California's IOU's
By John Amato Wednesday Jul 08, 2009 10:00amThis is more bad news for the state in the sun---run by Arnold.
From the WSJ: Big Banks Don't Want California's IOUs
A group of the biggest U.S. banks said they would stop accepting California's IOUs on Friday ... if California continues to issue the IOUs, creditors will be forced to hold on to them until they mature on Oct. 2, or find other banks to honor them.
...
The group of banks included Bank of America Corp., Citigroup Inc., Wells Fargo & Co. and J.P. Morgan Chase & Co., among others.I guess the banks don't think the 3.75% annual interest rate is worth the risk for a "BBB" rated debtor on the Rating Watch Negative list.
What a mess.
Duncan has a plan:
As I've said, I'm not sure what the Feds should do for California, but perhaps having the Fed guarantee California's IOUs, assuming they have that authority, so that banks will cash them for their customers might not be such a bad idea. It's just a bandaid for the overall problem, but will help some pretty needy people who need the cash.
I asked for California to get a bailout from President Obama in an earlier post instead of the IMF because soon, the money will dry up completely. I know a bailout won't solve the problem because we have the most frakked up legislative process in the US and that needs to really, really, really be fixed. Conventional thinking is that if we were to receive help then we'll never fix the problem. I agree with that, but what happens when the state is broke and nobody will play with us? As for Arnold, I'll take a phrase that Chief Brenda Leigh Johnson of The Closer commonly uses: Thank you, thank you so much.
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having trouble accepting all those TARP funds.
So basically god kills kittens when large financial institutions do not meet their earning estimates because they had been selling financial products which were detritus rated. However, when whole states go down... it is A-OK.
How can any admin make a case for the largest bailout in history when it affects Wall Street. However, Detroit and California can go pound sand?
Looking at the bailout, and the current health care debate, it is clear that the USA has one and only one fundamental right: the entitlement to profit by corporations. Any other social considerations, rights, responsibilities, etc revolve or are derived around the maxim of corporate profit.
... Bush was right. The Constitution really is just a goddamn piece of paper.
profit. The actions of the GOP (and most of the Dems) make perfect sense.
So yeah, Bush was indeed correct... for them the US Constitution is just a piece of paper. It was easy to dismiss his comment at the time as being just another manifestation of his sheer stupidity. But in the correct context, those words make perfect sense. It still does not make them "correct" but the words are not just random babbling from an idiot.
Now, look up the transcript of the health care townhall from the other day. Read Obama's words, and it becomes abundantly clear... Obama just can not compute a reality that does not have corporate profits. He just can not fathom it. He does not have a frame of reference that does not involve profit.
Which is very odd for a supposed community organizer (I assume he worked for non-profits then) whose mum had to fight tirelessly with HMOs during her cancer treatment.
The way I try to make sense of it all, it is that for certain sectors of our society... they seem to operate under the premise that sans the prospect of profit there would be absolutely no reason for people to do anything, ergo society would fail. Therefore, profit must be the main maxim that makes everything else fall into place. The constitution becomes irrelevant under hat premise. And thus witness the constant attacks we have seen on that piece of paper, most of the time you can make a case that the attack is initiated whenever that piece of paper may get in the way of corporate profit directly or indirectly.
Right or wrong, that context perfectly explains a lot our recent history/context.
During his speech in Berlin Obama remarked (and it must have been off-the-cuff; I've searched the transcript and can't find it):
"Americans don't hate the Rich. Americans want to BE rich."
.. and that's when I knew he was a Corporate Dem.
It's all about growth and expansion and profit for them.
The thought of an economy based on sustainable prosperity does not even enter their minds.
of fighting for the possibility of wealth more than they do to defend their interests. That is why they are so apathetic when it comes to the constant attacks on their very own rights and freedoms, but you will see people on the streets if any politician would be dumb enough to double tax rates for example.
That is why you have trailer park white trash flipping out when the tax rate on the rich is increased. Supposedly, everyone in this country thinks they are going to make it, and thus... they don't want to f*ck it up when they get there.
The American Dream was masterfully morphed into the proverbial carrot at the end of along stick.
It is what it is, I guess....
http://www.youtube.com/watch?v=8Cz4vcQKWfA
believe in baby jesus, you go to hell.
http://www.youtube.com/watch?v=5E5j-fIPyGk&fe...
and unless you can post a link to a vid, i will take it that you made it up
"This is the moment when we must build on the wealth that open markets have created, and share its benefits more equitably. Trade has been a cornerstone of our growth and global development. But we will not be able to sustain this growth if it favors the few, and not the many. Together, we must forge trade that truly rewards the work that creates wealth, with meaningful protections for our people and our planet. This is the moment for trade that is free and fair for all."
Well -- someone else heard it too.
I had the venue wrong.
It was April 2, 2009 at the G20 meeting in London.
American Values? Obama: 'Americans don't resent the rich, they wanna be rich'
Here's the transcript:
Transcript: Obama's G20 Press Conference
And here's the quote:
It was "Life, Liberty and the Pursuit of Property" from the beginning.
Howard Zinn makes the point quite well:
Howard Zinn: Untold Truths About the American Revolution
Get all the Hollywood, Pro Sports and Recording big shots that are from Cali or live in Cali or care about the people of Cali and throw a huge LIVE AID for Cali. If we can bankroll starving kids in Africa, can't we fix one of our own States.
All you TV watching, beer drinking mainstream media addicts could see ALL of your artificial heroes live on stage at the same time. You could have The Lakers, Buffy, Green Day, and the cast of Gray's Anatomy all doing something that is actually worth televising!!
... where either a $1000/day pay cut is in the works, or 1 month in prison/day.
There is no excuse for this Mexican standoff again. The 'no cuts' and 'no taxes' crowd simply can't stand on either side and thumb their noses at each other.
The budget has to protect infrastructure and those items that promote long-term growth/benefit for the state (that's education, IMHO, among other things).
The entire legislature (including staff) should be dismissed on July 1st. Entire funding should cease. They would then be forbidden to legislate until January 1 of the following year. It would be embarrassing the first time ... (Course tough love only applies to 'welfare moms' ). But would never happen again.
Seeing that this plays into the Republican's "small incompetent govt scheme meme" ...
I like your idea better ... Fine each member of the legislator $500 per day... increase it 10% a week. Each member of their staff is fined $25 per day. The funds go to make debt payments.
(Pay cuts are meaningless to most of them; Jails cost money ...maybe ankle bracelets?)
This state is disgusting!
of Arnold Bucks and sent it to Sacramento.
Okay, I know it is a huge part of the economy and therefore 'too big to fail,' but it is really irritating to me that a state that allows direct referendum voting on tax increases (which are always voted down) and on increased services (which are always voted in favor) is stunned by the fact that there is no money. I also get that it is a little more complex than that with the overall economy, but the last time CA went through this with Orange County--one of the most obscenely rich counties in the country--going bankrupt after the voters passed Proposition 13 so the folks sitting in their multi-million dollar beachfront mansions didn't have to pay as much in property tax as the average midwesterner (a point eloquently made by Warren Buffet at the time), it was clear that the voters deciding they were entitled to top-notch services while paying very little in taxes was not a sustainable model. The feds bailed them out then and here we are again. The attitude that they should reap the benefits of the horribly inflated housing market, but not have to pony up commensurate tax revenues--the rest of us should just bail their wealthy asses out when their model fails--is really not right.
strings attached.
Mickey7 -
I moved to CA ... I live in CA... Compared to other states (heck - economies). The problem is referendum voting. Period.
Many people still think CA is a "high-tax state" or that it is all the illegal's fault. The lack of knowledge and pervasive ignorance is devastating when voters decide fiscal issues.
back to Venice this fall, but now I'm not so sure...
Was the Gov of Calf and took over a massive hole the repugs kicked him out. So where is the same for a repug gov.
Now we know.
Bank On It: How Cash-Starved States Can Create Their Own Credit
Why should a State pay interest to a Bank???
When the State can create its OWN BANK???
All State Taxes go into the State Bank ..
And instead of paying interest to a Commercial Bank, the State Bank can EARN INTEREST ..
the answer is incredibly simple.
nationalize all the banks or better yet form a california bank and encourage people to do everyting locally. we have local bucks where i live and a surprising amount of vendors will accept them.
the only way to get away from under the dominance of the big banks and get the economy going again is to do this.
of course wars are really good for ending a depression as well,
and i know americans prefer killing to thinking this century.
It's time to Democratize The Economy.
... to something like the city of Vallejo, where the stranglehold by police/fire unions (top notch pay, six-figures in overtime) is basically running the city into the ground.
So we'd need a bank for Vallejo, but it'd be run by the same inept goobers on the City Council ...
http://rawstory.com/08/news/2009/07/08/robert...
read it and then you will know why you can't rely on the official story dumbass
Oh!!! I don't know , is it """ SOCIALISM """!!! I JUST CROSSED MYSELF , ATE GARLIC, AND JERKED OFF. Now i'm going to find an 18 yr old virgin and the spell against you demons will be complete
YouTube: BerkShares Local Currency on CBS (2007)
Plus related vids at that link.
on. people still think ZEITGEIST THE MOVIE is still made up. The banks are destroying us and people still just keep watching the shit on TV.
At least the CU I belong to here in the red county of Kern has stated they will continue to accept them.
Funny how that worked out. My CU didn't take any tarp funds and has posted earnings every quarter.
Terminate yourself, girly-gov.
The banks aren't going to do anything but take your money. You don't think they are obligated to actually protect you? Not after the TARP bailout, the bonuses, the corporate jets, the raises in pay.
If you use a bank, take your money out and put it in a credit union fast. The banks will collapse because they are worthless both on paper and in reality.
you can also blame the state legislature and the people
the legislature is made up of nutjobs on both sides of the aisle
and the people keep voting in bond measures and increasing our debt, without asking for accountability
This is the myth that is constantly being repeated in the media: it's 'nuts on both side' that is causing the current crisis. Although it is true that California is a haven for crazy politics on both sides, it does not follow that the current crisis is caused by extremists on both sides. In fact, as Krugmann pointed out, there's a simple solution to the crisis: raise taxes. Guess what side of the political spectrum is against that solution?
California is becoming a libertarian paradise, where there is no government to speak of. That's the only species of nut that is causing the current crisis.
We do not have marauding bands of road warriors going up and down the I5, so it is hardly a libertarian paradise, yet...
Read some commenter's words, and it becomes abundantly clear they just can not compute a reality that does not have California. They just can not fathom it. They do not have a frame of reference that does not involve California as a state.
Which is very odd for those asking for the rest of the country to put themselves at risk to bail out a failed experiment in narcissistic democracy.
The only way to make sense of it is that certain sectors of California society seems to operate under the premise that sans the prospect of low taxes there would be absolutely no reason for people to do anything, ergo society will fail. Therefore, low taxes must be the main maxim that makes everything else fall into place. This obviously is not working for the Golden State.
If Californbia is to be bailed out, there needs to be more than strings attached. The state should be busted up into smaller, more governable units or spun off in parts to more successful nearby states, like Nevada, Arizona, and Utah.
Those holding Arnold bucks can redeem them for US currency in Oklahoma. In return for their cars they will be given deeds to a small plot of land in that state and a sack of organic seeds.
Right or wrong, that context perfectly explains a lot California's recent history/context.
these IOU's are worthless.
I read something about this the other day and it was expressed that the reason the banks are putting a deadline on accepting IOU's is that if they don't the state will never be compelled to come up with a solution. The person who was speaking on behalf of WFB said that they did the same thing the last time the state had to issue IOU's and it forced them to come up with a deal within 3 days of the deadline.
I think we can all agree that the IOU's buy time and that CA is slow enough to resolve this crisis without a crutch added to the mix.
Q: Conventional thinking is that if we were to receive help then we'll never fix the problem. I agree with that, but what happens when the state is broke and nobody will play with us?
A: You then (FINALLY!) fix. the. problem.
Somebody posted "The Constitution really is just a piece of paper." That's right, and what did you think it was? The US Constitution upheld slavery, too, counting slaves as 2/3rds of a "person". Nix your "sacred" proposition problem. Period. Do it.
Even pathetic New York is getting very creative about the mess in the Senate (Patterson is going to appoint a Lt. Governor, maybe even a republican senator!, but even if he doesn't go that far, the Lt. Governor can break tie votes in the Senate). I'm very against California getting a federal bailout (or any state).
This recession looks like a calculated move so states and industry can get their employees off of payroll and pension obligations, assets sold to the highest bidder and any obligations to the poor rescinded.
Naomi Kline is a wise sage.
Can anyone here direct me to a good guide for emigrating to Canada please?
While I still have a few good working years left.
their immigration system is very transparent. They have a "point" system, so you can calculate whether or not you are eligible off the bat. If you have an advanced degree for example, you are pretty much guaranteed entrance.
I know a couple of people who moved to Canada, and the whole process was fairly painless.
for the info. Time to call the Canadian Embassy.
what’s the next step from there? Government issued chits. Maybe they’ll look like the German money/chits from the 1920s. They were half the size of today’s currency issued in One Billion Mark and Ten Bullion Mark denominations. But these will be corporate-issued chits. You’ll get a chit for so many gallons of water or a chit for so many hours of electricity. You can get a bag of corn-husk “tobacco” or coffee, which will be 10% coffee and 90% chickory, just like the “old days.”
..it's just very hard to convince people to take it.
Seriously. They do just that in the Berkshires right now. Not IOUs, a regional money called Berkshares. http://www.berkshares.org/
Maybe the better off parts of California should think about doing this. Put some fiscal responsibility pressure on Sacremento.
You need an entire community to commit to them, and even then...
Years ago I worked at a pizza shop that was involved in one of those 'scrip' programs. The problem was the scrip was being used by businesses whose services the pizza shop didn't use. He couldn't use the scrip to buy ingredients or pay the crew. So when the owner of the shop had to cash the 'scrip' in instead of trading it back for services from others involved, he had to pay taxes on the income. He took a loss. He got out of the program quickly.
I can't speak of the Berkshares program directly, but the program we were involved in seemed like an ill-thought-out tax dodge by right-wing libertarians.
Raising taxes, although a very attractive option, may (MAY, I SAID), cause additional problems for the state as CA is already not an attractive state to do business.
I know of many small businesses that plan to move to Nevada if taxes are increased further. Because of the types of businesses that these people are in, the location is not that important. It is the quality of life that attracts them to CA. although this may not seem important to many people, it needs to be considered. If you start losing more and more taxpayers, what is left?
NPR had a piece the other day that declared (whether accurate or not) that 5% of the people are paying 90% of the taxes in CA and that most of those 5% are small S-Corporation shareholders, in other words, small mom and pop companies.
Remember, we just had a sales tax increase as well. Some areas in LA county are as high as 10.75%.
For anyone who claims to be an expert, there is an interactive budget balancing exercise on the LA Times website. I was just sick after I saw what the options were, just sick. I invite you all just to take a gander at it. You will soon realize that there are no simple or comfortable solutions. http://www.latimes.com/news/local/la-statebud...
... that is why having a simpleton like Ahnold in charge is making things worse.
The solution is going to be painful, and there is a need for creative (and committed to the common good) people in charge. There is also a need for a lot of people in California to grow the f*ck up and own to their mistakes.
Killing California in order to "save it" should not even be an option. Period.
Newly bought Senator Ben Cardin put his foot in his mouth this morning on Washington Journal in trying to defend the pro-lobby/PAC support by our Democrats to a caller complaining of the ill effects on taxpayers.
Cardin mentioned a recent trip to Belarus by our Congress,led by him and paid for by us. He reminded the caller/gave the ususal excuse to cover the a**, of how "other people" have it so terrible -like in Belarus- and therefore he shouldn't complain. Cardin went on to over- exagerate the purpose of the trip as 'saving a very sick American from their evil grip'. Oh really Senator??
Actually the US and Belarus are trying to work together and the guy was not 'ill'. Rather he was a well to do US immigrant and lawyer - and a rightfully convicted felon. Russian politics was a specialty of his and he was heavily involved with the estate of a Russian tycoon. He forged documents in a legal case.
Cardin's real purpose was not to save an innocent man. Rather, it was simply a trip to free a wealthy Jewish immigrant from jail. The Economist and many other reputable news outfits make no bones about his guilt.
http://blogs.forward.com/bintel-blog/108764/
So, while California and several other states and their people suffer, Congress and their PACS play.
But worse to me as a Democrat, is that Congressional Senate Democrats in particular, are now more despicable in that they are more beholding to the interests - again - of Israel, over all other Americans sitting in foreign jails or here at home, some more seriously ill and completely innocent of the allegations made against them.
I no longer trust the Senate under Democratic control.
Prop 13 and the 2/3 majority vote for tax raising is repealed by referendum. Also, the referendum process should be made more stringent. And, as long as I'm daydreaming, lets us cut CA in half just below San Jose. Or San Francisco.
...have an actor for Governor, lets elect Meryl Streep or Woody Allen. Julia Roberts? I'm not familiar with todays actors & actresses, I haven't been to the movies in 6 years, and that was Harry Potter. Hmm.
I hope I am spelling his name correctly, but I understand Warren Beatty was suggested as a candidate against the terminator. I understand his response was something like, "Not interested, but I couldn't do a worse job than Arnold."
The GOP is really sticking it to the poor and the universities. My understanding is that in his meetings with the Democratic and Republican leaders of the legislature, he is trying to get concessions that he couldn't get with the special elections he called.
http://www.latimes.com/news/local/la-me-calst...
I talked to him for a while and asked him if he'd run..He's not interested, but he knows his stuff.
Government is not an endless well. It is, at least in a capitalist society, responsible for it's debts. And no matter what society you have, the first time it defaults on those debts it is no longer an entity.
Expecting banks to buy CA's debt at market rates is just stupid. This also doesn't solve any of the problems CA has. The only thing that can solve this insolvency is a united fiscal plan that requires CA to pay it's loans and stop taking new ones. Oh, maybe that would be too much to expect from the citizens of one of the richest states on the planet. They (gasp) might have to PAY for the shit they want.
What a concept.
hadn't been bailed out just a few months ago, sure... I can understand where you are coming from.
But since they did, now it is time for them to STFU and buy California's debt, just like we had to buy their shit.
I am all for personal responsibility, don't get me wrong. But I am also for applying that maxim to EVERYONE.
"The only thing that can solve this insolvency is a united fiscal plan that requires CA to pay it's loans and stop taking new ones. Oh, maybe that would be too much to expect from the citizens of one of the richest states on the planet. They (gasp) might have to PAY for the shit they want."
Well said! Some people want the public services of Sweden and the taxes of Mississippi.
At least one union has proposed that oil companies should have to pay a severance tax, i.e., a tax applied on oil taken from the ground. (This is the case in Alaska and Texas, two states with GOP governors.) A bill was drawn up requiring such a tax -- California is the only state in the union without one -- that would also prevent the tax from being passed on to consumers. The Republicans have simply said "no" to the idea.
Gray Davis must be laughing his ass off on this whole mess.
When Republican Arnold Schwarzenegger was elected governor of Democratic California, CA became the land of the surreal to me.
Then there was the episode when the Energy industry robbed CA through inflation of the price of electricity (under Bush).
The voting referendum just perpetuates the madness & ignorance.
But California is part of a larger problem: incompetent, corrupt leaders (one of the things that CIA analysis flagged as the quickest way for a country to become a failed state). Cf. California.
Then there is the disastrous Reagan-BushI-BushII deregulation policies. You'd think that some improvements would have been instituted after Enron (but under Bush such a wise move was seen as a non sequitur). Now with Geithner, it's just the same ol same ol writ astronomical
Now there's Obama, the Bush-regime friendly corporate dog. Well spoken corporate dog to be sure, but a dog nevertheless.
Thomas Jefferson “If a Central Bank is ever created in America . . . the “Bankers” will Rob The “Americans”
How about not giving free food healthcare and education to the illegals and their children. how many billions will that save? how about not giving an education to a child whose parents have defaulted on their mortgage? how much will that save? to the state of california how about living within your means? I don't feel i should have to pay for your bad spending habits.
Bravo!
The ironic part, it is that cali gives more to the Federal gob coffers, than we get back. The red saters sure have no problem with "our bad spending habits" in that case...
In fact, chances are that if the fed dollars contributed/received by California approached a 1:1 ratio, it would more than offset any of the cuts our troll friend was proposing.
Quote
"how about not giving an education to a child whose parents have defaulted on their mortgage?"
You're a poor excuse for an American. Go fuck yourself.
How are we ever going to get along with scum like this?
Is it wrong for me to hate them?
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