There is little wonder House Speaker and California congresswoman Nancy Pelosi seemed so immediately convinced, as Wall Street skidded toward apocalypse two weeks ago, that Congress needed to pass a bailout plan like NOW. What is truly sad is that she failed to convince so many of her state's fellow Democrats, most notably the congresswoman from the neighboring district of East Bay, Barbara Lee, to vote for her bailout bill.

Barbara Lee wanted the bill to include provisions protecting homeowners from foreclosure. Which makes sense. Just last year Lee's district had the highest price-to-rent ratio in the country: 51. Fifty-one. People were signing up for mortgages when they could have rented for less than a quarter of the price. They did this because they were stupid, but also because housing prices kept rising, and when the value of your house rose you could take out a home equity loan and use it to buy a new car (and in many cases, chrome rims.) Last year nearly a third of vehicle sales in California were purchased with home equity loans.

The attractiveness of a mortgage, from the perspective of the bank lending the money and the investment bank taking on the loan and rolling it up into securities and the hedge fund buying those securities and the insurer protecting the bond, etc. etc. etc., has always been that there was something solid, something lasting, underlying it: a house. An elementary school teacher who couldn't qualify for a bank loan to buy a $700 laptop could get a $450,000 mortgage because it had a house attached to it. No one ever anticipated that those houses would lose value quicker than the shiny new home equity-financed cars in their garages. In contrast, the lenders and the underwriters and the re-packagers and the insurers lobbied the SEC to allow them to amplify their exposure to the risk of that outcome exponentially by piling on debt of their own in a bid to maximize their profits, then proceeded to report said incredulity-straining profits in the assumption that they would continue rising and proceeded to pass those profits on to their employees, who in turn signed on for 100% mortgages on eight figure properties in Greenwich, where fear of the same sort of tidal wave of foreclosure has citizens proclaiming the financial crisis "Our Katrina."

The whole thing was a show of such dramatic private sector incompetence it could not be achieved had the plutocracy not known exactly what the fuck it was doing, just as that great Californian Ronald Reagan knew exactly what the fuck he was doing when he railed against government waste only to ratchet up that waste to unprecedented levels by outsourcing most of the government to crony capitalists whose fiduciary responsibility by definition required they do all they could to maximize government waste. It was all an ingenious plan to de-fund the left and its socialist bureaucracy of bleeding-heart "programs," and it worked so well the Bush Administration ripped off the strategy to launch a trillion-dollar war that represents a vast minefield blocking any of Obama's plans to "level the playing field."

Because while Obama's plans for the economy allegedly involve an average $800,000-a-household tax increase on the superrich, those plans were drawn up before the employees of Goldman Sachs spent their $21 billion in Christmas bonuses. The falloff in asset values has all the big pundits worrying we'll become the next Japan, but when you go to Japan and hear about the "Boom Years" of the eighties what strikes you is that most Japanese actually had some firsthand experience of said "Boom years." Did you?

We allowed America to become the land of ten thousand centimillionaires; now that we have a crisis poised to disproportionately — from a Year On Year perspective, anyway; that's how these people think — hurt that untouchable class, it is not going to be easy to wring out a massive increase in nominal tax dollars from them.

That is, of course, is what must be done. And it probably won't be positive for the Dow or the GDP or productivity levels or any of the arbitrary little numbers with which we're accustomed to measuring our economic well-being. It may well be a short term political windfall for the stubbornly fact-resistant class of politician who likes to say tax cuts on the wealthy always create jobs (when in fact no private sector of the economy besides health care has created jobs since 2000) or that Government "isn't the solution; more often than not it's the problem." What is the problem, of course, is people who think government is the problem who go into the government in what more often than not comes off like a twisted attempt to prove that. But the happy delusions of the state that brought us the Great Communicator are infectious, and the era clearly, desperately needs a Great Rebutter capable of optimistically guiding the country through what's going to be a rough time for all. The deep — and deeply unpatriotic — immorality of the "moral hazard" that has defined the past decade must be impressed upon every American voter. Every American voter needs to be able to visualize the 24-car garage of the billionaire hedge fund manager and wonder if some of the money might have not been better spent refurbishing the subway system or paying teachers more or helping an irresponsible homeowner renegotiate her mortgage or providing more comprehensive job training to some former welfare queen. All that stuff, after all, creates jobs too.

But to impress these ideas upon voters requires a kind of moral authority that is undermined by pandering partisan rhetoric and the pages and pages of pork-tasting provisions of the bill Congress is about to pass. (It's also sort of undermined by gazillion dollar tax breaks of the sort extended to Treasury Secretary Hank Paulson for taking the job, but whatevs.) Warren Buffett could certainly muster it; more importantly, he could articulate recent history in a way the politicians he supports can't. More importantly, he can inspire and/or shame his partners in uberwealth into accepting and acknowledging a measure of social responsibility, and more powerfully, broadcasting that sense of responsibility to the public. Billionaire hedge fund manager John Paulson profited handsomely betting against the housing market; he now is giving much of that away to helping screwed homeowners. More people should know about him; more rich folks should emulate him.

Mainstream media outlets — and our very own Richard! — have dipped into the market for Palin family fan fiction. Two weeks ago this market seemed the exclusive domain of independent satirists like Something Awful — which portrayed a young Levi Johnston as harboring an elaborate Sarah Palin wet nurse fantasy — and Jeff Johnson's blog, which imagined Todd Palin as the type of dude for whom "whiskey makes him more sober." Well this week New York's blog went there, inspired by the Sarah Palin's real-life, closed-to-the-press meeting with Henry Kissinger:

Kissinger: Zen I am very interested in vat you think of my legacy of realpolitik.
Palin: In what respect?
Kissinger: Vell, vat do you interpret it to be?
Palin: You mean your worldview? I think when someone like you says "Real Politics," you mean a clear, honest effort to rid the world of Islamic extremism, terrorists who are hell-bent in destroying our nation. There have been blunders along the way, though. There have been mistakes made, and with new leadership, and that's the beauty of American elections, of course, and democracy, is with new leadership comes opportunity to do things better.
Kissinger: I see. Can you get that bowl of vater for my dog, please?
Palin: Oh, I thought I just explained. I'm not a concierge — I'm Sarah Palin, I'm the woman John McCain selected as his vice-presidential running mate.
Kissinger: I know.
Palin: Oh! Sure, okay. So, you're German, right? I've been to Germany!
Kissinger: I am American.
Palin: Then why do you talk that way? You don't even say the "s" at the end of "politics."

L-U-L! But ugh, now the conservative establishment kind of has a point about lobbing whole "sexism" charge whenever the media makes a funny, right? Well, here's today's briefing from the Oracle of our Great Nation of Wasillas herself Peggy Noonan.

As for Sarah Palin, the McCain campaign continues to make mistakes. They don't seem to understand her strengths and weaknesses. The U.N. photo-ops were a staged embarrassment. Keeping the press away made her look infantilized. When she finally began to sit for television interviews, the atmosphere was heightened, every misstep magnified. With Katie Couric she seemed rattled. In the Charlie Gibson interview it was not good when she sounded chirpy discussing possible war with Russia. One should not chirp about such things. Or one wouldn't if one knew the implications. And knowing the implications is part of what we hire leaders for.

Okay, well, it's not like anyone really believed anything other than Peggy is an elitist liberal double agent of the chattering classes. But surely the prolific feminazis over at the National Review's Corner blog are national guarding their their favorite pitbull, right? Here's Palin fangirl Kathleen Parker today:

Circumstances have changed since Palin was introduced as just a hockey mom with lipstick — what a difference a financial crisis makes — and a more complicated picture has emerged.
…
Palin didn’t make a mess cracking the glass ceiling. She simply glided through it.

It was fun while it lasted.

Palin’s recent interviews with Charles Gibson, Sean Hannity, and now Katie Couric have all revealed an attractive, earnest, confident candidate. Who Is Clearly Out Of Her League.

No one hates saying that more than I do. Like so many women, I’ve been pulling for Palin, wishing her the best, hoping she will perform brilliantly. I’ve also noticed that I watch her interviews with the held breath of an anxious parent, my finger poised over the mute button in case it gets too painful. Unfortunately, it often does. My cringe reflex is exhausted.

Palin filibusters. She repeats words, filling space with deadwood. Cut the verbiage and there’s not much content there. Here’s but one example of many from her interview with Hannity: “Well, there is a danger in allowing some obsessive partisanship to get into the issue that we’re talking about today. And that’s something that John McCain, too, his track record, proving that he can work both sides of the aisle, he can surpass the partisanship that must be surpassed to deal with an issue like this.”

When Couric pointed to polls showing that the financial crisis had boosted Obama’s numbers, Palin blustered wordily: “I’m not looking at poll numbers. What I think Americans at the end of the day are going to be able to go back and look at track records and see who’s more apt to be talking about solutions and wishing for and hoping for solutions for some opportunity to change, and who’s actually done it?”

If BS were currency, Palin could bail out Wall Street herself.

HOLY SHIT.

So folks, there you have it: Sarah Palin is officially too much of a joke for conservatives with brains to have to pretend isn't a joke anymore. For this Noonan blames McCain's disregard of the Conservative Thinkosphere, but I actually think it's more like the subsector of conservatives that occasionally commits the gaffe of independent nonpartisan thought, which is something it turns out women — just not Sarah Palin — are capable of. Perhaps the continuing chaos on Wall Street, as notably communicated and commented upon to America by such gorgeous broads as Erin Burnett, Nancy Pelosi, Becky Quick and Maria Bartiromo, has reminded "Main Street" that the presence of lipstick doesn't necessitate being graded on a curve. But if they didn't get the message, Katie Couric sure hammered it home.

Graphic via Pressler at Daily Intel

Paulsen and congressional Republicans, or the few that will actually vote for this (most will be unwilling to take responsibility for the consequences of their policies), have said that there can't be any "add ons," or addition provisions. Fuck that. I don't really want to trigger a world wide depression (that's not hyperbole, that's a distinct possibility), but I'm not voting for a blank check for $700 billion for those mother fuckers.

Nancy said she wanted to include the second "stimulus" package that the Bush Administration and congressional Republicans have blocked. I don't want to trade a $700 billion dollar giveaway to the most unsympathetic human beings on the planet for a few fucking bridges. I want reforms of the industry, and I want it to be as punitive as possible.

Henry Waxman has suggested corporate government reforms, including CEO compensation, as the price for this. Some members have publicly suggested allowing modification of mortgages in bankruptcy, and the House Judiciary Committee staff is also very interested in that. That's a real possibility.

We may strip out all the gives to industry in the predatory mortgage lending bill that the House passed last November, which hasn't budged in the Senate, and include that in the bill. There are other ideas on the table but they are going to be tough to work out before next week.

I also find myself drawn to provisions that would serve no useful purpose except to insult the industry, like requiring the CEOs, CFOs and the chair of the board of any entity that sells mortgage related securities to the Treasury Department to certify that they have completed an approved course in credit counseling. That is now required of consumers filing bankruptcy to make sure they feel properly humiliated for being head over heels in debt, although most lost control of their finances because of a serious illness in the family. That would just be petty and childish, and completely in character for me.

But, sigh, s/he is not very hopeful.

Here's the industry's play: progressives will approach Nancy with ideas for reform, and she'll agree to push for their proposals, and she'll really mean it. Then industry lobbyists will go to Dennis Moore, Melissa Bean and a few other Democrats, and tell them how dire the consequences of the proposals would be, and that the members who understand how the economy works need to step up to stop Nancy and the crazy liberals from doing something rash. Then those Democrats will go to Steny and tell him how terrible Nancy's crazy ideas would be, and how we can't rush into something like that without much, much more thought. Maybe Barney will try to talk to Dennis or Melissa, but it will become apparent quickly that they have no idea what they're talking about; they're just repeating by rote what the lobbyists told them to say. Melissa may actually be dumber than Sarah Palin. Barney will realize he might as well talk to the lobbyists directly and save a step. The lobbyists will agree to something inconsequential, but certainly nothing that would really affect the industry's conduct. Then the leadership will do the math and conclude that because the vast majority of Republicans will vote against any bill, we can't get enough votes without the Dennis and Melissa crowd. The only way, our leadership will conclude, to get anything at all passed is to include nothing more than the inconsequential proposals that the lobbyists agreed to. Then we'll all go along because it would be wildly irresponsible not to act when we're staring over the brink of a complete collapse of world financial markets.
I'd diagram it for you if I had a chalkboard. I've seen the play again and again, and it always goes for long yardage.

Hey, you know what it reminds me of? That bank where everyone who wanted to get rid of those terrible CDOs got fired or demoted because it was easier to do things the way they'd always done them than face the ugly truth — plus it's not like anyone really understood any of that shit anyway! Which is to say basically all of them. Sorta makes you want to short-sell the whole fucking democratic process! Too bad the SEC outlawed it.

OpenLeft

*On the train over the weekend I spoke to a banker who pointed out, "Bottom line is that China's stock market has fallen 60% this year, our market falls 20% and we suspend capitalism. Guess they're more committed to it than us. And the truth is, when you explain away all the asterisks you'd have to qualify on that statement for it to be true, that capitalism is still capable of improving people's lives in China, whereas here it is largely not. Too bad the Democrats won't tell you that!

Clinton Supporter Pressures Pelosi Over White House Battle [CNN via TPM]

I am so sick of the matronly box — the rest of America doesn't dress like that," said Ms. Bono, 45, who, with her Palm Springs address, affection for the martial arts and her marriage to the late Sonny Bono, is decidedly un-Washingtonian. "We all want to be taken seriously and you certainly don't want to be too sexy," added Ms. Bono, a California Republican, "but you have to maintain your femininity. Pelosi is a beautiful dresser. I'm hoping she has great impact — fashion-speaking, not politically speaking."

Speaking Chic To Power [NYT]