasury Department to certify that they have completed an approved course in credit counseling. That is now required of consumers filing bankruptcy to make sure they feel properly humiliated for being head over heels in debt, although most lost control of their finances because of a serious illness in the family. That would just be petty and childish, and completely in character for me.

I'm open to other ideas, and I am looking for volunteers who want to hold the sons of bitches so I can beat the crap out of them.

More like that, please.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Sun Sep 21st, 2008 at 11:06:22 AM EST
[ Parent ]
Fuck that.
those mother fuckers.
the sons of bitches

I find it hard to believe that a Democratic lawmaker wrote that, at least in any form that might ever be made public.  Not that I disagree with any of the sentiments expressed, mind you.

We all bleed the same color.

by budr on Sun Sep 21st, 2008 at 11:33:37 AM EST
[ Parent ]
Based on the few experiences I've had with lawmakers, it's perfectly believable.

And I'm sure he/she asked to remain anonymous because of the language.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Sun Sep 21st, 2008 at 12:21:38 PM EST
[ Parent ]
Agreed.

Having worked in a state legislative chamber this is what's said when things stop being nice, and start being real.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Sun Sep 21st, 2008 at 01:41:25 PM EST
[ Parent ]
I'm going to crosspost what I wrote over at Open Left here.

Limited Liability Levy

Abolish the corporate income tax......

Keep on following.  

See the great issue with corporate taxation has been that they can shifts their profits overseas and declare bankruptcy (like Delphi)......

They can engage in creative accounting with tax credits so that they get money from the government........

And at the end of the day when the only liability that they have is limited to the assets that they own, even though they pay little or no taxes, and basically behave as anti-social little sobs.

So my suggestion?

Ditch the corporate income tax, it's shot through with loophole that allow companies to dodge their social obligations while sticking the public with the bill when they screw up.

Let's face it the chief benefit that the US government offers corporations is the limitation of liability, so let's recognize that the US government is in the insurance business.

And instead of taxing them, let's create a "limited liability levy" on corporate revenue, and let's be clear, this isn't earnings, this is money in hand they've gotten from their dealings.  No more of this turning a profit into loss through accounting tricks.

Charge a levy at 15% of gross revenue (again not profit) and use the spike in government funds to pay off debts, and look long term to creating universal healthcare and free higher education.

And if the corporations don't like that they've got to pay money for the privilege of having the government offer them insurance limiting their liability to funds invested, then let them try to find coverage in the private sector.

No private insurer can make that promise, and they would have to charge sky high rates if they tried.

Kill the illusion that the companies can get what they get from government in the market by letting them try.




And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg
by ManfromMiddletown (manfrommiddletown at lycos dot com) on Sun Sep 21st, 2008 at 11:48:09 AM EST
[ Parent ]
In other words, you're proposing what is, in effect, a back-door sales tax.  Yes?  Or do I misunderstand?

What I'd like to see is a Congress that would just cut the bullshit and let companies fail instead of having handouts for every asshole with a dumb idea and dumber backers.  This was the investment-banking version of the Dot-Com fever.

And that email has it right.  The response to this proposal should be simply, "Fuck you, Hank."

My proposal is simple: Put Glass-Steagall back up.  Let Wall Street drown.  I really and truly have no sympathy but for the poorest of the poor here -- that is the people who were victims of fraud on the part of the mortgage-peddlers.  But most of this was created by idiots -- in the mortgage industry, on Wall Street, and (yes) among homebuyers.

It's one thing to propose ensuring the biggest of the big in the commercial banking system don't fail, so that regular people can function, and because the Bushies would only fuck it up royally if they had to take over the commercial banks.  It's quite another to go parading around Wall Street with taxpayer money.

Let them die.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Sun Sep 21st, 2008 at 12:13:35 PM EST
[ Parent ]
Not really a sale tax, a revenue tax.

The problem is now, that say I'm a large manufacturer that assembles foreign sourced components (from my factories abroad) in the US.

It's a question of where the value is added.

There's free market value, and then there's internal pricing policy.

So let's say that I send components from a Mexican plant to US to make a transmission.  Now the transmission sells for $2400 when assembled, and purchased as aftermarket parts the components are only valued at $600, so there's $1800 in value added through assembly.  

But there's a catch, the corporate tax rate in Mexico is 10% (I'm making this example up) while the US rate is 20%.  

So 10% of $1800 is $180, while 20% is $360.  I save $180 per transmission adding the value in the US.  And worse internal trasnsfers of this sort are rarely taxed, so by adding the value in Mexico instead of the US, I can escape from taxes altogether.

On the books, the company is losing money because they parts are being overvalued in internal transfers so that the Mexican subsidiary bills the American assembly plant for $2400 for the components, so that by the time the product is sold the books say that the company is taking a loss.

It's massive tax fraud, but by impsosing a limited liability levy of 20% the governemnt is able to take in $480 in revenue from our hypothetical case instead of getting screwed over.

Coropate income tax as a percentage of tax revenue has been falling preciptiously for the the past two decades, and that is a large part of the government debt crisis that we face.

So again, I'm saying restate the argument for the government getting revenue from corporate gains by telling the companies that if they think they can get the insurance that they US government is offering them at a lower price in the market, they are welcome to try.

So that way it's their choice to be taxed, and the morality of the argument is changed to the favor of progressives.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Sun Sep 21st, 2008 at 12:30:29 PM EST
[ Parent ]
I should say that by converting what is nominally a tax into a charge for services rendered, it makes it much harder for companies to argue that they should be able to dine and dash.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg
by ManfromMiddletown (manfrommiddletown at lycos dot com) on Sun Sep 21st, 2008 at 12:34:38 PM EST
[ Parent ]
It certainly makes it cleaner, and cleaner is generally better.  I'm with you 110% on corporate taxes being bullshit because of all the accounting gimmicks companies have access to to fuck with the numbers.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Sun Sep 21st, 2008 at 12:45:03 PM EST
[ Parent ]
I follow you up to this point:

So again, I'm saying restate the argument for the government getting revenue from corporate gains by telling the companies that if they think they can get the insurance that they US government is offering them at a lower price in the market, they are welcome to try.

So that way it's their choice to be taxed, and the morality of the argument is changed to the favor of progressives.

You're suggesting this as a balancing-out of hypothetical bailouts -- a voluntary form of government insurance?

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Sun Sep 21st, 2008 at 12:40:12 PM EST
[ Parent ]
(I should add: I haven't had my coffee yet, so bear with me.)

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Sun Sep 21st, 2008 at 12:42:54 PM EST
[ Parent ]
Yes.

It's the same concept as the Edwards healthcare plan.

If they want to insist that the private sector can do it better, let them try.  And when it falls flat on its ass,  people make the voluntary choice to go with the government plan.  And then the argument that the state is coercive and evil, while the market is voluntary goes poof.

If the little bastards want to stick their fingers in the socket let them them get the shock of their life.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Sun Sep 21st, 2008 at 01:44:23 PM EST
[ Parent ]
Why not just do it this way, making it mandatory, without the bailouts?

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Sun Sep 21st, 2008 at 01:49:55 PM EST
[ Parent ]
Because by making it voluntary we take away the argument that they their hand was forced.  They made the decision, so they loose the right to bitch about it.

We have to attack the argument that government intervention is somehow inherently akin to dictatorship.

Force the bastards to cry uncle of their own accord.  Then it was their decision, not something forced on them.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Sun Sep 21st, 2008 at 01:54:17 PM EST
[ Parent ]
Fair point.  I think there's something to be said, however, for jamming policies down people's throats -- being openly hostile and creating an expectation from the public.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Sun Sep 21st, 2008 at 02:01:58 PM EST
[ Parent ]
Here's the issue I have with it: They fall on their faces in the private markets, then come to us looking for bailouts.  At that point we can say to them, "Okay, 20% of your revenue goes to us from now on."  But, by then, it's too late, and we haven't stripped the money from them prior to the need for a bailout.  They've already failed.

You have to let companies fall on their faces, or they'll wind up as they next airline or automaker going through a vicious cycle of Good Times and Teh Stoopid.  And then everybody but management -- taxpayers (debt), workers (pay and benefit cuts), etc - gets fucked.

By giving them insurance in return, it creates -- and here, for the record, I'm thinking more along the lines of the practical implementation rather than the philosophical underpinnings -- potentially some kinds of moral hazard down the road.

Your idea is a perfectly good way to collect corporate taxes.  I like it.  But I don't see any great need to give them anything in exchange.  When they say, "Hey, we gave you a whole buncha money, so lend us a hand," the government should be responding, "Fuck you, you gave us the money because we said you had too, so piss off."

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Sun Sep 21st, 2008 at 01:58:35 PM EST
[ Parent ]
By giving them insurance in return, it creates -- and here, for the record, I'm thinking more along the lines of the practical implementation rather than the philosophical underpinnings -- potentially some kinds of moral hazard down the road.

But the point is that currently limited liability is insurance for free.

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith

by Migeru (migeru at eurotrib dot com) on Sun Sep 21st, 2008 at 02:06:51 PM EST
[ Parent ]
Agreed.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Sun Sep 21st, 2008 at 02:08:01 PM EST
[ Parent ]
...adding...That's why I said that I think MfM's idea is a good one.  But I don't think we should promise bailouts.  If Congress winds up providing them, then we've at least planned ahead, but I don't think there should be an explicit agreement there.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Sun Sep 21st, 2008 at 02:09:57 PM EST
[ Parent ]
Rescue implies takeover, whether it's done by a public or a privately owned institutions.

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
by Migeru (migeru at eurotrib dot com) on Sun Sep 21st, 2008 at 02:11:23 PM EST
[ Parent ]
I think that we should use this particular clusterfuck as not only an opportunity to make the point that corporation's limited liability is currently free but also as an opportunity to take an ownership stake in the companies that are bailed out.

Force Lehman, AIG, et al to cough up stock shares, same thing for the Big Three automakers (full disclosure, I've recently bought a small number of shares in General Motors, and I've made a tidy little profit off of it.)

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Sun Sep 21st, 2008 at 02:37:58 PM EST
[ Parent ]
Off-Topic: What do you think of the timeline on cars like the Volt?  By that I mean, how long before we get something with a price tag in the teens/low-twenties that can travel (say) 70 miles per day?

(And come on, man, this isn't the NYT.  You don't have to disclose your financial holdings.)

If we're going to do the bailout -- and I think all would agree there's no doubt we will -- then, yes, I completely agree.  Make them cough up stock to the taxpayers so that we can recoup at least some of the cost.

And making the costs clear for taxpayers will be beneficial.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Sun Sep 21st, 2008 at 02:47:44 PM EST
[ Parent ]
Well.

The Volt's scheduled for release for the beginning of the 2010 run that starts in 2009.  Early estimate is something close to $40,000 for the Volt.  It has a significant advantage on the Prius, because it can go electric only for 43 miles.  

That's the trip to work and back for most people.  So for maybe 40-45% of miles traveled no gas used. Consider:

The way the Volt is designed, the wheels are powered by the electric motor and lithium-ion battery pack. When the batteries run low, the gasoline engine kicks in to extend the range. There is no direct connection between the internal combustion engine and the wheels. If the driver's commute is longer, driving is more aggressive, or if no plug-in option is available, the Volt will have to use its gasoline engine to keep the batteries charged, behaving more like a hybrid in this scenario. If the driver has a short commute, takes it easy on the accelerator, and plugs in to recharge the battery during the day, the Volt will operate primarily as an EV, and the gasoline engine's role will be greatly diminished.

In this configuration, the Volt can slip through about 85 percent of the EPA's test cycle without even firing up the gasoline engine. Using the EPA's standard formulas to calculate fuel economy, the Volt averages over 100 mpg. The EPA doesn't think that astronomical number is fair and has revised its tests with the requirement that the Volt finish the test with its batteries close to full charge, which means the internal combustion engine must run for the entirety of the test, dropping fuel economy to about 48 mpg.

I bought into GM on Thursday for two reasons: 1) Good new on the loan package and a general pickup after the central bank intervention. 2)GM is prepping not only the Volt for the 2010 model year, but also is going to import the Chevy Cruze which is rated at 40+MPG and may be able to get over 60 MPG on a gas engine alone.  It's set to replace the Cobalt at the Lordstown, OH assembly, and is likely going to be targeted at the same price point, around $15,000.

Detroit's got it's mojo back, and I a plan to go for the ride.  If I hadn't spooked Thursday afternoon I'd be up about $500 instead of the $50 I am now.  That's not a bad return for a guy living on grad assistant's stipend.  GM's at ~$13 now, I expect it to pop back to around the $40 it started the year at when it becomes clear that the loan package is going to go through.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Sun Sep 21st, 2008 at 03:48:04 PM EST
[ Parent ]
Why are cars so expensive in Europe (or ar least in Sweden) compared to the US?

A Prius sells for $25,000 in the US but for over $40,000 over here. That would put the Volt at $67,000 in Sweden which means few could afford it.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Sun Sep 21st, 2008 at 05:19:48 PM EST
[ Parent ]
Well, I've been talking about taxes on privilege for some time, including just this proposal of a Limited Liability Levy.

But if MfM came up with it independently that's fine with me.

Just shows that great minds think alike.... ;-)

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Sun Sep 21st, 2008 at 09:36:40 PM EST
[ Parent ]
too much of 'structured finance' is about exploiting differences between corporate tax regimes in different places, or between the tax and accounting rules. This is not productive work by any meaningful definition, even though it can be very profitable.

Universal progressive income taxes together with VAT (a form of sales tax) is a lot more effective, and VAT can be made progressive enough by having different rates for specific product categories, like food.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Sun Sep 21st, 2008 at 12:49:24 PM EST
[ Parent ]
Finland has used VAT (or Alv, as it is in Finland) in just this progressive way. ALV in Finland is 17% on food and drink, 8% on transport and books, 22% on others. Artistic performance fees are zero rated.

There is currently discussion on lowering the alv on food.

You can't be me, I'm taken

by Sven Triloqvist on Sun Sep 21st, 2008 at 12:56:22 PM EST
[ Parent ]
I'm surprised to find it so high on food.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Sun Sep 21st, 2008 at 12:58:45 PM EST
[ Parent ]
I suspect that it was a hidden marketing subsidy to Finnish producers. But high prices are now longer tolerated, and Lidl (a German warehouse type food operation that works out 20% cheaper, but with few Finnish branded goods) is getting more customers. Lidl goes for lower value industrial sites just outside of towns, but easily accessible.

The other side of expensive food is, of course, greater consumption of cheap crap food that brings its own problems at the healthcare end. I am sure it is a very elastic equation.

One key factor to remember in deciding progressive use of taxes of any kind is that while they are designed for one frame of mass mind, the change itself will cause another frame of mass mind. This always reminds me of Mr Hulot in Mon Oncle, struggling to right a perfectly manicured bush that has lost a branch to the activities of his nephew :-)

You can't be me, I'm taken

by Sven Triloqvist on Sun Sep 21st, 2008 at 02:45:20 PM EST
[ Parent ]
If only one country replaces the corporate tax with a tax on revenue, or if different countries put different tax rates on revenue, you still have opportunities for tax arbitrage.

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
by Migeru (migeru at eurotrib dot com) on Sun Sep 21st, 2008 at 01:01:41 PM EST
[ Parent ]
So we propose a global government to implement the revenue tax.

I dunno if it'd work, but watching the Paulites lose their shit after hearing of it would be hilarious.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Sun Sep 21st, 2008 at 01:12:02 PM EST
[ Parent ]
The EU has tried and failed to standarise the corporate tax base (not even the rate!) because too many of its member states are married to the race to the bottom. In fact, the fear of losing the "corporate tax advantage" is one of the alleged reasons for the Irish to vote no to Lisbon.

So, good luck globally.

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith

by Migeru (migeru at eurotrib dot com) on Sun Sep 21st, 2008 at 01:20:18 PM EST
[ Parent ]
It's never going to happen.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Sun Sep 21st, 2008 at 01:23:28 PM EST
[ Parent ]
Drew J Jones:
global government

Bingo.

Pie in the sky at the moment, but consider the advantages:

Equalisation of opportunity - people could move as freely as capital, subject to common sense limits
The instant removal of a $1 trillion annual military tax
Closing of all so-called off-shore tax loopholes, which would put yet more wealth into play for productive social investment

The current system of competing nation states is ruinously expensive.

Of course you'd need the strongest democracy in history to prevent a slide towards feudalism and oligarchy. You could create that with absolute limits on personal wealth and influence and semi-random sortition of public representatives.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Sun Sep 21st, 2008 at 01:36:31 PM EST
[ Parent ]
Sounds like Utopia to me, and I am a fan of utopian projects.  But the problem, as always, is getting from here to there.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Sep 21st, 2008 at 05:22:29 PM EST
[ Parent ]
I think that the opportunity is minimal if you base they levy on revenue rather than profit.

Most retail transactions are going to occur on the soil of one company, and there's no way that's going to change to something that's going to occur offshore.  

People buy cars and computers from distributors.  So long as we operate on a principle of point of purchase, there's less opportunity for arbitrage.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Sun Sep 21st, 2008 at 01:33:57 PM EST
[ Parent ]
if you bring down the corporate tax rate to 0 in your country, nobody can arbitrage against you (unless they actually provide subsidies to get to a negative tax rate).

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Sun Sep 21st, 2008 at 02:07:38 PM EST
[ Parent ]
They can arbitrage by having a lower rate of limited liability levy.

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
by Migeru (migeru at eurotrib dot com) on Sun Sep 21st, 2008 at 02:08:28 PM EST
[ Parent ]
But.

Liability limitation insurance is something that can be handled on a national basis.  So that Swiss RE can only issues policies on liability in the US through its US subsidiarity.  So if you can create walls for liability limitation at the national border, then in order to enter a market, a company must agree to the levy as the price of admission.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Sun Sep 21st, 2008 at 02:41:08 PM EST
[ Parent ]
One of the ironies of the US tax code is that in terms of absolute numbers large numbers of corporations don't pay corporate income taxes because they claim profits as personal income.  The US S Corporation is the most common here.

By separating out the charge for limited liability insurance from the idea of taxation, the double taxation argument collapses, and you can defeat the neo-libs in the market.  Because no private insurer is going to offer policies that limit liability to market capitalization at the rate that the government can.

Make the neo-libs eat their own shit.  They want the market to provide these things, let them try to show that it can be done.  Then laugh when they are forced to come crawling back to the government to ask that they be allowed the privilege of what they now feel entitled to.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Sun Sep 21st, 2008 at 01:39:13 PM EST
[ Parent ]
a lot. and I like the discourse you use to justify it.

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Sun Sep 21st, 2008 at 02:08:03 PM EST
[ Parent ]
Okay - but can we get one thing clear here?

The neolibs don't give a crap about markets, or about small government, or about any of the other talking points they vomit up regularly. There's a cadre of useful idiot apparatchiks who have been through the MBA mill who will repeat - and believe - this nonsense on cue because it makes them feel grown up. But the real players know the talking points are a show for the gullible and have no more substance than a McCain stump speech. (You think it's a coincidence that Bush, Palin and McCain lie about everything?)

The real aim of this kind of 'conservatism' has always been to loot national economies using whatever ideological or military excuses come to hand. This isn't conservatism, it's old-fashioned imperialism, with the empire as the entire planet.

The 'crisis' was manufactured by Greenspan, Gramm, Paulson and others. Greenspan may be a toad but he's not stupid, and the regret and woe which he's wailing out now, have to be contrasted with the palid and oily reassurances about the bubbleicious state of all things financial he spewed out during his term.

He was lying then, and he's still lying now. He knew damn well what was happening, and he didn't just ignore it, he helped engineer it.

So this is not a financial crisis, it's a constitutional crisis. It doesn't need a financial remedy, it needs a restoration of the constitution, and jail terms for the thugs who deliberately ran the car into a wall so that they could make an insurance claim on a shinier one.

No amount of financial re-engineering is going to fix this problem unless law and order are restored, and most of the population decides that Wall St's 'serious people' are thugs and criminals in sharp suits. Once that reality has sunk into public consciousness and cleaned out some of the festering corruption from the Anglo political systems, it may be possible to start legislating fixes. But the real need now is for pressure on Washington and London to start moving back towards genuine populist democracy.

Obama may make some tiny baby steps in that direction. But it needs a much wider cultural change, and even with the current sense of outrage among some of the left in the US, I'm not sure that we're done with the disasters yet.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Sun Sep 21st, 2008 at 05:23:25 PM EST
[ Parent ]

I'm not sure that we're done with the disasters yet.

I make no claim to clairvoyance, I don't read tarot cards, but I've got this grand gut feeling that the bigger disasters are just waiting offstage, regardless of what transpires this week.


... start moving back towards genuine populist democracy.

Do we do this before or after we find and slaughter all of the ultra-rich Republican types, because while they're  still alive, they will use ALL of their substantial resources to keep things going just the way they are now.

They tried to assimilate me. They failed.

by THE Twank (yatta blah blah @ blah.com) on Sun Sep 21st, 2008 at 06:52:06 PM EST
[ Parent ]
TBG
There's a cadre of useful idiot apparatchiks who have been through the MBA mill who will repeat - and believe - this nonsense on cue because it makes them feel grown up.
They also believe it because it makes them feel employed.  One would have to have a gag reflex set at infinity to work for these folks and not believe the official line.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Sep 22nd, 2008 at 12:00:02 AM EST
[ Parent ]
I think you're underestimating the degree to which many at the top believe their own propaganda. For example, I am close to certain that Greenspan does. Cheney a bit less, but to a large degree probably does as well. The fact that they consciously lie and steal is not evidence against belief. In general I tend to believe that people overestimate the cynicism of the elites, in any system, of any persuasion. Very few people are happy thinking of themselves as bad guys. Tough guys, people who are willing and able to cut corners to do what needs to be done - yes. And also feeling they deserve a bit extra for the wonderful and important job they're doing, that too. But pure mercenary opportunism isn't that common on the big stuff. When there are contradictions between actions and internal ideology, they rationalize things to themselves as necessary exceptions.
by MarekNYC on Mon Sep 22nd, 2008 at 01:20:50 AM EST
[ Parent ]
Ummm... just checked.

The first reference to a Limited Liability Levy I can find was thanks to Colman's provocation which gave rise to this debate back in January 2007

Iraqi oil etc

complete with the obligatory fisticuffs with HiD.

More recently in the

Risk Risk

thread on 5th April this year I posted this


Well what happened is that partners did (and still do, in the large number of professional partnerships still left unconverted to LLP's)insure themselves against these risks using Professional Indemnity Insurance.

These premiums started to rise rapidly, and led to the demand for limitation of liability. The government refused until they were essentially blackmailed into doing so when PriceWaterhouse and Ernst & Young paid City lawyers Simmons & Simmons around £1m in respect of the legislation that went through in Jersey in 1997 for a Jersey LLP.

Prem Sikka tells the story.

Essentially the UK government is handing out free insurance - as they do to every shareholder in a limited company.

ie the LLP does not quite "do way with that" it socialises what were private risks.

In my view, there should be a "Limited Liability Levy" or tax applied to gross revenues of any entity which has limited liability.

Jersey actually got one thing right in the end. They insisted on a bloody great bond being lodged by LLP's (either £5m or £10m) and this somewhat limits their appeal as a vehicle.....

Plus a good few more references by me in the last couple of weeks....

So, more power to MfM's elbow in developing the argument so much better than I could, but I think I can claim precedence on the concept...

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Sun Sep 21st, 2008 at 09:58:23 PM EST
[ Parent ]
I just assumed MfM was building on what you had written on this site over (apparently from your search) the last 20 months...

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
by Migeru (migeru at eurotrib dot com) on Mon Sep 22nd, 2008 at 06:44:38 AM EST
[ Parent ]
Basically the Robert Reich proposal, as written for a political speech.  In fact, it actually looks like it's ripped straight from Reich:

First, there must be no blank check when American taxpayers are on the hook for this much money.

Second, taxpayers shouldn't be spending a dime to reward CEOs on Wall Street.

Third, taxpayers should be protected and should be able to recoup this investment.

Fourth, this plan has to help homeowners stay in their homes.

Fifth, this is a global crisis, and the United States must insist that other nations join us in helping secure the financial markets.

Sixth, we need to start putting in place the rules of the road I've been calling for for years to prevent this from ever happening again.

And finally, this plan can't just be a plan for Wall Street, it has to be a plan for Main Street.

So, basically, (1) and (3) taxpayers get a share in the equity, (2) compensation reform, (4) courts can modify home loans, (5) (blah)allies(blah)foreign policy debate on Friday(blah), (6) regulation.

Now we'll see if he and the congressional leadership hold up when the Blue Dogs come to kneecap them tomorrow.  I think there's likely to be a fair number of Republicans who won't support this, at least in the House, so perhaps it balances out the Blue Dogs.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Sun Sep 21st, 2008 at 02:43:42 PM EST
[ Parent ]
I wrote e-mails to my senators and representative making many of these demands.  Our elected representatives need to be flooded with protests against bailing out billionaires and putting Paulson in total charge of a $700 billion fund backed by taxpayers.  Do that and forget the constitution.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Sep 22nd, 2008 at 12:05:04 AM EST
[ Parent ]

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