Sunday, 28 September 2008

Rants

Okay, here it is...


Bailout plan comparison based on statements and press coverage.  Sources and revision history at the bottom.

IssueOriginal (Paulson) PlanInterim proprosals (mostly Frank-Dodd)
9/28 compromise
Cost$700 billion taxpayer-funded Line-Of-Credit
(all at once)
$700 billion
in $150 billion tranches
$700 billion:
  • $250 billion at once
  • $100 billion on report to congress
  • remaining $350 billion requires further congressional approval
If after 5 years the government has a net loss of taxpayer funds as a consequence of the purchase program, the President will be required to submit a legislative proposal to recoup such funds from program beneficiaries.
Applies to“Toxic paper” backed by subprime mortgages.
‡ Adds “other troubled assets” owned by “pension plans, local governments, and small banks”
Government Acquires Equity?
Mandatory equity interest in all participating firms.Mandatory equity interest in total takeover scenario.

Proportional equity interest based on percentage of assets sold if deemed appropriate by Treasury Secretary.
Insurance

Requirement to establish mandatory insurance/guarantee program at no expense to the taxpayer. “Pay to play” for participating companies, based on risk.
Oversightnone, plus immunity from court review
(“trust us”)
(Various reporting and oversight requirements)Bipartisan oversight commission, split evenly between minority and majority.

† Inspector General and GAO to monitor Treasury Dept. actions.

† Treasury must post all transactions online.

† Immunity provision OUT.
Executive Pay
Executive compensation standards that would affect companies not involved in this financial crisis.

Lowered the deduction on executive pay to $400,000 for ALL companies.
Prohibitions on executive compensation to ensure bad actors are not rewarded:

In a total takeover (like what happened with AIG), no golden parachutes or severance pay.

‡ Recovers bonuses paid based on promised gains that later turn out to be false or inaccurate.

For equity participation over $300M, total ban for top 5 executives on golden parachutes and tax deduction limit on compensation above $500,000.
“Affordable Housing” Slush Fund
20% of any transaction profits channeled to Housing Trust Fund and Capitol Magnet Fund. “Profit” calculated on each individual sale, taxpayers stuck with any losses. See Jim LindgrenOUT
“Say on Pay”

(Mandated union representation on corporate boards)

Mandate a nonbinding shareholder vote on proxy access [by unions] and other corporate governance issues for any company in which the Treasury Department buys a direct stake in certain assets. OUT
Bankruptcy “cramdown”
Allow bankruptcy judges to reduce mortgage principal.OUT (Blunt) but...

‡ “The government can use its power as the owner of mortgages and mortgage backed securities to facilitate loan modifications (such as, reduced principal or interest rate, lengthened time to pay back the mortgage)” (Pelosi)
Loan to auto industry
$25 Billion for developing energy-efficient vehiclesMoved to continuing resolution.  (Not part of this bill, but will be spent anyway.)[2]
Oil shale development ban[1]
Extend to September 30, 2009 Not in “discussion draft”[3]
“Mark-to-Market” Accounting Standard

GAO study on the impacts of mark-to-market accounting standards and effects on the banking crisis.

Restatement of existing authority to suspend mark-to-market.
Tax benefits for community banks

Allow community banks to offset capital losses on GSE assets (= Fannie Mae and Freddie Mac paper) against ordinary income. (i.e., tax deduction)
Personal taxes

‡ Extends a provision (passed earlier in this Congress) to stop tax liability on mortgage foreclosures.





Anything I’ve missed?

Sources:
House Republican Whip Roy Blunt (via Tapscott).
Wall Street Journal coverage
House Speaker Nancy Pelosi
[1] (Added 23:35)  Thanks to “Vic” at Ace
[2] (Added 23:55) thanks to Bill Quick
[3] (Added 080929 14:01)

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Sunday, 21 September 2008

Rants

“Sexist” Republicans and the Professionally Indignant

Q: How many feminists does it take to change a light bulb?
A: THAT’S NOT FUNNY!!!

So I open my inbox to find an e-mail from The Sibling.  Seems that one of her associates is searching for a campaign item, a button sported by the Indiana delegation at the RNC.
Buttons are the hot item at the Republican National Convention. The Alaskan button reads, “From the coldest state comes the hottest vice president.”  But [Indiana State] Sen. Sue Landske and some fellow Hoosiers came up with a button of their own: “Hoosiers for the hot chick.”

Pat Koch from Santa Claus, Indiana likes it.

“Being a hot chick, strong fun and capable all go together,” said Koch, who said she wouldn’t see anything sexist even if a man were to don the button.

“We’ve been selling them at five dollars for hurricane victim relief and we’ve sold 250 of them,” said Sen. Landske.

At this point I must regretfully confess that, political junkie though I be, this is one aspect of Palin-o-mania that managed to escape my notice.

more...

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Friday, 12 September 2008

Rants

“Too Much Information” Yeah, that’s the problem.


Somebody named Dusty Horwitt (who, after we get to the bottom of the article, turns out to be “a lawyer who works for a nonprofit environmental group[1]”) writes in the Washington Post that he is worried. Worried that Data is drowning out Vital Information:

The information avalanche coming from all sides -- the Internet, PDAs, hundreds of television channels -- is burying us in extraneous data that prevent important facts and knowledge from reaching a broad audience.
“Important facts and knowledge.” Such as...?
...To achieve their goals, political movements need to reach and influence tens of millions of citizens...
Okay, propaganda. And...
“It's much more difficult [to reach people] today -- and much more expensive,” said Steve Eichenbaum, creative director of a Milwaukee-based marketing firm that helped engineer Russell Feingold's upset U.S. Senate victory in 1992...
...
...Media fragmentation has driven up TV advertising costs as candidates compete for the shrinking number of time slots that can reach voters, says Ken Goldstein, director of the Wisconsin Advertising Project at the University of Wisconsin...
Propaganda, political campaigning, and advertising. I see. And...?
The opportunity to educate millions of citizens, so essential to significant movements of the past, has dwindled. In the early New Deal era, the Roman Catholic “radio priest” Father Charles Coughlin...
(We’ll skip the discussion of whether Father Coughlin is best characterized as an “educator” or as a “rabble rouser, socialist propagandist, and bigot.” Meanwhile, say on...)
...promoted ideas for economic reform to a weekly audience estimated at 40 million... Today’s top talk-radio host, Rush Limbaugh, reaches only about 14 million people per week.
So the problem is that Rush’s audience isn’t large enough?

(Didn’t think so...)

Anyway (skipping some direct quotes; the piece is badly organized), Horwitt goes on to lament the decline of newspaper circulation, blaming “the overload” which “siphons audiences and revenue” (while carefully failing to note that, although some of the decline can be blamed on new alternatives, a lot has been existing subscribers getting fed up with a shoddier– Cut that news hole! Gotta maintain those profit margins!– and more biased newspapers).

And nobody seems to be watching network television anymore, either. Why, what’s a poor community organizer to do?
The challenge is to find ways to strengthen democracy in the era of TMI. It won't be easy, but the situation may not be irreversible, either.
“Strengthen democracy,” huh?  And I’ll bet you’ve got a plan, don’t-cha, bucky...
Rather than call for government regulation of technology itself, perhaps the best way to limit the avalanche is to make the technologies that overproduce information more expensive and less widespread.
I’ve got it!  We’ll abolish the internet and send everybody back to steam radio!

But Dusty, the great unwashed might resent us raising the price of, and then taking away, their toys.  What to do...what to do...?
It could be done via a progressive energy tax designed to keep energy prices at a consistently high level...
That’s it!  We’ll tax it out of existence!  Brilliant!  (Smithers!  Some single malt for the gentleman!)
... (while providing assistance to lower- and middle-income Americans).
Our clients! Of course. (Have another single malt!)
This solution may sound radical and unlikely,
Not to mention stupid.  You are writing in the Washington Post.  What’s less energy-efficient than printing stuff on dead trees and then hauling it around town on trucks?  Hey Post editors, did you read this before you printed it?
...Modern information technologies are highly energy-intensive. According to Arizona State University engineering professor Eric Williams, a desktop computer “is probably the most energy-intensive of home devices, aside from furnaces and boilers.[3]” ... It’s possible that over time, an energy tax, by making some computers, Web sites, blogs and perhaps cable TV channels
Hey, what about regular TV channels. After all, using millions of watts of electricity to throw something into the air is almost as inefficient as printing stuff on dead trees and hauling it around town on trucks. Has the NAB heard about this yet?
too costly to maintain, could reduce the supply of information...  A reduced supply of information technology might at least gradually cause us to gravitate toward community-centered media such as local newspapers
which print stuff on dead trees and then haul it around town on trucks
instead of the hyper-individualistic outlets we have now.

If the thought of more expensive information technologies makes you flinch, consider economist Alan Blinder's warning that the Internet could lead to the outsourcing of 40 million American service jobs over the next 10 to 20 years, including such jobs as financial analysts, lawyers[4] and computer programmers...

So. Under the guise of “strengthening democracy” (and saving energy and jobs), this clown wants to return us to those glorious pre-Rathergate days when the Recognized Media told us what to believe, and we believed it. When there were no alternate sources to contradict a Walter Duranty (or a Walter Cronkite).

When all the activists had to do was convince a few gatekeepers. When the Received Wisdom remained unquestioned.

Noooo thank you.


(And then there’s that little thing called Moore’s law.  I imagine that, tax or no tax, on the day the final issue of the last newspaper comes off the press, you’ll still be able to find us, sitting in front of our solar-powered computers, blogging away.)

HT:  Comment by “AlanDP” at Hell In A Handbasket
-----
[1]  It appears that he’s “Senior Analyst” for a U Street advocacy outfit called the Environmental Working Group[2], and is formerly Dick Durbin’s deputy press secretary.  I found that out by Googling.  (Probably more extraneous data that I don’t need to know about.)

[2]  78% foundation funded: Lessee... Joyce, Streisand, Turner... hmmm.

[3] 
and Al Gore’s hot tub. Don’t forget that.

[4]  We can only hope.  Then they can all get jobs doing something productive, like... printing stuff on dead trees and then hauling it around town on trucks.

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Monday, 08 September 2008

Rants

“Clueless” home buyers


The weekend takeover of Fannie and Freddie by the feds has restarted a lot of talk about the mess in the housing market. On the conservative side, there’s not a lot of sympathy for the “foolish/clueless” buyers who “bought more house than they could afford” and “failed to be cautious” of things like adjustable rate mortgages. They should have “done their research,” and not “ignored the warnings in the disclosures.” (paraphrasing comments by one local radio talker)

I’ll buy that, to a degree. But as somebody who has spent the last three months as an on-the-sidelines witness to a couple of real estate closings, I want to say that it’s not that simple, at least for most home buyers.

more...

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