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Gates to Stay On as Sec Def

The announcement has been made that it looks as though Defense Secretary Robert Gates is going to be staying on in the Obama Administration for at least the next year. There are many among us on the left and in the anti-war crowd who have not been at all pleased with this turn of events.

But as I see it – and I believe I’ve made this point somewhere along the line in the past – you can’t expect a new Sec Def to swoop in and move one hundred and forty thousand troops out of Iraq in a year without huge problems. I mean, you couldn’t even unpack a box before you started planning the withdrawal, and it would likely be a disaster no matter who you were. I think that if you’re serious about your pledge to get troops out of Iraq in the next eighteen months, you have to maintain some sense of continuity in the military hierarchy to do that. Of course, my years of working as a Secretary of Defense((that would be zero years, for you keeping track)) don’t lend themselves to an educated opinion on the matter.

Besides which, I think anyone whose been paying attention knows that Robert Gates has been as forthcoming as any member of the Bush Administration with Congress and the public. That’s not saying a lot, I grant. But it seems like he’s more sure of himself and less inclined to stonewall for the sake of his personal reputation alone. I think that, with a new president of the same party as the majority in the Congress, you will probably see much more candor going forward. That’s just a guess.

And its a damned shame that we can’t do the same with the economic team, but goddamn. I’ve never seen a guy fall so far so fast as has Hank Paulson. Ben Bernanke just seems like a putz lately, too. These are two guys I know from watching Wall Street Week for years, and I’ve been nothing short of shocked to watch them crumble in the face of this crisis. So, on that level, we need new leadership.

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Bernanke Testifies Before Congress: Live Now!

Fed Chairman Ben Bernanke is getting grilled on the bailout and the capital reinvestment portion.  Why isn’t it required that banks lend?  What is the pricing of the illiquid assets being bought out under the original bailout?  He’s not looking happy.  Watch it live now: http://www.msnbc.msn.com/id/27277381/

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The Bailout: it’s About Us

I think that the conversation on the national level is beginning as usual to tear itself away from rational thought, towards the kind of feedback loop of nonsense we’ve come to expect.  Local media, meanwhile, is noticeably absent from the entire conversation, which we’ve also come to expect.  So, allow me to point out a few things that bear mentioning:

Regardless of the circumstances, the rich will never suffer.  The rich never do.  I’m not talking about your cousin Bob who is a stock broker for JP Morgan Chase.  I’m talking about the real movers and shakers.  The Vanderbilt’s, the Rockafellers, the names we don’t know and never will.  The top executives at the top firms who went to the top schools and who’ve lived their entire lives at the top.  This is not their economic crisis.  They’ll be just fine.

It will be all our down-stream friends and family – what is popularly called Main Street, these days – that will suffer the consequences of whatever will come next.  It’s our jobs that are hanging in the balance, our homes, our financial futures.  Hell, it’s our tax money.

So when seen from this lens, how can it be anything other than right and proper that Congress put the brakes on and demand some sort of recompense from those we bail out?  It’s not really about demanding things of other people, it’s about getting the change we want out of an opportunity to demand said change.  It’s not about taking from the rich – they will lose nothing of value; its about securing our own futures.  We can restore the Depression-era oversight and regulation that has kept our banking system on the straight and narrow since then – except in those times when Republicans have chosen to ignore them.

By-the-by: don’t get sucked into the refrain that regulations need to be “updated.”  Even Barack Obama is saying that crap.  “Updating” right and wrong is not needed.  Enforcing it is.

And the answer is simple: in the words of Dean Baker, sell the company assets, and you’re in.

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Write Down the Debt?

As a sign of just how bad things are for banks right now, Fed chairman Ben Bernanke is now recommending that they write down the debt of delinquent mortgagers in order to stem the tide of foreclosures.

What does this mean?  It means that housing values have dropped like a stone across the country, to the point that people hold mortgages on homes that are now much larger than the value of their homes.  For example, a home buyer might have gotten a mortgage to buy a property at $100,000, but with the decline of home values, that same home may only be worth $80,000.  This trend is exactly the opposite of what’s supposed to happen with real estate investments.

So, they’ve got cheap homes, what’s the problem?  Well, the problem is that they’re also getting squeezed by increased mortgage interest rates on their ARM mortgages, which is increasing their payments beyond affordable limits.  Ordinarily, you’d recommend that person just go ahead and refinance.  But since the property is worth less than what they owe on the mortgage principle (as opposed to the interest), our hypothetical home owner would only be able to finance $80,000.  That would leave them with a balance of just under $20,000 unpaid.

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Bernanke Advocates Stimulus Package

And George Bush is on board with it. Holy shit, people, George Bush thinks its a good time to start doing stuff about our economy. . . . you know we’re in trouble. Hoard gold, people.