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Thursday, October 30, 2008

We're Doomed

posted by on October 30 at 10:03 AM

Yesterday, I linked to a Wonkette post about a bunch of Christians who were imploring the giant brass bull on Wall Street to go with God. This morning, I got an e-mail from Dan, who took the famously awesome picture of Christians worshipping the golden calf's less-fancy older brother. Dan says:

I'm the "Wonkette Operative" who came upon the crazy Wall Street Bull prayer party.

I noticed you posted about it yesterday and I thought you might be interested in the video I shot of Cindy Jacobs and her friends singing "God Bless America" to the Bull.

What a strange, yet entertaining group....

Dan is my new hero.

Wednesday, October 29, 2008

The Golden Calf's All Growed Up

posted by on October 29 at 1:17 PM

Wonkette just put up this amazing picture:


Apparently, some Christians are on Wall Street, putting their hands on and praying over a large brass bull in the hopes that God will save the world's economy and transform the United States from a bull and bear economy to a lion (of God) economy. Do these people actually read the book they're supposed to be following?

Saturday, October 25, 2008

Poison Ramen

posted by on October 25 at 1:50 PM

Via BBC.

Two large Japanese food manufacturers have found insecticide in their instant noodles, triggering a food scare.

First, Nissin - which invented the instant noodle - recalled 500,000 pots after a woman became ill. She had eaten from a cup containing insect repellent.

Now another Japanese food giant, Myojo, says it too has found the same substance in two of its own pots.

That's bad timing—a ramen panic just as global markets are "diving," "plummeting," and having a "meltdown."

Instant ramen was invented for economic depressions—during the food shortages after WWII, Nissin founder Momofuku Ando saw people lining up to buy bowls of soup from black-market street stalls. And voilà. He became a millionaire and dead last year of a heart attack at the age of 96. When I lived in Japan, my neighbors told me not to eat instant ramen because the flavor packet was poison that would kill all my sperm. It's population control, they said, to get rid of the poor people.

Ramen became popular in the west during England's economic depression in the 1970s. (In Mexico, they combine the poverty food from both hemispheres by cooking instant-ramen noodles in the orange glop you get in instant mac 'n' cheese.)

The first time I ever saw ramen was at my elementary school in a New Orleans. Justin Rambo—a tough-ass Cajun kid whose dad once came to class to give him a whupping after the teacher called to say he'd been acting up—would step on the plastic package to break up the noodles, then open it and pour in the flavor pack, then eat the little chunks. Soon, all the kids were eating ramen during recess.

Friday, October 24, 2008

The Fall

posted by on October 24 at 9:13 AM

The critic and philosopher Steven Shaviro is often right about the causes or consequences of cultural events/emergences/happenings in the domain of postmodern/global society. Recently, however, he got something wrong:

...I don’t think the current crisis [in the markets] marks the end of neoliberalism and market fundamentalism. For the sole aim of all the government intervention that is happening now is precisely to restart (reboot) the currently clogged market.
Agreed, what Bush is trying to do is simply restore the neoliberal order with blasts or shocks of government cash. But it's not working. The system will not stabilize. The happy business of unregulated markets is over.

Even the guru of neoliberalism, Alan Greenspan, is sobering up to this reality:

But on Thursday, almost three years after stepping down as chairman of the Federal Reserve, a humbled Mr. Greenspan admitted that he had put too much faith in the self-correcting power of free markets and had failed to anticipate the self-destructive power of wanton mortgage lending.

“Those of us who have looked to the self-interest of lending institutions to protect shareholders’ equity, myself included, are in a state of shocked disbelief,” he told the House Committee on Oversight and Government Reform.

It's not the end of the world. It's the end of a form of economic exploitation.

Wednesday, October 22, 2008

The Rise and Fall

posted by on October 22 at 9:45 AM


This neat little article convincingly corresponds the recent expansion and contraction of Starbucks with the real estate boom and bust that triggered the current economic crisis:

This recent crisis has its roots in the unhappy coupling of a frenzied nationwide real-estate market centered in California, Las Vegas, and Florida, and a nationwide credit mania centered in New York. If you could pick one brand name that personified these twin bubbles, it was Starbucks. The Seattle-based coffee chain followed new housing developments into the suburbs and exurbs, where its outlets became pit stops for real-estate brokers and their clients. It also carpet-bombed the business districts of large cities, especially the financial centers, with nearly 200 in Manhattan alone. Starbucks' frothy treats provided the fuel for the boom, the caffeine that enabled deal jockeys to stay up all hours putting together offering papers for CDOs, and helped mortgage brokers work overtime processing dubious loan documents. Starbucks strategically located many of its outlets on the ground floors of big investment banks. (The one around the corner from the former Bear Stearns headquarters has already closed.)


Like American financial capitalism, Starbucks, fueled by the capital markets, took a great idea too far (quality coffee for Starbucks, securitization for Wall Street) and diluted the experience unnecessarily (subprime food such as egg-and-sausage sandwiches for Starbucks, subprime loans for Wall Street). Like so many sadder-but-wiser Miami condo developers, Starbucks operated on a "build it and they will come" philosophy. Like many of the humiliated Wall Street firms, the coffee company let algorithms and number-crunching get the better of sound judgment: If the waiting time at one Starbucks was over a certain number of minutes, Starbucks reasoned that an opposite corner could sustain a new outlet. Like the housing market, Starbucks peaked in the spring of 2006 and has since fallen precipitously.

Sunday, October 19, 2008

This Is What Globalization Looks Like, Part 134

posted by on October 19 at 3:26 PM

From Friedman's column in yesterday's NYT:

Some mortgage broker in Los Angeles gives subprime “liar loans” to people who have no credit ratings so they can buy homes in Southern California. Those flimsy mortgages get globalized through the global banking system and, when they go sour, they eventually prompt banks to stop lending, fearful that every other bank’s assets are toxic, too. The credit crunch hits Iceland, which went on its own binge. Meanwhile, the police department of Northumbria, England, had invested some of its extra cash in Iceland, and, now that those accounts are frozen, it may have to reduce street patrols this weekend.

Friday, October 17, 2008


posted by on October 17 at 1:27 PM

Steven Shaviro just got me thinking. I read this passage in his penultimate post, "Crisis"...

[O]rgies of destruction of capital, such as we are witnessing now, are part and parcel of the “creative destruction” (Schumpeter’s term, very much following Marx’s observations) that is the modus operandi of capitalism. Individual capitalists may suffer (though usually far less than the rest of us do), but these convulsions clear up the system, unclog it, so that new rounds of exploitation and capital accumulation may then take place...
...I read the passage and thought about another passage on page 104 of Raymond William's book Marxism and Literature (one of the 27 or so books I constantly keep next to my bed). The William passage concerns the Benjaminian concept of correspondences:
At one level correspondences are resemblances, in seemingly very different specific practices, which may be shown by analysis to be both direct and directly related expressions of and responses to a general social process.

Walter Benjamin transformed (or translated, in the Latour sense--more about that in another post) the term from Baudelaire's initial use of it in his poem "Correspondences":

Comme de longs échos qui de loin se confondent Dans une ténébreuse et profonde unité, Vaste comme la nuit et comme la clarté, Les parfums, les couleurs et les sons se répondent.


Like prolonged echoes mingling in the distance
In a tenebrous and profound unity,
Vast as the dark of night and as the light of day,
The perfumes, the sounds, and colors correspond.

With all of this in mind, I now want to establish a new correspondence between of two seemingly dissimilar histories. The history of capitalism and the history of Dick Cheney's heart.

Sensing a problem early Wednesday, Cheney saw the White House physician, who discovered the vice president was experiencing a recurrence of the irregular heartbeat. Cheney participated in regular morning briefings with President Bush, among other duties, and remained working at the White House until he went to George Washington University Hospital in the afternoon for treatment.

The process took nearly two hours, after which Cheney went home, said Megan Mitchell, a Cheney spokeswoman.

"An electrical impulse was delivered to restore the heart to normal rhythm," she said. "The procedure went smoothly and without complication."

From another report:

Mr Cheney, 67, has had four heart attacks, quadruple bypass surgery and operations to clear blocked arteries.

To begin with, correspond those details with the one in Shaviro's passage:

[T]he modus operandi of capitalism.... these convulsions clear up the system, unclog it, so that new rounds of exploitation and capital accumulation may then take place.

Though one system or substance (or assemblage--more on that in another post) is social and the other organic, a diachronic (or historical) analysis of capitalism and Cheney's heart would reveal convincing commonalities. The heart as the base of Cheney's life; capitalism being the base of social life. The situation of the heart producing a certain type of person and the situation of capitalism resulting in a type of superstructure. Indeed, both went into a state of crisis at the same time, and both are treated with shocks to restore stability and confidence. Seriously, the two (the heart and mode of production) need to be examined as being expressions of some larger moment or world process.

Wednesday, October 15, 2008

That Good Idea

posted by on October 15 at 3:07 PM

The idea is not mine. Someone in a bar or some other place gave it to me. The idea had to do with Alaska.
No, not sending all of Palin's followers up there to do their secessionist thing (a waste of a great resource), but instead selling that state to the Chinese for the price of the debt we owe them. All at once, we owe them little or nothing and they get cold and big Alaska. It's a great idea.

Tuesday, October 14, 2008

Save Your Last Few Pennies, Don’t Go See This Movie

posted by on October 14 at 1:12 PM

I went alone—the first time I’d ever gone to a movie theater alone—to watch, of all gay things, Beverly Hills Chihuahua.

You see, when I lived with my niece and nephew, they wanted a Chihuahua. They chanted “Chihuahua, Chihuahua!” despite my insistence that Chihuahuas were nothing but throw pillows covered in teeth and claws. But the chanters won. I fell in love with Pixel. Look at him. See?


Photo by Dawn Bustanoby.

So I went.

Beverly Hills Chihuahua is, in point of fact, the worst movie ever. Which begs the question: why—why!?—is it the top grossing movie two weeks running, selling $17.5 million in tickets just last weekend?

BHC’s sunny opulence is at odds with Americans—as of October 2008—collectively staring down the barrel of the darkest depression in 80 years. The opening scene features Chihuahuas (we’ve since moved on to Pit Bulls), Starbucks cups (currently closing stores everywhere), and a Louis Vuitton purse (now replaced with 20-cent taxed plastic bags). So its release now is A) a huge mistake, B) the result of a catastrophic production delay, or C) unfettered genius.

The story begins at the lavish mansion of a bejeweled white Chihuahua, who quickly becomes the object of affection for the gardener’s mangy, brown, slightly-more-robust Chihuahua. After being kidnapped, the rich white dog ends up in deepest, darkest Mexico. She narrowly escapes peril—thanks to her rough-and-tumble Mexican suitor and her own gumption—and makes it safely home to Beverly Hills. “Prissy? No mas,” says the six-pound protagonist.

Beverly Hills Chihuahua is the story of descent from economic security, into the jaws of poverty, and returning to grace unscathed. And that’s a story America really needs right now. Wrote StC in comments of yesterday’s Morning News: “I WENT AND SAW IT AGAIN. With four others. Oh, chihuahua!”

This is a familiar refrain. BHC evokes Shirley Temple, Good-Ship-Lollipopping her way through the Great Depression, or Little Orphan Annie escaping to the safety of Daddy Warbucks’s mansion. As America braces for poverty, it’s so much more manageable to prepare for the worst when you’re projecting your future onto the shivering frame of a six-pound dog.

Monday, October 13, 2008

Kranky Krugman...

posted by on October 13 at 10:56 AM

... won the Nobel prize in economics! (Sharing this year's winners' circle with such illustrious creatures as a glowing jellyfish and its "brainbow.")


To celebrate, let's savor a few of his observations:

The fundamental fact of American politics—and I've sharpened my view on this since last year and the hardcover edition of the book—is that we've got an alliance between the religious right and the accumulators of great wealth. Those are the people who are running things.
On the economic policy of the Bush administration: "There is no economic policy. That's really important to say. The general modus operandi of the Bushies is that they don't make policies to deal with problems. They use problems to justify things they wanted to do anyway. So there is no policy to deal with the lack of jobs. There really isn't even a policy to deal with terrorism. It's all about how can we spin what's happening out there to do what we want to do."
The United States in particular and the West in general should be feeling a little embarrassed about all that lecturing we did to the Third World.
On supply-side economics: "The appeal to the intellectually insecure is also more important than it might seem. Because economics touches so much of life, everyone wants to have an opinion. Yet the kind of economics covered in the textbooks is a technical subject that many people find hard to follow. How reassuring, then, to be told that it is all irrelevant—that all you really need to know are a few simple ideas! Quite a few supply-siders have created for themselves a wonderful alternative intellectual history in which John Maynard Keynes was a fraud, Paul Samuelson and even Milton Friedman are fools, and the true line of deep economic thought runs from Adam Smith through obscure turn-of-the-century Austrians straight to them.
It's time for some straight talk about John McCain. He isn't a moderate. He's much less of a maverick than you'd think. And he isn't the straight talker he claims to be.

Congratulations, you lovey old curmudgeon.

''We turned a lot of backyards into an oasis."

posted by on October 13 at 10:17 AM

monicabellucci.jpgFor those looking for hot business opportunities, consider the market for this commodity: fake palm trees:

About 50 percent of the business is still residential, but commercial customers now demand half of his attention. A growing number of them are communities or telephone companies interested in hiding the ''visual pollution'' of cell towers.

Beringer said he's in a niche with few competitors, and — aided by a weak dollar that makes American products more affordable to foreign buyers — he's been fielding requests from El Salvador to India.

The disguised cell towers, in particular, ''are becoming quite popular'' overseas, he said. The artificial palm trees can be as tall as 130 feet. In northern locations, the same processes are used to mimic pine trees, he said.

Beringer uses a lot of rubber and plastic in creating the outdoor palms, while indoor displays are
made of silk or preserved fronds (real leaves that are treated to retain their appearance.)

Even real palm bark can be hollowed out to accept a PVC core, or peeled off its source and reinforced with a cardboard lining so it snaps around unattractive poles to create instant foliage.

Beringer installs the trees himself, from pouring concrete to which 18-foot-tall trees can be bolted, to shaping the fronds into a realistic green cascade.

The best and most erotic part of this report: "...pouring concrete to which 18-foot-tall trees can be bolted..."

Saturday, October 11, 2008

Capitalism for Chavez

posted by on October 11 at 10:22 AM

As Hugo Chavez welcomes “Comrade Bush" to the land of socialism, he himself is boarding the train to neoliberalism:

Venezuelan President Hugo Chavez has announced a plan to help the country's businesses as rising inflation threatens the economy.

Under a stimulus package unveiled on Wednesday, Mr Chavez scrapped a tax and eased currency controls that made it harder for Venezuelan firms to operate.

He also announced a $1bn fund to help key industries such as food and oil.

Friday, October 10, 2008

The Age of Post-Neoliberalism

posted by on October 10 at 9:54 AM

After a terrific (for a few) and brutal (for many) 30-year run, neoliberalism has reached death's door. That door will have to open and the world economy will enter the solution to everything: a permanent and universal state of socialism. Welcome to the future!

The crisis was caused by the largest leveraged asset bubble and credit bubble in the history of humanity were excessive leveraging and bubbles were not limited to housing in the US but also to housing in many other countries and excessive borrowing by financial institutions and some segments of the corporate sector and of the public sector in many and different economies: an housing bubble, a mortgage bubble, an equity bubble, a bond bubble, a credit bubble, a commodity bubble, a private equity bubble, a hedge funds bubble are all now bursting at once in the biggest real sector and financial sector deleveraging since the Great Depression...

...At this stage central banks that are usually supposed to be the "lenders of last resort" need to become the "lenders of first and only resort" as, under conditions of panic and total loss of confidence, no one in the private sector is lending to anyone else since counterparty risk is extreme. And fiscal authorities that usually are spenders and insurers of last resort need to temporarily become the spenders and insurers of first resort. The fiscal costs of these actions will be large but the economic and fiscal costs of inaction would be of a much larger and severe magnitude. Thus, the time to act is now as all the policy officials of the world are meeting this weekend in Washington at the IMF and World Bank annual meetings.

Thursday, October 9, 2008

"Is Bling Over?"

posted by on October 9 at 1:51 PM

The Wall Street Journal wonders.

The End

posted by on October 9 at 6:51 AM

Yet another sign of the times:

The US government's debts have ballooned so badly the National Debt Clock in New York has run out of digits to record the spiralling figure.

The digital counter marks the national debt level, but when that passed the $10 trillion point last month, the sign could not display the full amount.

The board was erected to highlight the $2.7 trillion level of debt in 1989.

Tuesday, October 7, 2008

Credit Default Swaps: $60 Trillion of Bullshit

posted by on October 7 at 3:30 PM

Car insurance makes sense. If I drive or own a car, I better have some way to pay for repairs and healthcare if I fuck up.

And it makes sense that the insurance company better be tightly regulated--forced to keep enough liquid assets around to pay out claims. If the insurance company failed to pay up, it would be a nightmare for everyone.

Credit Default Swaps (CDS) started out as insurance for bonds. For a percent or two a year of the face value of the bond, you received a contract to pay the face value of a bond if the issuing company defaults. This is little different than life insurance, homeowners insurance or car insurance.

The trouble started in 2000, when the Commodity Futures Modernization Act explicitly banned the regulation of these sorts of contracts. Funny things started to happen; people took out CDS contracts on bonds they didn't hold.

This would be like me insuring your car. Why on earth would I do that? It's a bet. If you get in an accident, I get paid; I'm gambling on your failure.

I could be even more clever, and eliminate my risk entirely--at least on paper.

Continue reading "Credit Default Swaps: $60 Trillion of Bullshit" »

Have Some Punch!

posted by on October 7 at 11:10 AM


I'm typically against violence, but for this, I'll make an exception:

While former Lehman CEO Richard Fuld was testifying before the House Oversight Committee Oct. 6, CNBC reported he had been punched in the face at the Lehman Brothers gym after it was announced the firm was going bankrupt.

Read the full report here. (And thank you, Slog tipper SeMe.)

Chapter 11 Loafing

posted by on October 7 at 10:51 AM

Last week, Atlanta-based alt-weekly chain Creative Loafing (recent purchasers of the Chicago Reader and Washington City Paper) filed for chapter 11 bankruptcy. Atlanta Magazine has a grim look at the perfect storm of bad news that hit the company in the last three months (declining ad sales, rising gas prices, tanking economy, etc.) as well as its probable future (spoiler alert: online content aggregation!):

Unfortunately, the purchase of the Chicago and D.C. papers couldn’t have come at a worse time. The housing market was crashing, which cut advertising revenues by up to fifteen percent. “It wasn’t the nightclubs or the retail stores,” he said. “It was housing. Furniture was just gone.” And Eason’s cost-cutting measures—like centralizing production of all the papers out of Atlanta—wasn’t saving enough money to offset the losses. Earlier this year, he ordered more layoffs at his papers. But it wasn’t enough. This summer, with gas prices creeping up, ad sales took an even bigger hit.

The Fed Moves to Save the Commercial Paper Market

posted by on October 7 at 9:15 AM

I demand a solution for the short-term credit crisis, and the Fed delivers. (Fear my power, and the power of SLOG!)

The Federal Reserve will create a special fund to purchase U.S. commercial paper after the credit crunch threatened to cut off a key source of funding for corporations.

Today's action follows a slide in the commercial-paper market to a three-year low of $1.6 trillion last week as investors fled even companies with few links to the subprime mortgage crisis. Companies from newspaper firm Gannett Co. to electricity producer Southern Co. have been forced to tap credit lines or forego raising debt because of the market's disruption.

The Fed's efforts are aimed at "stemming the bank-run-like panic," said Mark Gertler, a New York University economist and research co-author with Fed Chairman Ben S. Bernanke. "The immediate threat to the real economy is that large corporations are having difficulty obtaining funds via the commercial paper market."

This should help big companies, those large enough to seek short term debt on the market directly. And it seems to be working.

For small companies, that more typically borrow via lines of credit from a bank, things still sound pretty ugly. (If you own a company or work for a company that is suffering because of having a line of credit frozen, please email me at

I like this move. Ben Bernanke, the current chairman of the Fed, seems sharp. Unlike Treasury secretary Paulson, he's never worked on Wall Street. In the least, he's an expert on the (first) Great Depression. Seems to be useful right about now.

Monday, October 6, 2008

The Credit Crunch Starts Hurting Us

posted by on October 6 at 1:14 PM

Companies cannot borrow:

Some small companies say they are no longer able to get loans from newly cautious banks as credit tightens across the country, and even those who do qualify are increasingly reluctant to borrow and expand, fearful of overextending themselves in the midst of the financial crisis.

State governments cannot borrow:
Massachusetts State Treasurer Timothy P. Cahill this week approached the U.S. Treasury and the Federal Reserve Bank of Boston about lending Massachusetts money under the same extraordinary terms the government is giving banks and Wall Street firms during this financial crisis, The Boston Globe reported.

The request was prompted by the state’s inability to borrow from the short-term debt markets because the financial turmoil has essentially caused credit markets to stop lending or charge prohibitive rates, The Globe said.

Earlier this week, Mr. Cahill’s office shelved a $750 million debt offering because there were no buyers for state or municipal debt, he said. He did not say how much the state might want to borrow from the Fed.

Massachusetts’ need is not as urgent, Mr. Cahill told The Globe, as the state of California’s, which requested similar federal assistance on Thursday. California officials said the state would run out of money by the end of the month if the short-term debt markets do not ease, and if it could not obtain loans from the Fed.

The state of California needing an emergency loan of $7 billion dollars from the Federal treasury, to just meet its short term obligations, tells you how frozen solid the credit markets have become.

This is how the irresponsibility of Wall Street will ultimately undo us all: Not by scouring our tax dollars but by collapsing profitable companies--companies that actually do things, that have an actual social value--and by collapsing the state governments that provide the meaningful services that make our lives possible.

Continue reading " The Credit Crunch Starts Hurting Us" »

"Then Mr. Mozilo offered everyone a breath mint."

posted by on October 6 at 12:53 PM

You'd think I'd have more of a handle on the mortgage fiasco considering my family just lost a house--the house I was a teenager in--to foreclosure. But whenever I try to read in the paper about the collapse of Fannie Mae and Freddie Mac, I can't figure out what the hell anyone's talking about. The blizzard of terms loses me and, in the blizzard, the competing versions of events are impossible to sort out. For a while I stopped reading those stories because I just couldn't make sense of them.

Then yesterday the New York Times published this piece on the front page. Couldn't put it down. It is an orderly, gorgeously reported piece about the downfall of Fannie Mae based around an interview with the former chief executive Daniel H. Mudd and a bunch of other sources who are kept anonymous "to avoid legal repercussions." The piece zooms in on when exactly it was that Mudd began to make the decisions that led to the great unraveling, and why he made them, and it fills you with a tense, fluttering sympathy.

Read it at least to that line I've put as the headline, which marks a turning point in the suspense--"Then Mr. Mozilo offered everyone a breath mint"--and see if you can stop.

Nowhere Safe

posted by on October 6 at 12:36 PM

And what happened here?

Six people were found dead early Monday morning inside an exclusive community in Porter Ranch, [CA].

Police say the case appears to be a murder-suicide, although it is unclear how the victims died. Officials have said a gun was involved.

The bodies were discovered around 7 a.m. inside the home on Como Lane, located in an exclusive gated community in the northwest San Fernando Valley, according to LAPD officer Sara Faden.

And what is a gated community?

In its modern form, a gated community is a form of residential community containing controlled entrances for pedestrians, bicycles, and automobiles, and sometimes characterised by a closed perimeter of walls and fences... [G]ated communities provide genuine security to the upper class as well as expatriates.

A Falling Tide Sinks All Boats

posted by on October 6 at 11:40 AM

From CNN:

Economic chaos creates surge in homelessness... In just the past 12 months, the number of homeless families living in Massachusetts motels has skyrocketed from 17 in September 2007 to 550 in September 2008. That's on top of another 1,800 or so families in shelters.

Friday, October 3, 2008

How to Avoid Foreclosure*

posted by on October 3 at 2:55 PM

Addie Polk, 90, of Akron, Ohio, became a symbol of the nation's home mortgage crisis when she was hospitalized after shooting herself at least twice in the upper body Wednesday afternoon.

On Friday, Fannie Mae spokesman Brian Faith said the mortgage association had decided to halt action against Polk and sign the property "outright" to her.

"We're going to forgive whatever outstanding balance she had on the loan and give her the house," Faith said. "Given the circumstances, we think it's appropriate."

* Do not try this at home.

As We Know It

posted by on October 3 at 1:48 PM

On the website for the Socialist Worker, Britain's anti-capitalist paper...

a world that is on the edge of...
We old and crusty socialists are not that different from the extremists in Christianity. In every event that happens, they look for the signs of apocalypse; as for us, it's the signs of revolution. Though looking forward to the future, in reality Christian extremists are always going back to ancient Rome (the world they wanted God to end); though looking forward to the future, socialists in reality are always going back to 1840, going back to every economic crisis that was supposed to be the labor pains for the birth of a new tomorrow. What didn't happen back then is not going to happen today. We must give up this hope that makes us wait and wait for the "true" labor pains. What we need is a whole new science of revolution. A science liberated from the "weak link," the point of crisis.

The Only Way to Slow Immigration

posted by on October 3 at 12:44 PM

Not with a fence, not with patrols, not with vigilantes—the only effective way to slow immigration is to have a shittier economy.

And we're succeeding. Two headlines, the first from MarketWatch:

Payrolls sink 159,000, worst job loss in 5 years
Hidden unemployment rises to 11%

And from the Wall Street Journal:

Latest Immigration Wave: Retreat

(To be fair, the article credits Congress's defeat of the bill to legalize illegals—as well as the slumping economy and construction sector—as responsible for the retreat. But clearly, the clever shittier-economy strategy is working.)

Bailout Bill Passes

posted by on October 3 at 10:37 AM

The measure was approved in a 263 to 171 vote, with 172 Democrats and 91 Republicans offering support. ... Democrats also won 32 more votes than they had on Monday, despite reservations from some conservative Democrats that the tax package would add to the deficit. [...]

In addition, federal legislators noted that the public’s view of the measure seemed to swing following Monday’s precipitous stock market drop. While many lawmakers had said that nine out of 10 callers objected to the measure over the weekend and on Monday, things appeared to balance out later in the week.

Now we can shift our economic panic to the unemployment crisis.

Via The Hill.

Thursday, October 2, 2008


posted by on October 2 at 1:00 PM

Solid-gold Kate Moss statue unveiled at British Museum.


And another one by the same sculptor, Marc Quinn.


Quinn sculpts people with physical disabilities. The Moss series is an extension of this work.

The Land of Japan

posted by on October 2 at 12:59 PM

A deadly fire in downtown Osaka!

A pre-dawn fire has killed at least 15 men and injured 10 others in a video rental shop in western Japan.

The fire broke out at about 0300 (1800 GMT Tuesday) and swept through the 32 rooms of the first-floor premises.

The business, in the city of Osaka, rented videos and DVDs and hired rooms where the customers could watch them.

Such shops are often used by workers who have missed the last train home, as they provide a cheap alternative to hotel rooms.

The store, called CATS, was on the first floor of a seven-storey building in downtown Osaka.

More than 100 firefighters and 40 fire engines tackled the blaze, which was extinguished in one and a half hours.

The Japanese Kyodo news agency quoted a 37-year-old customer who managed to escape as saying he had gone to CATS around 0100 after work in order to stay there overnight.

He said the layout of the establishment was "so complicated that customers who visited here for the first time may have found it difficult to escape".

A customer could stay at CATS for up to 11 hours from 2300 at a cost of 1,500 yen ($14; £8).

The production of space in Japanese capitalism seems more intense and raw than the production of space in American capitalism.

Wednesday, October 1, 2008


posted by on October 1 at 7:42 PM

The $700 billion bailout plan, now newly saddled with $110 billion in tax breaks for "businesses and the middle class," has been approved by the Senate. It's now en route to the House, and the AP report merely hints to their having a "Friday" vote.

You'll find this bit 13 grafs deep into the story:

It doesn't designate a way to pay for many of the tax cuts, though


Tuesday, September 30, 2008

“Thanks to their flexible lending rules, Paul got a quick approval”

posted by on September 30 at 3:55 PM

This WaMu ad from 1996:

Slog tipper NaFun says, "Not so funny anymore, is it?"

Seen Outside the Washington Mutual Tower

posted by on September 30 at 12:34 PM

This morning, Slog tipper Stuart wrote:


Did you see the sign in front of the Wamu building? It must be a joke (not PDL, I already checked): it's one of those change of use signs that states the WaMu building is being converted to condos.

It was gone by the time I got there, but the trip was worth it for this sign:


The Return of the State

posted by on September 30 at 10:37 AM

Bush, by the way, is a Republican. He may not get his calls returned these days, but he is a Republican. That would be the same party McCain belongs to, and McCain, of course took credit for passing the bill that did not pass, after non-suspending his campaign and non-leading on the bill's progress. In fact, he not only screwed up his leadership photo op, he also managed to encourage the wingnuttiest of the House Republican wingnuts (it's socialism! Socialism, I tell you... like the Post Office, highways and Medicare!!) How great is that?
Yes, this is precisely why I agree with the bailout. Its passing will bring to an end 30 years of unhindered neoliberalism. In the way the war in Iraq collapsed the neocon project, the housing crisis ultimately collapsed the neoliberal project. The bailout is the bullet in the heart of an ideology that marks the state as a burden and the market as the solution to all our problems. Globalization will for now not be about "the withering of the state," but the coordination of a network of private interests (civil society) managed and stabilized by an international system of state powers. Down falls Wall Street, the neoliberal utopia; up rises the state and the socialization of financial planning. I can't believe I'm alive to see this.
Taxpayers should wake up the politicians and ask them to tell Wall Street: "We want the same deal Warren Buffett got." The Omaha billionaire announced he is playing White Knight to Goldman Sachs by investing $5 billion in the endangered investment house. What a big-hearted guy. Buffett is an old-fashioned capitalist who invests in companies for the long term and I am a big admirer. But Warren Buffett did not get to be a billionaire by committing public-spirited acts of charity. He plays to win.
Yes, the socialization of winning is possible for the first time in three decades.

Monday, September 29, 2008

Worst Day Ever

posted by on September 29 at 2:52 PM

The Dow's biggest single-day point drop--losing 778 points.

Pictures from the Floating World

posted by on September 29 at 1:15 PM

About Henry Paulson's tax loophole (from a 2006 story in Forbes):

The Goldman Sachs boss will see his annual paycheck shrink from last year's $38 million to a paltry $183,500 once he takes over the job of Treasury secretary.

But don't shed too many tears for Paulson. He has amassed quite a fortune--a roughly $700 million equity stake in Wall Street's premier investment banking house. And soon, he will have the chance to diversify a good chunk of those holdings without paying a dime to the Internal Revenue Service.

By accepting the Treasury post, Paulson is poised to take advantage of a tax loophole that allows government officials to defer capital gains taxes on assets they have to sell to avoid a conflict of interest, as long as the proceeds are reinvested in government securities or a broad array of mutual funds approved by the government within 60 days.

And about Goldman Sachs (from a story today in the New York Times):

The beginning of the end is felt even in the halls of the white-shoe firm Goldman Sachs, which, among its Wall Street peers, epitomized and defined a high-risk, high-return culture.

Goldman is the firm that other Wall Street firms love to hate. It houses some of the world’s biggest private equity and hedge funds. Its investment bankers are the smartest. Its traders, the best. They make the most money on Wall Street, earning the firm the nickname Goldmine Sachs. (Its 30,522 employees earned an average of $600,000 last year — an average that considers secretaries as well as traders.)

And about the stock market (from a story today in the Economist):

At one point the Dow Jones industrial average had fallen than 700 points, its biggest intraday drop ever.

And about the future (from a story today in US News & World Report):

After Bailout, Economy Will Still Be Lousy

Re: Bailout Deal Collapses

posted by on September 29 at 12:30 PM

And Republicans blame Nancy Pelosi's speech. Seriously.

“I do believe that we could have gotten there today had it not been for this partisan speech that the speaker gave on the floor of the House,” House Minority Leader John Boehner said, adding that Pelosi “poisoned” the GOP conference.

Deputy Minority Whip Eric Cantor (R-Va.) held up a copy of Pelosi’s floor speech at a press conference and said she had “failed to listen and to lead” on the issue.

The Speaker had blasted the Bush administration in her speech and Minority Whip Roy Blunt (R-Mo.) asserted that some GOP lawmakers, who had reluctantly agreed to support the bill, might have changed their minds following Pelosi’s remarks.

Hmm... here's how the votes broke down:

140 Democrats voted for the bill. They were joined by 65 Republicans. However, 95 Democrats voted against the measure, along with 133 Republicans.

Meanwhile, you can just refresh this page every few minutes to watch the stock market. The Dow was at 10,590 when I took the screen grab above but has dropped about 100 points in the last 10 minutes. Yikes.

UPDATE: It's Barack Obama's fault, too, says McCain's campaign.

McCain senior adviser Douglas Holtz-Eakin said in a statement on Monday that while the Republican presidential candidate had tried to lead on the issue by suspending his campaign and returning to Washington last week, Obama had not been involved with the negotiations and other Democrats had put partisanship ahead of finding a solution....

This bill failed because Barack Obama and the Democrats put politics ahead of country,” Holtz-Eakin said.

Interesting that this bill, a compromise between both parties yesterday, failed due to unexpected opposition from Republicans. And it was such surprise that Republicans could turn around moments afterward with unified talking points and a press conference.

UPDATE 2: Barney Frank characterizes the Republican response as, "Somebody hurt my feelings, so I will punish the country." (Video link from Mike in Renton.)

Friday, September 26, 2008

The Keating 5 in 97 Seconds

posted by on September 26 at 2:43 PM

As long as we're talking financial collapse and government bailouts and whether or not D.C. needs Senator McCain in a moment of economic crisis:

Thanks to Sullivan, who posted from Huffington, who probably paid some college intern in drink tickets—at tonight's debate party—to find the footage. So thanks, soon-to-be-drunk college intern!

Where's the Multiplier Effect in this Bailout?

posted by on September 26 at 11:57 AM

The people who really dislike this bailout are starting to speak out. John Washburn at The Brad Blog thinks Paulson's plan could allow Paulson to buy Microsoft for a buck? (Thank you to slog tipper, Jeremy.) I'm not entirely convinced.

A financially savvy slog reader made the following point to me in an email:

The point of the bailout was to inject liquidity back in the market, which was supposed to have occurred after people had confidence in their banks again. That's not going to happen. We do already have a much better method of injecting that liquidity directly though, and I feel dumb for not having thought of it before: the Small Business Administration.

Let's stick with the $700 billion number. $500 billion in loans for any business with 100 or fewer employees that wants to expand. If you've been profitable three out of the past five years, guaranteed approval up to $1 million. $200 billion for startups, normal (meaning 1990s normal) application standards apply.

If we buy bad debt, it means that there's one step with no multiplier effect. Really, it'll mean smaller writedowns for the banks, so they may go all conservative and not lend at all, so their books look even better. If we give it directly to the small businesses, it's got a multiplier immediately, since it's going into the banks as actual deposits, that then get spent on equipment, buildings, supplies and so on. Cuts out the fat cats altogether, gets liquidity back in the market, indirectly helps the banks, and is guaranteed to create millions of jobs.

It's a great point. Allow me to attempt to translate this to plainer language:

Let's say you have an extra four thousand dollars available to you. (How? You're a Stranger reader, and thus have a completely reliable, irrefutable source of financial advice upon which to draw. We brought down WaMu. We can make you rich!)

You want to help the economy get back on it's feet. So, you're going to lend out this money to help one of your friends who is struggling, giving out a no interest loan that can be paid back at leisure.

Two friends come to mind.

One guy took out a home equity loan at the peak of the bubble, and spent the money on a bunch of get-rich-quick schemes--like buying up the original iPhones to flip on ebay. He's lost about a quarter of what he borrowed when these schemes failed. His original plan was to pay back the loan by selling his house, but then the bubble popped and his house is worth about 20% less. He needs your money to pay back the difference he now owes on his home equity loan.

A gal you know has opened a small but thriving bakery on Broadway. She needs a little cash to buy a new commercial mixer--to keep up with demand. But the banks aren't lending money to "risky" small businesses anymore. With your four thousand dollars, she could buy the mixer, hire a person to run it each morning and grow her business.

Which is the better choice, for the economy as a whole? Let's follow the money.

If you give the money to your guy friend, he will indeed pay off his loan. The bank will take his money and, most likely, keep it. The banks are really sweating things now and are hoarding cash. Rather than lending out your guy friend's money, they'll probably keep most of it as cash. The impact on the economy stops with the money sitting around in an ATM, waiting to be withdrawn in the next panic.

Give the money to your gal friend, and she'll go out and spend it on a new mixer, plus start paying a new salary to an employee to work the mixer. Her employee with spend part of her paycheck around town, helping many other businesses. The mixer company can, in turn, spend your money on employee salaries. The employees of the mixer company will probably save some of their salaries, but spend most of it. The places where these employees spend their money will in turn spend the income. This multiplier effect makes your four thousand dollar initial investment have an impact of many thousands of dollars.

Go with the gal and her bakery. The Federal government should do the same.

Inside WaMu

posted by on September 26 at 11:27 AM


Philip1, who works in the Washington Mutual tower downtown, says his first instant message of the day came from a co-worker:


All the Washington Mutual employees received an email announcing the buyout last night2, giving people time to freak out in the privacy of their own homes before coming to work.

"Most everybody's been resigned for weeks that something like this would happen," Philip says. "Some people are working, others are slacking off, people taking extra-long coffee breaks together, joking around."

The most popular jokes in the Washington Mutual tower this morning:

As people arrived: "Welcome to J.P. Chase!"

Intermittently, as people pass each other: "It feels good working here!" and "I like this new office!"

Regarding a branding campaign—"fair, caring, human, dynamic, and driven!"—that Washington Mutual employees had beaten into their skulls a few years ago: "Do we still have to 'live the brand'?"

Philip, who works as a low-level compliance analyst, says he wouldn't mind being laid off. "But some of the older people," he says, "are looking pretty nervous. I haven't seen anybody crying. Not in my department."

The only material difference in the office, Philip says, is that they finally took down a portrait of Kerry Killinger—Washington Mutual's CEO, ousted earlier this month—and replaced it with a picture of an abacus.

"None of us," he says, "have any idea what's going to happen."

1Not his real name.

2 Full text of the "we've just been bought out but don't you worry!" email below the jump.

Continue reading "Inside WaMu" »

This Isn't Funny Anymore

posted by on September 26 at 11:25 AM

(If it ever was.)