Tag: bailout

Fairpoint Tries To Scuttle Maine Broadband Stimulus Grant

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Ya know, if my state got a grant for $24.5 million to build out broadband networks in underserved areas, I would jump for joy. Not only does that mean jobs in the short term, but economic development in the long term. So why did Maine State Senator Lisa Marrache (D-Waterville) and Maine State Rep. Stacey Fitts (R-Pittsfield) introduce legislation to keep the University of Maine from participating in the $30 million partnership project with Great Works Internet (also based in Maine)? is it a coincidence that Fairpoint — that champion of rural private sector broadband which has proved the power of the private sector by defaulting on debt, declaring bankruptcy, and pissing off regulators — has been busy challenging this application and has been chanting the usual slogans about how the public sector should (a) keep out of broadband, and (b) hurry up with my Universal Service Fund bailout?

Without knowing whether Marrache and Fitts are direct recipients of Fairpoint’s campaign contribution largess, or merely ideologically sympatico with the notion of keeping federal money for job creation out of Maine and telling their constituents that they’ll get broadband when Fairpoint is good and ready to give it to them, this little incident provides a valuable reminder why Congress ought to finally pass the Community Broadband Act, which would prevent states legislatures from shafting their citizens in the name of ideological purity.

More below . . .

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Oh, those witty JP Morgan Guys, Pissing on Little Timmy Geithner

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JP Morgan Exec mocks Treasury Sec for bailout money.

To which I cannot help but respond:

I am glad Mr. Dimon is so pleasant with us;
His words and his sneer, I thank him for:
When we are next met in Congress assembled,
We will, by God’s grace, pass such a bill as
Shall send his wits into the hazard.
And we understand him well,
How he comes now with memory of wilder days,
When he did reign as Prince untouchable
And those set to guard against his excesses
Catered to his whims and kept him safe against all
Accountability that had once been law.
What wonder when, having supped so freely and so long
at public feast, that he should task us so
for daring to restrain his monstrous appetites?

So tell the pleasant prince this mock of his
Hath turn’d his balls to gun-stones; and his soul
Shall stand sore charged for the wasteful vengeance
That shall fly with them. For I swear
His jest will savour but of shallow wit,
When his colleagues weep more than ever they did laugh at it.

(With apologies to Henry V)

I do hope the folks at Treasury who fought so hard to restrain the “radical” demands that public money have some conditions attached take note of how grateful their financial sector “clients” are for their services.

Stay tuned . . . .

Guest Post: Bailout Or Bust

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I’m pleased to post a guest blog posting from Professor Alan L. Feld of Boston University School of Law. Two disclaimers are in order. First, the views expressed herein by Prof. Feld are his own, and not those of B.U. Second, he is my Dad — a matter on which I am quite pleased and proud.

For his position on the proposed auto industry bail out, see below . . . .

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Ah, Capitalism, er, Socialism, er, Paulsonism?

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Boy, that sure was some crisis

Wall Street banks in $70bn staff payout
Pay and bonus deals equivalent to 10% of US government bail-out package

Imagine if we had not had the bailout bill! The Wall Street types who shit the worldwide bed might have missed their outlandish compensation! One shudders to think.

But we’re safe now; at least until their bonuses come due next year, when we’ll have to have another emergency to make sure they get paid.

Run the banks?

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On some other blogs I read (obsessively, lately), I’m starting to see people calling for a run on the banks. Go down and take out $700.00. Or or $70. Or $7,000. Whatever you can afford. That’s what they’re saying, not me. The idea is that even though nobody in the country likes this bailout, congress is going to vote for it. Since they won’t listen to our calls, faxes and letters, send a message that they cannot ignore.

Frankly, it doesn’t sound like a bad idea to me. Sure, it’s like burning down your own house to make a point, but it’s better than just being robbed at gunpoint with no protest at all.

Ayn Rand in Heaven

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Ayn Rand was a muddle-headed thinker who wrote wooden prose, “novels” that were really merely polemics .1 She maintained the beliefs that all wealthy people merited their wealth, that all poor people merited their poverty, that selfishness was a virtue, that the myth of Robin Hood was pernicious because Robin Hood stole from the rich and gave to the poor. Because she did not believe in history (or complexity or nuance), Rand did not count as important that Robin Hood lived during feudal times. In her philosophy, it does not matter to her how wealth and poverty were distributed in feudal times, nor how the wealthy got wealthy. Her fictional world is ahistorical. In her world, government is synonymous with force, but in her worldview, the only legitimate use of force is to take from the poor and give to the rich. She loathes democracy and thinks well of plutocracy. The current Bush/Cheney government of plutocrats would be very much to her liking, I think.

She is a high priestess in the Cult of the Market Gods.

Ayn Rand’s writing is known be esteemed by, among others, Alan Greenspan (“the whore”, as my father calls him), and by impressionable teenage boys with little social success. I don’t know if Dick Cheney is a fan of Rand, but he is the epitome of a Randian hero.

Anyway, Rand is dead, presumably in Heaven. From whence she must be beaming down upon us with great joy at the developments of the past few weeks, when a hundred billion dollars was taken from the treasury and given to the investor class, all in the name of “stabilizing the market” (Market gods angry! Market gods want eat money! Must feed market gods! Paulson! Bernanke! Feed market gods more money! Now!) The wealth transfers of the “Resolution Trust Corporation” bailout of the S&Ls under the Reagan regime, the Bear Stearns and Fannie Mae/Freddy Mac handouts of more recent times were as mere hors d’oeuvres before the meal of the Great Investor Class Bailout of 2008. It’s about time for a Randian beatification or maybe even apotheosis, wouldn’t you say.

UPDATE: I forgot to include a link to this diary entry over on Daily Kos, which got me thinking. I agree with the post 100%.

1. When the woman who is now my wife and I were first dating, we found ourselves talking about Ayn Rand novels one afternoon. I had read Atlas Shrugged and one or maybe two others, but not The Fountainhead. She summarized it for me in one memorable sentence: “In this one he’s an architect.” Really, if you’ve read one of her novels, you’ve read them all.

And the Wheels Fell Off…

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For the first time since the Federal Reserve began tracking home equity data in 1945 the amount of equity homeowners hold in their homes fell below 50% in the fourth quarter of 2007 according to the Federal Reserve. More interesting still is the finding by Moody’s Economy.com that approximately 10% of homeowners now have zero or negative equity in their homes. This resulted from a 8.9% drop in U.S. home prices in the fourth quarter of 2007.

And analysts are predicting roughly an equal decline in home prices in the first quarter of 2008. That will put nearly 20% of homeowners at zero or negative equity.

What happens if homeowners are genuinely the rational actors of neoclassical economics? They default on their mortgages the moment they reach zero equity and wait for the up to two years it would take for their lender to force them out by foreclosure. That means large-scale bank failures even with a massive federal bailout. Can we say the magic words “conjunctural crisis of capital”?

More below…

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