Former Institutional Investor editor Michael Carroll is the apparent ghost writer for Paulson's memoirs, Heidi Moore writes in Daily Intel. And yet Paulson was too "busy writing" those memoirs to give an interview to the Times, his flack told the paper ahead of a big article questioning Paulson's calls to Goldman Sachs.

The flack also tried to claim Paulson had been barred from speaking by his publisher; this was refuted nearly instantly. It should be, on some level, comforting that the man once entrusted with distributing hundreds of billions of taxpayer dollars can't pull of the simplest of lies. And yet, it isn't, is it?

Paulson's spokesperson said he was "busy writing his memoirs and that his publisher had barred him from granting interviews until his manuscript was done."

Oops, the WSJ's Katherine Rosman actually went and asked his publisher if that was true. And the publisher, in a comical twist, said no, he never "barred" Paulson from anything, but of course, "Hank is in process of writing his book and quite frankly, he is on deadline. He is too busy to go and sit for interviews."

The entire US Treasury Department is a subsidiary of Grand Central Publishing's Business Plus imprint.
[Pic: Getty]

Reports the Guardian:

A lack of competition and a surge in revenues from trading foreign currency, bonds and fixed-income products has sent profits at Goldman Sachs soaring, according to insiders at the firm.

Staff in London were briefed last week on the banking and securities company's prospects and told they could look forward to bumper bonuses if, as predicted, it completed its most profitable year ever. Figures next month detailing the firm's second-quarter earnings are expected to show a further jump in profits. Warren Buffett, who bought $5bn of the company's shares in January, has already made a $1bn gain on his investment.

Further, the piece cites "experts" who say that Goldman's bonus-slinging ways is a big "F You!" to those trying to regulate a corrupt financial system. You don't say?!

Vince Cable, the (UK) Liberal Democrat treasury spokesman, said: "The investment banks more than any other institutions created the culture of excessive leverage, excessive risk and excessive bonuses that led to the downfall of the financial system. Now they are cashing in and the same bonus culture has returned. The result must be that we are being pushed to the edge of another crash."

This proves once and for all that Goldman Sachs is in fact running the United States government. Thank you Hank Paulson, Neel Kashkari et al for setting up the circumstances that have fully illuminated this fact. We're sort of pissed about this but, at the same time, feel liberated by you guys finally affirming who our true masters are. So yeah, thanks a lot a-holes.

The only bright spot in all of this is that Matt Taibbi is going to be so pissed about it, and we kind of like it when Taibbi is pissed off about something.

Goldman To Make Record Bonus Payout [Guardian]

A tipster at the ceremony snapped a photo of Kashkari, the Treasury's assistant secretary for financial stability, waiting to deliver a speech at Western Reserve Academy. He graduated from the private school in Husdon, Ohio, in 1991, where classmates remembered him as an "egocentric jerk" who featured a Ferrari on his high school yearbook page.

He returned today to his alma mater to explain how being a failure is awesome. For example, the first time he tried to leave Goldman Sachs and get a government job, he got nixed!

Kashkari was trying to get into a prestigious White House Fellowship program for mid-career people. As part of the process, his boss at Goldman Sachs got him a letter of recommendation from the company's then-Chief Executive Officer Henry Paulson.

But Kashkari got rejected from the program halfway through the process.

Then Paulson became Treasury Secretary and got Kashkari a job. Nice how that works! Unfortunately, Republican-appointed, Ferrari-loving, wind-energy-hating Goldman Sachs alumni aren't exactly popular with the Obama kids.

Kashkari back in his Western Reserve days:

• This Is Why You're Poor
• I Was Told There'd Be Self-Regulation
• Atlas Sucked
• Twitter Wit

Vote for the scoundrel who most exemplifies the venal, self-interested, scheming, dastardly behavior that emptied out your 401k, and we will dedicate one of the three water closets at Gawker HQ to the winner and affix to the door a memorial plaque bearing his name. We'll name the Most Loathsome at noon on Friday.

Bernard Madoff
The Pope of Ponzi schemes bilked gullible investors out of $64 billion in a byzantine scam involving forged profit statements, fake trades, and a complicit auditor. The biggest fraud in the history of Wall Street.

AIG's James Haas, Douglas Poling, Jonathan Liebergall, and John Does 1 through 71
These AIG executives destroyed AIG with credit-default swaps and incompetence. We paid $170 billion for their sins; they each got $1 million-plus bonuses.

Sir Allen Stanford
The Texan billionaire and Antiguan knight has yet to be charged with a crime, but is accused of running a billion-dollar fraud through his Stanford Financial Group, which is under investigation by the FBI and SEC. Also, like Timothy Geithner, he doesn't pay his taxes, and owes the government $227 million, according to the IRS.

John Thain
The Merrill Lynch chief ran his brokerage into the ground while redecorating his office to the tune of $1.2 million with $35,000 commodes, and is under criminal investigation for allegedly rushing out $4 billion in bonuses to Merrill Lynch executives before Bank of America bought the firm and found out that it was worthless.

Jimmy Cayne
The Bear Stearns chief was busy getting high, playing bridge, and golfing while his firm went under and had to be sold to JPMorgan Chase in a Fed-brokered fire sale. The Bear Stearns collapse launched the Panic of '08.

Jim Cramer
What an asshole! He grinned and grimaced and shouted and rang bells and pressed buttons and now no one has any money, and all he had to do was go on the Daily Show and act catatonic for about 20 minutes.

Dick and Kathleen Fuld
The arrogant Lehman Bros. CEO passed up multiple chances to sell the company he destroyed, engaging Treasury Secretary Hank Pauson in a catastrophic game of chicken that ended in Lehman's bankruptcy. He reportedly got his clock cleaned by an employee when he used the company gym on the weekend after the bankruptcy, but he denies it. He recently sold his $13 million Florida estate to his wife Kathleen in an attempt to shield it from creditors. Kathleen, at least, has a healthy enough sense of shame to ask for a plain paper bag when shopping at Hermes, which she did last Christmas.

Timothy Geithner
Do something!

Hank Paulson
The erratic and unstable former Treasury Secretary calmly let Lehman go belly up, promptly announced to Congress that hell would rise up and swallow America if he didn't get $700 billion to spend on troubled assets, and then decided not to do the whole troubled asset thing and just give it to some banks. All yours, President Obama!

Alan Greenspan
He staked the future of the nation on the rantings of an insane lady who wrote dirty novels, and assured us that low interest rates and endless streams of credit would—and he scientifically proved this!—never, ever end up biting us in the ass. Then he apologized.

Marcus Schrenker
The Indiana financial consultant was accused of fraud, so he stashed a red motorcycle in a storage unit in Birmingham, Alabama, flew his private turboprop plane from Indiana to the skies over Alabama, parachuted out, injuring himself and leaving the plane to crash 200 yards from a residential neighborhood, sought out local residents for help by claiming to have been in a canoeing accident, and hid in a pup tent in a Florida campground until authorities found him after a three-day manhunt.

Robert Rubin
The architect of Clinton's economic policy made sure that complex derivatives remained unregulated and that the Glass-Steagall act was repealed, which allowed banks like Citigroup to do whatever they pleased, so that when Rubin left the government and joined Citigroup as an "adviser" Citi shareholders could lose all of their money.

Herb and Marion Sandler
The couple founded Golden West, a mortgage lender that gave enormous mortgages to unemployed grifters. The grifters didn't make their payments, but that's OK because the Sandlers sold Golden West to Wachovia for $24 billion in 2006, before anybody figured out what they were up to. Saturday Night Live threatened to kill them on the air, but then censored themselves when the Sandlers got to them.

So there you have them. Vote for the worst of the worst. Harboring particular hate for someone we left off? We'll consider write-ins from the comments.

A background on the science: Men typically have longer ring fingers than index fingers, while women's fingers are even. But excess testosterone in utero has been found to lengthen ring fingers (and turn women lesbian). The ring-finger characteristic, in turn, has been linked to traits like success in hypercompetitive fields like Wall Street and professional sports. As you study the finger length of Washington's moneymen, new and old, the question to ask: Having gotten into this mess by people taking outsized risks, do we really want a bunch of damn-the-torpedoes macho men fixing it?

The old team:

Bush Treasury Secretary Hank Paulson's ring finger is freakishly long, which could explain his impulsive behavior with the government's bailout money.

Federal Reserve chair Ben Bernanke's ring finger is cocked here, but extended, he seems to fit the profile.

Neel Kashkari, the Ferrari-loving head of the Treasury bailout program, has a relatively normal hand.

The new team:
President-elect Barack Obama's index finger is almost as long as his ring finger, which fits with his reputation as a cool cat, but not his reputation as a studmuffin.

Paulson's replacement at Treasury, Tim Geithner, is an eerie match for his spidery fingers.

As Harvard's president, Obama economic advisor Larry Summers got in trouble for suggesting women were no good at science. But did his critics take into consideration his womanly hands?

The villain:
Called to account for the collapse of his firm, Lehman Brothers CEO Dick Fuld could invoke a novel defense: With that stubby ring finger, how could he possibly be a wild and crazy type who'd risk his entire company on bad mortgage-bond bets?

Okay, so, today's Times byline orgy re-enactment of that coupla days a coupla weeks ago where suddenly every banker was like "OHSHTWRSCRWD" achieved two important things:

1. Reminded "Main Street" (Aside: irk you as much as it does yours true that the pols keep calling it "Main Street" when the whole reason this started is because there's NO SUCH THING anymore in this country?? Because everyone had to have his own house, recall?? Anyhoo) that, you know, every business in this freakin country operates on debt, not because they're spoiled delusional children like every last CEO on the Street except John Thain (which reminds me, Johnny Boy is staying on with the new Bank of AMerillca! See, you KNEW he wasn't in it for the nine figure pay package, aw…) but because DUH, because that's like the basis of all civilization or something!! And

2. Reminded Wall Street Just How Crazy it is with a creepy/inspiring (which? both?) anecdote about Black Thursday over at Goldisachs. Lloyd was freaking out, Goldman stock in freefall, etc. etc.…and then one o'clock rolls around and someone they identify as a "prankster" starts playing the "Star-Spangled Banner" over the loudspeaker. All the bankers are like, what?! Some even put their hands over their hearts. And at THAT VERY MOMENT, the stock stopped falling. Turned up a little even! Guess what had happened? That's right, a short-selling ban had just been announced!! Capitalism itself had been suspended! Think that means there's something Goldman guys find inspiring about this country… other than its free market?? Yeah probably not, but I thought about shedding a tear!

Okay so moving on, the big story is…well shucks, got a few hours? No of course not! We're all about to hit me baby one more time with another public appearance by everyone's fave fakenbaked ratings black gold governess!!! (Broad is like Merrill with the CDOs after even AIG stopped insuring them, we know she's bad for us, but we just can't stop.) So I'll make it quick: everyone, except maybe Buffett and John not to be confused with Hank Paulson, is screwed: every other hedge fund is screwed, Veronica Peterson of Columbia, Maryland, who is trying to pay a $4,450-a-month mortgage on fifty grand a year — hey, why not have a go at that, quant jocks? — is screweder, the market that is being artificially propped up by the continued short sale ban managed to fall 350 points today anyway, not that anyone is paying attention to the market because the entire private sector is too busy wondering where the heck they're supposed to find a line of credit when the entire financial system won't trust anyone but the guv-mint with its money anymore. Yikes! Oh, though if Veronica Peterson's story shook your faith in private enterprise, here's a doozy from the public sector: there's a special provision in the new bailout bill offering (SORELY-needed) tax relief to the makers of wooden arrows used in bow-n-arrow sets for children. Think you could poke someone's life out with one of them things?

Anyway, if I were really Serwer this is where I would actually round up a few MORE asides and tangents here and call them "Loose Change," but in the Web 2.0 era that gets to be your job! Although if Dismal Science wants offer himself for the position of Serwer's old standby source "Deep Blue" (sug. nickname change: "Deep Shit") he knows who to G-chat!

1. "Profit" is kind of a scam.

Profit, as they say in the business, is the "bottom line."* But when every financial institution in America can follow a decade of unprecedented "profits" with the threat of Universal Abject Ruin, you have to conclude the whole damn "bottom line" is bullshit. Yesterday the NYT ran a story about an obscure unit of the insurance company AIG that generated shitloads of profits in the boom years. It generated shitloads of profits because it sold "credit default swaps." Credit-default swaps protect the principal paid on a bond in the case of a default. AIG made shitloads selling them in the boom years because a lot of other guys on Wall Street were making shitloads of money rolling up mortgages into bonds, and a guy from Morgan Stanley called up a guy at AIG named Joseph Cassano, told him about these rolled-up mortgage security deals, and asked if AIG would be interested in getting into the business of insuring these mortgages in much the same way AIG insured the houses said mortgages had been taken out to buy. Because Morgan Stanley would totally buy that insurance! Goldman Sachs would also be interested. A few crafty hedge fund guys were interested too. Later that "interest" would yield a profit bonanza for the guys who were smart enough to load up on them!

But first the profit bonanza's was AIG's. By 2005, this unit of AIG generated three and a quarter billion dollars revenue. And you know what the operating profit margin on that revenue was? Fucking 83%. Eighty-three percent. That is after they paid everyone's salary and Blackberry bills and sleeper-class airfares and five-star hotel rooms and for all their office supplies. AIG shared the wealth with employees more, of course. At the end of the day people who worked in that unit brought home between a third and 44% of revenue. Forty-four percent!!! That is literally unreal. Isn't the whole point of having an "insurance" company that you save money like that to have on hand for disaster? What sort of insurance company makes an record-breaking profit the same year they're on the hook over a billion dollars for a record-breaking natural disaster? (An insurance company with a freakishly profitable near-impossible-to-understand unit that does not report to any insurance regulators, for one!)

Well anyway, Goldman ended up putting as much as twenty billion dollars "on the line" with AIG's CDS-es. Twenty billion dollars is just over a billion dollars less than Goldman gave out in Christmas bonuses last year because, in stark contrast to most other banks on Wall Street, Goldman had been so smart and prudent and visionary and bought CDS-es early and booked record profits. In any case, now Goldman was worried about AIG. Goldman stock could plummet if AIG went under! And Goldman CEO Lloyd Blankfein must have told his old boss Hank Paulson that, because Hank invited Lloyd to be the only investment banker in attendance at a special meeting two weeks ago about the fate of AIG. Hank saved the insurer, and while they were at it they made some sort of arrangement for Goldman and Morgan — the guys who hatched this whole plan in AIG's head to begin with! — to become "holding companies" that would be protected by the FDIC. This effectively eliminated investment banking, and one hopes, some of the heady profit margins with which it was once synonymous.

2. Because the system — like CNBC itself! — is rigged to reward fear of commitment.

On CNBC this announcement was met with a lot of talk about how investment bank stocks would no longer "justify" their huge price-earnings ratios because, as real banks instead of specialized "investment" banks, they wouldn't be able to continue to take such big risks and generate the same grotesquely large profit margins they once did. There is something seriously warped about that mentality, though. If you watch CNBC you probably buy into the notion that profits are somehow "the bottom line," that the pursuit of profit makes everything more efficient, that profits create jobs and therefore salaries should more closely track the "bottom line," and if everything ran more "like a business" then employees would be more "accountable." Maybe you buy into this notion because it seems rational; maybe you buy into this notion because it takes so goddamn long at the DMV, but whatever the case, if you are watching CNBC now, it might dawn on you that they are too panicked trying to relay to you all this pressing urgent information to give you the real story, which is that all those assumptions about profits and the bottom line and accountability get turned completely on their heads when it you impose upon them the term limits of the fiscal year and everyone gets to cash out. Nowhere is our national fear of commitment more readily apparent than our willingness to allow Hank Paulson to pay no taxes on a half billion dollars in Goldman stock options to take a government job for three years because we are so wary of investing such faith in an entrenched bureaucrat, only to have him hit us up for a line of credit when all that fear of commitment results in a whopping expression of our collective fear of commitment.

3. "Demand" is also a construct.

A corollary to the "profit" construct is the "demand" construct. A story: the other day my friend the NYSE trader was ruminating on the absurdity that the defining buzzword of the subprime mortgage crisis was "tranche." Yeah, why does everyone pronounce it funny? I wondered. Because it means 'slice' in French, he told me. When you are selling bonds assembled from the foggy promises of ignorant unskilled people to pay ever-increasing fees to ensure their continued residences in shitty overpriced tract homes in eastern San Diego for thirty fucking years — unskilled people who at best work themselves in real estate — it helps to pretty up the sales pitch with pretty French verbiage.

On the front of today's Wall Street Journal "Marketplace" section are two stories on top of one another that form a neat little parable about the nature of demand. One is about how fast food chains like McDonald's and Panera Bread are worried about the credit crisis because Bank of America and other banks have suddenly tightened lending to people whose plan to make money depends on opening evermore McDonald's and Panera Bread locations. Just below this story is another story about how food makers like Campbell's, Kellogg and Kraft are excited about the credit crunch, because it enables them to make the pitch to American consumers to spend more money on "value" foodstuffs such as Frosted Flakes and condensed soup, and those kinds of foods have huge profit margins because of course they are actually a terrible value to consumers, but that doesn't matter as long as some ad agency is being paid eight figures to come up with a folksy campaign reminding Americans what great "value" they're getting. Whatever the outcome of the credit crunch, the only logical takeaway of the two stories goes, Americans will continue eating junk.

Which reminds me: I could go for a tranche of pizza right now!

But the point is, demand is highly manipulable, and we are the masters of manipulation. We've convinced ourselves that if a lower-profit margin-generating division of a company is sold to a Japanese company or simply discontinued it is because that division — and thus the country — is "moving up the value ladder." In the market's ceaseless quest to ascend the value ladder America has, of course, left behind such resilient, and also arguably valuable, industries as the manufacture of sophisticated computer chips and the construction of half-billion dollar oil tankers and probably soon car manufacture, for Asians to occupy themselves working on.

4. Good people will be punished. Good people are always punished. Just ask the Jews.

The Asian countries, of course, are concerned about this. Just because they work six day weeks in sweltering assembly lines doesn't mean they aren't addicted to our demand. China keeps living standards artificially low to maintain high employment, and they build up excess reserves they have to invest it in our iffy financial system, and Chinese people are aware of this, which is why the government faces angry internet retaliation back home when those investments suffer, as they did when Blackstone stock started crashing a few months back.

Which brings me to the Jews. As any Chinese person could tell you, the Jews have long been associated with a knack for making money. But many Jews also pursue relatively unprofitable jobs, like running for Congress. Much has been made of the need for Congress to vote on a bailout package before the Jewish holidays, because there are 43 Jews in Congress, almost all of them Democrats, and as Barney Frank so wryly noted last week "It's a well-known rule; God will only hear your prayers if you're in your congressional district." Barney can say that because he is of course himself Jewish. Anyway, this morning on CNBC Charlie Gasparino was trying desperately to hammer home to viewers that Barney Frank was largely to credit for getting the bailout package done in time to save Wall Street. (Uh, or not!?!) Other anchors kept cutting Charlie off. As Frank himself just told the Washington Post, "You don't get credit for a disaster averted." You also don't get credit for holding your nose and doing the politically unpopular thing and trying to avert disaster if you did not have the votes to avert disaster because everyone hates everyone. However, Barney Frank does get credit for being funny just now. Sigh.

5. And despite the protestations of contrarian pundits it is hard to believe some sort of disaster was/is not at hand.

Because in a story on the Lehman bankruptcy today, the Wall Street Journal noted that the Tuesday morning following the announcement the London Interbank offered rate, the interest rate at which banks offer one another overnight loans, the interest rate to which some $300 trillion in contracts are anchored, rose from 3.11% the day before to 6.44% and "even at those rates, banks were balking at lending to one another." The two guys who actually calculate the Libor have not been on CNBC to my knowledge, but I bet I can tell you what they were thinking when they went through their spreadsheets that day: "Holy Fuck." (And maybe also: "Why again do we securitize mortgages?
Isn't the one book read by everyone in the entire finance industry sort of about how that was a bad idea?) In any case, nothing on CNBC managed to be quite so startling as this story. Maybe because they've desensitized everyone with their incessant re-loop of Jim Cramer's prescient freakout clip.

*Oh, a lot of finance guys will distract you by calling other metrics the "bottom line" — EBITDA or profit "from continuing operations" or during the internet era ha ha, blah blah "eyeballs" — but all that is accounting bullshit, and the whole system is accounting bullshit.

The Wall Street Journal on what happens now:

Democrats could decide to go ahead with their plan without Republicans. While this would ensure passage, it would essentially saddle Democrats with responsibility for a bailout package that has stirred up strong resistance among both Democrat and Republican voters — with elections just weeks away.
[...]
If Democrats are forced to move forward on their own, the party's demands on the White House are sure to go up. Proposals that once seemed off the table — such as a plan to give bankruptcy judges authority to adjust mortgage terms — would likely gain new life. The prospects would also likely rise for Democratic proposals to stimulate the economy, such as new spending on roads and bridges and extended federal benefits for the unemployed.

But they won't want to do that because the bailout plan is unpopular (depending entirely on how it is explained and described to voters) so they need the support of Congressional Republicans in order to make sure Democrats facing reelection don't have the albatross of bailing out Wall Street around their necks. This close to an election, it's better to be obstructionist (while complaining about a do-nothing congress) than bold.

Roll Call (in a special Friday edition!) on the negotiations:

Senate Republicans are pissed at House Republicans and John McCain, for sabotaging the progress they made:

Senate Budget ranking member Judd Gregg (R-N.H.) said he didn’t know whether the process would break down as a result of House Republicans.

“I certainly hope that rational minds will take control of the process on both sides,” Gregg said. “The problem isn’t hypothetical. It’s real.”

House Fanancial Services committee ranking Republican Spencer Bachus has now pissed off everyone because he acceded to the Dodd/Frank compromise and went to their little press conference and then he announced that House Republicans were rebelling. He was forced to put out a statement announcing that even though he was the ranking Republican involved in the negotiations, he did not represent House Republicans.

Congress will probably be in session through the weekend, though the Senate's schedule is "murky." They still have to pass "a continuing resolution, a stimulus bill and the bailout." Democrats might sneak the bailout into the CR, though that is a last resort move. Probably no votes today on anything.

Mark Ambinder on whether this is McCain's fault.

Yes and no. He didn't say a damn word to anyone during the Cabinet Room meeting. So he didn't bring up the John Boehner/House Republicans plan, and he didn't attack the Paulson deal. He is "urging all sides to come together."

But Boehner and the White House — and McCain — if they want to get something passed — do have the responsibility to persuade these Republicans to support the bailout .

After all, if not to get these recalcitrant Republicans on board, why did McCain go to Washington in the first place?

So he's doing nothing, at all, except providing political cover to Republicans who don't want to vote for this.

Judging from the recent Fortune profile we went back and read, he is exactly the type of dude we'd never see ourselves getting involved with, which maybe gives you some insight into how he has stayed married for 39 years. A non-ideological mild-mannered Republican pragmatist who likes to work out, he's depicted as a consummate optimist. Oh yeah and he doesn't drink. "Slow to grasp the seriousness of the credit crunch." And there's this scary quote that is so scary because he sounds like he thinks he is expressing some serious conviction:

"When there is intervention, I really believe that the shareholders need to lose. Bear Stearns was a great old institution, but I don't know how you can put government money in there and protect the shareholders."

But one specific detail about this guy just stuck out as so amazingly awesome: Paulson is a Christian Scientist. Don't Christian Scientists not believe in medicine or something? Isn't that like the Ron Paul of religions? Because it's a pretty massive irony that Wall Street is on life support and we've got a follower of a religion that doesn't believe in America's Awesome First Rate Health Care System "playing God."

1. Because money is overrated!
We know this. We know it so well. And just to prove it we pay billions of dollars to science to prove it to us, year after year after year. And yet. As a society we totally live and die (no not really, we just act like we live and die!) by the tiny nuances of the trajectory of the aggregate of all the flows of all that money, as if it Really Totally Matters. We do this, obviously, because we're obsessed with making comparisons — am I at least doing as well as last year? Am I really smarter than his last girlfriend? Shouldn't I buy a house now that all my friends are doing it? — because it is just so much easier than the Is This Bringing Me Joy question that seems so totally sappy and sentimental we find it to be a hilarious joke when some little Third World country like Bhutan pragmatically invents a Gross National Happiness Index because no one actually thought of that first. But as the Times reminds us today:

Research has shown a significant level of depression, for example, among lottery winners. Other research has shown that above a household income of $50,000, there is little or no correlation between income and happiness.

2. Because It is already making New York more fun funner!
Nick wanted me to point out that the Great Depression was good or some industries — electrical engineering, film — that are maybe more worthwhile and exciting than the freaking stock market, but that brings me to a larger point. On Saturday I got this email from a friend who is a specialist on the New York Stock Exchange:

Last week was one of the most exciting weeks of my life. I think traders who had previously taken psychedelics had an unfair advantage.

Which kind of neatly underscores an important truth of this city: we are here for the "action." We are not here for the riches or because Guiliani made it so tidy and safe and Singaporean like our relatives always annoyingly assume when we so graciously leave it to endure family gatherings. I mean, if our relatives ever visited us they would know that New York is still fundamentally gross, and THAT'S SORT OF WHY WE'RE HERE. It is fucked up, but we chose to live among the tenements and the rats and all that once-proud peeling buckling infrastructure and all those whiffs of strangers' body odor because something about it makes us feel alive, even as the constant unquenchable thirst for that feeling also exposes the parts of our insides that we're slowly choking to death. But look! The New York Observer reports people are actually talking to strangers on the subway again. It's a paradox, and creative destruction, and possibly sector rotation — so the action leaves the Street for a little while, it will return in some gross new neighborhood the haters will instantly hate just as much. In the meantime, it's like that time all the power went out! Everyone loved that, remember? Oh and remember the subway strike? People loved that too. Shit, they probably secretly loved the cholera epidemic. Moral of story: we love that the economy is as fucked-up as we are. Like, there is a reason they call it "depression" duh!

3. Because Haters are tired of Hating!
I am not such a hater that I did not find it touching how right after 9/11 the Two Americas united to declare War On Haters. Petey Pablo penned that patriotic remix of his "North Carolina" song and Ja Rule and Kid Rock hung out together at some military base, etc. etc. Fast forward seven years, and the New York Times brings us the amusing news that Sarah Palin actually refers to her critics as "haters." This nonsense rapper concept reached all the way out to Alaska! Can we kill it now? It turns out yes! Because the very next week, following comparisons of the professional stock market haters known as shorts to terrorists and homicide bombers, the SEC actually outlawed short-selling! It outlawed hate. You would think this action would have gotten more hate from the shorts, but I have a theory: Haters really like nothing more that to be put out of their Hating-Ass Misery, at least for a few weeks. (Remember 9/11?) And this way they got to be proven right in the process, which is really all they care about. In any case, the Depression will sort of force Hateration Nation to acknowledge the symbiotic nature of its relationship with the Plutocrats, Jocks, Preachers, Republicans, Bloviating Public Intellectuals, Venture Capitalists and Self-Help Gurus that Make This Country "Great" and vice versa. Fittingly, this grudging detente was prophesied by the rapper Maino in the remix to his song Hi Hater.

4. Because everyone feels a lot better about capitalism now that Warren Buffet is the guy who will be making another few billion dollars profiting off its near-collapse!
If you are a capitalist, Warren Buffet was your hero when you were, like, eight. By the time you started your first private equity internship or whatever you were more like "Ah, Buffet, sentimental old sucker, making his money the hard way like that." Why? Because Warren Buffet made $62 billion over a six decade career investing in real companies over the Very Long Term, and that is just so unnecessary when you can make like at least a billion dollars in like a year just by taking a 20% fee on some money you got from rich folks plus a whole lot more money you got to borrow from banks at superlow rates, and throwing all that into some algorithm whereby the money makes a gazillion trades a day on some supercomplex financial instruments made up by bankers who got bored of collecting fees splitting up and re-packaging the weary pieces of the American economy and in any case, now you somehow make a half penny on the dollar every time some ratio goes below pi and none of it requires any entanglements with companies that actually produce stuff at all (thank god because that would be awkward.) Well, putting all that money through all that pointless action was not for Warren Buffet. Not because he worries about detachment from labor or any of that Marxist crap, but because it actually did just seem so pointless. (Buffet once said of gold: "It gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.") Anyhow, so all this madness goes on for a few decades, generates a little "liquidity crisis" and suddenly Goldman Sachs has to become a real bank, which basically means the Smartest Richest Most Elite Motherfuckers on Wall Street are forced to sit acknowledge the existence of the Actual Economy. Put a wonkier way: Exchange Value, Meet Use Value! And Buffet sees that investors are worried about this, but he knows it's a good plan for the Long Term everyone laughed at him for caring about, so he plows $5 billion into it at supergood terms and suddenly everyone's like, "Damn, that Buffet, he really is pretty smart." And smart turns out not to be incompatible with good!

5. Because there is a reason they call it the "Dismal" Science!
At some point the economists of America got sick of no one listening to their earnest well-intentioned prescriptions for making globalization not so shitty, so they launched a hostile takeover of psychology and wrote ninety different books full of highly detailed "analyses" of why people do the things they do. The message of these books was generally: "Hey, Starbucks Is Smart And Other Crazy Ideas!" These books became bestsellers because in times like these there is a huge market for books that state true facts without being totally depressing or resorting to "self-help," which is to say they basically amounted to self-help, which is to say they kind of dumbed down the profession. Well, here is a true fact: last week chief Freakonomist Steve Levitt made the following admission on his own damn Freakonomics blog:

As an economist, I am supposed to have something intelligent to say about the current financial crisis. To be honest, however, I haven’t got the foggiest idea what this all means.

Anyway, the point is, the fiftieth anniversary of The Affluent Society came and went and no economist managed to write a more relevant book about the economy. Although The Affluent Society author John Kenneth Gabraith's son James is apparently trying to do that now!

The latest is that McCain wants to postpone the debate until October 2. If Obama doesn't agree, he can debate some panel of undecided voters or whatever, McCain won't be there. An inspiring display of diplomacy, this one. Still mad about Obama snubbing his ethics reform ideas, I guess! Oh well, I have been watching these hearings for the past two days and the rest of Congress has been doing a pretty good job questioning spooky-looking Treasury Secretary Hank Paulson without angry angry John McCain.

My favorite was this guy, because of his accent obviously but also because he seemed somehow emblematic of the shifting tide of public opinon. Walter B. Jones was elected to Congress in eastern North Carolina as a Democrat in 1983 but switched to the Republican party in 1994. He gladly voted to authorize the war in 2003 but now says that was a mistake. He's a convert to Catholicism and a supporter of raising the minimum wage and most recently an endorser of Crazy Ron Paul. (Paul's debate with Bernanke over the causes of the Great Depression: also a highlight.)

Anyway, Jones sounded like he was on the verge of tears the whole time! And he had harsh words for the bailout concept, but managed to seem so goddamn genteel while saying them! I felt like I was watching a movie sort of. Except I know the end will be depressing!

The "Top Shit" is all pretty Lol, but be sure not to miss
1.The Entire GDP Of China, Inside My House

2. Loan To Retarded Brother And Sister-In-Law

3. Tom Friedman ha ha and (seriously)

4. Worst columnist ever Michael Gerson

From Brokaw:

- A pawn shop in Reno, Nev., has an excess supply of eight-track cassette players, flower print shirts, broad white belts and Wayne Newton tapes, having gambled that the '70s would come roaring back. The owner pleaded for a Treasury take-over, arguing, "How can the government stand by and let such a rich part of our American culture simply fade away?"

- The owner of an NFL poster shop in Green Bay, Wis., reports that he has given up on divine intervention and is now asking for Treasury to take over his business in a last-ditch effort to preserve the notion that whatever our differences, we're all Americans.

Asked how his business got into trouble, Karl Andursen of Muledeer, Minn., said he met a man who specialized in printing Minnesota Viking and Chicago Bears posters. Mr. Andursen said the man was willing to bundle his posters and sell them at a discounted rate to anyone who would take over the Green Bay territory.

Mr. Andurson said in the back of his mind he knew that could be risky since Green Bay is sacred ground for Packer fans who wouldn't cheer for the Vikes or the Bears if they were promised a fleet of new snowmobiles and lifetime hunting rights on Brett Favre's farm.

But, as he said, everyone was in the NFL merchandise game and he figured he'd take the territory and after 30 days flip the franchise for a big profit. A year later and he's not made a sale, not one, but who knew?

He's offered his complete inventory of Go Bears! and Vikings Rock! posters for 20 cents on the dollar or $500,000 in 30-year Treasury bonds.

(Personally, everything I ever buy is liquid so I don't have much to add to this list. But I hear Jezebel editor Dodai is moving this weekend!)

Pandit's more concerned visage:

Treasury secretary Hank Paulson's former look:

But now—don't bother him, he's busy:

[via CJR]