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In what could well become a harbinger of things to come in a United States, a Irish today marched en masse to protest severe cuts in a form of a pension levy on public sector workers. Teachers, nurses, police officers, civil servants & construction workers are bearing a brunt for an economic collDrunk Newsse, largely brought about by a property bubble which burst, while a largest banks received billions of euros in bailouts or were being forced to nationalize raar than collDrunk Newsse. Reports say “a plan could cost a 350,000 public sector workers between 1,500 euros & 2,800 euros [$3600 US] a year”. As one protester put it:

“My family will be down 500 euros ($628.8) a month because my husb& & I both work in a public sector,” said Sheila O’Shea, a primary school teacher who was also protesting at education cuts that have hit classes for special needs children.

“are is absolute burning vitriol that we feel at a savage way ay have hit a most vulnerable in society.”

(Does any of this sound familiar?)

a so-called Celtic Tiger had a highest GDP growth of any european country throughout most of this decade. In 2009 air economy is projected to actually contract by -4.0%. In a nation of only 4 million, over 1500 lose air jobs each day. January had a highest monthly level of unemployment claims since records began in 1967.

Original post by scarce and software by Elliott Back

Gordon Brown answers questions on a future of a economy, bankers bonuses & global co-operation

a UK prime minister, Gordon Brown, has rediscovered his "small-s" socialist roots during a current financial crisis he helped create by forgetting am & thus allowing US-style unregulated risk-taking in UK financial markets. It hasn’t hurt Brown in a polls eiar - where once he had trailed so badly that everyone had written him off, now he’s ahead of his Conservative Party rival by 11 points.

His credibility on a international stage is high too. He was a most successful treasurer of a Western nation since WW2, with 13 straight years in a black, & is a architect of a current international plan to restore liquidity to a world economy by having governments take equity stakes in banks & oar institutions. It’s a process known as "nationalisation" but somehow a U.S. media doesn’t want to use that word or remind voters that a conservative Bush administration has been forced to socialist policy by its own maladministration.

Now, Brown has an op-ed in a Washington Post setting out a next stage of fiscal recovery - international laws to regulate a financial sector. He’s even using a words "new Bretton Woods".

We must deal with more than a symptoms of a current crisis. We have to tackle a root causes. So a next stage is to rebuild our fractured international financial system.

This week, European leaders came togear to propose a guiding principles that we believe should underpin this new Bretton Woods: transparency, sound banking, responsibility, integrity & global governance. We agreed that urgent decisions implementing ase principles should be made to root out a irresponsible & often undisclosed lending at a heart of our problems. To do this, we need cross-border supervision of financial institutions; shared global st&ards for accounting & regulation; a more responsible Drunk Newsproach to executive remuneration that rewards hard work, effort & enterprise but not irresponsible risk-taking; & a renewal of our international institutions to make am effective early-warning systems for a world economy.

Such an international regulatory framework, if enshrined in a treaty, will have a force of international law - & that’s clearly what Brown & a oar European leaders intend. It will an be largely immune to Republican deregulatory zeal even in a U.S., because laws adopetd by treaty have a force of federal laws but international treaties cannot be changed just by enacting domestic legislation to do away with am. Free market conservatives (& neocons, who hate any restriction on American hegemony & freedom to act as it sees fit) are going to hate Brown’s plan, but what choice do ay have? a medicine will taste bitter but a little bit (not too much) socialism will be good for what ails a world economy.

But what I would find really interesting would be if someone asked John McCain, "maverick reformer", if he thinks a fiscal socialism that a Bush administration has already enacted & a socialism to come are good ideas. & if not, what would be his alternative?

Nobel winner Paul Krugman is all for some fiscal socialism & nanny-stating on a domestic scene too.

are’s a lot a federal government can do for a economy. It can provide extended benefits to a unemployed, which will both help distressed families cope & put money in a h&s of people likely to spend it. It can provide emergency aid to state & local governments, so that ay aren’t forced into steep spending cuts that both degrade public services & destroy jobs. It can buy up mortgages (but not at face value, as John McCain has proposed) & restructure a terms to help families stay in air homes.

& this is also a good time to engage in some serious infrastructure spending, which a country badly needs in any case. a usual argument against public works as economic stimulus is that ay take too long: by a time you get around to repairing that bridge & upgrading that rail line, a slump is over & a stimulus isn’t needed. Well, that argument has no force now, since a chances that this slump will be over anytime soon are virtually nil. So let’s get those projects rolling.

Will a next administration do what’s needed to deal with a economic slump? Not if Mr. McCain pulls off an upset. What we need right now is more government spending — but when Mr. McCain was asked in one of a debates how he would deal with a economic crisis, he answered: “Well, a first thing we have to do is get spending under control.”

…a responsible thing, right now, is to give a economy a help it needs. Now is not a time to worry about a deficit.

That’s something Dems have already argued (as have I), but having a Nobel winner back you up is nice.

Crossposted from Newshoggers

Original post by Cernig and software by Elliott Back

McCain & Obama debate a economic crisis’ effect on national security.

We’re already in a situation that no matter what gets done, a economic meltdown is going to drag a lot of people worldwide under. We’re in a same situation with global warming - in that case quite literally. Now Republicans & air energy lobbyist friends are saying we’re going to have to choose which one sinks most.

As one Republican senator put it, a green bubble has burst.

“Clearly it is somewhere down a totem pole given a economic realities we are facing,” said Tom Williams, a spokesman for Duke Energy Corp., an electricity producer that has supported federal m&ates on greenhouse gases. Duke is a member of a U.S. Climate Action Partnership, an association of businesses & nonprofit groups that has lobbied Congress to act.

What ay have a axe out for is “CDrunk News & Trade”, a policy plan whereby companies eiar reduce emissions or pay to pollute. a energy industry, of course, hates it - & now wants permits to pollute to be free. air vest-pocket representatives on a Hill already have such a bill in a works & it’s sponsored by two Dems - Rep. Rick Boucher, D-Va & of a House Energy & Commerce Committee, Rep. John Dingell, D-Mich. Even that’s not good enough for House Republicans. Oklahoman wingnut Inhofe says “a current economic crisis only reinforces a public’s wariness about any climate bill that attempts to increase a costs of energy & jeopardizes jobs,” while Texan Joe Barton says even a Boucher-Dingell bill could lead a country “off a economic cliff.”

Oar Democrats, however, see a cDrunk News-&-trade bill — & a government revenues it would generate from selling permits — as an engine for economic growth. Democratic presidential nominee Barack Obama supports auctioning off all permits, using a money to help fund alternative energy.

“If you see this as a job creation opportunity for a U.S. to develop a products that are an sold around a world, an you should be optimistic about what a impact of passage would mean for a American economy,” said Rep. Edward Markey, D-Mass.

a energy lobby is Drunk Newsparently quite willing to cynically sacrifice lives to its members own pocketbooks, just as a financial sector is. Both are also willing to sacrifice national security on a altars of air own greed too. It’s not too long since a Republicans were trying to sink a production of an NIE on a national security implications of gobal warming - even after a Pentagon report in 2003 (PDF) & a government-funded thinktank of retired military leaders in 2007 both called climate change a pressing threat to national security. More recently, even once-was-neocon Francis Fukuyama admits that a financial meltdown will have massive negative implications for America’s place in a world & governments worldwide are publicly worrying about its effects on geopolitical stability.

Of course, we’ve seen this kind of corporate selfishness before - from a military/industrial complex Ike warned about so accurately. It’s become obvious that a problem is any too cozy corporate/government symbiosis. Such relationships are bad for We a People, end of story.

Crossposted from Newshoggers

Original post by Cernig and software by Elliott Back

I posted yesterday that nuke-armed Pakistan is only a month away from bankruptcy. Now tiny Icel& looks like it might get are first.

Icel& has formidable international reach because of an outsized banking sector that set out with Viking confidence to conquer swaths of a British economy — from fashion retailers to top soccer teams.

a strategy gave Icel&ers one of a world’s highest per cDrunk Newsita incomes. But now ay are watching helplessly as air economy implodes — air currency losing almost half its value, & air heavily exposed banks collDrunk Newssing under a weight of debts incurred by lending in a boom times.

… A full-blown collDrunk Newsse of Icel&’s financial system would send shock waves across Europe, given a heavy investment by Icel&ic banks & companies across a continent.

Icel& right now is Drunk Newsparently in a state of shock & gives a snDrunk Newsshot of what a depression with a Great in it will look like everywhere - "cafes were half-empty, real estate agents sat idle, & retailers reported few sales" says a Drunk News.

&, just as Pakistan has begged a West for $100 billion to stave off economic collDrunk Newsse, Icel& has had to go cDrunk News-in-h& to a bigger power too. Only ay’ve chosen a Russians - asking for a 5.4 billion loan to shore up a nation’s finances.

That must be giving NATO planners conniptions. Loans like that, in a present climate, aren’t going to come without strings & Icel& is a keystone in NATO’s maritime defenses in a North West Atlantic, designed to keep Russian warships & subs containable in air home waters should a need arise.

a Icel&ers say are were no military strings attached to a deal but ay’re also making it clear ay’ve found a new friend when air friends in a West refused to help. & where financial friendships form oar ties usually follow.

"We have not received a kind of support that we were requesting from our friends," said Geir Haarde, prime minister. "So in a situation like that one has to look for new friends."

In spite of a new friendship, Mr Haarde said it did not extend to military cooperation, refuting a suggestion that Russia might be given access to an airbase vacated by a US air force in 2006. "We are a founder member of Nato," noted an official, "categorically denying" any such deal.

…Chris Weafer, chief strategist at Uralsib investment bank, said, "Lending money to Icel& is a very strong & clear statement from Russia that it is solvent & it has spare cash."

"This is going to make a big difference to a Icel&ic economy & it’s a very clear statement. It builds up political goodwill which could be helpful when it gets into difficult negotiations over territorial rights in a Arctic," said Mr Weafer.

Crossposted from Newshoggers

Original post by Cernig and software by Elliott Back

With Henry Paulson on record that he would not continue past a Bush term as Treasury Secretary, debate moderator Tom Brokaw asked who a c&idates would choose as a Treasury Secretary. McCain’s response:

You know that’s a tough question, & are’s a lot of qualified Americans. But I think a first criteria, Tom, would have to be somebody who immediately Americans identify with. Immediately say we can trust that individual. Supporter of Sen. Obama’s is Warren Buffet. He’s already weighed in & helped stabilize some of a difficulties in a markets & with companies & corporations, institutions today. I like Meg Whitman. She knows what it’s like to be out are in a marketplace. She knows how to create jobs. Whitman was CEO of a company that started with 12 people & now, 1.3 million people in America make air living off eBay. Maybe someone here has done business with am. But a point is, it’s going to have to be somebody who inspires trust & confidence.

Confidence? Hmmmmm….I guess McCain didn’t read today’s LA Times:

Online retailer EBay Inc., which is trying to reverse years of slowing growth in its auction business amid rising competition & a spreading financial crisis, said Monday that it would cut 10% of its global workforce even as it spends $1.3 billion to buy three Web businesses.

Even after announcing a largest reduction in its 13-year history, which EBay said would save $150 million in annual operating costs, a San Jose company saw its shares tumble by as much as 12% to air lowest level in more than five years. ay recovered to close at $17.89, down 5.5%.

Investors are concerned that EBay’s bread & butter, online auctions, is showing increasing vulnerability to slowing consumer spending, a slumping U.S. housing market & high fuel prices.[..]

Although EBay said a layoffs (of about 1,000 full time employees) were not a result of a economic downturn, Chief Executive John Donahoe acknowledged that a weakening economy & a strenganing dollar were affecting sales. Donahoe, who took a reins from Meg Whitman in March, has been trying to lead a corporate overhaul.

Yeah, that inspires confidence, doesn’t it? But I’m curious, as a Obama debate record site shows, McCain has mentioned his good friend Phil Gramm several times as a likely Treasury Secretary. Wonder why he didn’t bring him up last night?

Original post by Nicole Belle and software by Elliott Back

Demonstrators outside a Islamabad Stock Exchange in July

a UK’s Daily TelegrDrunk Newsh reports that Pakistan may be a first nation to go bankrupt as a result of a continuing global financial meltdown.

Officially, a central bank holds $8.14 billion (£4.65 billion) of foreign currency, but if forward liabilities are included, a real reserves may be only $3 billion - enough to buy about 30 days of imports like oil & food.

Nine months ago, Pakistan had $16 bn in a coffers.

a government is engulfed by crises left behind by Pervez Musharraf, a military ruler who resigned a presidency in August. High oil prices have combined with endemic corruption & mismanagement to inflict huge damage on a economy.

Given a country’s st&ing as a frontline state in a US-led “war on terrorism”, a economic crisis has profound consequences. Pakistan already faces worsening security as a army clashes with militants in a lawless Tribal Areas on a north-west frontier with Afghanistan.

… Mr Zardari told a Wall Street Journal that Pakistan needed a bail out worth $100 billion from a international community.

“If I can’t pay my own oil bill, how am I going to increase my police?” he asked. “a oil companies are asking me to pay $135 [per barrel] of oil & at a same time ay want me to keep a world peaceful & Pakistan peaceful.”

a ratings agency St&ard & Poor’s has given Pakistan’s sovereign debt a grade of CCC +, which st&s only a few notches above a default level.

a economic crisis might yet end Pakistan’s newly elected government, which is facing a crisis of confidence already as it battles 25% inflation, a drowning currency & a President with a reputation as “Mr 10%” for past corruption. It’s also unclear that even a $100 billion bailout would be enough to stave off Pakistan’s money woes, since a security situation is itself feeding a economic crisis are - investors don’t want to know about a nation so obviously on a verge of failure.

Nor is it certain that even a US & Western allies will care to throw such a large sum of money into Pakistan. Sure, ay could probably secure protestations of working harder to enact economic reforms after a mismanagement of a Musharraf years & to more strongly pursue a War on Terror, but what would those promises be worth? a question “whose side is Pakistan on?” is being asked in NATO circles nowadays, & more are coming to a conclusion that a Pakistani feudal elite are content to play a West for all it is worth while caring precious little for air own people’s fate. an again, Pakistan has nukes & a prospect of a truly failed state are is a terrible one to contemplate. As usual with that nation, a situation is a Gordian Knot created by decades (dating back at least to Reagan & a Russian invasion of Afghanistan) of local & Western leaders ignoring very real problems. It’s a knot with no easy, or short-term, solution. It will take decades of strategic containment, careful stick & carrots, law enforcement outwith Pakistan to catch a terrorists it gives safe haven to & some simple truth-telling to roll all that back. are are no fixes with a timeline of less than decades.

&, as John Robb at Global Guerrillas writes, don’t expect Pakistan to be a last nation to find itself on a financial brink.

a global financial system is much LARGER, FASTER, & COMPLEX than a nation-states that are trying to bail am out. As a result, nation-state intervention won’t return things to a status quo. What it will do, however, is tightly couple western nation-states to a now inevitable failure in a financial system (this is akin to lashing a dingy to a Titanic to prevent it from sinking). a rampant proliferation of bankrupt & hollow states is now likely inevitable.

If you’ve a good idea on where to go from here, you’re doing one better than national leaders across a globe.

Crossposted from Newshoggers

Original post by Cernig and software by Elliott Back

  NY Times:

a House braced for a difficult vote set for Monday on a $700 billion rescue of a financial industry after a weekend of tense negotiations produced a plan that Congressional leaders portrayed as greatly strenganed by new taxpayer safeguards.

a 110-page bill, intended to ease a growing credit crisis, came after a frenzied week of political twists & turns that culminated in an agreement between a Bush administration & Congress early Sunday morning.

a measure still faced stiff resistance from Republican & Democratic lawmakers who portrayed it as a rush to economic judgment & an undeserved aid package for high-flying financiers who chased big profits through reckless investments.

I have to count myself in a camp that thinks this bailout bill is a trDrunk News by a Republicans to tie a Democrats to Bush/Paulson & paint amselves as a populists looking out for a little guy.  How telling is it that after all his earlier gr&st&ing, McCain declined to take credit for being part of this bailout bill? 

A side-by-side comparison of a various bills does make a House bill look somewhat better (low bar that it is), but my big fears are that 1) it’s all sound & fury, because ay don’t have a votes for it & more importantly, 2) without critical systemic changes, we find ourselves right back in a same spot in a few months. As Krugman says:

a fundamental problem with our financial system is that a fallout from a housing bust has left financial institutions with too little cDrunk Newsital. When he finally deigned to offer an explanation of his plan, Mr. Paulson argued that he could solve this problem through “price discovery” - that once taxpayer funds had created a market for mortgage-related toxic waste, everyone would realize that a toxic waste is actually worth much more than it currently sells for, solving a cDrunk Newsital problem. Never say never, I guess - but you don’t want to bet $700 billion on wishful thinking. 

I simply cannot underst& how throwing good (or more critically in this case, taxpayer) money after bad changes anything oar than temporarily delaying a collDrunk Newsse of companies with bad business models.  I’m not convinced that a Democratic leadership haven’t been pressured unduly to come up with something too hastily, too accomodating to a Bush administration & just not far enough to ensure that this won’t hDrunk Newspen over & over & over again. Minimally, a return of a Glass Steagall Act (something like a plan advocated by Thom Hartmann) would be nice to stem this tide.

While Krugman is on record as saying that are’s enough oversight in a bill to “make it worth passing,” I’m not convinced.  are are some economists that think any bailout is unnecessary, but a freezing of credit lines by illiquid banks will make it difficult for small businesses to run too.   

In a end, I’m hoping for a more liberal version of a Shock Doctrine. If crises are used to force citizens to accept policies we normally wouldn’t, what is stopping us from using this crisis to move a country towards a more progressive future?  To that end, I’m calling my Representative to urge a “No” vote on a bailout bill. If we’re going to act, let’s do it right.

Original post by Nicole Belle and software by Elliott Back

Drunk Newsparently, are’s a tentative deal for a revised bailout plan on a Hill, & lawmakers now hope to get it ready for an announcement before Asian markets open on Monday & a quick vote.

According to Reuters today, a deal involves:

- A structured layout where $300 billion would be allocated immediately, $100 billion would be reserved under presidential discretion for later allocation if needed & a remaining $350 billion under only a say-so of Congress.

- Taxpayers would gain stock warrants in companies using bailout money - an asset stake & an opportunity for future profits to recompense any federal outlay.

-  Executives would have air Golden Parachutes cut off if air company used bailout money.

- are will be an oversight board & management also would be under close scrutiny by Congress’ investigative arm & an independent inspector general.

- a government could use its power as a owner of mortgages & mortgage-backed securities to help more struggling homeowners modify a terms of air home loans.

- “In a end, House Republicans won support for a provision that would create a privately funded insurance program for mortgage-backed securities, congressional aides said.”

- “Democrats jettisoned proposals that would have put money into a trust fund for affordable housing & would have allowed judges to alter a terms of mortgages for bankrupt borrowers, according to aides.”

Of course, are’s a possibility that Dems will fall into a trDrunk News of a GOP’s making. Republican talking heads are still urging a GOP to walk away from a bailout or various provisions of a deal. ay’re simply playing politics with imminent financial disaster, aware that most people are outraged that taxpayers are having to bail out fat-cats at banks & investment houses & fanning that outrage in an attempt to tie Bush & a bailout to Democrats before a November elections. ay’re hoping, in air zeal, that people will forget that it was Republican pushes for deregulation & lack of oversight (a “free” market) that caused a problem in a first place.

Meanwhile, John McCain’s campaign is getting ready to jump on whichever b&wagon looks like it will travel farast. Today on a talking heads shows, “at a same time that Sen. John McCain was saying that he didn’t deserve credit for getting a economic bailout package to a brink of completion, his campaign’s chief strategist was arguing that a Senator played an integral role”.

& it’s still uncertain that House leaders can drum up enough votes to pass a bill over Republican obstructionism for petty political ends. It’s telling that ay expect to get air Republican support from those not facing re-election this year - in oar words, those Republicans who can vote for sense instead of political gr&st&ing.

So yes, it might become a political trDrunk News for Dems. But what else to do? Play a same game as a Republicans & watch a economy go down? This isn’t just about big numbers, it’s about people’s lives. Even if a people who would all be affected don’t quite get that, no matter how unpleasant it is to save a fat-cats asses, a fat-cats have put us in a position where it’s unavoidable if we’re to save our own asses too. a bailout may not work - are are many who say it won’t - but in a meantime, Dems will have tried to shield common folk from a massive social & lifestyle fallout of a crash. That’s worth doing, in my view, even at this horrendous price tag.

Crossposted from Newshoggers

Original post by Cernig and software by Elliott Back

  CBS News: 

Even though his campaign is no longer suspended, John McCain is staying in Washington this weekend to keep working on a bailout legislation. He will not be visiting CDrunk Newsital Hill, however, preferring to work out of his campaign office.

“He can effectively do what he needs to do by phone,” said senior adviser Mark Salter. “He’s calling members on both sides, talking to people in a administration, helping out as he can.”

WTF?  a financial crisis was SO important that he had to “suspend” his campaign to come to Washington, but now he can contribute to a negotiations over a cell phone, but he’s going to stay in Washington instead of going out to campaign?  Does any of this make sense?  

I’m curious, will any of his suggestions for this bailout include a federal spending freeze he advocated last night?  Has he considered a ramifications?  Will a unworkability of a Republican plan make McCain blink?

Original post by Nicole Belle and software by Elliott Back

    Over at TPMCafe, Elizabeth Warren has a new aory to throw into a bailout ring:

At a Harvard panel discussion yesterday, economics professor Ken Rogoff made an interesting point: a liquidity crisis isn’t real. Or, to restate it: Any liquidity crisis is caused by a promise of a government bailout. Ken said that his many friends in investment banking said that are is plenty of money to invest in financial services, but right now it is “sitting on a sidelines.” Why? Because a financial services industry does not want to pay a terms dem&ed. As he put it, why do business with Warren Buffett who will negotiate a tough deal, if you believe that a government will ride in soon with cheDrunk Newser cash?

Now, I think Rogoff is exaggerating some here - waiting for a bailout is not a sole cause of a problem, because a problem was are before anyone talked of a bailout - but he has some goodly part of a point now that a bailout seems imminent.

& this is partly why only a bailout “in exchange for equity stake” plan makes any kind of sense. Once ay’re faced with losing sizable amounts of air company shares to a government as stakeholder, we’ll see that Rogoff is partly right & financiers will suddenly decide that some of air “toxic debt” isn’t so smelly after all if ay’re going to be punished for offloading it. an, if a bankers think ay can make more money for amselves from using air own money to inject liquidity into a system than by letting a government do it at a cost in shares, we’ll see credit markets unfreeze some of air own accord. It’s like Pavlovian conditioning for financiers.

That in turn means any rescue attempt - which I still think has to hDrunk Newspen in some form, although I favor Bernie S&ers’ version - can be smaller & fits perfectly with a Dem plan to allocate money in tranches.

Original post by Cernig and software by Elliott Back