Lessons from Japan - more money, faster

If only we had elected Democrats in 2008 and not GOP-lite. So what if the GOP economic policies have been proven to be completely false? Why make changes when to be fair, the US and global economy has not been completely destroyed yet? Maybe it's best that we allow the GOP dictate policy - including the Obama economic team who are every bit as clueless - because so far, riots in the streets haven't occurred. Worst case prediction (today) is US unemployment at 10% so really, it's not that bad. Sure it was down to 4% and it's a shocking increase but it's not shocking enough. Until we hit 15% or 20% it's better to let the Republicans decide what works and let the chips fall where they may.

The Obama administration is committing huge sums of money to rescuing banks, but the veterans of Japan’s banking crisis have three words for the Americans: more money, faster.

The Japanese have been here before. They endured a “lost decade” of economic stagnation in the 1990s as their banks labored under crippling debt, and successive governments wasted trillions of yen on half-measures.

Only in 2003 did the government finally take the actions that helped lead to a recovery: forcing major banks to submit to merciless audits and declare bad debts; spending two trillion yen to effectively nationalize a major bank, wiping out its shareholders; and allowing weaker banks to fail.

By then, Tokyo’s main Nikkei stock index had lost almost three-quarters of its value. The country’s public debt had grown to exceed its gross domestic product, and deflation stalked the land. In the end, real estate prices fell for 15 consecutive years.

More alarming? Some students of the Japanese debacle say they see a similar train wreck heading for the United States.

“I thought America had studied Japan’s failures,” said Hirofumi Gomi, a top official at Japan’s Financial Services Agency during the crisis. “Why is it making the same mistakes?”

Many American critics of the plan unveiled Tuesday by Treasury Secretary Timothy F. Geithner said the plan lacked details. Experts on Japan found it timid — especially given the size of the banking crisis the administration faces.

“I think they know how big it is, but they don’t want to say how big it is. It’s so big they can’t acknowledge it,” said John H. Makin, an economist at the American Enterprise Institute, referring to administration officials. “The lesson from Japan in the 1990s was that they should have stepped up and nationalized the banks.”

Don't these people know that we are Americans? There's nothing that we could ever learn from other people, especially foreigners. Japan, Sweden, wherever...they're all socialists, you know. What America needs is red-blooded pig headedness, freebies for business and more of the same. Isn't that what we all voted for last fall? Read the rest of this post...

United Arab Emirates denies visa to Israeli tennis player

If you listen closely, you can almost hear the dragging of their collective knuckles inside the halls of power in the UAE.

The United Arab Emirates has refused to grant a visa to a female Israeli tennis player, preventing her from competing in the Sony Ericsson World Tennis Association Tour in Dubai, the WTA said in a statement Sunday.

Shahar Peer would have been the first Israeli athlete to participate in a professional sporting event in the UAE, CNN Sports Correspondent Pedro Pinto said.

The governing body of women's tennis said it was "deeply disappointed" that Peer was being denied entry to the country hosting the tournament, but it did not cancel the competition.

The move runs counter to WTA policy, which says no player should be barred from competing in a tournament for which she has qualified.

Dubai could lose its WTA membership next year over the ban on Shahar, according to the governing body's rules.

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Bush's top economic adviser is worried about "the direction of economic policy"

Here's the thing -- If your name is Gregory Mankiw and you served as the chairman of George Bush's Council of Economic Advisors, you're really not in a position to question or challenge anything anyone is doing to fix the economy that you and your former boss, George Bush, destroyed. Mankiw is up in arms about pay limits on Wall Street (because of an article in the Wall Street Journal, no less):

This story is one sign about what concerns me about the direction of economic policy. President Obama has appointed some outstanding economic advisers. But policy will be determined largely by Congressional leaders whose instincts are more populist and less informed by solid economics.

Like the kind of "solid economics" that informed the practices of the Bush administration? Please.

It's really no wonder Mankiw's blog bio doesn't mention his stint as Chair of Bush's Council of Economic Advisors. Doesn't do much for one's cred. Read the rest of this post...

Global warming "underestimated"

Oh great.

Professor Chris Field, an author of a 2007 landmark report on climate change, said future temperatures "will be beyond anything" predicted.

Prof Field said the Intergovernmental Panel on Climate Change (IPCC) report had underestimated the rate of change.
He said warming is likely to cause more environmental damage than forecast.

Speaking at the American Science conference in Chicago, Prof Field said fresh data showed greenhouse gas emissions between 2000 and 2007 increased far more rapidly than expected.

"We are basically looking now at a future climate that is beyond anything that we've considered seriously in climate policy," he said.

Prof Field said the 2007 report, which predicted temperature rises between 1.1C and 6.4C over the next century, seriously underestimated the scale of the problem.

He said the increases in carbon dioxide have been caused, principally, by the burning of coal for electric power in India and China.

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Meet Rinku Sen, activist and author of "The Accidental American"

Last week, I had the chance to catch up with my friend, Rinku Sen. She's the President of the Applied Research Center, a true activist and an author. Her new book, The Accidental American, was published last month. It takes a critical look at immigration policy. It's a readable take on the immigration debate because it's told through the stories of real people, including Fekkak Mamdouh, who wrote the book with Rinku. He was born in Morocco who worked as a waiter at the World Trade Center.

Most of us have immigrant stories and to some extent, those of us who do are accidental Americans. In my case, my mother's parents emigrated from Ireland. They met here although they're from towns not too far apart in rural County Galway. Irish immigrants weren't beloved back when they came in the early 1900s. My grandfather came in 1910 and became a citizen by serving in World War I. My grandmother came in 1911 with her brother, John. A little known family fact is that because of some age requirement, my grandmother lied on the paperwork so her younger brother could travel with her. He was too young so they both lied about their ages on their immigration forms. Nowadays, for doing that, she probably would have been caught, prosecuted and put in jail, then deported. Instead, she made it, met my grandfather a couple years later and married him. Lucky for me.

I did a short interview with Rinku to provide some context for her book. Rinku is both smart and fun:

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Why not let Wall Street banksters move to Dubai?

It sounds like a great place and families will love it. They won't have to worry about government intervention and business can be business. Yeah, the downside is prison and who knows what else, but our glorious financial friends are all about unbridled capitalism, right? Isn't that what they want?

Sofia, a 34-year-old Frenchwoman, moved here a year ago to take a job in advertising, so confident about Dubai’s fast-growing economy that she bought an apartment for almost $300,000 with a 15-year mortgage.

Now, like many of the foreign workers who make up 90 percent of the population here, she has been laid off and faces the prospect of being forced to leave this Persian Gulf city — or worse.

“I’m really scared of what could happen, because I bought property here,” said Sofia, who asked that her last name be withheld because she is still hunting for a new job. “If I can’t pay it off, I was told I could end up in debtors’ prison.”

With Dubai’s economy in free fall, newspapers have reported that more than 3,000 cars sit abandoned in the parking lot at the Dubai Airport, left by fleeing, debt-ridden foreigners (who could in fact be imprisoned if they failed to pay their bills). Some are said to have maxed-out credit cards inside and notes of apology taped to the windshield.

The government says the real number is much lower. But the stories contain at least a grain of truth: jobless people here lose their work visas and then must leave the country within a month. That in turn reduces spending, creates housing vacancies and lowers real estate prices, in a downward spiral that has left parts of Dubai — once hailed as the economic superpower of the Middle East — looking like a ghost town.

No one knows how bad things have become, though it is clear that tens of thousands have left, real estate prices have crashed and scores of Dubai’s major construction projects have been suspended or canceled. But with the government unwilling to provide data, rumors are bound to flourish, damaging confidence and further undermining the economy.

Instead of moving toward greater transparency, the emirates seem to be moving in the other direction. A new draft media law would make it a crime to damage the country’s reputation or economy, punishable by fines of up to 1 million dirhams (about $272,000). Some say it is already having a chilling effect on reporting about the crisis.

Last month, local newspapers reported that Dubai was canceling 1,500 work visas every day, citing unnamed government officials. Asked about the number, Humaid bin Dimas, a spokesman for Dubai’s Labor Ministry, said he would not confirm or deny it and refused to comment further. Some say the true figure is much higher.

Sounds dreamy. Read the rest of this post...

In stimulus, pundits think the GOP found its "voice" (but, the new GOP "voice" has a very high disapproval rating and is being mocked by SNL)

This morning, at around 8:03 a.m., CNN's Political Editor Mark Preston told CNN Anchor Betty Nyugen that there was an "upside" in the stimulus battle for the Republicans:

In the short term, they lost the battle, Betty. They weren't able to stop this bill from moving through Congress. They weren't able to really alter very much what was happening to this bill as it was going through Congress, except what were they able is they were able to find their voice.

Preston's analysis reflects the warped thinking of "The Villagers" (a term coined by Digby who is, without a doubt, one of the brightest and insightful people in the blogosphere.) See, "their voice" was opposing a bill designed to save the economy from collapse. Only in the upside-down world of the inside-baseball pundits like Mark Preston could the GOP's negative tactics be viewed as something of a a victory. Let's just say, after watching Preston, I was annoyed.

But, I took Petey for a walk and an hour later I read Frank Rich's column:

Because Republicans are isolated in that parallel universe and believe all the noise in its echo chamber, they are now as out of touch with reality as the “inevitable” Clinton campaign was before it got clobbered in Iowa. The G.O.P. doesn’t recognize that it emerged from the stimulus battle even worse off than when it started. That obliviousness gives the president the opening to win more ambitious policy victories than last week’s. Having checked the box on attempted bipartisanship, Obama can now move in for the kill.

And, Obama should. The Republicans in Congress put their political agenda ahead of the country's needs and they're all high-fiving each other for it. Then, they've got the talking heads, like Mark Preston, seeing an "upside" to their opposition to the economic recovery package. So be it.

But, as Rich also notes, outside the very narrow little sliver of the beltway populated by pundits and GOP members of Congress, the numbers reflect a different take. Let's call it reality:

In any event, the final score was unambiguous. The stimulus package arrived with the price tag and on roughly the schedule Obama had set for it. The president’s job approval percentage now ranges from the mid 60s (Gallup, Pew) to mid 70s (CNN) — not bad for a guy who won the presidency with 52.9 percent of the vote. While 48 percent of Americans told CBS, Gallup and Pew that they approve of Congressional Democrats, only 31 (Gallup), 32 (CBS) and 34 (Pew) percent could say the same of their G.O.P. counterparts.

Such an upside, huh?

To top it off, the Republicans have achieved the rarified status of being brutally mocked by Saturday Night Live:
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Suze Orman's Valentine wish: All Americans, including gays, deserve the same financial benefits of marriage

Suze Orman is one of the only financial types who I trust to give good advice during this economic crisis. She gets it and is just amazingly smart. Very. Actually, I'm a little afraid of Suze Orman and I'm just glad she's on our side. And, she is unabashed about saying it:


Suze sure has great messaging on gay marriage -- and she is a powerful messenger. (For those who don't know, Suze is openly gay.) Read the rest of this post...

Sunday Talk Shows Open Thread

Okay, here's a challenge for the Sunday Talk Show hosts: Ask the Republicans guests, including leading GOP drama queen Lindsey Graham, why they hate America. Because only people who hate this country would work so hard to defeat the stimulus package when our country is on the verge of economic collapse -- a collapse enabled by those Republicans and their former leader, George Bush. (Their new leader is the former drug addict, Rush.) Now, we all know this is wishful thinking. The Republicans will ever be forced to explain themselves by the inside-the-beltway pundits. Never ever.

Gibbs, Axelrod and Barney Frank should kick the crap out of the intransigent and anti-American Republicans. Remember what Barney said about bipartisanship in December:

I think [Obama] overestimates his ability to take people — particularly our colleagues on the Right — and sort of charm them into being nice. I know he talks about being post-partisan. But I’ve worked frankly with Newt Gingrich, Tom Delay, and the current Republican leadership. … When he talks about being post partisan, having seen these people and knowing what they would do in that situation, I suffer from post partisan depression.

Obama did overestimate the willingness of the GOP to work in the best interest of our nation.

Here's the lineup:

ABC's "This Week" — Sens. Chuck Schumer, D-N.Y., and Lindsey Graham, R-S.C.; Reps. Maxine Waters, D-Calif., and Peter King, R-N.Y.

___

CBS' "Face the Nation" — White House spokesman Robert Gibbs; Sen. Richard Shelby, R-Ala.; Rep. Barney Frank, D-Mass.

___

NBC's "Meet the Press" — David Axelrod, senior White House adviser.

___

CNN's "State of the Union" — Sen. John McCain, R-Ariz.; Gibbs.


"Fox News Sunday" _ Axelrod; Eric Schmidt, CEO of Google; Mark Zandi, Moody's Economy.com

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Zimbabwe drops treason charge, changes to terrorism

It almost sounds like the Blair government when they abused what constitutes terrorism. Something tells me this new unity government might struggle to take root.

The treason charges against Zimbabwe ministerial nominee Roy Bennett have been dropped but replaced with attempt to commit terrorism, banditry and sabotage, his lawyer said on Sunday.

"The police must have realised that they had no leg to stand on. Their case would not hold water," said Trust Maanda.

"Bennett is currently being interviewed by the police. He is now appearing in court on Monday facing fresh charges," added Maanda.

Bennett is a member of the Movement for Democratic Change (MDC) which struck a power-sharing deal with veteran President Robert Mugabe's ZANU-PF party.

Designated to become deputy agriculture minister, Bennett was arrested on Friday at an airport outside Harare shortly before President Robert Mugabe swore in new ministers for the unity government.

The power-sharing government will see the country's bitter enemies try and work together to pull Zimbabwe out of a deep crisis marked by hunger, the world's highest inflation rate and a deadly cholera epidemic.

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Michael Moore targeting banksters in next film

Hell yeah.

Mr Moore posted a letter on his website yesterday urging people who work or had worked for banks, brokerages and insurance companies to "step up as an American and do your duty of shedding some light" on the crisis.

The implosion of the banking system has already forced banks globally to write down almost £1 trillion and driven many of the world's major economies into recession.

The filmmaker, whose documentaries include Farenheit 9/11, which dealt with the September 11 terrorist attacks in New York, is in the middle of shooting the film, according to his Web site. He claims to have heard from a "few good people" already.

"Based on those who have already contacted me, I believe there are a number of you who know 'the real deal' about the abuses that have been happening," Mr Moore said. "You have information that the American people need to hear. I am humbly asking you for a moment of courage, to be a hero."

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Lord Paulson's hedge fund may have made $67 million in 25 minutes

It's good to be da' king, or even a Lord.

Paulson & Co., the hedge fund run by billionaire John Paulson, may have made as much as $67 million in 25 minutes today as Lloyds Banking Group Plc lost about 5.9 billion pounds ($8.5 billion) in market value.

Lloyds fell the most in 20 years after saying HBOS Plc, the U.K. lender it took over last month, would report a 10 billion- pound pretax loss. The shares plunged as much as 43 percent in less than 25 minutes of London trading.

Paulson, who made billions from betting against the subprime mortgage market, held a Lloyds short position representing 0.79 percent of the bank, or 129.3 million shares, as of Jan. 20, according to a regulatory filing. DataExplorers.com, which tracks share borrowing from London, said 1.1 percent of the stock was on loan as of Feb. 11, the most recent data available. That’s down from as much as 8 percent six months ago and suggests Paulson held the bulk of the remaining short position.

“It wasn’t really shorted at all before this share drop,” Julian Pittam, a managing director at DataExplorers.com, said in an telephone interview from London. “There’s little upside and lots of downside in banks when there’s this much political rhetoric and volatility going on.”

Armel Leslie, a spokesman for the $30 billion New York-based hedge fund, declined to comment. There’s no indication that Paulson closed his short position, and there won’t be until a subsequent filing.

Paulson’s Credit Opportunities Fund soared almost sixfold in 2007 on bets that subprime mortgages would plummet. Last year, his flagship fund returned 37 percent, compared with a loss of 19 percent for hedge funds on average.

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Peanut business at center of controversy files for bankruptcy

Will this translate into a new era of corporate responsibility? Maybe not, though it's possible that some businesses will start to realize that the days of ignoring problems (self regulation, as the GOP calls it) are on the decline. They're definitely not over as long as the Democrats hold on to the old guard who also thought it was possible to be nice to Republicans, though it's likely the Democrats will show some level of interest in finding a balance between business and consumers. Business needs to do business, but hell, people in the richest country in the world should expect to be able to eat something as simple as peanuts or peanut butter without fear of dying. Dying from food problems is what you expect to see in poor developing countries but not in America. Not the America I used to know, at least.

The peanut processing company at the heart of a national salmonella outbreak is going out of business. The Lynchburg, Va.-based Peanut Corp. of America filed for Chapter 7 bankruptcy in U.S. Bankruptcy Court in Virginia Friday, the latest bad news for the company that has been accused of producing tainted peanut products that may have reached everyone from poor school children to disaster victims.

"It's regrettable, but it's inevitable with the events of last month," said Andrew S. Goldstein, a bankruptcy lawyer in Roanoke, Va., who filed the petition.

The salmonella outbreak was traced to the company's plant in Blakely, Ga., where inspectors found roaches, mold and a leaking roof. A second plant in Plainview, Texas was shuttered this week after preliminary tests came back positive for possible salmonella contamination. So far, the outbreak has been suspected of sickening more than 630 people and may have caused nine deaths. It also has led to more than 2,000 product recalls, one of the largest recalls in U.S. history.

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