The return of the ninja bandits

by twit

Via the Associated Press on September 24, 2008:

WASHINGTON (AP) – The FBI is investigating four major U.S. financial institutions whose collapse helped trigger a $700 billion bailout plan by the Bush administration, The Associated Press has learned.

Two law enforcement officials said Tuesday the FBI is looking at potential fraud by mortgage finance giants Fannie Mae (FNM) and Freddie Mac (FRE), and insurer American International Group Inc. (AIG) Additionally, a senior law enforcement official said Lehman Brothers Holdings Inc. (LEH) also is under investigation.

[…] Just last week, FBI Director Robert Mueller put the number of large financial firms under investigation at 24. He did not name any of the companies under investigation but said the FBI also was looking at whether any of them have misrepresented their assets.

Over the past year as the housing market cratered, the FBI has opened a wide-ranging probe of companies across the financial services industry, from mortgage lenders to investment banks that bundle home loans into securities sold to investors. Mueller has previously said the FBI’s hunt for culprits in the nation’s subprime mortgage crisis focused on accounting fraud, insider trading, and failure to disclose the value of mortgage-related securities and other investments.

This is so much funnier now that we know all about McCain campaign manager Rick Davis’ ties to Freddie Macupdate: so much funnier

“John McCain’s campaign manager and Freddie Mac essentially had what amounts to a secret half a million dollar lay-a-way plan. For almost three years and as late as last month, Freddie Mac made secret, monthly payments of $15,000 to Rick Davis’s firm, apparently in exchange for providing special access to a future McCain White House. If McCain knew about this, his presidential campaign should be in serious trouble. If he didn’t know about it, he ought to fire Rick Davis immediately,” said David Donnelly, Director of Campaign Money Watch.

but it does sound awful familiar

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McCain has a familiar plan for health insurance

by twit

It turns out that McCain’s plan to “fix” the health insurance system is actually a lot worse than causing five million more people to lose their health insurance.

Paul Krugman reports on September 19, 2008 that John McCain wrote an article,”Better Health Care at Lower Cost for Every American,” in the latest issue of the magazine Contingencies, and says this:

Opening up the health insurance market to more vigorous nationwide competition, as we have done over the last decade in banking, would provide more choices of innovative products less burdened by the worst excesses of state-based regulation.

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McCain means no more special interest giveaways

by lestro

Both campaigns are responding to this weekend’s fiscal crisis.

The Obama camp is reminding folks that John McCain has supported the president’s economic policies since they failed the first time around as Reagan’s economic policies and cost the current president’s dear old dad the big job.

(For the record, George H. W. Bush was not a party ideologue and actually tried to fix the economy instead of further pushing the country along the Reaganomic, trickle-down path, which he himself had dubbed “voodoo economics” in his campaign against the Gipper. Since Reagan’s spend spend spend ways had finally caught up, Bush was forced to raise taxes to help balance the budget, a unforgivable no-no among party ideologues.)

Meanwhile, the McCain camp is making sure that everyone knows that now that his friends are taken care of, there will be no more help for anyone:

The McCain-Palin campaign quickly released a new advertisement this morning, titled “Crisis” that focused on the troubled economy, citing foreclosures and job losses. It also repeated the candidate’s pronouncement that there would be no “special interest giveaways,” were the Republicans elected, as the site of Lehman Brothers in downtown Manhattan flashed upon the screen. In the ad, he promised to shore up protections for voters’ savings.

What friends? Why, the top-level Fannie and Freddie lobbyists he has working for him, of course. Now that their business has been saved by the government, screw these other folks.

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The exorcism of voodoo economics

by lestro

Why do Republicans seem to think that they best know how to run the economy when every indicator says otherwise?

The stark contrast between the whiz-bang Clinton years and the dreary Bush years is familiar because it is so recent. But while it is extreme, it is not atypical. Data for the whole period from 1948 to 2007, during which Republicans occupied the White House for 34 years and Democrats for 26, show average annual growth of real gross national product of 1.64 percent per capita under Republican presidents versus 2.78 percent under Democrats.

That 1.14-point difference, if maintained for eight years, would yield 9.33 percent more income per person, which is a lot more than almost anyone can expect from a tax cut.

But it’s not just growth. The whole idea of “trickle down” (or as George H.W. Bush famously dubbed it, “voodoo economics”) has been proven a sham both in practice and now on paper:

Professor Bartels unearths a stunning statistical regularity: Over the entire 60-year period, income inequality trended substantially upward under Republican presidents but slightly downward under Democrats, thus accounting for the widening income gaps over all.

Or in more basic terms:

It shows that when Democrats were in the White House, lower-income families experienced slightly faster income growth than higher-income families — which means that incomes were equalizing.

In stark contrast, it also shows much faster income growth for the better-off when Republicans were in the White House — thus widening the gap in income.

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