Right Wing Nut House

Greg Sargent touting President Obama’s speech in Philly as he tries to “close the sale” on health care reform:

One striking thing about the speech Obama just gave at the big health care rally in Pennsylvania is how many times he stressed that if reform passes, voters will begin enjoying the benefits this year.

Though he didn’t say it directly, it’s an obvious effort to put some spine in wavering Congressional Dems by urging them to understand that they’ll have something to run on this year if they vote for reform. Here’s the key part:

Within the first year of signing health care reform, thousands of uninsured Americans with preexisting conditions would suddenly be able to purchase health insurance for the very first time in their lives.

This year, insurance companies will be banned forever from denying coverage to children with preexisting conditions.

This year, they will be banned from dropping your coverage when you get sick. And they will no longer able to arbitrarily and massively hike your premiums. Those practices will end.

If this reform becomes law, all the new insurance plans will be required to offer free preventive care to customers starting this year. Free checkups so we can catch preventable diseases.

Starting this year, there will be no more lifetime restricive annual limits on the amount of care you can receive from your insurance companies…

It would change fast: Insurance companies would finally be held accountable to the American people

Before examining the reality, let’s look at the rhetoric. Is it true that those with pre-existing conditions will be able to purchase health insurance “for the very first time in their lives?” Only if the condition existed for their entire lives or came upon them in adolescence before they had the ability to buy insurance. In fact, most pre-existing conditions occur after someone enters adulthood which means the idea that they never had the opportunity to purchase insurance is a crock.

And how about that “free” preventive care? And you wonder why we’re running a $1.4 trillion deficit? Of course, there is nothing “free” about nationalizing insurance or ordering insurance companies to offer a specific coverage. The bottom line is that those who don’t use the health care system will be paying for those who do. I predict this crazy idea hitting the auto insurance industry soon, where those with multiple drunk driving convictions demand the same rate of insurance and coverage as a teetotaler.

It would be more accurate to say that the preventive care coverage is mandated as part of the insurance plan that companies must offer. It is hardly “free” since we’re all paying for it. In short, the customer is paying for preventive care whether he wants to or not. We get a lot of this already from state insurance boards who demand insurance companies cover many procedures the overwhelming majority of policy holders will never use.

But what is the reality of all those goodies we are going to get the first year of Obamacare? An interesting development occurs when sick people pay exactly the same amount for insurance as healthy people; “insurance” is no longer insurance and becomes a government entitlement whose management and cost is farmed out to private industry.

For some reason, insurance companies have an aversion to going bankrupt. Don’t ask me why. They must be old fashioned or something to believe that they aren’t in business to get Democrats re-elected but rather to make a little money for their shareholders. Since that won’t be possible even in the first year under Obamacare, look for insurance companies to be screaming for rate increases in everybody’s premiums which will cause enough heart attacks in customers that Obama will be forced to activate the Death Panels 3 years early just to handle drain on health care resources.

This entire debate has taken a topsy-turvy turn. I’ve got history on my side when I say what Matt Welch says here:

The Senate promised more than $300 billion in such cuts. Furthermore, the CBO scores bills in 10-year windows. So the Senate delayed more than 99 percent of the reform package’s spending until 2014, thus allowing the decade of 2010–2019 to clock in under the magic $1 trillion number. Add to all that chicanery the fact that every major health care entitlement expansion in U.S. history has vastly exceeded initial cost projections, and you have ample reasons for why Americans believed, by a margin of more than 3 to 1, that health care reform would exacerbate rather than improve the deficit.

It should be up to the proponents of health care reform to prove that their schemes will not meet the fate of past entitlements - every single one of them - that exceeded spending projections by laughable margins.

And when I say laughable, I mean real loony toons, cross-eyed Mary, monkey wanking, impossibly incorrect margins:

Congress has a long history of dramatically underestimating Medicare costs. “At its start, in 1966, Medicare cost $3 billion,” wrote Steven Hayward and Erik Peterson in a 1993 Reason article. “The House Ways and Means Committee estimated that Medicare would cost only about $12 billion by 1990 (a figure that included an allowance for inflation). This was supposedly a ‘conservative’ estimate. But in 1990 Medicare actually cost $107 billion.”

Why, I say to reform advocates with as much sincerity and passion as I can muster, should things be different this time? What evidence do you have that history won’t repeat itself and we will be embarking on an insane fiscal course that will lead to the actual ruin of the United States? The burden of proof, as I said is on you. History has taken the measure of other entitlements and shown projections of costs to be ludicrous and silly.

With Democrats poised to prevent their labor allies from paying a tax for their gold plated health care plans, their extraordinary nebulous disingenuousness on “waste and fraud” savings to be found in Medicare, and the non-existent “doc fix” that is supposed to save $500 billion over 10 years - how in God’s name can you stand in front of the American people and make a case that this reform bill won’t add to an already out of sight deficit?

You can’t, which means you are either deluding yourselves or Obama and the Democrats are lying outright.

Welch thinks its the latter:

Obama’s dishonesty, by contrast, seems to spring from a different place. As a man who has spent most of his career wowing people with his words and very little of it converting those words into deeds, he has an activist’s gap between rhetoric and reality and a radio broadcaster’s promiscuous carelessness with cutting rhetorical corners. Sure, it’s not technically true that the administration’s day-one lobbying reforms served “to get rid of the influence of…special interests,” as he claimed in a January radio address (to the contrary: federal lobbying in 2009 set an all-time record), but it’s easy to imagine that the president feels his combination of tighter employment restrictions for ex-lobbyists and stricter disclosure requirements for current ones is, in the context of the Manichean fight between “the people” and “special interests,” good enough for government work. The perfect shouldn’t be the enemy of the good, and the critics who complain are just opportunistic literalists grasping for any club to beat back the march of progress. No need to give them an inch.

But there’s a less charitable explanation too. During the president’s nonstop gabfests before, during, and after the State of the Union speech, he kept repeating the fiction that the medical industry’s “special interests” were significantly to blame for scotching his health care legislation. In fact, the administration and Congress negotiated with those interests every step of the way, receiving crucial buy-in and millions in campaign contributions. Pro-reform lobbyists outspent anti-reform lobbyists on advertising by a factor of 5 to 1. There’s a three-letter word for blaming the defeat of his bill on health care lobbyists, and it rhymes with pie.

In his speech yesterday, Obama picked a familiar target; insurance companies who he thinks the government should hold accountable to their customers:

President Obama struck a populist tone, setting up the health insurance industry as his main target.

“We can’t have a system that works better for the insurance companies than it does for the American people,” he said.

Citing big rate increases for buyers of individual insurance policies in some states — 40 percent, 60 percent, even 100 percent — Mr. Obama sought to focus attention on provisions in the legislation that he said would protect consumers from the worst excesses of insurers, give people more choice among insurance policies, insure most people who do not have coverage, and put downward pressure on health care costs.

Boiling down his proposal to a few sentences, Mr. Obama asked, “How many people would like a proposal that holds insurance companies more accountable? How many people would like to give Americans the same insurance choices that members of Congress get? And how many would like a proposal that brings down costs for everyone?

Obama missed his calling. He should have been an insurance company Customer Service Rep.

Holding insurance companies more accountable might make people feel better when Obama sticks it to them but how does it improve the situation if it drives them out of the business of insuring all but the wealthy in 5 years? Also, the idea that Joe Blow will get the same health care coverage as a Member of Congress is snicker-worthy. If that were true, Members of Congress would be opting in, not passing laws to exclude themselves from the plan. And only a real Pollyanna - or the village idiot - believes that this reform package will “bring costs down for everyone.”

I would like to give Democrats the benefit of the doubt and say that they are actually kidding themselves about what reform will actually do when the rubber meets the road and the plan is being enacted. But I can’t. They know there are horrendous, unsolvable problems, with this bill. They know their cost cutting provisions are bullsh*t. They know it will substantially increase the deficit. They know it will mean less health care for most of us. They know it will mean less innovation in the pharma, bio tech, and other industries. They know it won’t put any downward pressure on the costs of health care. And they know that this massive thrust to control an unbelievable 1/6 of the economy - never before seen in peacetime - is beyond a riverboat gamble that it will work and enters the realm of a wing and a prayer.

They can’t actually believe what they are saying about it, can they? Of course not.

I first became aware of blogger Al Weisel (AKA “Jon Swift”) when I started my “Carnival of the Clueless” linkfest back in 2005. Al submitted a post each week almost from the beginning.

I have to admit to being had by the Jon Swift character. I never read his submissions closely, scanning them for the essence of what he was writing about, and thus was totally unaware for a couple of months that he was skewering conservatives. It wasn’t until I read on some other blog that he was a satirist that I actually began to read what he wrote with that in mind.

I don’t necessarily feel bad or stupid about it. I apparently wasn’t the only conservative unable to divine the author’s intent. In truth, what Al and others on the left sometimes see as right wing nonsense is occasionally anything but. However, his unerring eye for absurdities on the right, and a pitch perfect ear that regurgitated conservative talking points to make them sound ridiculous, placed him in a class all his own as a satirist.

Al Weisel died on February 27. 2010. The tragedy of his death at age 46 was compounded by the circumstances; he suffered “2 aortic aneurysms, a leaky aortic valve and an aortic artery dissection from his heart to his pelvis,” according to his mother who posted the news on his long defunct blog. And he was stricken on the way to his father’s funeral in West Virginia.

Good satire needs to be subtle enough to sound plausible while giving broad hints that lets the reader in on the fun. It is a tightrope few are creative enough, disciplined enough, and talented enough to walk. Al managed it with apparent ease. At all times, he maintained a sincerity so believable, you occasionally did double takes on what he wrote to make sure he was poking fun at you.

I was an occasional target of his saucy barbs, to which I responded with my usual good humor. The fact that Al was amenable to correcting some of the stuff I complained about always impressed me.

Eventually, we struck up a sort of odd email relationship. Whenever I was a subject of one of his satirical lances, he would email me - usually including a pithy comment. I would banter back in kind (although with less joie de vivre and not half as much talent). I was pleased that he invited me to participate in his “Best Blogs of 2007″ roundup. Not too many conservatives could say that.

Eventually, he mostly stopped linking because we were usually on the same wavelength when it came to criticizing conservative lunacy; me screaming about it and he parodying it. I can’t say I missed being the target of his razor sharp wit and poison pen. But he was a joy to read if only to marvel at the elegance and clarity of his writing.

As with many such email relationships over the years, we fell out of touch. The news of his passing has opened the floodgates to memories from my early days of blogging and has helped me recall how every day seemed a challenge to be joyfully faced.

Can’t say that anymore. Age and burnout eventually take their toll on a blogger’s constitution. Al doesn’t have to worry about that anymore. And I have no doubt that he’s already skewered St. Peter in The Heavenly Times for something he said when Al talked his way past him and through the pearly gates.

UPDATE

Ed Morrissey has an old Blog Talk Radio show of his that featured me on the first half hour and Jon Swift the last half hour.

Ten billion dollars. Ten lousy billion dollars held up by Jim Bunning and Washington explodes in tears, hand wringing, and vituperative finger pointing at the retiring senator, the author of all this pain. (Evidently, Bunning did a little finger pointing of his own, but it was the middle digit and was directed at an ABC News producer - not necessarily a bad target but I question the timing.)

Welcome to the future. This is how it will be when even minimal, nonsensical, irrelevant, and paltry cuts in federal spending are attempted. It can be argued - and I am happy to do so - that Bunning chose the wrong time, the wrong place, and the wrong bill to fight for fiscal sanity.

But ten lousy, fricking, billion dollars engendering an explosion of hate and angst directed toward Bunning? What in God’s name is wrong with this country?

By the reaction, you would think that Bunning was trying to throw poor people out into the street, force grandma and grandpa to eat Meow Mix, strip soldiers naked and send them into battle, while singlehandedly increasing his carbon footprint to the point that the ocean drowns Los Angeles in a wave of melting arctic ice due to global warming.

The reality is, that what Bunning is asking is impossible; that the Congress find $10 billion dollars to cut at the same time they want to spend $10 billion on all these worthy, and necessary programs.

That’s $10 billion out of a budget of $3.6 trillion that the Congress can’t find. Are you getting the sense that Washington has turned into some bad Dadaist dream - a surreal nightmare with rabbits in top hats, chameleons sitting on park benches that change colors in rapid succession, while toothless hags wander among the ruins cackling uncontrollably? (That’s MY surreal nightmare, thank you. Butt out.)

Harry Reid farts and the EPA spends $10 billion on air purification. Nancy Pelosi sneezes and NIH gets a $10 billion grant to study allergic reactions by west coast society matrons. Max Blumenthal picks his nose and Democrats spend $10 billion to memorialize it.

Washington spends $10 billion - and ten times ten billion - without breaking a sweat. The spend $10 billion on their lunch breaks.

“But it’s an emergency!” scream the Democrats and liberals. Fine. If you don’t think a trillion dollar deficit is an “emergency” get the hell out town. When are we going to have the same zeal to cut spending as we do in increasing it? Are you trying to tell me that a couple of committee chairmen from the House and Senate couldn’t sit down for an hour and come up with $10 billion to cut? Are we that far gone where three trillion plus in federal spending has generated such powerful lobbies that Congress fears for its political life if they vote to cut less than 0.003% of the budget? What is going to happen when we are forced to cut hundreds of billions of dollars in order to deal with the deficit crisis?

Emergency? Absolutely. Let’s treat it like one. If you’re so all fired eager to spend $10 billion then by God, you should be equally glad to cut the same amount. We’ve reached the point in Washington where cutting a measly $10 billion in order to pay for necessary expenditures causes a reaction more in keeping with a threat to the stability of the republic rather than a simple exercise in minimal - minimal fiscal discipline.

Robert Samuelson presciently describes the mindset in Washington:

There is a make-believe quality to modern American politics: People — and this applies across the political spectrum — say things that are stupid, misleading or unattainable and think (or pretend) that these very same things are desirable, candid and realistic. A disconnect between the language of politics and the nation’s actual problems is growing. The politics of the budget offer a splendid example.

On the right, we have conservatives clamoring for tax cuts when, as a practical matter, today’s massive budget deficits preclude permanent new tax cuts. With present policies and a decent economic recovery, the federal government could easily spend $12 trillion more than it collects in taxes from 2009 to 2020, reckons the Congressional Budget Office. So before reducing taxes, the tax-cut advocates need to identify hundreds of billions of annual spending reductions — or accept huge and hazardous annual deficits. Naturally, a comprehensive list of spending cuts is nowhere in sight.

On the left, President Obama and Democrats have spent the past year arguing that, despite the government’s massive deficits and overspending, they can responsibly propose even more spending. Future deficits are to be ignored (present deficits, to be sure, partially reflect the economic slump). The proposal is “responsible” because it’s “paid for” through new taxes and spending cuts. Even if these financing sources were completely believable (they aren’t), the logic is that the government can undertake new spending before dealing with the consequences of old spending. Of course, most households and businesses can’t do this.

Politicians can, because it’s all make-believe. They pretend to deal with budget deficits when they aren’t.

Certainly part of this “make-believe” is denial. Another aspect of fantasyland on the budget is an adherence to the old procrastinator’s maxim, updated to reflect reality in Washington; “Never cut today what someone else will be forced to cut tomorrow.”

Finally, simple politics is at play. It is more popular to spend money than to cut it out of the budget, more popular to cut taxes than to raise them. I mentioned the lobbies that have sprung up to protect their share of the $3.6 trillion budget. Every program, every proposed purchase that is cut affects real people. Let’s not kid ourselves. It’s not just the poor who benefits from federal spending. It’s the rich, the super rich, the middle class, and everybody in between and above and below. The government has burrowed so far into our lives in the last half century that removing it will be literally like operating without anesthetic.

America has been on a binge since the end of World War II and purging what we’ve gorged on will be worse than any emetic on the market. The problem has been that we - and through us, our elected representatives - have refused to make choices regarding what we want our government to do for us. Some need it to do more than others. Some desire it to do more than most. A few want it to do more than can be accepted in a democratic republic and maintain individual liberty.

Because we refuse to make choices - except that we don’t want to pay for whatever Washington does for us - we are staring upwards at a mountain of debt that will bury us sooner rather than later. And into this charged atmosphere comes retiring Jim Bunning like a bull in a china shop trying to bend the Congress to his will. He has made his point. It is time to relent.

As I said, wrong war, wrong time, wrong battlefield. But Bunning’s piquancy should be a cautionary tale. Samuelson again:

The common denominator is a triumph of electioneering over governing. Every campaign is an exercise in make-believe. All the good ideas and good people lie on one side. All the “special interests,” barbarians and dangerous ideas lie on the other. There’s no room for the real world’s messy ambiguities, discomforting contradictions and unpopular choices. But to govern successfully, leaders must confront precisely those ambiguities, contradictions and choices.

The make-believe of campaigns increasingly shapes the process of governing. Whether this reflects cable TV and the Internet — which reward the harsh hostility of extreme partisanship — or the precarious balance between the two parties or something else is hard to say. But the disconnect between policy and the real world is harmful. Proposals tend to be constructed more for their public relations effects than for their capacity to solve actual problems.

The result is a paradox. This electioneering style of governing strives to bolster politicians’ popularity. But it does the opposite. Because partisan rhetoric creates exaggerated expectations of what government can do, people across the ideological spectrum are routinely disillusioned. Because actual problems fester — and people see that — public trust of political leaders erodes.

When our chickens come home to roost, and the unsustainable debt and deficit has had its way with our economy, our budget, and our way of life, two partisans will be seen standing in the rubble tossing bricks at each other, screaming vile epithets back and forth, blaming each other for the collapse. Meanwhile, the rest of us will be sitting in the smoking ruins of a once dynamic, liberty loving country wondering pitifully what the hell happened.

The best article I’ve read to date on how we have become a bailout nation and why was published about 2 weeks ago in Rolling Stone. It was by the estimable Matt Taibbi and is entitled “Wall Street’s Bailout Hustle.”

I dare you to read it and not be grinding your teeth by the end of it.

Recognizing a certain class bias inherent in Taibbi’s explanations of what the Wall Street banks have wrought doesn’t diminish the impact of this horror story in the slightest. The bottom line, as Taibbi explains is that nothing has changed since September 2008. The same practices that got us into trouble then, have been resurrected and, if anything, are being used with even more gusto by the Wall Street Raiders who are now working hand and fist with the government to rob the taxpayers:

That’s why the biggest gift the bankers got in the bailout was not fiscal but psychological. “The most valuable part of the bailout,” says Rep. Sherman, “was the implicit guarantee that they’re Too Big to Fail.” Instead of liquidating and prosecuting the insolvent institutions that took us all down with them in a giant Ponzi scheme, we have showered them with money and guarantees and all sorts of other enabling gestures. And what should really freak everyone out is the fact that Wall Street immediately started skimming off its own rescue money. If the bailouts validated anew the crooked psychology of the bubble, the recent profit and bonus numbers show that the same psychology is back, thriving, and looking for new disasters to create. “It’s evidence,” says Rep. Kanjorski, “that they still don’t get it.”

More to the point, the fact that we haven’t done much of anything to change the rules and behavior of Wall Street shows that we still don’t get it. Instituting a bailout policy that stressed recapitalizing bad banks was like the addict coming back to the con man to get his lost money back. Ask yourself how well that ever works out. And then get ready for the reload.

Taibbi - sometimes to the detriment of his narrative - uses various plays by con-artists (a society of criminals unique in their vocabulary and history) and compares them to what J.P. Morgan and other Wall Street outfits did to get the trillions in Fed money that have made them so profitable today.

In essence:

A year and a half after they were minutes away from bankruptcy, how are these assholes not only back on their feet again, but hauling in bonuses at the same rate they were during the bubble?

The answer to that question is basically twofold: They raped the taxpayer, and they raped their clients.

Beyond that, either the big banks haven’t learned a thing, or more likely, know a good thing when they see it:

The bottom line is that banks like Goldman have learned absolutely nothing from the global economic meltdown. In fact, they’re back conniving and playing speculative long shots in force — only this time with the full financial support of the U.S. government. In the process, they’re rapidly re-creating the conditions for another crash, with the same actors once again playing the same crazy games of financial chicken with the same toxic assets as before.

That’s why this bonus business isn’t merely a matter of getting upset about whether or not Lloyd Blankfein buys himself one tropical island or two on his next birthday. The reality is that the post-bailout era in which Goldman thrived has turned out to be a chaotic frenzy of high-stakes con-artistry, with taxpayers and clients bilked out of billions using a dizzying array of old-school hustles that, but for their ponderous complexity, would have fit well in slick grifter movies like The Sting and Matchstick Men.

Why we have been sanguine in the face of what Taibbi describes as these “old school hustles” is the result of the extraordinarily arcane nature of the cons being visited on the Fed and Congress by the banks.

To appreciate how all of these (sometimes brilliant) schemes work is to understand the difference between earning money and taking scores, and to realize that the profits these banks are posting don’t so much represent national growth and recovery, but something closer to the losses one would report after a theft or a car crash. Many Americans instinctively understand this to be true — but, much like when your wife does it with your 300-pound plumber in the kids’ playroom, knowing it and actually watching the whole scene from start to finish are two very different things.

Taibbi lists 7 of these con games that the gamblers at J.P. Morgan and other big banks have been running at our expense. Here is a too brief description of a few of them:

* “The Swoop and Squat.” How counterparties - including a French bank - played both sides in the AIG meltdown and forced it into bankruptcy. The big banks had been using AIG to “insure” the toxic mortgage backed securities, for which AIG received a substantial cut, but was unprepared when hundreds of billions in bad paper drowned it.

The “swoop and squat” is the well known insurance scam where your car is boxed in by 2 or 3 other cars and a deliberate “accident” ensues so that the scammers can collect:

This may sound far-fetched, but the financial crisis of 2008 was very much caused by a perverse series of legal incentives that often made failed investments worth more than thriving ones. Our economy was like a town where everyone has juicy insurance policies on their neighbors’ cars and houses. In such a town, the driving will be suspiciously bad, and there will be a lot of fires.

When AIG was drowning, the banks hurried its collapse along:

So Goldman and other banks began demanding that AIG provide them with cash collateral. In the 15 months leading up to the collapse of AIG, Goldman received $5.9 billion in collateral. Société Générale, a bank holding lots of mortgage-backed crap originally underwritten by Goldman, received $5.5 billion. These collateral demands squeezing AIG from two sides were the “Swoop and Squat” that ultimately crashed the firm.

Of course, Goldman demanded the government reimburse them for the full “value” of the $5.9 billion in collateral they ripped from AIG. If the insurance giant had gone through bankruptcy, Goldman would have received virtually nothing. Just one way that Goldman gamed the government and the Fed in gorging itself to bursting.

* “The Dollar Store.” In grifter parlance, this refers to something like what we saw in the movie “The Sting” where a lot of con artists set up a fake front to fool the mark. Goldman and Morgan Stanley applied for, and received in record time, a charter that redefined the kind of bank they were just 5 days after the AIG bailout:

By law, a five-day waiting period was required for such a conversion — but the two banks got them overnight, with final approval actually coming only five days after the AIG bailout.

Why did they need those federal bank charters? This question is the key to understanding the entire bailout era — because this Dollar Store scam was the big one. Institutions that were, in reality, high-risk gambling houses were allowed to masquerade as conservative commercial banks. As a result of this new designation, they were given access to a virtually endless tap of “free money” by unsuspecting taxpayers. The $10 billion that Goldman received under the better-known TARP bailout was chump change in comparison to the smorgasbord of direct and indirect aid it qualified for as a commercial bank.

Before reading this next bit from Taibbi on what the banks did with that new charter, I suggest you remove all sharp objects from within reach plus anything that might be used as a missile to hurl through your monitor:

When Goldman Sachs and Morgan Stanley got their federal bank charters, they joined Bank of America, Citigroup, J.P. Morgan Chase and the other banking titans who could go to the Fed and borrow massive amounts of money at interest rates that, thanks to the aggressive rate-cutting policies of Fed chief Ben Bernanke during the crisis, soon sank to zero percent. The ability to go to the Fed and borrow big at next to no interest was what saved Goldman, Morgan Stanley and other banks from death in the fall of 2008.

[...]

In fact, the Fed became not just a source of emergency borrowing that enabled Goldman and Morgan Stanley to stave off disaster — it became a source of long-term guaranteed income. Borrowing at zero percent interest, banks like Goldman now had virtually infinite ways to make money. In one of the most common maneuvers, they simply took the money they borrowed from the government at zero percent and lent it back to the government by buying Treasury bills that paid interest of three or four percent. It was basically a license to print money — no different than attaching an ATM to the side of the Federal Reserve.

That’s right. They borrowed interest free money from the government and lent it back to us - with interest. This is one con game used by Taibbi that has a direct application to what occurred in the real world.

* The Rumanian Box. This is an age old scam invented by a guy named Lustig where the con man shows the mark a magical machine where you put a blank piece of paper in one end, turn a crank and out pops a $20 on the other end. Here’s how the banks used this concept and bilked the Fed:

The brilliant Lustig sold this Rumanian Box over and over again for vast sums — but he’s been outdone by the modern barons of Wall Street, who managed to get themselves a real Rumanian Box.

How they accomplished this is a story that by itself highlights the challenge of placing this era in any kind of historical context of known financial crime. What the banks did was something that was never — and never could have been — thought of before. They took so much money from the government, and then did so little with it, that the state was forced to start printing new cash to throw at them. Even the great Lustig in his wildest, horniest dreams could never have dreamed up this one.

The big banks threatened to freeze lending even more unless the Feds came up with more goodies. The government didn’t disappoint:

The ploy worked. In March of last year, the Fed sharply expanded a radical new program called quantitative easing, which effectively operated as a real-live Rumanian Box. The government put stacks of paper in one side, and out came $1.2 trillion “real” dollars.

The government used some of that freshly printed money to prop itself up by purchasing Treasury bonds — a desperation move, since Washington’s demand for cash was so great post-Clusterfuck ‘08 that even the Chinese couldn’t buy U.S. debt fast enough to keep America afloat. But the Fed used most of the new cash to buy mortgage-backed securities in an effort to spur home lending — instantly creating a massive market for major banks.

And what did the banks do with the proceeds? Among other things, they bought Treasury bonds, essentially lending the money back to the government, at interest. The money that came out of the magic Rumanian Box went from the government back to the government, with Wall Street stepping into the circle just long enough to get paid. And once quantitative easing ends, as it is scheduled to do in March, the flow of money for home loans will once again grind to a halt. The Mortgage Bankers Association expects the number of new residential mortgages to plunge by 40 percent this year.

The last con game Tabai uses to highlight what Wall Street has been up to is called “The Reload.” This refers to a mark who comes back for seconds.

It’s important to remember that the housing bubble itself was a classic confidence game — the Ponzi scheme. The Ponzi scheme is any scam in which old investors must be continually paid off with money from new investors to keep up what appear to be high rates of investment return. Residential housing was never as valuable as it seemed during the bubble; the soaring home values were instead a reflection of a continual upward rush of new investors in mortgage-backed securities, a rush that finally collapsed in 2008.

But by the end of 2009, the unimaginable was happening: The bubble was re-inflating. A bailout policy that was designed to help us get out from under the bursting of the largest asset bubble in history inadvertently produced exactly the opposite result, as all that government-fueled capital suddenly began flowing into the most dangerous and destructive investments all over again. Wall Street was going for the reload.

Why? Why haven’t we woken up to this outright robbery? Well for one thing, the financial services industry gives generously to both parties, thus allowing them virtual free reign to snooker the taxpayer. But even Obama’s new regulations - being watered down even further as I write this - will be inadequate. And the reason has to do with morals, not regulation:

Con artists have a word for the inability of their victims to accept that they’ve been scammed. They call it the “True Believer Syndrome.” That’s sort of where we are, in a state of nagging disbelief about the real problem on Wall Street. It isn’t so much that we have inadequate rules or incompetent regulators, although both of these things are certainly true. The real problem is that it doesn’t matter what regulations are in place if the people running the economy are rip-off artists. The system assumes a certain minimum level of ethical behavior and civic instinct over and above what is spelled out by the regulations. If those ethics are absent — well, this thing isn’t going to work, no matter what we do. Sure, mugging old ladies is against the law, but it’s also easy. To prevent it, we depend, for the most part, not on cops but on people making the conscious decision not to do it.

My concern about Democrats and liberals bashing bankers has always been that they fail to adequately differentiate between the robber barons on Wall Street, and the friendly, smiling face of a loan officer we have dealt with at our neighborhood suburban bank. Those are the guys who suffer because of the indiscriminate class card played by the left. They have as much in common with the crooks at Goldman Sachs as my pet cat Aramas has with a saber tooth lion.

But I think the key here has been misplaced conservative support for these rogues who we see as the ultimate success stories in the free market. The problem, as Taibbi points out and as we should have realized long ago, is that these guys operate on another level of the playing field altogether. They can’t be effectively regulated by the government because they are so powerful both politically and as economic entities that drive the macro economy, that they, in effect, hold most of the cards. They are partners with the government. Or perhaps it would be more accurate to say that the government is partners with them. There is no competition except among the extremely small group of bankers to which they sometimes conspire with to realize their enormous profits.

Maybe tar and feathers isn’t such a bad idea after all.

The simple minded Congressman who wondered out loud whether abortion in the black community was so rampant that it can be compared to the suffering of slaves inadvertently has done us a favor.

Rather, he would have if the left was willing to engage in a conversation about the efficacy of federal government policies that are specifically directed at poverty stricken black communities. This is a “no go” zone because it challenges the foundation of modern liberalism to ask questions that have no good answers when it comes to the state of the black family, the ravaged inner city black communities, and an African American culture that tolerates a shocking number of teenage mothers, absent fathers, and the social problems that arise from dependency.

“Racism” as an encompassing catch all to explain the above doesn’t cut it. But its all the race baiters like Jackson and Sharpton - and their liberal allies - have because the alternative would be actually examining the problems of black communities in a cold, rational manner, devoid of the kind of emotionalism so beloved of the left, in order to eliminate or adjust federal policies that may in some cases, be contributing to the holocaust.

By contrast, it is much easier to take the inelegant words of Trent Franks out of context, twist their meaning, and play the race card for all it’s worth.

This fellow is a rabid abortion foe - so much so that he hyperbolically tried to connect abortion in the black community to slavery:

We should look back on that with criticism. It is a crushing mark on America’s soul. And yet today, half of all black children are aborted. Half of all black children are aborted. Far more of the African-American community is being devastated by the policies of today than were being devastated by policies of slavery. And I think, What does it take to get us to wake up?

He’s 100% wrong, of course. The idea that “far more” of the African American community has been affected by abortion than slavery is, on its face, absurd. And Rep. Franks didn’t mention the other half of that equation; 70% of children delivered to African American mothers are born out of wedlock.

What makes Rep. Franks remarks offensive is not the hate, but the tone deafness. It brings to mind a defense of Jim Crow that was common in the south in the 1950’s; blacks were better off when they were slaves and had massah to take care of them. I don’t believe that was Frank’s intent in saying that abortion was more devastating than slavery but it is easy - if you’re simply trolling to score political points against your foe by taking context out of meaning - to promote the perception that he was.

It is tempting to take statistics from 1965 on the effects of poverty on the black family and compare them to today, drawing the easy conclusion that federal poverty programs are to blame for the radical decline in the viability of the black family.

But nothing is ever that simple or easy. The fact is, when Daniel Patrick Moynihan penned his famous “Moynihan Report” when he was Assistant Secretary of Labor in 1965 that eloquently and in devastating detail raised the alarm about the disintegrating black nuclear family, the crisis was already at code red. The litany of statistics used by Moynihan compared the status of the black family in the 1950’s to where it was in 1965. The divorce rate was twice that of whites at 25% (now 68%). Female headed households was at 22% in 1965 (45% today). And while 70% of black children today are born out of wedlock, that number was at 25% in 1965.

It would be wrong to blame all the problems of the black family today for policies promulgated in the 1960’s. But it is a valid question to ask have any or all of those policies made things worse than they would have been if care had been taken to mitigate the impact on black families?

Federal programs targeted the symptoms of poverty largely by granting in kind payments to the head of household. I recall some spirited debates at the time among liberals about whether a guaranteed annual income, or Basic Income, should be substituted for housing vouchers, food stamps, and other Great Society expansion of welfare payments.

What could never be imagined by Johnson, and his social engineers was the devastating impact that dependency would have on the black community, and specifically, the black family. Those policies emasculated the black male, encouraged female welfare recipients to keep having children so that her welfare payments would increase, and made it more profitable for black couples not to marry. In short, all the cultural nuclear bombs identified by Moynihan back in 1965 that were already detonating on the African American landscape were, at the very least, exacerbated by some federal programs. Clearly, the increased opportunities available to blacks in the education and employment spheres had a positive impact. But others engendered consequences we still can’t talk about today.

A guaranteed annual income might have altered that equation. We’ll never know. Along with forcing cities to address the crisis in inner city schools, and more effective job training programs, building self esteem and promoting independence might have gone at least some ways toward saving the black family.

Bobby Kennedy was eager to change the thrust of much of the welfare state from dependency to freedom. How he might have accomplished this if he had been elected president is another of those “What ifs” in history that prick at our conscience. Was there - is there - another way to assist those Americans in poverty that would lift them up rather than keep them down? As long as even discussing the problem brings false cries of “racist,” we’ll never know.

Abortion, drug use, gangs, illegitimacy - all of these are symptoms of the destruction of the black family. Rep. Franks was making an accusation - overripe, in my opinion - that federal policies are responsible for the abortion rate among blacks, and by extension, the other symptoms of decline as well. He is suffering for his inelegance and tone deafness.

Too bad his critics refuse to engage on the substance of his critique.

After having just seen the euphoria and confident words coming out of CPAC about how conservatism isn’t dead - it’s back and better than ever - I feel some trepidation in trying to rain a bit on that parade.

I really don’t like being a Cassandra. Nothing would give me greater pleasure than to be able to report on a popular, dynamic, vibrant conservatism that is in the ascendancy and ready to reinvigorate government. But blinding oneself to the facts, misinterpreting straws in the wind, and basing a conservative comeback more on wishful thinking than on the evidence before our eyes only makes the task of asking you to face our shortcomings, own up to them, and change course all the more difficult and depressing.

For those of you who refuse to believe that all polls are rigged against the right, and all pollsters have it in for conservatives, you may find the following interesting. The rest of you can move on to more agreeable sites who would rather blindly engage in cheerleading, while ignoring the fact that conservatism is still seen as a marginal philosophy among the young, and that the right’s comeback is the result almost entirely of a huge jump in support among those aged 65-82.

First, the numbers (via Larison), that show some movement toward the right among “millenials” (18-29) but still show a huge gap in party ID:

However, over the course of 2009 the Democratic Party’s advantage among Millennials in party affiliation weakened considerably from its high point in 2008. The most recent party affiliation data (from the fourth quarter of 2009) show that in terms of straight partisan identification, Democrats held a 36% to 24% lead over the GOP among Millennial voters, a significantly narrower edge than the nearly two-to-one margin (41% vs. 22%) in 2008. At the same time, the percentage of Millennials who said they lean Republican has nearly doubled, from 8% in 2008 to 15% at the end of 2009. There was little change in the percentage who leaned Democratic (20% in 2008 vs. 18% in late 2009). While the Democratic Party has a larger advantage among Millennials than it does among the two oldest cohorts, a greater proportion of the party’s support comes from people who do not explicitly identify as Democrats but only lean toward the party.

Despite the shift in partisan leaning among Millennials, the Republican Party has had limited success in increasing the number of Millennials who identify as — and not just lean –Republican. Just 22% of Millennial voters identified as Republican in 2008, and there was no significant rise in the latest polling (24% in the 4th quarter of 2009).

In other words, no sale. Gains were also made by the right among the Gen X, Boomers, and the “Silent Generation” (65-82) with the last of those showing a complete flip in support away from Obama and the Democrats. However, all but the “Silents” still show majority support for the Democrats.

On average, Millennials’ underlying social and political views put them well to the left of their elders. If you dig into the full report, you will see that the recent Republican resurgence owes almost everything to the dramatic shift among members of the so-called “Silent Generation,” whose voting preferences on the generic ballot have gone from being 49-41 Democrat in 2006 to 48-39 Republican for 2010. There have been small shifts in other age groups toward the Republicans, but by far it is the alienation of voters aged 65-82 that has been most damaging to the Democrats’ political strength*. As we all know, these are the voters who are far more likely to turn out than Millennials, which is why Democratic prospects for this election seem as bad as they do even though the Pew survey says that Democrats lead on the generic ballot in every other age group. Among Boomers, Democrats lead 46-42, and among Gen Xers they barely lead 45-44. In other words, the main reason why the GOP is enjoying any sort of political recovery is that many elderly voters have changed their partisan preferences since the last midterm. Republicans remain behind among all voters younger than 65.

What does it mean for Republicans and the right that they now find themselves in the position of defending Medicare against fiscally responsible moves to rein in its costs? Catering to the elderly voting bloc means maintaining the complete integrity of their entitlements.

Even a cursory examination of the huge hole that Medicare is digging for future generations will tell you that addressing the problem is going to entail much more draconian cuts than the measly $500 billion contemplated by the Obama administration in their health insurance reform package. When we’re talking about an eventual shortfall of tens of trillions of dollars, such gestures are hardly worth the political blood spilled to get them enacted.

But the GOP now finds themselves the Defenders of Medicare - an irony too sour for many of us who believe that entitlements need to be drastically overhauled in order to save us from ruinous decline. But since old people vote, it isn’t likely that the Republicans will give up their current advantage in that age group willingly.

It is the young that should concern us, however, Unless something unexpected occurs, the Millenials will be lost to conservatism largely due to what is perceived to be a much less tolerant and less expansive view of social issues:

The percentage of self-identifying conservatives among Millennials is basically equal with that of self-identifying liberals (28% vs. 29%). The youngest generation of voters is unusually ill-disposed towards movement conservatism of the sort on display at CPAC, which is the event Gardiner hails not only as proof that conservatism is the future but as an “intellectually vibrant” gathering.

Gardiner can believe what he wants, but the evidence we have available right now suggests that conservatism is losing, indeed has already lost, most of the next generation, and that conservatism as we know it today is going to keep losing ground in the future. It is possible that something could happen in the next few years that could change that significantly, but typically once a cohort attaches itself to one party or the other its later voting habits become fairly predictable. The generation that came of age during the Bush years and overwhelmingly backed Obama is not going to become receptive to movement conservatism.

Larison’s analysis fails in one respect; the idea that the Millenials will always vote Democratic because they have attached themselves to the Democratic party and their voting habits become “predictable.” The survey Larison references, in fact, shows a growing comfort with conservatism the older one gets.

The Democrats feel they have a chance to cement the loyalty of Millenials to their party by passing national health insurance. Perhaps the “right bill” might have done so, but the monstrosity that has come forth will almost certainly drive them away from the party or, at least, make them so cynical that they drop out of the voting process altogether. The entire burden in the current health insurance plan falls on the youngest wage earners. Once they get wise to that, I suspect they won’t like it much at all and will be looking for someone to blame.

Larison’s point, then, has some deficiencies but its thrust is correct; the current state of Millenial attraction to movement conservatism is very weak and may get weaker over time. Obviously, the conservatives will never abandon their anti-gay marriage stance (and the perception that this makes them bigots plays a significant role in the standoffishness of Millenials), nor is the right likely to move away from the pro-life position - a stance that drives away Millenial women in droves. (While the numbers may be near equal, better educated and wealthier Millenial women are more pro choice.)

Perhaps social upheaval caused by a significant economic downturn would shunt social issues like gay marriage and abortion to the sidelines enough that a conservative economic populist message would resonate more with the Millenials. Then there’s always the chance that they might go the opposite way and embrace more liberal solutions. Given the fact that neither side will change their base conclusions about social issues, something along those lines would appear to be the only real chance to cause the Millenials to give conservatism another look.

As for the other age groups, it was encouraging that in the NJ and VA governor races last year, and the MA senate race this year, it appeared that the right was making a small comeback in suburbia. But it should be noted that the GOP candidates in all three of those races downplayed their social conservatism and talked up economic populism.

The recently completed CPAC conference also lends credence to this idea that the dominance of social issues on the GOP agenda may be on the wane with only 1% of attendees believing that opposition to gay marriage should be the number one issue of the GOP. No word on how many think it should be #2, or #3 which makes me think that the perception that the GOP is anti-gay might not be changing any time soon.

In 2010, where only half the number of people will vote who cast a ballot in 2008, the general level of enthusiasm on the right along with the turnout among the old folks will mean sizable, perhaps spectacular Republican gains.

But what of 2012? Conservatives still have a huge problem with the highly educated, the wealthy, and still trail the Democrats in support by the Middle Class. In a general election with elevated turnout, the Millenials may once again give the Democrats victory despite all that has happened.

Perhaps instead of crowing about a comeback, conservatives should keep their focus on developing alternatives to what the Democrats are doing in order to offer a positive program that would win over those independents who will decide the next two elections.

Was the Austin terrorist John Stack a right wing loon?

Sure - because as we all know, liberals love to pay taxes and never get mad at the IRS.

Don’t believe me? Here’s Paul Begala wanting to make April 15 “Patriot’s Day:”

Happy Patriots’ Day. April 15 is the one day a year when our country asks something of us — or at least the vast majority of us.

[...]

This country has showered me with the blessings of liberty. So what do I owe my country in return? Paying my fair share of taxes, it seems, is the least I can do. Thanks to President Obama and the Democratic Congress, 95 percent of Americans will get a tax cut this year. No one — not even the wealthiest 1 percent — will have to pay higher income taxes until 2011.

But no one kisses the ass of our IRS overlords with more nauseating obeisance than Matt Stoller:

I just paid my taxes, and I have to say, I always take pride when I do so. I don’t like having less money to spend, of course, and the complexity of the process is really upsetting. But I am proud to pay for democracy, and I feel when I do send money to the DC Treasurer and the US Treasury that that is what I am doing. The right-wing likes to pretend as if taxes are a burden instead of the price of democracy. And I suppose, if you hate democracy, as the right-wing does, then taxes are the price for paying for something you really don’t want. Personally, I find banking fees, high cable and internet charges, health care costs, and credit card hidden charges much more abrasive than taxes, because with those I’m just being ripped off to pay for someone’s summer home.

To which I responded:

When liberals like Stoller make noises of satisfaction like an infant who has just soiled their diaper just because they obeyed the law one wonders what lefties like our Matt do when they come to a complete stop at a stop sign. The celebrations must go on far into the night.

Obviously, liberals love it when they are racked and stretched by the IRS - even for honest, piddly-sh*t transgressions. They get off on a government agency that can make your life miserable - and, as Mr. Stack suggests - unlivable once caught up in the maw of IRS enforcement procedures. The trauma and torture wears one down, as forcefully and unrelentingly as tectonic plates grinding against each other.

Here’s Amanda Marcotte who suggests that Mr. Stack was indeed a left winger but that he was trying to goose right wing nuts into picking up on his IRS jihad:

Stack’s beef with the IRS seems to have developed from personal problems stemming from possible tax evasion on his part. But it appears to have turned into a full-blown ideological stance, and again, it’s clear that he hopes others who share his ideological stance—and believe me, there are a lot of crazy right wing nuts in the area who do, and I have no doubt Stack was aware of this—will act on his wishes. This is what I mean by a mish-mash. Most of his ranting seems very left wing, but if you’re living in central Texas and you do something like this, you’re sending a signal to right wing nuts, and you know it.

“Most of his ranting seems very left wing…” but ignore that, pay it no mind. It disturbs the narrative that this fellow was a tea party type.

What was that “left wing rant?”

And while they appear to make it look like it’s all about anti-government and anti-IRS, they fail to mention his anti-Catholicism, anti-Bushism, anti-capitalism and pro-communism.

I guess it doesn’t fit the preferred narrative

No, it doesn’t. But when has that ever stopped anyone on the left from jumping to conclusions? Recall that suicide of the federal worker in Kentucky that the left flayed conservatives over before it was discovered he took his own life and wasn’t murdered by “anti-government extremists.” Or Fort Hood shooter Nidal Hasan’s “PTSD transference” where he heard so many bad things about Iraq coming from his patients that he snapped. I wrote here about both right and left jumping to conclusions about Hasan but in the case of the Austin terrorist, there is a clear, and laughably ignorant attempt by many on the left to tie Mr. Stack to tea partyers.

Why can’t a nutcase just be a nutcase? Why does he have to be “motivated” by political views at all? I’m not a mental health professional, but I’ve read enough to know that trying to glean intent from a diseased mind is a ludicrous sport for amateurs. The reason someone commits suicide in the first place is that the natural, healthy, normally functioning mind breaks and the primal urge of self preservation is either short circuited or is prevented from working properly. This does not happen in minds that are in love with logic or reason.

The left is ascribing a rational thought process to an irrational man. If it weren’t so stupidly obvious that there’s is a political attack rather than a serious attempt to reach a conclusion based on observation, investigation, and a familiarity with how mental disease can lead to suicide, we might excuse liberals for simply being dumb. But tis the season for idiotic political bloviating so we’re stuck with nonsense like this:

Joseph Stack was angry at the Internal Revenue Service, and he took his rage out on it by slamming his single-engine plane into the Echelon Building in Austin, Texas. We now know this thanks to the rather clear (as rants go) suicide note Stack left behind. There’s no information yet on whether he was involved in any anti-government groups or whether he was a lone wolf. But after reading his 34-paragraph screed, I am struck by how his alienation is similar to that we’re hearing from the extreme elements of the Tea Party movement.

I was not struck by that at all. What struck me was this guy’s lack of a clear ideology - something that some of the less reason challenged liberals recognized and, to their credit, are writing about.

Or this:

5. He was mad at the IRS, and left what CNN reports was a suicide note on a local website, detailing his trials with the agency. In fact, a lot of his rhetoric could have been taken directly from a handwritten sign at a tea party rally.

The question of whether this guy was a terrorist is a no brainer; of course he was. Maybe the FBI and Homeland Security refuse to call incidents like this “terrorism” because of the increased paperwork involved in reporting it that way. Otherwise, the only explanation that makes sense is they don’t want to make a big deal out of the incident.

But in this case, we have a terrorist without portfolio. His motivation, given the building housed a regional IRS office, seemed to have been revenge more than anything. His ranting about wanting to inspire people is just that - the mouthings of a madman who wanted to give his death a twisted kind of meaning. It’s not logical or rational. It is delusional.

Maybe some day both sides will realize that the only people they are fooling with their politicization of the insane are themselves.

Rob Port is at CPAC and took a White House tour which included the White House Library:

Now, according out the person who guided our tour, the library is stock with books picked out by the First Lady, Michelle Obama. Being a bit of a bibliophile, I started to peruse some of the books on the shelves…and lookie, lookie what I found (click for a larger view):

By itself, this wouldn’t be that big of a deal. But in the context of Anita Dunn saying Chairman Mao is her favorite political philosopher? In the context of the Mao ornament on the White House Christmas tree?

In the context of Obama’s economic policies?

Well, I’ll let you make your own call.

OK. My call is that you’re a loon.

Anyone looking at my father’s library would have had him arrested for sedition if they thought like Mr. Port. My dad had Karl Marx, Frederick Engels, Michael Harrington, Howard Zinn, and a host of socialists, communists, and other far left authors on his book shelf. The fact that he was a dyed in the wool capitalist, a New Deal Democrat, a veteran of World War II, and a practicing Catholic would not make any difference to someone of Mr. Port’s ilk. Those books are in his library so obviously, he must agree with their content.

Of course, this is anti-intellectualism run rampant. Whoever our next president is going to be, I hope to god they have a supple and open enough mind to have read Marx and Engels, as well as Ambrose and Friedman. I hope they inculcate this attitude of open scholarship and free inquiry into their children. I hope there are no ideas or ideology they fear. And I hope they can recognize this liberty of mind as essential to the liberty of the soul.

Parenthetically, I see where Michelle Obama also placed John Hicks seminal work on prairie populism, The Populist Revolt: A History of the Farmers’ Alliance and the People’s Party on the shelf. What are we to think of someone who displays a book about a grass roots rebellion against east coast elites? That they support the tea party movement?

Just asking.

Some might believe the idea of writing 1500 words about toilet paper to be a complete waste of time. Of course, that means that reading 1500 words about toilet paper would be an even bigger waste of time. But before you click away from what, on the surface, would seem to be a throwaway post, I want to engage your mind and stir your soul about the importance, the efficacy, and the sheer wonder of this absolutely essential household product.

Have you ever contemplated what our civilization would be like without toilet paper? We’d be stuck using old copies of the New York Times or Washington Post - sort of like spreading shi*t on sh*t, although if newspapers wish to survive, perhaps they could start a movement to ban bathroom tissue. Think of the extra millions of copies newspaper companies would sell. People might not read them, but in our modern society, products with more than one purpose have a better chance of surviving.

Still think I’m off my nut?Au contraire, bon ami. I believe there is a direct correlation between the economic health and spiritual well being of a society and the quality and selection of the bathroom tissue it offers.

It is unknown when humans even began to care about cleaning themselves after defecating. The fossil record is silent on the issue and archeological evidence from paleo-human campsites is lacking.

It was probably some Cro-Magnon woman who got tired of sleeping with a stinky man and pointed out the advantages of cleaning oneself after doing his business. Since we all know that women’s stools don’t smell, this is logical (neither do women stink when they sweat, or perhaps men don’t notice it because female perspiration is an aphrodisiac to most of us).

It was the Chinese who first figured out in the second century AD that their invention of paper had applications far beyond the ordinary purpose of being a surface upon which writing might be stored and shared. A fanatically clean society, the use of paper to wipe one’s bum must have seemed a much better option to the Chinese than bamboo grass which, unless you are careful, is capable of cutting the flesh like a Ginsu knife. (The Greeks apparently used a sea shell to scrape the area clean. Try that without letting out a yelp of pain.)

Paper was used in various forms and shapes by succeeding cultures. But it was a highly discriminatory product. Only the rich could afford paper while the middling classes and poor were stuck with other, decidedly less comfortable and efficient products.

It took American ingenuity to invent egalitarian toilet paper. Wikpedia says it was a fellow by the name of Joseph Gayetty who developed the first commercially available TP in the world in 1857. The product had a few drawbacks, however. It came in small sheets for one. Then there was the problem of splinters, since the process of manufacturing soft, smooth, quilted, or multi-ply paper was a few decades away. It doesn’t take much imagination to experience the pain that would be felt if one were to be unfortunate enough to have a splinter lodged in your anus. True love would be your wife assisting you in removing it.

It wasn’t until 1935 when Northern Tissue advertised “splinter-free” bathroom tissue that the modern technological age began and industrial society was poised to reach its peak of perfection. I shudder to think that I might have been born in an era without Charmin or other premium brands of TP.

It should be noted that there is still something of a stigma attached to the product. Why this is so relates to our shame regarding any discussion of the private parts of the body. That, and the indelicate nature of what the product is used for. But really, when you think about it, why should shame be attached to a wonderfully useful product for which everyone has need? There isn’t a soul alive or dead who could honestly say that they were indifferent about the necessity of utilizing this product. It as universally essential to daily life as Hellman’s Mayonaise or Plochman’s Yellow Mustard.

Hopefully, this attitude is changing thanks to a groundbreaking series of commercials for Charmin TP that features animated bears who are actually seen almost using the product. That, of course, is the final barrier that needs to be broken. Once the Charmin Bears are seen wiping, we will have a new normal for bathroom tissue commercials. There will be a scramble among Northern, Scott, and the other giants of the industry to show their product in use. I await this day with much anticipation for it will be then that toilet paper can come out of the water closet and breathe the fresh air of a deserved, respected notoriety.

We have few jokes about toilet paper in our culture. That’s because of its ubiquitousness, as well as the superb quality of the tissue that is generally available even to the poorest among us. I did find a rather funny Chuck Norris/Jack Bauer truism. Playing off the idea that some toilet paper has celebrities printed on the roll:

They once made a Chuck Norris toilet paper, but it wouldn’t take sh*t from anybody.

Socialist societies overflow with TP jokes. That’s because when such a basic necessity is part of a command economy, there will never be enough and its quality will be a joke. This brings to mind P.J. O’Rourke’s masterpiece Holidays in Hell where his visit to the Soviet Union in the early 80’s was painted as a nightmare of shortages, and standing in line for hours just to purchase a couple of rolls of toilet paper.

This incredible report from a sociologist in Russia describes how the Stalinist state designed one kind of toilet paper:

My view is that the development and usage of toilet paper has a much neglected ‘cultural’, as opposed to crudely ‘economic’, aspect. I remember using something called ‘Izal’ - a sort of hard, crumply, medicated affair, prone to splitting under excessive pressure. It was clearly designed and manufactured by an anally retentive Methodist sworn to clean living, clean air and clean bums. It came in boxes especially designed to keep use of paper to a minimum. Each sheet had to be withdrawn singly and was usually the devil’s own job to extract. Sort of thing one found in the lower middle class household of Stalinist persuasion that I inhabited during my childhood years…. It never did me any harm, honest.

And Obama wants our government to have a big say in the design of cars?

If you read between the lines of this old Russian joke about toilet paper, you can catch the utter helplessness that people feel in a society that is incapable of addressing their most basic comforts:

A woman walking in the street is carrying a bag full of rolls of toilet paper.

A passer-by opens his mouth, “Hey, mother, where did you buy it?”

“Buy? Are you crazy? Where could I buy it nowadays? They are five years old. I am taking them back from the cleaners.”

And, of course, there are dozens of variations on the newspaper Pravda (Truth) being better utilized for duty in the water closet than actually finding out what was going on in the Soviet Union at the time. Those humorous anecdotes also say something profound about a society where attacking the state by smearing excrement over its propaganda organ is a way to fight back against the stultifying nature of Communism.

In contrast, the bidet - that most elegant and efficient of hygienic aids - would probably make the average Soviet citizen of the period contemplate bloody revolution. But frankly, I’ve never gotten the hang of the contraption and prefer the less ritzy, but more utilitarian paper alternative.

I hope you come away with a greater appreciation of bathroom tissue, and a more enlightened grasp of the spectacular successes of American society after reading this. If not, I’m sure you can find some shells somewhere.

It should be clear to all of us by now that the single driving factor in this economic downturn was the meltdown in home values. All the talk about how the big banks screwed us over is relevant only as it relates to the massive devaluation of our largest personal asset; our homes. If home values had stayed relatively stable, or come down at a reasonable rate, the bank crisis may have been manageable. It may have been seen as a bad couple of quarters rather than the catastrophe it became.

But that didn’t happen so here we are. And where we are may very well precipitate another huge devaluation of homes which would then lead to another round of bailouts and takeovers. This is because according to most experts, there is still slack in home values that has yet to be taken in; that our homes are still overvalued despite dropping 30-35-40%.

This has created a situation that is evidently not unprecedented except in scale; people with “underwater” mortgages - where they owe more than their house is worth - simply mailing the keys to their domicile to the bank and walking away from their mortgage obligations. Many simply stop payments and dare the bank to foreclose and evict them. Others find cheaper quarters by either renting, or taking advantage of cheaper mortgages.

There were a few of these walkaways during the housing bust of the early 1990’s. But today, nearly 5 million mortgages - about 10% of all residential mortgages in the country - are underwater (defined as a mortgage where the value of the house is 75% or less than the principle). And while no one is keeping track, one outfit has estimated that a half million people took the walkaway route last year.

Financial advisors are at the point of actually urging their clients to walkaway. Sure, their credit rating will take a hit. Better that than pouring money down a black hole where you will never realize any return on your investment.

There are a couple of ethical questions associated with walkaways that need to be addressed; one is personal, the other is an apparent double standard in the application of society’s disapproval.

Case in point; a New York developer walked away from paying the loan on 11,000 apartments in Manhattan:

The rules are different, though, for the walkaway of all walkaways.

That title is reserved for what happened to one of New York’s trophy properties, the 56-building Stuyvesant Town and Peter Cooper Village complex. Spanning 80 acres on Manhattan’s east side, it’s the largest single-owned residential area in the city. Its red brick buildings, built by Metropolitan Life in the 1940s for World War II veterans, are still a haven for the city’s middle class.

Commercial real-estate firm Tishman and its partner, investment firm BlackRock, paid $5.4 billion to buy the property from MetLife in late 2006 — right at the market’s peak. They hoped to make money by converting rent-regulated apartments into luxury condos and raising rents.

Then the housing crash hit. The value now: $1.8 billion.

And you thought you overpaid for your house.

“They made assumptions that things would grow to the moon, and things certainly did not,” said Len Blum, a managing partner at investment bank Westwood Capital.

Tishman said last week that it was turning the property back over to creditors to avoid filing for bankruptcy protection. In recent weeks, Tishman failed to restructure $4.4 billion in debt, and couldn’t find another buyer, according to a statement from the company.

Will Tishman come in for less disapprobation than a homeowner who walks away from a mortgage where he is paying 40% more than the house is worth? It’s a certainty that banks are treating Tishman differently than the ordinary homeowner:

Walking away isn’t risk-free. A foreclosure stays on a consumer’s credit record for seven years and can send a credit score (based on a scale of 300 to 850) plunging by as much as 160 points, according to Fair Isaac Corp., which provides tools for analyzing credit records. A lower credit score means auto and other loans are likely to come with much higher interest rates, and credit card issuers may charge more interest or refuse to issue a card.

In addition, many states give lenders varying degrees of scope to seize bank deposits, cars or other assets of people who default on mortgages.

Even so, in neighborhoods with high concentrations of foreclosures, “it’s going to be really difficult to prevent a cascade effect” as one strategic default emboldens others to take that drastic step, says Paola Sapienza, a professor of finance at Northwestern University. A study by researchers at Northwestern and the University of Chicago found that as many as one in four defaults may be strategic.

The double standard is easy to understand, less easy to justify. The fact is, a bank is less apt to severely penalize someone who owes them billions as opposed to someone who is into them for a few hundred thousand. The “sin” may be similar, but repentance is more complicated. It’s as if a rich man and a poor man both stole a loaf of bread; the poor man was forced to knee walk up a rocky mountain and say the rosary while the rich man got away with saying one our father, one hail mary, and a glory be (old line catholics will recognize that penance immediately).

Ideally, the same sin should engender the same penance or punishment regardless of wealth or social station. But in this case, we hold people and corporations to different standards of behavior and hence, different attitudes toward walkaways.

But it is the personal ethics of abandoning a promise to repay monies loaned in good faith by a lending institution based on your past history of good credit and timely repayment that is of most relevance for us. What happens when so many walk away from their obligations not because they can’t pay but because paying what they owe is a bad personal financial decision?

We can all sympathize with the walkaway and wonder if we’d do the same in their situation. But from an ethical standpoint, this is really rotten. By walking away, these homeowners are making it more difficult for the rest of us to get a homeloan or refinance our existing home. This is an inherently selfish act in that the walkaway fails to take into account the effect on the community and society.

And then there’s the prospect if there are enough walkaways, a tipping point will be reached and all that bad paper that is still on the balance books of major banks will cause another meltdown necessitating still more bailouts and takeovers when home values go into another death spiral.

What happens if five million Americans decide to stop overpaying their mortgages and mail the keys back to the bank? There would be a sharp decline in housing values. There would be another downward leg to the financial crisis, with a big hit to the capital of banks and other institutions holding large mortgage portfolios.

I think the housing decline would be a healthy thing, as this market is still overvalued. I don’t believe we would see a deflationary spiral, a widespread collapse of debt values, and a descent into a full-fledged Great Depression II. This was the great fear when the bubble first started popping in late 2006.

But since late 2008, the Bernanke Doctrine has showed that the modern Fed has the tools to keep this from happening. Administration officials can say whatever they want, but Too-Big-To-Fail is still reality.

What of the decline in individual purchasing power, the so-called adverse wealth effect, that would come with lower housing values? It would be muted because making mortgage payments on an overvalued house diminishes purchasing power just as badly.

But the net effect of the Great Walkaway would still be a strong downdraft in the overall economy.

I don’t for a moment believe that 5 million people will strategically default on their mortgages. But who can guess where the tipping point might be? Who can be sure that 1 million or 2 million such defaults wouldn’t crash the economy again?

All because people selfishly took stock of their personal financial situation and decided it was OK to saddle the rest of us with what is, after all, their problem. I say they have no ethical right to do it and that Congress should make it easier for banks to collect from these voluntary deadbeats.

Not surprisingly, Congress will treat these people as victims and no doubt either bail them out (one estimate is it would take about $750 billion to pay off the difference between what underwater borrowers owe and what their houses are worth), or make some accommodation with credit reporting services to give these strategic deadbeats a pass. Encouraging irresponsibility has been the hallmark of the Obama administration housing policies so why should we expect anything to be different here?

For the vast majority of us who have suffered a big hit on the value of our homes but continue to remain faithful to our obligations, this whole walkaway phenomenon is a slap in the face. We are being played for suckers. And it’s depressing to think that rewards will accrue to those ethically challenged scofflaws who don’t play by the rules but come out smelling like roses anyway.