I heard this story about how the banks that are still in business are whining about big increases in the FDIC premiums they must pay on NPR this morning.
I kept waiting to hear as the story neared its end that many banks have not been paying any premium for the past ten years. The Boston Globe has a story that explains the situation with much more context.
Instead of providing the important historical information, the NPR story interviews a bank manager who says:
“We were very angry that we were paying for the sins of others,” Marranca says. “Obviously, the cost of this was because other people were doing silly, imprudent, criminal things. We never got involved in subprime loans. We would never do a loan with no documentation. We didn’t cause this problem. Imagine if you had to pay for your neighbor, or your competitor screwed up somehow, and you had to pay for it.”
Then the reporter makes this lame joke:
Yes, taxpayers, close your eyes and try to picture a scenario where you pay for the mistakes of others.
Bank managers whining about increased premiums that will cut into their profits really does seem lame in the face of the massive debt incurred by the government bailout that taxpayers will have to pay off. But the NPR story doesn’t even mention that this is the way insurance works! When hurricanes or other natural disasters destroy lots of property, our State Farm/Generic Brand Insurance rates go up.
Thanks for nothing on this story, NPR!
I have been encouraged to hear that Obama, in Europe this week for a variety of meetings, is talking with Russia about reducing stocks of nuclear warheads, but in the same week he has a couple of contradictory speeches.
First, Obama reiterated his support for missile installations in east Europe, claimed to be to protect Europe from a theoretical attack by Iran. How can he justify asking Russia to reduce armaments while continuing to add arms in eastern Europe?
Second, North Korea launched a missile that they claimed was to put a communication satellite in orbit. US forces tracking the missile claim no orbital insertion was achieved, but North Korea says it was a success. Immediately afterwards, Obama spoke of the importance of stopping proliferation. The obvious double standard: It is OK for the US to build missiles and emplace them all around the world, but it is not OK for North Korea to launch a missile, even if they claim it is for peaceful purposes.
The double standard also stands with Iran, of course, where enrichment of uranium is not to be tolerated by other countries, even if Iran claims it is only for nuclear power.
While Obama so far seems to be much more of a “straight talker” than Bush was, he is definitely capable of massively hypocritical statements within just a couple of days.
Speaking of senselessness, Noam Chomsky had some interesting points about the continued existence of NATO during an interview on Democracy Now. Why does NATO continue to exist when it’s stated purpose, protection of western European states from Russia and “the east,” is no longer an issue? Why has NATO turned into a “global intervention force” for the US?
Jon Stewart on The Daily Show had an interview scheduled with CNBC’s Rick Santelli last week. Santelli cancelled, so The Daily Show spent several minutes destroying CNBC’s claimed reputation as ‘Your Source for Business News.’ The segment expertly skewers CNBC, you can watch it here. Several of the many CNBC clips showing inaccurate predictions included Jim Cramer, host of CNBC’s “Mad Money” show. Jim Cramer seems to have made the foolish decision to attack Jon Stewart in retaliation. How smart is it to attack someone who’s specialty is making fun of people?
Cramer wrote a long article at MainStreet.com to “defend himself” from numerous ‘misguided attacks.’ He also toured several shows on NBC networks to ‘clear things up.’ The Daily Show had a great response in which more of Cramer’s lies are exposed. You can watch it here.
But that’s not the worst of Cramer’s lying. The Huffington Post points out an interview of Cramer on TheStreet.com available on YouTube. In the interview, Cramer describes things he did to manipulate the market when he ran his hedge fund. Here are some quotes pulled from the interview and featured in the HuffPo article:
He calls [manipulating stock prices] “a fun game, and it’s a lucrative game.” He suggests all hedge fund managers do the same. “No one else in the world would ever admit that, but I could care. I am not going to say it on TV,” he quips in the video.
He also calls Wall Street Journal reporters “bozos” and says behaving illegally is okay because the SEC doesn’t understand it anyway.
Here are some gems:
- On manipulating the market: “A lot of times when I was short at my hedge fund, and I was positioned short, meaning I needed it down, I would create a level of activity before hand that could drive the futures,”
- On falsely creating the impression a stock is down (what he calls “fomenting”): “You can’t foment. That’s a violation… But you do it anyway because the SEC doesn’t understand it.” He adds, “When you have six days and your company may be in doubt because you are down, I think it is really important to foment.”
- On the truth: “What’s important when you are in that hedge fund mode is to not be doing anything that is remotely truthful, because the truth is so against your view – it is important to create a new truth to develop a fiction,” Cramer advises. “You can’t take any chances.”
This is the culture of the “Wall Street” people and businesses we are bailing out.
Ted Kaczynski, the convicted bomber who blew up dozens of technophilic professionals, was right about one thing: technology has its own agenda.
Kevin Kelly takes a look at some of the Unabomber’s writings about technology in his article, The Unabomber Was Right.
I too argue that the technium is guided by “technical necessity.” That is, baked into the nature of this vast complex of technological systems are self-serving aspects – technologies that enable more technology, and systems that preserve themselves — and also inherent biases that lead the technium in certain directions, outside of human desire. Kaczynski writes “modern technology is a unified system in which all parts are dependent on one another. You can’t get rid of the ‘bad’ parts of technology and retain only the ‘good’ parts.”
Kelly finds some truths in Kaczynski’s writings, but sees other points to dispute. Many of the comments at the end of the article are also quite interesting. I don’t agree with all of Kelly’s assertions, but the article is thought-provoking.
There are many aspects of technology that are not subjected to real scrutiny in terms of what is given up when adopting the new technology. Cars are an example – it wouldn’t be hard to argue that there are currently more cars in the U.S. than are really needed. But automobiles are a self-reinforcing technology: The more cars there are, the more demand there is for roads and other infrastructure (drive-through windows!) to support them. As more infrastructure is created, more people see the value of owning a car. But what is given up? Local community cohesiveness. Pedestrians and bicyclists become less safe while all the transportation infrastructure spending is spent on roads for cars. Less is spent on mass transportation.
Newspapers may disappear as people get their news from the internet, but we still need quality journalism. What other things are we giving up by adopting various technologies?
To no-one’s surprise, hypocrisy continues even in the new administration of change.
Defense Secretary Robert Gates testified before Congress this past week. He said, (quoting from Ann Scott Tyson’s article in The Washington Post
U.S. goals in Afghanistan must be “modest” and “realistic”
“This is going to be a long slog, and frankly, my view is that we need to be very careful about the nature of the goals we set for ourselves in Afghanistan,” he said.
Civilian casualties resulting from U.S. combat and airstrikes have been particularly harmful to progress in Afghanistan and must be avoided, Gates stressed. “My worry is that the Afghans come to see us as part of their problem rather than part of their solution, and then we are lost,” he said.
Oopsy, wasn’t it just a few days before this testimony that the Obama administration approved an air strike from an unmanned aerial drone that killed about 20 people, three of them children? Oh, that was in Pakistan, so the Afghans are still happy, right?
Gates also warned of Iranian interference in Afghanistan, pointing to a slightly increased flow of weapons including components of lethal munitions known as “explosively formed projectiles.”
Iranian activities have been troubling in other parts of the world, Gates said, including Latin America, where Iran is setting up “a lot of offices and a lot of fronts.”
This is the part where everyone is supposed to ignore the fact that the U.S. is ‘interfering’ in Afghanistan, Iraq, Columbia, and elsewhere overtly and covertly, The country that has over a hundred military bases outside of its own territory around the world needs to be concerned that Iran is setting up ‘offices and fronts.’
This kind of testimony would be kind of funny if it didn’t involve killing people.
I posted a Fed Borrowings chart back in August that seemed worrying at the time… Check out the latest ( December 2008 ) data:
Federal Reserve Borrowings by Depository Institutions as of Dec 1 2008
(Source: Federal Reserve Bank of St. Louis)
Borrowings are now about three times as much as they were in August.
This Reason article by Ron Bailey reviews the new Frontline documentary, Heat. I haven’t watched the show, but now I want to.
Mr. Bailey spends most of the article trying to prove how much smarter he is than the show’s authors. Some of his points are valid and interesting – good, thoughtful stuff.
But then, his grand conclusion in the final paragraph:
The solution is ‘let climate change continue and adapt better via trickle-down economics and increased corporate power and control.’
That’s the dumbest ‘solution’ I can think of, since trickle-down economics and “free” trade have impoverished people in the U.S. and around the world and made their societies less able to cope with climate change, not more.
Treasury Secretary Henry Paulson has finally taken a cue from the Europeans and figured out that it might be smarter to buy stock in the ailing banks than to just buy up the toxic paper. It only took him, what, two or three weeks to figure that out?
I am still waiting for the FBI to march tens or hundreds of the bankers and brokers who engaged in deceptive practices down Wall Street in handcuffs, but, not surprisingly, that does not seem to be a priority for Secretary Paulson (ex-CEO of Goldman Sachs) or the Bush Administration. Instead, we have the previous heads of Fannie Mae and Freddie Mac leaving with a combined $9M in severance packages.
A post at The Big Picture, based on Kate Wellings’ work, provides a time-line of quotes from Secretary Paulson clearly showing that he is either totally incompetent, or a compulsive liar. I’m not sure which is worse, but as Kate Wellings says,
In short, any jot of credibility that the Secretary may have had surely cannot withstand this inarguable evidence of aberrant thinking; the inconsistency alone is staggering. These quips run the full gamut from puerile denial to deliberate understatement to bald-faced demagoguery, right on down to yesterday’s call for patience. Suffocated by his unabashed, unprincipled and incessant manure-spreading, I honestly wonder how the heck it is that we are not on the WH lawn – right this instant – pitchforks in hand.
One of NPR’s news pieces this morning was about a coupon-clipping queen. Why wasn’t it about Senate investigations? FBI findings? We’re supposed to stay calm, clip coupons, and wait for Paulson and Bush to sort out a fix?