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Studs Turkel died today.
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For Voter Protection go to: http://www.866ourvote.org/elections-101/
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By Steven Rosenfeld, AlterNet
Posted on October 27, 2008, Printed on October 27, 2008
http://www.alternet.org/story/104735/
As the 2008 presidential election heads into its final week, the current president threw a political wild card on table late Friday, when he asked Attorney General Michael Mukasey to investigate the status of 200,000 Ohio voters.
George W. Bush’s request, if honored, could be politically explosive. It would remind voters of the Department of Justice’s partisan abuses of power in the scandal surrounding the firing of seven U.S. attorneys in 2006 who did not deliver ‘voter fraud’ convictions.
It could be a big distraction, drawing attention away from issues that call for legitimate DOJ intervention, such as shortages of voting machines in minority precincts in Virginia and Pennsylvania, compared to nearby white precincts. That disparity would violate existing civil rights law.
Or it could interject a complicating dynamic into the already heavily litigated Ohio general election, by adding the Department’s weight to GOP legal claims that pre-emptively question the legitimacy of a close vote count in a key battleground state.
Either way, the Department must choose if it will remain silent or get involved in an action that would go well beyond its historic role of quietly monitoring elections and avoiding messages to voters.
“This is taking the politicization of this to a new level, and the last thing we need is for the elections officials and voters of Ohio to be put in a chaotic situation in the last days before the election,” Jon Greenbaum of the Lawyers’ Committee for Civil Rights Under Law, told the Washington Post, reacting to the White House request.
“Some said we should just stick capital in the banks, take preferred stock in the banks. That’s what you do when you have failure. This is about success.” Henry Paulson, September 23
By Paul Krugman
Full Article: http://www.nybooks.com/articles/22151
What the world needs right now is a rescue operation. The global credit system is in a state of paralysis, and a global slump is building momentum as I write this. Reform of the weaknesses that made this crisis possible is essential, but it can wait a little while. First, we need to deal with the clear and present danger. To do this, policymakers around the world need to do two things: get credit flowing again and prop up spending.
The first task is the harder of the two, but it must be done, and soon. Hardly a day goes by without news of some further disaster wreaked by the freezing up of credit. As I was writing this, for example, reports were coming in of the collapse of letters of credit, the key financing method for world trade. Suddenly, buyers of imports, especially in developing countries, can’t carry through on their deals, and ships are standing idle: the Baltic Dry Index, a widely used measure of shipping costs, has fallen 89 percent this year.
What lies behind the credit squeeze is the combination of reduced trust in and decimated capital at financial institutions. People and institutions, including the financial institutions, don’t want to deal with anyone unless they have substantial capital to back up their promises, yet the crisis has depleted capital across the board.
The obvious solution is to put in more capital. In fact, that’s a standard response in financial crises. In 1933 the Roosevelt administration used the Reconstruction Finance Corporation to recapitalize banks by buying preferred stock—stock that had priority over common stock in terms of its claims on profits. When Sweden experienced a financial crisis in the early 1990s, the government stepped in and provided the banks with additional capital equal to 4 percent of the country’s GDP—the equivalent of about $600 billion for the United States today—in return for a partial ownership. When Japan moved to rescue its banks in 1998, it purchased more than $500 billion in preferred stock, the equivalent relative to GDP of around a $2 trillion capital injection in the United States. In each case, the provision of capital helped restore the ability of banks to lend, and unfroze the credit markets.
NYRB / Chrysalids Holiday
A financial rescue along similar lines is now underway in the United States and other advanced economies, although it was late in coming, thanks in part to the ideological tilt of the Bush administration. At first, after the fall of Lehman Brothers, the Treasury Department proposed buying up $700 billion in troubled assets from banks and other financial institutions. Yet it was never clear how this was supposed to help the situation. (If the Treasury paid market value, it would do little to help the banks’ capital position, while if it paid above-market value it would stand accused of throwing taxpayers’ money away.) Never mind: after dithering for three weeks, the United States followed the lead already set, first by Britain and then by continental European countries, and turned the plan into a recapitalization scheme……………………………………………..
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Immediate need. The markets need a lasting period of time, longer than a few days, for the policymakers around the world to evaluate the distress. Get away from their daily, almost hourly, responses to the markets. The market is now dominated by computerized idiots involving the short sellers, the hollow knowledge of the derivatives market and short-term trading strategies of hedge funds. Until trust returns to the market the mayhem will continue.
I propose the following plan. I believe a plan is necessary to save the incompetents on Wall Street from themselves but also to save the common man’s homestead and what he or she has been able to save, looking forward to that day of retiring and enjoying life.
Critical to my plan are:
- It recognizes the immediacy of the problem.
- It gives time to develop real assistance for the common man
to keep his homestead.
- The election of Senator Obama as President and the election of a Democratic Congress. This is an imperative. The election of McCain Palin would be a disaster for the necessary intense monitoring of the plan and the implementation of rules and regulations to govern the financial markets. McCain has been the God of deregulation during his time in the Senate. Further his past corruption as a member of the infamous “Keating Five” and the subsequent Savings and Loan bailout must not be forgotten.
Obama would bring a brilliant mind to the undertaking and would surround himself with the best minds there are. To oversee the monitoring of the Plan I recommend persons such as Mayor Bloomberg and Warren Buffit.
All activities of the U.S. Treasury relating to the Plan are to placed and remain in a Trust Fund (Fund) with the sole purpose of the Fund to execute, administer and monitor the Plan until its demise. All funds, regardless of source, belong solely to the Fund and may not be used for any other purpose or other Government funding.
1.) Immediate moratorium of 180 days on all foreclosures of a person’s homestead property whose outstanding mortgage is $400,000 or less.
A joint committee of Congress to be formed with the charge to report back to Congress within 90 days with recommendations of relief for such persons.
2.) Immediate loan availability for those financial institutions holding major blocks of troubled mortgage securities with conditions on the loans as follows:
a.) Interest at the five year treasury rate plus 3 % (adjustable every 3 months)
b.) Warrants for preferred stock issued to U.S. Treasury with terms as follows:
i) Preferred stock warrants are exercisable at the discretion of the U.S. Treasury with the amount of debt canceled owed to the U.S. Treasury equal to the amount of equity purchased at a price determined by the fair market value of the company
ii) Fair market value (FMV) of the company’s equity to be determined as of November 30, 2008. Such FMV to be determined excluding the debt owed to the U.S. Treasury.
FMV to be certified by a major auditing firm, such firm approved by the U.S. Treasury, and the FMV presented to the U.S. Treasury in the form of a balance sheet, with financial notes to the balance sheet with full disclosures of all contingencies which could have a material effect on the present or future value of the equity.
iii) Preferred stock is to be cumulative, participating, convertible into common and senior to all debt.
iv) Preferred stock to have an accumulated dividend rate of 12% compounded if unpaid quarterly
v) Preferred Stock to have:
Full registration rights: demand rights; “piggyback”; zero registration expenses; full transfer of rights and non-competition agreement with all executives.
Veto rights: financings, acquisitions, mergers, sale and other disposition of assets, dividends, amount of stock issued, borrowing, leasing & compensation of executive staff
3.) Immediate representation of the U.S. Treasury on the Board of Directors of the company with full powers over the executive pay, the audit committee, the governance committee, and all rights enunciated under b (v) above.
themcglynn
