Two Months Of Fun With The Fed!

How did a $700 billion dollar bailout package turn into $2 trillion dollars in taxpayer funded loans?

Fed Defies Transparency Aim in Refusal to Identify Bank Loans

Nov. 10 (Bloomberg) -- The Federal Reserve is refusing to identify the recipients of almost $2 trillion of
emergency loans from American taxpayers or the
troubled assets the central bank is accepting as collateral. Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson said in September they would comply with congressional demands for transparency in a $700 billion bailout of the banking system. Two months later, as the Fed lends far more than that in separate rescue programs that didn't require approval by Congress, Americans have no idea where their money is going or what securities the banks are pledging in
return.

GM Volt - What took Detroit so long to come out with an new electric car?

Meanwhile, the Detroit Big Three, which avoided building fuel efficient cars and still can get an electric car to the market until 2010, is asking the taxpayers for their share of the pie too.

This letter by a Mr. Horsburgh to the Wall Street Journal lays out the problem.

Regarding your editorial "Dining at the Taxpayer Buffet" (Oct. 31): Representatives of the Detroit Big Three met with House Speaker Nancy Pelosi to request $25 billion more in taxpayer money. They've already received commitments for $25
billion from taxpayers to modernize their facilities. Now they want more to pay into the UAW retiree health-care trust. Even this isn't enough as they are apparently also looking for access to the Federal Reserve discount window, a privilege reserved for banks.

Let's see if there are any politicians who can read a
balance sheet and stand up for the American taxpayer. The Big Three claim that the credit crunch and economic downturn suddenly and unexpectedly caused their financial reversal, but their problems have been decades in the making and were obvious before the current credit crunch. As of the end of this year's second quarter, a quarter in which the economy grew at around its typical rate, GM had a negative net worth of $57 billion. It had assets of $137 billion, owed $67 billion to suppliers and for payroll, $44 billion to banks and bondholders, $59 billion in retiree claims and $21 billion to "other." How is it not insolvent to have $191 billion in debts backed by only $137 billion in assets? GM's financial position isdeteriorating rapidly, hemorrhaging cash to the tune of at least $1 billion
per month.

How much taxpayer cash should be injected into supporting a company that needs at least $57 billion just to even out its assets and debts? Why should taxpayers bail out Big Three stockholders and Cerberus, the private equity holders controlling Chrysler and GMAC? Why should 140 million taxpayers be forced to pay for the retiree health benefits of just 300,000 people?

A lot has happened in the last two months.

Election 2008 - A Seismic Shift

In my lifetime America has changed from a country with segregated lunch counters and water fountains to one that has elected an African American President.

Just imagine what this woman has seen in her lifetime.

At 109, Slave's Daughter Revels In Historic Vote

Jones is the living link between the time when black men were owned as property and the time when a black man has been elected president of the United States.

Setting A New Standard
Obama's election now gives the extended Jones family — and millions like it across the country — a new standard for their children.
Jones' daughter, Ruth Jones, is 73.
"And I told my youngest grandson, [who] is 10, 'You can be anything you want to be. You can even be president of the U.S.,'" Ruth Jones says. "He thought that was so funny. He really did. He said, 'I can be the president!' I said, "You sure can, but you really have to apply yourself.'"

And from John McWhorter's article The End of Racism?

It was one thing when legalized segregation and disenfranchisement were outlawed in the mid-60s. This was a massive undertaking, but people devoted their lives--sometimes literally--to making it happen.
It was something else when, in the wake of this, racism became socially taboo in most segments of American society. Sure, there are lapses. But anyone who thinks there has been anything short of a seismic shift in America's racial relations since the 60s should take a look at Mad Men. The very fact that it is news that there remain people who wouldn't vote for a black man shows that we live in a different world than 40 years ago.

America has problems and our new president knows it. However, is America's main problem still "the color line" as W.E.B. DuBois put it 105 years ago? The very fact that the president is now black is a clear sign that it is no longer our main problem, and that we can, even as morally informed and socially concerned citizens, admit it.
There is nothing at all "unreal" about this. It is, after all, what we were supposed to be working toward. We must embrace it.

Now that we've moved beyond "the color line" can we get back to addressing the other serious challenges that this country faces.

Independence Day Indeed for Ingrid Betancourt

Ingrid Betancourt before kidnapping

Ingrid Betancourt in Captivity

Today, as we celebrate July 4th we can also celebrate the brilliant rescue of Ingrid Betancourt who has been held hostage by those FARC f**kers in Colombia for over 6 years.

Congratulations to President Uribe, Minister of Defense Santos and the Colombian Special Forces for freeing Betancourt, Americans Marc Gonsalves, Thomas Howes and Keith Stansell, and 11 members of the Colombian Security Forces.

There are still more hostages being held by FARC and I can only hope that Uribe, whose father was killed by FARC in 1983, gets the rest of them out quickly.

Audi Availability?

According to Autobloggreen, available in England, this Audi A4 TDI Diesel gets 46 miles per gallon.....

Meanwhile, the gasoline based A4 which is sold in the US gets a modest 30 miles per gallon.

So Americans are stuck with cars that get lower mileage, and the US government refuses any attempt to increase domestic oil production.

From James Lileks.

It’s not that we cannot produce any more oil; you suspect that some are motivated by the belief, perverse as it sounds, that we should not. We should not drill 50 miles off shore on the chance someone in Malibu takes a hot-air balloon up 1000 feet and uses a telephoto lens to scan the horizon for oil platforms. Also, there are ecological concerns. (The ocean is a wee place, easily disturbed.) There’s something else that may well be my imagination, but I can’t quite shake the feeling: high gas prices and shortages of oil make some people feel good. This is the way it has to be. Oil is bad. Cars are bad. Cars make suburbs possible. Suburbs are the antithesis of the way we should live, which is stacked upon one another in dense blocks tied together by happy whirring trains. So some guy who drives to work alone has to spend more money for the privilege of being alone in his car listening to hate radio?
Good.
Yes, I know, projection and demonizaton and oversimplification. But this is true: there’s a side of the domestic political structure that opposes expansion of domestic energy production, be it drilling or nukes or more refineries.
The long-term upside seems indistinct, and the short-term downside seems rude and obvious.

Serious Subjects

Somehow over the last week while my internet was down I was making a mental list of all of the subjects I wanted to comment on. I decided to leave the comments on Oil Prices, 57 States, Lebanon and the Trade Deficit to the serious cyber pundits and stick to blogging on softer subjects.

But...of course I always have an opinion and it concurs with this WSJ editorial.

Kick Burma out to the UN

The United Nations this week said the refusal of Burma's government to allow workers into the country's devastated agricultural region was unprecedented in the history of humanitarian relief. The human catastrophe produced by Burma's refusal to permit aid in the wake of Cyclone Nargis has stunned the senses of a world that has watched this spectacle for a week.

There are uncounted numbers of persons dead, homeless and orphaned. Bodies still float in water. The World Health Organization has warned there could be outbreaks of cholera and especially malaria. U.N. member-state India warned the junta the deadly cyclone was headed toward Burma on May 1, two days before it hit. Yesterday, U.N. Secretary General Ban Ki-moon said food relief hasn't yet reached the region because "regrettably" the junta won't talk to him.

After so much international assistance was brought so quickly to those who suffered from the Tsunami, it's deplorable to see how the Burmese Junta has hindered humanitarian aid after this terrible tragedy.

But how can we be shocked by any actions by Burma after decades of house arrest of the world's only imprisoned Nobel Prize winner, Aung San Suu Kyi.

Wall Street Journal Weekend Journal

I've been reading the Wall Street Journal for decades. Unlike with the Los Angeles Times, the New York Times and other papers, I never get bored with the reporting or enraged with the editorials. I am particularly fond of the Weekend Journal which covers a variety of stories.

In this past Weekend Journal there was a beautiful tribute to WFB by Peggy Noonan, an article by Jane Garmey on Harold Peto, the great English Edwardian Landscape Architect, a guide to viewing wildflowers in Southwestern Deserts by Stan Stasser, a list of favorite books about composers by James Penrose, a recipe for Beef and Beer Stew by chef Sanford D'amato, an article about cone roofed Trulli stone houses in Puglia Italy by Rosemaria Mancini, and so much more worth reading.

Now...go read!