THE COMFORT OF DISBELIEF

by thebeerdoctor

There is something quite marvelous in modern American television. It allows the viewers to be constantly distracted. A plethora of topics is available to astound. There is a man having a baby, while another baby almost falls off a cliff. A book is returned to the public library after being overdue for fifty years. And what about the bold dress color, worn by the first lady of the President-elect, on their open house visit to what will be their residence for the next four years. Then there is The Economy. An unpleasant topic filled with stories of a Dow Industrial Average continually tanking, and the need for a bailout… no strike that, a rescue plan, that involves showing how much faith the federal government has in big businesses, and the assumed fantasy known as the free market system. This is where the American citizens are told to just surrender unto corporate Caesar what is their monetary (therefore, Divine) right to. And do not fret your precious little head over the details about how this rescue plan is to be implemented. There is no need for oversight. Instead of governance laws, there are not even rules, just simply, guidelines.

Neel Kashkari, the Treasury department Santa in charge of the bailout goody bag, opposed the FDIC proposal of using $24 billion to cut the mortgage payments for homeowners threatened with foreclosure. For these true recipients of the housing crisis, who truly feel the brunt of all of this, there is not even a stocking with a lump of coal.

People who attempt to put a civil face on this mess, will say that the money is being poorly targeted. I do not believe that for a second. The so-called focus of the bailout assumes there is public service altruism involved, and that it is good for the country. No, this is a robbery. Robbery on a grand scale, but robbery nonetheless. A working synopsis would be: the game, known as the free market credit system, has been busted by the ownership class, and now there is a frantic dash to destroy all evidence of their participation, by looting everything in sight, and, in the case of treasury tax law section 382, everything that still remains hidden.
“Poverty is the most urgent crisis facing the world,” says European Development Commissioner, Louis Michel. This is certainly not Job 1 for the rescue plan, where multi-billions have already been put into our financial system, supposedly to unleash lending. But without enforced stipulations on how this money was to be used, much of this went to paying executive bonuses and buying up smaller, and often profitable, banks.

The Congressional Democrats, along with some of their appalled Republican colleagues, found themselves aghast with a toothless give-away piece of legislation, where the only remedy was to compose angry letters to the Chief Executive Officers of the corporations who stand to benefit greatly from this U.S. government largesse. What were once investment banks are now holding banks. What was once a credit card company is now classified as a bank also.

Quite remarkable is the rapidity at which this new mindset of the government existing solely for the corporate elite, has been adopted by the population in general. The television liaisons of the ownership class, such as Oprah and Dr. Phil, comfort their audiences with reassurance, saying we are all in this together. Local news carries features on how to survive on a tightened (and getting tighter) budget. Learn how to turn down the thermostat on the heater, and where to download cost saving coupons from the internet!

The Republicans, in their recently failed election campaign, loved to cite Fannie Mae and Freddie Mac as the chief culprits in the housing mortgage crisis. In reality, those two quasi, now owned by, government backed entities account for only 40% of the mortgage system. To get an idea how the other 60% participated in this robbery, former Wall Street analyst Michael Lewis’ article titled The End, speaks volumes about how mortgage backed securities became an instrument for increasing wealth, by betting, therefore shorting, that those instruments would inevitably fail. As Lewis notes: “The juiciest shorts–the bonds ultimately backed by the mortgages most likely to default.”

“The loans would have been made by one of the more dubious mortgage lenders, Long Beach Financial, wholly owned by Washington Mutual, was a great example.”
It turns out: “Long Beach Financial was moving money out the door as fast as it could, few questions asked, in loans built to self destruct. It specialized in asking homeowners with bad credit and no proof of income to put no money down and defer interest payments for as long as possible. In Bakersfield, California, a Mexican strawberry picker with an income of $14,000 and no English was lent every penny he needed to buy a house for $720,000.”

What seems to be the most shocking for Michael Lewis was the extent of the crime. Writing about analyst Steve Eisman he states: “Eisman knew subprime lenders could be scumbags. What he underestimated was the total unabashed complicity of the upper class of American capitalism.”

One time junior accountant, Vince Daniel, saw this up close, while working for the once-upon-a-time Arthur Andersen, during an audit of Solomon Brothers: “I saw how the sausage was made in the economy, and it was really freaky.”

This could easily be applied to Meredith Whitney’s observations, around Halloween 2007, when the Oppenheimer Fund analyst announced that Citigroup would have to cut its dividends in order to remain operating. People were shocked, especially when it turned out to be true. Now, a little over a year later, Citigroup announced it would have to slash ten thousand jobs, for a start, with its stock price falling from $50 to under 10. The robbery that dare not speak its name, has been involved in nearly all of this.

This makes the denials of the participants even more appalling. The people in charge at these firms claim, not unlike much of the political leadership, that they were simply along for the ride and had no idea that the vehicle they were traveling in, was actually stolen.

But then there is always the matter of the corporate image to be considered. Lloyd Blankfein, CEO of Goldman Sachs, it has been announced, will not be receiving any bonus to his $600,000 base salary, partially due to the firm’s participation in the $700 billion bailout. This seems only proper. Lucas van Praag, company spokesman said, “They believe its the right thing to do. We can’t ignore the fact that we are part of an industry that’s directly associated with the ongoing economic distress.”
What a remarkable admission. Never mind that Mr. Blankfein took in just under $70 million last year. The six hundred grand? The bare skin and bones take home pay? It will be tough, but he will manage somehow. It’s the right thing to do, like having a bowl of old fashioned oatmeal in the morning. And yes, they can’t ignore the fact that they are part of an industry… don’t you just love that word, industry? The big glass and steel building that manufactures these mysterious financial instruments, that are not only directly associated with the ongoing economic distress, but bloody near the cause of it all.

“CEO Lloyd Blankfein,” as Bethany McLean wrote in Fortune, “who took over last spring, gets credit for helping steer Goldman away from the most damaging investments. And Goldman which says it has limited exposure to the subprime mess, stands confirmed - for now, anyway - as the smartest bank on the Street.”
Of course these words of confidence were written before Goldman Sachs changed their operation mode (or modus operandi) from an investment bank to a holding bank. Which also makes me wonder if they were so smart in steering clear of the subprime mess, why are they receiving bailout money?

Unreality has its psychic advantages. If only President Bush could look into the Economy’s eyes and see its soul, and know it has a good heart. If only he could just call in an air strike and stop all this bleeding from these collateralized debt obligations. If only…

Late at night, when the other usual voices have gone to bed, you can hear the BBC radio world service, where commentators across the globe, speak of the present situation. There is not much mincing of words. They seem to know that we are in an economic global depression, whether anyone cares to admit or not. The air has been let out of the balloon, and people are genuinely worried.

As this unique winter of discontent approaches, I am strangely reminded of the song Have Yourself A Merry Little Christmas, sung by Judy Garland, in the movie Meet Me In St. Louis. It seems that Ms. Garland and her future husband, the director Vincente Minnelli, found the original lyrics too depressing, and decided to change them. So did Chairman of the Board Frank Sinatra, who wanted to “jolly it up a bit” when he recorded the song in the 1950’s. But for myself, the original draft seems much more pertinent to our present situation.

Have yourself a merry little Christmas
It may be your last
Next year we may all be living in the past

No good times like the olden days
Happy golden days of yore
Faithful friends who were dear to us
will be near to us no more

But at least we will all be together
If the Lord allows
From now on we’ll have to muddle through somehow
So have yourself a merry little Christmas now

And that’s what Wall Street is all about Charlie Brown.

AN UNEASY BIRTHDAY

November 6th, 2008 | by thebeerdoctor

The end of October and the beginning of November has always been a special time for me. Being born on All Saints Day, there has always been that morning after tie-in with Halloween. Never was this more acutely felt as in 1963, when on my way to school I saw the jack-o-lanterns set out for Friday’s garbage and became sad, until I realized it was also my birthday.

Years later I became aware of Malcolm Lowry’s novel Under The Volcano, which fictionally takes place on November 1, 1938. Add to that, the Day of the Dead, the Mayan Day of the Dead, Samhain Day, etc., and this period of time becomes rather personally significant. But never has this holiday period been under such pressure as that being generated this presidential election year.

It really does not matter that the Democratic candidate is really a centrist, non-ideological person. The fact that he is a man with a permanent tan… and that sadly, is what all the damn fuss is about.

Republicans especially, but independents also, will not admit that their trouble with Barack Obama is not because he is a radical child of the sixties (he most certainly is not), or that they just do not know him well enough. Which is particularly strange, because many of the people who got on board the runaway train known as George W. Bush, knew very little about him, except he seemed to relish his mandate from the state of Texas to enforce the death penalty. Oh and yes, his daddy is a former President. No, the real problem many have with Senator Obama is the realization that there is going to be a brother in charge. A national civic moment that finally says, it doesn’t matter what a person’s background is, what matters now is can they do the job or not.

Halloween night was unusually different. Senator Hillary Clinton appeared that day at a get-out-the-vote Obama rally, four and a half blocks from my house. The local neighborhood is clearly in the tank for Barry O. A McCain/Palin sign here is considered an aberration, usually posted by someone who is worried about their guns, or their lawn, or both. There is also the occasional right-to-life warrior. An issue driven concern for fetuses that is greater than actual babies being murdered in our far away wars. Folks of this persuasion will not even consider the notion that the best way to prevent abortions is to avoid circumstances which require their consideration. But that would involve sexual education, contraceptives and such. This is the real kicker: many anti-abortion advocates do not want anyone using contraceptives. Consider the Governor of Alaska’s inflexible position on this issue. It is not all surprising that her daughter finds herself with bump.

The uneasiness about the election makes many people nervous. Adding to this are the divisive remarks from Governor Palin, who seems hell bent on convincing the electorate that Senator Obama is a card carrying fellow traveler of terrorists. It quickly becomes apparent what the Republicans are up to. Unable to gloss over the mismanagement and incompetence of the Bush years, they choose to divert attention away by constructing a false, social-cultural war. Of course the McCain/Palin campaign claim nothing of the sort. Despite the fact that Mrs. Palin chose to quote Westbrook Pegler, a bona fide American fascist, during her infamous GOP convention speech. Later, when a few people did notice this, nobody seemed very concerned.
Television, both local and national, decided to broadcast many of the Alaska Governor’s unctuous stump speeches. To put it in her vernacular, they were tight little pointed packages of verbiage, designed to strike fear in the hearts of those with just enough audacity of hope, to actually question her supposed patriotic authority. This was ironic. The advancement of women in the workplace, now included creating an unapologetic demagogue.

Senator McCain for his part seem befuddled. Long before the economic crisis, he seemed off his game the first day he announced his vice- presidential pick. The kind of people that Sarah Palin pals around with (witch doctor, secessionist) added an exotic flare to her biography that was not exactly desirable. When shadow president Dick Cheney endorsed their ticket, a McCain supporter said to me: “we need that like we need a hole in the head.”

Despite it being often reported how much Barack Obama outspent Senator McCain, here in the local market the Republican based fear ads were everywhere. Where money really did make a difference was the boots on the ground, the so-called ground game. Here Obama’s people seemed omnipresent, continuously calling up for support, asking if you need help when going to vote. As late as the last hour before the polls closed, I saw Obama workers still knocking on doors. After witnessing this gargantuan effort, it is not surprising at all that Senator Obama won the state of Ohio. I am sure Indiana experienced similar actions. The McCain crowd, even the third part dreamers, could not match the hard work and tenacity of the Obama campaign. Why should they be surprised at the results?

But there is no way to describe, or simply convey, what happened on election night. This is something I will never experience again, after living over half a century on this earth. It all fell into place around 11pm, eastern standard time. The television news announced that Senator Barack Hussein Obama would be the next United States President.

I look over at my older brother, who says to me, using his Animal House language: “The war is over. Obama dropped the big one.”

I quickly went upstairs, knocked on the bedroom of my 82 year old mother. “Mom, I said, Barack Obama is the next President of the United States.”
There was a quiet joy on her face knowing that she lived long enough to see something occur that only a few years ago was said to be a complete impossibility. To know, to actually know, that destiny is not always predicted, that Providence, if you will, works in very mysterious ways.

I quickly made an exit from my house to the convenience store located a couple of blocks away. Being a beer consultant to non-alcohol drinking, middle eastern Americans, I have always been held in higher regard than I deserve.
“You predicted it.” Nasser said. The fiercely independent shop owner was abundantly happy, making reference to what I said a few days earlier, that Obama would win and it would all be over by midnight.

People in the store were shaking hands and giving hugs. Black people wandered in with a kind of happy shell shock. Damn! There is going to be a black man in the White House!

Nasser, feeling and looking magnanimous said: “What do you think of Barack Obama now?” and then, “The Beer Doctor predicted it.”
Which was all very flattering, but basically besides the point. My so-called analysis was simply based on the assumption that all the polls showed Senator Obama was ahead, and the only way for a McCain victory to happen would be if they were all wrong. The Harry Truman election was brought up briefly, but I said no, that won’t do, John McCain is not a sitting President.

Television, despite all the data, seemed to assume a say it isn’t so mode, right up to the end. This was understandable. TV has products to sell. A foregone conclusion can be a real marketing killer.

The expression tears of joy maybe foreign to many. But on this unforgettable night, I finally understood what that meant. Racism has always been an ugly backdrop growing up in the state of Ohio. My late father, a decent kind, thoughtful man, taught me at a very early age how ridiculous racism always was, even when to advocate this truth, you did so at your own peril. Even when I was only six years old, I thought the only race is the human race.

But considering that notion was difficult and sometimes dangerous. So many of the good people I lived around and their children that I played with, had essentially a racist viewpoint towards other parts of humanity. They justified dehumanizing black folks by claiming they were ignorant nigger monkeys. Wild animals as it were, ready on a moment’s notice , to come up the hill from the valley, to attack them unmercifully.

With such concentrated xenophobia, it is no revelation that my neighbors took comfort in their right to bear arms. After all, is that not what the second amendment is all about: guns to protect you against varmints? One good catholic family in the neighborhood took comfort and pride in knowing that a family member was in the National Guard, and that, in case of a riot, he could shoot niggers legally.

I kept my silence, knowing that the truth was a secret shared by my family only. Besides, our neighbors were good decent people, who happened to be racially insane. How did I know this? Well circumstantial evidence first and foremost. The most intelligent and talented kid at the elementary school I attended was black. For us other kids, he was a kind of oracle.

All of this unfinished business came flooding back that night Senator Obama became the President-elect. What a relief it was! To finally have the vindication that my fellow citizens are exactly that: my fellow citizens.
Perhaps this spells an end to the extreme right and extreme left, of the political spectrum. Those who have been driven by issues to the point of hardened cynicism, will have to reckon with the fact that sometimes justice actually does prevail, that human decency can eventually triumph.

This ship of state, through the unrelenting efforts of a community organizer, has been dragged over what was only recently considered an insurmountable mountain. All peace and blessings for that. These are new waters, in a new time, on which to sail.