NYT article covering Obama’s and McCain’s positions on how to fix the problem.  Or rather how Obama proposes fixing the problem, and how McCain blames greedy “Wall Street Bankers”.

Basically, Obama says increase regulations (the article doesn’t mention giving agencies teeth), and McCain has no answer.  That’s because he’s trapped by his Senate voting record tying him to the hands-off Republican approach that got us into this situation in the first place.  How does McCain propose we fix the problem of those greedy bankers?  The article doesn’t say, but it does point to earlier quotes like this:

“I’m always for less regulation,” he told The Wall Street Journal last March, “but I am aware of the view that there is a need for government oversight” in situations like the subprime lending crisis, the problem that has cascaded through Wall Street this year. He concluded, “but I am fundamentally a deregulator.”

Later that month, he gave a speech on the housing crisis in which he called for less regulation, saying, “Our financial market approach should include encouraging increased capital in financial institutions by removing regulatory, accounting and tax impediments to raising capital.”

I might be reading this wrong, but wouldn’t that be like giving a compulsive gambler a credit card with a higher limit?  How would that fix things?

One of the fundamental problems (and possibly the most scary and intractable) as I understand it, is that banks no longer trust each other.  Prior to the current credit crisis, they would readily loan each other money at super low rates:  the so-called overnight rate.  This is the rate that is changed by the Federal Reserve and covered with great fanfare by the media.  But the problem currently is that each bank knows that their own books are bogged down with overly risky investments, and the numbers they present to the world range from the confusing to the outrageously untrue.  So they know this is true at all the other banks, too.  Which means when one of them comes asking for money, nobody is selling.  Try as the Federal Reserve might by lowering the overnight rate, they can’t entice the banks to trust each other.  So they have no access to cash.

I really don’t see how the government stepping in to finance more risky investments is a good thing.  We should acknowledge the fact that banks don’t trust each other and fix the problem that gives rise to that mistrust.  And this requires regulation and enforcement.

I learned about this from John K. Galbraith from an article in Mother Jones this summer.  Do yourself a favor and read his article, and everything else he writes.  He’s a regular contributor to MoJo.

Unless you’ve been under a rock for these last few months, you’ve heard about the last-minute rescue by the U.S. Government (of, by and for the people) of Bear Stearns and of Fanny Mae and Freddy Mac.  This weekend it was Lehman Brothers turn.

Unfortunately for Lehman, this time around the Treasury Department and the Federal Reserve Bank (can someone tell me why they’re involved?) weren’t interested in putting any guarantees or cheap loans in place to make the deal sweet for other banks.

As told by the NYT:

Mr. Geithner [President of NY Federeal Reserve] made an impassioned appeal to the group: We need an industry solution. We need an industry solution, no matter what, he said. His message was clear; it is not about any individual bank, it is about the industry. If you don’t create an industry solution, you will be next.

Most of the bankers quietly listened. But some questioned the need for them to play a role in a bailout. Lehman Brothers had overreached and brought its troubles upon itself, they argued. Why should they put up their own money in a rescue?

I don’t know about you, but this situation sounds familiar to me, even down to the language of “personal responsibility”.  If you abstract things a bit, government seems to be taking an ideologically progressive position (everyone together can improve the lot of the few) and the banks are taking the conservative position (it’s dog-eat-dog, man; stop crying).  Only this time the government doesn’t want to invest any money in the fix.

The banks are being true to their character:  cold-hearted capitalism and pursuit of the bottom line at all costs dictates that they should hold out for a sweatheart deal where they get a troubled (but still valuable) asset, while the ever-shrinking and impoverished middle class pays for all the risk.  This is what banks do.  No surprise.

With little time to inspect Lehman’s toxic assets, Barclays and Bank of America made it clear that any deal would be contingent on them receiving government agreeing to absorb a portion of the losses.

But the government seems to me to be trying to strike an ideological middle ground.  They want the banks to take on both the risk and the reward, like this is some kind of normal sale deal.  Which of course it isn’t.  They’re practically begging the banks to do something that is fundamentally opposed to how their beloved free market ideology works.  They want them to buy a broken bank not for profit, but for the common good.  With no incentives.

I’m just curious why the government is digging in their heels now, after bailing out Bear Stearns and Fanny Mae and Freddy Mac.  Have we run out of money?

What’s the answer?  It’s not the morally bankrupt answer of the right, the banks’ current position; the so-called free market.  It’s not the morally dishonest position that the government is currently taking; attempting to acheive the free market by expecting business to just do the right thing.

No, the answer is regulation.  I’m no economist, and there are complexities to this situation that I’ll never understand.  But a progressive ideology would dictate that you can’t leave these huge corporations to set the rules of the game themselves.  Our government has to set rules, and to make sure they are enforced.

Now that it’s the endgame and the government is getting involved, we should either let these banks go under or buy them and liquidate them.

It’s just the same old tired cliché, this time told with a lot of zeros and dollar signs.  And in the end, the only real victims will be people.  Lower- and middle-class people whose tax dollars will be spent to bail out yet another bank who tried to game the system rather than being spent on education.  People whose mortages are getting riskier, whose jobs are less stable and whose future is more cloudy.

Katha Pollitt with the clearest view on the Palin appointment I’ve seen yet.  An excerpt:

John McCain chose the supremely under-qualified Sarah Palin as his running mate partly because she is a woman. If you have a problem with that, you’re a sexist. She talks incessantly about being a mother of five and uses her newborn, Trig, who has Down syndrome, as a campaign prop. If you wonder how she’ll handle all those kids and the Veep job too, you’re a super-sexist. “When do they ever ask a man that question?” charges that fiery feminist Rudy Giuliani. Indeed, Palin, who went back to work when Trig was three days old, gets nothing but praise from Phyllis Schlafly, James Dobson and the folks at National Review, who usually blame all the ills of modern America on those neurotic, harried, selfish, frustrated, child-neglecting, husband-castrating working mothers. Even stranger, her five-months-pregnant 17-year-old, Bristol, gets nothing but compassion and respect from Bill O’Reilly, Rush Limbaugh and others who have spent their careers slut-shaming teens for having sex–and blaming their parents for letting it happen.

Yeah!

HHS Secretary Leavitt wants to save the poor doctors from being forced to provide abortions.  The nut:

Today, HHS will file a rule in the Federal Register aimed at increasing compliance with existing federal laws protecting provider conscience. The proposed rule clarifies that non-discrimination rules apply to institutional health care providers as well as to individual employees working for recipients of certain funds from HHS.

Interpretation: he wants to create legislation that ensures any employee at any clinic that provides federally-funded medical care be able to not provide that care at will.  Let me say this another way: a receptionist at a clinic should be able to bar access to healthcare to anybody if they like.

Remember pharmacists deciding not to issue birth control pills?  This rule would establish a federal regulation endorsing that despicable behavior.

My response to his blog post (we’ll see if it posts):

This is not a matter of free speech. This is a matter of religion clouding judgment.

If my employer pays me to paint widgets and I refuse, nothing protects me from being fired, not even free speech. If I have a problem painting widgets, I should seek other employment.

If a person has a problem assisting women in getting abortions, perhaps they should seek employment in a field other than one that involves maintaining the health of women’s reproductive organs.

If you’re as outraged as I am about this, please send a quick email to consciencecomment@hhs.gov.

Over the years we’ve been living in our house, our sewage line has been blocked maybe three times.  The symptoms weren’t as gross as they could have been, probably because the sewer line exits the house at the basement slab level, and we have no plumbing in the basement.  That means we’ve got a good 10′ of gravity to protect us.  Instead, the symptoms have been either in the form of water bubbling out of the cleanout lid, or water condensate overflowing from the HVAC condensate drain line.  See, some smart cookie decided that the condensate should tie into the sewer cleanout.  So when I said we had no plumbing in the basement, I meant real plumbing.  The weak link in the sewer chain was a 3/4″ pipe that would clog when the sewer line backed up, causing the water condensate to back up in our garage.

These two symptoms started exhibiting last Saturday, and when I opened up the cleanout, sure enough we were backed up.  So I hauled out my trusty 50′ pipe snake and started to try and unclog the line.  Unfortunately, about 48′ in I hit an obstruction that wouldn’t clear.  That pretty much left my only option to be to call a plumber.

I was a little surprised to get someone who could come out on a Saturday on quick notice, but Kenny from Metro Septic came out in the afternoon to pump my septic tank.

Oh yeah, I forgot to mention that I thought I was on septic.  See, the other times plumbers came out to unclog my line, they told me I wasn’t on sewer.  I had thought I was on sewer, though, because Cobb County was charging me sewer fees, and had been since I moved in in 2000.  So I naturally contacted the county to get them to stop billing, which they did after I visited a county office that had plans for our street that clearly showed that neither my house, nor any of my near neighbors, were on sewer.  Not only did they stop billing me, they credited me back to when I bought the house.  So I’m on septic, right?

Well, when Kenny showed up and started looking for my septic tank with a nifty fiberglass probe and a metal detector, he couldn’t find anything.  He must have poked 100 holes looking for the thing.  When it became clear that we weren’t going to find it that way, he rolled his mini backhoe into the yard and started digging.  He started at the cleanout and followed the pipe that I had snaked out to 48′.  But when he got to that point, what we found wasn’t a septic tank, or even a drain field.  No, it was a collapsed pipe.  And judging by the black dirt all around it, the pipe appeared to have been broken for years.  So he kept digging.  Another 20′ on he found another section of broken pipe that had sunk about 2′, but it didn’t look like anything had passed that way for many years:  the pipe was clean.

At this point he was pretty sure we weren’t on septic, because we were getting far enough down the hill of my backyard that there was nowhere for the drain field to be, but it was getting dark, so he promised to come back first thing Monday.

When he returned, he only dug another 10′ or so just to pick up the other side of the broken pipe.  He had brought with him a nifty camera this time, so he snaked it down the pipe to see where it went.  As expected, it didn’t end up in a septic tank.  No, apparently my sewer line goes about 15′ into my neighbor’s yard, ties in with theirs, and we both share a tap into the sewer main.  The main appears to run across the very bottom of our yards.

Kenny dug another trench parallel to the one following the damaged pipe, tied in to the existing good pipe on either end, and buried the whole thing again.  He didn’t want to put the new pipe in the same trench, fearing it would collapse like the old one did.  He even installed another cleanout for me further down, which I’ve looked into in order to see our newly functional sewer drain in operation.

It wasn’t cheap, but obviously wasn’t optional, either.  And the mystery of the clogging septic tank is

solved.  I just have to wonder how it was possible for our sewer system to consist of 48′ of pipe ending 4′ underground.  No tank, no drain field, nothing.  There are only two of us, and we don’t produce much waste.  And 4′ deep is probably deep enough in this Georgia clay to keep stuff from percolating up into the yard.  I would think the thing would have been backed up all the time.

If you live in Atlanta and need someone to work on your septic or sewer system, I would recommend Kenny and Metro Septic highly.  He did a good job, he communicated well, and his rates are reasonable.  He’s a nice guy, too.