HOUR 2: A Global Tsunami

HOUR 2: A Global Tsunami

The meltdown's devastation ripples around the world from California to Iceland and China. Facing economic ruin, desperate world leaders are at each other's throats.



Source: CBC

HOUR 4: After the Fall

HOUR 4: After the Fall

MELTDOWN: THE SECRET HISTORY OF THE GLOBAL FINANCIAL COLLAPSE

Investigators begin to sift through the meltdown's rubble. Shaken world leaders question the very foundations of modern capitalism while asking: could it all happen again?



source: CBS

Economists for an Imaginary World

From the Washington Post, "Economists for an Imaginary World":

"The worldly philosophers" was economist Robert Heilbroner's term for such great economic thinkers as Adam Smith, Karl Marx, John Maynard Keynes and Joseph Schumpeter. Today's free-market economists, by contrast, aren't merely not philosophers. They're not even worldly.

Has any group of professionals ever been so spectacularly wrong? Pre-Copernican astronomers and cosmologists, I suppose, and for the same reason, really: They had an entire, internally consistent, theoretically rich system that described the universe. They were wrong -- the sun and other celestial bodies save the moon didn't actually revolve around the Earth, as they insisted -- but no matter. It was a thing of beauty, their cosmic order. A vast faith was sustained in part by their pseudo-science, a faith from which such free thinkers as Galileo deviated at their own risk.

As it was with the pre- (or anti-) Copernicans, so it is with today's mainstream economists. Theirs is an elegant system, a thing of beauty in itself, as the New York Times' Paul Krugman has argued. It just fails to jell with reality. And unlike the pre-Copernicans, whose dogma posed a threat to those who challenged it but not, at least directly, to anyone else, their latter-day equivalents in the economic profession pose a clear and present danger to the well-being of damned near everyone.

The problem with contemporary economics, at least with the purer strain of free-market economics associated with the University of Chicago, is not simply that it failed to predict the near-collapse of the world financial system last year. The problem is that it believed such a collapse could not happen, that all risk could be quantified by mathematical models and that these quantifications could help us correctly price just about everything. Out of this belief arose the banks' practice of securitization, which put a value on all manner of mortgages and enabled buyers to purchase and swap them with the certainty that such transactions reflected an accurate judgment of the value of the properties and the risks associated with them.

Except, they didn't. So long as economists insisted that they did, however, there really was no need to study such things as bubbles, which only a handful of skeptics and hopelessly retro Keynesians even considered possible. Under mainstream economic theory, which held that everything was correctly priced, bubbles simply couldn't exist.

The one economist who has emerged from the current troubles with his reputation not only intact but enhanced is, of course, Keynes. Every major nation, no matter its economic or political system, has followed Keynes's prescription for combating a major downturn: increasing public spending to fill the gap created by the decline of private spending. That is why the world economy seems to be inching back from collapse and why the nations that have spent the most, China in particular, seem to be recovering fastest.But Keynes's vision has yet to reestablish itself among economists, who, like the Catholic Church in Galileo's time, aren't about to change their cosmology just because the facts demonstrate that they happen to be wrong. The quants at the banking houses say that they simply failed to sufficiently factor some risks into their mathematical models. Once they do, their system will be corrected, and banks can resume their campaign to securitize everything (as some banks are already doing by establishing a secondary market in life insurance policies).

The problem with that, Robert Skidelsky argues in a new book on economics after the fall, "Keynes: The Return of the Master," is that it neglects one of Keynes's central insights -- that an uncertainty attends human affairs that transcends quantifiable risk. (Skidelsky is also the author of a magisterial three-volume biography of Keynes.) Psychology affects value as much as rational calculation does. Thus the state must ensure against periodic madness in the markets with regulations and social insurance, because madness is a potential threat in markets just as it is in other human endeavors -- because the market is a human endeavor, not reducible to a mathematical construct.Will contemporary economists ever accept this last precept? In the 1970s, a wry economist named Robert Lekachman observed that economics students had to master so much mathematics that they became emotionally invested in the idea that the math they had learned explained -- had to explain -- the universe. Skidelsky calls for combining the postgraduate course in macroeconomics with another discipline -- history or psychology, say -- to expose young quants to the complexities of human institutions.

If mainstream economics doesn't change, however, it may eventually face the worst of all possible fates: market failure. How many students want to spend their lives quantifying a world that doesn't exist?

By Harold Meyerson, Washington Post, 30September2 009

Goldman Sachs: Pirates of Wall Street

In the New York Times article, "The Joy of Sachs" by Paul Krugman, Mr. Krugman states: The American economy remains in dire straits, with one worker in six unemployed or underemployed. Yet Goldman Sachs just reported record quarterly profits — and it’s preparing to hand out huge bonuses, comparable to what it was paying before the crisis. What does this contrast tell us?

First, it tells us that Goldman is very good at what it does. Unfortunately, what it does is bad for America.

Second, it shows that Wall Street’s bad habits — above all, the system of compensation that helped cause the financial crisis — have not gone away.

Third, it shows that by rescuing the financial system without reforming it, Washington has done nothing to protect us from a new crisis, and, in fact, has made another crisis more likely.

Let’s start by talking about how Goldman makes money.

Over the past generation — ever since the banking deregulation of the Reagan years — the U.S. economy has been “financialized.” The business of moving money around, of slicing, dicing and repackaging financial claims, has soared in importance compared with the actual production of useful stuff. The sector officially labeled “securities, commodity contracts and investments” has grown especially fast, from only 0.3 percent of G.D.P. in the late 1970s to 1.7 percent of G.D.P. in 2007.

Such growth would be fine if financialization really delivered on its promises — if financial firms made money by directing capital to its most productive uses, by developing innovative ways to spread and reduce risk. But can anyone, at this point, make those claims with a straight face? Financial firms, we now know, directed vast quantities of capital into the construction of unsellable houses and empty shopping malls. They increased risk rather than reducing it, and concentrated risk rather than spreading it. In effect, the industry was selling dangerous patent medicine to gullible consumers.

Goldman’s role in the financialization of America was similar to that of other players, except for one thing: Goldman didn’t believe its own hype. Other banks invested heavily in the same toxic waste they were selling to the public at large. Goldman, famously, made a lot of money selling securities backed by subprime mortgages — then made a lot more money by selling mortgage-backed securities short, just before their value crashed. All of this was perfectly legal, but the net effect was that Goldman made profits by playing the rest of us for suckers.

And Wall Streeters have every incentive to keep playing that kind of game.

The huge bonuses Goldman will soon hand out show that financial-industry highfliers are still operating under a system of heads they win, tails other people lose. If you’re a banker, and you generate big short-term profits, you get lavishly rewarded — and you don’t have to give the money back if and when those profits turn out to have been a mirage. You have every reason, then, to steer investors into taking risks they don’t understand.

And the events of the past year have skewed those incentives even more, by putting taxpayers as well as investors on the hook if things go wrong.

I won’t try to parse the competing claims about how much direct benefit Goldman received from recent financial bailouts, especially the government’s assumption of A.I.G.’s liabilities. What’s clear is that Wall Street in general, Goldman very much included, benefited hugely from the government’s provision of a financial backstop — an assurance that it will rescue major financial players whenever things go wrong.

You can argue that such rescues are necessary if we’re to avoid a replay of the Great Depression. In fact, I agree. But the result is that the financial system’s liabilities are now backed by an implicit government guarantee.

Now the last time there was a comparable expansion of the financial safety net, the creation of federal deposit insurance in the 1930s, it was accompanied by much tighter regulation, to ensure that banks didn’t abuse their privileges. This time, new regulations are still in the drawing-board stage — and the finance lobby is already fighting against even the most basic protections for consumers.

If these lobbying efforts succeed, we’ll have set the stage for an even bigger financial disaster a few years down the road. The next crisis could look something like the savings-and-loan mess of the 1980s, in which deregulated banks gambled with, or in some cases stole, taxpayers’ money — except that it would involve the financial industry as a whole.

The bottom line is that Goldman’s blowout quarter is good news for Goldman and the people who work there. It’s good news for financial superstars in general, whose paychecks are rapidly climbing back to precrisis levels. But it’s bad news for almost everyone else.

The New York Times

Peter Schiff on the Daily Show

Peter Schiff believes Americans should return to a basic economy that grows based on savings, not consumer credit.

The Daily Show With Jon Stewart	Mon - Thurs 11p / 10c
Peter Schiff
www.thedailyshow.com
Daily Show Full Episodes Political Humor Joke of the Day

Bush's Economy

Americans should be admired for their patience and fortitude. In a matter of less than eight years, the misguided policies and ineptitude of their not so great leader have damaged their country's reputation and their pockets, perhaps irreparably.

Who could possibly have imagined that in such a short period a massive Federal budget surplus of $128 billion would be frittered away to be replaced with a $ 357 billion deficit? And who can blame Senator Kent Conrad of North Dakota for predicting Bush “will be remembered as the most fiscally irresponsible president in our nation's history”?

Who would have believed when Bush moved into the White House that, eight years later, the mighty dollar would be turned into funny money to the extent that Egyptian landlords are now demanding Euros instead?

Not so long ago, even the most reputed financial seer would have been ridiculed if he or she had divined the fire sale of Bear Stearns and Washington Mutual or the bankruptcy of Lehman Brothers.

Bear Stearns managed to survive the crash of 1929, Washington Mutual has been in business since 1889 and Lehman Brothers was founded even earlier in 1847. Is it mere coincidence that three “rock solid” institutions should collapse on Bush's watch?
Bush on the economic collapse:

Bailout Bush

Demonic Derivatives and the Greenspan Legacy

The New York Times examines the Former Fed Chairman, Alan Greenspan, in an article entitled, The Reckoning: Taking Hard New Look at a Greenspan Legacy:

...“Clearly, derivatives are a centerpiece of the crisis, and he was the leading proponent of the deregulation of derivatives,” said Frank Partnoy, a law professor at the University of San Diego and an expert on financial regulation.

The derivatives market is $531 trillion, up from $106 trillion in 2002 and a relative pittance just two decades ago. Theoretically intended to limit risk and ward off financial problems, the contracts instead have stoked uncertainty and actually spread risk amid doubts about how companies value them.

If Mr. Greenspan had acted differently during his tenure as Federal Reserve chairman from 1987 to 2006, many economists say, the current crisis might have been averted or muted.

Over the years, Mr. Greenspan helped enable an ambitious American experiment in letting market forces run free. Now, the nation is confronting the consequences.

Derivatives were created to soften — or in the argot of Wall Street, “hedge” — investment losses. For example, some of the contracts protect debt holders against losses on mortgage securities. (Their name comes from the fact that their value “derives” from underlying assets like stocks, bonds and commodities.) Many individuals own a common derivative: the insurance contract on their homes.

On a grander scale, such contracts allow financial services firms and corporations to take more complex risks that they might otherwise avoid — for example, issuing more mortgages or corporate debt. And the contracts can be traded, further limiting risk but also increasing the number of parties exposed if problems occur.

Throughout the 1990s, some argued that derivatives had become so vast, intertwined and inscrutable that they required federal oversight to protect the financial system. In meetings with federal officials, celebrated appearances on Capitol Hill and heavily attended speeches, Mr. Greenspan banked on the good will of Wall Street to self-regulate as he fended off restrictions.

Read the entire article here.

Enron Loophole

John Bogle

John Bogle addressing the Miller Forum at the University of Virginia: Curiously enough, what has happened to our system of capitalism is precisely what this university's great founder warned us about two centuries ago. Hear Thomas Jefferson: "I hope we shall crush in its birth the aristocracy of our moneyed corporations which dare already to challenge our government in a trail of strength, and bid defiance to our laws." We didn't do that, and here are nine quick examples—three each from corporate America, investment America, and mutual fund America—that reflect the negative consequences of this change.

In Corporate America:
1. The staggering increase in managers' compensation.... Long ago, Herbert Hoover, one of our few businessmen to serve as President, put it well: "The only trouble with capitalism is capitalists. They're too darn greedy." Imagine what he'd say today.
2. The rise of financial engineering. In a remarkable manipulation of financial statements,corporate earnings are managed to meet the "guidance" that these executives give to Wall Street, quarter by quarter.....
3. The failure of our traditional gatekeepers. ..auditors,...became partners, if not co-conspirators...Regulators and legislators (who in 1993 forced the SEC to back down on requiring that option costs to be treated as—of all things!—corporate expenses) also ignored the public interest. And corporate directors failed to provide, as I put it in my book, the necessary "adult supervision of these geniuses" who managed the firms. Put more harshly, ... "When we have strong managers, weak directors, and passive owners, don't be surprised when the looting begins." And that's, of course, what we've seen at Enron, WorldCom, and too many others.
In Investment America:
4. The vanishing ownership society. ..
5. The rise of short-termism. Institutional money management, once an own-a-stock industry (holding an average stock for 6 years during my first 15 years in this field) has become a rent-a-stock industry,...
6. The triumph of illusion over reality....security analysts came to focus ever more heavily on illusion—the momentary precision of the price of the stock—they increasingly ignored the reality—... Measuring up, unfortunately, to Oscar Wilde's piercing description of the cynic, our money managers came "to know the price of everything, but the value of nothing." But when there is a gap between perception—illusion—and reality—the business fundamentals of cash flow and dividends—it is, to state the obvious, only a matter of time until the gap is reconciled . . . inevitably, in favor of reality.
In Mutual Fund America:
7. The industry changed. ... Our traditional guiding star of stewardship was transmogrified into a new star—salesmanship.
8. The conglomerates take over. ... Alas, in the fund industry in the aggregate, you not only don't get what you pay for, you get
precisely what you don't pay for.
9. Mutual fund returns fall drastically short of market returns... Warren Buffett accurately describes the problem: "The principal enemies of the equity investor are expenses and emotions." The fund industry has failed investors on both counts.

Read the John Bogle's entire address here.

Read "Democracy in corporate America" by John Bogle.

Watch John Bogle on Bill Moyers

From GM to AIG

There's an old saying: 'As General Motors goes, so goes America.' This week the share price of General Motors nosedived. In the closing hour of trading on the New York Stock Exchange on Thursday, the iconic US automaker fell by 30% cutting its share price to a level not seen since 1950.

There's now a real danger that one of the biggest companies in America could go bankrupt.. . .

And the pain of the top echelon of AIG was also eased somewhat in September when they repaired to the St Regis resort in southern California to digest the implications of the $85bn government bailout of their firm. It cost $440,000 with $23,000 spent on 'spa' treatments. 

The trouble in which General Motors finds itself and the grotesque greed of the filthy rich who pushed Wall Street over the edge are, in an odd way, connected.

On Wall Street, the deregulation of banks in the final years of the Clinton Administration allowed for nimble investment banks like Lehman Brothers to create un-dreamt of wealth through a dizzying complex web of financial engineering. Risk was a concept that could be squared away using algorithms. Money was not linked to selling things. It was seemingly created out of thin air. 

Somewhere along the line, income distribution became seriously skewed. The rich became incredibly rich. The moderately well paid union jobs at Ford and GM came to be considered a problem and were blamed for making their companies uncompetitive.

In this election year, both US presidential candidates continually tell their audiences their country is at a turning point. Indeed it is. Debt to pay for cars, college tuition and yes, those houses- became a temporary solution to a society and economy enormously out of balance.

The US Treasury has signed an $800bn bailout bill for the financial sector. It has given a $25bn bailout to the 'Big Four' US automakers. Its national debt is headed for over $10 trillion.

The unfortunate irony for either presidential winner who arrives in the White House in January is: He may find the country too broke to fix.

From "Shortt Take: General Motors" by Robert Shortt.

Keating 5 Scandal

From the Keating Economics website: The current economic crisis demands that we understand John McCain's attitudes about economic oversight and corporate influence in federal regulation. Nothing illustrates the danger of his approach more clearly than his central role in the savings and loan scandal of the late '80s and early '90s.

John McCain was accused of improperly aiding his political patron, Charles Keating, chairman of the Lincoln Savings and Loan Association. The bipartisan Senate Ethics Committee launched investigations and formally reprimanded Senator McCain for his role in the scandal -- the first such Senator to receive a major party nomination for president.

At the heart of the scandal was Keating's Lincoln Savings and Loan Association, which took advantage of deregulation in the 1980s to make risky investments with its depositors' money. McCain intervened on behalf of Charles Keating with federal regulators tasked with preventing banking fraud, and championed legislation to delay regulation of the savings and loan industry -- actions that allowed Keating to continue his fraud at an incredible cost to taxpayers.

When the savings and loan industry collapsed, Keating's failed company put taxpayers on the hook for $3.4 billion and more than 20,000 Americans lost their savings. John McCain was reprimanded by the bipartisan Senate Ethics Committee, but the ultimate cost of the crisis to American taxpayers reached more than $120 billion.

The Keating scandal is eerily similar to today's credit crisis, where a lack of regulation and cozy relationships between the financial industry and Congress has allowed banks to make risky loans and profit by bending the rules. And in both cases, John McCain's judgment and values have placed him on the wrong side of history.

The Un-American Economy on the Colbert Report

Wall Street Got Drunk on Swampy Swaps

Steve Kroft from 60 Minutes covered the Wall Street meltdown story: "A Look At Wall Street's Shadow Market." I've been crying like a voice in the wilderness that the whole Wall Street mess was from the demonic derivative market and their skanky cousin the swampy swaps. The Republicans are trying to smear the poor and minorities with the whole financial market meltdown, but if anyone just scratches below the surface, they'd see that the derivatives and the swaps are the reason for this market freefall.

From the transcript of the 60 Minutes show:

Before your eyes glaze over, Michael Greenberger, a law professor at the University of Maryland and a former director of trading and markets for the Commodities Futures Trading Commission, says they are much simpler than they sound. "A credit default swap is a contract between two people, one of whom is giving insurance to the other that he will be paid in the event that a financial institution, or a financial instrument, fails," he explains.

"It is an insurance contract, but they've been very careful not to call it that because if it were insurance, it would be regulated. So they use a magic substitute word called a 'swap,' which by virtue of federal law is deregulated," Greenberger adds.

"So anybody who was nervous about buying these mortgage-backed securities, these CDOs, they would be sold a credit default swap as sort of an insurance policy?" Kroft asks.

"A credit default swap was available to them, marketed to them as a risk-saving device for buying a risky financial instrument," Greenberger says.

But he says there was a big problem. "The problem was that if it were insurance, or called what it really is, the person who sold the policy would have to have capital reserves to be able to pay in the case the insurance was called upon or triggered. But because it was a swap, and not insurance, there was no requirement that adequate capital reserves be put to the side."

"Now, who was selling these credit default swaps?" Kroft asks.

"Bear Sterns was selling them, Lehman Brothers was selling them, AIG was selling them. You know, the names we hear that are in trouble, Citigroup was selling them," Greenberger says.

"These investment banks were not only selling the securities that turned out to be terrible investments, they were selling insurance on them?" Kroft asks.

"Well, it made it easier to sell the terrible investments if you could convince the buyer that not only were they gonna get the investment, but insurance," Greenberger explains.

But when homeowners began defaulting on their mortgages, and Wall Street's high-risk mortgage backed securities also began to fail, the big investment houses and insurance companies who sold the credit default swaps hadn't set aside the money they needed to pay off their obligations.

Bear Stearns was the first to go under, selling itself to J.P. Morgan for pennies on the dollar. Then, Lehman Brothers declared bankruptcy. And when AIG, the nation's largest insurer, couldn't cover its bad debts, the government stepped in with an $85 billion rescue.

Asked what role the credit default swaps play in this financial disaster, Frank Partnoy tells Kroft, "They were the centerpiece, really. That's why the banks lost all the money. They lost all the money based on those side bets, based on the mortgages."

How big is the market for credit default swaps?

Says Partnoy, "Well, we really don't know. There's this voluntary survey that claims that the market is in the range of 50 to 60 or so trillion dollars. It's sort of alarming that, in a market that big, we don't even know how big it is to within, say, $10 trillion."

"Sixty trillion dollars. I know it seems incredible. It's four times the size of the U.S. debt. But that's the size of the market according to these voluntary reports," says Partnoy.

He says this market is almost entirely unregulated.

The result is a huge shadow market that may control our financial destiny, and yet the details of these private insurance contracts are hidden from the public, from stockholders and federal regulators. No one knows what they cover, who owns them, and whether or not they have the money to pay them off.

One of the few sources of information is the International Swaps and Derivatives Association (ISDA), a trade organization made up the largest financial institutions in the world. Many of them are the very same companies that created the vast shadow market, lobbied to keep it unregulated, and are now drowning because of unanticipated risks.

Read the entire transcript here. Or, better yet, watch the Kroft 60 Minutes segment.

Watch CBS Videos Online

Jim Cramer: Sell Everything!

Jim Crammer in his usual over-the-top style said on the Today Show for the small investor to panic now and avoid the rush. In other words, sell everything! While he was speaking with Ann Curry, Cramer said, "Whatever you may need for the next five years, please take it out of the stock market. Right now. This week. I do not believe that you should risk those assets in the stock market."

Is Cramer yelling fire? I don't know. At one point, the Dow was down more than 800 points. Although the stock market rallied during the final 90 minutes of the trading day, the Dow finished down about 370 points at 9,955.50, which is the lowest point since 2004.

MSNBC

Remember the Political Hit on Eliot Spitzer

Former NY Governor Eliot Spitzer pulled the cover off of the whole sub-prime lending mess. The Republicans in the Bush Administration used the full power of the federal government to wiretap and trap Spitzer. Since Spitzer was the governor who knew too much, the Republicans had to take him down with a sex scandal.......as if he were the ONLY politician that paid for sex. But with Spitzer it wasn't about the sex. Read Eliot Spitzer's article "Predatory Lenders' Partner in Crime," published by the Washington Post on Thursday 14 February 2008, which happened to be the day after Spitzer was busted. This excerpt was found it on Truthout, but it has also been cited on the Daily Kos.

How the Bush administration stopped the states from stepping in to help consumers.

Several years ago, state attorneys general and others involved in consumer protection began to notice a marked increase in a range of predatory lending practices by mortgage lenders. Some were misrepresenting the terms of loans, making loans without regard to consumers' ability to repay, making loans with deceptive "teaser" rates that later ballooned astronomically, packing loans with undisclosed charges and fees, or even paying illegal kickbacks. These and other practices, we noticed, were having a devastating effect on home buyers. In addition, the widespread nature of these practices, if left unchecked, threatened our financial markets.

Even though predatory lending was becoming a national problem, the Bush administration looked the other way and did nothing to protect American homeowners. In fact, the government chose instead to align itself with the banks that were victimizing consumers."...

...When history tells the story of the subprime lending crisis and recounts its devastating effects on the lives of so many innocent homeowners, the Bush administration will not be judged favorably. The tale is still unfolding, but when the dust settles, it will be judged as a willing accomplice to the lenders who went to any lengths in their quest for profits. So willing, in fact, that it used the power of the federal government in an unprecedented assault on state legislatures, as well as on state attorneys general and anyone else on the side of consumers."

Read the complete article here on Truthout.org.

Soup is Good Stock

On the day that the Dow absorbs its biggest one-day loss in history (777.68 points). The Nasdaq dropped 199.61 (9.14%), to 1,983.73, the eighth largest point decline and the third biggest percentage fall in its history.

The Standard & Poor's 500 index declined 106.59 (8.79%), to 1,106.42. It was the S&P's largest-ever point drop and its biggest percentage loss since the week after the October 1987 crash. When 499 of the S&P 500 stocks headed south for the biggest stock meltdown of the new century, one sock held it's value and even increased. Campbell's Soup is not only good food, but in the midst of an economic collapse, it also proves to be a sound investment.

Even Stephen Colbert noted the Campbell Soup rally phenomenon:

Putin Pooh-Pooh's US Financial "Irresponsiblity"

From the UK Independent article entitled "Putin turns on US "irresponsibility'": Vladimir Putin has accused the United States of "irresponsibility" as he criticised its primary role in the economic and financial turmoil that has undermined the foundations of global capitalism across the world.

The Russian Prime Minister's remarks yesterday came after several European leaders, including the French President Nicolas Sarkozy and the German Chancellor Angela Merkel, said the spiralling crisis started by toxic housing debts in the US raised questions about the "Anglo-Saxon" way of doing business.

"Everything that is happening in the economic and financial sphere has started in the US," Mr Putin told a government meeting in Moscow. "This is a real crisis that all of us are facing. And what is really sad is that we see an inability to take appropriate decisions. This is no longer irresponsibility on the part of some individuals, but irresponsibility of the whole system, which as you know, had pretensions to [global] leadership."

Read the entire UK Independent article "Putin turns on US 'irresponsibility'" here.

America's Big Gamble: Nixon, Bush, Palin

From Richard Cohen's New York Times article entitled "Nixon, Bush, Palin":

A closer look at the Bush gamble is merited because the first person to reprice risk on the basis it no longer existed was the president. Now, that’s leading by example.

The gamble involved going to war in Iraq at an estimated cost to date of about $700 billion (does that figure sound familiar?), while opting not to raise taxes but to lower them. It involved going into that war, and another in Afghanistan, while asking not for shared sacrifice but a great collective maxing-out in the service of: shopping.

At the same time, Bush, who often seemed to need directions to the Treasury, opted to allow an opaque derivatives market to grow into the trillions without supervision, regulation or information. The market knew best. Turns out that what the market knew best was how to turn capitalism into a pyramid scheme for trading worthless paper.

The cost is now clear. But we should be grateful for small mercies. Remember Bush wanted to throw Social Security into the casino, too, by privatizing it!

Continue reading Richard Cohen's "Nixon, Bush, Palin" here.

Kill Bill

Jon Stewart is on a roll.