“The recession is over”

It's kinda over, seems to be over, could be over, but...don't hold your breath. As Mike Whitney explains:

Yesterday's report from the Commerce Dept. confirmed that the economy expanded in the third quarter by 3.5 percent, better than most economists estimates. GDP had contracted in the four previous quarters in the longest and deepest recession since the Great Depression. Massive government stimulus, cash for clunkers, and inventory restocking accounted for most of the surge in economic activity. Consumer spending grew at 2.36 percent while consumer credit continued to contract at a near-record pace of 4.5 percent. Unemployment swelled to 9.8 percent, "with nearly nearly [sic] 26 million workers — 17 percent of the workforce — unemployed or underemployed," according to economist Mark Zandi. The economy remains extremely weak and is expected to lapse back into recession if the Obama administration fails to provide a second-round of stimulus.

In other words, the structural problems that produced the crisis remain. That is one reason the economy remains weak and recession-prone. The growth that brought the recession to an end merely expresses the effects produced by the Obama stimulus. This outcome was predicted, as Dean Baker points out. Nevertheless the Obama stimulus failed to implement the kind of structural reforms the economy needs if it is to strengthen as the reforms work their magic. Nor was it meant to effect reform of this kind.

What we are witnessing, then, is a macroeconomic effect produced by Obama's effort to restore to 'health' the system as it existed before the crash.

One benefit of the Obama stimulus: A slight decrease in the rate of unemployment.

Given the political benefits a presidential candidate could expect to gain from an economy that grows during an election season, it is only natural that a sitting president eligible for reelection would want to push hard for another stimulus program in order to dampen the effects of the crisis. Well, not in this case, for "…President Barack Obama hasn't requested more stimulus and recent polls indicate that a majority of people are against more deficit spending." Obama, it seems, faces political constraints:

The administration has done a poor job of explaining the advantages of reducing the output-gap or — for that matter — the overall objectives of Obama's economic recovery plan. Many people heap the bank bailouts (TARP) with the fiscal stimulus. This is a mistake that's easy to make. But the point needs to be clarified so more people don't needlessly suffer. It's up to Obama to articulate the differences in policy so the country can muddle through the tough days ahead. The problem is, Obama is afraid to use his skills as a communicator, because he thinks his message will offend financial industry constituents who wield tremendous power at the White House and on Capital Hill. The bankers and brokerage mandarins are more than happy with the present arrangement, which means that the conveyor-belt connecting the US Treasury to Wall Street will continue to operate at full-throttle diverting ungodly sums of money to broken banks and financial institutions rather than for unemployment benefits, work programs, and state aid.

Placating Wall Street appears to be an Obama priority. Crisis management, not crisis resolution through reform, informs his strategy. The financial elite, not the rabble, make up his constituency. To meet this strategic goal Obama can depend on the fears of the common American who, unsurprisingly, would rather the government put a stop on this deficit spending. Yet their fears and Wall Street's greed should not:

…stop Obama from doing the right thing and making the case for another round of stimulus. His job is to strengthen demand and put the country back to work. The rest is just politics.

Obama, I would add, should also make the case for structural reform. Neither massive unemployment nor widespread poverty are politically acceptable results for an economy as well-placed as the American.

How could we forget?

This day marks the 80^th anniversary of Black Tuesday, the stock market crash that signaled the onset of the Great Depression.

Entitled to loot

This is one to savor as the world plunges into the abyss

One may find this sentiment expressed in the Guardian:

One of the City's leading figures has suggested that inequality created by bankers' huge salaries is a price worth paying for greater prosperity.

In remarks that will fuel the row around excessive pay, Lord Griffiths, vice-chairman of Goldman Sachs International and a former adviser to Margaret Thatcher, said banks should not be ashamed of rewarding their staff.

Speaking to an audience at St Paul's Cathedral in London about morality in the marketplace last night, Griffiths said the British public should "tolerate the inequality as a way to achieve greater prosperity for all".

Monday, Monday…

Can't trust that day

October 19 marks the 22^nd anniversary of the Black Monday stock market crash.

Banksters face opposition

Adrianne Appel points out that:

The U.S. Federal Reserve and U.S. Treasury have doled out trillions in taxpayer dollars to banks and corporations and now the boom may be falling on what lawmakers say is a shroud of secrecy that surrounds their actions.

In separate hearings on Capitol Hill this week, lawmakers expressed support for a bill to make the Fed's decisions more transparent, and for the findings of a special inspector general report that calls for greater transparency in the Treasury's bailout of banks, called the Troubled Asset Relief Programme (TARP).

The Fed Chair sought to reassure those paying attention:

"We are taking all the steps necessary to protect taxpayer money. One sensitive area is to have Congress second-guessing monetary policy," Bernanke said.

Bernanke's words are not at all reassuring, I would say, given the origin of the crisis, which can be located in the dysfunctional relationship between Wall Street and the Federal government. Consider Bernanke's position on the controls placed upon the Fed:

"If we raise interest rates at a [Fed meeting] and someone in Congress didn't like the decision and ordered an audit, isn't that interference?" he said.

Or political oversight…

Wall Street has hired a Kool-Aid maker…

PR campaign intends to patch a hole by applying a coat of whitewash

According to a Bloomberg report (the link comes via Zero Hedge):

Wall Street's largest trade group has started a campaign to counter the "populist" backlash against bankers, enlisting two former aides to Treasury Secretary Henry Paulson to spearhead the effort.

In memos of confidential meetings with top financial executives, the Securities Industry and Financial Markets Association said it began this month the "execution phase" of the operation, which pledges to "embrace change" and accountability. The plan targets policy makers and the media in New York, London, Washington and Brussels and calls for a "city-by-city, grass roots" approach.

The securities industry "must be perceived as part of the solution, which will allow it to better defend against populist overreaction," the documents, prepared for a June 17 meeting of SIFMA's board, said.

One obvious question: Why would SIFMA and its clients believe a grass roots approach might work when the popular backlash it wishes to counter can be considered the manifestation of a popular consensus that reflects a widespread type of experience?

On the other hand, everyone involved is not so gullible as to believe that image management will work:

The [SIFMA] group's polling "indicated that there is a lot of anger out there and feelings that the industry is not focused," the minutes said. While "Wall Street and CEOs" received low scores, local banks and brokers got better marks.

The outside consultants join SIFMA staff for a daily 10:00 a.m. conference call, "given the importance, complexity and real-time nature of the campaign style-implementation," according to one of the memos.

Still, that kind of approach may not be enough for Wall Street to lift its reputation, said Bill Brown, a visiting professor at Duke University School of Law in Durham, North Carolina.

"It's right for them to try to come back from this, but they have to realize that they are not going to be reborn into what they were," said Brown, who was global co-head of listed derivatives at Morgan Stanley. "The best P.R. comes from doing good, not from having to manage your image."

Another Chicago crime boss

Obama's neomercantilist moment in American history

This is my creative interpretation of Steven Lendman's recent judgment of Barack Obama:

Since taking office, Obama, wittingly or otherwise, has headed the largest criminal enterprise in history — the mass looting of national wealth to enrich his Wall Street benefactors. He assembled a rogue economic team of Clinton/Robert Rubin retreads — to fix the current crisis they engineered.

On the Wall Street grifters

Glenn Greenwald asks his readers to:

Just think about how this [Wall Street scam] works. People like Rubin, Summers and Gensler shuffle back and forth from the public to the private sector and back again, repeatedly switching places with their GOP counterparts in this endless public/private sector looting. When in government, they ensure that the laws and regulations are written to redound directly to the benefit of a handful of Wall St. firms, literally abolishing all safeguards and allowing them to pillage and steal. Then, when out of government, they return to those very firms and collect millions upon millions of dollars, profits made possible by the laws and regulations they implemented when in government. Then, when their party returns to power, they return back to government, where they continue to use their influence to ensure that the oligarchical circle that rewards them so massively is protected and advanced. This corruption is so tawdry and transparent — and it has fueled and continues to fuel a fraud so enormous and destructive as to be unprecedented in both size and audacity — that it is mystifying that it is not provoking more mass public rage.

Greenwald continues by marking some of the ways President Obama and his administration had already helped these grifters to loot the public's money. He quotes with approval William Black who went so far as to identify the financial system as one grand Ponzi scheme and Secretaries of the Treasury Geithner and Paulson before him of "covering up" this immense fraud. Campaign rhetoric aside, that the Obama administration gave this help should have surprised no one. Not only had the FIRE sector (Finance, Insurance, Real Estate) given candidate Obama more money than any other candidate, but Wall Street has effectively captured not only the executive institutions which finance capital found most interesting but even the federal government as a whole, as Greenwald points out by quoting from Simon Johnson's recent article on the crisis.

Briefly put, the federal government is becoming — or has become — a massive rent extraction mechanism which serves the interests of American finance capital.

Why?

Now that a flock of buzzards await GM and Chrysler to finish it, John Nichols directs this broad but obvious question towards Detroit, Wall Street and Washington, DC: "How come, if the auto industry must feel the pain, the speculators on Wall Street and the CEOs of the big banks and insurance companies only feel the love of the TARP program?"

Really…. Does Obama's preference here reflect the effective limits of America's crony capitalism? Permitting much of America's auto industry to die without a real fight makes as much sense as the previous indifference to the plight of America's steel industry.

Some crimes of the greedy, reckless and self-absorbed

Drawing upon Hannah Arendt's famous analysis of Adolf Eichmann, the Nazi regime, the destructive potential a modern administrative system harbors within and, of course, upon the Holocaust as a manifestation of that destructive potential, Shoshana Zuboff contends that: "The economic crisis has demonstrated that the banality of evil concealed within a widely accepted business model can put the entire world and its peoples at risk." Indeed, it can, for how might one assess a deep global economic crisis but as an systemic event that puts millions — if not billions — at risk? What also might one say about those individuals, groups and organizations responsible for the crisis? Zuboff continues by asking:

Shouldn't those businesses be held accountable to agreed international standards of rights, obligations, and conduct? Shouldn't the individuals whose actions unleashed such devastating consequences be held accountable to these moral standards?

Her answer:

I believe the answer is yes. That in the crisis of 2009 the mounting evidence of fraud, conflicts of interest, indifference to suffering, repudiation of responsibility, and systemic absence of individual moral judgment produced an administrative economic massacre of such proportion that it constitutes an economic crime against humanity.

Zuboff fails to provide a remedy for these crimes which were so neatly woven into the fabric of the modern world that they became perceptible to common folk long after the disaster began to snowball. This absence is unsurprising since the blame for the crisis properly extends to individuals, organizations and groups worldwide. We live in a globalized and globalizing world. The key problem: How might so many with so much power be brought to justice? The task is daunting. Yet parsimony in practice is possible. This potential derives from the fact that the major portion of the blame for the latest crisis falls upon the putative "masters of the universe." They earned this blame because with power comes responsibility. It is for similar reasons that countries like Great Britain and the United States deserve a special share of the blame since "[t]he use of force to configure a 'liberal' world economy (as Marx and Later Rosa Luxemburg argued) is what Pax Britannica [and later Pax Americana] was really about," according to Mike Davis (295). It is undisputable that the Western imperial powers gave shape to the modern world. Consequently they should at least be assigned responsibility for the world they have created and from which they have taken so much.

Another pundit jumps on the populist bandwagon

E.J. Dionne writes:

We are at the beginning of a great popular rebellion against those who showed no self-restraint when it came to lining their own pockets. Their entitlement mentality arose from an inflated sense of their own value and of how much smarter they were than everyone else.

The sound you are hearing in response to the AIG payoffs — excuse me, bonuses — is the rancorous noise of their arrogance crashing to earth.

Yet there is much hand-wringing that this populist fury is terribly perilous, that the highfliers who could not control their avaricious urges have skills essential to repairing the damage they caused in the first place.

Beware populism, we are told. Honor those AIG contracts. Forget about any moral reckoning and just fix the economy.

This view is wrong on almost every level, especially about populism. Of course not all forms of populism are attractive. But as historian Michael Kazin argued in "The Populist Persuasion," the "language of populism in the United States expressed a kind of idealistic discontent" and "a profound outrage with elites who ignored, corrupted and/or betrayed the core ideal of American democracy."

Is this not an entirely appropriate reaction to elite decisions dating to the 1980s that ultimately ran our economy into the ground?

Looting alleged at Merrill Lynch

This is Andrew Como's latest assertion about the defunct bank, according to the New York Times (the link comes via Naked Capitalism). The looting in question took the form of bonus payments taken by Merrill Lynch employees just before the Bank of America acquired the troubled investment bank. And, as Yves Smith of Naked Capitalism emphasizes, the Times story also reports the Como allegation that Merrill Lynch employees cooked their books to gain these bonuses:

"It appears that some of these losses may have been booked by Merrill employees who marked down their portfolios only after their 2008 bonuses were set," the attorney general wrote in the filing. "Despite the gargantuan unexpected losses, Merrill did not reconsider its bonus awards" and Bank of America did not request or demand that Merrill reduce its bonus pool, he wrote.

A second Times story indicates that the Obama administration will adopt an aggressive and, perhaps, coordinated strategy in this area. Momentum for a legal approach to the crisis and its sources has been building since last fall (see this, this and this).

Masters of the Universe whine for all to hear

It was only a matter of time before the crying game appeared

The New York Times reports that

…there is a lot of wincing [among Wall Streeters] about the [financial] profession's catastrophic loss of cultural cachet. Wall Street has become a target of populist rage, raw material for talk-show tirades, the occasional street protest and a lot of punch lines.

'Shit happens' even to the chosen few strong enough to push the world over the ledge. Of course, the culpable can manage the situation somewhat by relying upon denial:

Financiers tell their not-for-attribution account of the mortgage crisis like this: Americans undersaved and overspent for decades, relying on rising property values to bankroll their lifestyles. But nobody on Wall Street forced United States homeowners to take out loans on houses they couldn't afford, or refinance mortgages to spend money on cars they shouldn't have bought.

The esoteric securities underneath the current mess are, to the people who invented and marketed them, analogous to pharmaceutical drugs. Used correctly, they can enhance your life. Abused, they are lethal.

Some points:

First, while it may be true that the banksters and their kin never forced common Americans to undersave, overspend and take out loans they could not afford, as the Times article tells its readers, it is equally true that no one forced the banksters to loan money to individuals and families that could not repay these debts. Why did they do this? What motivated them to take make these dubious loans? Where, for that matter, was the system-wide commitment to due diligence when these loan-making practices were common?

Likewise, no one forced the banksters to securitize these dangerous loans, to trust the judgments made by the credit ratings agencies or to rely upon the politically compromised regulatory agencies which supervised the financial sector. In the end, not only are the banksters responsible for their deeds, it is evident they adopted these practices because of the incentives they faced and the goals they pursued. The opportunities for profit-taking sat before them and the banksters did not pass over these chances to make money. Finally, it is worth mentioning that the banksters as a whole and economic sector they occupy had the wherewithal and the motives to identify the systemic risks that were conspicuous features of these loan-making and loan-manipulation practices. Yet they refused to heed the warnings entailed by this available knowledge. Why? I ask because their refusal, when considered in hindsight, appears to be a form of collective insanity. The answer is obvious: They refused to take sufficient care because they wanted more than anything else to take massive profits and incomes from their activities.

In their superficial rationalizations the banksters stand tall with the pimps and drug pushers of the world, groups with whom they share a sense of ethical integrity and justice. Tony Soprano, for instance, would merely call the loan-takers "degenerate gamblers" or "stupid-greedy-fucks." The banksters, we have learned, snidely point to their myopia and naïveté. Both the gangsters and banksters feel superior to their victims and both wish to profit off of human frailty and myopia. I believe they receive the recognition they have earned.

But not every bankster is afflicted by the moral idiocy depicted above. Some do see the problem which arises when one denies the obvious and refuses to accept the responsibility entailed by one's humanity:

"People say 'Well, the Fed is to blame because there was all this loose money,'" said Luis E. Rinaldini, a former partner at the investment banking firm Lazard Frères, now at the merchant bank Groton Partners. "But guys who run banks are paid to be cautious when there's loose money around."

"I mean, if you had a bus driver who went 100 miles an hour on an icy road, you'd think he was crazy," he adds. "But if his boss said, 'It's our policy to drive faster as the roads get icier,' you wouldn't be surprised if the boss ended up in jail."

Will many of the blameworthy banksters spend their days in jail? Most likely will not.

Second, one might wonder if those banksters prone to bouts of self-pity also suffer from a loss of memory? It seems that they do since the relatively autonomous finance capital which first emerged in the 1970s undoubtedly fomented these recent systemic crises: The Latin American debt crisis of the late 1970s and early 1980s; the Savings and Loan crisis of the late 1980s; the 1987 Black Monday Stock Market Crash; and the Long-Term Capital Management crisis of the late 1990s. Each event foreshadowed the disaster we now confront. Each was dangerous. So, given the magnitude of the current crisis and the role Wall Street had in generating the crisis, outsiders like myself cannot help but to wonder what the banksters learned from the earlier crises? Anything? Or, did they fixate on the well-founded belief that Washington would eventually throw a golden lifeline to the reckless but well-placed financial capitalists?

Third, who actually abused the esoteric securities which are known to be the major proximate cause of the current crisis? The hapless and now ruined spendthrifts who took on debt they could not afford and did not completely understand? Or, perhaps, did the abuse issue from the overcompensated, overindulged and overvalued finance capitalists who allegedly knew what they were doing? I would lay the majority of the blame on those individuals and institutions with the means and the motives to prudently manage the risks given along with the use of these financial tools. To be sure, the federal government also shares in this blame, especially for enabling Wall Street to drag the world into this crisis. After all, with power comes responsibility. And most of the relevant powers responsible for the crisis can be located in Washington, DC and on Wall Street.

Bluntly put: These powers broke the economy, they own the subsequent crisis.

What happens when Wall Street loots all that it can?

According to Pam Martens latest essay, our well-heeled grifters petition Uncle Sam to do all the work for it:

We've arrived at the finish line in the race to the bottom and it's clear there are few winners: once the little fish were eaten, the big fish fed on each other (Madoff's Ponzi scheme and assorted hedge fund frauds against the wealthy). Now the big fish have no where else to feed but at the government's bailout trough, transferring the debt-ownership society to our children.

It looks like Wall Street business as usual….

Bloomberg (via EconoSpeak) reports that:

Goldman Sachs Group Inc., which got $10 billion and debt guarantees from the U.S. government in October, expects to pay $14 million in taxes worldwide for 2008 compared with $6 billion in 2007.

The company's effective income tax rate dropped to 1 percent from 34.1 percent, New York-based Goldman Sachs said today in a statement. The firm reported a $2.3 billion profit for the year after paying $10.9 billion in employee compensation and benefits.

Some crisis links (10.23-10.24.2008)

The police nationwide prepare to crack heads (maintain order) on election Tuesday, according to The Hill (via News from the Underground).

Alan Greenspan admitted to having made a mistake when "…he…put too much faith in the self-correcting power of free markets and…failed to anticipate the self-destructive power of wanton mortgage lending." So, in the end it turns out the earth is not flat….

Mike Whitney's latest article begins by noting that the credit crisis has abated somewhat. This has come about because:

The US Treasury and Federal Reserve are now underwriting the entire financial system. The free market has been abandoned altogether. Everything from commercial paper to money markets is now backed by the "full faith and credit of the United States". Without that explicit government guarantee, the credit markets would still be frozen and the system would crash.

Nouriel Roubini (via Naked Capitalism) recently predicted that hedge funds will fail, thus forcing countries to close their financial markets.

Following the global trend, the Dow fell again, today, according to the New York Times.

The good news: The continuing failure of the McCain-Palin strategy which, by attacking Obama, amounts to an appeal to the GOP's racist base.

Some economic crisis links (10.5.2008)

A German real estate bank — Hypo Real Estate — stands ready to collapse, according to Yves Smith of Naked Capitalism. Smith observes

The bank has a €400 billion balance sheet, which would make for a failure of a similar scale to Lehman's (Hypo's footings are roughly $550 billion, while Lehman's were $660 billion as of its last balance sheet date).

Even though Hypo it technically a bank, it is not a depositary institution, so rescuing it poses similar difficulties (procedural and political) to the authorities as Bear and Lehman did in the US. The financial system cannot take another body blow of this magnitude. The authorities had better patch this one up over the weekend, or we face even more credit market panic on Monday. [emphasis added]

Smith affirms the belief that a Hypo Bank failure may take the Euro with it.

Edward Cody of the Washington Post reports that European Union lacks a unitary strategy to manage the crisis. He also reports that sentiment exists to schedule and economic summit that would, hopefully, kill off the Bretton Woods system once and for all and replace it with a more rational and contemporary international financial system.

James Wilson and Bertrand Benoit of the Financial Times report that German Chancellor Angela Merkel and Finance Minister Peer Steinbrück intend to hold Hypo Real Estate executives accountable for their part in this disaster.

Daniel Dombey, James Politi, et. al. of the Financial Times report that passage of the modified Plan did little to stabilize the stock markets, perhaps because of the decline seen in the real economy in the United States and elsewhere and failure of the plan to quickly resolve the global financial crisis.

Sara Robinson of AlterNet debunks the belief now circulating among conservatives that identifies the Housing and Community Development Act of 1977 as the root cause of the current crisis.

Tim Arango and Julie Creswell of the New York Times announces the end of what can be called the second Gilded Age.

Some financial crisis links (10.4.2008)

Congressional Democrats carried the Plan to victory in the House vote yesterday. Thanks, Nancy! The Roll Call can be found here.

Alexander Cockburn commented on the Democratic Party and especially Obama's commitment to passing the Plan:

The brief mutiny is over. The Democrats, who control Congress, have pushed through the outrageous Paulson swindle, giving an initial $700 billion or so to Wall Street. The Democratic presidential nominee, Barack Obama, lobbied hard for the bankers' bailout, according to reps and senators receiving his phone calls. Obama voted for the package of course, and so did the vice presidential Democratic nominee, Joe Biden.

Cockburn continues:

Normally, in these elections, one tries to peer forward into the future, to alert people to impending villainies, still dim in contour. Rare is it to have corrupt servility to the Money Power so brazenly displayed by the Democratic ticket merely a month before the ballot. We have just witnessed a class struggle where, for once, we had a huge popular coalition stretching all the way across the political spectrum. The coalition was there; the anger was there; the timing was perfect.

…Obama's designated role in these fraught times is to de-fuse, not inspire; to urge the angered crowd to remain calm, and disperse quietly, not to march upon the citadel, pitchforks upraised.

Peter Morici addresses a few crucial problems in the real economy. The very bad news:

Today, the Labor Department reported the economy lost 159,000 payroll jobs in September, after losing 73,000 jobs in August.

This was much worse than was expected, as the full weight of the banking crisis, the cost of imported oil and job losses to China bore down on manufacturing and the broader economy with unrelenting pressure. The United States has lost jobs every month since December, even as GDP and productivity have grown.

So, American's should elect Obama and follow him to the land of milk and honey? Well, no:

Obama's tax and redistribute policies will not resurrect jobs, wages or the price of stocks in American retirement accounts. Ordinary Americans who have to earn their livings outside the cosseted confines of Wall Street will be not much better off two years from now. In fact, Obama's policies may make economic conditions worse. However, middle class distress gives populist promises…strong appeal. If Obama wants to make Americans better off, he would serve them better by straightening out the banks and taking substantive action on the trade deficit with China. Also, he would be less politically correct on energy and the environment. His platform is full of platitudes and generalizations but not enough substance.

One might conclude that Obama has been possessed by the ghost of Jimmy Carter if it were not for the fact that Carter still walks the earth.

CNNMoney reports:

Democrats who switched to "yes" votes include Rep. John Lewis, D-Ga., Rep. Elijah Cummings, D-Md., and Rep. Donna Edwards, D-Md.

Cummings noted before the vote that this was the most difficult vote for him in his 12 years in Congress. "But today we must step up and lead," he said.

Earlier this week, Cummings and Edwards were part of a group that had been working on an alternate proposal. The lawmakers had lobbied strongly but unsuccessfully to include, among other things, a change to the bankruptcy law that would let judges modify mortgages on primary residences, a move the lending industry has strongly opposed.

Cummings and Edwards said they had received calls from Democratic presidential nominee Barack Obama, encouraging them to change their minds. They said they received assurances that he was committed to the bankruptcy provision [emphasis added].

Thanks, Barak…

California, the homeland of modern conservatism, has been reduced to reaching for straws. Oddly enough, Friday's House vote gives them a bit of hope, according to Lifsher and Halper of the Los Angeles Times. What if no one wants to help Der Arnold?

John William of the Financial Times makes a prediction:

The first world war was not "the war to end all wars", and the dotcom bust only temporarily blighted the attractions of technology investments. But it will take many years for finance and its high priests to return to their position of unchallenged power — which will be no bad thing.

We can only hope for this bit of good fortune.

Some financial crisis links (10.1.2008)

The Senate plans to vote this evening on a slightly modified version of the Plan. Articles reporting on this possibility include:

Agence France-Presse

Business Week

Forbes

New York Times

Washington Post

Wall Street Journal

Joseph Stiglitz weighs in on the initial failure of the bailout Plan (via Naked Capitalism): "A sad day for Wall Street, but it may be a glorious day for democracy." His hope:

…Congress will now devise a plan that is not based on trickle-down economics. A plan that identifies the real sources of the problem and does something about them - a real stimulus to the economy, a real programme to stem the flood of foreclosures, and a transparent programme for filling the holes in bank balance sheets. A plan that assures US taxpayers the costs will be borne by those who created the problem. Accountability means paying for the full consequences for one's actions — and the financial system has much to account for.

Der Spiegel displays a bit — a lot! — of Schadenfreude in this report even though the authors believes the sentiment "is out of place":

This is no longer the muscular and arrogant United States the world knows, the superpower that sets the rules for everyone else and that considers its way of thinking and doing business to be the only road to success.

A new America is on display, a country that no longer trusts its old values and its elites even less: the politicians, who failed to see the problems on the horizon, and the economic leaders, who tried to sell a fictitious world of prosperity to Americans.

Also on display is the end of arrogance. The Americans are now paying the price for their pride.

Yet complacency rules in Washington. Glen Ford, writing in CounterPunch and Black Agenda Report, observes

Never has Republican-Democratic co-subservience to finance capital been on such naked display [as it has been over this last week]. But then, "We the People" have never before been witness to the terminal unraveling of late-stage global finance capital.

One might expect that, when facing the demise of all they consider proper, America's political caste would manage something better than to cling to the legs of its paymaster. And yet....

The President ‘ain’t too proud to beg’

The New York Times reports that President Bush and other leaders from both major parties remain determined to get the bailout Plan through Congress.

President Bush and Senate leaders of both parties vowed on Tuesday to work toward quick approval of a financial bailout plan despite the House's rejection of a $700 billion proposal that the White House had negotiated with Congressional leaders of both parties.

"We are at a critical moment for our economy," the president said. "Congress must act."