MONITORING SUBPRIME CRISIS STRIKES

TWO ARTICLES from the Atlantic Monthly bear notice. Here is a strident look at that housing strata may very well be welling up as the next wave of American slums—not the cities, but those isolated suburbs of abandoned McMansions. Then there is this long piece dissecting and analyzing a rather comprehensive set of notions impacting the history of past economic stresses and their continued impact upon the current financial meltdown in How the Crash Will Reshape America:

In this sense, the financial crisis may ultimately help New York by reenergizing its creative economy. The extraordinary income gains of investment bankers, traders, and hedge-fund managers over the past two decades skewed the city’s economy in some unhealthy ways. In 2005, I asked a top-ranking official at a major investment bank whether the city’s rising real-estate prices were affecting his company’s ability to attract global talent.

He responded simply: “We are the cause, not the effect, of the real-estate bubble.” (As it turns out, he was only half right.) Stratospheric real-estate prices have made New York less diverse over time, and arguably less stimulating. When I asked Jacobs some years ago about the effects of escalating real-estate prices on creativity, she told me, “When a place gets boring, even the rich people leave.”

With the hegemony of the investment bankers over, New York now stands a better chance of avoiding that sterile fate.

THE GEARS OF PREPAREDNESS

BATTLING FEARS OF THE FUTURE? Here's what one fellow says you can do to help ease your mind. Consider the necessities of life—purchase now in bulk, especially storable food.

if inflation ensues, it will be worth more tomorrow.

if deflation, it may not be available tomorrow due to shortages.

If a complete financial breakdown follows, you're already more self-sufficient and can barter for other necessities.

If nothing happens, you will have paid off the future now instead of later.

Begin buying in your local area now, and keep buying there. Tell your friends what you are doing, and encourage them to do the same. We also need to slow down on purchasing imported items. I am one who doesn't believe we MUST buy imported anything! Globalism has suffocated American industrial know-how and can do, and thus the skills of self-preservation.

The problem in America is the same problem as in the rest of the nations on our planet; it's the rich/poor system. As long as rich people get richer, the country and the world will continue to spiral towards the oblivion we see elsewhere around the world. We must again tax the rich according to the benefits they have acquired through a system slanted in their favor at the outset; once upon a time if one earned in excess of the masses annually, one would be obliged to give back in kind to the system.

I am not a socialist or a communist. Nor am I currently poverty-stricken. But we are our brother's keeper, and as long as competition squashes the natural caring for our nation, we will keep slouching as a civilization toward that beastly keeper of Hell.

On the national front, here's some advice from an old codger:

Cut non-essential government spending. Nearly all of it is non-essential. Cut all social programs. Cut all pork spending. Cut at least half of the humongous Federal work force (the government will run better.)

Bring our troops home who are scattered all around the world. We'll be stronger. Drastically downsize our armed forces, but maintain a large reserve in case we're attacked.

Bail out no one. No home owners, no Companies. For every company or homeowner that fails there is someone there to pick up the pieces at a bargain price. We're a resilient people. We'll bounce back.

Tighten our belt. If we survived The Great Depression—we can survive anything. I'm near eighty and I remember the depression. It was awful. Incidentally, we were slowly pulling out of it before WWII started.

McCAIN REBUTS ARGUMENTS TYING HIM TO BUSH

CAN ANY REPUBLICAN HERE voting for McCain tell me five things that John McCain will do differently than President George W. Bush?

1) 2003: Senator McCain called for a surge in troop levels in Iraq. Bush refused. Adopted in 2007, McCain's surge strategy won the war in 18 months. Had Bush listened to McCain instead of General Colin Powell and Secretary Donald Rumsfeld, the Iraq war would have been over in mid 2005. Obama to this day won't admit that the surge strategy has turned out to be superior to the cut-and-run strategy.

2) 2005: Energy Policy Act of 2005. Bush and VP Cheney proposes an energy plan that gives away billions of dollars in pork to energy special interests. McCain opposed it. Senator Barack Obama and other special interests on both sides of the aisle supported it.

3) 2008: SEC Chairman Cox and Secretary Paulson asks Congress to draft bail-out legislation. Senate and House majority caucusses draft a bill that includes major pork such as a $600 million per year every year slush fund to ACORN (the electoral-fraud, sub-prime mortgage "community organizer" organization). Desperate to get a bill, Bush supported it immediately. Obama came out in support of it as well. McCain opposed it until sufficient modifications were made to the bill to ensure that its funds will go towards the bailout of the economy and not special interests like ACORN. Obama continues to accuse McCain of being "erratic" because he opposed it (when it was loaded with pork for ACORN) before he was for it (after getting tax-payer protection into the bill).

Of course, I can go on and on. But for argument sake, let's look at two more public policy decisions.

4) Neutral with Bush) Senate Bill 190 in the 2005 Congress, McCain co-sponsored legislation to rein in Fannie Mae and Freddie Mac. Fannie and Freddie's powers-to-be in the United States Congress, in this case Senate Banking Chairman Chris Dodd and House Banking Chairman Barney Frank, among others indebted to Fannie and Freddie on both sides of the aisle, opposed it. Of course, Fannie and Freddie, in conformation with the banking regulation Community Reinvestment Act which made it mandatory that banks make loans to people who can't pay it back for politically correct purposes, which Obama calls a "good idea" because his front group ACORN bullied banks into making them, Fannie and Freddie CEOs Jim Johnson and Franklin Raines made tens of millions of dollars peddling these toxic loans and earned themselves advisorship in the Obama campaign and therefore possibly cabinet positions should there be a Barack Obama ial administration.

5) The Bush Water Resources Development Act of 2007. This act provided money to the construction of roads and levees. However, it was loaded with pork barrel spending. McCain co-sponsored legislation to guarantee road and levee projects got the money first before it went to special interests. Special interests on both sides of the aisle, including Obama of Illinois, prevailed even over a ial veto. Of course, afterwards, an interstate bridge in Minnesota collapsed killing tens of people, and not atypical seasonal flooding in Iowa subsequently overran levees subsequently. Had McCain and Bush had their way, the funds earmarked to road and levee repairs would have actually gone to road and levee repairs, thus saving lives and property, instead of special interests.

Thank you for your open-mindedness. I trust you will research these legislations to find them factually accurate and join this recent Obama-to-McCain convert in spreading the message that on the big issues of the day, whether it was with or against Bush, McCain has been always right, and when Obama agreed with McCain, he was right, but every time Obama disagreed with McCain, Obama was wrong.

Found on an ABC News blog posted by a fellow named James. And let us not forget, both candidates threw in with the Bush FISA extensions, the domestic spy bill, which hardly differentiates between Joe the Plumber from Toledo and Abdullah the suicide bomber newly arrived from Pakistan, also now residing in Toledo.

JAPAN CONSIDERS WORLD BAILOUT

Not that this generosity would be anything but a stop gap for the ailing American economy, thanks to a dwindling industrial base and our need to tack our economy to production of real goods.

TOKYO—Kotaro Tamura, an investment banker turned Japanese lawmaker, has an immodest proposal for healing the sick global economy, making all Japanese richer and compelling the United States to be more deferential toward Japan.

"We are in a special position because we have huge money," Tamura said, referring to about $950 billion in government foreign reserves, $1.5 trillion in public pension funds and $15 trillion in personal financial assets, about $8 trillion of which is on deposit at shockingly low interest rates in Japanese banks.

"We should send the signal that we are ready to save the world with this money," he said in an interview.

Tamura leads a group of 65 lawmakers from the ruling Liberal Democratic Party who have proposed to Prime Minister Taro Aso that Japan treat the global financial meltdown "as a huge opportunity for us."

They are urging the government to inject some of its abundant cash into troubled U.S. and European banks, in return for equity, and to purchase distressed corporate assets at fire-sale prices.

"The economy of every major power has crashed, and Japan has the least tainted market in the world," Tamura said.

The chronically risk-averse habits of Japanese savers, who keep most of their trillions in accounts that pay less than 0.5 percent interest a year, suggest that Tamura's plan to save the world and make Japan richer is unlikely to generate much popular support.

"We are a bank-centered nation that avoids risk, even good risk," said Akira Kojima, chairman of the Japan Center for Economic Research.

Kojima called the idea of investing some of Japan's cash in the midst of the financial crisis a good one, if done prudently. "It could be a catalyst for changing Japanese investment management strategy," he said.

At the same time, he said, it would be all but impossible to carry out, given the conservative bent of the government and the public.

Read it all.

RIDING THE BIG WAVES

Capitalism operates in waves. I have held the opinion for a decade or so that the United States would need to eventually ease into a form of national capitalism in order to compete with similar large regimes in China, Russia, Europe, and several oil-rich quasi-socialist entities in the Middle East. Let me be perfectly clear. I am not advocating a misguided heavy-handed socialist agenda for America, or anything remotely close to the pie-eyed Marxist flim flam so popular among Left-wing bookstore café hipsters who are as personally selfish as any pickup truck-driving capitalist I've ever met. Yet so many of these lovely people with the trés chic smiles embrace an ideology which always seems to end in a pernicious totalitarianism and uninvited oppression by an elite class, quite a shell shocker or two in scale from the worse forms of capitalism ever practiced. Forget all that shuck and jive about false consciousness. It exists, but no one has a monopoly on a justifiable antidote. Life is not that damn complex, even for the uneducated. After all, even for the Big Kahuna, negotiating a Big Wave is a good thing. Negotiating a tsunami, not so much.

I predicted this need to ease into a form of national capitalism back in the 1990s to a loosely knit group of internationalists who were known as the Sworgists for no other reason than the fact that we had gathered around the fledgling Scenewash Project to discuss the future of capitalism. Back then, I was a staunch believer in the capitalist system, and at some point in the late 90s I coined the phrase, "Capitalism has proven to be the most effective and purest form of communism ever practiced."

Having founded the listserv I dubbed—THE SWORG SWILL—I was operating among several staunch Marxists, and a couple of progressives who decried all previous failed experiments, of which Situationist Marxism and formal capitalism were the two more prominent. We hailed from Washington, DC, Austin, TX, Nottingham, England, Peoria, IL, and Sidney, Australia. All of us intuited that capitalism was weakening and its constitutional faultlines deepening. Trapped in our own miasma and personal biases however, we often disagreed on how to proceed with our investigations, and the group ended rather abruptly in May, 2000, after several years of communication.

But I had I suggested that we didn't need no stinking revolution because I viscerally agreed with the poet and musician John Lennon, who rejected revolution while advocating peace. No bloody pacifist am I—given the horrid nature of the world—I however still prefer peace to war, a slap in the face or a kick in the collective ass to total war, and a purpose bounced ounce of dignity in life for everyone not waving a death sentence at me or my family. My impression then and my impression now is that capitalism would fall of its own weight and greed, and in that particular historical moment, a massive reorganization towards a kinder gentler socialist model could possibly improve the government, its daily standards, and the uncommon conditions of more common people struggling in this world, where unfortunately the many prop up the few.

I think that time has come. To that end, let's observe the festering approach in today's New York Times:

FINANCE EXPERTS SAY THAT HAVING Washington take stakes in United States banks now—like government interventions in the past—would be a promising move to address an economic emergency. The plan by the Treasury Department, they say, could supply banks with sorely needed capital and help restore confidence in financial markets.

Elsewhere, government bank-investment programs are routinely called nationalization programs. But that is not likely in the United States, where nationalization is a word to avoid, given the aversion to anything that hints of socialism.

In past times of war and national emergency, Washington has not hesitated. In 1917, the government seized the railroads to make sure goods, armaments and troops moved smoothly in the interests of national defense during World War I. After the war ended, bondholders and stockholders were compensated and railways were returned to private ownership in 1920.

During World War II, Washington seized dozens of companies, including railroads, coal mines and, briefly, the Montgomery Ward department store chain. In 1952, President Harry S. Truman seized 88 steel mills across the country, asserting that unyielding owners were determined to provoke an industrywide strike that would cripple the Korean War effort. That nationalization did not last long, though, because the Supreme Court ruled the move an unconstitutional abuse of presidential power.

In banking, the government took an 80 percent stake in the Continental Illinois Bank and Trust in 1984. Continental Illinois failed in part because of bad oil-patch loans in Oklahoma and Texas. As the nation’s seventh-largest bank, Continental Illinois was deemed “too big to fail” by federal regulators, who feared wider turmoil in the financial markets. In the end, the government lost an estimated $1 billion on the bad loans it bought as part of the takeover of Continental, which eventually became part of Bank of America.

Read it all.

THE FRAUD, THE FIX, THE FOOL

Andy Kessler of the WSJ has piped in with some good news in the works which should help ease the tensions of us little folks seared with doubts and fears over this Wall Street monstrosity. But then, why in the world should we believe the holy writ of the very folks who is supposed to scrutinize the swindlers who nuanced this mess?

IN 1992, HEDGE FUND MANAGER George Soros made $1 billion betting against the British pound. In 2007, John Paulson's Credit Opportunities fund correctly bet against subprime mortgages, clearing $15 billion for the year and $3.7 billion for him. Warren Buffett is now hoping to make big money on Goldman Sachs.

But these are small-time deals. My analysis suggests that Treasury Secretary Henry Paulson (a former investment banker, no less, not a trader) may pull off the mother of all trades, which could net a trillion dollars and maybe as much as $2.2 trillion—yes, with a "t"— for the United States Treasury.

Here's what's happened so far. New technology like electronic trading meant that Wall Street's bread-and-butter business of investment banking and trading stocks stopped making much money years ago. So investment banks took their enormous capital and at first packaged yield-enhanced, subprime mortgage loans into complex derivatives such as collateralized debt obligations (CDOs). Eventually and stupidly, these institutions owned them for themselves—lots of them, often at 30-to-1 leverage. The financial products were made "safe" by insurance products known as credit default swaps, a credit derivative from companies such as AIG. When housing turned down, the mortgages and derivatives were worth a lot less and no one would lend Wall Street money anymore.

Then the piling on started. Hedge funds could short financial stocks and then bid down the prices of CDOs stuck on Wall Street's balance sheets. This was pretty easy to do in an illiquid market. Because of the Federal Accounting Standards Board's mark-to-market 157 rule, Wall Street had to write off the lower value of these securities and raise more capital, diluting shareholders. So the stock prices would drop, which is what the shorts wanted in the first place. It was all legit.

There is a saying on Wall Street that goes, "The market can stay irrational longer than you can stay solvent." Long Term Capital Management learned this lesson 10 years ago when it got its portfolio picked off by Wall Street as its short-term financing dried up. I had thought the opposite—hedge funds picking off Wall Street—would happen today. But in a weird twist, it's the government that is set up to win the prize.

Read it all.

THE CRIMINAL COLLAPSING OF AMERICA

SHE IS ABSOLUTELY ON THE MARK. We appear to be witnessing a coup. But by whom? Mop-up on aisle seven. Is it even possible to push back on the two dominant political parties? Is it too late? Have the mendacious Tri-lateral Commission globalists finally made their move to wrestle control of whatever resources that remain to them?

Great speech by Congresswoman Marcy Kaptur, D-Ohio...

As one wit put it, "The whole American banking system needs to be changed. American families need to save more and spend less and pool their resources together to achieve their goals. In that way, they don't have to pay the price for living beyond their means. Cash is king. Those who have lost their jobs and can't pay their mortgages, should either sell or rent out their homes, room by room, and look for something else to do to pay the bills in the meantime. Give up the debit and credit card, and pay with cash."

As much as this pains a "big spender" like myself, this sober but grim assessment and strategy for surviving it, even if still possible, appears to be the elephant in the room.

And where are the two presidential candidates and the tar baby MSM while this meltdown of American financial markets is continuing? Quick on the draw, Senator John McCain suspends his campaign, and rushes back to Congress to join Congresswoman Kaptur to shore up his prescient warning of two years ago. So let's clear up some of the disinformation coming out of the media the past 24 hours or so.

John McCain got involved in the bailout negotiations after Treasury Secretary Henry Paulson told Senator Lindsey Graham yesterday that the bailout plan would fail unless McCain came in and brought balking Republicans aboard, according to news anchor Bob Schieffer on this morning's Early Show. Schieffer's account stands in stark contrast with the allegation by Democrats like Barney Frank, Harry Reid, and their MSM cohorts that McCain's moves of yesterday were nothing more than a political "stunt."

Present but uncommitted Barack "Listen, I'm skinny but I'm tough" Obama is hiding out in battleground Tampa hypocritically practicing for a foreign affairs debate—obviously serving his nature in refusing as usual to take a stand on this financial ballout plan, preferring to stick his finger in the wind for clues and pay grades, while his Obamabots with every tick of the atomic clock, hustle and bark like frothing maniacs in decrying that Governor Sarah Palin is nothing more than a mental bulimic in everything from raising her five precious children to worshipping the fatted calf of political affairs.

Joltin' Joe Biden—the Human Gaff Machine—seems to have completely dropped off the political radar, even though he is up to his highballs in this failing economy mess, having been in the pocket of Big Finance most of his congressional career. Actually Senator Biden has never been on the radar in this election except to tally his daily blooper, his credentials as a long sitting senator from the Great State of Delaware and two failed presidential runs obviously affording him the opportunity to rest on his laurels.

The mainstream media? Go fish. The MSM would be a laughing stock if not for the undeniably vicious fangs dripping with the blood of journalism's proud history, and its mangled corpse now rotting on the ground, cast aside as ill-suited for these more spectacular times, fangs that it bares for all but its Most Chosen One during this election cycle. The air around DC is thick with intrigue, the stuff of cloak and daggers, political machine tactics, faded hopes and involuntary convulsions, the government itself just another animated corpse masquerading as business as usual.

This has been an ugly, ruthless campaign. Just ask Hillary Clinton supporters. The question on the angry quivering lips of millions of earnestly informed citizens who fear the worst in these Dickensian times, yet whom are still clinging to hopes of electoral salvation one well-equipped leader at a time, is this—will we (let us pray), as a nation of consequence, once brimming with charm, courage and promise, even survive the circular insanities informing this season's election process?

Or will November 4, 2008, actually launch an even uglier civil strife, starting with riots in the cities when one side eventually loses, fair and square, or not? Have we fallen from grace as a nation so far and so fast that The United States of America now resembles a third world dictatorship right down to the inability to transition political power without visiting violence and thuggish atrocity behind the scenes and on Main Street?

Of course with the law of unintended consequences always on our breath, perhaps we are setting ourselves up for yet another wrinkle in the rise of World War III, or worse—some foul amalgamation of all of the above as we rush to transcend race, industry and intelligence by insisting that every living creature on planet earth is somehow a racist, is somehow just plain ignorant, is somehow a troll, is somehow a bot, and we are certain, is somehow too poor for comfort, and thus so very obviously quite irrelevant in our almighty pursuit of liberty and justice for the few who make what seems increasingly to be the cheater's grade?

An enemy in American clothing. And I mean you and your kind, Bozo!

Obviously some once mighty heads need to roll under the bus before we will any of us quite be ready to look ourselves in the mirror again without seeing an enemy of the people, even as not a few very real enemies infiltrate our shores. Let me be absolutely clear. Unless these malignant financiers are prosecuted to the full extent of the law and then some, for fraudulent schemes, America will NEVER recover. Our leadership must not let these people take the money and run. They must pay the price of their plunder. Here is a link to McCain's speech given to former President Bill Clinton's Global Initiative just before he departed for Washington.

Even the often ignored but ever so outspoken and vigilant constitutionally-correct congressman from Texas—Ron Paul—doesn't offer much more than a rather vague and anemic response to this very real and unquestionably immediate (or so THEY say) economic crisis. And as we have been saying for some time now, this is only the tip of the global iceberg American industry is facing. Let's just pray that somebody now whirling around the drain will actually grab hold of reality and finally stand up for common decency and equitable justice for all, after all is said and done.

Half of life is just showing up.
—Woody Allen

HILLARY OFFERS SOLID FINANCIAL PLAN

HILLARY CLINTON IS NOT SQUIRRELED away in the corner knitting a snappy sweater for each of her former rivals. Quite the contrary. Despite Obama's continued pleas that she somehow put away their differences, his dirty tricks, embrace party unity, and campaign for him like the Chosen One he is, she continues to stake her reputation, past and present, on the idea that assisting in this long expected financial crisis of the American republic is far more important than slaving away for any single candidate, particularly one who is failing to measure up to his own hype.

Watch the video and read the Clinton proposals to address the crisis:

Create a new entity to buy up and quarantine toxic mortgage securities that are dragging down the markets which would allow the markets to stabilize. Last spring Senator Clinton was among the first to call for a new entity modeled after the successful Depression-era Home Owners’ Loan Corporation (HOLC) or the Resolution Trust Corporation (RTC) created after the Savings and Loan crisis.

Place a temporary moratorium on the most abusive stock transactions, many of which involve the “short-selling” of stocks. Yesterday, Senator Clinton wrote to the Securities and Exchange Commission urging such a moratorium, saying it would provide breathing room for the markets to recover, for investors to make accurate assessments of companies and for regulators to assess what trading practices should be permanently banned.

Convene an emergency economic summit to show the American people their government is working together. Bringing together leaders in the administration and Congress with lenders, consumer advocates, non profits, financial institutions, and all stakeholders will allow a coordinated response to the crisis.

Aggressively pursue and encourage mortgage modifications. Senator Clinton has introduced legislation to remove barriers to mortgage modification and to encourage lenders to voluntarily work with borrowers to keep them current on payments and in their homes.

Restore competent federal oversight of the increasingly complicated financial markets. The rapid evolution of the securities and banking industry overwhelmed the current regulatory framework, resulting in a “shadow banking system” that operates outside of oversight and without accountability.

Require transparency and accountability on executive pay. Senator Clinton has proposed the Corporate Executive Compensation Accountability and Transparency Act to impose new transparency rules on executive pay, end the accounting techniques that hide compensation, and provide shareholders a say in executive compensation packages.

Ensure the accountability of financial institutions borrowing money from the Federal Reserve’s new lending facilities. Taxpayers deserve to know that the companies they are bailing out are on the road to recovery and aren’t throwing more good money after bad.

Senator Clinton urged the administration and the Congress to move quickly to adopt these proposals and prevent the crisis from worsening. “Time is of the essence. Any delay could be ruinous for both financial institutions and confidence in our markets,” she said.

CHRIS DODD AND BARACK OBAMA

Obama and Dodd. Tight as ticks in the Financial Dawg House.

WORKING FROM TOWNHALL.COM, Amanda Carpenter exposes the Democrat connection to the Fannie Mae and Freddie Mac fiascos with her compellingpiece—Obama Owns Housing Bubble Crisis. You will recognize the names and the faces. All Democrats. Excepting McCain who in 2005 and 2006, warned of the approaching problem that the housing giants were hiding behind closed doors, protected by influential Democrats in the legislature, including Chris Dodd and Barack Obama.

There may be nothing new under the sun, but there is certainly nothing new in Washington.

Why do I say this? Because Obama now places the blame on McCain, as old Washington power. And yet, incredibly, here are the words of one of Obama's own top financial advisors:

In Bubble-lusions: Why most real-estate agents aren't getting rich, published in Slate on September 23, 2007, the author wrote, if you want to make money off the housing bubble, you'll have to do it the old-fashioned way: Buy a place with a no-money-down mortgage and then flip it.

In A Reality Check For Home Sellers, published in the New York Times that same day, the author wrote of the conflict between economists and real people, and said people who refuse to sell their houses for less than they paid for them are violating a cardinal rule of the market: stuff is worth what it’s worth. It doesn’t matter what you paid for it...

By being hung up about whether your condominium will sell for what you paid for it, you aren’t just driving yourself crazy trying to get a buyer. You may be threatening the very performance of the economy and driving up the unemployment rate—provided that many others behave in a similar way. What is to be done? Well, if you are holding out for an above-market price to recoup your losses, perhaps you would do well to hear the advice that Professor Joe Blow gives his own family members.

"If you want to sell your house then you list it at the market price and you sell it," he said. If you don’t really want to sell then don’t put it on the market. But don’t say you want to sell and then set the price so high that you spend the year cleaning up every morning, having people walk through your living room and look in your medicine cabinets and reject you. That's just painful—and expensive."

Apparently, this flippant economist's carefully nuanced research offers a simple lesson for everyone out there waiting for a high price to push them back into the black: You must be dreaming.

All of the following are written by Obama economic policy adviser Austan Goolsbee, a provocative thinker whose above language will assuredly not show up in any Obama speech anytime soon.

TAKING A LOOK AT POVERTY'S LEADERSHIP

WHAT DO THE TOP TEN cities with the highest poverty rate “all” have in common? Answer: Democrat leadership. And let's not try to frame this situation as a variation of which came first, the chicken or the egg:

Detroit, MI (1st on the poverty rate list) hasn’t elected a Republican mayor since 1961;
Buffalo, NY (2nd) hasn’t elected one since 1954;
Cincinnati, OH (3rd)… since 1984;
Cleveland, OH, (4th)… since 1989;
Miami, FL (5th) has never had a Republican Mayor;
St. Louis, MO (6th)…. since 1949;
El Paso, TX (7th) Has never had a Republican Mayor;
Milwaukee, WI (8th)… since 1908;
Philadelphia, PA (9th)… since 1952;
Newark, NJ (10th)… since 1907.

The turmoil in the capital markets is bad news and is forcing each candidate to reassess their current pronouncements on the economy. So, let’s ask some questions. Of the two candidates for President, who got the most money from the two financial giants now in the news–Lehman Brothers and AIG?

John McCain received $117,500 from Lehman Bros.
Barack Obama received $370,524 from Lehman Bros.

How about AIG?

McCain got $36,875 from AIG
Obama raked in $75,899 (+205%)

Got that? Barack Obama, the guy who supposedly is not beholden to special interests, took three times as much money from Lehman Brothers and more than twice as much from AIG.

Gee, and who did the now Government financed mortgage broker Fannie Mae give its money to when it wanted to influence a politician?

OpenSecrets lists the top three politicians in which FNMA “invested” from 1989 to 2008.

Top Recipients of Fannie Mae/Freddie Mac Campaign Contributions, 1989-2008 Name Office State Party Grand Total

Dodd, Christopher S CT D $165,400
Obama, Barack S IL D $126,349 ($6000 came from the PAC)
Kerry, John S MA D $111,000

What about McCain?

The folks at Fannie Mae didn’t show him a lot of love. According to Open Secrets:

McCain, John S AZ R $21,550 (all from individuals).

Oh yeah, and who tabbed the former head of Fannie Mae to head up his Vice Presidential search team? OBAMA, that’s who. Back in May Barack turned to Jim Johnson, former CEO of Fannie Mae. Who is Johnson?

Johnson served as Fannie Mae CEO from 1991 to 1998 and has a long history in both Washington politics and business. He served on the boards of numerous companies, including The Goldman Sachs Group, KB Home, and Target Corporation, and has been Vice Chairman of Perseus LLC. He also was a corporate finance managing director for Lehman Brothers. He was an executive assistant for Vice President Walter Mondale (1977-1981) and a U.S. Senate staff member. Johnson also helped screen running mates for Democratic presidential nominees Walter Mondale in 1984 and John Kerry in 2004.

When it came time for a tough decision who did Barack turn to? A former community organizer per chance? Hell no! He went with the inside the beltway uber lobbyist.

So, Obama bots, save your sanctimonious bullshit. When it comes to cozying up to big players and wealthy Wall Street types smack in the middle of the lastest scandals and crises, Barack Obama is in a league of his own. That is “change” you want to believe in? What a goddamned joke!!

Deal with reality, John McCain wisely was not in bed with these guys. Will the media ask Barack to explain? Probably not.

And to further drive home the point, here is John McCain back in 2006 railing against the power of lobbyists like Fannie Mae:

The OFHEO report also states that Fannie Mae used its political power to lobby Congress in an effort to interfere with the regulator’s examination of the company’s accounting problems. This report comes some weeks after Freddie Mac paid a record $3.8 million fine in a settlement with the Federal Election Commission and restated lobbying disclosure reports from 2004 to 2005. These are entities that have demonstrated over and over again that they are deeply in need of reform.

For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac–known as Government-sponsored entities or GSEs–and the sheer magnitude of these companies and the role they play in the housing market. OFHEO’s report this week does nothing to ease these concerns. In fact, the report does quite the contrary. OFHEO’s report solidifies my view that the GSEs need to be reformed without delay.

I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.

McCain’s last comment should lead his next batch of Presidential ads. Where was Obama? He was pocketing Fannie Mae cash. Any questions? Breaking news! Prominent Clinton backer Lynn Forester de Rothschild is set to endorse McCain/Palin today. The Obama fallout continues.

Thanks to Larry Johnson of No Quarter.

Addendum: Rumors about de Rothschild coming out for McCain have been confirmed—she called Obama arrogant and not in touch. And here she is with Wolf Blitzer.

Posits another poster named Wolfman Jack: "I think this hits the nail on the head. The Dems ARE “elitist” in the sense of thinking themselves superior, intellectually, culturally, socially, than regular working people. Republicans seem to be more comfortable with working people. I don’t really know why this is. I think of Al Gore eating the corn husk tamale wrapper, or John Kerry not knowing how to eat a Philly cheesesteak. It gives the impression that they only eat in fancy restaurants.

It is one of the main reasons Democrats lose. They are looking down at half of their own voters, or at least seem very out of touch. Obama’s comment about the price of arugula reminded me of Mike Dukakis comment about Belgian endive (he suggested that wheat farmers in the Midwest switch to growing Belgian endive). Obama is not JFK. He is Mike Dukakis.