Come for the politics, stay for the snark.

A democracy can’t function when people can’t distinguish facts from lies.

There are no moderate republicans – only extremists and cowards.

The lights are all blinking red.

T R E 4 5 O N

Republicans do not pay their debts.

There is no right way to do the wrong thing.

America is going up in flames. The NYTimes fawns over MAGA celebrities. No longer a real newspaper.

Incompetence, fear, or corruption? why not all three?

The fundamental promise of conservatism all over the world is a return to an idealized past that never existed.

At some point, the ability to learn is a factor of character, not IQ.

Baby steps, because the Republican Party is full of angry babies.

Republicans do not trust women.

Is it irresponsible to speculate? It is irresponsible not to.

“But what about the lurkers?”

Hot air and ill-informed banter

We’re watching the self-immolation of the leading world power on a level unprecedented in human history.

The current Supreme Court is a dangerous, rogue court.

The words do not have to be perfect.

Dumb motherfuckers cannot understand a consequence that most 4 year olds have fully sorted out.

“The difference between stupidity and genius is that genius has its limits.”

GOP baffled that ‘we don’t care if you die’ is not a winning slogan.

Historically it was a little unusual for the president to be an incoherent babbling moron.

75% of people clapping liked the show!

Lick the third rail, it tastes like chocolate!

You are here: Home / Economics / Free Markets Solve Everything / Main Street Paying Wall Street

Reader Interactions

144Comments

  2. 2.

    Poopyman

    Cole, why are you on a jihad to raise my blood pressure? If I wanted outrage, I’d spend my time cruising blogs.

  7. 7.

    Violet

    From the article:

    “Money that should be invested in students, classrooms and fixing infrastructure in Pennsylvania is instead lining the pockets of Wall Street,” Jack Wagner, the state’s auditor general, said in a statement in April after calling on lawmakers to ban swaps. “State and local governments must stop gambling with public money,” he said.

    Public money should be used for the public good? How quaint.

  8. 8.

    Kryptik

    @Poopyman:

    I’ve cruised the news. My blood pressure is already sky-high.

    Face it, all US politics is these days is one giant fucking hippie punch.

    @Violet:

    But public schools iz de debil! And look how Chris Christie got so popular sticking it to teachers and public workers! Don’t you see what a winning strategy fucking over public workers is?!

  9. 9.

    Dennis SGMM

    Oh, gee, the Walmartization (If it’s cheaper then it’s better) of America has a down side? No way.

  10. 10.

    JPL

    I can’t wait until we privatize Social Security because everyone knows how honest Wall Street traders are.

  11. 11.

    Alice Blue

    I’m with you Kryptik. After what I’ve read this morning, Im ready to step away from the computer for the rest of the day. Maybe for several weeks.

  12. 12.

    daveNYC

    Swaps, either interest rate or currency, are very useful. However they’re only really useful to a very specific and limited group of clients.

    The fact that municipalities, which can borrow at very low fixed rates, what with the tax exemption and all, went ahead and entered into these agreements is criminal. The fact that the financial firms pimped these products to clients that absolutely had no use for them is criminal.

  13. 13.

    aimai

    If you read that article it says that Reading, PA is one of the places that got taken for everything but its eyeteeth–weren’t they mentioned as also not being able to organize themselves to pick up their own trash during the trash wars on this blog?

    When you put this together with today’s other story, linked at Atrios, about how the banks and the insurers and the servicers got together to allow your homeowner’s insurance to lapse and then sell you “forced” coverage at twice or ten times the price your blood pressure will more than rise, it will simply fountain out of the top of your head like your chakras are exploding.

    aimai

  14. 14.

    Dave

    This does piss me off. A lot. But the municipal administrators have some responsibility here as well. They got greedy, going for a high-risk/high-reward scenario. They could kept doing things the old-fashioned way and they chose not to.

    This doesn’t absolve Wall Street for being fucking predatory liars. But they didn’t have to work that hard to get these guys to go along.

  16. 16.

    The Republic of Stupidity

    @Bullsmith:

    What was that great line from The Godfather years ago?

    “One lawyer can steal more money w/ just a briefcase and a fountain pen than all the armed gun men in the world…”

    Or something to that effect…

  17. 17.

    Dennis SGMM

    @JPL:
    Obama’s Catfood Commission will show us the way to that halcyon state of privatization. We can rest assured that nothing can go wrong…go wrong…go wrong….

  21. 21.

    The Republic of Stupidity

    @Comrade Dread:

    Riiiiiiiiiiiiight… alternating between bitch-slapping you silly when you’re looking the other way and then lifting your wallet while you’re still groggy…

  23. 23.

    cat48

    I already had my ragefest over this abt 5a.m. It was all perfectly legal probably, but like the gangsters Mozila/ Countrywide, can’t we fine some of these people too for something?

    I finally made it to NYT a few minutes ago and there’s an oped by John friggin Yoo and John friggin Bolton “Why Rush to Cut Nukes?” I wonder why they’re in the NYT…..

    Cutting nukes was one of my favorite things Obama was going to do. I don’t know where they’re going to get 67 votes in the Senate. Very depressing. I wouldn’t extend any taxes until this was passed.

  24. 24.

    RobertB

    I’m kind of with Dave @14 on this. The investment bankers are scum, that’s a given. But anyone over the mental age of 10 should be suspicious of free money.

  25. 25.

    Poopyman

    @The Republic of Stupidity: Well, ’twas Woodie Guthrie who wrote:

    Yes, as through this world I’ve wandered
    I’ve seen lots of funny men;
    Some will rob you with a six-gun,
    And some with a fountain pen.
    __
    And as through your life you travel,
    Yes, as through your life you roam,
    You won’t never see an outlaw
    Drive a family from their home.

    Le plus ca change….

    (Edited to fix blockquote fail)

  26. 26.

    Paris

    If you want to get really riled up, go see Inside Job.

    There’s one part that discusses this issue, pointing to a town in one of the southern states (Alabama?) whose pension fund got cleaned out. Average pension 18k, fund manager’s bonuses in the millions. How many retirees does it take to support one fund manager? Its infuriating.

  28. 28.

    Linda Featheringill

    No, it doesn’t infuriate me. SSDD.

    It does make me feel totally inadequate to the task of coping with the world, filled with enemies that are big and strong and rich and eager to drain the last bit of blood from me.

    The world is a vampire . . .
    [Smashing Pumpkins?]

  29. 29.

    Paris

    The other thing in Inside Job that is discussed is how much coke and whores the Wall St firms fund. They interviewed a madam and point out how easy it would be to take these guys down. She was given open corporate POs to pay for stuff. Its charged to research, client entertainment, etc. Ripping off poor people may be legal but if someone gave a shit you could still put these guys in jail. Our system completely and permanently fucked up. It won’t change until the next depression.

  30. 30.

    srv

    I’ve been thinking, if you can’t beat them, join them. If the Koch’s can form a grass-roots group like the AFP, maybe I should just throw in the towel and form “Friends of Goldman Sachs” (FoGS) and hope for what ever bones they’ll throw me.

    It could be a multi-level thing. Y’all go out and sign 10 people up each and we can join the AFP lame-duck virtual march.

  31. 31.

    El Cid

    This sort of whining is class warfare. The real shame is that these Wall Street producers haven’t gotten even more from these government parasites, particularly if you think about how much they did to save the economy from Jimmy Carter, the CRA, Barney Frank, and Chris Dodd.

  32. 32.

    beergoggles

    If someone took the law into their own hands about this and I were on the jury, I’d just treat them just like the DOJ treats war criminals and torturers.

  34. 34.

    piratedan

    almost makes you wonder why we don’t have a radical left movement yet. I could see enough distraught homeowners and former pensioneers getting together and performing a bit of retribution after enough publication of these financial shakedowns.

  35. 35.

    The Republic of Stupidity

    @Poopyman:

    I’m thinkin’ mebbe Mario Puzo was channeling his inner Woodie Guthrie then…

    That just brought to mind that scene from Bonnie and Clyde where Beatty lets the farmer and his help fire a few shots at their own, recently repossessed home…

  38. 38.

    sukabi

    just think… if the wallstreeters and banksters hadn’t been able to co-opt congress so well, most everything that’s gone on in the financial markets in the last decade and a half would have been illegal, it’s clearly fraud, but because they’ve co-opted congress the laws have been written in such a way as to legalize their screwing everyone.

  39. 39.

    Calouste

    @Paris:

    __

    The other thing in Inside Job that is discussed is how much coke and whores the Wall St firms fund. They interviewed a madam and point out how easy it would be to take these guys down. She was given open corporate POs to pay for stuff. Its charged to research, client entertainment, etc. Ripping off poor people may be legal but if someone gave a shit you could still put these guys in jail. Our system completely and permanently fucked up. It won’t change until the next depression.

    The good thing is, that won’t be far off. The bad thing is, that won’t be far off.

  40. 40.

    cat48

    I agree w/the prez…..”The Rethugs have gotten kinda cocky”
    This is rich…..

    WASHINGTON – The Obama administration has a message for Republican governors who campaigned against the president’s high-speed rail program: Build the trains or give back the money.

    They said they were returning the $$ but decided to keep it for budget expenses instead. Kasich says they were going to have to fight him to get it back……….So they’ve told them it’s illegal to keep it and Secy LaHood is on it. Kasich crashes Lehman and now he’s working on OH.

  41. 41.

    MikeTheZ

    I’m about 5 minutes from becoming a teabagger leader. I’ll never be able to live with myself, but at least I’d be able to make some money. Lord knows my college education isn’t helping with that.

  42. 42.

    Joshua

    These deals with the devil were signed because the citizens of these areas demand services they are not willing to pay for.

    Arizona, for example, is run by wingnut lunatics. They also have huge budget problems. Their ability to issue bonds is limited. So their plan was to sell off the capitol building and then sign a lease. Which is, functionally, the exact same thing as issuing a bond, except the public just lost a crucial piece of public property.

  43. 43.

    El Tiburon

    This story will infuriate you.

    No. No it won’t. On a scale of 1-10, this is about a 4 or 5.

    We just need to accept that we are simply the help and are here to provide for the Masters of the Universe.

    Do that, go about your lives, kiss your dog and kick your wife.

    Have a drink, go to sleep, wake up and do it again.

    The end.

  45. 45.

    goblue72

    @Paris: And it’s no exaggeration. A law school classmate of mine used to work as a trader in Chicago on the commodities markets. Coke and hookers billed to marketing or training budgets was a regular occurrence.

    These people are amoral scum and should be treated like it. I personally advocate public beheadings on a daily basis until they get in line. Robespierre was on to something.

  46. 46.

    A Duck

    Why is everyone upset? Until it started hitting them and theirs, most people in America were fine with this sort of thing. The idea that someone isn’t outraged until it hits home isn’t a Republican or Conservative trait, it’s an American one.

    I mean where’s the outrage when America does this sort of thing to non-Western, non-First World nations?

  47. 47.

    cat48

    @Kryptik:

    Indeed, WTF is Bolton & Yoo coauthoring an oped in MY NYT & rethugs are gleefully on MSNBC on my teevee all day. Just shoot me now.

  48. 48.

    aimai

    @Joshua:

    Prezackly. The voters aren’t willing to do what has to be done the old fashioned way–by raising and paying taxes for the things they want. You have to hold the local governments accountable but you also have to remember that the best people are probably part timers, or coming into a system and a meeting where they are completely outvoted and bowled over by the promises of the lawyers and the accountants. I’ve often wanted to run for local government, and hell I’ve got a Ph.D. ‘n everything, but I am pretty sure that the repeat players can beat the hell out of the one shotters like myself when it comes to corruption and hiding shit in the budget.

    aimai

  49. 49.

    ThatLeftTurnInABQ

    From the article:

    “The basic idea from the bank’s perspective is just to do a swap because that’s where the money is,” said Andrew Kalotay, head of the debt-management advisory firm Andrew Kalotay Associates Inc. Willie Sutton Associates, LLC

    Fixt.

  51. 51.

    Linda Featheringill

    On a more cheerful note, from WaPo:

    “. . . you can still enter the Loop Who Gets It First Contest, which lets you guess which federal agency or individual gets Issa’s first subpoena.

    To win our contest, simply predict which agency or person will get the first Issa subpoena and over what issue. As a tiebreaker, guess the month and day.

    Please send your entry to [email protected].”

    My suggestions:

    1. Barack Obama for presidenting while black.
    2. Nancy Pelosi for being effective while female.
    3. Everybody who has ever criticized any rich people.
    4. Everybody who has ever laughed at the Republicans.

  53. 53.

    Anoniminous

    Expected it.

    Ponzi Schemes, aka “the US and other national global financial sectors,” go ker-flooie when they run out of suckers or the suckers in the Scheme run out of money.

  54. 54.

    Larry Signor

    Comic relief or just what we deserve?

    US downgraded on QE2 … by Chinese rating agency

    Dagong has downgraded the local and foreign currency long term sovereign credit rating of the United States of America (hereinafter referred to as “United States” ) from “AA” to “A+“, which reflects its deteriorating debt repayment capability and drastic decline of the government’s intention of debt repayment.

  56. 56.

    cat48

    @sukabi:

    I’m not sure the Congress was co-opted. The Commodities bill was written by Phil Gramm & a few buds in Congress and if Wikipedia is accurate, the bill was never debated; never debated! Then it was attached to a budget appropriation bill when it was voted on right before Christmas break. I don’t know how these people sleep at night, but I’m sure they do.

  57. 57.

    kdaug

    @Larry Signor: Option B.

    And so it begins.

    It will be fun to watch the “keep you’re government hands off my Medicare” crowd have to deal with the consequences of “no taxes”/”starve the beast”.

    Unfortunately, we’re all going down with them.

  58. 58.

    Anoniminous

    @cat48:

    The Powers That Be are facing two choices:

    1. Substantially change the political economy of the US and crater the US financial sector

    2. Keep the financial sector and crater the political economy of the US

    Since both parties get massive amounts of cash from the US financial sector …

  61. 61.

    HyperIon

    @daveNYC wrote:

    Swaps, either interest rate or currency, are very useful. However they’re only really useful to a very specific and limited group of clients.

    Yeah, the folks who could understand them.

    How can someone be in charge of millions of dollars of public funds and commit them to something they do not thoroughly understand?

    I mean, hoocoodanode?

  62. 62.

    Original Lee

    @JPL: This. The GOP is all upset about an alleged failure of SS in the future, but if we privatize it now, the failure is gonna be sooner than later. These firms pay the big bucks to people whose job entails figuring out the next big scam and running away with the money.

  63. 63.

    Bullsmith

    @Sentient Puddle:

    You can’t spend your way out of debt, but apparently you can tax-cut your way to solvency. You’d think that would be working by now, but I guess the existing cuts weren’t deep enough to save the patient.

  66. 66.

    klem

    @cat48: Proof that crime does pay: Phil Gramm is a VP at UBS AG, which is among the financial services companies raking in the billions because of these deals.

  67. 67.

    Bullsmith

    @HyperIon:

    A bribe or kickback is the traditional way to get government employees to sell out their constituents. No doubt financial innovation has made the process especially efficient in America.

  69. 69.

    Bullsmith

    Glenn Beck was on CNN HN, Dobbs is going to Fox business. Is CNN officially the farm team now?

    edit- meant to reply to me’s link above.

  70. 70.

    Comrade Dread

    @Larry Signor: I’d pay no heed.

    That’s just the official Chinese government protesting the fact that our central bank might devalue our currency and start competing with their central bank and its devalued currency.

  72. 72.

    quaint irene

    My suggestions:
    1. Barack Obama for presidenting while black.
    2. Nancy Pelosi for being effective while female.
    3. Everybody who has ever criticized any rich people.
    4. Everybody who has ever laughed at the Republicans.

    5. Kanye West, for hurting Dubya’s feelings.

  73. 73.

    Peter

    What I want to know is, why does anyone even listen to these chucklefucks anymore? It should have been plainly obvious as of ten years ago that they are, without exception, extremely skilled at lining their own pocket, but incompetent or unwilling or both to do anything to help anybody else.

  74. 74.

    jl

    @Sentient Puddle:

    Thanks for pointing out that hunk of junk commission mostly consisting of corrupt hacks, incompetents, and useless old fogeys, and unbalanced arrogant fools dropped their turd today.

    Following jump out at me:

    “Index Social Security yearly increases to inflation rather than wages, which will generally mean lower cost of living increases and less money per average recipient.”

    (my comment, this is weird. existing benefits are already indexed to inflation. Future benefits of current workers grow at the rate of real wages. If this proposal aims to replace a wage index by an inflation index for future beneficiaries, then this will eventually effectively eliminate the social security. Need to figure what what the heck they are talking about here)

    ‘ “Increase progressivity of benefit formula” — i.e., means test part of Social Security benefits by 2050.’

    (turn it into a welfare program for the poor, the better to kill it off later, though the time horizon seems a bit long to me to satisfy the GOP)

    ” Increase the Social Security contribution ceiling: while people only pay Social Security taxes on the first $106,800 of their wages today, that’s only about 86% of the total potentially taxable wages. The co-chairs suggest raising the ceiling to capture 90% of wages.”

    (well, OK, one good proposal, but does not go far enough in my opinion)

    ” The co-chairs suggest capping both government expenditures and revenue at 21% of GDP eventually.
    (stupid idea) ”

    From what I read, it is a mess, but mess we must study closely. From what I read, mishmash of symbolic measures, stuff that on first reading makes little sense, and surrender to reactionary and ignorant deficit hawks.

    Let’s hope the competent members of the commission flush this mess down the john.

    Edit, beside fixing whatever the hell happened with the formatting, I forgot to add that they want to index the retirement age to increases in average longevity. In other words, make working class and poor people work until they die. That idea will also be counterproductive since it will just bust the budget on disability insurance programs.

    What a hunk of junk.

  75. 75.

    David Hunt

    @Linda Featheringill:

    1. Barack Obama for presidenting while black.

    You got it wrong. It’ll be for presidenting while a Democrat. The black part is an enhancement on the base crime of being a Democrat. It’s the Republican version of a Hate Crime.

  76. 76.

    ThatLeftTurnInABQ

    @Sentient Puddle:

    The fiscal commission report is out today!

    Hurray, hurray, the 1st of May! Outdoor…
    Oh, wait.
    Wrong season.

    Speaking of screwing around, I wonder who came up with this idea:

    All their proposals limit Congress to collecting taxes on income made within the United States, reducing or eliminating taxes on American expats and revenues companies earn abroad.

    What a fncking brilliant idea! Now that’ll show them not to outsource jobs!

  78. 78.

    ChrisNYC

    Sorry — not buying that public employees who are paid to manage massive financial deals get off by saying that they were duped by bankers. Their job is not to be duped. If they thought they had a claim, i.e. if they thought they were really tricked, they wouldn’t “quietly” pay the termination fees.

  80. 80.

    FlipYrWhig

    @jl:

    Thanks for pointing out that hunk of junk commission mostly consisting of corrupt hacks, incompetents, and useless old fogeys, and unbalanced arrogant fools dropped their turd today.

    Actually, it wasn’t the whole commission, and several members immediately rose to denounce it.

    ETA: the Bloomberg News story on the panel

  81. 81.

    daveNYC

    Yeah, the folks who could understand them.

    I think it’s kind of understood that one would have to have an understanding of something if they were to determine if it would be useful to them.

    The fact is, these products should never have been offered to these clients, and if offered, then the clients should never have agreed to them.

    The fact that the councils of these cities were so trusting that they signed these contracts is just depressing.

    I believe the applicable quote is, “Life is pain, anyone who says otherwise is selling something.”

  82. 82.

    Delia

    @FlipYrWhig:

    So when do we all get the cat food?

    Silly. Cat food is much too high in protein to waste on the proletariat. GlaxoSmithKline is working on a nifty little drug that will enable us all to eat hay and thus save a bundle for our social betters.

  84. 84.

    Belafon (formerly anonevent)

    It would infuriate me, except I’m angrier at the people who wouldn’t understand that this points out the limits of capitalism.

  85. 85.

    KG

    Plato was right.

    This, then, seems likely to be the fairest of States, being an embroidered robe which is spangled with every sort of flower. And just as women and children think a variety of colours to be of all things most charming, so there are many men to whom this State, which is spangled with the manners and characters of mankind, will appear to be the fairest of States.

  86. 86.

    JPL

    @Delia:
    But Sarah said I could have cookies and cake
    Silly. Cat food is much too high in protein to waste on the proletariat. GlaxoSmithKline is working on a nifty little drug that will enable us all to eat hay and thus save a bundle for our social betters.

  89. 89.

    cat48

    Why do they want to raise copays on Medicaid? These people are dirt poor who qualify & little piddly tax rates from Fiscal report. I feel like Nancy Kerrigan today…..Why? Why? Why?

    Edit/Don’t get me wrong, we need to do something quickly abt $13T debt & growing deficit; just not on the backs of the poor. I’m not rich but I can change my lifestyle & not suffer. They can’t.

  91. 91.

    jl

    @cat48: because most of the commission consists of incompetent vicious old political hacks, who are also fools.

    But, sorry, I was being polite.

    Edit in response to your edit: NO, I forecfully disagree, we do not need to do something quick about either. Doing something quick about the deficit will result in it being more difficult to solve in the long run. Right now, we need to increase the deficit in order to fund productive investment to increase productivity, in order to make up for the type of wasteful foolishness produced by an unregulated financial markets that have been making wasteful and useless investments over the last five or six years. And then doing everything it can to render what useful investment were made (excess housing stock) worthless.

  93. 93.

    Dennis SGMM

    @ThatLeftTurnInABQ:
    Not one word about curbing the defense budget. Not one word about spending billions on a new jet fighter while we’re getting our asses kicked by a bunch of guys with Vietnam-era weapons. Nothing about closing the hundreds of overseas bases either.

    Finally, nothing about a transaction tax on Wall Street or taxing investment income at the same rate as wages.

    The only question remaining is how long it will take the new Congress to cherry-pick those recommendations that advantage the wealthy into a bill that Obama will sign as he touts bi-partisanship.

  94. 94.

    fourlegsgood

    @Dennis SGMM: Hey, missed your comment yesterday, but yes, that was me at Digby. And eschaton, kos and everywhere else since 2004.

    I gave up on Digby too.

  96. 96.

    Silver Owl

    But the rich banksters and wall streeters are gods. It’s their customers that are stupid fuckers and should have gotten their finanical degrees rather than actually trust the advice of the those deemed “financial gods”.

    Done snarking.

  98. 98.

    Joshua

    The 21% of GDP thing is rich – yea that sounds reasonable but let’s look at it. During the Reagan years, federal spending was 22% of GDP, and that was before the war on terruh (yea, it was during the Cold War, but let’s be honest here – we are still paying for the Cold War too) and the baby boomer retirements. They’ve moved the window so far to the right that Reagan’s federal spending is too much.

  99. 99.

    MattR

    @jl:

    Edit, beside fixing whatever the hell happened with the formatting, I forgot to add that they want to index the retirement age to increases in average longevity.

    I am perfectly willing to go along with this if they also index it to the current physical and mental capability of the average retiree as well as additional life expectancy for someone who has reached the current retirement age. If according to these metrics, 70 is the new 65 twenty years from now then SS should probably be adjusted to reflect that new reality.

  101. 101.

    BenA

    @Joshua:

    buuttt we had to because cold war… and it wasn’t Reagan it was all those damn Democrats in congress… and… but.. but..

  103. 103.

    FlipYrWhig

    @MattR:

    if they also index it to the current physical and mental capability of the average retiree

    Will lower mental capability win more benefits or less?

  107. 107.

    Culture of Truth

    •Eliminate the Office of Safe and Drug-Free Schools.

    Finally they found a way to unite wingnuts and progressives.

  108. 108.

    Jules

    @cat48:

    Why do they want to raise copays on Medicaid? These people are dirt poor who qualify & little piddly tax rates from Fiscal report. I feel like Nancy Kerrigan today…..Why? Why? Why?

    Do people even pay a co-pay on Medicaid*?
    I have no issue with a nominal $5 co-pay for those who can afford it, no one should be turned away if they don’t have the cash on hand…but really that is a pack of cigarettes you have t do without.

    I also have no problem with Vets and Military personnel having to pay a nominal co-pay either…sliding scale?

    *asking because at one point we were on ARKIDS (Ar CHIPS) and had a $20 co-pay because we qualified for it but not for the “medicaid” version. Best health insurance we ever had for my son.

  109. 109.

    cat48

    @jl:

    I think you’re probably right abt doing it immediately. I really don’t want to hurt the poor so I’m a little hysterical right now; plus we owe a lot of that to China and we’re basically in a monetary war/can’t remember proper term!? with them. Again, why, why, why? You realize everything is #ObamasFault of course!

    We must pay more taxes soon/Clinton taxes weren’t bad. Relax McConnell; the prez is leaving. His hair has turned so gray & now I know why.

  111. 111.

    Corner Stone

    This story will infuriate you.

    I was planning to get my furious on but then I decided to wait for burnspbesq to drop by and tell us all how this was perfectly legal and we should all just stfu if we don’t have a J.D.

  112. 112.

    jl

    @MattR:

    “70 is the new 65 twenty years from now then SS should probably be adjusted to reflect that new reality.”

    The two reports I read said that the proposal was to index the retirement age to average life expectancy, with no adjustment or distinction.

    The problem is that there is no evidence that 70 is becoming the new 65, except for the rich useless old crooks and male crones who infest this idiotic commission.

    There is no evidence that 70 is the new 65 for working class and poor people. In fact there is some evidence that, in some areas of the country, mainly South and SW midwest, 60 is becoming the new 65.

    I have been a tad rude, but I really really hate everything about this commission. It was a bad idea, initiated at the wrong time, full of the wrong people. I don’t think most of them have the basic competence to do the work. And then you have miserable people like Bowles and the awful Simpson running it.

  113. 113.

    Jules

    @Dennis SGMM:

    Not one word about curbing the defense budget.

    Defense spending cuts:
    * Double the number of defense contractor positions scheduled for elimination from 10 percent of current staff augmentees to 20 percent.
    * Reduce procurement by 15 percent, or $20 billion.
    * Eliminate the V-22 Osprey program.
    * Cancel the Marine Corps’ Expeditionary Fighting Vehicle program.
    * Halve the number of F-35 Joint Strike Fighters in favor of F-16s and F/A-18Es.
    * Cancel the Marine Corps F-35 program.
    * Cancel the Navy’s Future Maritime Prepositioning Force.
    * Cancel the new Joint Light Tactical Vehicle (JLTV), the Ground Combat Vehicle, and the Joint Tactical Radio.
    * Reduce military forces in Europe and Asia by one-third.
    * Send all military children based in the U.S. to local schools.

    http://tpmdc.talkingpointsmemo.com/2010/11/deficit-commission-co-chairs-simpson-and-bowles-release-eye-popping-recommendations.php

  114. 114.

    MattR

    @Dennis SGMM: Yeah. I am well aware of how serious a problem that is, especially with the economic downturn. But at the same time we do need to keep the ratio of years working before reaching retirement age to years retired and living off social security somewhat stable to keep the system solvent without increasing the contribution level or decreasing the benefits. (EDIT: Personally the first change I would make is to completely remove the ceiling on which wages are subject to SS withholdings.)

    @jl: No argument from me. Anything the commission puts forth is likely to be complete crap. I was just pointing out that we are gonna have to deal with increased life expectancy at some point and when we do I hope it is based on the metrics I pointed out rather than some stupid, simple formula (like the commission suggested)

  115. 115.

    jl

    @cat48: I was a little extreme. The US does have a long term debt problem. Social Security does have a long term shortfall compared to scheduled benefits. There are fixes, and people like Brad DeLong, Stiglitz, Krugman have discussed good policies to fix long term debt and Social Security problems.

    The infuriating problem I have is that the only proposed fixes that seem to get media attention or political support are misconceived measures that will make the long term debt problem worse.

    An example is the proposed across the board inflexible indexing of retirement age to increase in average life expectancy. Putting aside the inequity, it won’t even work. They paid no attention to the problem of ballooning state and federal disability costs, which is already happening. Any competent analysis would at least consider that problem, and I see no sign that they did.

    Beside being jackasses, most of the commission members are objectively incompetent.

  116. 116.

    cat48

    @Jules:

    I think they do on prescription drugs & other items the govt/state decide the person could do without. I worked at Social Security for 20 yrs and we had real problems with folks who would come in & be off their Meds. They would always say they couldn’t afford them later. Mental illness abounds with the poor I dealt with. It’s really quite common and they did some strange/scary things. They would often come in with their PJ’s/Housecoat/or normal clothing on and were often disoriented or extremely upset & raging. It got scary at times. They survive on SSI/Medicaid/Foodstamps; just not a good life without the Meds.

  117. 117.

    Agoraphobic Kleptomaniac

    @MattR:

    If according to these metrics, 70 is the new 65 twenty years from now then SS should probably be adjusted to reflect that new reality.

    Longer lifespan does not mean longer workable years. Instead, you incentivise working longer, increasing the % of what payback you get from SS for every year you work past 65. That way, those who want to keep working, and have the ability to, can, and will be rewarded for their extra years of paying in.

  118. 118.

    jl

    @Jules: They did propose military spending cuts. That is good. As I said, there are some good proposals there, but the good ones alone are inadequate to fix the problem, and many of the other ideas are just wrong, or half baked, or counterproductive. Beside being jackass ideas.

  119. 119.

    4tehlulz

    @Jules:

    Eliminate the V-22 Osprey program.

    DOA

    If this ever gets to the House (and I would be shocked if it did), would they have to vote on the whole thing like the base-closure commission? If so, the Osprey could save Social Security all by itself.

  121. 121.

    Joshua

    @Agoraphobic Kleptomaniac:

    Longer lifespan does not mean longer workable years.

    Just to clarify: it means longer workable years if you are a Village hack regurgitating Beltway pablum a few times a week. It doesn’t mean longer workable years if you busted your back from decades doing blue-collar work. Guess who is deciding on this?

  122. 122.

    MattR

    @Agoraphobic Kleptomaniac:

    Longer lifespan does not mean longer workable years.

    Absolutely agree. For most people, medical technology means that you die slower at the very end but it does not necessarily mean that you are significantly healthier or more fit in the years before that sharp decline. Which is why my metrics took into account the physical and mental capabilities of people at that age as well as how many years a person who reaches retirement age is expected to live beyond that. If life expectancy increases by 5 or 10 years, but the average 65 year old is still similar physically and mentally to today there is no way that the retirement age should be raised. However if we reach that day when a 65 year old is similar to what a 50 year old is like today, we probably need to adjust things.

  123. 123.

    cat48

    @jl:

    I know what you mean about the indexing. I’d have to dig out some of my SS books, but didn’t we already index it before? You know when Reagan/Tip “fixed it” and took govt employees spouse benefits away from people like me….Probably $800 more a month for me eventually but since govt employees are feckless/overpaid, they picked on us & cut student benefits.

  124. 124.

    ruemara

    Sole useful recommendations, IMHO, pulled from the Illustrative Discretionary Cuts Documents
    page 5, cut unnecessary printing costs & trim federal vehicle budget
    page 8, slow growth of foreign aid (if it means cutting aid to countries who don’t need it, details are missing)
    page 17, create a cohesive fire management service
    page 20, double cuts to defense contracting
    page 21, ending the V22 Osprey, cancel the Expeditionary Fighting Vehicle
    page 22, Cancel the Marine’s Version of the F-35, Cancel the Navy’s Future Maritime Prepositioning Force, Cancel the Joint Light Tactical Vehicle, The Ground Combat Vehicle & Joint Tactical Radio
    page 24, Reduce military overseas in Europe & Asia
    page 24-25, Reduce military research and development budget
    page 27, Consolidate the DOD’s retail shopping divisions

    The bulk of the rest are total screw the poor and the working class, wtf douchebags! types of shit. We should get our money back.

  125. 125.

    Linda Featheringill

    @Corner Stone:

    [#111]

    I was planning to get my furious on but then I decided to wait for burnspbesq to drop by and tell us all how this was perfectly legal and we should all just stfu if we don’t have a J.D.

    Ah Corner, you say the sweetest things. Winning friends and influencing people.

    [chuckle]

  126. 126.

    elftx

    @daveNYC: The fact that municipalities, which can borrow at very low fixed rates, what with the tax exemption and all, went ahead and entered into these agreements is criminal. The fact that the financial firms pimped these products to clients that absolutely had no use for them is criminal.

    Isn’t this pretty much what they did to Greece as well?

  127. 127.

    Corner Stone

    @jl:

    I really really hate everything about this commission. It was a bad idea, initiated at the wrong time, full of the wrong people.

    The thing you have to remember is that Obama had to form this commission. He had no choice in the matter if he was going to show the American people he was tough on the deficit. He co-opted the Republican’s ideas on fiscal issues and can now use this report to pivot against them and really push back.
    When you look at it that way, this commission is really kind of a good thing.

  128. 128.

    Jules

    @cat48:

    I think they do on prescription drugs & other items the govt/state decide the person could do without. I worked at Social Security for 20 yrs and we had real problems with folks who would come in & be off their Meds. They would always say they couldn’t afford them later. Mental illness abounds with the poor I dealt with. It’s really quite common and they did some strange/scary things. They would often come in with their PJ’s/Housecoat/or normal clothing on and were often disoriented or extremely upset & raging. It got scary at times. They survive on SSI/Medicaid/Foodstamps; just not a good life without the Meds.

    Thanks for the response.
    I would hope that any co-pay would be nominal and more of a “suggestion” then a “you must pay or no Doctor for you”.

  129. 129.

    FlipYrWhig

    @Corner Stone: I can imagine that the whole point is to say, “Welp, we tried, but it turns out that there really is no such thing as a bipartisan consensus on how to reduce the deficit.” Or, relatedly, to create a list of recommendations that scare the hell out of people so that the public can say, “Damn, I don’t like the sound of that, but I don’t envy those guys for trying to solve something that jacked up.”

    I think there is a “theatrical,” so to speak, value in establishing that to do this is hard, not easy, and it’s not just a matter of sitting members of both parties together in a room and having them cut the bullshit to get something done.

    Whether that’s a smart use of anyone’s time and/or money is a different matter.

  130. 130.

    Mnemosyne

    Interesting pull quote from the Bloomberg story:

    “This is Al’s and my proposal, nobody else’s,” Bowles said. “The president hasn’t seen this proposal.” Some members of Obama’s financial team have seen the plan and they liked some things and not others, he said.

    IOW, this is not actually the official report, because they couldn’t get 14 out of the 18 commission members to approve it. This is what Bowles and Simpson pulled out of their pasty white asses.

  131. 131.

    Phoenician in a time of Romans

    You know, for years teh argument against raising the marginal tax at the top end is “but the rich will go do business elsewhere”.

    At some stage America might say “So?”

  133. 133.

    RobNYNY1957

    The article left out these three paragraphs. They should help everyone calm down.

    It is simply considered to be good financial practice to hedge floating rate debt. Interest rate swaps, at approximately $400 trillion (yes, with a “T”) are by notional amount the most common financial transaction in the world.

    Traditionally, the cheapest way to issue debt with an effective fixed rate is to issue floating rate debt while simultaneously entering into a floating-to-fixed interest rate swap. While it is of course possible to issue fixed rate debt, that option is usually more expensive than the floating-to-fixed swap option over the life of the transaction. It is also possible to hedge floating rate interest with an interest rate cap, but that is more expensve as well, at least at the beginning. Similarly, callable fixed rate bonds are more expensive initially, making them politically unpopular.

    None of the institutions mentioned in this article would have paid out more under the swaps than under fixed rate bonds. But now that the interest rate swaps are out of the money, the insitutions are suffering from buyer’s remorse. If interest rates rise in the future, as they are almost certain to do from historic lows, the payments under the swaps would decrease, or even reverse. Political pressure has forced the institutions to terminate the swaps now, locking in huge losses that might not have come to pass.

    At least the author didn’t use the word “exotic’ to describe interest rate swaps.

  134. 134.

    FlipYrWhig

    @Corner Stone: It’s the only defensible explanation I’ve come up with. (And that’s what I like to think about — what good _could_ anyone have thought would come of this? Or why _would_ someone do this fool thing, other than just simply being a fool?)

    But I also have never been particularly concerned that it was a “catfood commission” that reflected Obama’s deeply-seated desire to inflict injury.

    ETA: I guess the more conspiratorial view would be that the commission is supposed to go out there and say scary doomsday shit, providing an opponent against whom Obama can “triangulate.”

  138. 138.

    Joshua

    @Phoenician in a time of Romans: Americans have been saying that, and many of us don’t believe them anyway. Where are they gonna go? A lot of other desirable places are infected with teh marx and/or discriminate against wasps like them. America is a very, very good country to live in if you are rich or ultra-rich. Taxes are low and people seem to think your bank account is some sign of personal morality and virtue. You won’t get that in many other places.

  139. 139.

    buckyblue

    Here in beautiful cheeseland I work for a school district that has lost a substantial amount of money betting on the derivatives markets (whatever they are) with borrowed money. We’re into it for 65M. Larger class sizes and smaller paychecks thanks to some wall street trader. Nice.

  140. 140.

    RobNYNY1957

    @buckyblue:

    If a school district was speculating with borrowed money, it is not Wall Street’s fault, it’s the school district’s fault. No one should speculate who can’t afford to lose the money.

  141. 141.

    RobNYNY1957

    “They found the swap agreements extremely complicated,” New Jersey’s former Inspector General Mary Jane Cooper said in a report in May after auditing the authority and interviewing board members who listened to Wozniak’s pitch.

    If people don’t understand interest rate swaps, one of the simplest kinds of financial instruments, what are they doing entering into them? Go take a finance class at community college, for Christ’s sake.

  142. 142.

    Bill Murray

    @MattR: you do realize Matt, that the average years lived after reaching 65 is around 1 year longer today than when SS was started, so really this hasn’t changed appreciably since the 1930s and is not really an issue. The problems SS seems to have in the long term are come from the SS commission making low growth assumptions for the future and low future immigration assumptions. That is probably useful, but making predictions about future cash flows on a 75 year horizon are Republican err I mean extraordinarily stupid

  144. 144.

    RobNYNY1957

    Cost Covered

    All the authority had to do to get the deal from UBS was to sell auction-rate securities, he said. The Zurich-based bank would help cover the cost of that adjustable-rate debt in exchange for annual fixed-rate payments from the authority, he said. The fixed rate was 4.65 percent, about a half percentage point less than the 5.18 percent the state would pay if it sold conventional bonds, he said.

    So they locked in 53 basis point of saving, and now they are compaining about it.

    If you need to look up what a basis point is, STFU.

Comments are closed.