Accused by faux-centrist right-wingers Third Way of proposing changes to Social Security that would give Citi CEO Jamie Dimon greater Social Security benefits, U.S. Sen. Elizabeth Warren, D-Mass., replied, “Oh please. I’m out there working for Jamie Dimon the same way Dick Cheney is out there trying to save the environment.”
Sunday, December 8, 2013 1:22 pm
Saturday, November 16, 2013 11:24 pm
Their ideas aren’t gaining favor on the merits (nor should they) — about 90 percent of Americans think Social Security should be preserved or even expanded, not cut — so they resort to paying people to lie, and they’re real sloppy about it:
Our friend Jon Romano, press secretary for the inside-the-beltway PR campaign “Fix the Debt” and its pet youth group, The Can Kicks Back, have been caught writing op-eds for college students and placing the identical op-eds in papers across the country.
This is the latest slip-up in Fix the Debt’s efforts to portray itself as representing America’s youth. Previously, they were caught paying dancers to participate in a pro-austerity flash mob and paying Change.org to gather online petition signers for them.
The newspapers involved in the scam were not amused.
Gainesville Sun to Fix the Debt: “Lay Off the Astroturf and Outright Plagiarism”
The identical op-eds were discovered by Florida’s Gainesville Sun. The paper’s scathing editorial on the topic makes for an entertaining read.
If you liked University of Florida student Brandon Scott’s column last Sunday about the national debt, you also should enjoy columns by Dartmouth College student Thomas Wang and University of Wisconsin student Jennifer Pavelec on the issue.
After all, they’re the same columns.
The identical columns ran last weekend in newspapers in New Hampshire and Wisconsin. They each included the same first-person passage describing the student’s work with the Campaign to Fix the Debt and its “millennial arm,” The Can Kicks Back.
After I was told last week about the column appearing under the byline of different writers in other publications, it was removed from The Sun’s website. Staff with the Campaign to Fix the Debt, who sent out the columns, said they were templates that were supposed to be personalized or otherwise reworded.
The campaign’s vice president of communications, John Romano, said Scott -— an intern with the group — was not at fault.
“This was an inadvertent mistake and the campaign takes full responsibility for it,” he said.
Folks, Fix the Debt is not a grassroots thing. It is not a lot of college kids writing letters to the editor. It is a network of PR agencies led by billionaire Pete Peterson. Peterson, because he is stupid, because he would personally profit, or both, wants draconian spending cuts — along the lines of Simpson-Bowles or worse. There are many problems with that, but the most important one, as the linked article points out, is that such cuts would eliminate 4 million jobs at a time when America needs many more jobs, not fewer. As for the deficit? Well, hey, let’s just ask our good friends at Fox News, who actually provide accurate information this time although they take a little too much time explaining what the numbers mean:
The U.S. government started the first month of the 2014 budget year with a $91.6 billion deficit, signaling further improvement in the nation’s finances at a time when lawmakers are wrestling to reach a deal that would keep the government open past January.
The Treasury Department said Wednesday that the deficit in October fell 24 percent compared with the $120 billion imbalance recorded in October 2012. The deficit is the gap between the government’s tax revenue and spending.
Across-the-board spending cuts and the partial government shutdown helped lowered expenditures in the first month of the new budget year. Higher taxes and an improved economy also boosted revenue.
The October decline comes after the government ran an annual deficit in 2013 of $680 billion, the lowest in five years and the first in that period below $1 trillion. Shrinking deficits could take some pressures off of lawmakers, who are facing a Dec. 13 deal to fund the government and avoid another shutdown.
The deficit is a manageable problem, and we’re managing it — almost in spite of ourselves, what with sequestration, but we’re managing it nonetheless. We do not need dramatic new government spending cuts, unless maybe they’re in defense. (By the way, everything else being equal, a dollar spent on defense benefits the economy substantially less than a dollar spent on something civilianish.) What we need, desperately, is J-O-B-S.
Wednesday, October 30, 2013 7:57 pm
Actually, The Washington Post (among others) did the lying, as economist Dean Baker helpfully notes:
The Washington Post joined Republicans in hyping the fact that many individual insurance policies are being cancelled with insurers telling people that the reason is the Affordable Care Act (ACA). The second paragraph comments on this fact:
“The notices [of plan cancellation] appear to contradict President Obama’s promise that despite the changes resulting from the law, Americans can keep their health insurance if they like it.”
It would have been useful to point out that the plans that were in effect as of the passage of the ACA were grandfathered. This means that any insurers that cancel plans that were in effect prior to 2010 are being misleading if they tell their customers that the cancellation was due to the ACA. It was not a mandate of the ACA that led to the cancellation of the plan, but rather a decision of the insurer based on market conditions.
But Obama is black!
Also, if you really want to know what’s going on in the economy, just read Baker’s blog every day. It’s called Beat The Press, and that’s what it does. Pretty much the only thing he ever posts about is mistakes made by major news-media outlets in coverage of economics, and he never lacks for material, averaging about 3-4 posts per day. He also doesn’t have to go far afield for material: The major print, broadcast and cable outlets keep him supplied without his having to go beat up on a 22-year-old cub reporter in East Buttville to flesh out an item. I started reading him several years ago, and in less than a week, I arrived at the conclusion that where economics coverage is concerned, American news media just ought to be ashamed, full stop. This matters not only in and of itself but also because the income and wealth of working people and the middle class are under siege right now by the 1%, who are counting on people’s economic ignorance to let them do what they want to do, which is rob us blind. Baker is our Thin Blue Line. Read him and support him.
Monday, October 28, 2013 8:38 pm
It’s so simple even Bill Maher gets it:
This is the question the Right has to answer. Do you want smaller government with less handouts or do you want do you want a low minimum wage because you cannot have both. If Coronel Sanders isn’t going to pay the lady behind the counter enough to live on, then Uncle Sam has to. And I for one is getting a little tired of helping highly profitable companies pay their workers.
And spare me the crap about how raising the minimum wage kills jobs because 1) it doesn’t, 2) CEO pay relative to worker pay is at an unprecedented height, and it ain’t because CEOs are, in general, competent at running providers of goods and services rather than gaming the system, and 3) corporate profits are at an all-time high.
Wednesday, October 9, 2013 7:41 pm
The government, via insurance and regulations, has some leverage over the banks. It should use it to recover the money the banks stole and return it to retired public workers.
Oh, and a unicorn.
Tuesday, October 1, 2013 7:33 pm
Shorter Dean Baker: because bankers are f—— stupid:
… it is interesting to look at the fundamentals here. The vast majority of bonds … will not have defaulted. Even the ones that are technically in default will have only lost a small fraction of their value. Think it through. You have a government bond that was supposed to have a coupon payment on October 17th which was not made because of the debt ceiling standoff. How much less are you willing to sell this bond for on October 18th? (If you say 3 percent or more, send me a note.)
While this set of events could possibly undermine the system as it functions today, if the bankers could not develop a workaround pretty quickly, they are a lot dumber than people give them credit for. …
In the current situation, does anyone really doubt that at some point the government will make the interest and principle payments on its debt? …
[But] the Wall Street boys really don’t seem to be very good with numbers. Put to the test, they may well fail.
My predictions: 1) If it comes to that, they will fail, and 2) even if they do fail, they’ll still collect big bonuses while we taxpayers clean up their mess. Again.
Tuesday, September 24, 2013 7:17 pm
Never, ever underestimate the capacity of rich douchebags to be rich douchebags.
Today’s example is Robert Benmosche, who took over as CEO of insurance giant AIG (which has a subsidiary here in Greensboro) after 2008, when only about a billion metric assloads of taxpayer money kept AIG from going bankrupt. Here’s what The Wall Street Journal quotes him as saying:
The uproar over bonuses “was intended to stir public anger, to get everybody out there with their pitchforks and their hangman nooses, and all that — sort of like what we did in the Deep South [decades ago]. And I think it was just as bad and just as wrong.”
OK, let’s test that hypothesis. Our null hypothesis is that if we got out our hangman’s nooses and pitchforks and took Robert Benmosche out and bound him hand and foot and gave him a bilateral orchiectomy (which was a pretty common feature of lynchings in the Deep South) and then put the noose around Benmosche’s neck and hauled him up high enough to do the air dance (perhaps waiting until he was already dead to set him afire, or perhaps not), he would actually think that lynching was quite a bit worse than taking grief from ordinary taxpayers who are watching him stuff himself in a way that could only have been made possible with the money of said taxpayers, while their own incomes drop year after year after year.
Our alternative hypothesis, the one we’re testing here, the one that Benmosche is propounding, is that we’d do all these things to Benmosche and he would notice no difference. None. Both experiences would seem equally awful to him.
So, Robert, want to put your alternative hypothesis to the test? I’ll be happy to write up the results for an academic journal.
Now, some of you, probably white guys my age or older, are saying, c’mon, that’s not all that bad. I’m tired, so I’ll let Alex Pareene school you:
Aggrieved white men of America, here’s a little tip from your old pal “historical consciousness”: People being mean to you is not remotely equivalent to genocidal violence. You are not at any risk of ever facing anything close to an actual lynching. It is not effectively legal for people to murder you. If someone did murder you, the state would attempt to arrest and punish them. If you wouldn’t claim to be the victim of a “genocide,” don’t claim to be the victim of a lynch mob.
Words have meanings. The era of lynchings is one of the darkest points in American history. The Tuskegee Institute, one of a few organizations that attempted to count all documented American lynchings, lists 3,445 black victims of lynch mobs between 1882 and 1968. Almost 200 anti-lynching bills were introduced in Congress during those years. Three passed the House. None passed the Senate. Lynchings were effectively state-sanctioned and they continued happening well into the 20th century. The last known survivor of a lynching attempt only just died in 2006 — one month after Richard Cohen’s column about his mean emails.
To compare being the target of protest or criticism to the shameful, horrific, common practice of lynching — or to think you can append some idiotic modifier like “digital” and use the phrase to mean whatever you want — isn’t just ignorant. It cheapens the phrase, strips it of meaning, and dilutes the awfulness, and the appalling recentness, of a great generational crime against black Americans.
I’m in a bad mood, so if you try to argue with this, I might just delete the comment and block your ass.
Friday, September 13, 2013 7:10 pm
Shorter Dean: Because the Justice Department let them:
[In a real investigation] [t]he people who put together some of the worst mortgage backed securities would be asked if they were really dumber than rocks and had no idea that many of the mortgages being put into the packages were fraudulent. If the prosecutors could demonstrate evidence of intelligent life at Goldman Sachs and Morgan Stanley they would then ask the lower level people whether they wanted to spend years in jail or would rather explain why they thought it was a good idea to put tens of millions of dollars of fraudulent mortgages into mortgage backed securities. This would presumably lead to testimony against higher ups at these investment banks. …
There is no guarantee that these sorts of efforts would have landed top executives of financial firms behind bars. However there is no evidence that the Justice Department even began this sort of investigation. At the least, such an investigation would have resulted in prosecutions of lower level actors who clearly violated the law in issuing and passing on fraudulent mortgages.
As [Neil] Irwin said [link added -- Lex], bad business judgement is not a crime. However, it is a crime to allow bad business judgement to lead to fraud. Clearly fraudulent mortgages were a major factor in propping up the housing bubble. No one went to jail for this crime.
Friday, September 6, 2013 7:01 pm
If one were to list the people most responsible for the country’s dismal economic state few people other than Alan Greenspan and Robert Rubin would rank higher than Larry Summers. After all, Summers was a huge proponent of financial deregulation in the 1990s and the last decade. He was a cheerleader for the stock bubble and never expressed any concerns about the housing bubble. He thought the over-valued dollar was good policy (and therefore also the enormous trade deficit that inevitably follows), and he was unconcerned that an inadequate stimulus would lead to a dismal employment picture long into the future.
If you think high unemployment is a good thing that ought to continue, then support Larry Summers. If you don’t, contact your senators and tell them not just no, but hell, no. The last person you want in charge of the economy is one of the miscreants who blew it up in the first place.
Tuesday, August 13, 2013 6:10 pm
Before the 2008 crash, Spain was running a surplus, news that too frequently comes as a surprise to austerians. But it, like many other countries, was experiencing a housing bubble. That bubble was caused by many of the same bankers who are now insisting that Spain “take its medicine.” What should happen instead is that those bankers should take their medicine, including an outright scalping on their bond holdings. The Spanish people didn’t cause this problem, and visiting unnecessary pain and poverty on Spaniards will not get Spain out of this problem. If both economics and history are any guide, it’s more likely to lead to bankers dangling from lampposts than to economic prosperity in Spain. But nobody, not even bankers, believes that bankers act in their own best long-term interests all the time, mainly because they don’t. So here we are. Well, here the Spaniards are. And if the Republicans got their way, here we would be as well.
Friday, July 26, 2013 6:19 pm
The Washington Post had a chart on how corporate taxes have been rising as a share of GDP in OECD countries (industrialized countries comparable for economic purposes to the United States). The problem is that the piece was a tad misleading in that every country counted the same.
In the U.S. that burden has been generally shrinking since World War II. As of 2009, that burden was 1%, down from its postwar high of 6% just after the Korean War. Here’s a chart showing how it’s gone:
Now, corporations are sitting on $2 trillion in cash. If they’re not going to create jobs with it, which they’re not because there’s no demand for their goods and services because too many people have been unemployed for too long, then they ought to pay a bit more of it to the government so that we can set about some badly needed infrastructure projects. Those projects, in turn, will both create jobs in the short term and lay the foundation for future wealth creation in the long term.
This is not rocket science. This is not even rocket economics.
(h/t: Dean Baker)
Tuesday, July 23, 2013 6:26 pm
Mr. Paine was talking about hereditary monarchy, but he could as well be speaking of hereditary oligarchy, the condition toward which the U.S. is headed like a rocket on rails thanks to corrupt legislative and judicial branches and a cowardly executive (not to mention a bought-and-paid-for N.C. General Assembly, which just abolished the estate tax):
But it is not so much the absurdity as the evil of hereditary succession which concerns mankind. Did it ensure a race of good and wise men it would have the seal of divine authority, but as it opens a door to the FOOLISH, the WICKED, and the IMPROPER, it hath in it the nature of oppression. Men who look upon themselves born to reign, and others to obey, soon grow insolent. Selected from the rest of mankind, their minds are early poisoned by importance; and the world they act in differs so materially from the world at large, that they have but little opportunity of knowing its true interests, and when they succeed in the government are frequently the most ignorant and unfit of any throughout the dominions.
Monday, June 24, 2013 6:12 pm
I’m not in the market, and if Mike Whitney’s reporting is accurate, you shouldn’t be, either:
… nearly 5 million homes are either seriously delinquent or in some stage of foreclosure. This unseen backlog of distressed homes makes up the so called “shadow inventory” which is still big enough to send prices plunging if even a small portion was released onto the market. In other words, supply vastly exceeds demand in real terms. Now check this out from Zillow:
“13 million homeowners with a mortgage remain underwater. Moreover, the effective negative equity rate nationally —where the loan-to-value ratio is more than 80%, making it difficult for a homeowner to afford the down payment on another home — is 43.6% of homeowners with a mortgage.” (Zillow)
This might sound a bit confusing, but it’s crucial to understanding what’s really going on. While many people know that 13 million homeowners are underwater on their mortgages, they probably don’t know that nearly half (43.6%) of the potential “move up” buyers (who represent the bulk of organic sales) don’t have enough equity in their homes to buy another house. Think about that. Like we said, housing sales depend almost entirely on two groups of buyers; firsttime homebuyers and move up buyers. Unfortunately, the number of potential move up buyers has been effectively cut in half. It’s simply impossible for prices to keep rising with so many move up buyers on the ropes.
So, if “repeat” buyers cannot support current prices, then what about the other “demand cohort”, that is, first-time home buyers?
It looks like demand is weak there, too. According to housing analyst Mark Hanson: “First-timer home volume hit a fresh 4-year lows last month and distressed sales 6-year lows”.
So, no help there either. First-time homebuyers are vanishing due to a number of factors, the biggest of which is the $1 trillion in student loans which is preventing debt-hobbled young people from filling the ranks of the first-time homebuyers. Given the onerous nature of these loans, which cannot be discharged through bankruptcy, many of these people will never own a home which, of course, means that demand will continue to weaken, sales will drop and prices will fall.
Now, despite these appalling numbers, he notes, foreclosures are down by a third from this time last year. Is it because the housing market is really any better? Nope. It’s because the fewer foreclosures the banks follow through on, the fewer losses they have to report, the more profitable they seem and the bigger the bonuses their executives can then claim. The technical term for this behavior is “securities fraud,” and it looks as if every major bank is involved to a greater or lesser degree.
But by all means, let’s reduce enforcement on banks and mortgage companies. Free markets! Murca, hail yeah! Who cares if millions of homeowners and would-be homeowners get hurt?
Friday, June 7, 2013 5:01 am
Tuesday, June 4, 2013 6:53 pm
I’m poking my head up from underground only briefly. It’s been a month: The busiest time of year at work, my own projects and term papers to turn in, and then comprehensive exams in my master’s program, on which I only got official notification of my final grade Sunday. I still have a capstone project to finish by December, and we’re redesigning the website at work. So: though there’s plenty I’d like to say about tornadoes, Benghazi, the IRS and wiretapping, much of it critical of the government, no blogging from me.
But I did stumble across a nice quote I wanted to share on joblessness, the most serious threat facing this country besides climate change. It comes from the low-tech cyclist at Cogitamus:
The problem is, the ability to create widespread abundance doesn’t mean abundance will actually be widespread. Right now, in the U.S.A. of 2013, we could have an economy where everybody’s working, and where we’re producing a lot more stuff than we are now. But we’re not in that alternate reality, because many see the economy as a morality play where we’ve got to suffer for our previous (and largely imagined) excesses, and other movers and shakers are simply dead set against a world where people have better choices than to do their bidding. Many of the people who run our world are quite happy for our economy to run at well under peak efficiency, so long as it puts them and their interests in the driver’s seat.
It’s time to take back the wheel.
Friday, April 12, 2013 6:50 pm
Quote of the day, is our children learning edition; or, measure everything and don’t do anything you can’t measure
From Kay at Balloon Juice, with emphasis in the original except where noted:
Michelle Rhee came to Ohio and lobbied my state legislature on her last national tour. She was treated like a celebrity. No one questioned any of her claims, which is unsurprising if you actually live in this state because all of her reforms involve union busting, pension looting and shifting public money to private operators(emphasis added). She’s a Right wing ideologue’s dream come true. They bought it because they believed it before she walked onto the floor that day.
The school reform industry response to the Atlanta cheating scandal was to call for better test security. As usual, the reform industry spokespeople are missing the larger point, the bigger picture. The truth is they based their reforms on high profile “turn arounds” in Atlanta and (especially) DC. If the scores in these places where they ran their experiments were bullshit, they “reformed” the US education system based on bullshit. They’re supposedly “data-driven” and most of them are billionaires. I shouldn’t have to point this out.
Hire an independent prosecutor like they did in Atlanta. Let’s find out. In the meantime, get a different opinion on “school reform.” Stop relying on the billionaires who backed this, the politicians who swallowed it without question, the hundreds of lobby shops who now exist because of it and the celebrities who promote it to evaluate it. They’re biased, they’re all in, they believe they are the “best and the brightest” and the top-tier analysts and executives are making a lot of money. It’s a recipe for disaster.
Well, disaster for ordinary taxpayers. For the grifters (and, remember, grifters are gonna grift), not so much.
Thursday, April 4, 2013 7:46 pm
… let me remark that the best way to insure against unemployment is to have no unemployment.* …
Next there is the spacious domain of public health. I was brought up on the maxim of Lord Beaconsfield which my father was always repeating: “Health and the laws of health.” We must establish on broad and solid foundations a national health service. Here let me say that there is no finer investment for any community than putting milk into babies. Healthy citizens are the greatest asset any country can have.
Following upon health and welfare is the question of education…. In moving steadily and steadfastly from a class to a national foundation in the politics and economics of our society and civilization, we must not forget the glories of the past nor how many battles we have fought for the rights of the individual and for human freedom. We must beware of trying to build a society in which nobody counts for anything except the politician or an official, a society where enterprise gains no reward and thrift no privileges. I say “trying to build” because of all the races in the world our people would be the last to consent to be governed by a bureaucracy. Freedom is their life blood….
It is in our power, however, to secure equal opportunities for all. Facilities for advanced education must be evened out and multiplied. No one who can take advantage of higher education should be denied this chance. You cannot conduct a modern community except with an adequate supply of persons upon whose education, whether humanitarian, technical or scientific, much time and money have been spent….
Interesting, isn’t it, that those who now call themselves conservative are so actively fighting that for which Winston Churchill stood when few national leaders in history have been proven so right as he? Thom Tillis and Phil Berger, y’all might want to listen to and learn from your philosophical and moral better.
*That’s not as stupid as it sounds. In context, it means putting people to work even if doing so requires running larger deficits in the short term.
Thursday, March 21, 2013 7:35 pm
Quote of the day, from Sir Charles at Cogitamus:
I have been a liberal for a long time as have many of the people I’ve known. And let me assure you, it wasn’t because back in 1980 or 1984 or 1988 all of the cool kids were doing the liberal thing and supporting food stamps. It was because I — like most people who hung in there during the Reagan years — had the moral imagination to consider what life might have been like if I lost the lottery and was born poor. It was because a study of history led me to understand how tenuous the climb to middle class status had been for so many people and how much the government giving people a hand up had meant to vast swaths of society. I was a white male middle class kid, but I understood that the world was bigger than my tribe, a spirit that continues to animate most people on the left. I did not grow up in an ideological household. … [My parents] were both very devoted to overall notions of fairness. (Neither has voted for a Republican since 1976 — I take some of the credit.) I took that overall spirit of fairness and constructed a political view that struck me as consistent with it — a kind of Rawlsian view of the world long before I ever heard of John Rawls.
Emphasis added, because the concepts included therein are so critically important for a society to function.
“Moral imagination” is just another word for empathy. Without it, we are nothing more or less than sociopaths, we have way too many of those already and we are making more by the day.
The notion of life as lottery is something many conservatives and so-called libertarians find risible. But when you compare social mobility in the U.S. with that of other wealthy Western countries, you find something interesting and disturbing: Only the U.K. has less social mobility than we do.* Parents’ wealth is the biggest single predictor of offspring’s financial success. I suppose it was only coincidence that I learned today that Gov. Pat McCrory’s proposed budget would ax the state’s inheritance tax completely.
History does indeed show that a lot of people are middle-class today only because their ancestors who were not fought to be. The labor movement of the ’30s, the right of women to vote, the civil-rights movement, and perhaps most importantly the desegregation of K-12 schools and higher education in the face of bitter resistance, all played a part in helping to increase the size of the middle class. And it’s no coincidence that all these efforts are under attack today, or that those attacks are funded by a very small number of very wealthy people who think the Constitution mandates a plutocracy. I suppose it is only coincidence, then, that the same gov I mentioned a graf ago is attacking teaching the liberal arts (such as, oh, say, history) in the UNC system.
Yes, by hook and by crook, the gov and the thugs who fund him seem bent on keeping the proles proles and turning more non-proles into proles. Sir Charles suggests above that they do not understand that the world is bigger than their tribe. I think the problem is bigger than that. I think they understand and actively seek to screw everyone who is not part of their tribe, because this hypothesis is the simplest explanation for what is otherwise a set of decisions difficult to justify on grounds of fairness, practicality or public good.
Evidence to the contrary is welcome, but I’m not holding my breath.
*Corak, Miles. 2006. “Do Poor Children Become Poor Adults? Lessons from a Cross Country Comparison of Generational Earnings Mobility.” Research on Economic Inequality, 13 no. 1: 143-188.
Wednesday, February 20, 2013 10:00 pm
This is just a taste. And I am grateful to him for the service (which was live-tweeted, thus the weird diction/syntax in places; also, I did a quick search-and-replace on some of the more vapors-inducing participial adjectives):
- Remember David Brooks’ column calling people who opposed Wolfowitz antisemitic? No? That’s the firetrucking problem.
- Remember David Brooks’ columns mocking Liberals who opposed Iraq war as deluded Bush-deranged posers? No? That’s the firetrucking problem
- Remember David Brooks calling people cynical assholes who objected to Dubya’s flightsuit tango? No? That’s the firetrucking problem.
- Remember when the collaborators at the NYT gave a firetrucking weekly column to Bloody Bill Kristol? No? That’s the firetrucking problem.
- Remember when David Brooks leveraged his Liberal bashing tripe into a column-for-life at the NYT? No? That’s the firetrucking problem.
- Remember Steve Gilliard? No? That’s the firetrucking problem.
- Remember when the wingnutosphere went nuts trying to discredit every alarming report out of Iraq? No? That’s the firetrucking problem.
- Remember when palette-trucks of shrink- wrapped taxpayer cash just firetrucking vanished into Iraq? No? That’s the firetrucking problem.
- Remember when everything that is now settled history was America-hating surrender-monkey treason? No? That’s the firetrucking problem.
- Remember when a gay hooker Conservative “reporter” w/ a fake name sat 100 ft away from Dubya for 2 yrs? No? That’s the firetrucking problem
- Remember when Halliburton made $$ selling American soldiers in Iraq toilet water? No? That’s the firetrucking problem.
- Remember when the GOP made “[Forget] Reality” into American national policy? No? That’s the firetrucking problem.
- Remember when Phil Donahue got fired for telling the truth and Conservatives got promoted for lying? No? That’s the firetrucking problem.
- Remember how the Cheney clans got really, really rich sending kids off to die for their lies? No? That’s the firetrucking problem.
- Remember when 60 million Americans re-elected these deficit-creating war criminals? No? That’s the firetrucking problem.
- Remember the incompetent children of GOP campaign contributors were put in charge of governing Iraq? No? That’s the firetrucking problem.
- Remember when Fox News told soldiers rolling into battle to look into the camera and say “Fox Rocks!” No? That’s the firetrucking problem.
You know, I stack this list up against the whining from Politico reporters that I mentioned below, and I think perhaps I should call Mike Allen or Jim Vandehei at Politico and tell them, “There are better ways you could be spending your time, and some pseudonymous blogger in flyover country has just handed you a double fistful of them for free, so pack a lunch and get busy.“
That, also, is the polite version. Too. Here’s kind of what I really feel like saying.
Wednesday, December 5, 2012 7:29 pm
This one’s for my friends and family in Charlotte.
Brian Moynihan is the CEO of Bank of America. Last May, unbeknownst to most of us, he was deposed by lawyers for insurance companies suing Bank of America and Countrywide, the “mortgage” company that BofA acquired. The insurance companies lost a metric shit-ton of money because Countrywide spent years originating a boatload of mortgages to anyone with a pulse, mortgages that were doomed to fail, and then packaged and sold them as AAA-grade bonds, which were even more attractive investments at the time because MBIA and other prominent companies had insured them.
When BofA acquired Countrywide, for no small amount of money despite the company’s obvious worthlessness at that point, Moynihan famously promised to make good on all his company’s new acquisition’s misdeeds, a promise that, if kept, could render BofA so much more insolvent that even the government wouldn’t be able to ignore it any longer. And I haven’t kept close track, so this may all be over and done with, but Moynihan also may have legal problems with BofA stockholders who have claimed they weren’t fully informed of Countrywide’s problems at the time of the acquisition, as securities law requires.
Anyway, this little Q&A between MBIA lawyers and Moynihan runs on to 223 pages, and if we are to take its protagonist at his word — a dangerous thing to do, as we shall see in a moment — then he not only has no business serving as the CEO of anything more important than watching moss grow, he also desperately needs full-time dementia care. (And having had friends and relatives with Alizheimer’s, I don’t throw that metaphor out lightly.)
Moynihan essentially had three choices in answering these questions. He could tell the truth and, in all likelihood, admit under oath to securities fraud, conspiracy and a host of other crimes. Or he could lie and say these things did not happen on his watch when they manifestly did, and face perjury charges. Or he could say he didn’t recall. (I suppose he had a fourth possibility, taking the Fifth Amendment, but a quick scan suggests he either didn’t do that or else did it very obliquely.)
Well, to absolutely no one’s surprise, Brian the Job Creator chose Door No. 3. At the moment, if you Google the phrase “great amnesiacs of history” in quotes, you get no hits. I suspect that’s about to change, as Matt Taibbi of Rolling Stone comments:
If you’re a court junkie, or have the misfortune (as some of us poor reporters do) of being forced professionally to spend a lot of time reading legal documents, the just-released Moynihan deposition in MBIA v. Bank of America, Countrywide, and a Buttload of Other Shameless Mortgage Fraudsters will go down as one of the great Nixonian-stonewalling efforts ever, and one of the more entertaining reads of the year.
In this long-awaited interrogation – Bank of America has been fighting to keep Moynihan from being deposed in this case for some time – Moynihan does a full Star Trek special, boldly going where no deponent has ever gone before, breaking out the “I don’t recall” line more often and perhaps more ridiculously than was previously thought possible. Moynihan seems to remember his own name, and perhaps his current job title, but beyond that, he’ll have to get back to you. …
Taibbi’s account alone is both hilarious and outrageous. Now that the semester is over, I can’t wait to read the actual deposition. (Hey, it’s how I roll.)
In the deposition, attorney Peter Calamari of Quinn Emmanuel, representing MBIA, attempts to ask Moynihan a series of questions about what exactly Bank of America knew about Countrywide’s operations at various points in time.
Early on, he asks Moynihan if he remembers the B of A audit committee discussing Countrywide. Moynihan says he “doesn’t recall any specific discussion of it.”
He’s asked again: In the broadest conceivable sense, do you recall ever attending an audit committee meeting where the word Countrywide or any aspect of the Countrywide transaction was ever discussed? Moynihan: I don’t recall.
Calamari counters: It’s a multi-billion dollar acquisition, was it not?
Moynihan: Yes, it was.
[Q:] Well, isn’t that the kind of thing you would talk about?
Moynihan: not necessarily . . .
This goes on and on for a while, with the Bank of America CEO continually insisting he doesn’t remember ever talking about Countrywide at these meetings, that you’d have to “get the minutes.” Incredulous, Calamari, a little sarcastically, finally asks Moynihan if he would say he has a good memory.
“I would – I could remember things, yes,” Moynihan deadpans. “I have a good memory.”
Calamari presses on, eventually asking him about the state of Countrywide when Moynihan became the CEO, leading to the following remarkable exchange, in which the CEO of one of the biggest companies in the world claims not to know anything about the most significant acquisition in the bank’s history (emphasis mine):
Q: By January 1st, 2010, when you became the CEO of Bank Of America, CFC – and I’m using the initials CFC, Countrywide Financial Corporation – itself was no longer engaged in any revenue-producing activities; is that right?
Moynihan: I wouldn’t be the best person to ask about that because I don’t know.
There are no sound effects in the transcript, but you can almost hear an audible gasp at this response. Calamari presses Moynihan on his answer.
“Sir,” he says, “you were CEO of Bank Of America in January, 2010, but you don’t know what Countrywide Financial Corporation was doing at that time?”
In an impressive display of balls, Moynihan essentially replies that Bank of America is a big company, and it’s unrealistic to ask the CEO to know about all of its parts, even the ones that are multi-billion-dollar suckholes about which the firm has been engaged in nearly constant litigation from the moment it acquired the company.
“We have several thousand legal entities,” is how Moynihan puts it. “Exactly what subsidiary took place [sic] is not what you do as the CEO. That is [sic] other people’s jobs to make sure.”
The exasperated MBIA lawyer tries again: If it’s true that Moynihan somehow managed to not know anything about the bank’s most important and most problematic subsidiary when he became CEO, well, did he ever make an effort to correct that ignorance? ”Do you ever come to learn what CFC was doing?” is how the question is posed.
“I’m not sure that I recall exactly what CFC was doing versus other parts,” Moynihan sagely concludes.
The deposition rolls on like this for 223 agonizing pages. The entire time, the Bank of America CEO presents himself as a Being There-esque cipher who was placed in charge of a Too-Big-To-Fail global banking giant by some kind of historical accident beyond his control, and appears to know little to nothing at all about the business he is running.
In the end, Moynihan even doubles back on his “we’ll pay for the things Countrywide did” quote. Asked if he said that to a Bloomberg reporter, Moynihan says he doesn’t remember that either, though he guesses the reporter got it right.
Well, he’s asked, assuming he did say it, does the quote accurately reflect Moynihan’s opinion?
“It is what it is,” Moynihan says philosophically.
There’s nothing surprising about any of this – it’s natural that a Bank of America executive would do everything he could to deny responsibility for Countrywide’s messes. But that doesn’t mean it’s not funny. By about the thirtieth “I don’t recall,” I was laughing out loud.
It’s also more than a little infuriating. In the pre-crash years, Countrywide was the biggest, loudest, most obvious fraud in a marketplace full of them …
One of the biggest indictments you can level against U.S. news media is that U.S. financiers were engaging in this level of world-historical theft, fraud and conspiracy right out in the open for a decade and more, and yet no one of consequence has done any hard time for it.
If we are to take Moynihan at his word, the only way you could have been more delusional and out of touch than he was to have believed on election night that Mitt Romney was going to win big. But as the deposition makes clear, taking Brian Moynihan at his word would make a box of rocks look like a Davidson valedictorian.
Wednesday, November 28, 2012 7:54 pm
Pretty much every single professional journalist in Washington, and a lot of regular Americans, think there are virtues to be had in balance, moderation and centrism. Perhaps as an extension of that belief — for it certainly is not on the basis of even moderately complicated economics, or, for that matter, mathematics — they believe that both the rich and the poor must give something up to address the nation’s budget issues.
(I refuse to call them budget problems, let alone crises; they are issues in the way that we say that sociopaths have issues in that they are the perfectly predictable, and pretty well predicted, results of predictably sociopathic decisions made by known sociopaths.)
So a lot of people who either ought to know better, or who do know better but stand to profit from pretending otherwise, are out there arguing that we need to screw the rich a tiny bit and the middle class and poor a lot to “fix” the deficit (which is fixing itself pretty nicely at the moment, plunging dramatically as a percentage of GDP, but never mind that) and that if both sides are angry, as they are about the nonexistent Simpson-Bowles “report,” then we must be doing the right thing. The problem, of course, is that not all anger is justified, valid, moral or even sane, as Charlie Pierce reminds us:
Can we please have an honest assessment of credibility here? If billionaires are angry because they might have to chip in some boutonniere money on April 15, and a middle-class family is angry because their 82-year old grandmother with Alzheimer’s is lying in her own filth in a substandard nursing home because of Medicare “reforms,” are we honestly saying that the anger of both sides is equally justified? Has anyone even asked that question?
To the best of my knowledge, no one in the DC media has asked this question, and my friend Doug Clark at the N&R, who’s usually much more sensible, doesn’t seem to be concerned with it, and, hey, I’ve got a blog, so I thought I’d raise it here.
Wednesday, November 14, 2012 7:12 pm
Also, if you don’t want to repeat after me, kids, repeat after economist Dean Baker: The deficit problem is not an entitlements problem.
Listen to the man before you go giving away your — and my — Social Security and Medicare:
The gang for gutting Social Security and Medicare (aka “The Campaign to Fix the Debt”) are running in high gear. During the long election campaign they gathered dollars, corporate CEOs and washed up politicians for a full-fledged push in the final months of the year. They are hoping that the hype around the budget standoff (aka “fiscal cliff”) can be used for a grand bargain that eviscerates the country’s two most important social programs, Social Security and Medicare.
They made a point of keeping this plan out of election year politics because they know it is a huge loser with the electorate. People across the political and ideological spectrums strongly support these programs and are opposed to cuts. Politicians who advocated cuts would have been likely losers on Election Day. But now that the voters are out of the way, the Wall Street gang and the CEOs see their opportunity.
It is especially important that they act now, because one of the pillars of their deficit horror story could be collapsing. Due to a sharp slowing in the rise of health care costs over the last four years, the assumption that exploding health care costs would lead to unfathomable deficits may no longer be plausible even to people in high level policy positions.
As we all know, the large budget deficits of the last four years are entirely due to the economic downturn caused by the collapse of the housing bubble. The budget deficit was slightly over 1.0 percent of GDP in 2007 and the Congressional Budget Office (CBO) projections showed it remaining low for the near-term future. The origin of the large deficits of the last few years is not a debatable point among serious people, even though talk of “trillion dollar deficits, with a ‘t’” is very good for scaring the children.
However, the big stick for the deficit hawks was their story of huge deficits in the longer term. They attributed these to the rising cost of “entitlements,” which are known to the rest of us as Social Security, Medicare, and Medicaid.
While they like to push the notion that the aging of the population threatened to impose an unbearable burden on future generations, the reality is that most of the horror story of huge deficits was driven by projections of exploding private sector health care costs. Since Medicare and Medicaid mostly pay for private sector health care, an explosion in private sector health care costs would eventually make these programs unaffordable.
As some of us have long pointedout, there are serious grounds for questioning the plausibility of projections that the health care sector would rise to 30 or 40 percent of GDP over the rest of the century. Recently a paper from the Federal Reserve Boarddocumented this argument in considerable detail.
Even more important than the professional argument over health care cost projections is the recent trend in health care costs. While the CBO projections assume that age-adjusted health care costs rise considerably more rapidly than per capita income, in the last four years they have been roughly keeping pace with per capita income.
In fact, in the last year nominal spending on health care services, the sector that comprises almost two-thirds of health care costs, rose by just 1.7 percent. This is far below the rate of nominal GDP growth over this period, which was more than 4.0 percent. While at least some of this slowing in health care costs is undoubtedly due to the downturn, it is hard to believe that it is not at least partially attributable to a slower underlying rate of health care cost growth.
CBO and other budget forecasters can ignore economic reality for a period of time (they ignored the housing bubble until after its collapse wrecked the economy), but if it continues, at some point they will have to incorporate the trend of slower health care cost growth into their projections. When this happens, the really scary long-term deficit numbers will disappear.
A projection that assumes that health care costs will only rise as a result of the aging of the population, and otherwise move in step with per capita income, will lop tens of trillions of dollars off the most commonly cited long-term deficit projections. It would cost some deficit hawks, like National Public Radio, more than $100 trillion of their long-term deficit story. This would be a real disaster for the deficit hawk industry.
This is why the Campaign to Fix the Debt and the rest of the deficit hawk industry will be operating at full speed at least until a budget deal is reached over the current impasse. If CBO adjusts its long-term health care cost projections downward then their whole rationale for gutting Social Security and Medicare will disappear. Now that is really a crisis.
And in light of today’s horrid front-page News & Record article on the so-called fiscal cliff, here’s a question for Greensboro peeps: Would it really be too much trouble to get Jeff Gauger and his crew at the N&R to introduce some fact-based economic coverage? The voters last week seemed to indicate a taste for that kind of thing.
Monday, November 12, 2012 7:21 pm
Monday, November 5, 2012 10:38 pm
It is vitally important that the Republican party be kept away from as much power as possible until the party regains its senses again. It is not just important to the advance of progressive goals, though it is. It is not just important to maintain the modicum of social justice that it has taken eighty years to build into the institutions of our government, though it is. It is important, too, that that you vote for one of these men based on whom else, exactly, he owes. Who is it that’s going to come with the fiddler to collect when you get what you’ve bargained for?
Barack Obama owes more than I’d like him to owe to the Wall Street crowd. He probably at this point owes a little more than I’d like him to owe to the military. The rest he owes to the millions of people who elected him in 2008 — especially to those people whose enthusiasm I neither shared nor really understood — and he will owe them even more if they come out and pull his chestnuts out of the fire for him this time around. He may sell them out — and, yes, I understand if you wanted to add “again” to that statement — but they are not likely to revenge themselves against the country if he does and, even if they decided to, they don’t have the power to do much but yell at the right buildings.
On the other hand, Willard Romney owes even more to the Wall Street crowd, and he owes even more to the military, but he also owes everything he is politically to the snake-handlers and the Bible-bangers, to the Creationist morons and to the people who stalk doctors and glue their heads to the clinic doors, to the reckless plutocrats and to the vote-suppressors, to the Randian fantasts and libertarian fakers, to the closeted and not-so-closeted racists who have been so empowered by the party that has given them a home, to the enemies of science and to the enemies of reason, to the devil’s bargain of obvious tactical deceit and to the devil’s honoraria of dark, anonymous money, and, ultimately, to those shadowy places in himself wherein Romney sold out who he might actually be to his overweening ambition. It is a fearsome bill to come due for any man, let alone one as mendaciously malleable as the Republican nominee. Obama owes the disgruntled. Romney owes the crazy. And that makes all the difference.
I expect Pat McCrory to be elected governor tomorrow and for his coattails to bring this state’s electoral votes back into the red column. And I expect McCrory to spend the next four years signing every damn-fool piece of lunacy the teabaggers in the General Assembly send his way, because that’s the GOP base in this state now, and McCrory has ambitions. And the damage from this dynamic will be significant. Make no mistake. If we’re not careful, by 2016 we’ll be well on the way to making Mississippi look good.
But, if honest ballots are counted honestly, Barack Obama will win re-election with a minimum of 300 electoral votes. And given issues ranging from Iran to global warming, that might be the difference between life and death, both here and abroad, to millions of people. Me? I’ve already voted. I am disgruntled, very much so. But I am not crazy.
A final word to my friends in deep-blue states who aren’t totally happy with Obama’s record and are thinking about casting a protest vote for Jill Stein or Roger Rabbit or whomever: I hear you. But know this: Those crazy folks I mentioned above intend, if Obama wins the electoral vote but not the popular vote, to claim that Obama is not a “legitimate” president. They will go through every hare-brained legal exercise they can find to try to prevent him from returning to the White House, and there are at least four Supreme Court justices who will nod and smile at any damn-fool argument these crazy people try to make. Yes, yes, George Bush lost the popular vote in 2000. But expecting logical consistency from crazy people, although not necessarily crazy itself, is a fool’s errand. Let’s just erase this contingency by giving Obama a popular-vote margin not even well-organized, well-funded crazy people can steal.
Wednesday, October 24, 2012 7:01 pm
Rajat Gupta, a former director of Goldman Sachs, is getting two years in prison and being fined $5 million for his role in providing insider information to Galleon Group hedge-fund manager Raj Rajaratnam.
The max he was looking at was 25 years, but the max generally isn’t a real number. The government was recommending 10 years, which sounds about right; Rajaratnam got 11. But Gupta got off with two after lots of people testified about what a nice guy he was and his daughter testified about how she’d been harassed at school after his arrest. I’m sorry for his daughter, but that has no bearing on Daddy’s sentence. The guy was walking directly out of Goldman Sachs board meetings to telephone Rajaratnam; that’s pretty brazen.
Unlike homicide, a crime often committed in the heat of the moment and with a less than clear head, it takes a fair bit of premeditation and deliberation to engage profitably in insider trading. That’s exactly the kind of crime that stiffer sentences really will deter. Frog marching the banksters around in orange jumpsuits on live TV probably would also help, I think.
But getting sentenced for insider trading is so 1980s. How ’bout we start sentencing people for blowing up the economy? We wouldn’t want Gupta to be lonely in prison, missing all his friends at Goldman Sachs, would we?
*hed h/t commenter rgqueen
Thursday, October 18, 2012 6:56 pm
Our terrible, horrible, no-good, very-bad news media and the deficit; or, Don’t point that gun unless …
In the middle of a steep recession, any measure that reduces the deficit will cost jobs. That is because it will reduce demand. If anyone wants to see a lower deficit in 2013 (certainly the Post does), then they want to throw people out of work.
This is sort of like pulling the trigger on a gun pointed at someone’s head. Presumably this is not done unless the desire is to see the person dead.
Saturday, August 18, 2012 12:02 am
Saturday, August 4, 2012 10:35 pm
Yes, on this great day when we hear the unemployment rate is 8.3 percent, NYT columnist Bill Keller is still pressing on the need to curb Social Security and Medicare spending and calling on his fellow baby boomers to rise to the occasion. He has even brought in Jim Kessler, the senior vice-president for policy at Third Way, to help him make the case.
I’m sure that Keller and Kessler would consider my mention of the 8.3 percent unemployment rate to be rude, after all what does that have to do with the need to cut Social Security and Medicare? There is a simple answer to that. The 8.3 percent unemployment rate should be seen as comparable to a school fire where the children are still inside the building. Tens of millions of people are seeing their lives ruined.
This is not a short-term story. Many of the families that will break up under the stress of high unemployment or the loss of their home will not get back together when the unemployment rate falls back to a more normal level. Similarly, the kids who have their school lives disrupted because their parents lose their homes or must move in search of jobs and/or family break up will not have the damage repaired later. This is why 8.3 percent unemployment should be problems #1, #2, and #3.
And yes, we do know how to fix this. Spending money puts people to work. Contrary to a bizare cult in policy circles, it does not matter whether money comes from the private sector or public sector –dollars will get people to work. And the people who get those dollars will spend them and put other people to work. If Keller and Kessler want to be responsible baby boomers they will do everything in their power to try to get us back to full employment quickly so that so many children do not have to grow up in families that are troubled by unemployment. The next generation will thank them for their efforts, I assure them.
UPDATE: Link added. H/t to Beau for alerting me to the omission.
UPDATE: Greensboro folks, this Keller piece appears on the front of today’s Ideas section in the News & Record.
Thursday, July 26, 2012 8:29 pm
Sorry, but, yes, the 2008 bank bailouts really were as much of a reaming of the American taxpayer as we thought at the time
Another crappy “both-sides-do-it” column: Betsey Stevenson and Justin Wolfers write at Bloomberg that our current political debate on the economy is a “sham” because leading economists unanimously agree that the bailouts helped the unemployment situation. But economist Dean Baker provides the missing context: While that claim might be technically true, the bailouts could have been structured far more constructively than they were, both to address then-current problems and to help prevent the recurrence of similar problems:
The Wall Street banks were on life support in the fall of 2008. Without trillions of dollars of government loans and guarantees (much more came from the Fed than the TARP money that went through the Treasury), they would be dead, deceased, pushing up daisies, out of business. The boys and girls getting those huge paychecks on Wall Street were at Uncle Sam’s doorstep pleading for help. There was no one else to save them from destitution.
In this context there were three main choices. One was to drag out Mitt Romney and give them a lecture about the free market and tell them the government is not about giving people stuff. In this case the banks go under leading to a full-fledged financial melt-down. In this story, the economy certainly takes a bigger immediate hit, but the advantage is that we have a Wall Street free world. Goldman Sachs, Citigroup, Morgan Stanley, J.P. Morgan and the rest would be history. They are in receivership, waiting to broken up and sold off. This parasitic sector that has led to so much waste, corruption and inequality is no longer a drag on the economy. Consider this short-term pain for long-term gain. (Just kidding about the Romney part, he supported the bailout.)
The second choice is hand over the money, which is the route we took. Oh yeah, Congress did put conditions on the money, but we know that was just for show. One of the most disgusting things I’ve seen in my years in Washington were the excellent stories on how executive compensation was treated in the TARP that the Washington Post and Wall Street Journal ran after the TARP passed.
Both articles featured comments from compensation expert Graeff Crystal who explained that the government could have changed compensation patterns on Wall Street forever (the Wall Street boys needed the money), but Congress instead took a pass. It would have been great if Crystal’s views were part of the public debate before the bill was passed.
This brings up option number 3, hand the money over but with real conditions. Congress could have said that banks that got TARP money, funds through the Fed’s special lending facilities, or benefited from the various Treasury and FDIC insurance commitments had to:
a) strictly limit all pay in all forms for the next five years;
b) set up a clear, legally enforceable plan for writing down underwater mortgages on their books;
c) agree to a breakup schedule that would get them below “too big to fail” size by a set date.
To my mind, option #3 was clearly the best route since it would fix the financial industry and avoid the crash that would result from going cold turkey in option #1. But let’s say that the choice is just the full crash in option #1 or the handout in option #2. In order to seriously decide between these we need some basis for assessing the size of the downturn. Saying that the short-term impact would have been worse in option #2 doesn’t tell us anything about the proper policy choice. We pay short-term costs for long-term benefits all the time. We need the terms of the trade-off.
In ths respect, the commonly claimed “second Great Depression”scenario is, to use a technical economic term, “crap.” The first Great Depression, by which I mean a decade of double-digit unemployment was not locked in stone by the mistakes made at its onset. There was nothing that would have prevented the government from having the sort of massive stimulus spending that eventually got us back to full employment (a.k.a. World War II) in 1931 instead of 1941 and without the war. The fact that we remained in a depression for more than a decade was due to inadequate policy response.
In this respect, to claim that if we let the banks collapse we would have been destined to suffer a decade of double digit unemployment is absurd. That would only be the result if we continued to have bad policy, not just in 2008, but in 2010, in 2012, right through to 2018.
The serious question is how bad could we reasonably expect the downturn to have been if we had gone the cold turkey route. The place to look for insight on this question is Argentina, which went the financial collapse route in December of 2001. This was the real deal. Banks shut, no access to ATMs, no one knowing when they could get their money out of their bank, if they ever could.
This collapse led to a plunge in GDP for three months, followed by three months in which the economy stabilized and then six years of robust growth. It took the country a year and a half to make up the output lost following the crisis.
While there is no guarantee that the Bernanke-Geithner team would be as competent as Argentina’s crew [indeed, subsequent events have shown that they are not -- Lex], if we assume for the moment they are, then the relevant question would be if it is worth this sort of downturn to clean up the financial sector once and for all. I’m inclined to say yes, but I certainly could understand that others may view the situation differently.
Anyhow, this is the debate that we should have had the time and at least be acknowledging in retrospect.
We had the bastards down in the fall of 2008, and we didn’t hit them with the chair. A century from now that failure will be considered the key turning point in the transition of the U.S. from a democratic republic to a full-on oligarchy.