Sweet pony pancakes, the Federal Reserve has gone insane. I would expect the free market boxheads maybe to be ratcheting the U6 with a socket S&P. Or squonking the concatenated APR. Maybe taken up with spell-checking the Ten Year Note, or what have you. But helping the economy? Talk about balls.

Rep. Paul Ryan (R-Wis.) said the Federal Reserve’s latest policy shift amounts to a “bailout” of the economy under President Obama.

Well that tears it. This is Obama’s economy, and if the damned thing is about to crash well that’s his fault. So everybody stand back and make room for the crater. It’s just like your mother used to say, “If you don’t want to help some people, you can always hurt them.” Your mother would have loved Paul Ryan, the old bag.

Speaking at a campaign event in Oldsmar, Fla., Mitt Romney’s vice presidential candidate lambasted the Fed’s recent decision to try and do more to boost the economy as “sugar high economics.”

“We don’t need synthetic money creation. We need economic growth. We want wealth creation,” he said. “We don’t want to print money. We want opportunity and growth.”

That’s right. We want jobs. And money. Without all your Rubik’s boobery, or is that too much to ask? When Paul Ryan wants to run a 3-hour marathon, he quits after 15 miles. When Paul Ryan wants to climb 59 of America’s 48 tallest mountains, he climbs the same one. Over and over. It’s called “problem solving” buddy. Look it up, Library Face. Now give us a good economy, okay? Barring that, Paul Ryan THE END.

This is a pretty good demonstration of Rick Santorum’s mastery of the mechanics of our country. This is his grasp of our most vital national commons, the U.S. economy.

If I were to ask you what caused the recent historic and disastrous collapse of our fiscal well-being, I imagine you’d say something like this: “It’s complicated.” Some of you would add, “Lending institutions over-extended themselves in reckless attempts to make quick profits. While the influx of loan money caused an artificial inflation in home values, the sickly loans were sold to investment firms. A house of cards got built across several vital sectors of the economy. And, when it collapsed, we were left with crippling debt but almost no way to pay it off.”

For Rick, however, things aren’t so messy. Things are pretty simple:

“We went into a recession in 2008 because of gasoline prices,” Santorum told a packed hotel ballroom of supporters. “The bubble burst in housing because people couldn’t pay their mortgages because of $4 a gallon gasoline,” he added.

This isn’t a new attack Santorum is road-testing in Michigan, he’s said it before:

“We went into a recession in 2008. People forget why,” Rick Santorum told an audience recently. “They thought it was a housing bubble. The housing bubble was caused because of a dramatic spike in energy prices that caused the housing bubble to burst … People had to pay so much money to air condition and heat their homes or pay for gasoline that they couldn’t pay their mortgage.”

As far as reasons a sane observer might offer for our economic misery, this is an absurd one. Look at gas prices in 2008:

The spike around June is remarkable. But the epic price collapse is even more astonishing. If Rick thinks a short price hike in gasoline is capable of wiping out the American economy, he’s a frighteningly poor student of the world. Someone foisting that logic upon us better be able to defend the chronic nature of the recession in the face of the exact same critical factor collapsing to no effect. How can gas prices drive the economy in the middle of 2008 and have absolutely no effect a few months later?

If you look at the details, Rick’s supposed understanding of our economy becomes even more preposterous. From the beginning of 2008 to the spike, gas prices rose about $1.10. That means that, at its worst, the rise in gasoline cost the average American family an additional $103 a month. Bad, but hardly devastating.

The peak was over in a couple of months. Meantime, gasoline costs were something people had control over: they could drive less, carpool, or switch to fuel-efficient cars. Rick figures that, instead of choosing to solve the gasoline problem, Americans simply threw up their hands and sacrificed their houses.

This demonstrates a knowledge of virtually nothing vitally important to the workings of our economy, least of all the behavior of that element — Americans — he’d like to get to vote for him. And anyone who argues that the economy entered a recession after 2007 can’t be taken seriously.

In part one, I detailed how, amongst businessmen like Michael Bloomberg and Conservatives universally, the misguided swore the stupid government forced lenders to loan to undeserving poor folks and minorities, causing the housing bubble and the subprime crisis. This liberal ‘social crusade’ was to blame for the collapse of the economy.

In part two, I demonstrated how perfectly wrong that was. The U.S. data on all loans originating in 2006, at the height of the subprime loan frenzy, showed that those banks most highly regulated and government-constrained to make loans to lower income and minority borrowers, the Community Reinvestment Act (CRA) banks, were far less likely to offer risky, ‘high-cost’ subprime loans. It was the government-independent institutions that generated the vast majority of subprimes. And, when they did, the brokers manufactured loans at higher APRs across the economic strata.

Federal Reserve Governor Randall S. Kroszner summed it up nicely:

Our analysis of the loan data found that about 60 percent of higher-priced loan originations went to middle- or higher-income borrowers or neighborhoods. Such borrowers are not the populations targeted by the CRA. In addition, more than 20 percent of the higher-priced loans were extended to lower-income borrowers or borrowers in lower-income areas by independent nonbank institutions–that is, institutions not covered by the CRA.

Putting together these facts provides a striking result: Only 6 percent of all the higher-priced loans were extended by CRA-covered lenders to lower-income borrowers or neighborhoods in their CRA assessment areas, the local geographies that are the primary focus for CRA evaluation purposes.

There it is. Only 6 percent of subprimes went to poor people. The crisis wasn’t because of the darkies. And it wasn’t because of the government.

So, the question becomes: Why were fatal, risky loans being made? Why did so many lenders do something so dumb? Why didn’t anyone flag the dangers? Bitterly, we know now it was the high-risk, high-cost loans that couldn’t be re-paid. When the loans died, the houses died, the banks died, the financial institutions and markets died, and the great recession was on.

So, who would be prompted to make loans that default? If you’re only going to be a stupid lender, you’re only going to get hurt, right? You would think. But thanks to Bush administration-era ‘business innovation,’ the answer was “No.”

For the first time in the history of lending, you could make all sorts of stupid loans and escape the consequences. You didn’t have to worry about whether a penny got paid back from the borrower to the bank. How? Why? Because lenders were the last people on Earth responsible for their own lending. Within days of making the loans — bon voyage — they sold them allthem.

Home loans were boxed up and sold to giant secondary financial players. Those guys cut them to pieces and cabbaged them into “risk averse” bundles (mortgage-backed securities [MBSs] and collateralized debt obligations [CDOs]), and the bundles were then sold again, this time to ordinary American investors. They told Ma and Pa America that cutting and bundling made a losing investment impossible. ‘Trust us, people, there’s no harm in sight’ they said, and they put their ‘good’ name on it. Goodnight, thanks for shopping with Goldman Sachs. And, honestly, before everyone got hip to the game, they would have been right.

The problem began in the early 2000s when business types everywhere got smart. The government-independent players were running away with the industry. The Government Sponsored Entity (GSE) giants, Fannie Mae and Freddie Mac, whose job it is to buy home loans and then sell them elsewhere in order to keep the loan market moving, went cold. Mortgages by the thousands were being bought up, bundled and sold by outsiders:

Then in 2003-2004, the subprime mortgage crisis began. The market shifted away from regulated GSEs and radically toward Mortgage Backed Securities (MBS) issued by unregulated private-label securitization conduits, typically operated by investment banks.

Government-independent secondary market operators were making a killing buying up days-old loans, stewing them and selling them to investors across the world. The investors had such faith in the financial giants of the world that they didn’t ask why the loans wouldn’t tank.

So the market for loans, any loans, green-gilled loans, walking on club-feet and mumbering loans, went white hot. Lenders were handsomely rewarded for anything they managed, including mortgage dogshit. Especially dogshit.

Lending became an open-ended game of paperwork and profit: it didn’t matter how you got someone to agree to a loan, you simply had to get them to do it. An explosion of stupid, crazy-ass fire sale and discount loans got plastered across America’s retail windows.

The mortgage qualification guidelines began to change. At first, the stated income, verified assets (SIVA) loans came out [got removed from the high-standards loan pool]. Proof of income was no longer needed. Borrowers just needed to “state” it and show that they had money in the bank. Then, the no income, verified assets (NIVA) loans came out. The lender no longer required proof of employment. Borrowers just needed to show proof of money in their bank accounts. The qualification guidelines kept getting looser in order to produce more mortgages and more securities. This led to the creation of NINA. NINA is an abbreviation of No Income No Assets (sometimes referred to as Ninja loans). Basically, NINA loans are official loan products and let you borrow money without having to prove or even state any owned assets. All that was required for a mortgage was a credit score.

Another example is the interest-only adjustable-rate mortgage (ARM), which allows the homeowner to pay just the interest (not principal) during an initial period. Still another is a “payment option” loan, in which the homeowner can pay a variable amount, but any interest not paid is added to the principal. Nearly one in 10 mortgage borrowers in 2005 and 2006 took out these “option ARM” loans, which meant they could choose to make payments so low that their mortgage balances rose every month. An estimated one-third of ARMs originated between 2004 and 2006 had “teaser” rates below 4%, which then increased significantly after some initial period, as much as doubling the monthly payment.

All of these bargain-fumbling fancies were designed to do one thing: get someone to bite on the front end of a deal destined to crash at the back. Regardless of the menial APRs at the beginning of the mortgage, these were big, high-cost deals. These were horrible to live with, even for the financially healthiest Americans.

But, my gosh, didn’t the sales pitch work:

The ratio of lower-quality subprime mortgages originated rose from the historical 8% or lower range to approximately 20% from 2004-2006, with much higher ratios in some parts of the U.S. A high percentage of these subprime mortgages, over 90% in 2006 for example, were adjustable-rate mortgages.

One-fifth of mortgages became “You’re out of your mind, you can’t possibly pay this back” gambles. All because the loans weren’t really loans — they were investments to be sold to suckers to be re-sold to other suckers.

Of course, a multi-trillion dollar system gone ravenous for toxic debt is suicidal. Such irresponsibility can’t survive. A violent crash was inevitable.

In the third quarter of 2007, subprime ARMs making up only 6.8% of USA mortgages outstanding also accounted for 43% of the foreclosures which began during that quarter.

The foreclosures, sadly, had only begun. You can fill in the rest of the story, you know what happened after that.

Recap, part one:

These colored people, they have no money. They have no assets, they have no credit history, they have crappy jobs. Hell they barely know what a loan is, and we don’t speak Spanish. Nevertheless, in 1994, the Clinton administration demand we, the hallowed bankers, start giving them loans . .

“It took a little more than a decade for the negative effects of the assault on prudent lending to be felt. By 2006, the shaky subprime mortgages began to default. In 2008, the bubble exploded.”

We’ve been faced with this lie before, and it still comes dressed up so many ways. The right-popular version of this charge is that the liberals’ big government Community Reinvestment Act (CRA) is mostly to blame.

Cause and Effect — Government Policies and the Financial Crisis
By Peter J. Wallison | American Enterprise Institute | November 2008

The current financial crisis is not–as some have said–a crisis of capitalism. It is in fact the opposite, a shattering demonstration that ill-considered government intervention in the private economy can have devastating consequences. The crisis has its roots in the U.S. government’s efforts to increase homeownership, especially among minority and other underserved or low-income groups . .

The two key examples of this policy are the CRA, adopted in 1977, and the affordable housing “mission” of the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac. As detailed below, beginning in the late 1980s–but particularly during the Clinton administration–the CRA was used to pressure banks into making loans they would not otherwise have made and to adopt looser lending standards that would make mortgage loans possible for individuals who could not meet the down payment and other standards that had previously been applied routinely by banks and other housing lenders.

Previously, banks operating in poorer neighborhoods took depositors’ moneys but refused to loan it back to them in the form of car or home loans. The CRA demanded that institutions taking deposits from people in low and middle income areas loan the money back to their own depositors. As a result, the government has tightly regulated the “CRA banks” ever since, monitoring very closely their lending habits for color-blindness.

Conservatives swear it was the government’s CRA that murdered the economic planet. When you loan money to the browns and blacks, they warn, they’re going to screw up the loan. You’re not gonna get your money back. And when you force enough lenders to do this, a catastrophe is inevitable. Didn’t we just have a disaster? Need we say more, hmm?

But this is a lie, one debunked over and over again. It’s bull, and I can prove it. Of all the data and documents I’ve culled to understand the mortgage crisis and the implosion of the economy, there’s one I recently came upon that defeats this canard most thoroughly in examining the subprime mortgage frenzy.

Titled “The Community Reinvestment Act: A Welcome Anomaly in the Foreclosure Crisis,” it’s a bit of simple well-written research produced by a 3rd Avenue New York law firm, Traiger and Hinckley, specializing in “fair lending” counsel.

They crunched the data on all U.S. home loans from 2006 — the height of the subprime frenzy — in our 15 biggest cities. The analysis proves the opposite of what the right-wing and business harpies allege: the CRA, its banks, and its targeted beneficiaries, low and moderate income minorities, had almost nothing to do with the subprime crisis.

Our study concludes that CRA Banks were substantially less likely than other lenders to make the kinds of risky home purchase loans that helped fuel the foreclosure crisis. Specifically, our analysis shows that:

(1) CRA Banks were significantly less likely than other lenders to make a high cost loan;
(2) The average APR on high cost loans originated by CRA Banks was appreciably lower than the average APR on high cost loans originated by other lenders;
(3) CRA Banks were more than twice as likely as other lenders to retain originated loans in their portfolio; and
(4) Foreclosure rates were lower in MSAs with greater concentrations of bank branches.

Let’s look at who made loans back in 2006. Let’s particularly look at subprime loans. Subprimes are loans charged higher percentage rates because borrowers are higher risks, for any number of reasons: they have low-paying jobs, few assets, shaky credit histories, etc. These 2006 borrowers often got subprime, or “high-cost,” loans.

Look at the difference between the lending in 2006 by low and middle-income serving “CRA banks” and all other lenders for all loans. Then compare the same institutions lending subprimes:

All other institutions outpaced CRA bank lending for ‘all loans’ at around a 3.5:1 (77.2%/22.8%) pace. You would expect to see this because other lenders outnumber CRA banks, so that’s fine. But when you look at subprimes, the lending ratio suddenly jumps to 10:1. This is the opposite of what Bloomberg, Sperry, Wallison and other business types had claimed. Terrified as they were of government bullying, lenders were supposed to be rushing headlong towards borrowers with risky mortgages. No. Instead, it was the CRA-independent lenders, like Countrywide, that were doing it. The banks living among the poor folks were far less likely to issue subprime mortgages.

When you narrow the focus of the data even more upon Lower and Middle Income (LMI) borrowers, you still get the same contrast:

In loaning to lower and middle income borrowers, the CRA regulated lenders were far less likely to issue high-cost subprime loans. The data show they were generating far fewer subprime loans at the height of the crisis. The facts destroy the charge that minority lending caused our economic collapse. CRA banks, forced by big brother, were offering affordable mortgages to minorities. Period. Independent institutions, government-free, were pushing high-cost, high-risk loans on everyone.

When you look at what the lenders were charging, you see even more of the same. In a graph titled “Average Rate Spreads on High Cost Loans Originated by CRA Banks and Other Lenders,” the Traiger and Hinckley data show that independent lenders charged higher rates for their subprime loans:

Taken together, the 2006 U.S. loan data analyses demonstrate that the government-independent institutions were pushing far more subprime loans, pushing them upon far more people, rich and poor alike, and charging higher interest rates for them.

Much as our conservative and business bloviators would like, while being entitled to their own opinions, they are not entitled to their own nationwide loan data set from 2006. The facts dismantle any pretense that lending to minorities caused the mortgage crisis and, thus, our collective misery.

Tomorrow, in part 3, the finish. Ciao.

Here. We. Go. Again.

The love that dares to speak its name, that of bankers for ass-screwing poor people, raises its voice once more. Funny how these business tough guys love to attack the defenseless. And this time it’s not greed or opportunity or conventions or shame or the understandable attempt to duck penitentiary time that inflamed its habitual desires. Of all the motivators, this time, it is Occupy Wall Street.

Congratulations you street-bound shivering types, you have driven the banksters crazy. They’re unhinged enough by the specter of protests reflecting poorly upon them to revive one of their historically stupid lies. And this is it: When the government forced us to lend to minorities, it caused the economy to collapse.

We didn’t want to do it — the government made us. These colored people, they have no money. They have no assets, they have no credit history, they have crappy jobs. Hell they barely know what a loan is, and we don’t speak Spanish. This is the three-legged banker bullshit come ’round for its latest jog.

All over the internets today, it was again the poor folks’ fault:

Bloomberg: ‘Plain and Simple,’ Congress Caused the Mortgage Crisis, Not the Banks
By Azi Paybarah 11:03 am Nov. 1, 2011

. . Bloomberg was asked what he thought of the Occupy Wall Street protesters.

“I hear your complaints,” Bloomberg said. “Some of them are totally unfounded. It was not the banks that created the mortgage crisis. It was, plain and simple, Congress who forced everybody to go and give mortgages to people who were on the cusp . .

“But they were the ones who pushed Fannie and Freddie to make a bunch of loans that were imprudent, if you will. They were the ones that pushed the banks to loan to everybody. And now we want to go vilify the banks because it’s one target, it’s easy to blame them and congress certainly isn’t going to blame themselves. At the same time, Congress is trying to pressure banks to loosen their lending standards to make more loans. This is exactly the same speech they criticized them for.”

He’s a billionaire, he must be right. Except Fannie and Freddie don’t make loans, they buy them. And they were initially left out in the subprime cold, away from the growing market frenzy because they hated buying into the obvious risk. And here’s where perhaps the second great subprime crisis mystery (the first being ‘how could this happen?’) pops up: How can businessmen be so stupid? Bloomberg should know a lot more about Government Sponsored Entities (GSEs) than your average foul-mouthed blogging molecular biologist/musician. But here he is saying to a bunch of nodding business types that the government pushed Fannie and Freddie “to make a bunch of loans that were imprudent, if you will.”

Dear Mayor Mammon: you are wrong. You’re not the only one, here comes the Investor’s Business Daily:

Smoking-Gun Document Ties Policy To Housing Crisis
By PAUL SPERRY, FOR INVESTOR’S BUSINESS DAILY Posted 10/31/2011 08:05 AM ET

President Obama says the Occupy Wall Street protests show a “broad-based frustration” among Americans with the financial sector, which continues to kick against regulatory reforms three years after the financial crisis.

“You’re seeing some of the same folks who acted irresponsibly trying to fight efforts to crack down on the abusive practices that got us into this in the first place,” he complained earlier this month.

But what if government encouraged, even invented, those “abusive practices”?

Rewind to 1994. That year, the federal government declared war on an enemy — the racist lender — who officials claimed was to blame for differences in homeownership rate, and launched what would prove the costliest social crusade in U.S. history.

Well, there’s a simple enough claim. The government started going after racist lending practices in 1994 and ended up destroying the world economy in 2008. What data does Paul Sperry offer for this shocking criminal claim? None, never mind. Please only pay attention to who Sperry claims ended up with the smoking guns:

–10 federal agencies issued a chilling ultimatum to banks and mortgage lenders to ease credit for lower-income minorities.

–The unusual full-court press was predicated on a Boston Fed study showing mortgage lenders rejecting blacks and Hispanics in greater proportion than whites.

–For the first time, Washington’s bank regulators put racial lending at the top of their checklist.

–”Applying different lending standards to applicants who are members of a protected class is permissible,” it said.

–To that end, lenders were directed to “make changes in marketing strategy or loan products to better serve minority segments of the market.”

–They were also advised to “change commission structures” to encourage brokers and loan officers to “lend in minority and low-income neighborhoods” — a practice Countrywide Financial, the poster boy of the subprime scandal, perfected.

–FDIC warned banks that even unintentional discrimination was against the law, and that they should be proactive in making “multicultural” loans.

–It warned lenders who rejected minority applicants with high debt ratios and low credit scores to “be prepared” to prove to federal regulators and prosecutors they weren’t racist.

You see what the stupid government was doing. If not, Sperry shocks you back to reality with time-worn business truths about minorities:

–The author of the 1992 study, hired by the Clinton White House, claimed it was racial “discrimination.” But it was simply good underwriting.

–In addition to finding embarrassing mistakes in the data, they concluded that more relevant measures of a borrower’s credit history — such as past delinquencies and whether the borrower met lenders credit standards — explained the gap in lending between whites and blacks, who on average had poorer credit and higher defaults.

–The study did not take into account a host of other relevant data factoring into denials, including applicants’ net worth, debt burden and employment record . . [etc.] . . When these missing data were factored in, it became clear that the rejection rates were based on legitimate business decisions, not racism.

Mix a stupid social crusade with hard market realities and . .

It took a little more than a decade for the negative effects of the assault on prudent lending to be felt. By 2006, the shaky subprime mortgages began to default. In 2008, the bubble exploded.

. . it’s just as simple as that. The economy exploded, and now you can’t get a job.

Except the whole thing is a lie. Tomorrow, in part two, the debunk begins.

See part Two. Part Three.

There are the actors, over there, the audience. Here come the media, the go-betweens. Someone has to convey the, uh, hmm. Some group has to tell you, ehh, err. Okay — here come the useless, self-important assholes of the world:

At a million-dollar San Francisco fundraiser today, President Obama warned his recession-battered supporters that if he loses the 2012 election it could herald a new, painful era of self-reliance in America.

Great journalism, sober and accurate. While he writhed on a bed of fur-lined German bonds, President Bon Bon struck an ominous tone with the Democrat Dauphins:

“Back to wiping your own butts?”

Hell no. Bring back Day Spa America. 4 more years of neck rubs and personal attendants. This circular war footing / economic downturn creates nothing if not a blissed whirlpool of languor. Bankers foreclosing on your house? Whatever. You and 172 people interviewing for the one job opening in past 6 months? I’m tired. Your son’s remains being interred in Arlington? He’s not going anywhere.

Yes, simple times call for simple narratives. You’d be surprised to find out this “news” story didn’t originate with the New York Post. Nor from Fox News Channel, either. This was ABC News style journalism, aka your liberal media. Not that anyone noticed.

Sitter in Chief
Barack Obama and the infantilization of America
James Taranto | Wall Street Journal

. . Here’s ABC News, reporting on the speech the president gave in Fog City: “At a million-dollar San Francisco fundraiser today, President Obama warned his recession-battered supporters that if he loses the 2012 election it could herald a new, painful era of self-reliance in America.”

Oh no! Horror of horrors! Obama is the only thing standing between us and having to rely on ourselves! And do you know what they call people who rely on themselves?

Adults.

Here’s a photo of you the WSJ appended to Taranto’s piece:

Much for the worse we’d be without professional, big league journalism.

Let’s take a closer look at the right-wingers who are holding the debt ceiling hostage. That’s a fairly serious thing to do: threaten to cause harm to the government, to the stock market and to the economy in general. Tank the government’s triple-A rating.

Just who are these people? Can they be trusted? Do they know what they’re doing?

It doesn’t appear so. House Speaker John Boehner rolled out a shockingly punitive ‘Cut, Cap and Balance’ plan this afternoon, but the Tea Partiers, the most refractory political contingent with respect to debt ceiling negotiations, immediately knocked it down.

“A BBA [balanced budget amendment] that allows a tax increase with anything less than a 2/3 supermajority is not a serious measure.”

Conservatives were also rubbed the wrong way by Boehner’s inclusion of a “Super Congress” in his plan . . “History has shown that such commissions, while well-intentioned, make it easier to raise taxes than to institute enduring budget reforms,” reads the coalition’s statement.

Taxes and taxes. California currently has one of those two-thirds majority provisions for tax hikes which is why we are eternally debt-ridden, if not ungovernable. I can’t begin to imagine how the federal government would function with such a provision. But the nightmare won’t have begun there. Boehner’s plan will have re-made America even before the Tea Party put their finishing touches on the disaster:

Center on Budget and Policy Priorities Statement: July 25, 2011
Robert Greenstein, President, on House Speaker Boehner’s New Budget Proposal

House Speaker John Boehner’s new budget proposal would require deep cuts in the years immediately ahead in Social Security and Medicare benefits for current retirees, the repeal of health reform’s coverage expansions, or wholesale evisceration of basic assistance programs for vulnerable Americans.

The plan is, thus, tantamount to a form of “class warfare.” If enacted, it could well produce the greatest increase in poverty and hardship produced by any law in modern U.S. history.

This may sound hyperbolic, but it is not. The mathematics are inexorable.

And it doesn’t go far enough for the Tea Party?

Policymakers would essentially have three choices: 1) cut Social Security and Medicare benefits heavily for current retirees, something that all budget plans from both parties (including House Budget Committee Chairman Paul Ryan’s plan) have ruled out; 2) repeal the Affordable Care Act’s coverage expansions while retaining its measures that cut Medicare payments and raise tax revenues, even though Republicans seek to repeal many of those measures as well; or 3) eviscerate the safety net for low-income children, parents, senior citizens, and people with disabilities. There is no other plausible way to get $1.5 trillion in entitlement cuts in the next ten years.

That’s right. ‘Eviscerating’ America’s social safety net isn’t enough. Reaching backward into history to roll back the entitlements that Franklin Delano Roosevelt established doesn’t satisfy them. They want more, in the form of an essentially permanent ban on new or raised taxes. A quick reminder: we’re in panic mode over the debt ceiling ‘crisis’, with mere days before the August 2nd deadline.

But these are the demands we get from the debt clowns. Boehner’s plan would be one of the greatest re-modelings of American government in history, a radical change in the covenant between the American people and their federal authority, and it’s a piece of legislation no Democratic president would ever sign. But it’s nowhere ‘serious’ enough for the debt jokers. Or, should I say, ‘debt terrorists’? We’re past any of this being funny.

Which brings me to this. You see this?

CHRIS MATTHEWS: How many days do you think we have, on the outside, to get this debt ceiling through before we have a problem? How many days?

SENATOR MIKE LEE [R-UT]: I don’t know, maybe ten days. [eight days, Mike. now seven. -- ed.]

MATTHEWS: Okay, in ten days you want to change the United States Constitution by two-thirds vote in both houses? That’s what you’re demanding.

LEE: Yes. If possible we can’t change the Constitution just in Congress but we can submit it to the states. Let the states fight it out.

MATTHEWS: And you think you’re being reasonable by saying you want a two-thirds vote in the House, which is Republican, and in the Senate which is Democrat. You want the Democratic Senate, by a two-thirds vote, to pass a constitutional amendment or you want the house to come down?

LEE: Yes. That’s exactly what I’m saying and I’ve been saying this for six months.

The clowns will bring the house down. No doubt about it. Get ready.

No inflation! Yer good to go!

I was glad that George W. Bush had disappeared from our view. What good has ever come from his hanging around, saying crazy things, provoking his idiotic champions into nauseating huzzahs and back-slapping?

Absolutely nothing. Why should this week be any different?

One of the champions, NewsBusters’ Geoffrey Dickens, couldn’t wait to illustrate how Bush embarrassed Matt Lauer, schooling him on the economy. Oh, the potential ironies:

George W. Bush Delivers a Basic Economics Lesson to Matt Lauer
By Geoffrey Dickens | November 10, 2010 | 12:04

. . it was Lauer’s questions about Bush’s tax policy where he revealed his bias . . Bush shot back with a basic economics lesson for the Today co-anchor, as seen in the following exchange:

MATT LAUER: There’s a heated debate, right now over whether we should continue in this country with your tax policies. They call them the Bush tax cuts. Give me your best argument for continuing those tax cuts . .

BUSH: Here’s, here’s the deal. Most new jobs are created by small businesses. Many small businesses pay tax at the individual income tax level because of how the are organized. For example, sub chapter S corporations or limited partnerships. Therefore, if you raise the top rate you’re taxing job creators.

The ‘precious job creators at the top of the tax brackets’ meme is a familiar and weak Republican gambit. Only about 3% of all the people who report business income from ‘S’ corps, partnerships and the like fall into the top brackets. Granted, they may make a lot of small and medium-business money, but they’re also far less likely to be squeezed by a 3% tax hike to the point of firing people. If they report profits of $400,000 as income, the resultant tax hike is a whopping $6000. On $1,000,000, it’s $24,000.

I think we just did more number-crunching there than Bush has done in his entire life. More:

Before the question on taxes Lauer wanted to know how much “blame” Bush was willing to give himself for the economic meltdown and argued that “some would say you didn’t call enough for regulation” to which Bush fired back his administration did its best to prevent the housing crisis by calling for better oversight, as he told Lauer: “The housing bubble was fueled by government policy” which was the result of “Congress refusing to regulate Fannie and Freddie.”

It’s one thing to be stupid, to realize you screwed up but you still don’t know exactly how. That’s George W. Bush to begin with, who neither realized nor understood that the livelihoods of Americans were being destroyed in a bitterly tragic, historic way. It’s quite another thing to lie outright about how it all happened.

Fannie and Freddie were the willing victims of it all. It was the $1.5 trillion in reckless sub-prime mortgages that killed the housing, investment and banking sectors, thus killing the larger economy. Who wrote, marketed and aggressively pursued these instruments of death? Not Freddie and Fannie, not a single one.

It was the private sector that created the sub-prime loan glut as fodder for mortgage-backed securities. Those private players that made out like mega-bandits during the bubble, they’re your criminals. A two year old study by the Federal Reserve tells the tale:

The study identifies five causes of the subprime meltdown:
–Convoluted loan products that consumers didn’t understand.
–Credit ratings that didn’t do a good job highlighting the risks contained in subprime-backed securities.
–Lack of incentives for institutional investors to do their own research (they just relied on the credit ratings).
–Predatory lending and borrowing (which I think means fraud perpetrated by borrowers).
–Significant errors in the models used by credit rating agencies to assess subprime-backed securities.

You’ll note in the Fed’s five causes that there’s some culpability for lenders, borrowers, investors and credit raters. There’s no blame for Freddie Mac or Fannie Mae which had little or nothing to do with the entire situation.

. . until you ask the former President of the United States, whose inattention and impotence allowed the wrenching catastrophe to occur. Then it’s Fannie’s and Freddie’s fault, sure. Unfortunately, those two won’t get the chance to defend themselves in an interview with Matt Lauer.

It’s been — what? — 7 days since the midterm election? So there are now barely 103 weeks to get your Presidential campaign message straight. And Sarah Palin is definitely, absolutely, without-an-atom-of-a-doubt running for President.

She covets the most powerful position on the planet. How do I know? How could anyone be sure? Because when she starts throwing around terms like ‘quantitative easing’, she’s either going for big laughs or going at national voters’ requirement for candidate gravitas. For me, she hit the former on the noggin:

I’m deeply concerned about the Federal Reserve’s plans to buy up anywhere from $600 billion to as much as $1 trillion of government securities. The technical term for it is “quantitative easing.” It means our government is pumping money into the banking system by buying up treasury bonds.

And you thought your dog couldn’t talk?

What’s the end game here? Where will all this money printing on an unprecedented scale take us? Do we have any guarantees that QE2 won’t be followed by QE3, 4, and 5, until eventually – inevitably – no one will want to buy our debt anymore?

“Hey, Dave, could you let me out now?”

When Germany, a country that knows a thing or two about the dangers of inflation, warns us to think again, maybe it’s time for Chairman Bernanke to cease and desist.

When Africa, a country that knows a thing or two about the dangers of ravenously ambitious white politicians . .

Okay, you get the idea. Well, the Wall Street Journal very politely swatted at her sudden economic ‘expertise’:

. . Palin tries to draw the concerns about quantitative easing to inflation today and falls short. She says, “everyone who ever goes out shopping for groceries knows that prices have risen significantly over the past year or so. Pump priming would push them even higher.”

Grocery prices haven’t risen all that significantly, in fact. The consumer price index’s measure of food and beverages for the first nine months of this year showed average annual inflation of less than 0.6%, the slowest pace on record (since the Labor Department started keeping this measure in 1968).

Oops. You can’t fake the numbers: food and beverage price inflation is at its lowest in decades. Palin’s reflexive need to provoke a random bit of populist anger has done her a disservice in the realm of fractions and graphs.

It’s at this point she should just absorb the critique and sharpen her game, but you know she won’t. Instead, we get this encore of comedy:

Do Wall Street Journal Reporters Read the Wall Street Journal?
Sarah Palin on Monday, November 8, 2010 at 4:58pm

Ever since 2008, people seem inordinately interested in my reading habits. Among various newspapers, magazines, and local Alaskan papers, I read the Wall Street Journal.

Now she wants to answer Katie Couric? Somewhat puzzling she’d suddenly pull this rabbit out of her own internet hat. But excelsior gravitas, I suppose. It recalls the great Otto West/Wanda Gershwitz debate where Otto claimed apes didn’t read philosophy. “Yes they do, Otto. They just don’t understand it.”

Apes also don’t write their own Facebook page screeds. But when you back anybody into a factual corner, what can they really do? And, to be clear, I’m not talking about the WSJ cornering Palin. I’m talking about an over-wrought Palin menacing her poor Facebook blog-monkey. What’s a monkey to do?

So, imagine my dismay when I read an article by Sudeep Reddy in today’s Wall Street Journal . .

He writes: “Grocery prices haven’t risen all that significantly, in fact.” Really? That’s odd, because just last Thursday, November 4, I read an article in Mr. Reddy’s own Wall Street Journal titled “Food Sellers Grit Teeth, Raise Prices: Packagers and Supermarkets Pressured to Pass Along Rising Costs, Even as Consumers Pinch Pennies.”

The article noted that “an inflationary tide is beginning to ripple through America’s supermarkets and restaurants…Prices of staples including milk, beef, coffee, cocoa and sugar have risen sharply in recent months.”

If you look at the sections I bolded, you can crunch all the economic ‘data’ yourself.

We may have lost the House, but we’ve gained a Sarah Palin on the campaign warpath. Watching a talentless neurotic like her try to construct a facade of both intellectual heft and frontier whimsy will be a joy.

The boys at Power Line smell a rat. A Democratic rat. A unionized government employee rat. A money-grubbing stimulus bill fat cat commie wolf pack government cheese-eating rat. And aren’t we all sick and tired of those teacher, cop and construction worker parasites?

That’s all there is to it. Simple. Succinct. Stupid.

There are about 310 million people in the U.S. and about 160 million of those are employed, about 15 million of those are government employees and about 8 million are union members. You can see how we ended up running everything, how we got Obama elected just so we could douse the nation with gasoline and throw flares at it: pandering to 2.58% of America. Nothing much more to be said about us.

Since the recession started, almost eight million private sector jobs have been lost. But no worries if you’re a government employee; in the public sector, almost 600,000 jobs have been gained. We are experiencing a deep private sector recession, combined with a government boom:

I’d hardly call it a ‘boom,’ but there are more employees. And that’s exactly how the graph is supposed to look, that’s a good thing in a recession.

That was the whole idea behind the stimulus, duh. The government would step in to shoulder the employment load while the private sector was tanking. How’s about another graph? This one shows where the $750 billion in stimulus funds were allocated:

Infrastructure and science, education and training and healthcare all increase the numbers of people on government payrolls. I’d certainly rather have people doing those things for the nation than have them sitting at home, looking for work. I don’t mind at all having my taxes spent that way.

Incidentally, did you notice how those three bubbles added together are still much smaller than the tax bubble? About 1/3 of the America-killing stimulus bill, the largest allocation by far, are Republicans’ vaunted tax cuts. Those were implemented far more quickly than the other provisions, so, if the bill’s been a failure so far, you know what to blame.

Bow before us, the guys who build your roads and bridges!

We should be murdered, every last nurse and fireman.

George Will, what an old bag. I oughta hire a gang of giddy children to slap Grandma senseless.

Scroogenomics
by George Will

WASHINGTON — Another huge value-destroying hurricane is about to slam America, destroying billions of dollars of value. Another Katrina? No, another Christmas.

Take cover, everybody, a ‘value’ tragedy, a bruising of ‘value’, is about to blah-blah. And all the smart people in the world have already clicked something else.

But, no, not me. Why? Insomnia.

This voluntary December calamity is explained in a darkly amusing little book that is about the size of an iPhone. “Scroogenomics: Why You Shouldn’t Buy Presents for the Holidays” comes from a distinguished publisher, Princeton University Press, and an eminent author, Joel Waldfogel of the University of Pennsylvania’s Wharton business school.

This is going to be depressing, one way or another, because the title isn’t bad at all. When George Will likes it, especially if it’s ‘darkly amusing’, it’s guaranteed to be complete dog poo.

He says that the crux of Yuletide economics, which common sense suggests and research confirms, is:

Gifts that people buy for other people are usually poorly matched to the recipients’ preferences. What the recipients would willingly pay for gifts is usually less than what the givers paid. The measure of the inefficiency of allocating value by gift-giving is the difference between the yield of satisfaction per dollar spent on gifts and the yield per dollar spent on recipients’ own purchases.

AHH, HEADACHE. Why does George Will even exist, other than to pain good people? Good lord, it’s Christmas, you douchebarrel.

By calculating the difference between the consumption of holiday goods (e.g., jewelry, but not gasoline) in December as opposed to November and January, you get a rough estimate of Christmas spending. Waldfogel’s conservative estimate is that in 2007, Americans spent $66 billion on gifts and produced $12 billion less satisfaction than would have been produced if the recipients had spent the $66 billion on themselves.

OOWWW. Yes, douchevat, gift-giving is bad science, it’s easy to ‘miss’. How it stinks of high spirits that besot accuracy. Lemme guess–this sort of behavior has societal consequences, you naked teens.

At least the Christmas stimulus strengthens the economy, right? Wrong, says Waldfogel. If all spending justified itself, we would pay people to dig holes and then refill them — or build bridges to unpopulated Alaskan islands. Spending is good if the purchaser, or the recipient of a gift, values the commodity more than he does the money it costs. Otherwise, there is a subtraction from society’s store of value.

…jeez, how pathetic is George? At this time of the year, perhaps we all should keep “society’s store of value” in mind. Hell, wouldn’t want to put a leak in that. No, not gonna give you anything you won’t ‘value’ as much as I paid for it. If only I knew exactly what you thought of all the stuff in the stores near me.

Douchetank offered a stupid example, incidentally. The ditch digger isn’t doing anything of value in the universe, digging and then filling in holes. But while some gifts may be unwanted, they still hold value elsewhere. That whole thing, goods moving about into higher ‘valuation’ sectors, is called…AN ECONOMY. The secondary value extracted is…MONEY. Wharton owes me some sort of award.

But, you say, what about sentimental value? Don’t you value the thoughtfulness of dotty Uncle Ralph who gave you the sweater? Actually, Ralph’s sentiment in selecting it was like your sentiment when you selected for him the candle shaped like Gandhi — desperate bewilderment about what he might like.

Were it not for sentimentality about sentiments, which are highly overrated, we would behave rationally, giving cash, thereby avoiding value subtraction. We almost do that with wedding registries.

Well, cold rationality is a drunken joy. And fulfilling a couple’s wedding demands for flatware is almost as fun. Get the idea that self-centered George has given a few stone gifts in his holiday history? It wasn’t his fault–he’s too smart to make mistakes. It’s stupid Christmas‘ fault, stupid day. And you’re stupid too. Don’t you know anything about the economy?

“There are worlds of money wasted, at this time of year, in getting things that nobody wants, and nobody cares for after they are got.” So said Harriet Beecher Stowe in 1850… Data from 1919 concerning the retail giants of the day — mail-order companies (e.g., Sears and Montgomery Ward) and “dime stores” (e.g., Woolworth) — actually show that Christmas sales as a share of the economy is about half as large as it once was. This means proportionally less value subtraction. Hallelujah.

Cue George, on his phone:

“Hello, is this Harriet? Harriet, this is George Will. Yes, good afternoon. The holidays are upon us again, Harriet, so I thought I’d call you while I was making out here, before me, my schedule. Tell me, Harriet–in dollar terms, what sort of value would you put on a toaster?”

[Pause]

“A toaster, like perhaps a chrome one, say a Hamilton Beach. What would you hazard is its worth?”

[Pause]

“Yes, roughly, I understand. Of course, very good. Harriet, if I find one at that price, I shall gift wrap it and send it to you.”

*click*