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« Ruminations – 19jul13 (updated++) | Main | Corporate Taxes – One more time »

21 July 2013


Michael Anderson

George, perhaps you should have posted this after this morning's service at your local house of worship. I like to think the morning's sermon would have given you pause.

But no matter, here it is and we will deal with it. I have commented on your screeds of this nature many times so you know from where I come, but I did have a new thought that I wanted to add. I actually look forward to a Republican taking over the White House in January of 2017 so that I can read what hopefully will be a continuum of these sorts of diatribes.

If they disappear, I will then learn of their partisan, nee Obama-centric, nature. I know that's a long time for me to wait, but I see no other way to confirm my hypothesis since you have had nothing to say on RR about the "transnationalists (nee globalists)" operating within the White House since George HW Bush's term began in 1989.

Ben Emery

Do you really dismiss the one world government of international banking/ free trade or just didn't want to comment on it as one of the biggest problems we face today?

WTO Destroying American Sovereignty


In past years, one of the local armored personnel vehicles, iirc labeled "RESCUE" in large white letters, was on display at the Nevada County Fair.

Assuming this year is no different, Mike should look it over in a couple weeks and tell us how safe it makes him feel.

Michael Anderson

GG, how does that address what I wrote? Is Obama responsible for that vehicle being at the Nevada County Fair?


"The Russians Are Coming, The Russians Are Coming"

George Rebane

MichaelA 1028am - Yes he is. Without federal monies given for those specific expenditures, the vehicle would not be there.

Stevnfrisch 1210am - Sadly, this is another post whose message has again eluded you.

MichaelA & BenE 946am++ - Liberalizing world trade has been the goal of trading nations since biblical times, and which efforts went on steroids during the 19th century. As a world hegemon, the US is free to participate in the WTO as little or as much as it wants. What evidence do you have that the two Bushes were promoting the kind of globalism that could be applied to the US which in the interval had reduced itself to no-options compliance?

Todd Juvinall

With the rogue EPA doing their business and the ESA locking up our Sierra's for a frog being killed by other frogs, I get a bit worried about things too. However, I believe Americans will not allow us to be the thirty fifth state of the Planet Earth United. They will rise up and kick some ass. Then those "One Worlders" will have to settle for Zimbabwe and Burma.

Russ Steele

MA @09:46

President George W. Bush and British Prime Minister Tony Blair both publicly embraced globalization. President George W. Bush made global engagement a theme in one of his State of the Union addresses. He said, “The road of isolationism and protectionism may seem broad and inviting -- yet it ends in danger and decline.” The Bush worldview was to spread democracy throughout the world to make it a safer place--a new world order of democratically elected governments.

His vision was NOT a new world order under the administration "of international bureaucracies." It was of representative government, made up of democratically elected organizations. This is not the government organizations envisioned by the trans-nationalists, "under the under the aegis of international bureaucracies." It was instead under constitutionally constituted representative government that chose to work together to create a better world.

This is a supportable position from my point of view, as we were not giving up our sovereignty in return for world order.

Bill Tozer

Dr. Rebane. I find this article too upsetting to comment much at the moment. Despite some of your invaluable posters here pooh-poohing this event which is happening, I find it as more evidence of what is really happening on our One Planet. This is more than Grass Valley Blue. Go ahead and put your head in the sand you all. Thank you Dr. Rebane for your diligence. Who says it can't happen here?

I have been puzzled ever since my friend in the Great Northwest e-mailed me about all the UN folks running around Spokane. Especially mysterious was their comment to the local press that "They are within 100 miles of the US Border which makes it a UN Free Zone." Don't know what to make of that except "we don't need no stinkin' papers."

George Rebane

Please also see my 21jul13 update to the Zimmerman/Martin post for further commentary on the President's remarks and the ongoing demonstrations.

Michael Anderson

Russ, thanks for your response. That's a lot of nuance for today. I am currently taking a nice vacation in Ashland, dumping some cash into their professional theatre local economy. But I'll get back to you shortly on this.

Todd Juvinall

Don't get too much culture there with the Shakespeare plays it may wreck your abiliy to relate at the pervese Burning Man.


Gee George, I guess you did not appreciate the humor in my reference to the classic film with Alan Arkin and Carl Reiner. I would not want to stand in the way of you replacing one bogey-man with another!

I am eagerly awaiting the future refrain that I am a 'trans-nationalist' now, to go along with 'collectivist'
'communist' 'socialist' 'fascist' and 'communitarian'.

Todd Juvinall

How true SteveF, you have acculturate identified yourself. What a pink!

George Rebane

stevenfrisch 0814am - Can't accuse you of being transnationalist for anything you've said on RR. But you do actively promote beliefs, initiatives, and policies that (perhaps unwittingly) abet the transnationalist cause.

Joe Koyote

Is there any gross politico/socio/economic problem that is not the fault of non-conservative thinking? Most of what transpires in here is blame blame blame. On the other hand, are there any of these problems that can be directly laid on the feet of conservative thought, like all things Wall St?

George Rebane

JoeK 133pm - good question JoeK. And the answer is 'Not really.' Using "all things Wall St" as an example, that industry in its proper operation has been a model of effective capital formation and direction so as to contribute not only to America's quality of life, but also the world's. Things go wrong when governments pass laws that distort the connection between risk and reward. Government/corporation collusion is not a tenet of conservative thinking, but it is a stanchion of progressive policies. Next question.

Joe Koyote

"All things Wall Street" seems to me to be the result of lax regulations and no oversight of the regulations that exist. How is that progressive thinking? I always thought de-regulation and little oversight to be more in line with conservative thinking and more regulation to be more liberal in nature. The bizarre financial instruments out there, some of which that led to the crash, were designed to yield huge rewards with little risk unless you are the one caught holding the bag (of sub primes as it were). Is the nature of the bailouts conservative or progressive in scope? By bailing out the banks wasn't the risk transferred to the homeowners who lost homes while the banks that gave out the loans got their money back? Wouldn't progressive thought bail out the homeowners and screw the banks? Perhaps all of the confusion is by design. If no one can figure out exactly what went on (is going on) then the real culprits (whoever they might be) get away with the loot. Sounds like "Oceans 11" or a zillion other "caper" movies to me. Reality trumps fiction once again.

George Rebane

JoeK 231pm - RR is on record for not supporting bailouts, especially of those corporations and institutions judged to be 'too big to fail'. And the "bizarre financial instruments" were designed to entail big risk and rewards. It's when the govt stepped in to spread the risk on the taxpayer that things go to hell. We should be on the same side of corporate bailouts Joe. (I would remind all that there are also progressive Republicans, e.g. I think Bush2 would have qualified.)


Here is the definition of 'abet':


Encourage or assist (someone) to do something wrong, in particular, to commit a crime or other offense.
Encourage or assist someone to commit (a crime).

instigate - incite - encourage - foment - provoke

Joe Koyote

"RR is on record for not supporting bailouts. We should be on the same side of corporate bailouts" - I understand that and agree.. What I am trying to understand is the reasoning behind commonly held conservative beliefs as they are characterized in the public sphere (and in here at times by some people) and how they are rationalized to the public... not necessarily your personal beliefs on which we share common ground on some issues. Many Americans buy into the "too big to fail" and other common rationalizations and I am trying to understand how it is possible and by what process it is that people can be persuaded to hold beliefs that are in direct contradiction to their own well being. I am a student of propaganda.

George Rebane

I used 'abet' in my 924am in the following sense -
a·bet (-bt)
tr.v. a·bet·ted, a·bet·ting, a·bets
1. To approve, encourage, and support (an action or a plan of action); urge and help on.
2. To urge, encourage, or help (a person)

But if someone reads it in the sense of supporting doing something wrong, then in my assessment of the transnationalists' goals, that additional coda fits perfectly.

George Rebane

JoeK 647pm - The critique of conservative beliefs and their apologetics is on strategy for RR. I'm not aware of a conservative backing of bailouts. However, if you are troubled by a particular conservative tenet, then point it out by all means. But please cite a conservative source for the tenet, and not a liberal attribution of 'what they really mean' or worse, fabricating a tenet out of whole cloth. And it is a no brainer to cite bad Republican behavior and lay it at the feet of conservative, libertarian, or conservetarian ideology.


Posted by: George Rebane | 22 July 2013 at 06:51 PM

Just wanted to be clear about what a charged word 'abet' actually is.

Posted by: George Rebane | 22 July 2013 at 07:01 PM

Really, "not aware of a conservative backing of bailouts"

Here is the vote on TARP:

George Rebane

stevenfrisch 742pm - please reread my 701pm.


George Rebane 8:26 PM

So reading the list of Senators who voted for TARP is it your contention that none of them are conservatives? Are we talking about the same TARP that was signed by U.S. President George W. Bush on October 3, 2008? Do I need to provide a fuller list of conservatives who have backed "bailouts"?

George Rebane

stevenfrisch 416am - Not at all Steve. Conservatives are not perfect and also make mistakes. You've been pointing out mine for years.

Ben Emery

I think what Steve and your own positions on the issue of bailouts is proving, no matter what political party a representative belongs they are owned by the banking/ financial sectors along with all other major industries. The TARP bailouts were a perfect example of who our government answers. I want to say the % was in the 70's who didn't want to bail out the banks but it was passed anyway with 74% majority. Oddly it was about the same % as American public who didn't want the bailout. Interesting though the democratic socialist Bernie Sanders voted against the bailouts.

During the Bush administration the house republicans had nearly 100 votes in favor but during the Obama administration could only muster up 4 votes.

To me the most disappointing caucus in the bailouts was the progressive caucus who were against the original bailout but then became in favor of it when the white house switched political party. My guess they were lobbied heavily and promised many things by the new Obama administration.

George Rebane

BenE 801am - Interesting analysis. But I still see that you lay the blame on the lobby interests and not so much on the politicians who are the only ones to draft legislation, vote, and sign it into law. As I have said countless times, the good part of capitalism is that it will game the system, as is the bad part of capitalism. It is the system of government (taxes, tariffs, regulations, ...) that needs fixing not the further shackling of capitalists. That is why I start with government - guilty until proven innocent - and not the private sector.

Todd Juvinall

Looking at the vote for the Bush bailout it appears to m the conservatives of the republican party did vote against it. Not in every case for sure, but Jeff Sessions and others I consider conservative did. I do understand the Bush bailout because when a train gets going, (the fear of worldwide collapse) it is hard to stop.

Michael Anderson

Todd blurped: "Don't get too much culture there with the Shakespeare plays it may wreck your abiliy to relate at the pervese Burning Man."

Todd, when will you stop typing stupid shit? Will your idiocy never cease?

While you were sitting in your Banner Lava Cap enclave of silliness, touching yourself inappropriately I can only assume, I was penciling a deal with Caldera Brewery in Ashland,Oregon for a new presence at Burning Man this year at a variety of locations within BRC. Big money deals. Wow, capitalism. Something apparently alien to Banner Lava Cap Toodles.

Burning Man annual budget = $25 million dollars.
Oregon Shakespeare annual budget = $35 million dollars.
Toodles annual budget (minus not paying for his foreclosure bullcrap) = 25 cents and change.

Any questions?

Ben Emery

I get what you are saying but the political reality is it takes an increasingly large amount of money to run for public office. Those who win will spend more money around 95% of the time, so a candidate needs to outspend their opponents not be able able to out think their opponents. Much of that spending is telling us how horrible the other candidates will be. What this means is those who want to get elected need lots of cash and the easy place to get it is through these big time lobbying efforts. Also I believe the last time I read the statistics a US Senator average lobbying salary waiting for them when they get out of congress is $1 million and for house of reps it is around $750,000. That is a nice raise from $174,000. It is set up for corruption.

I guess it comes down to the chicken or the egg.


Don't get me wrong, I think that without TARP our economy would have collapsed, and in retrospect Ben, I think almost all economic historians are going to agree with that. The issue I had was with George portraying conservatives as against TARP. Many conservatives voted for it.

Just because the % of 'people' opposing TARP may have been in the 70 % range does not mean that, at the time, it was not necessary. In short, I think Bernie Sanders and the House Progressive Caucus were full of crap....without TARP 50% or more of American mortgages held by federally supported underwriters would have failed, on top of the 20% that had already failed, and we would have seen a depression perhaps unequaled in US history. It would have collapsed the entire global economy, including China, and meant significantly more economic dislocation than we actually suffered.

The problem with TARP is that we did not follow it up in 2009-2010 with a complete overhaul of the federal banking and home mortgage system, including de-centrlaization of mortgage financing (by busing up and Fannie/Freddie and privatizing their assets back to smaller regional and local banks), a system to protect homeowners from foreclosures (by re-negotiating and extending mortgages) , and strict controls against future use of exotic financial instruments.

If I have a long term critique of the Obama administration it is that they expended their political capital on the Affordable Care Act (a policy I happen to support) instead of focusing on long term economic reforms which were sorely needed. Historians will argue which was more necessary at the time, and in the absence of the one I was left with little choice but to support the other, but that is only because the nature of politics is that one can only get one really big thing done at a time in Congress today.

Although I support campaign finance reform, the fact that 74% of the Congress voted against the gut instinct of 70% of the people may have actually been leadership rather than corruption.

Todd Juvinall

Michael Anderson | 23 July 2013 at 10:48 PM

Wow Mikey you are certainly off your meds on that post. Anyone who attends Burning Man is a pervert. I have chatted with my tenant who has attended and he has fully informed me of why people go there. Since you go there you must be one too, right? Attending the Ashland stuff does not give you a "pass go".

Regarding my life at my home. Unlike you I am a very happy fellow and in my spare time I pray for your salvation from your perverse lifestyle. I am sure your kids are safe from that kind of crap right? So have fun at the BM (too funny) and I will ask GOD to save you.

Ben Emery

You are one of the few people I have never met that I can honestly say I do not like as a human being. I hope I am wrong about this and in real life you are decent person. I hope your online persona is just an act and you really aren't this dumb, bigoted, misogynistic, and judgmental towards things you don't have any understanding or experience. Michael Anderson is a thoughtful, caring, and net positive to our community and planet as a whole. I have never gone to burning man but it looks like it would be fun. I have a friend who is going for the first time this year, she is in her mid 60's. She is going mainly to see the art work and just experience Burning Man in general. Maybe you should check it out with MA as your guide before you condemn the event and all its attendees.

"and said to them, “You know that it is unlawful for a Jewish man to associate with, or visit, a Gentile, but God has shown me that I should not call any person profane or unclean." Acts Chapter 10:28

Peter was met with humility and appreciation as I am sure those at Burning Man would greet yourself. We are all creation of God so none of us should be considered profane or unclean.

George Rebane

re stevenfrisch 708am - what is not brought into the TARP discussions by the 'collapse advocates' is that when businesses with real assets go bankrupt, those assets are taken by creditors who will do everything they can to capitalize them. Most often this means continuing the business essentially unchanged with new management and ownership. In the TARP saga the mortgages and other financial instruments with claims on wealth producing assets would have survived and been managed by others more astute. But the nominal dollar value of wealth would have been reduced as the fluff components would have disappeared - a fate well deserved and observed even after TARP. The Citibanks and Goldman-Sachs don't have to survive, but their portfolios will.

Doing simplistic nominal value accounting about these matters is mostly a political exercise for public consumption, and its real purpose is to maintain the old power structure that screwed up (I think even BenE will agree with that). Repeating myself, I quote von Mises 'Do nothing, sooner!', sage advice that would have had the economies soon firing on all cylinders again.


Posted by: George Rebane | 24 July 2013 at 08:52 AM

I anticipated this response George, and agree that we will never really know, since we engaged in TARP and we can't know if, or how bad, the collapse would have been.

The rub is in the 'everything they can to capitalize them' part. The question is would the new owners of mortgages manage them as the old owners did, or 'continue the business unchanged' as you put it, or would they accelerate foreclosures to get rid of the 'fluff' and would getting rid of the 'fluff' and 'reducing the nominal dollar value of wealth' end up so contracting the market in other ways (like consumer spending) that depression was the result? Would the resulting reduction trigger a deflationary cycle?

Living by von Mises principles is one thing, playing chicken with revolution is another. In principle I definately agree with George, let businesses fail, and the assets be taken over and put to better use by others.

To me the real question today is can we reform our financial system now that we are not under threat of collapse in a way that it does not allow 'too big to fail' and it eliminates our moral hazard problem? The whole point of a 'bailout' is not to allow the business to continue to operate poorly; it is to buy time to fix it because there is some other social and economic value you are trying to protect. If you don't fix the core problem the 'bailout' is wasted.

George Rebane

stevenfrisch 348pm - In general agreement. But unless I missed something really fundamental, the mortgage market did collapse even with TARP, and stayed that way for some years spilling blood the whole while. Only the bad players survived, hopefully having learned something from their mistakes. I would have welcomed new players.

As always, risk and reward should fly in tight formation. And it is only government that enters in to mangle the markets and break up that formation. The result is corporate gaming for which game anyone with a GS paygrade is out of their league to deal with in a timely manner.

Ben Emery

The TARP bailouts were a side issue to what actually caused the collapse. Derivative market with FDIC backed subprime mortgages were implanted into those derivatives exceeded $900 trillion globally. So when those mortgages which were making banks huge sums of money along with all the agents who got bonuses for signing people up for subprime loans.

Glass Steagall was taken apart in 1999, which allowed all of this to happen. Commercial banking need to be separate from investment banking.

Todd Juvinall

Posted by: Ben Emery | 24 July 2013 at 08:12 AM

Ben Emery, I share your feelings about me with you. You are truly an ignorant man. I know you are unable to grasp your persona on these blogs but I do. No one takes anything you say seriously since you are really not too bright. Also, you only criticize my responses to people like MichaelA and never theirs against me or us. Therefore you are not taken seriously because of your bias.

Burning Man is a whole lot of pervs running around naked doing all kinds of weird stuff to each other. MichaelA defends Burning Man and now has tried to convince us he really goes because there is money being generated there. He compares Ashland and Shakespeare with Burning Man! If you don't understand how ridiculous that is then I am sure you are as I say.

My persona is one of love and kindness. I am not a misogynist as I love women. I am not a racist as I would say you libs are. I love all people. So, take your pop-psychology and use it on yourself and MichaelA as you both need it. I don't.

George Rebane

BenE 533pm - Ben, I think there's a misconnect here. No has claimed that TARP was a causal factor in the collapse and recession. The discussion here is about what role TARP played in ameliorating the collapse and contributing to its recovery. As witnessed above, my position is that TARP and the follow-on stimulus packages have hurt the economic recovery. The ongoing evidence for this contention is now in its fourth year.

Ben Emery

I know that but just wanted it to be put out there so others don't get it wrong on what actually caused the collapse.

What is needed are some major reforms in every aspect of our government but that will not happen until the reforms I continuously repeat on RR, FB, and SFR take place. Then and only then can we possibly have a republic set forth in the Declaration of Independence.


The republic wasn't set forth in the Declaration of Independence, Ben (7:44). Nothing about the Federal government was set in the Declaration; it has no force of law whatsoever besides letting Queen Liz know we won't be seeking her permission to do anything.


Posted by: George Rebane | 24 July 2013 at 04:11 PM

George, I think a pretty strong case could be made that the mortgage market (Yes Ben i think we know we are talking about mortgage backed securities here rather than actual mortgages) did not collapse anywhere near as much as it could have, and that government support propping up MBS's played a major role in keeping the market from quickly losing about 50% in value. By interfering with 'mark-to-market' rules, which would have required banks to mark down the value of the MBS's immediately and taking the hit all at once, government intervention slowed the pace of the mark down, in some cases deferring them for years, and allowed the market to absorb the losses gradually.

Between June of 2007 and November of 2008 Americans lost about a quarter of their net worth, according to the Department of the Treasury. It is my contention, backed by many economists, that the over all economy could not have withstood the shock of losing another quarter of our net worth as mortgages were called. Thus I supported TARP, and still think that distasteful as it was, corporate welfare as it was, it was necessary.

You and I will never agree on the role of government. It is my contention that the appropriate role of government was exercised in this case; to slow, delay, buffer the blow, and avoid a downward deflationary cycle that could have led to collapse and revolution. Government is ultimately about maintaining order in the midst of chaos, and that is what occurred. Ironically, I also agree that risk and reward should fly in tight formation, and now that the crises has abated the weak should die.

Nevertheless, we are where we are now, and now we should dismantle Fannie and Freddie, send mortgages back to a distributed network of smaller local banks who are not 'too big to fail', require about 20% down and an income that holds mortgage cost to 25% of annual family income, and let banks who make bad bets go belly up, at shareholder expense.

I am with Ben that the repeal of Glass-Stegall and the blending of commercial and investment banking played a role, because it led to rapid expansion of the market for MBS's.

Ben Emery

You are a f'ing idiot. Have you ever read it? The Declaration of Independence was letting the world and the people of what would become the United States of America know that we were free from British rule and outlined the reasons why. Within the that declaration they put forward the radical ideas of self determination and power to the people (democracy).

You really need to pull your head out of your a$$ and stop trying to outsmart everybody on every issue, you fail just about every time and come off looking like a jerk.

Ben Emery

It really started in the Reagan administration. Greenspan was warned in the late 80's early 90's. Greenspan thought this would be a perfect way to prove that the market is the best self regulator. After the collapse that caused tens of millions if not more people of extreme suffering and death he admitted he was wrong. This is the problem with George and those of his ilk ideology of free markets, millions to billions of people will have to experience great discomfort or damage before our global market can correct itself. In the mean time a small few profit and benefit immensely. Those who profit then buy off those who control the other levers of society to make sure the laws are structured in such away that what they have done is legal.

I encourage all to read

Greenspan's Fraud

George Rebane

Stevenfrisch 657am - my problem with crediting government with such salves as easing off on 'mark to market' rules is that these are perverse since it was government regulations that required instant response to mtm in the first place. Left to their own devices, the banks would not have responded in such a precipitous manner, and the market for MBSs would not have responded within a vicious feedback loop. But that is getting very technical, and we will never know other than go on our beliefs about how the world operates.

Agree about Fannie/Freddie and that institutions should not speculate with OPM, especially people who have not been advised of the risk, and speculators with no skin in the game (or worse, getting bonuses on the upside, and no recourse on the downside). Glass-Steggal may not have been the best way to stop that, but it helped.

My bottom line is that when someone pounds on your toe with a hammer, they should not be credited with coming to your aid and providing relief when they stop doing that.


Feel better after the tantrum, Ben?

"Then and only then can we possibly have a republic set forth in the Declaration of Independence." [sic]

Ben, perhaps you should read the Declaration; it does nothing to define the kind of government the newly independent States would take. Some wanted a monarchy but that decision was a decade after the Declaration was made.

Q: “Well, Doctor, what have we got—a Republic or a Monarchy?”

A: “A Republic, if you can keep it.” - attr Benjamin Franklin at the close of the Constitutional Convention of 1787

While you're at it, you might read John Locke's 2nd Treatise on Government from which Jefferson gained great inspiration for the Declaration. One of the three or four books I was forced to read as a college student that made it clear to me why colleges assign great books to be read.

George Rebane

Gentlemen, the economics discussion here is off topic but admittedly of great interest given Obama's current round of ongoing speeches on fixing the economy (again). I will post a more appropriate topic under which to continue this thread.


" my problem with crediting government with such salves as easing off on 'mark to market' rules is that these are perverse since it was government regulations that required instant response to mtm in the first place."

Yes, indeedy. In addition, the toxic MBS's were largely a creation of those whacky Government Sponsored Entities, Fannie and Freddie, who got the great idea of slicing and dicing risky subprime loans with solid mortgages in a scheme to make the crap marketable at higher rates.

The MTM meltdown was largely due to the resultant salsa being toxic since no one wanted to buy those assets because of the inability to know what the underlying value was.


In the midst of the crises it really doesn't matter much whether the MBS was a creation of the Mae's and Mac's or were exotic instruments of investment bankers; the question really is "do you want government to play a role in stabilizing markets so the landing is a little softer or do you want a laissez faire approach where more people don't survive the fall". Its easy in a fairy land to say, "sound economic theory says let them fail". We live in the world as it is, not the world as we wish it to be, and in the world as it is a 50% reduction in the value of mortgages on top of realizing a 25% drop in net worth would have been catastrophic. It is Weimar Republic comparable.

TARP was the most important thing President Bush ever did.

Todd Juvinall

I thought Bush did TARP?


Posted by: Todd Juvinall | 25 July 2013 at 10:50 AM

I acknowledged that at the time, I believe here, and above.

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