You can view this video right here by getting the latest version of Flash Player!

DOWNLOADS: (1025)

PLAYS: (1396)

Chris Matthews and Jim Cramer praise President Obama, Ben Bernanke and Tim Geithner for saving us from another Great Depression while failing to note a number of things. One, what caused the financial collapse in the first place that resulted in the need to rescue it. Two, that we still don't know where all of our tax dollars went. And three, that the system is still not safe and as Simon Johnson just pointed out on Bill Moyers Journal, things could worse because the system has not been reformed.

Matthews: Well, I guess the big question I would have Jim is if you had to look say five, ten years from now, looking back to now with the clarity of history, does Barack Obama deserve credit for a) avoiding a second Great Depression as he came into office with a strong stimulus of almost two trillion dollars in fiscal stimulus, huge printing of money, the bailouts etc. and secondly has he really put us on the course to recovery from this recession?

Cramer: Alright, I think it’s a team effort. Chris, first of all Ben Bernanke was late, but really went into high gear and the transition from Bush to Obama was really saved by Bernanke’s actions. Second, Bernanke did a good thing, but also Tim Geithner did a good thing and you could argue well Tim Geithner’s totally Obama’s man. Geithner made everybody feel that the banking system was safe. Once we had the banking system safe we began to have the recovery. So Obama should get a lot of credit for that.

Matthews: Well you know when the politicians wag and the right wing goes after them as they do—that’s the way politics works—they say bailouts, bailouts, bailouts as if there’s something wrong with the guy. They say deficits, deficits, deficits as if there’s something wrong with the guy. But everything I studied on college and grad school was that you’ve got to do those things, both in terms of the sectors of the economy which were in trouble, the financial sectors, the auto industry and you had to do something with regard to the over all economy in terms of printing the money, monetary policy, fiscal policy. The very things he did are things you’re taught you have to do. Am I wrong?

Cramer: No! You’re totally right. I hear those people criticize and I think, did they ever read any history about what this country did wrong between 1929 and 1932? This was exactly—what these pundits are calling for is exactly what created a multi-year depression. No! I mean, Bernanke, Obama, Geithner…they got it right!

Matthews: Well, all you hear from on the right is like Terry Jeffrey’s my pal who sits there like from Human Events on the far right, they come on here as if all you had to do was laissez faire. Step back; let the invisible hand solve the problem. Say’s law is still in effect, everything’s going to clear—they actually say this crap… so loudly they must believe it or else they’re just desperate. But they do believe that doing nothing was the right answer. Just balance the budget.

Cramer: They’re dreamers. Look!

Matthews: Let business solve the problem.

Cramer: Here’s the hand. It wasn’t invisible. It was choking America. We are very lucky that these guys understood history. Now the reason why it’s easy to criticize Obama and why he doesn’t take any credit is we haven’t created any jobs yet Chris.

Matthews: Yeah.

Cramer: And that is bad.

Sadly being humiliated by Jon Stewart was not enough to keep Jim Cramer from ever appearing on my television set again. He was right back on the air pretending it didn't happen. I don't know why anyone would take this guy's advice about anything. Later in the segment he also said this when asked about where we were headed with unemployment.

I think we are at the peak or within .1 [of the peak]. We are not going to breach 10%. I have my neck on the line on that.

Oy.

So now we know who the real death panelists are!

After the mortgage business imploded last year, Wall Street investment banks began searching for another big idea to make money. They think they may have found one.

The bankers plan to buy “life settlements,” life insurance policies that ill and elderly people sell for cash — $400,000 for a $1 million policy, say, depending on the life expectancy of the insured person. Then they plan to “securitize” these policies, in Wall Street jargon, by packaging hundreds or thousands together into bonds. They will then resell those bonds to investors, like big pension funds, who will receive the payouts when people with the insurance die.

The earlier the policyholder dies, the bigger the return — though if people live longer than expected, investors could get poor returns or even lose money.

And really, who could possibly have a problem with that? Why would we think that enormously powerful financial interests would want to, you know, protect their investments by making sure our health care is less than optimal?

I wrote a short piece last week in which I tried to remind Congress that we need to have hearings on the financial meltdown for obvious reasons:

Just a reminder.

I know we've asked for a Truth Commission on torture over and over again, but what about the financial catastrophe the world just experienced? When will hearings be held to uncover the facts that led us and the world to financial ruin? I know we have many basic facts of what happened, but when will an actual hearing take place? If nothing is officially uncovered then how can we stop another one from taking place?

Bill Scher of CFAF heard a little birdy and it sounds quite promising on that front now:

Word is circulating in Washington that members for the Financial Crisis Inquiry Commission will be named this week.

The commission is supposed to resemble the 1930s Pecora commission that dug into the culprits behind the Great Depression and laid the groundwork for major bank reform. But that will only be true if the commission is run by aggressive seekers of truth, independent of the financial industry, willing to use their subpoena power, knowledgeable enough to have warned us of impeding crisis in the first place despite market cheerleading from the political and media establishments.
--
Speculation from Reuters last week on who might be named was not terribly encouraging, though most of the names floated clearly were coming from conservative circles, as Republican leaders will pick four of the 10 members.

Cut...OK, here's where we come in. Updated: No members of Congress can be on the commission, but
I think an Alan Grayson or Henry Waxman type would be good choices for the commission. . We do need a panel of brilliant minds that has real progressive representation, but what we also need are people that have an appreciation for the "dramatic." That is, they should know how to ask questions with their allotted time in such a way that it will be highly informative and entertaining at the same time. These are the moments that can really educate Americans, but the commission needs members that understand how to use their valuable time---not to pontificate---but to educate and uncover. And it needs to be riveting while getting to the truth of this mess.

Please ask Speaker Pelosi and Harry Reid to make sure they put together a great panel. Nancy was almost scheduled to do a live chat on C&L last week, but because of my family issues, we are rescheduling. However, I think if we let her know how strongly we feel about the new Pecora Commission and ensuring that progressives are solidly represented, she'll come through.

Here's her contact info.

Harry Reid is another story. Here's Reid's office info, so please let him know too.

Continue reading »

Just a reminder.

I know we've asked for a Truth Commission on torture over and over again, but what about the financial catastrophe the world just experienced? When will hearings be held to uncover the facts that led us and the world to financial ruin? I know we have many basic facts of what happened, but when will an actual hearing take place? If nothing is officially uncovered then how can we stop another one from taking place?
Being too big to fail should never happen again. If it's too big to fail,( Citi Group) then it shouldn't exist.

The S&L scandal wasn't a blip on the radar and more will come if nothing is exposed. How many times will a Senator like John McCain be given a new lease on life to remake himself after a financial scandal? It's just a matter of time. Greed by the CNBCers will always be too much for them to handle, but they will never have to pay for it. You know who covers the bill.

I remember the night I first saw "Sicko," and I said to my friend, "This movie is going to change the whole health care debate." He was skeptical: "You really think so?" I said yes, that what really struck me was that we're the only Westernized country with for-profit health care, and it never even occurred to me that it wasn't like that everywhere. Once people realized that, I said, there were going to be changes.

Now change isn't far off. And I can't wait to see what Michael Moore does with these Wall Street bozos:

LOS ANGELES (Reuters) - Firebrand filmmaker Michael Moore, who targeted the Bush administration in "Fahrenheit 9/11" and the healthcare industry in "Sicko," is now focusing on the global economic meltdown.

The Oscar-winning director will release his as-yet-untitled documentary across North America on October 2, co-financiers Overture Films and Paramount Vantage said on Thursday.

"The wealthy, at some point, decided they didn't have enough wealth," the statement quoted Moore as saying.

"They wanted more -- a lot more. So they systematically set about to fleece the American people out of their hard-earned money. Now, why would they do this? That is what I seek to discover in this movie."

As the crisis of the American financial system deepens, former Texas Senator Phil Gramm is a consensus choice as one of its chief culprits. In recent weeks, the New York Times, Time and Nobel prize-winning economists alike have suggested a warm seat awaits Gramm in Dante's inner circle. Which is why on the very day the UBS vice-chairman's firm was sued by the Justice Department for its role in a mushrooming tax evasion scandal, Gramm took to the pages of the Wall Street Journal to blame others for the economic calamity he helped create.

As ThinkProgress noted, Gramm in his extreme makeover pointed the finger at the right-wing's usual suspects. In Gramm's revisionist history, Fannie and Freddie, the Community Reinvestment Act and, above all, the poor are responsible for the nation's economic plight. Three months after the New York Times concluded "deregulator looks back, unswayed," Gramm insisted the 1990's deregulation crusade he led had nothing to do with it:

"I believe that a strong case can be made that the financial crisis stemmed from a confluence of two factors. The first was the unintended consequences of a monetary policy, developed to combat inventory cycle recessions in the last half of the 20th century, that was not well suited to the speculative bubble recession of 2001. The second was the politicization of mortgage lending."

Gramm's fingerprints, of course, have been all over the financial meltdown and steep downturn gripping the U.S. economy over the past year. In his role as an adviser to John McCain's presidential campaign, Gramm famously decried the "mental recession" and mocked the United States as a "nation of whiners." But it was his "Enron Loophole," codified in the 2000 Commodity Futures Modernization Act, which not only enabled the Enron disaster but opened "the door to unregulated trading of credit default swaps, the financial instruments blamed, in part, for the current economic meltdown." And the Texas Senator's machinations in the Senate to create the 1999 Gramm-Leach-Bliley Act helped produce the subprime mortgage cataclysm, including catastrophic losses at UBS since joining the company in 2002.

Which brings us to a final irony of Gramm's extreme makeover. As it turns out, before he became a UBS vice-chairman in 2002, a company which this week agreed to pay a $780 million criminal fine and admitted to conspiring to defraud the IRS, then Senator Phil Gramm helped lead the 1990's Republican war to gut the Internal Revenue Service. Perrspectives has the details.

(London - October 20, 1987)

Sometimes the similarities can get eerie. I remember thinking, during the recent Wall Street crisis, how certain elements seemed so familiar, how fears seemed so complete.

I went back to an earlier crisis, the one which hit Wall Street the morning of October 20, 1987. The dismay, the shock, and even the denial that something was just fundamentally wrong with our economy.

Listening this past September to John McCain, proclaiming with dead-certainty that the economy was sound, and remembering how, almost the exact words, then-President Reagan saying yes, the economy was fundamentally sound, that all indicators pointed to no crisis.

The words and events from that day are assembled in a montage. Have a listen and remember, it's not 2008.

(Outside the New York Stock Exchange - October 20, 1987)

Saying he's "fairly optimistic about 2010," Paul Krugman says the economy will still need economic stimulus for several years to come and warns Obama to resist the temptation to cut back at the first signs of recovery:

A more plausible route to sustained recovery would be a drastic reduction in the U.S. trade deficit, which soared at the same time the housing bubble was inflating. By selling more to other countries and spending more of our own income on U.S.-produced goods, we could get to full employment without a boom in either consumption or investment spending.

But it will probably be a long time before the trade deficit comes down enough to make up for the bursting of the housing bubble. For one thing, export growth, after several good years, has stalled, partly because nervous international investors, rushing into assets they still consider safe, have driven the dollar up against other currencies — making U.S. production much less cost-competitive.

Furthermore, even if the dollar falls again, where will the capacity for a surge in exports and import-competing production come from? Despite rising trade in services, most world trade is still in goods, especially manufactured goods — and the U.S. manufacturing sector, after years of neglect in favor of real estate and the financial industry, has a lot of catching up to do.

Anyway, the rest of the world may not be ready to handle a drastically smaller U.S. trade deficit. As my colleague Tom Friedman recently pointed out, much of China’s economy in particular is built around exporting to America, and will have a hard time switching to other occupations.

In short, getting to the point where our economy can thrive without fiscal support may be a difficult, drawn-out process. And as I said, I hope the Obama team understands that.

Right now, with the economy in free fall and everyone terrified of Great Depression 2.0, opponents of a strong federal response are having a hard time finding support. John Boehner, the House Republican leader, has been reduced to using his Web site to seek “credentialed American economists” willing to add their names to a list of “stimulus spending skeptics.”

But once the economy has perked up a bit, there will be a lot of pressure on the new administration to pull back, to throw away the economy’s crutches. And if the administration gives in to that pressure too soon, the result could be a repeat of the mistake F.D.R. made in 1937 — the year he slashed spending, raised taxes and helped plunge the United States into a serious recession.

The point is that it may take a lot longer than many people think before the U.S. economy is ready to live without bubbles. And until then, the economy is going to need a lot of government help.

  Barack Obama today continued his assault on John McCain's empty response to the monumental collapse of Wall Street. From Phil Gramm and the bevy of lobbyists running his campaign, to the pass-the-buck "solution" of forming a committee, to his failure to take action over the past 26 years, Obama lays out the clear contrast between his vision for the economy and the same old failed Republican ploys offered by Bush/McCain/Palin.

Download | play   Download | play  

"Yesterday, John McCain actually said that if he's president that he'll take on, and I quote, 'the old boys network in Washington.' Now I'm not making this up. This is somebody who's been in Congress for twenty-six years, who put seven of the most powerful Washington lobbyists in charge of his campaign. And now he tells us that he's the one who's gonna' to take on the old boys network. The old boys network? In the McCain campaign that's called a staff meeting. Come, on!"