“The future ain’t what it used to be.”

Yogi Berra

Mysteries: Today’s Too-Big-to-Fail Mentality

The Federal Reserve announced in March 2009 that it was poised to inject $1.2 trillion (whatever that means) into the economy (whatever that is). Well it’s a big number, we can probably agree on that. It brings to mind George Steinbrenner overpaying another Yankee roster in his brand new and impressive stadium with the failed right-field line. But George actually had the bucks, unless he was deeply invested with Bernie Madoff.

It’s not as if the Fed actually has it in an account somewhere to transfer, like you or I (or Steinbrenner) might from savings to checking. Nor are we taxing ourselves in order to create it. God, or Heaven, or Bernanke forbid, that’s the old-fashioned way from old-fashioned times when we paid for wars, planted Victory Gardens and all pulled on an oar.

At the present moment, there is no one forbidding and that’s probably just as well, because the number and the event and its eventual outcome are all fictions—works of the imagination. I have some experience with that, an old Cub fan, standing up to my ankles in beer-cups and candy wrappers, watching another October collapse. The very idea of security was always a wary adversary for me, not quite a NY Yankee sure thing. Even so, Chicago’s a tough town, a Cubs and White Sox town, tempered by the realism of Chicago-style baseball.

It will not work, this metaphoric loading the bases with trillions. Those at the top chant the mantra of ‘too big to fail,’ while failure is upon us. Congress promises a rally, but markets are slumped in the dugout and looking for scapegoats. Solutions that could (or even might) work are long-term and require patience. But we’re out of patience and we’re scared of how far behind we are, how weak our bullpen. It’s getting dark and the neighborhood is dangerous after dark, unless you have a limousine is waiting.

We elected Barack Obama to solve it–no matter that the engines of our financial demise have been running full-tilt since before the man was born. Not able to wrap it all up in the first term of his presidency, his stock may slip and his (and our) hopes for a successful IPO could fail as well.

But that was 2009 and has long been forgotten, if anyone actually paid attention at the time. This is 2012 and Bernanke has not been stopped, let alone questioned. The General Accounting Office (GAO) announced a first ever (since 1913) audit of the Federal Reserve.¹ The media hardly noticed. The Congress didn’t even raise a well paid-off eyebrow, although the Fed had ‘loaned out’ without their knowledge some $16 trillion to American and foreign banks—at zero percent interest.²

Just to put you in the loop and try to make some comparison to what has been done under Ben Bernanke’s administration over at the Fed;

• The $16 trillion secretly loaned out is equal to the total current federal budget for four years and four months.

• The $16 trillion is essentially the equal of the entire national debt, that same debt that is destroying our social structure, crippling our economy and bankrupting Medicaid, Medicare, Social Security, infrastructure and our ability to compete.

• The $16 trillion is fifteen times the total amount of currency in circulation, as of 2011.

• This money (or the credits it represents) was ‘loaned’ out to American and foreign banks at no interest. Therefore, it represents no value received, even if it is repaid and repayment is anybody’s guess. Thus it will devalue our currency, already under extreme pressure, by an unknown (and unknowable) amount.

• Arbitrarily increasing the monetary supply to suit whatever circumstances prevail is a prescription for hyper-inflation. Alan Greenspan and Ben Bernanke are specifically tasked with managing the money supply and interest rates to hold down inflation.

• After all that, the banks have thus far (apparently) not yet opened the gates to make loans. One can only presume they are first busily paying off their gambling debts and buying back stock.

Jesus, this could get deep. Zero interest rate and unprecedented supply.

Probably will get deep, which is not so far from the hopes of the Rush Limbaugh crowd that it actually will fail, allowing conservatives another chance to come to bat. But we’re in for a long, tough haul. We’re not halfway there; maybe not even ten percent, who would know? Economists still argue over the Great Depression and it’s nearly eighty years behind us.

AIG, Bank of America and Goldman Sachs, who claimed to underpin our financial security in these frenetic decades, are not too big to fail. Fail they will, fail they must, to rid markets of fraud and preserve what’s worth keeping. Goldman had already moved on from merely destroying portions of the American economy to bringing down entire nations. Greece, Ireland, Spain and Portugal are all now mere notches on the Goldman gun-belt. Time for Goldman Sachs to fail, too big or not, before the planet collapses economically.

Three years ago, at the height of the real estate debacle, I Googled “Bank of America customer base” and this is what came up second on the first page:

Announcing the Bank of America Preferred Real Estate Broker Network™ and the Bank of America Real Estate Center™

Bank of America continues to reinvent the real estate partnership model by adding cutting edge technology and innovation to our suite of business building opportunities for real estate companies. The Bank of America Real Estate Center™ enables millions of our online banking customers to connect with our Preferred Real Estate Brokers™. Bank of America has the largest online customer base of any financial services company worldwide and is willing to leverage it to help our Preferred Real Estate Brokers grow their bottom line.

A piece of ad-copy absolutely peppered with trademarks. In the midst of a real estate collapse, they actually wrote that and promoted it online. Does that even remotely sound like the public interest is at stake? Bank of America’s boldly stated willingness to leverage is not even suggested as being to your or my benefit. You and I are merely the levers with which they intend to help our Preferred Real Estate Brokers grow their bottom line.

I don’t know about you, but I’ve already been levered down to my shoelaces. Having had my fill of ‘preferred brokers,’ bottom-feeding to grow their bottom line, I have another suggestion for their bottoms (and lines). Toss them into the street and begin prosecution. Too big to fail is phrasing directly from the New York Yankees and the swamp of Wall Street, a non sequitur rivaling too fat for a heart attack, too good to be true, too essential to be let go, too old to die and (in this unfortunate case) the best defense is a good offense. Consider me offended.

The public interest is best served we are told, by hooking an already addicted investment community to an endless intravenous drip of public money. Just because these trillions do not exist does not mean they are not ours to pay off. The melding of Wall Street with ever new and more shiny marketing tools (Warren Buffet disgustedly calls them weapons³) got us used to the idea that the ball would forever be in play.

Congress (still paid-off and unwilling to admit their own complicity) maintains, along with the Fed, that bankers and their co-conspirators suddenly acquired the wisdom and character to steer a course beyond their own self interest. It matters not that the same players are still on the roster in the same failed batting-order. They’re sticking with the high, inside fastball, still convinced that good pitching always defeats good hitting.

The verb to watch is defeat. These slicksters would defeat our best interests in favor of their own and it looks like they’re fielding a lineup that includes heavy money, Congress and the fear Franklin Roosevelt was so quick to recognize. A sizable adversary, that. In FDR’s day, fear was the main threat. Today, we have Congress.

Time out for a moment as I step back from the mound and wipe my brow: Does it make sense to you that a Senator eagerly spends $6-8 million (expanding toward $25-30 million) to get in the game, to land a position that pays a $169,300 annual salary? None but the most credulous would swallow that. Bribes to Harry Reid alone, in the past five years, totaled over $12 million. Chuck Schumer, that New York paradigm of financial blowhardiness, sucked up more than $13 mil during the same period.

So, who’s to say no to the banks and hedge-funds? Chuck and Harry? Not bloody likely. Certainly not their congressional co-conspirators, those with such a well-paid line in the water and yet they’re the only current hope, short of barricades and pitchforks. A pair of Roosevelt presidents worried their way through similarly murky and unregulated waters, yet here we are again, stranded in the late innings without a closing pitcher in the bullpen. Obama, it seems, was our last and we hoped, best closer. Yet the score against us just keeps running up.

Another sports metaphor. It makes the arcane understandable and clouds issues at the same time. Yogi again,

It ain’t the heat, it’s the humility.

The Suicide Squeeze in a Nation Hungry for Home Runs

In baseball, the squeeze play is a sacrifice bunt with a runner on third base. The batter (AIG) bunts the ball, expecting to be thrown out at first base (Congress), but providing the runner on third base (Goldman Sachs) an opportunity to score. In a suicide squeeze, Goldman Sachs takes off as soon as Tim Geithner begins his delivery, but before actually releasing the ball. If properly executed, getting called out by regulatory agencies (the Fed at 1^st, SEC at 2^nd, FDIC at home plate) is extremely unlikely.

However, if AIG fails to make contact with the pitch, Goldman Sachs is dead sure to be nailed by regulators (hence, “suicide”). Therefore, the suicide squeeze usually requires a skilled bunter who can make contact consistently, even on poor pitches. That, in a nutshell, is why AIG is so often pulled off the bench to perform this difficult play, best used in the late innings of a close game, when Schumer is playing first base. As Yogi would say,

It ain’t over ‘till it’s over.

It’s my hunch that we are not yet⁴ a third of the way into the economic bad news to come and my concern is not that we can’t deal with the collapse—Americans are good at that—but that we will prove unwilling to wait. We are not good at waiting. No-hitters are for devotees, we bleacher-bums thirst for the back-slapping 12-12 tie games, won in the tenth inning by a grand-slam. Give us blood. We want action.

It’s been said that the only thing gamblers find as thrilling as winning, is losing—it’s the action they are after. We are a nation of doers and, having said that, sometimes the work that needs to be done is less productive than we’d like and requires a steadier hand. I am reminded of the old black and white photos from post-war Germany. While Europe stood mostly in shock, kicking its toes in the rubble and waiting for rescue, the Germans chipped loose mortar and neatly piled the bricks. They would need bricks. It was certainly not enough, there was no such thing as enough in a nearly destroyed Germany. But it was what was there to be done and they did it. That ability to see through the dust to the end of the road (and the Marshall Plan) made Germany a powerhouse.

It remains a question if Americans are sufficiently stoic to pile the bricks that came cascading down during the last year of the Bush administration (and tumble yet). In fairness, the stage was set for collapse decades ago. Pick your administration;

• Johnson with his Great Society and unfunded war,

• Nixon taking us from the gold to the oil standard,

• Jimmy Carter’s inability to tamp down the 22% interest rates that followed an oil crisis,

• Reagan deregulating,

• Bush Senior adventuring in Panama and the Persian Gulf,

• Clinton allowing Alan Greenspan to loose the dogs of Wall Street,

• Bush the Younger fighting two unfunded wars, giving unprecedented tax breaks to the rich and privatizing essential government services.

And the walls came a tumbling down. Even an apparently invincible American economy proved unable to withstand the unending bombing raids of Wall Street.

The celebration of Barack Obama has peaked long ago; the promise of his message lost its ring of truth and call to action. The bipartisanship alluded to in the Congress of the United States has been tested and found wanting. We were eager, perhaps even inspired by this man. But would we pile bricks for him?

Now, because Nancy Pelosi unilaterally took indictments of the former administration ‘off the table,’ it has become Obama’s wars, Obama’s deficit and Obama’s economic crisis. He had nothing to do with any of them and yet he now owns them all. FDR had the great advantage of coming into office after the 1929 crash had nearly destroyed the country.

Does Anybody Know How to Play This Game?

The Dow Jones Average dropped 332 points on the day Obama was sworn in as 44th President of the United States. The Audacity of Hope, offset by the reality of markets gone to hell—and, as Randy Bachman sang, “you ain’t seen nothin’ yet.” We’ve yet to deal with nearly $60 trillion in credit default swaps out there somewhere, essentially insurance policies with nothing backing them. An AIG too-big-to-fail, but not too-big-to-rig financial derivative time-bomb that no one much talks about. Maybe if we don’t look in that corner of the room, the man with the scythe will go away.

Thus far, the Fed money thrown at banks has yet to inspire loans to consumers or businessmen. Not much into brick-piling, these banks took the scratch, paid themselves dividends, paid down loans to their buddies as well as the government, bought other banks and scattered to various fine-dining experiences. Why make loans, when you can get cash from the Fed at zero interest and loan it to the government at 3.5%? Tap a couple computer keys, take a snooze and book tickets for the Caribbean.

All of which sounds grindingly true to the attitudes and fiddling the books that got us into this mess, but the guys and the institutions into which we are pouring (and printing) money, all have familiar names;

• Citigroup, Vikram Pandit, $45 billion

• AIG, Martin Sullivan (fired) Robert Willumstad (ex Citigroup) $40 billion

• J.P.Morgan Chase, (Jamie Dimon) $25 billion

• Wells Fargo, (John Stumpf) $25 billion

• Bank of America, (Kenneth D. Lewis) $25 billion

• Goldman Sachs, (Lloyd C. Blankfein) $10 billion

• Morgan Stanley, (John Mack) $10 billion

• and on and on and on . . . each of them on a first-name basis with Geithner and Summers.

In March of 2008, Wells Fargo CEO John Stumpf said “the financial crisis is presenting the bank with more acquisition opportunities.”⁵ How’s that workin’ out for you, John? Lloyd Blankfein over at Goldman kicked off a ‘letter’⁶ to investors that opened, “At Goldman Sachs, we regard diversity as a business imperative – it is at the very core of our ability to serve our clients well and to maximize return for our shareholders.”

Diversity, in Goldman-speak, includes $10 billion in taxpayer bailouts, so that Lloyd can maximize returns for shareholders. And here I thought it was all about what it was said to be all about, liquidity. The guy who signed the check was then Treasury Secretary Henry Paulson—ex CEO of Goldman. Nice lateral pass, as you work your way downfield, Henry. Yogi, again,

“In theory there is no difference between theory and practice. In practice there is.”

Thanks for clearing that up, Mr. Berra. You were born to a second career as spokesman for the financial community.

This ongoing extravaganza is pretty much about acquisition opportunities and maximized return for shareholders. It was sold to the public (we doddering taxpayers) as a way to bring equity to Main Street and scrub Wall Street with a wire brush, like a derelict in a drunk-tank. Wall Street, having neatly swindled us out of homes, jobs and property, then abandoning us in the midst of an economic hurricane, talks of acquisition opportunity and maximized profits as if it was not on life support. Brain-dead and on the heart-lung machine of endless cash support, there appears to be no cure. Outside of grand jury indictments and prison terms, there’s not much to do but watch it all finally drift to the side of the road, tires blown and engine frozen.

Bernie Madoff swindled his friends out of $50 billion and isn’t even in the news as I write this, some years after his imprisonment. Madoff was not an unknown guy. He was Chairman of NASDAQ, for god’s sake, an exchange listing over 3,000 companies and carrying more trading volume than any stock exchange in the world. The chairman turned out to be a thief, a crook and a swindler, reported again and again to the SEC, who chose to turn a blind eye.⁷

(Times-UK, Dec, 2008) The world’s biggest fraud could have been averted if the Securities and Exchange Commission (SEC) had acted on numerous warnings about Bernard Madoff’s financial impropriety years ago, the regulator’s chairman admitted last night.

Christopher Cox, the chairman of the SEC, effectively admitted mea culpa over the scandal after conceding that tip-offs were repeatedly made to the investors’ watchdog but never resulted in any investigation.

Mr. Cox said that in less than a week of checks made into the regulator’s oversight of investment businesses run by Bernard Madoff, he had found that “credible and specific allegations” had been “repeatedly” brought to the attention of the SEC but that no recommendations had ever been made to investigate the accusations.

Bernie never apologized to any of the thousands of retirees he made pauper, yet penned this note to his Condo Association;

“Dear neighbors,

Please accept my profound apologies for the terrible inconvenience that I have caused over the past weeks. Ruth and I appreciate the support we have received. Best regards, Bernard Madoff”

Apologies for crowding the elevator with cops on duty to watch his sorry ass, but not so much as a quick scrawl to those who trusted him personally and are now left holding the bag. In an amazing example of Wall Street egocentricity, the fault is all forces beyond Bernie’s control and he’s but another hapless victim of circumstance. When there are bricks to be piled against the long, hard work of reconstructing our blown-apart economic structures, don’t look in the streets for Bernie or Hank. Nor will you find Vikram, Bob, Jamie or John dusting off and stacking blocks of clay. Feet of clay perhaps, plenty of those in size 10 Guccis, but Ken Lewis, Lloyd Blankfein and John Mack will all be viewing the destruction they caused from the decks of yachts and villas in Europe. Makes a guy want to borrow a pitchfork or vote for someone, anyone, who runs against his particular Senator or Congressman.

There are no Nuremberg Trials for financial crime, yet the global destruction caused by our particular brand of greed-capitalists approaches WWII dimensions. The patience of our historically impatient nation will soon be sorely tried, as the true breadth and depth of what has been stolen reveals itself.

Stolen. There is no other word. Financial advisors and professors of economics, the same counselors who were unable to see the train-wreck coming, are now declaring the tracks clear, if only the taxpayer takes these terrible toxic investments off their hands. I smile at the other definition of counselor, “Someone who has supervisory duties at a summer camp.”

Indeed, those who bullied their way through regulatory oversight and strong-armed their way to unknowable derivative fraud were no doubt summer-camp terrors but a few decades ago. One more reason to slap down bullies, early and hard.

Barack Obama or Mitt Romney will have to deal with the aftermath of that, among their thousands of other crises. In sports metaphor, it’s the bottom of the ninth inning and the home team is close to hopelessly behind. We totter unsteadily behind Greece, Ireland, Spain and Portugal, all Goldman victims.

Will we have the patience? Patience aside, will we even stay at the park or have we already headed for the exits and a chance to beat the traffic?

If only traffic were the problem.

Taxpayers Get Caught in a Run-Down

It is the first and only duty of a corporation to maximize investor earnings. But how did ‘investor satisfaction’ ever come to be a taxpayer priority and how did we get conned into accepting that? Who died and left the investors in charge of America’s future? When did manufacturers, airlines, investment banks, mom and pop shoe stores (if there are any left) and big-box retailers decide that business practice didn’t mean anything and business presentation was the whole ball game?

Oops, take mom and pop out of that equation, they are still providing the sweat-equity that built America. It’s the rest of the business world that has given up sweat in favor of equity. Except for sweating-out quarterly reports. Plenty of that goin’ around, but even they no longer make sense; Google reports record profits and their stock drops; Merrill Chase doesn’t lose as much as they were expected to lose and their stock goes up.

Does anybody know how to play this game, or do they know all too well? The umpires, it seems, are in the bag.

Slowly, inevitably, unendingly over the past four or five decades, we saw our American business model—the finest on the planet—hijacked by investors. Not customers or clients, but investors. They made themselves King of the Hill. If there’s a Freudian slip toward that ‘hill’ being Capitol Hill, so be it. We deserve, under these maneuvered and contrived, massaged and outright lied-about circumstances, to be sent to the back of the room until we better understand the free-market system that made us great. It’s possible, very possible, that’s what’s happening now.

Free markets are not those markets that abandon the security and welfare of their workers. Nor should they be free from all forms of government oversight, allowed to buy and sell Congress as suits their purpose. No section of the Bill of Rights empowers investors to privately pocket profits and off-load losses to the taxpayer. Short-term gains for corporations, manipulated by relieving themselves of that messy old habit of actually making things and (in place of that) dealing exclusively in the branding of things once was called cattle-rustling instead of merger. Branding, without actually owning a herd, was a hanging offense in more sensible times.

A case in point is Larry Summers’ assessment of the rush (mid 2008) to bail out Freddie Mac and Fannie Mae, so that investors would not lose confidence.⁸ Bless their fragile little egos, we can’t have the dears losing confidence, lest they suffer a damaged self-image.

“Anyone who cares about the health of the U.S. economy should welcome the enactment of the Treasury’s rescue plan for Fannie Mae and Freddie Mac, along with other measures to support the housing market. While there is room for argument about details, the risks to the financial system were too great to allow delay.”

Argument about details. Architect Ludwig Mies van der Rohe said, “God is in the details.”

No one in the know supposed however, that the issue was satisfactorily resolved, even in the short term. Emergency legislation was necessary because those same little dears mentioned above were unwilling to buy Fannie and Freddie’s debt. Who could blame them? Investors knew damned well that government-sponsored enterprises (GSE), had access to the public purse.

What the hell is government ‘sponsoring’ enterprises for anyway? Private ‘sponsorship’ is not a government role. If Fannie-Freddie debt began to move, it was only because of the rescue plan, not because anything changed at the GSEs. Stonewalling investors were finally successful in extorting the taxpayer into putting up the cash and it wasn’t even a taxpayer choice. Congress chose on our behalf.

To put it mildly, this was (and is) a highly problematic posture for policy. You and I are only going to find out how problematic, on down the line. Now I know this won’t make a whole lot of those fragile investors happy, nor will it strengthen their already damaged self-image, but suppose (just suppose) we let them take the losses. God knows they richly deserve them and wouldn’t that wring the bathwater out of Freddie and Fannie’s tub?

Presumably, that allowance could be made without picking the public pocket. Investors are supposed to be risk-takers. That’s how they bill themselves, so let them take the risk of failure and (perhaps) learn from it. After they took their well-earned bath, what we would be left with, is the baby.

If this preferred (by me) alternative isn’t realistic, given the state of Government Sponsored Enterprise finances, the government should use its new receivership power to protect taxpayers and the financial system. Let the sons-of-bitches fail. In the process, payments to stockholders, holders of preferred stock and probably subordinated debt holders would be wiped out, conserving cash for the benefit of taxpayers. The GSE borrowing costs would fall considerably, helping prospective homeowners. Investors would learn the useful lesson that stocks go down as well as up. Sure, they’d take a hit. But investors have spent their entire time on this earth telling us the fable that they are there to make markets honest. Their very presence in the game (they say and say and say) is to absorb the shocks of rising and falling prices.

Well, it’s time to absorb.

After decades of bubbles and case upon case of privatizing profit and socializing loss, it’s time for these wild-swingers to step up to the plate and face the fastball. I don’t know when the last time was that I heard anyone suggest that taxpayers ought to be protected and investors made responsible for their (essentially) gambling choices to win or lose on the great, green ball-fields of Wall Street.

We’re in a meltdown, no doubt about it. The only question is how much melt and how far down, but it’s time to contemplate the pain of another ’29 style crash or perhaps even worse. There’s no precedent for an economy this size coming apart. Yet the alternative to that sad circumstance could be worse. The alternative may be to take a gamed system that impoverished tens of millions (for the enrichment of thousands) and extend it. The beast must be put down, not encouraged to keep on lowering its head and turning on us.

America is a parody of itself rather than an economic engine, a screenplay for a Wall Street of Michael Douglas-Gordon Gekko dimension. We no longer make anything in this country but deals and phantom investments. Witness the overnight capitalization of Google to 25 times the value of General Motors, which has divisions on five continents, dealerships worldwide and a mix of product that ranges from Chevrolets to Saabs. Google, much as I love it and much as I value the ingenuity of Google, sells ads on the Internet.

Google is a brand, more than an actual thing. Even Amazon.com is a store that sells stuff. Brand has replaced product, because product can be made anywhere—mostly in places you wouldn’t want to have to find a hotel room for the night. Nike doesn’t actually make anything! Confront them with their third-world criminality in working conditions and wages, they just sniff that it’s all done by subcontractors over whom they have no control.

Nike pays Tiger Woods a hundred million⁹ to mate his brand with their brand. The result has been the birth of a super-brand, whose incidental made-by-someone-else shoe cost $4 to make, $40 to brand, creating (for the investor) nearly $60 in profit. In a business environment that encourages (much less allows) those kinds of profits, why would anyone in his right mind actually try to manufacture an athletic shoe or soccer ball in America?

On the other hand, where in that mix is a meaningful American job upon which an American man or woman can support a family? Or a Pakistani, Indonesian or Chinese family? There is none. This fable we have been sold is not about families or jobs or sustaining anything but profits and growth. Unrestrained growth is a definition of cancer.

The meaningful job upon which a man or woman can support a family has long been massaged out of the business formula, as companies learned that making stuff was not nearly as nifty and profitable as branding stuff. That’s how company after company is able to lay off thousands (sometimes tens of thousands) of ‘employees’ during a financial downturn. These workers are antipathetic to profit, redundant, a general pain in the ass and can be let go when the phones stop ringing—they don’t bloody make anything in the usual sense. They service the labor of others, worldwide. Cut back today and you don’t just do it in America, but in France, Argentina, South Korea and a thousand other markets.

When (and if) those let go are hired back in an upswing, their benefits are gone, along with seniority and the wage they made when they were let go. Both business and profit benefits on the way up and even more on the way down. Is this a great farm-club for the majors, or what?

The meltdown of this glitz-based chimera of what business once actually was should bring us to our senses. The Harvard MBA program, which we have largely to thank for

• a Pentagon that lost its mission,

• a new paradigm for waging war,

• a currency in shambles,

• a debt run wild,

• a series of ‘bubbles’ that periodically bring the nation to its knees, a quarterly-profit mentality that defines greed in place of purpose and, last but not least,

• parachutes its grads from disaster to disaster at a raise in pay)

might finally be laid to rest as a business model.

What on earth would rise in its place? Old timey horses and carriages? The return of Ozzie and Harriet? Speaking in that vein to the narrower issue of Fannie and Freddie, Summers summarized,¹⁰ six months before he became Barack Obama’s financial guru;

“The stakes here are high. The choices made in the coming months will bear on the housing market, future taxpayer burdens, the credibility of U.S. financial authorities in times of crisis and the integrity of the political system. It is a time for decisive action.”

The stakes were actually higher than that, Larry.

Freddie and Fannie were not the only credibility problems we faced as a nation and it’s hard to believe you didn’t know it at the time. But then, squaring with America might shy off those flighty investors you guys inside the Beltway value so damned highly. Fear is palpable in Congress and a fearful legislature is dangerous.

China is producer to America’s consumer and creditor to American debt. Congress seems blithely unaware that it has a 9% approval rate—half that of the just-departed George Bush. No Congress in history occupied so low an approval rate, but these legislative frauds made themselves bullet-proof by gerrymandering districts and raking in the gobs of money from lobbyists that assure re-election.

Meanwhile, out in the real world, caught flat-footed between 1^st and 2^nd, we are at the brink of a run-down of individual families facing financial disaster. No one has their back. Barack Obama was excoriated by the press for pointing out that obvious fact.¹¹

We need somehow to escape investors temporarily playing first base and shortstop. An eye-fake and a slide won’t do it. Unable to call a time-out, we must put resources once again into research and development (in something other than the pharmaceutical industries) and rebuild our infrastructure with jobs, rather than selling it off to foreigners.

Farming, among other priorities, has to come back to meaning more than absentee landlords who raise horizon-to-horizon crops and animals on lakes of sewage.

This country is too incredibly great to kick the can down the alley and we are doing that as surely as God or Whole Foods Market (who can tell the difference?) made little green apples.

1 Report to Congressional Addressees, July, 2011, Federal Reserve System

2 Actually, 1/1000^th of one percent, as the Fed is required to charge interest.

3 BBC News; Buffett warns on investment ‘time bomb,’ 3-4-03

4 As of May, 2009

5 San Francisco Business Times, 3-24-08

6 Goldman Sachs Web Site

7 Times Online-UK, 12-17-08

8 Unfinished Business at Freddie and Fannie, Lawrence Summers, 7-28-08

9 Golf, ESPN Sports, 12-13-06

10 The way forward for Fannie and Freddie, by Lawrence Summers

11 Slate, The Coming Obama Press War, 11-3-08