The Next Bubble to Implode: Commercial Real Estate

Cartoon courtesy of Giovanni Fontana

The Next Phase: Looting Social Security, 401Ks, IRAs and Whatever Is Left?

After what we have seen in the last eight years in particular, why do we assume that there is any boundary to the venality of powerful men? That there is ever enough?

Crony capitalism gives way to coolie capitalism. The belief in the priority of the privileged few to possess the greatest share of the nation's wealth endures.

Where is the justice? Where is the reform?

"Greed is a fat demon with a small mouth and whatever you feed it is never enough."
Janwillem van de Wetering

“Experience demands that man is the only animal which devours his own kind, for I can apply no milder term to the general prey of the rich on the poor."
Thomas Jefferson

"The more we do to you, the less you seem to believe we are doing it."
Dr. Josef Mengele

The Nation
Looting Social Security
By William Greider
February 11, 2009

Governing elites in Washington and Wall Street have devised a fiendishly clever "grand bargain" they want President Obama to embrace in the name of "fiscal responsibility." The government, they argue, having spent billions on bailing out the banks, can recover its costs by looting the Social Security system. They are also targeting Medicare and Medicaid. The pitch sounds preposterous to millions of ordinary working people anxious about their economic security and worried about their retirement years. But an impressive armada is lined up to push the idea--Washington's leading think tanks, the prestige media, tax-exempt foundations, skillful propagandists posing as economic experts and a self-righteous billionaire spending his fortune to save the nation from the elderly.

These players are promoting a tricky way to whack Social Security benefits, but to do it behind closed doors so the public cannot see what's happening or figure out which politicians to blame. The essential transaction would amount to misappropriating the trillions in Social Security taxes that workers have paid to finance their retirement benefits. This swindle is portrayed as "fiscal reform." In fact, it's the political equivalent of bait-and-switch fraud....

Read the rest of the story here.

Discussion of this topic at Economist's View here.

Congress Removes Provisions to Limit Wall Street Bonuses "Behind Closed Doors"

The Democrats talk a good game, but their record of reform and renewal after winning the Congressional elections and then the Presidency is pathetic.

Nancy Pelosi is useless as House Speaker. Barney Frank is all talk and little action. The Democratic leadership should be replaced along with about half the remaining Republican congressmen.

Ok, Obama how about some transparency on this one. And better yet, can we see a single reform that improves the system, other than firedrills to shore up the status quo?

AP
Congress kills plan to recover Wall Street bonuses
By Matthew Daly
Thursday February 12, 2009, 5:19 pm EST

Congress kills plan, approved in Senate stimulus bill, to recover Wall Street bonuses

WASHINGTON (AP) -- Congressional leaders have killed a plan that would have forced financial institutions to compensate taxpayers if they paid their executives large bonuses after receiving federal bailout money.

The Senate had approved the repayment plan as part of an effort to crack down on Wall Street firms that paid huge bonuses -- some in the millions of dollars -- to their top executives even as they received taxpayer money in the federal bailout last fall.

The provision was removed as House and Senate negotiators hammered out final details of the $789 billion economic stimulus legislation this week.

A spokeswoman for Sen. Ron Wyden, D-Ore., said no one spoke against the amendment when Wyden introduced it on the Senate floor. "Somehow, it got stripped out behind closed doors," said the spokeswoman, Jennifer Hoelzer.

Wyden is looking for an opportunity to offer his amendment again to help taxpayers get their money back, Hoelzer said.

Sen. Olympia Snowe, R-Maine, co-sponsor of the amendment, issued a statement saying the financial bailout Congress approved last fall "left open an escape hatch of golden parachutes for top executives on Wall Street."

Many of the executives who got bonuses were the ones whose mistakes hurt the financial system and forced taxpayers to foot the bill in the first place, Snowe said.

The Wyden-Snowe amendment would have penalized companies that paid bonuses greater than $100,000 to executives after receiving government rescue funds last year. The companies would have had to repay within four months any portion of the bonus above $100,000 or face an excise tax of 35 percent on the portion of the bonus above $100,000.

Lawmakers removed the provision without explanation in closed-door talks this week. Hoelzer said several senators had questioned whether the provision was legal, since Congress had not limited the bonuses in approving the original legislation last October.

But Hoelzer said the measure was appropriate. She cited a letter from the Joint Committee on Taxation saying the measure "presents a strong case for constitutionality since it has only a modest look-back period."

Most of the bonuses in question were paid in the final two months of 2008.

The tax committee estimated that the Wyden-Snowe amendment would have raised as much as $3.2 billion. Financial institutions received more than $274 billion through the bailout program while paying out an estimated $18.4 billion in employee bonuses last year, the committee said.

SP Fututres Hourly at Market Close

The SP futures went down to the forecast support level of 806 and then we went into the last hour of the trading day with a short covering technical rally.

The bulls are not out of the woods yet, and must take that overhead resistance, formerly support, and stick it. It might not be easy to do into a three day holiday weekend.



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