The Zong

Why was this man so damn pissed off last week?

It’s the credit market, stupid.

As I’m sure everyone out there with a no money down, variably funded, subprime mortgage now knows, the housing credit market shit the bed a few weeks ago, and the resulting effect it had on the credit market in general has Market Playas like “Iron” Jim Cramer here and his Captain of Industry ilk shaking in their very expensive shoes. It’s not that they’re paying for their Hampton estates on a wing and prayer, it’s that, to our great benefit and sometimes bane, our economy is linked in ways it never has in the past, not since the pre-1929 days. Cramer and his hedge fund buds make money off the intricate shuffling of liquidity from one source to another: I don’t pretend to really understand it, but I do know that rattling of the credit market gives the Wall Street glitterati a nasty case of the runs. There’s even some creditors that have taken to shutting off all lending all together until they see where everything shakes out.

In this week’s New Yorker, James Suroweiki has a great little blurb (8/27/07, ‘Beware Bailouts’) on the credit meltdown (hereafter known as The Great Meltdown, Seriously, This Time, Not Counting 1979, 1989, 1993, and 2001), and it’s effects, or rather possible non-effects on the economy as a whole. To wit:

“Wall Street so dominates our image of the U.S. economy these days that it’s easy to assume that what’s bad for the Street must be bad for everyone else. But, while it’s true that a complete market meltdown would have disastrous effects on the economy as a whole, market downturns like those of the past few weeks often have only a small effect on businesses and consumers. In part, that’s because much of what happens on Wall Street consists of the shuffling of assets among various well-heeled players, rather than anything that’s fundamental to the smooth functioning of the U.S. economy. (The economy did fine before the advent of hedge funds and private-equity funds, and would probably do fine in their absence.) Similarly, while stock-market tumbles are always painful, they have no concrete impact on most American consumers, who own little or no stock. (In any case, the S. & P. 500 is still up ten per cent over the past year, which hardly suggests imminent disaster.) And, in the short run, they’re irrelevant to most corporations, too, since few companies actually use the stock market to raise capital.”

So “Barbwire” Jim’s little rant has a bit of a whiff of the disingenuous to it. He’s freaked out, sure, and so are his buddies. But how much do the high-value movers and shakers have to do with what we, as normal working Americans, see as our daily living economy?

Surowiecki’s excellent article’s main point is that with every Fed bailout, the risk-takers that drive our Dow numbers higher and higher to such dizzying heights are less inclined to think sagely about where and what to put their (and our) money into, and he’s spot on. But he’s only got half the point, and maybe he doesn’t say it because he doesn’t want be Swift-Boated as an insane, anarchistic anti-capitalistic crackpot. Luckily, I don’t mind.

I’m a free-marketeer in the best beating-back-bloated-bureaucracy sense of the phrase, but it doesn’t take a lot of insight or financial acumen (of which I’m short on both) to start to get the sneaking suspicion that some of the highest rollers on Wall St. don’t exactly have Main St. best intentions at heart. I’m not really sure why it’s so dangerous to mention this in polite company, but when real money is made, it doesn’t trickle down too much: in the past 20 years, the separation between the rest of us and the super rich ( hedge fund managers, et all) has leaped frogged to unheard of heights. Additionally, we have ample evidence time and again that when the people at the top of market think they can get away with it, they will binge and purge, sneak around, make and bunch poor choices, and eventually vomit all over the US public and economy with their lousy bets. And guess who gets to clean it all up? I’ll give you a hint: Marc Rich doesn’t own a mop.

In the past 20 years, ever since the Reagan Revolution (*chortle*), the deregulation of Wall St. has continued apace, and I’m not sure how many times the US government has to come in and bail folks out before we start talking seriously about the pitfalls of completely unmonitored financial markets. I’m a believer in the human condition as much as the next guy, but I’m also not dumb enough to believe people won’t try to get away with something if they can. Countrywide and other lenders posed their subprime lending habits as “for the people” , and “enabling the American Dream”, but you and I know that’s a bunch of horseshit. The lenders saw a group of people they could lock in to very higher percentage loans, and they went for it, because they were easy marks. And I don’t even want to begin talking about credit cards marketed to college students.

Until “Nuclear” Jim and his high level pals are actually forced to conform to some type of standards, we’re going to be seeing this again and again. I’m tired of seeing the US Government, and by proxy normal Americans, having to continually step to the plate and bail out these idiots when one of their schemes to cut this country into smaller pieces for themselves goes belly up. Hopefully, we’ve been lucky this time, the Fed’s .25 percent slashing of the discount rate did the trick, and we’ll all get to keep buying cool stuff. But eventually, we’re gonna have to pay the piper for these bozo’s choices, and I don’t know about you, but I’m a little short on funds these days.

So, I’m busy working on a small treatise about how crappy San Francisco Giants fans are when the team plays in it’s own home park, but I had to stop and comment on this story. Evidently, some poor bastard at an Astros game proposed to a woman last night and got popcorn dumped on his head before she stormed out of the place faster than a Mormon at a donkey show.

I don’t know the circumstances surrounding any of this, but the Houston Chronicle has a couple observations from Astros skipper Phil Garner.

“If it was an act, she put on a good one,” Garner said. “She looked totally surprised and then totally mad. We couldn’t even get a proposal right down here tonight.

“We lead the league in marriage proposals, and we couldn’t get that one right tonight.”

Putting aside that it’s not a great idea, ever, to propose to someone at a regular season Astros-Nationals game, let’s not forget how nervous the poor bastard probably was that she might say no, and then imagine his “surprise” when she dumped a bunch of popcorn on his head — in anger.

I don’t know if it was an act or not, but I think this guy dodged a bullet. I’m not an expert on relationships or anything, but if a woman’s reaction to your marriage proposal is to get pissed at you, think about how fun things are gonna get the first time you forget to put the cap back on the toothpaste. Consider yourself warned.

Anyhow, the guy who wrote the article for the HouChron, one Jose de Jesus Ortiz, has one of the best leads I’ve ever read in sports journalism. Props to you, Jose, for writing this:

“It was not a good idea to make assumptions Monday night at Minute Maid Park…”

Brilliant. Thanks to DK for sending me the story…

If by “the war” I mean “the race to fuck poor people right in their class-hole,” that is. Tucked away safely in the business section of the New York Times was an article entitled “Average Incomes Fell for Most in 2000-5.” It lays out a bunch of new government data and a bunch of fairly boring-ass numbers that might make most people’s eyes glaze over. Check it out:

The combined income of all Americans in 2005 was slightly larger than it was in 2000, but because more people were dividing up the national income pie, the average remained smaller. Total adjusted gross income in 2005 was $7.43 trillion, up 3.1 percent from 2000 and 5.8 percent from 2004.

At this point, I was wondering if this was really all that bad. Reporting about stuff in abstractions (read: trillions of dollars) makes me think maybe I should be reading USA Today or something. That said, it did say that the average income was $55,238 in 2005, which is a real number I can almost understand. Turns out though, that this particular report is kind of a fucking bombshell. Read on:

Total income listed on tax returns grew every year after World War II, with a single one-year exception, until 2001, making the five-year period of lower average incomes and four years of lower total incomes a new experience for the majority of Americans born since 1945.

Yeah? Wow. I’d better tell my parents what’s going on, since they were definitely born since then. I’ll then ask them what the new experience feels like.

The White House, who among other things wants sick kids to just hurry up and die because we don’t have the money to pay for their insurance, says these changes “should not surprise anyone” because of the terrorists and what with Al Gore’s invention breaking down for awhile there. This statement is a little less than shocking considering all the great stuff the president has been saying about the economy lately.

The thing is, even if we put aside that this is the first time this has happened since fucking Hitler died, the next part of the article is a jagged motherfucking pill for us progressives and for anyone making less than $100,000 per. It turns out that things weren’t all that terrible for all Americans, especially if you were (gasp!) rich.

The growth in total incomes was concentrated among those making more than $1 million. The number of such taxpayers grew by more than 26 percent, to 303,817 in 2005, from 239,685 in 2000.

These individuals, who constitute less than a quarter of 1 percent of all taxpayers, reaped almost 47 percent of the total income gains in 2005, compared with 2000.

Now, I’m not all that good at the math, but even I know there’s a big fucking difference between 1 percent and 47 percent. I’m not really sure what the disparity between those numbers has been in previous five-year periods, but I’ll be looking into it. In the meantime, this paragraph kind of has a nice “no shit” quality about it:

The fact that average incomes remained lower in 2005 than five years earlier helps explain why so many Americans report feeling economic stress despite overall growth in the economy. Many Americans are also paying a larger share of their health care costs and have had their retirement benefits reduced, adding to their out-of-pocket costs.

So that great economic recovery that the administration has been puking all over themselves to brag about doesn’t seem to be actually benefiting anyone except (wait for it) the richest 1% in the country! Shocking!

Is it stupid for me to be talking about something that we all knew was going to happen under this administration? Well, maybe so, but I’ll say this much: these numbers speak VOLUMES about the bullshit that conservative armchair economist assholes trot out every time they’re talking about tax cuts. Call it “Trickle-down” or “Something D-O-O Economics” or whatever you like, it still adds up to the same thing–a fucking ruse that allows Republicans to pay off their biggest donors and leaves the middle class struggling to pay their bills.

Robert S. McIntyre, the director of Citizens for Tax Justice, said that even though he expected a few very wealthy people to reap most of the tax savings generated by lower tax rates on dividends and capital gains, the size of the savings “still takes your breath away.”

He said the tax savings at the top, combined with lower average incomes after five years, “shows that trickle down doesn’t work.”

The verdict on Jose Padilla is in, and Tim Grieve over at Salon’s War Room really stated it as well as anyone. He points out that inevitably, this will be covered as a victory for the Bush Administration, but it’s important to remember the circumstances surrounding his original arrest and the suspension of Habeas Corpus which commenced as they threw him in a military brig without counsel or access to due process.

When Padilla was arrested at Chicago’s O’Hare Airport in June 2002, then-Attorney General John Ashcroft interrupted a trip to Russia to tell the American people of a “significant step forward in the war on terrorism.” “We have captured a known terrorist who was exploring a plan to build and explode a radiological dispersion device, or ‘dirty bomb,’ in the United States,” Ashcroft said.

For the next three years, the Bush administration held Padilla — without charges — in military custody, where he was subjected to “sensory deprivation” and God knows what other “interrogation techniques” while being denied access to counsel. In the midst of it all, the Justice Department declared in June 2004 that Padilla had been recruited by al-Qaida and trained to blow up apartment buildings with natural gas.

Then in November 2005, just when it appeared that the Supreme Court might order him released, the administration abruptly moved Padilla out of military custody and handed him over to the civilian criminal justice system, where he was lumped in with two other defendants already facing federal charges.

For the last three months, prosecutors have put on their case in Miami. “For long stretches of time,” writes a reporter whose followed the case, the prosecutors “barely mentioned” Padilla. Dirty bombs? They never came up at all.

This is hopefully not the end of the line for this story. While Padilla doesn’t seem like a very nice guy, he should be held up as an example of one of the most heinous threats posed towards American Democracy; Not from dirty bombs or exploding buildings, but from our very own government which, given the abilities we’ve endowed ours with since 9/11, can listen to our phone calls, read our emails, and detain us indefinitely for reasons they’ve made up out of thin air.

Extra Credit: I’ve been following the Padilla story for a long time now, ever since an amazing episode of This American Life called “Our Secret Government” back in 2003, when Jack Hitt did a story on him. I really encourage you to listen to the entire episode (it’s free!), as all three segments are scintillating. My personal favorite is the FISA court segment, and that also holds a lot of significance in the recent news.

Watching the highlights from #756, one thing really stands out to me about Barry Bonds. His swing hasn’t changed much (though his physique has) over the years, and the cut he took to launch that ball out past the 420 marker was about as great a swing as has ever existed. The man is 43 years old, and I think we can probably be pretty sure he’s not still juicing. I grew up watching Bonds play for the Giants, and the pure balance and mechanical precision of the man’s swing when he’s hitting well is a familiar, welcome sight to anyone wanting the Giants to win a ballgame.

Strip away all the juicing and the venom surrounding the record for a minute, or don’t. It’s still there: Bonds is undeniably among the greatest pure hitters the game has ever seen. Add in all the gold gloves, stolen bases, MVPs and records, and it’s hard not to wonder how different this moment would be for everyone involved had steroids never been infused into Major League Baseball. You already know that there’s more than one man to blame for it, but Bonds’ achievement last night is a rare (but not unprecedented) thing for the history of baseball, in that the monumental nature of the moment highlights both what is great about his talent, and tragic about his character.

And by the way, the Giants lost to the Nationals last night, 8-6.  It’s finally fucking football season!

Putting aside for one minute the fact that Barry Bonds is reviled by folks in the media and Los Angeles, and the fact that he has become the face of steroid allegations all over the world of baseball, let’s review the reaction to home run #755 from the fans in San Diego (who have seen Bonds hit more home runs against them than any other team) and the reaction of commissioner Bud Selig. If you’ve been living under a rock for awhile you probably didn’t hear that he didn’t even applaud when Bonds tied Hank Aaron Saturday evening.

No matter how you feel about Bonds, and actually, because of the way you feel about him, this was history of a unique sort for the sports world. The great thing about sports is that you can choose to dismiss the garish numbers Bonds has put up over his career if you want to. Even though he’s never actually failed a steroids test, you can go with the popular assumption that he’s a cheater, and then write off the man’s natural talent and all his records because of that. I can’t blame you for it, and in fact my opinion of the man as a fan of both the Giants and the game lies somewhere in between reverence and shame. The point is that we’re fans, and fans are allowed to be critical because we pay to watch the games.

Major League Baseball, on the other hand, takes our money and we trust that they’ll do a good job preserving the game’s integrity, tradition and excitement. Bud Selig, for all the attendance records set during his tenure, oversaw every aspect of the administration of the league since being named Acting Commissioner in 1992. One of the most important choices he made was to turn a blind eye to a pervasive steroids-fueled culture within the sport just as long as the fans wanted to see more home runs hit. While everyone turns on Bonds as he breaks baseball’s most hallowed record, why the fuck isn’t anyone discussing the home run chase that “saved baseball” after the strike? Did Selig applaud Sammy Sosa and Mark McGwire as they chased Roger Maris? How can anyone forget Sammy Sosa’s claim that he built his physique with “Flinstones Vitamins” and McGwire’s reluctant admission at the time that he was using Andro, much less Big Mac’s non-denial of steroids use under oath in front of congress? Selig can acknowledge the damage the steroids scandal has done to the game by putting his fucking hands in his pockets instead of applauding, but when will he acknowledge that Bonds is a product of a culture that he, himself encouraged for years until the BALCO scandal and Canseco’s book?

The real irony here is that steroids brought people back to the ballpark after the strike, which makes ignoring it a great business decision by Selig. When Bonds hit number 755, he had to be told to stand up by one of his staffers, and then he stood there with his hands in his pockets while San Diego’s home fans stood and cheered. This display of indifference (and hypocrisy) should stand as an enduring image long after Bud’s retirement, and should serve to remind all the Bonds-hating reporters and fans about who made the soiling of Aaron’s record possible in the first place.

Remember all the way back in 2004, when the New York Times suppressed a story about the NSA eavesdropping on Americans’ phones before the presidential election? That was really fucking cheeky of them, don’t you think? Well, they finally let that particular flea-bitten, smelly cat out of the bag in December, and then some fun political posturing started, and the Republican-led congress decided they weren’t going to have hearings and such because well, constitution-be-damned, we’ve got to be listening for them there terrorists, goddamit! For the time being, it didn’t seem to matter that the president had broken the fucking law. Now we know that the program was so fucking sketchy that John Ashcroft wouldn’t even sign off on it. When John Ashcroft worries about the privacy of the American citizen, I start to tremble like a closeted gay man at a Justin Timberlake concert.

Well, when the Democrats took over this year, I was pretty sure we might see some changes around here, especially considering all the hand-wringing and posturing and what have you when they were in the minority. Changes were indeed afoot before congress left on their “Fuck Our Armed Forces” style vacation; those fightin’ dems got their shit in line and basically legalized the program. What a twist!

“This more or less legalizes the N.S.A. program,” said Kate Martin, director of the Center for National Security Studies in Washington, who has studied the new legislation.

Previously, the government needed search warrants approved by a special intelligence court to eavesdrop on telephone conversations, e-mail messages and other electronic communications between individuals inside the United States and people overseas, if the government conducted the surveillance inside the United States.

Today, most international telephone conversations to and from the United States are conducted over fiber-optic cables, and the most efficient way for the government to eavesdrop on them is to latch on to giant telecommunications switches located in the United States.

By changing the legal definition of what is considered “electronic surveillance,” the new law allows the government to eavesdrop on those conversations without warrants — latching on to those giant switches — as long as the target of the government’s surveillance is “reasonably believed” to be overseas.

I love this solution: Rather than fuck around by actually trying to hold anyone accountable for all the laws (and constitutional fucking amendments!) that the administration broke, let’s just sell our constituents’ civil liberties up the river and make all that shit legal so we can go pretend we have a happy marriage for a month! Genius! Have a great vacation, you spineless fucking knuckle-walking fuckups!

I hope that all the emails I send to the Syrian government every day are being read by the NSA. Every one of them contains a dirty limerick about a different member of the Bush Administration. I’m having a hell of a time finding something that rhymes with Zalmay Khalilzad.