Links 12/11/09

The Genesis 2.0 Project Vanity Fair (hat tip reader Crocodile Chuck). Science porn on the Large Hadron Collider.

Fake ‘kid in a kit’ excuses workers for leaving early Springwise. So we have a newletter that extols a new business concept that helps workers deceive their employers. Anyone wonder why the US is going down the tubes?

Wells Fargo forecloses farm, animals fend for themselves Rolfe Winkler

David Rosenberg’s Outlook For 2010 Clusterstock

Melissa Bean’s backers are key Obama associates Kevin Connor. I wish I had the energy to run this as a separate post. As some readers well know, Bean is the most bought and paid for (by banksters) of any member of Congress, which is a perverse achievement in and of itself.

Restaurant of the Future? Wall Street Journal

Loopholes Lurk in Bank Bill Wall Street Journal. The bill is being rushed through with so many last minute changes that it is hard to stay on top of what the current language says. Which of course works to the advantage of the lobbyists.

White House Loan Modification Plan Falls Flat Washington Independent. There is new news here. Mortgae mods were running at a HIGHER rate prior to the Obama program.

Dean Baker: The Return of the TARP Hostage Takers Huffington Post. Today’s must read.

Antidote du jour (hat tip DoctoRx):

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  1. jupiterx43.7

    It’s the Great Pumpkin, Charlie Brown's_the_Great_Pumpkin,_Charlie_Brown

    “Later on that day, Charlie Brown and Linus are at the rock wall, talking about last night’s events. When Charlie Brown tries to console Linus by saying, “I’ve done a lot of stupid things in my life, too,” Linus blows a fuse and angrily vows to Charlie Brown that the Great Pumpkin will come next year, and his ranting continues as the credits roll.”

    All music was performed by the Vince Guaraldi Sextet. The lively instrumental, “Linus and Lucy”, associated originally with A Charlie Brown Christmas, is used at the beginning of this cartoon as Linus and Lucy prepare a pumpkin to be a jack-o-lantern.

  2. dearieme

    “Exploring its whizbang machinery, deep underground,…”: literally true, eh? It did whizbang a few months ago, didn’t it?
    Still, it consumes lots of electricity, thus adding to the emissions of CO2, thus helping keep the next Ice Age at bay, so it’s a Good Thing.

    1. aet

      Its operation adds to CO2 emissions, assuming that its power is not derived from falling water or a nuclear source.

      And the 2 degree warming “limit” is adopted by the IPCC not arbitrarily: anything above that risks a “runaway” greenhouse. (See conditions on the planet Venus for a possible future should such a “runaway” commence.) You’re “burn more oil and coal to prevent the next ice age” line is not a very funny meme. Ice ages, we’ve survived before….

      1. wunsacon

        Glass-Steagall repealed, derivatives unregulated, securitization, no-money-down led to predictable consequences. Richard Clarke wasn’t taken seriously until after 911. Evidence prior to Iraq that WMD intel was exaggerated/fabricated was dismissed. We hardly pay attention to the deleterious chemicals in the food we eat and the water we drink, leading to occasional ad hoc campaigns that require *so* much effort to win obvious cases. So, what makes us think that we’ll be any more successful in mustering the political will to stop global warming?

        Oh, the world community will take some steps to combat global warming. But nothing “serious” until after we’ve passed tipping points.

        There’s been no need yet in the evolutionary chain for a species to think so far ahead. We’re just not up to it.

        (I’m not certain of this outcome. But, I think it’s the most likely one.)

        So, what, if anything, can some do? Build an ark.

  3. attempter

    Re the rushed finance bill: Why is everything (this, health “reform”) so rushed? We know the answer: the insane drive for speed without time for thought is an essential element of disaster capitalism. The lobbyists and Frank are doing their best to be as fast with the shell switches as possible even as they rush the whole process.

    For example this Bean amendment: am I hallucinating the memory, or didn’t we already go through this over a month ago? This prostitute introduced her amendment, there was a struggle, Frank tried to help her while pretending he wasn’t, they ended up with a “compromise” which was bad but not quite as bad as the original.

    Now the filthy streetwalker’s back again, and we’re back to square one with the attempted mugging.

    And with derivatives: every day it’s a new story on who’s up, who’s down.

    Re a business to help employees deceive employers: I don’t see who should be complaining about it. It’s capitalism, baby! The free market in action. This sounds like a mainstream service.

    While I suppose there probably are a few conscientous employers left, scattered here and there, the vast majority are simply exploiters waging war on their workers, and the worker has every right to fight back.

    So if someone can help level the playing field a bit, help the worker act in self-defense, good.

    As I said, it’s simple mainstream capitalist logic at its best.

  4. fresno dan

    “(I finally indulged my inner 12-year-old, asking one of the top managers of the accelerator team, Paolo Fessia, if I’d feel a proton beam if it were pointed at me. “I’ve never thought about that,” he replied. But he said it would bore a quarter-mile-long hole through any material.) ”
    Uh, so would you feel it before you were vaporized? And what diameter is the hole?

  5. Andrew Foland

    The beam would knock you over (experiments at Fermilab, which has a much less powerful beam, have had this problem before with their targets being knocked out of the beam.) The hole would be a few microns wide, though it might act more like a knife due to your falling motion–I’m not quite sure. It would heat up the flesh around the tunnel of passage quite hot, the heat of which would then diffuse through your body, so it would feel like a white-hot needle. I haven’t done the numbers as to what would happen, though my guess without calculating is that you’d actually live.

    Semi back-on-topic, Matt Taibbi has a new article on the Rubinites in the Obama administration. I thought I’d lost the capacity for outrage, but while reading this article I learned that I hadn’t.

  6. BDBlue

    Everyone should read the article on Bean’s backers and their close ties to Obama and others. Too many people, IMO, are buying into the “Democrats are weak” narrative or that a particular Congresscritter is the problem (if only we didn’t have Melissa Bean, if only we didn’t have Joe Lieberman). Not that there’s much to recommend Melissa Bean or Joe Lieberman, just that they often are not, in fact, rebels but simply the people willing to do Versailles’ dirty work. Until folks are willing to see the system is corrupt – as are most of the participants – we will never get any real change.

  7. DownSouth

    The Dean Baker column needs to be placed in juxtaposition to a Bloomberg article that Jojo linked on another thread:

    “Americans Want Government to Spend for Jobs, Send Bill to Rich”

    We’re rapidly approaching showdown time.

    As Baker observed, and as became all too clear from Bernanke’s testimony earlier this week:

    This time the plan (Wall Street’s) is go after Social Security and Medicare…

    The plan is to hold up legislation for raising the debt ceiling unless a provision is included for establishing a commission for the purpose of cutting future deficits. This commission in turn would be stacked with people who want to cut Social Security and Medicare.

    But as the Bloomberg poll showed, a vast majority of Americans have very different ideas:

    Americans want their government to create jobs through spending on public works, investments in alternative energy or skills training for the jobless.

    They also want the deficit to come down. And most are ready to hand the bill to the wealthy.

    A Bloomberg National Poll conducted Dec. 3-7 shows two- thirds of Americans favor taxing the rich to reduce the deficit.

    Wall Street is of course peddling the archetypical neoliberal prescriptions. We’ve seen this movie in Latin America many times before. It should be pointed out, however, that no democratic nation has ever opted for neoliberalism of its own volition. Neoliberalism is always imposed at the point of a gun, and in the case of Latin America that gun has with few exceptions been furnished by the United States.

    So it looks like it’s Wall Street vs. the vox populi/i>, plutocracy vs. democracy. “If Peterson, Conrad and Gregg want to bring their ideas to be debated, we have the forum,” Dean counsels. “If they have problem with democracy; they can look for a dictatorship somewhere.”

    But of course that is the entire agenda of Wall Street and its neoliberal-libertarian-Austrian School sycophancy: to turn the United States into a dictatorship. The goal is to have government of Wall Street, by Wall Street and for Wall Street, and a majority of the people be damned.

  8. MyLessThanPrimeBeef

    I believe that’s Cinderella and her pumkin driver, trying to fix the carriage so she could attend the party before midnight.

    By the way, in a sure sign the Chinese are overtaking the West, well, at least in one area, it is now said that the earliest version of the Cinderella story in the world dates to China’s Tang dynasty, around the 7th to the 10th century, in the story of Yeh Shen, hundreds of years bofore it appeared in Europe.

  9. Rickstersherpa

    I am going to download and read “American Apocalpyse,” that I heard about on Calculated Risk.

    Two difference between now and the 1930s and the 1890s, the last two periods when the U.S. had mass unemployment and hardship reaching deep into the middle class was the healthy fear that the elite had of “Red Revolution” and thereby an incentive to take action to mitigate it. In both periods, but especially in the 1880s and 1890s (and the folks who were decision making in 1933 were old enough to well remember those days) was that there was significant mass violence and clashes. Our current elite’s indifference to the current mass unemployment (the finance reporter on CNN is typical, “there is a problem of not enough jobs, but the Big Problem is the deficit” is that just think that their apathetic fellow citizens will quietly go to the tent cities and homeless shelters. And the elite has had a lot practice just writing off large areas of American cities and countryside as “invisible” the last 40 years – see inner cities, Rust Belt towns, and most of rural America that is not a second home haven for the wealthy.

    So perhaps it is not a bad idea that folks at Goldman Sachs are getting so apprehensive that they are starting to arm themselves. Perhaps a little bit of reality is starting to penetrate the bubble. Or else Blackwater, or whatever they call themselves now, definitely looks like a growth company as the premier provider of “security services.”

  10. Michael

    “Fake ‘kid in a kit’ excuses workers for leaving early Springwise. So we have a newletter that extols a new business concept that helps workers deceive their employers. Anyone wonder why the US is going down the tubes?”

    Oh come now, this is really a poor comment. So the US is failing because employees are trying to cheat some extra personal time (out of the piddling — well behind every other industrialised nation — they get to start with)?

    I thought this blog has been documenting why the US is in such a dire state, and last time I read it had nothing to do with supposedly lazy workers!

    1. Yves Smith Post author


      Have you ever heard of zero tolerance? I lived in NYC before Bratton became chief of police, and I have to tell you, the theory behind zero tolerance works. Tolerance of petty crimes sends a signal of lawlessness and encourages bigger crimes. Getting graffiti off the subways was an important step in getting NYC back under some semblance of control.

      Lying to your employer to take time off is lying. I gather you are a fan of dishonesty and other forms of petty theft, like padding expense accounts.

    2. Millionaire A. Hol

      Workers like that would have their fingernails and toenails extracted in an extremely painful process if they were in Saudi Arabia.

      Yves is right. Workers and the poor are destroying America.

      1. Yves Smith Post author

        C’mon, you can’t complain about bankers being thieves and be a crook yourself. You are affirming you’d engage in their behavior if you had the opportunity.

        And what I objected to is a company selling products to encourage this sort of behavior, and a newsletter on top of that extolling it. So we have multiple independent encouragement of bad behavior because third parties will profit from it.

        1. john c. halasz

          “What’s robbing a bank, compared to founding a bank”- Mackie Messer.

          It’s all a matter of a sense of proportion, Yves. Pick and choose your sins, because sin we must.

  11. The Recusant

    Melissa Bean has a record of voting, sponsoring, and co-sponsoring many bills to contain the financial sector’s too-big-to-fail banks. Do a little research and check out her voting record and bills yourself rather than reading a blog on the internet and allowing yourself to be influenced by allegations. Her district has traditionally been a center for big financial donations due to the constituency. The previous representative, Phil Crane, was the largest PAC recipient in Congress at the time, did little to promote American values, was largely abandoned by the Republican Party, and failed to ascend to the Ways and Means Committee chairmanship. Representative Bean was easily reelected in a traditionally conservative district which shows her ability to transcend political parties and the subservience to either Democrats or Republicans.

    As a previous commenter has stated, the problem lies in the process of lobbying and donations, not with the people who are forced by political conventions to continue it.

    1. Yves Smith Post author

      My statement is accurate, and yours is not, so I suggest you stop casting false aspersions against blogs. Bean has received far more from the financial services, insurance, and real estate industries than ANY OTHER MEMBER of the House Financial Services Committee:

      In the period Jan. 2005 to Dec. 2007, Bean received 92% of her $4.9 million in campaign contributions from outside her district.

      Melissa Bean belongs to that group known as “pro-growth Democrats” that largely support bank lobbyists policies.

      Your remarks about re record on the banking industry is also wildly counterfactual. She has consistently acted to blunt or undermine measures that would constrain banks. As for her role in the derivatives regulation, I have considerable expertise in that arena (I was consulting to a major OTC dealer in 1991, when the market was just starting). I have said repeatedly that putting them through a clearinghouse is the wrong remedy, that in the end few contracts will go through that route, and the of the ones that do, the ones that are the real cause for concern, credit default swaps, are certain to be undermargined, which will make the clearinghouse another TBTF institution. So this is mere industry-favoring Potemkin reform.

      This details a stunt she pulled last week, an 11th hour amendment, one of the preferred routes for undermining reform and keeping the public in the dark about it:

      I suggest you stop defending a person of no ethics and character such as Melissa Bean. She shamelessly not only prevented Dr. Robert Johnson, the former chief economist of the Senate Banking Committee, from offering providing his testimony against credit default swaps, when he had been given invited to speak before the House Financial Services Committee with less than 24 hours to prepare testimony. She further went to considerable lengths to make sure his written testimony never became part of the official record.

      She performed an unusually aggressive act of bank-favoring censorship. And you remarkably try to claim she is not on their side. I have a bridge I’d like to sell you, but it is more likely you have some official relationship to her or bank industry lobbying efforts.

  12. The Recusant

    Yves Smith wrote: “I suggest you stop defending a person of no ethics and character such as Melissa Bean.”

    I suggest that you realize that a person may have weaknesses of character in specific areas and yet is fundamentally honest and humane in others. Bean’s approach to financial reform may not match your opinion, but often her explanation for not supporting certain “reforms” is that they are not comprehensive enough to get to the real problems. As for Dr. Robert Johnson, her stance and perhaps others on the committee would agree that Dr. Johnson’s take on “mirage capital” for derivatives would require a gutting of the entire derivatives market. He also espouses the restructuring of the large banks that is in effect nationalizing them. He is a very brilliant man, but he opposed the reform act in its entirety by saying that he did not agree with its methods to achieve its goals.

    Finally, Bean’s commitment to other areas of governance are exemplary and I have followed her career closely. The lives of Americans do not entirely revolve around banking and the stock market and her efforts in other areas are appreciated by her constituents.

  13. Richard Smith


    “I suggest that you realize that a person may have weaknesses of character in specific areas and yet is fundamentally honest and humane in others.”

    The weakness of character does seem to coincide with the source of her campaign contributions, though. That might indicate a certain venality, no? Are you sure her honesty and humanity are all that dependable?

    “Bean’s approach to financial reform may not match your opinion, but often her explanation for not supporting certain “reforms” is that they are not comprehensive enough to get to the real problems.”

    How does this tie up with last week’s derivatives reform bill amendment? Did she perhaps attempt that act of sabotage out of sheer pique that the reform wasn’t comprehensive enough? Forgive me, but my impression is that you haven’t really countered Yves’s point here.

    “As for Dr. Robert Johnson, her stance and perhaps others on the committee would agree that Dr. Johnson’s take on “mirage capital” for derivatives would require a gutting of the entire derivatives market.

    Is “gutting” a term of art in derivatives reform? Does it actually mean anything at all? Have you seen his testimony? The rest of us haven’t. It was censored.

    “He also espouses the restructuring of the large banks that is in effect nationalizing them.”

    That’s nationalizing as in paying over lots of taxpayer money to get an investment stake, or control, as opposed to paying over lots of taxpayer money to get nothing at all, (apparently the preferred approach in USA 2008-9), right? How do you know how much emphasis Johnson put on this in his actual testimony? Have you seen his testimony? The rest of us haven’t. It was censored.

    “He is a very brilliant man, but he opposed the reform act in its entirety by saying that he did not agree with its methods to achieve its goals.”

    So his testimony was suppressed?? Are you OK with that?

    “Finally, Bean’s commitment to other areas of governance are exemplary and I have followed her career closely.”

    I daresay she does nice things when she isn’t paid. Good for her. What she does for money isn’t so pretty.

    “The lives of Americans do not entirely revolve around banking and the stock market and her efforts in other areas are appreciated by her constituents.”

    I’m sure the point you’re trying to make here can’t possibly be as vacuous as it looks. Perhaps what you mean is that Bean can get away with this rampant corruption as long as she toadies to the right people?

  14. Yves Smith Post author


    Thank you for replying. Per this remark,

    “Bean’s approach to financial reform may not match your opinion, but often her explanation for not supporting certain “reforms” is that they are not comprehensive enough to get to the real problems. As for Dr. Robert Johnson, her stance and perhaps others on the committee would agree that Dr. Johnson’s take on “mirage capital” for derivatives would require a gutting of the entire derivatives market. He also espouses the restructuring of the large banks that is in effect nationalizing them.”

    To your first statement, has Bean therefore every put forward MORE sweeping reforms that get at the real problem? Perhaps there is a proposal or bill I missed somehow, but I cannot find any evidence of her backing in any meaningful way more effective banking reform, and so her statements look like a mere cover for obstructionism.

    On your second point, Johnson’s remarks were not about derivatives overall, but about credit default swaps. I have said here many times and make a longer-form analysis in my book that they are a fee machine for Wall Street with no net positive uses, but they cannot be shut down quickly because they have become so embedded in the infrastructure. World experts on CDS, such as Satyajit Das, have a similar dim view of CDS. So gutting that market would be desirable. Plain vanilla swaps have never posed a problem from a capital set-aside standpoint.

    Re nationalizing banks, we do that all the time. It’s called an FDIC resolution. So calling it “nationalization” for large banks is a scare tactic. Yes, winding down large banks is operationally vastly more complex. But de facto nationalizing them (by virtue of the scale of subsides made) and not imposing suitable operational controls and management changes is the worst of all possible world, it subsidizes failure and allows for looting on a much larger scale.

    Re re alleged responsiveness to local interests, that is contradicted by her behavior toward her own constituents, as in her advocating denying them the dual benefit of Illinois as well as Federal law as far as bank regulation is concerned (the proposal I highlighted above) and this:

  15. The Recusant

    Thank you gentlemen for your counterpoints in our discussion on Representative Melissa Bean. I have contacted her office about your concerns and should be receiving a response from her this week. (So far she has responded to my inquiries within days.)

    As for her proposing more meaningful banking reform, I believe her amendment will in fact provide for a fair, uniform set of regulations that banks can follow without being tethered to fifty different states’ consumer laws that would certainly muddy the waters of an already restricting regulation. Only those consumer laws that could materially and negatively impact the business of a national bank would be dismissed by a subcommittee. Imagine if you will, a state law, such as one in California, that allows a consumer to take over a previous home owner’s mortgage at the previous interest rate. What bank could withstand the losses of such a “consumer friendly” law? It is this type of over-reactionary but totally impractical consumer law that the amendment addresses. Granted the states should have control over what services national banks provide in their states, but forcing the banks into financial losses could precipitate unwanted results for the states that have such laws. A simple example would be national banks might avoid those states altogether, neighboring states without such restrictions might be favored for services that drive businesses to those states. And again, this only applies to those consumer laws that would place a financial burden on the banks, other consumer laws would still apply.

    As for your referenced URL concerning Bean’s $25 fee to the town hall meeting, the meeting was a breakfast meeting for only the Chamber of Commerce in Lake Zurich, Illinois that was open for members only and not the public. The $25 fee was to cover the breakfast costs. I’d say that was fiscally responsible.

    If you lived in the area you would find that during leave from DC, Bean is most often at the local grocery stores answering endless questions from constituents in endless lines. And having attended a few of these, I can tell you that the heated discussions at times make the Tea Party demonstrations look lame! In addition, while in DC she frequently uses telephone conferences to all the district citizens for updates and Q&As. In all the years I have been eligible to vote in numerous states, and I started by voting for Hubert H. Humphrey, I have never seen a more open and concerned representative who was willing to listen and respond to the voters’ concerns.

    Perhaps you don’t agree with her slant on conservative and pro-business financial policies and are suspect of her contributors, but you are just plain wrong about her conviction to serve the people. That’s why she gets re-elected.

    1. Yves Smith Post author

      I must note you have abandoned your original line of argument, which attempted falsely to contend that Bean’s posture on bank regulations was to the benefit of her constituents has now switched to one where you attempt to argue that changing the rules is necessary to help banks. Even your example does not hold water.

      First, you presuppose that a bank even still holds the mortgage it originated, when as you know, most are held by securitization vehichles. Second, in your example, there is no “loss” to the bank or securities holder by having a new party step in. If current mortgage rates are higher than on the outstanding mortgage, any “mark to market” loss already exists. And any bank that held a loan would (or could have) hedged the interest rate risk.

      Assuming mortgages was once common practice in many states; indeed, my parents assumed the mortgage in one house they purchased. I was advising banks since the 1980s and never once was this identified as even remotely a problem for banks. Indeed, it is quite conceivable that the new party on the mortgage could be higher credit quality than the original buyer.

      Banks have always operated under the jurisdiction of state law; interstate banking is a comparatively recent development. All real estate law is local, with their own requirement for title transfer and foreclosure. Banks navigate those state and locality requirements just fine. The idea that local protection needs to be swept away, when banks have suffered no harm from this system, save some adminsitrative nuisance that they long ago mastered, is completely false. You have no evidence to support a need for this change, and neither does Bean. This is merely an aggressive effort to shift more power to federal regulators, who have been far more bank friendly than many states have been.

      The fact that Bean has been re-elected does not constitute proof that she is dedicated to serving her constituents. Indeed, the information I presented earlier, that 92% of her funds come from outside her district, suggest quite the reverse, that she has very aggressively cultivated donors who have NOTHING TO DO with her district. Thus her success in being re-elected is very likely to have resulted from her ability to outspend her opponents in media buys.

      And heart-warming stories of speaking to constituents do not constitute any from of proof of either her interest or effectiveness in serving her constituents (and how often does this really happen? And how often is this staged, with video cameras running and friendly folks deployed to make sure these encounters come off well?) All it points to is some level of skill in managing appearances. Kissing babies, I am told, also works well.

      If her office does contact me, that is a sign of hypocrisy. Many of my readers were upset at her shabby treatment of Rob Johnson, and tried to contact her office, but were rebuffed because they were not in her jurisdiction. If her staff responds to me, who is also a non-constituent, it confirms her interest in preserving appearances. Perhaps if it becomes apparent that she is a willing tool of the financiers, she might become less useful to them. That might hurt her ability to obtain generous donations from them. It then becomes important to blunt criticism from those who publicize who is funding her campaigns and how her actions demonstrate whose interests she is really serving.

    2. Marshall Auerback

      Interesting that you think that Bean’s funding played no part in her re-election. Like to see how she would do if she didn’t have that war chest from her friends in finance. As for the substance of the argument, Eliot Spitzer was the only guy who actually responded to this crap. The federal agencies did nothing. It was always thus. She’s either bought or one of Lenin’s useful idiots.

  16. The Recusant

    My argument remains valid since laws benefiting banks can and do benefit her constituents. Although I am sure that she thinks on a much grander scale than merely her own district.

    In regards to the mortgage example that I submitted, which was merely an example of how consumer laws can adversely effect banks financially, the actual cases did create huge deficits in banks in California during the real estate bubble that were eventually resolved through changes in laws. So you are wrong to think that such mortgage laws do not create bank losses regardless of your lengthy but erroneous explanation.

    The POINT of the example was to show why such consumer laws could preempt sounder Federal consumer laws and motivate a politician to want to curb them when they impact a bank’s fiscal soundness. It certainly benefits the national banks to pass such an amendment, but then it also can have positive benefits in expedient, uniform, financial services. One does not negate the other.

    In addressing Bean’s contributors again, many if not most representatives receive substantial portions of their contributions from outside of their districts and from lobbying organizations and companies. It is a fact of political life. If you feel this compromises politicians, then how many politicians are exempt from suspicion? If you do not like the process then attack the process and change it instead of condemning those who are forced to work within its tenets. There are naturally exceptions to this, such as Bean’s predecessor, Crane, who was literally the largest PAC money recipient in Congress and was always away on a paid junket. Bean is nowhere close to being his caliber of corporate lackey.

    My description and personal testament of her attentiveness to her constituents was slyly sidestepped by a rather pessimistic and banal viewpoint taken by those stereotyping to discredit politicians en masse. I’ve never seen any videos of her kissing babies, but I have personally seen her answering those endless questions and lines of voters with intelligent, well-thought-out answers.

    I note that you did not respond to my explanation about the erroneous and slanted article concerning the $25 “town hall meeting”. Citing such acrimonious and biased drivel is always risky when forming an argument, you’re forgiven.

    If her office did not respond to inquiries I can understand it perfectly. She has received tens of thousands of emails, phone calls, and requests over the last few months concerning financial and health care issues from her actual constituents. Should she take the time to respond to out-of-district requests about Dr. Johnson’s remarks? Can you accept how illogical the point is?

    The bloggers on this site, like so many other sites, have an ill-disposed penchant for calling people names like idiots and filthy streetwalkers and apparently have an anti-Obama/Lieberman/Bean ax to grind. I know when my efforts are wasted on closed ears. However, in an attempt to keep an open mind, I will take into consideration what you have mentioned here in your arguments and weigh Bean’s actions in the future against them. Although I doubt anyone on this page will do the same with mine. Good luck.

    1. Yves Smith Post author


      I must note you failed to respond to many of the issues I raised earlier in the thread, such as the censoring of Rob Johnson and your mischaracterization of “nationalization.” So you chose to ignore retorts of mine, yet then jump on me for failing to respond to one of yours, namely, a meeting advertised as a town hall meeting. If she did present it as a town hall meeting, but it was in fact for a limited audience, I would say that was misleading. “Town Hall” usually means “open to the public.”

      As to her patience in dealing with constituents, that is no proof of how well she handles the lawmaking aspects of her job, which is the focus of my criticism. Your comments on her meeting with constituents is a communications issue. She may do a very good job on that, but it has NO BEARING on her legislative moves. This is like judging a heart surgeon on his bedside manner. There is no reason to assume one is a predictor of the other.

      As for the California rule, with all due respect, you give the impression of not understanding the economics at work. There would be no economic loss to the bank. The bank might be forced to report a loss from an accounting standpoint, but a loss would ALREADY exist from an ECONOMIC standpoint regardless IF the interest rate on the mortgage being assumed was lower than current rates. And if the bank had hedged the interest rate movement, as it could have, it could likely find a way to realize hedge profits to offset any accounting loss it might be forced to realize.

      Having a homebuyer assume an existing mortgage will not produce an economic loss. The only “loss” was an opportunity cost, not any kind of economic loss. If any banks claimed losses, these statements are highly misleading. I follow bank analysts and have heard not a single one mention this issue, so I believe you are simply repeating misleading bank complaints on this issue.

      As for Bean, you seek to obscure the issue by saying other politicians also take money from out of district sources and her predecessor was worse. That is no defense. Differences in degree are differences in kind. 92% of funding from outside her district is a breathtaking number, and says very eloquently who her real constituents are. She also has the highest level of donations from FIRE donors of ANY member of the House Financial Services committee. I am sorry, but the numbers speak for themselves. She is clearly receiving lavish support from the industry, and virtually none from the locals. You effort to suggest that her profile is like that of other Congressmen is simply counterfactual.

      And re her office, you have twisted my statement. I suggest you re-read it. I said IF her office were to get to me as a result of your comment, that would be a sign of hypocrisy, given its refusal to respond to other out-of-district inquiries.

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