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On Bilking The Sophisticated, Or, Check It Out: We’re Suing Banks! September 6, 2011

Filed under: Economics — fakeconsultant @ 9:54 pm
Tags: , , , , , , ,

I took a break to enjoy the holiday, as I’m sure many of you did, but my inbox kept busy, and on Friday came a doozy, courtesy of the Washington Post.

You remember that little bit of a banking crisis we had a couple of years back, where banks around the world might have possibly, maybe, just a little, conspired in a giant scheme to package toxic mortgage loans into Grade A, investment-ready securities instruments, which then blew up in everyone’s faces to the tune of a whole lot of taxpayer bailouts?

Well all of a sudden, it looks like an agency of the Federal Government is looking to do something about it, in a real big way.

Last Friday the Federal Housing Finance Agency (FHFA) announced they’re suing 17 firms (I’ll give you a list, bit it’s pretty much all the usual suspects); depending on who you ask the Feds are seeking an amount as high as $200 billion.

As Joe Biden would say, it’s a big…well, it’s a big deal, anyway, and that’s why we’re starting the new week with this one.

“An artist is only answerable to himself. He promises nothing to the centuries to come save his own works. He stands caution only for himself. He dies childless. He has been his own king, his own priest, and his own god.”

–Charles Baudelaire, as quoted in the book Cezanné and Beyond, edited by Joseph J Rishel and Katherine Sachs

So what do we know?

As we said, on Friday the Washington Post and others reported that there were a series of lawsuits filed by the FHFA in their capacity as Conservator of the assets of Fannie Mae and Freddy Mac against darn near everyone.

The FHFA is alleging, to make a long story short, that everyone involved misled Fannie Mae or Freddy Mac (the “Entities”, in the words of the lawsuits), to some extent, and that the misleading involved making representations to the Entities about the various metrics related to what Fanny and Freddy were buying from these banks.

For example, it’s alleged that when certain banks sold batches of mortgage loans to the Entities, they lied about how many of the owners were actually living in the homes; that makes a difference when you’re trying to figure out how likely a borrower is to pay back a loan.

It appears that a defense the banks will offer is that Fannie and Freddy were “sophisticated investors” who should have known the risks buried in the batches of loans they were buying (and they were sophisticated investors: they bought, literally, trillions of dollars worth of loans) – but if it can be proven that the banks were lying about what was in the loan packages, that defense might not do so well in front of a jury.

Everyone involved” includes Bank of America (B of A), Citigroup, JP Morgan Chase, Countrywide (which means B of A is actually being sued twice), Deutsche Bank, Credit Suisse, the UK’s HSBC and Barclays Banks, France’s Société Générale, the Royal Bank of Scotland, Nomura Securities (representing Japan), and GE and GM (GE Capital is a surprisingly large and varied business; GM got in the banking business to finance auto sales, and you may today know them as Ally Bank).

Of course, Wall Street is also part of “everyone”; that’s why the list also includes Goldman Sachs, Morgan Stanley, and Merrill Lynch (which means, thanks to acquisitions, that B of A is actually getting sued three times). The City of Memphis also proudly makes the list, thanks to First Horizon.

Some notable names not on the list? Key Bank and Wells Fargo, who seem to have escaped action so far; there’s also UBS (Union Bank of Switzerland), who was already served with a similar lawsuit in July.

It is difficult to determine exactly how much money is involved, as various sources disagree, but we know that Deutsche Bank is being sued for about $14 billion, all by itself. (B of A is being sued, all told, for a bit over $50 billion; they’ve already paid out more than $12 billion this year to settle another similar claim.)

Felix Salmon, at the Seeking Alpha website, has created a chart that seeks to measure who is in the most trouble here; by his measure JP Morgan Chase is far and away at the top of the list…except that the current incarnation of B of A represents three of the top eight spots on his list, which suggests the FHFA is targeting them for the most recovery. (Salmon used the number of individual defendants, how many pages were in the lawsuit, and whether the suits seek punitive damages as his yardsticks; from there he calculated a score that makes up his rankings.)

All this had to happen right now, it appears, because a statute of limitations is in play; the WaPo reports that a failure to file the suits would have meant the FHFA would have lost the ability to recover those monies. (It’s also reported that pre-lawsuit negotiations were stalling, and those negotiations will presumably continue, with a series of impending court dates to help, shall we say, sharpen the focus.)

Now that is pretty much all the story I have for you today on this one – except for a bit of a “discuss amongst yourselves” to finish things up:

It has been suggested that the FHFA is in an inherently conflicted position in all these cases. That’s because the agency is acting as both the regulator of these banks and the “victim” as we seek any monies that may be due from any fraud.

So what would be a better situation?

Should the FHFA continue to regulate the banks they’re suing as a victim, or should another regulator be put in place…or should another Conservator be appointed, leaving the FHFA as “just a regulator”, and not a victim?

It’s a question worth about $200 billion, more or less – and even in these times, that’s still a lot of your money.

 

On Running Your Own Government, Or, Why Pay The Military? July 30, 2011

I have not been talking about the insanity around the debt ceiling and debt and deficit and the efforts of Republicans to drive us all off the cliff, but I am today – and I’m going to do it by allowing you to grab ahold of this problem and see for yourself just how unbelievably bad this manufactured crisis is going to be.

You will hear a lot of conversation about the consequences from others; today, however, you are going to get the chance to be both the President and the Secretary of the Treasury, and you will get to decide for yourself exactly what bills the Federal Government should and should not pay as the cash runs out if a deal is not made by the time borrowing authority runs out.

At that point you’ll be able to see what’s coming for yourself – and once you do, you won’t need me to tell you what ugly is going to look like.

“…no state has the right to secede unless it wishes to…[and] it is the President’s duty to enforce the laws, unless somebody opposes him…”

William H. Seward, deprecating President James Buchanan’s efforts to preserve the Union, as quoted in the book Battle Cry of Freedom: The Civil War Era

So before I go sending you off to take the reins of power, let’s fill you in on a few things that you’ll need to know.

If no one has explained it to you yet, the Great Big Fuss that is going on right now is set around two issues: there are those who feel that the best way to make this economy better is to ensure that the Federal Government is a smaller player in our economy and not running on a deficit; many of these folks feel the way to achieve this is to make immediate, drastic, cuts in Federal spending.

At the same time, the United States has run up against its “debt limit”. That means the US will be unable to borrow money to fund ongoing government operations, and as you’ll soon see, right now we borrow a lot of the money we need to run today’s Government.

So if you are one of those who seeks to immediately cut Federal spending, you could force that to happen by refusing to allow the Federal Government any more borrowing authority; the fear of what could happen after that is presumably going to force the opposition to accept any deal, no matter how draconian, just to obtain that borrowing authority.

Naturally, the bigger a hostage you’re holding, the more draconian of a deal you hope you can make, and holding the “Full Faith and Credit of the United States” hostage is about as big as it gets; that’s why the Republicans are pushing for everything right this very second, from the end of Medicare and Medicaid to the right to mine uranium right next door to the Grand Canyon.

So with all that in mind, let’s talk money.

In the month of August, the Federal Government is expected to take in $172.4 billion.

There will be a mess of bills that are coming due during the month; that amount totals $306.7 billion, and that means about 44% of the bills must go unpaid.

Where’s that money go?

The Big Five are interest on current debt, which must be paid to avoid a default, payments due to defense contractors, Social Security, Medicare, and Medicaid; the five of those, alone, will be just about $160 billion.

And that leaves $12.4 billion to fund everything else the Federal Government has to do.

That would include the remaining cost of supporting our several wars, the entire Federal law enforcement establishment (for example, the FBI, DEA, ATF, Immigration and Customs Enforcement, the TSA, the Border Patrol, the Federal Marshals’ Service and the Bureau of Prisons), the National Parks Service and the Forest Service, the Centers for Disease Control, the Weather Service…well, just about every single thing the Federal Government does, except the Big Five.

So that’s the situation – and now it’s time for you to become the boss and make the choices:

The fine folks at Bloomberg Government have created an interactive tool that allows you to point and click your way to figuring this stuff out.

You will find your spending choices, and you just click on what you want until you run out of money, which the handy bar on the left will manage for you. When the bar turns red…you’re out of money.

“…Each month, I put all my bill collectors’ names in a hat, reach in, and pull out a name. That’s who I pay. If you keep calling here, then your name is not going in the hat next month.”

–Steve Harvey, quoted in October 2003’s Vibe magazine

OK folks, so now you know where to go, and you know what to do, so let’s make something happen.

Take this tool and use it to create a conversation about just what really is at stake, and watch the look on your friends’ faces when you point out that the entire Federal Government is about to go out of business if Republicans have their way.

I’d tell you the looks on their faces would be priceless – but that’s not true.

Absent a debt ceiling deal, the price is actually going to be about $134 billion, which is the money we’re just not going to have next month, when we’re not doing things like paying for the salaries of active-duty servicemembers or food inspectors or the guards out there at the Supermax.

It should be a fun time, all the way around – unless, of course, you’re one of the 300 million or so of us who are gonna get screwed over by it all.

 

On Hole Cards, Or, “Drill, Baby, Drill”? Why? Is Canada Out Of Sand? May 25, 2011

In America, today, there are three kinds of drivers: those who look at the other gas pumps down at the ol’ gas station and think: “Oh my God, I can’t believe how much that guy’s spending on gas”, those who look at their own pump down at the ol’ gas station and think: “Oh my God, I can’t believe how much I’m spending on gas” – and those who are doing both at the same time.

Naturally, this has brought the Sarah Palins of the world back out in public, and once again the mantra of “Drill, Baby, Drill” can be heard all the way from the Florida coast to the Arctic National Wildlife Refuge.

But what if those folks have it exactly backwards?

What if, in a world of depleting oil resources, the last thing you want to do is use yours up?

To put it another way: why isn’t all our oil part of the Strategic Petroleum Reserve?

Consider the inexorable logic of the Big Lie. If a man has a consuming love for cats and dedicates himself to the protection of cats, you have only to accuse him of killing and mistreating cats. Your lie will have the unmistakable ring of truth, whereas his outraged denials will reek of falsehood and evasion.

–From the book Ghost of Chance, by William S. Burroughs

So here’s the thing: we produce a surprising amount of our own oil right here in the USA (in fact, we’re the world’s third-largest oil producer), but we don’t produce enough to cover our current use, and that’s why we import about half of the roughly 19 million barrels of oil we use daily. The vast majority of that is used in vehicles or for heating; almost none is used to generate electricity.

Our largest suppliers of oil, despite what you might think, are not all from the Middle East: instead, it’s Canada, Saudi Arabia, Mexico, Nigeria, and Venezuela, in that order.

(Perhaps you’re thinking: “Canada? Oil?” Yes. Canada and Oil. They provide us with more than twice as much as Saudi Arabia from huge “oil sand” resources, primarily in Alberta; the exploitation of those resources has created a huge environmental controversy.)

Now if you ask me, an ideal situation would be one where we decided to get out of the business of using oil altogether – and to help make my point, we have some helpful numbers from a guy that you pay every day to figure this stuff out: Mark Doms; he’s the Chief Economist for the US Department of Commerce, and, to paraphrase Little Feat, he’s always handy with a chart.

According to Doms, 60% of our 2010 trade deficit (about $265 billion) represents the cost of imported petroleum products, and if things continue through December as they did the first three months of this year, in 2011 every American, man, woman, and child, will pay a “tax” of about $1000 to import all that petroleum.

Do you know what we, individually, spend on gas? In March of this year, the average household spent just over $300 on that month’s gasoline; 5 months ago that number was $56 lower. The way it works out, every time gas goes up 10¢ a gallon, it costs the average household another $7 a month.

And that’s not all: less than half of the total cost of imported oil is paid at the pump: about 44% of imported oil is used by businesses; another 15% is used by governments across the USA, and that means almost 60% of the cost of imported petroleum is “folded into” the price of everything else.

(A quick author’s note: you’ve seen the words “oil” and “petroleum” used liberally in this story; the exact literal reality is that in each instance we should really be referring to “petroleum products”, and that’s because we import and export not just crude oil, but a variety of other petroleum products. I get tired of using the phrase “petroleum products” over and over, and I’m probably using “oil” and “petroleum” more interchangeably than I should.)

So get this: if we were out of the importing oil business, we’d save about $300 billion a year – and as it turns out, over a 10-year period we could actually convert the entire US auto fleet to electric cars powered by windmills by providing $15,000 cash “buy-outs” for today’s 135,000,000 gasoline cars and building the wind generation and “smart grid” we’d need to support the effort…and doing all that would cost…wait for it…about $250 billion a year.

If I get the math right, 20 years after we first started building windmills and subsidizing cars, everything would be paid off; and every year after that the US economy would generate a $300 billion “profit” on our investment – unless the price of a barrel of oil goes up. If it does, the amount of money coming back to our wallets every single year from then on, obviously, also goes up.

And if we were out of the “using oil for driving” business, once everything was paid off we could put almost $4000 a year (in today’s dollars) right back in the pocketbooks of every family in this country – which, if you ask me, represents a pretty good “tax cut”.

Let’s also keep in mind that any new oil drilled on our public lands might not necessarily end up in the US; that’s because even if oil companies were 100% free to “Drill, Baby, Drill” in our waters to their hearts’ content…they’d also be perfectly free to sell as much of that same oil, anywhere in the world, to whatever entity might end up being the highest bidder – and today, our friends in places like India and China are desperate to be that high bidder.

Put all of this together, and you get back to the question I posed at the top of the story: why in the world would we be in a hurry to “Drill, Baby, Drill”, when we could, instead, put all our efforts into getting out of oil, which would save us so much money that the conversion pays for itself?

Then, when oil’s running $400 a barrel or so, let’s use our oil to pay China back the trillion dollars we owe ‘em…which, at current production rates, would only take about 400 days, assuming it were possible to divert all our production for that purpose.

To state it a bit more ironically, it may be that the smartest thing we can do right now is to conserve every possible drop of oil we have…until we don’t need it any more, and it becomes a sort of Strategic Cash Reserve that can help strengthen the dollar and reduce the national debt in the years to come, both at the same time.

Or to put it another way, the next time someone tells you they want to “Drill, Baby, Drill”…you can step right up, look them square in the eye, and ask: “Why do you hate America?”

And won’t that be fun?

 

On Happy-ing Their Gilmores, Or, Will Body Bags Be The New Gold Watch? April 26, 2011

We are continuing a recent theme here today in which two of my favorite topics are going to converge: Social Security and in-your-face political activism.

I have been encouraging folks to take advantage of the recent Congressional recess to have a few words with your CongressCritter about the proposed Death Of Medicare and all the proposed cuts to Social Security…and you have, as we’ll discuss…and now we have an opportunity to do something on a national scale, just as we did a few weeks ago in support of Social Security.

This time, we’re going to concentrate on fighting the idea that retirement ages should go up before we become eligible for Social Security and Medicare (and elements of Medicaid, as well), and that Americans should just keep right on working until the age of 67 or so—which isn’t going to be any big problem…really…trust us.

Now that just makes no sense, and to help make the point we have a really cool video that you can pass around to all your friends—and your enemies, for that matter, since they’ll also have to worry about what happens to them if they should ever make it to old age.

“…Art can create a climate of sensitivity in which it is possible for change to occur…”

Shabana Azmi, on Riz Khan’s Al Jazeera program One on One

Members of Congress are at home this week, and they love to go out and meet the voters—but it hasn’t been as much fun all of a sudden for some of them, and there are several videos out on the Web right now where it looks like Members wish they hadn’t been hanging out where the public could see them so easily.

Now some of these videos are loud and boisterous—but the one that should really scare Republicans was Charlie Bass’ appearance in Hillsboro, NH on the 4/20 holiday.

If you look at the crowd, they’re older, for the most part—and for the most part they came to the meeting with their own information, meaning that they weren’t so much looking for the Congressman to tell them what was up as they were looking to tell Mr. Bass (who represents the State’s 2nd District) that they weren’t too happy with him about this “entitlements reform” deal.

Now they weren’t there with pitchforks and torches by any means, and a lot of them were supportive of many of the Congressman’s other positions—but they were extremely unhappy about the idea that Medicare would become a voucher system (just so you know, Bass would insist that it’s a “premium support system” whenever the word “voucher” came up), and they did not find the argument that “this won’t affect you” very convincing, either.

In addition to the obvious question (basically, “why would the plan be better if it only sticks it to our kids and grandkids?”), a woman from the crowd asked a question I don’t think Karl Rove ever thought would come up: you might not be sticking it to senior citizens today…but she wondered what’s to prevent conservatives from coming back in a few years and asking those under 65 why they should be supporting those old people and their “Cadillac plans”—at which point it will be “stick it to the old folks” season, and Medicare will officially die, along with a lot more old and disabled people, sooner than they should have.

And he wasn’t the only one to have a bit of a tough week at what used to be really friendly Town Halls: Pat Meehan (PA-07) got himself into a shouting match with his putative employers, so did Lou Barletta, he of Pennsylvania’s 11th…and so did Catfood 2.0’s architect, Paul Ryan, who had to face what he politely described as an “enthusiastic” crowd in Milton, Wisconsin.

“Happy learned how to putt! Uh-oh!”

–Adam Sandler, from the movie Happy Gilmore

To put it bluntly, the Members are hating it, big-time, as it appears that their 2009 “Town Hall Goose” has suddenly become just a little too good for the gander.

And if we’re already making life hot for these folks…why not just keep on pushing?

That’s the idea behind “Don’t Make Us Work ‘Til We Die”, which is an effort of the fine folks at Strengthen Social Security to highlight the fact that a lot of people right now are proposing to raise the retirement age; either to 67, or to something north of that…for the good of America, of course.

After all, if you’re a firefighter, or a nurse, or maybe you work in the trades, or a restaurant kitchen, or you drive a gasoline truck…or maybe you’re a smokejumper for the Forest Service…why would working until 67 be a problem for you?

Here’s a video that makes the point very nicely:

(By the way, they would love for you to spread this video far and wide; grab the embed code and just go nuts—or, if you prefer, email the link—and in the interests of Full Disclosure: I’m associated with the Campaign for America’s Future and they’re one of the members of the Strengthen Social Security coalition.)
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On Wednesday and Thursday all of this goes outside and hits the streets all across the country, and to make it easy, the same website can help you find an event near you—or, if you live in Wyoming or something, you can attend the “virtual event”—either way, just visit the handy website and go from there.

So there you go: we have Republicans feeling mighty uncomfortable all of a sudden, we have a chance this week to get out in public and make the point in a bigger way—and now you even have the perfect video to send to that one relative who always forwards you Michael Savage’s latest missives.

Now get out and keep the momentum going forward—and don’t forget, it’s really easy to look at the person next to you in line at the grocery store and say: “Can you believe how they’re trying to screw us out of Social Security?”

That’s about all it takes to get a pretty good conversation going…and if you repeat that process, about a million times…well, that’s how politics gets done.

FULL DISCLOSURE: This post was written with the support of the CAF State Blogger’s Network Project.

 

On Taking It Back, Or, Wisconsin Recalls, Explained March 14, 2011

News is suddenly moving so fast that it’s becoming hard for me to keep up; that’s why we’re not finishing the story today that we just began Tuesday. You know, the one about Titan Cement suing two North Carolina residents who appear to be doing nothing more than speaking the truth.

Unfortunately, other important news has forced itself to the front of the line, and it’s going to demand that we break schedule, whether we like it or not.

That’s why today we’re going to be talking about Wisconsin, and how workers there are fighting back against the State’s Republican legislators and Governor, who seem to have gone out of their way this past three weeks to govern without the consent of the governed.

It’s kind of chilly today in Wisconsin…but I can assure you, things are heating up fast—and it ain’t because of spring.

“I will tell you this: Any business where two partners don’t trust each other, any business where one party says, ‘You need to do X, Y and Z because I told you,’ is a business that is not only not run well, it is a business that can never be as successful as it can be,”

–Former National Football League Players’ Association executive director DeMaurice Smith

As so often happens, we need a bit of background:

In Wisconsin, a recall involves first, the collection of signatures, then, if you get enough, a recall election.

Once the proper papers have been filed, those who want to recall an elected official have 60 days to gather signatures for a recall petition that equal 25% of the number of votes cast in the prior gubernatorial election in that “political subdivision”.

What that means in English is that if you’re looking to recall a State Senator and the last time a Governor ran, 50,000 votes were cast in that Senator’s District, you need to gather 12,500 signatures in 60 days to force a recall election in that District.

The election is not to ask the question: “Should this officeholder be recalled?”

Instead, the incumbent will run against other candidates, and whoever has the most votes either keeps or takes over the office.

It is possible that multiple candidates will emerge from within the same Party; if that happens a “recall primary” election is held.

A primary would take place four weeks after the signatures are turned in, the recall election itself would be six weeks after, and both elections would be held on a Tuesday; all of this according to Article XIII, Section 12 of the Wisconsin Constitution.

You can’t recall someone until after they’ve been in office for a year, so the Governor can’t be recalled…today…but because the Senate elects half of its Members every two years there are a group of State Senators who can be recalled; they were elected in 2008.

If three Republicans were to be recalled and replaced by Democrats, the State Senate would change from majority Republican to majority Democratic.

If you’ve ever been to Embarrass, Wisconsin (home of The Chair That Grew), you’ve visited Robert Cowles’ 2nd District. (For the record, it’s more or less 100 miles due north of Milwaukee, and there’s some football team that plays in Green Bay that’s also in his District.) He’s been a Senator since 1987, and in ’08 he ran unopposed. His District voted 52-46 for Obama over McCain in ‘08, and chose Bush over Kerry by almost exactly the same margin in ‘04.

I do not have a feel for who might run against him, but I have some calls out to try to get an answer; if I learn more, we’ll add it to the story.

One Senator who might be in trouble is Alberta Darling (so far as I know, she’s unrelated to cricket great Joe Darling), who represents District 8, which is basically Milwaukee’s northern suburbs.

In ‘08 she only won by 1007 votes (of about 100,000 cast).

It’s worth noting, however, that her District cast the most votes for Governor in 2010; as a result her opponents will be required to gather more valid signatures than in any other District (20,343, by one reckoning).

Her opponent last time was Sheldon Wasserman; he’s a former State Representative, an OB/GYN from Milwaukee, and a member of the State’s Medical Examining Board.

(On a side note, it looks as though the Governor might be messing with the Board as well; he refused to allow two recent physician nominees selected by the Board to be seated, and he’s apparently looking to nominate his own people.)

Just as in District 2, this District voted for Obama in ’08, and Bush in ’04.

Sheila Harsdorf, who currently chairs the Senate Committee on State and Federal Relations and Information Technology, was sent to Madison to look after the interests of the State’s westernmost District, “The Fightin’ 10th”, as Sir Rev. Dr. Stephen T. Colbert, DFA, would say.

Even though she thinks State workers are taking too much from the public Treasury…her relationships with the Federal Government are so good that she had no problem taking in $195,000 in Federal farm subsidies over a ten-year period for Beldenville’s Trim-Bel Valley Farms, of which she just happened to be a 50% owner as recently as 2008 (for all I know, she may still be an owner, more current information was unavailable).

This is another one of those Districts that went for Obama in ’08 by about just the same margin as it went for Bush in ’04.

Luther Olsen of the 14th (located about 40 miles or so due north of Madison) is another farm owner; he owns 20% of Waushara’s Riverview Farm; they also happily accepted at least $58,502 of your money and mine, because Olsen, like Sheila Harsdorf, apparently believes that’s a better use of our money than, you know, paying a public school teacher or something.

(Fun Fact: did you know Golda Meir, the former Prime Minister of Israel, used to be a Milwaukee public school teacher?)

Olsen did not face an opponent in ’08…and once again, this District went Obama in ’08, Bush in ’04—although it went about 4 points farther for Bush than for Obama.

And that brings us to Randy Hopper.

This District (the 18th, which most notably includes Oshkosh and Fond Du Lac) is another one of those Republican seats that are considered among the most “gettable”; that’s because just 163 votes separated Hopper and his ’08 opponent, Jessica King.

There’s also this:

“I have a lot of correctional facilities, a couple universities, and a couple of tech schools [in my district]. I have the second largest population of state employees in the state.”

Hopper also chairs the Senate Education Committee…and there’s also a story going around that his wife is telling people that he’s been providing some “private lessons” to his 25-year-old mistress down in Madison; this according to the MAL Contends… blog—and that’s not going to help a family-values candidate.

He owns two radio stations, one an AM-talk Ag Report and Hannity broadcaster, the other an FM station that caters to the “music at work” market; this may allow him to mitigate some of the potentially-about-to-occur bad publicity, and certainly can’t hurt at election time.

Perhaps the most unrepentant Republican during this process has been Glen Grothman of the 20th (which actually, literally, includes Fredonia, and that has to have some deeper meaning…), and he can afford to take a strong stand.

This guy might well be a mortal lock in this District: the Sheboygan area is one of the most reliably Republican-voting regions of the State over the past 30 years, and of all the Senate candidates who faced opposition in ’08, he won with a larger margin of victory than any of ‘em. (He didn’t get 61% of the vote in ‘08…he won by 61% of the vote.)

(Fun Fact #2: Our friends at the Milwaukee Journal Sentinel created these two most excellent voting trend maps for your dining and dancing pleasure; they illustrates how Wisconsin can swing wildly back and forth between Republican and Democratic “electoral domination”.)

Moving on: Mary Lazich, of the 28th, occupies another seat that is going to be tough to get—her District encompasses Milwaukee’s western suburbs (a reliably Republican voting region; in both ’04 and ’08 Republican Presidential candidates won with over 60% of the vote), she did not face an opponent in ’08, and this is another District that will require more than 20,000 signatures to force an election.

“…Fate has been hounding me like a Mormon missionary with an Amway franchise…”

–A. Whitney Brown, appearing on the television show Almost Live!

We’re going to complete today’s “Recall Roundup” with one of the most vulnerable of all the Senators: Dan Kapanke, the Senate Majority Caucus Chair (and a pretty good ”get” if you’re running a recall campaign). He’s from the 32nd, which is all the way across the State from Milwaukee, on the Minnesota border, pretty much in Wisconsin’s southwest corner.

He won by less than 3 points in ’08, his District voted 61%-38% for Obama over McCain…and 53%-46% for Kerry over Bush in ’04, which is the largest margin of any of the 8 Republican Senators currently under recall threat. (Go back and have another look at those voting trend maps, and look at what’s happened to this corner of the State.)

He’s hard right on social issues, but the Farm Bureau loves him.

He is quoted as saying that he expects the signature gathering effort in his District to be successful (only about 15,400 signatures are needed) …and he’s also quoted as having the belief that there is such a thing as a Wisconsin State Senate arrest, despite the presence of an “immunity from arrest” clause in the Wisconsin Constitution.

As of March 8th, 57% of voters in the 32nd would rather have “generic” than Kapanke in a recall election, and they had to close the road outside his house on Friday to keep the hundreds of peaceful protesters gathered there safe.

Now before we close today…we need to offer “big ups” to DavidNYC, who posted a fantastic interactive results spreadsheet at the Swing State Project site; we’ve been referring to it a bunch in this story and you should have a look at it yourself.

And with all that said, that’s today’s “scorecard”, folks, and you can keep track of all the races—or volunteer to help—from one handy location: WisconsinRecall.net…so bookmark the spot, help out any way you can, and let’s start with Wisconsin…and then move on to Ohio and Indiana and Michigan next.

 

Campaign Manifesto #3: On The Road, Defending Social Security February 28, 2011

So it’s Day 3 of my fake campaign for Congress, and we’ve run into our first obstacle

The Fake Campaign, as you may recall, is fake headed for Wisconsin, to show solidarity, and we’ve fake hitched a ride on a delivery truck headed for Rush Limbaugh’s Florida broadcasting studios—but we fake found ourselves caught up in the all-too-real Giant Grip Of Winter that has seized the Midwest over the past week.

We’re back on the road now, but we were stuck for darn near a half-day there at Wall…and if you know anything about South Dakota, you know there are really only two things to do in the City of Wall: you can shuffle back and forth between Gold Diggers and the Badlands Bar, partaking of numerous intoxicating liquors along the way…or you can head on into Wall Drug (the same one that’s on all those bumper stickers and signs) and partake of the finest display of Giant Jackalopia on the planet.

The Campaign, naturally, chose Jackalopia—and that’s why today’s Manifesto is all about the fake impromptu 5-cent-coffee-fueled Social Security Town Hall that we held in the Wall Drug Mall for several hours while we waited for I-90 to reopen.

Sitting quietly, doing nothing,
Spring comes, grass grows by Itself.

–From the Zenrin Kushu, attributed to Toyo Eicho

I-90, the main route from West to East (if your fake trip begins in Seattle, as ours did), was closed at Wall, South Dakota for about 24 hours this week, but this particular delivery truck just absolutely has to be in Florida by Monday…and the delivery is so important that to get us back on the road we now have a special escort of two South Dakota Department of Transportation snowplows and two 2011 “new and improved” South Dakota Highway Patrol Dodge Charger Pursuits (now with longer lasting brakes!) to make sure we get to the Wisconsin line in the shortest time possible.

With the weather being what it is, Jenna and Tendei, our driving team, have been earning their money, in a big way, this trip, and for the moment Tendei is asleep, while Jenna and I mull over the conversations we had tonight, me and the caravan of Wall Drug customers who gathered, first by the snake-oil salesman (that’s not hyperbole, either: they actually have an anamatronic snake-oil salesman), then out in front of the Western bookstore, and finally over by one of the 5-cent coffee stations.

It was my fault: standing next to the snake-oil salesman got me thinking about all the lies we hear every day about Social Security…which I mentioned to the 30-something couple standing next to me, young son in tow.

“If I didn’t know better, I’d guess the next words out of his mouth are going to be: ‘I’ll never see a dollar of my Social Security anyway, so who cares how they fix it?’.”

He looked back at me, all surprised: “We’re not ever going to see any; they tell us that all the time.”

“Yeah, I know…but it’s a big ol’ load of hooey, and I’ll tell you why: Social Security is funded by payroll taxes that are, for the most part, paid out as they’re collected, that means there’ll always be money that we will use to pay benefits, unless we just quit collecting that money altogether, which is not likely.”

We were beginning to gather a few others around us (hey, we were all stuck there—nothing else to do…); that means my gestures were getting a bit bigger—but there’s a nice echo in there, and you can be heard.

“The way things work now, if nothing changes, there will be enough money to pay out all the benefits we expect to pay until 2037. After that, if the ‘pessimistic projection’ plays out, even if nothing else changes, we can still pay 75% of what we expect to pay for about 50 years after that. We only look out 75 years at a time, so we don’t have a projection that goes out past 2084…but, pretty much, as long as we keep collecting the money, we’ll still be able to pay the benefits.”

I looked over at a 40-ish couple that had come over to listen: “What about you two? Right now there’s a lot of talk about ‘fixing’ Social Security by making you wait longer to retire or by making sure cost-of-living increases don’t really keep up with inflation. Don’t y’all feel like if they do that, you’re just getting screwed?”

It was almost like Parliament and “Question Time” in there for a second (which is not a George Clinton reference) as the 15 or so folks listening began to “harrumph” in agreement.

“Well how about if I were to tell you that I could fix this problem, and that I could do it without raising the retirement age or messing with your cost-of-living…and that I could do this in a way that gives every person in this room a tax cut at the same time…and that, even though I’m running for Congress, I’m not a snake-oil salesman?”

About two lives ago I used to be a failed stand-up comic (true!), and it is possible to know when the crowd is turning—and this was one of those moments.

The 40-ish husband looked at me and said, basically, that I did sound like a Congressman—and not in a good way.

“I know you don’t believe me, but listen to this: if you turn a wrench or carry a tray or do anything that makes under, basically, $105,000 a year in wages, all your income is taxed for Social Security…but if you make a million a year, you don’t pay any tax at all on the last $890,000…and if that income was taxed, we wouldn’t have a Social Security problem.

Now you don’t hear much about this back in Washington, and there’s a couple of reasons why: right off the bat, this President and this Congress don’t want to be accused of ‘raising anyone’s taxes’; beyond that, 2012 is coming fast, and both the President and the Grim Weeper are trying to be the one who can look at the voters and say: ‘I’m The Slasher, and I will cut the deficit and balance the budget faster than the other guy’.

Lots of people think cutting Social Security will somehow cut the deficit and reduce the debt, even though it has nothing to do with it at all, and some of them figure that if they campaign around cutting everything that government does it’s gonna help their political future, and that includes cutting benefits for people just like you, instead of just funding Social Security with a flat tax for everyone…even the rich.”

This argument, I might add, was starting to gain traction.

“Look at where we are right this very second: standing in front of a Western bookstore…and if you go in there you’ll see stories of how people died of starvation and how land barons ruled counties with an iron fist and how we fought range wars with imported hired guns and shootouts in the streets.

Is that what we want to go back to?

It’s not what they wanted. The pioneers didn’t just build isolated ranches, they built towns, and towns with a schoolhouse, so that the kids on those ranches didn’t have to rely on a home school education. They had a Sheriff or a Marshal and a Town Council and a Judge, because they knew that they had to create some rules and establish some government.

Some towns in the Wild West, and you know I’m telling the truth about this, didn’t even allow guns inside the town limits…just like when Wyatt Earp was the Marshal in Dodge City and you had to check your guns if you were going north of the railroad tracks.”

You know what? This was working: the crowd began to nod with me, and I figured while I had the advantage I’d press the thing home:

“Now a lot of people probably think the fix is in, and what’s the point…but I don’t agree. There was an effort at the beginning of this Congress to force these cuts by threatening to stop providing any money for the Government at the beginning of March if the ‘Wrecking Crew” didn’t get their way, and the Tea Party folks came in here with a big ol’ war cry about ‘shut it all down’ and all that…but now that March 4th is actually drawing close, and the public is starting to figure out what’s up, the message is suddenly all about ‘maybe we can extend the funding after all’.

That tells me that the people who think cutting everything in sight because it looks good are finding out it doesn’t always look good to just go around cutting everything in sight.

Tell ya something else. A lot of the people who want to change Social Security want to change it into a system that rewards people who manage Social Security accounts, not the people who own the accounts, and if you look at what ‘privatizing’ the system is all about, that’s what it is: it’s just a plan to get more money out of you in the form of fees and charges, which is going to be a great big reward to great big political donors who have been trying to make this happen since the 1980s.

So here’s the reality: there is enough money in the system to pay for you and your kids to have benefits, even if no changes are made, and if you just make Social Security a flat tax, even for the rich, we are pretty much guaranteed to have every dollar we need until at least 2084, and we don’t have to cut benefits or raise the retirement age, or do any of that crazy stuff…and we don’t have to give up our hard-earned money to big banks and Wall Street in the form of new fees and charges on your Social Security accounts.

So I came here in a truck, and it has to be in Florida in a couple days, and my driver friend is walking over here, and that means I gotta go, but I hope I told you something about Social Security you didn’t know a while ago…and if any of you are fake voting for a fake Congressional candidate in 2012, I hope you’ll keep me in mind.”

And with that, I fake shook a few hands, jumped in our fake truck, and headed off to Wisconsin.

 

Campaign Manifesto #1: In A World Of Phonies, It’s Time For A Fake Candidate February 18, 2011

We have spent the past two years watching as insanity has gripped Congress, and even more so with Republicans now running the House.

We have a wavering President, far too many feckless Democrats, and Republicans that have decided to dive headfirst into total “insane mode” in a full-blown effort to destroy this country just as fast as possible.

To give but one example, in my own District, WA-08, we are represented by the absolutely useless Republican Dave Reichert, whose best-known legislative achievement is that he has virtually no record of any legislative achievement whatever.

Now we’ve had a very interesting relationship, you and I, over these past few years; in my efforts to “bring you the story” I’ve been a fake political consultant, a fake lobbyist, even a fake historian…and now, I think it’s time to try to bring our relationship to a new level.

And that’s why, America, I’m announcing my fake candidacy for Congress.

It was almost too good to be true. Richard Milhous Nixon, the main villain of my political consciousness for as long as I can remember, was finally biting that bullet that he’s been talking about all these years. The man that not even Goldwater or Eisenhower could tolerate had finally gone too far—and now he was walking the plank, on national TV, six hours a day—with The Whole World Watching, as it were.

That phrase is permanently etched on some grey rim on the back of my brain. Nobody who was at the corner of Michigan and Balboa on that Wednesday night in August of 1968 will ever forget it.

Richard Nixon is living in the White House today because of what happened that night in Chicago. Hubert Humphrey lost that election by a handful of votes—mine among them—and I had it to do again I would still vote for Dick Gregory.

–From Fear and Loathing in the Bunker, by Hunter S. Thompson

So let’s start with the obvious question: why a fake candidacy?

Well…why not?

Obviously, I can be just as fake as any real politician, and, as we discussed before, we have years of history together to prove it.

Can I be more useful to the District than Reichert?
Hey…even a fake me can do that.

After all, it’s not like there’s a high bar to jump over or anything.

It was four years in office before he actually got anything passed…and according to Congress.org, by 2008 he was ranked number 401 out of 435 in terms of how much power he exerts in the House…and that’s 9th out of 9 for the Washington State delegation. (Reichert’s own Congressional website reports he was ranked 166th out of 435 in 2006—and that means he fell more than 250 spots in a single term.)

So basically, all I have to do is take the Oath of Office…and we’re pretty much tied.

Now Dave tries to some extent to “ straddle the middle ”, as a result he supports environmental legislation but he’s against “card check”; he also voted to extend children’s health care coverage. He supported the repeal of “Don’t Ask, Don’t Tell”.

His stance on Social Security?

Do a search for Social Security on his Congressional website, and you get “No documents matched your query”. Look for Social Security as an issue on his site and you can find this:

Congressman Reichert has fought to protect seniors’ Medicare and Social Security benefits, preserve their access to needed health care services, and make prescription drugs more affordable

(You have to look under “ Seniors ” to find it…but at least it’s there.)

According to FreedomWorks, Reichert had no position worth reporting on Social Security when they attended his April ’05 Social Security workshop…although another attendee reports he had this to say about removing that “tax cap” that represents a giant tax dodge for the richest among us:

Raising the cap was portrayed by all three as a tax hike, which they oppose because “the government shouldn’t be taking any more out of families’ hard earned budgets.”

OnTheIssues has this to say about his Social Security record:

No issue stance yet recorded by OnTheIssues.org.

By the way…did I mention that Reichert is currently serving on the House Subcommittee on Social Security ?

That’s a pretty high level of useless, and it’s exactly this kind of “get up and go” that explains how Reichert managed to fight his way right on up to number 401 in effectiveness among those 435 Members of Congress.

Me, I support the “Rich People Pay, Too” approach: no matter what your wage income might be, you gotta pay Social Security tax. No more “once you get rich, it’s a free ride”.

And guess what? If we just made all wage income taxable for Social Security purposes…the problem is actually solved…and it might not even require that much reform.

Law and order?

Reichert is a former Sheriff, and a man who cultivates the image that he personally caught the Green River Killer. When a bill came up to get the Justice Department off the backs of medical marijuana users, Reichert voted “ no ”.

I am most assuredly not a former Sheriff…and as a fake candidate, I would propose a different approach:

If you elect me, and we can get the bill passed, once a week I will personally dose up Members like Louie Gohmert and Michelle Bachmann and Joe Barton with large amounts of LSD…and I will then transport them right back to the House floor…and then one hour a day we’ll set up something like the obstacle course on MXC and then have them run it…and I will introduce a bill to set up a special “Premium Content” partnership with C-SPAN that charges $14.95 a month so that you can see the uncensored “GoDaddy” version of the video, with the money to be used to lower the Federal deficit.

I support medical marijuana—but I would limit the co-pay, by law, to $10.

Civil rights?

Reichert opposes same-sex marriage, and only gets a 50% rating from the NAACP…and I’m one of the only people you’ll ever meet who was officially notified he was gay by email…and if one of my family members had a “homosexual relationship”, unlike some Members, I wouldn’t keep it on the “ down low ”.

I’m more or less broke, just like you—and they tell me that, if you win, there’s pretty good health insurance —but I’m not looking for donations, from any source…with one exception:

At the moment this is a fake candidacy, but I’m thinking about asking a group to consider underwriting this as a comedic art project—and if they do, that would be the only money the “fake campaign” would accept.

So there you go: from here on out, there will be more “Manifestos” from the fake campaign—and in the next one, we’ll be talking, once again, about how you can support a candidate like Reichert, who’s basically a joke…or you can support a candidate like me, who really is one.