Ex-fundie Frank Schaeffer in stunningly frank 12 minute Video

Via Crooks & Liars

From our friends at GritTV, the former Christian Fundamentalist Insider-turned Author expounds on the dangers of religious extremism and its takeover of the former Republican party~

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Why We Won't Get Real Healthcare Reform

George Carlin Nails It


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The Right’s Twisted Blame Game

By Joe Conason writing in New York Observer

As Barack Obama’s economic advisers confront choices that vary from bad to worse in their mission to revive the financial sector and the broader economy, it is worth remembering that those choices were in essence inherited by the president, who is still new to his office.

Listening to his critics, especially on the right, it would be easy to believe that the president is personally responsible for ballooning deficits, gigantic bailouts, ridiculous bonuses, nationalized institutions and careening markets. It would be easy to believe but it’s entirely false—and merely the latest episode in an old political con game that is all too typical of Washington. Ever since Election Day 2008, the usual suspects have been hard at work, deflecting responsibility from the Bush administration (and the Republicans in Congress) for the catastrophic effects of conservative policy enacted during the past eight years.

Within days after Obama’s victory, as stock prices fell, radio host and ideological commissar Rush Limbaugh exclaimed that we were already in the “Obama recession.” In fact, the economy had been shrinking for nearly a year by then, and the market was responding to bad economic news rather than the election result. But facts are inconvenient for propaganda—especially when politicians and pundits are seeking to escape blame for policies that have failed. Among the boldest perpetrators of this con game over the past few decades is Limbaugh, who shares with his fellow Republicans a peculiar method of timing the blame for economic woe. When he was flacking for the first President Bush back in 1992, he wrote: “The worst economic period in the last 50 years was under Jimmy Carter, which led to the 1981-82 recession, a recession more punishing than the current one.”

But of course the president during the 1982 recession was not named Carter; that president was the sainted Ronald Reagan. In January 1981, Reagan took the oath, and within his first three months had rammed through a budget that contained his historic “supply-side” tax cuts. Reagan budget director David Stockman had created computer simulations supposedly showing that those tax cuts would result in 5 percent growth in gross domestic product during the following year. Years later, when simulation failed to materialize as reality, Stockman referred cynically to that prediction as the “rosy scenario”—and admitted that it was essentially a fraud. Contrary to the rosy scenario, 1982 was the worst year since the Great Depression, with negative growth of 2.2 percent.

According to conservative theory, the mere announcement of massive tax cuts for the rich by a Republican president ought to have stimulated euphoria in the markets and rapid growth. And according to that same theory, as explicated by Limbaugh, the prospect of a Democratic president with a progressive agenda was what drove the markets down last autumn. But there is a double standard at work here.

When a Democrat is elected president, he is responsible for economic contraction even if he will not be inaugurated for three months. When a Republican is actually president, he need not be held responsible, even well after he takes office. If that strikes you as inconsistent, then you are beginning to notice how blatant deception passes for conservative ideology. But the deception is even worse than it appears at first glance. The same Republicans in Congress and on the radio who lionize the late Reagan now complain bitterly about the tax increases on the wealthy in President Obama’s budget. What they never mention is that their conservative idol, faced with the recession that they blamed on his predecessor, likewise raised taxes during an economic slump. Terrified by the looming deficits that resulted from the supply-side tax cuts, the Reagan administration rolled back many of the cuts just a year after they had passed—instituting what then amounted to the largest tax increase in American history. Those tax hikes took back about a third of the cuts legislated in 1981.

But that historic tax increase is never mentioned when Republican legislators invoke Reagan—and they still love to blame Carter for their hero’s recession. So even as critics roast President Obama and his treasury secretary, honesty requires that they acknowledge that the problems faced by Obama and Timothy Geithner are not of their making. Obama has held office only since Jan. 20—and if held to the Reagan standard, he deserves at least a year to begin correcting the Bush recession.

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12 Failures and Schemes that Lead to Current Multi Trillion $$ Bush Depression

Hat tip to: AlterNet

While somewhat lengthy for this pithy-striving blog, this IS WELL WORTH THE READ.


Thanks, Tadpole for calling my attention to this analysis!


$5 billion in lobbying to Congress got the finance industry lucrative legislative favors that paved the way for Wall Street's devastating collapse.


What can $5Billion buy in Washington?


Quite a lot.


Over the 1998-2008 period, the financial sector spent more than $5 billion on U.S. federal campaign contributions and lobbying expenditures.
This extraordinary investment paid off fabulously. Congress and executive agencies rolled back long-standing regulatory restraints, refused to impose new regulations on rapidly evolving and mushrooming areas of finance, and shunned calls to enforce rules still in place.

"Sold Out: How Wall Street and Washington Betrayed America," a report released by Essential Information and the Consumer Education Foundation (and which I co-authored), details a dozen crucial deregulatory moves over the last decade -- each a direct response to heavy lobbying from Wall Street and the broader financial sector, as the report details. (The report is available at: www.wallstreetwatch.org/soldoutreport.htm.) Combined, these deregulatory moves helped pave the way for the current financial meltdown.

Here are 12 deregulatory steps to financial meltdown:

1. The repeal of Glass-Steagall

The Financial Services Modernization Act of 1999 formally repealed the Glass-Steagall Act of 1933 and related rules, which prohibited banks from offering investment, commercial banking, and insurance services. In 1998, Citibank and Travelers Group merged on the expectation that Glass-Steagall would be repealed. Then they set out, successfully, to make it so. The subsequent result was the infusion of the investment bank speculative culture into the world of commercial banking. The 1999 repeal of Glass-Steagall helped create the conditions in which banks invested monies from checking and savings accounts into creative financial instruments such as mortgage-backed securities and credit default swaps, investment gambles that led many of the banks to ruin and rocked the financial markets in 2008.

2. Off-the-books accounting for banks

Holding assets off the balance sheet generally allows companies to avoid disclosing “toxic” or money-losing assets to investors in order to make the company appear more valuable than it is. Accounting rules -- lobbied for by big banks -- permitted the accounting fictions that continue to obscure banks' actual condition.

3. CFTC blocked from regulating derivatives

Financial derivatives are unregulated. By all accounts this has been a disaster, as Warren Buffett's warning that they represent "weapons of mass financial destruction" has proven prescient -- they have amplified the financial crisis far beyond the unavoidable troubles connected to the popping of the housing bubble. During the Clinton administration, the Commodity Futures Trading Commission (CFTC) sought to exert regulatory control over financial derivatives, but the agency was quashed by opposition from Robert Rubin and Fed Chair Alan Greenspan.

4. Formal financial derivative deregulation: the Commodities Futures Modernization Act

The deregulation -- or non-regulation -- of financial derivatives was sealed in 2000, with the Commodities Futures Modernization Act. Its passage orchestrated by the industry-friendly Senator Phil Gramm, the Act prohibits the CFTC from regulating financial derivatives. 5. SEC removes capital limits on investment banks and the voluntary regulation regime

In 1975, the Securities and Exchange Commission (SEC) promulgated a rule requiring investment banks to maintain a debt to-net capital ratio of less than 15 to 1. In simpler terms, this limited the amount of borrowed money the investment banks could use. In 2004, however, the SEC succumbed to a push from the big investment banks -- led by Goldman Sachs, and its then-chair, Henry Paulson -- and authorized investment banks to develop net capital requirements based on their own risk assessment models. With this new freedom, investment banks pushed ratios to as high as 40 to 1. This super-leverage not only made the investment banks more vulnerable when the housing bubble popped, it enabled the banks to create a more tangled mess of derivative investments -- so that their individual failures, or the potential of failure, became systemic crises.

6. Basel II weakening of capital reserve requirements for banks

Rules adopted by global bank regulators -- known as Basel II, and heavily influenced by the banks themselves -- would let commercial banks rely on their own internal risk-assessment models (exactly the same approach as the SEC took for investment banks). Luckily, technical challenges and intra-industry disputes about Basel II have delayed implementation -- hopefully permanently -- of the regulatory scheme.

7. No predatory lending enforcement

Even in a deregulated environment, the banking regulators retained authority to crack down on predatory lending abuses. Such enforcement activity would have protected homeowners, and lessened though not prevented the current financial crisis. But the regulators sat on their hands. The Federal Reserve took three formal actions against subprime lenders from 2002 to 2007. The Office of Comptroller of the Currency, which has authority over almost 1,800 banks, took three consumer-protection enforcement actions from 2004 to 2006.

8. Federal preemption of state enforcement against predatory lending

When the states sought to fill the vacuum created by federal non-enforcement of consumer protection laws against predatory lenders, the Feds -- responding to commercial bank petitions -- jumped to attention to stop them. The Office of the Comptroller of the Currency and the Office of Thrift Supervision each prohibited states from enforcing consumer protection rules against nationally chartered banks.

9. Blocking the courthouse doors: Assignee Liability Escape

Under the doctrine of “assignee liability,” anyone profiting from predatory lending practices should be held financially accountable, including Wall Street investors who bought bundles of mortgages (even if the investors had no role in abuses committed by mortgage originators). With some limited exceptions, however, assignee liability does not apply to mortgage loans, however. Representative Bob Ney -- a great friend of financial interests, and who subsequently went to prison in connection with the Abramoff scandal -- worked hard, and successfully, to ensure this effective immunity was maintained.

10. Fannie and Freddie enter subprime

. . .Fannie and Freddie are not responsible for the financial crisis. They are responsible for their own demise, and the resultant massive taxpayer liability. . . . In fact, the motivation was the for-profit nature of the institutions and their particular executive incentive schemes. . . . .Massive lobbying -- including especially but not only of Democratic friends of the institutions -- enabled them to divert from their traditional exclusive focus on prime loans.

11. Merger mania

The effective abandonment of antitrust and related regulatory principles over the last two decades has enabled a remarkable concentration in the banking sector, even in advance of recent moves to combine firms as a means to preserve the functioning of the financial system. The megabanks achieved too-big-to-fail status. While this should have meant they be treated as public utilities requiring heightened regulation and risk control, other deregulatory maneuvers (including repeal of Glass-Steagall) enabled them to combine size, explicit and implicit federal guarantees, and reckless high-risk investments.

12. Credit rating agency failure

With Wall Street packaging mortgage loans into pools of securitized assets and then slicing them into tranches, the resultant financial instruments were attractive to many buyers because they promised high returns. But pension funds and other investors could only enter the game if the securities were highly rated.

The credit rating agencies enabled these investors to enter the game, by attaching high ratings to securities that actually were high risk -- as subsequent events have revealed. The credit rating agencies have a bias to offering favorable ratings to new instruments because of their complex relationships with issuers, and their desire to maintain and obtain other business dealings with issuers.

This institutional failure and conflict of interest might and should have been forestalled by the SEC, but the Credit Rating Agencies Reform Act of 2006 gave the SEC insufficient oversight authority. In fact, the SEC must give an approval rating to credit ratings agencies if they are adhering to their own standards -- even if the SEC knows those standards to be flawed.


From a financial regulatory standpoint, what should be done going forward? The first step is certainly to undo what Wall Street has wrought. More in future columns on an affirmative agenda to restrain the financial sector. None of this will be easy, however. Wall Street may be disgraced, but it is not prostrate. Financial sector lobbyists continue to roam the halls of Congress, former Wall Street executives have high positions in the Obama administration, and financial sector propagandists continue to warn of the dangers of interfering with "financial innovation."