October 6, 2015 archive

Big Ben

If you’re a careful reader you know that I don’t exactly worship at the altar of Krugthulu.  He has good ideas about economic stimulus but willfully misses the point of Modern Monetary Theory, until you can demonstrate inflation the amount of fiat currency you circulate is meaningless, even though his research and analysis point to exactly that conclusion.

Still it’s useful and handy in some cases to appeal to the authority of his Nobel Prize.  Yes it’s a fallacy but arguments are won by rhetoric, not logic.  I quote him when I agree and mostly ignore him when I don’t.

One thing I’ve never gotten is his infatuation with Benjamin Bernanke (or for that matter Larry Summers).  They all went to the same schools and graduate seminars and had the same teachers so there is familiarity and a collegial aspect I suppose counts for a lot in the halls of Academe and, to be fair, much of what they are saying now that they’re out of the Beltway Bubble of Madness is perfectly sound Samuelson Economics (not that he was particularly Keynesian mind you, just that he had the intellectual integrity not to argue with the proven results of fiscal stimulus).

But I can’t help but remember that when these two cowards (Bernanke and Summers) had a chance in power to put into action the policies that they now say they favored all along they cravenly failed to do so.

Thanks for nothing assholes.

Ben has a new volume of preening mental masturbation out that prompted this assessment from Yves Smith (who is likewise wrong on some things, I only quote her when she’s right, meaning of course that she agrees with me).

Bernanke’s Cockroaches

by Yves Smith, Naked Capitalism

Posted on October 6, 2015

The idea that Bernanke did a praiseworthy job has been widely debunked. Bernanke continued the “Greenspan put” that stoked speculation all across the credit markets, to the point that anyone who was paying attention had heard of the “wall of liquidity” and massively compressed credit spreads by mid 2006. The Fed did even less to enforce the Home Ownership and Equity Protection Act meant to curb subprime lending than the bank-cronyistic OCC did.

As the crisis unfolded, the Fed failed to take the risk posed by the credit default swaps market seriously, even though CDS contagion risk was the most important reason for bailing out Bear Stearns, otherwise too small to be deemed worthy of a rescue. Instead, the Fed went into “mission accomplished” mode after Bear’s bailout.

Worse, after the crisis, the Fed consistently pursued policies to save banks, in particular the bank executive incumbents, and let the cost of the crisis fall on Main Street, particularly workers and homeowners in the bottom 90%. Did Bernanke say a peep when the big financial firms that had just been saved from certain death went to pay their executives and staffs record bonuses in 2009 and 2010 rather than rebuild their equity bases? The Fed was so deeply complicit that it didn’t even attempt a private scolding.

And the central bank was fully on board with the Treasury’s treatment of the mortgage-backed securities market as too big to fail, which amounted to a second, stealth bailout. The refusal to pressure banks to do principal modifications resulted in unnecessary foreclosures, and a massive loss of wealth, not just to homeowners but also to investors in mortgage backed securities. The Fed joined the Treasury and OCC in all of the various bank “get out of liability for almost free” mortgage and servicer settlements. It was thus a full, albeit quiet, partner with the Geithner “foam the runway” program of wrecking borrowers’ lives for the dubious purpose of preserving bank profits.

Bernanke apparently feels compelled to up his game in self-hagiography a bit, since at least some of the public recognizes that he’s an arsonist trying to take credit for putting out a fire, except the fire-fighting wasn’t all that well done, since the rubble is still smoldering years later.

Bernanke conveniently conflates bailing out institutions (which was necessary) with the issue of responsibility, as in holding individuals accountable. The refusal to replace boards and top executives, particularly at institutions with obviously weak leadership (Citigroup and Bank of America were top of the list) was indefensible. Even if there was not enough readily locatable recently retired bank executives to fill the ranks of all the wobbly banks, forcing changes upon Citi and Bank of America would have sent a very powerful message to the rest. And we’ve argued at length, for years, that there was no dearth of legal theories that were simply not even attempted as far as prosecuting bank executives was concerned, starting with the one designed for the task, Sarbanes Oxley.

But what pathetic new line do we get from Bernanke? His feelers were hurt when he read a bumper sticker? People lost their businesses, their jobs, their homes as a result of the crisis, and we are supposed to feel sorry for his wounded feelings when he is called out in the tamest terms possible?

This illustrates how insulated and preening our ruling classes have become, that they are unable even to take mild criticism, let alone a remotely accurate assessment of the job they’ve done. By contrast, as Jim Collins found in his book on true top performers, Good to Great, the heads of those companies did the opposite of the diseased norms exhibited by Bernanke: they gave credit for success to their teams, and took full blame for failure.

The time is past to deal with these intellignce-insulting efforts at revisionist history. When I read a new, improved set of excuses from people like Bernanke, I feel like I’ve walked into my kitchen and turned on the lights after the exterminator paid a visit, only to find cockroaches scuttling all over my counter yet again.


The Breakfast Club (You Ain’t Heard Nothin’ Yet)

Welcome to The Breakfast Club! We’re a disorganized group of rebel lefties who hang out and chat if and when we’re not too hungover  we’ve been bailed out we’re not too exhausted from last night’s (CENSORED) the caffeine kicks in. Join us every weekday morning at 9am (ET) and weekend morning at 10:30am (ET) to talk about current news and our boring lives and to make fun of LaEscapee! If we are ever running late, it’s PhilJD’s fault.

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This Day in History

Egypt’s President Anwar Sadat assassinated; Yom Kippur War breaks out in Mideast; Top U.S. arms inspector reports on Iraq’s WMD; Actress Bette Davis dies; ‘The Jazz Singer’ heralds talking pictures.

Breakfast Tunes

Something to Think about over Coffee Prozac

If you’ve never been hated by your child, you’ve never been a parent.

Bette Davis

On This Day In History October 6

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.

Find the past “On This Day in History” here.

October 6 is the 279th day of the year (280th in leap years) in the Gregorian calendar. There are 86 days remaining until the end of the year.

On this day in 1927. The Jazz Singer makes its debut in New York City.

The first feature-length motion picture with synchronized dialogue sequences, its release heralded the commercial ascendance of the “talkies” and the decline of the silent film era. Produced by Warner Bros. with its Vitaphone sound-on-disc system, the movie stars Al Jolson, who performs six songs. Directed by Alan Crosland, it is based on a play by Samson Raphaelson.

The story begins with young Jakie Rabinowitz defying the traditions of his devout Jewish family by singing popular tunes in a beer hall. Punished by his father, a cantor, Jakie runs away from home. Some years later, now calling himself Jack Robin, he has become a talented jazz singer. He attempts to build a career as an entertainer, but his professional ambitions ultimately come into conflict with the demands of his home and heritage.

The premiere was set for October 6, 1927, at Warner Bros.’ flagship theater in New York City. The choice of date was pure show business-the following day was Yom Kippur, the Jewish holiday around which much of the movie’s plot revolves.  The buildup to the premiere was tense. Besides Warner Bros.’ precarious financial position, the physical presentation of the film itself was remarkably complex:


Each of Jolson’s musical numbers was mounted on a separate reel with a separate accompanying sound disc. Even though the film was only eighty-nine minutes long…there were fifteen reels and fifteen discs to manage, and the projectionist had to be able to thread the film and cue up the Vitaphone records very quickly. The least stumble, hesitation, or human error would result in public and financial humiliation for the company.

None of the Warner brothers were able to attend: Sam Warner-among them, the strongest advocate for Vitaphone-had died the previous day of pneumonia, and the surviving brothers had returned to California for his funeral.

According to Doris Warner, who was in attendance, about halfway through the film she began to feel that something exceptional was taking place. Jolson’s “Wait a minute” line had prompted a loud, positive response from the audience. Applause followed each of his songs. Excitement built, and when Jolson and Eugenie Besserer began their dialogue scene, “the audience became hysterical.”  After the show, the audience turned into a “milling, battling, mob”, in one journalist’s description, chanting “Jolson, Jolson, Jolson!” Among those who reviewed the film, the critic who foresaw most clearly what it presaged for the future of cinema was Life magazine’s Robert Sherwood. He described the spoken dialogue scene between Jolson and Besserer as “fraught with tremendous significance…. I for one suddenly realized that the end of the silent drama is in sight”.

Critical reaction was generally, though far from universally, positive. New York Times critic Mordaunt Hall, reviewing the film’s premiere, declared that


not since the first presentation of Vitaphone features, more than a year ago [i.e., Don Juan], has anything like the ovation been heard in a motion-picture theatre…. The Vitaphoned songs and some dialogue have been introduced most adroitly. This in itself is an ambitious move, for in the expression of song the Vitaphone vitalizes the production enormously. The dialogue is not so effective, for it does not always catch the nuances of speech or inflections of the voice so that one is not aware of the mechanical features.

Variety called it “[u]ndoubtedly the best thing Vitaphone has ever put on the screen…[with] abundant power and appeal.” Richard Watts, Jr. of the New York Herald Tribune called it a “a pleasantly sentimental orgy dealing with a struggle between religion and art…. [T]his is not essentially a motion picture, but rather a chance to capture for comparative immortality the sight and sound of a great performer.” The Exhibitors Herald’s take was virtually identical: “scarcely a motion picture. It should be more properly labeled an enlarged Vitaphone record of Al Jolson in half a dozen songs.” The film received favorable reviews in both the Jewish press and in African American newspapers such as the Baltimore Afro-American, the New York Amsterdam News, and the Pittsburgh Courier. The headline of the Los Angeles Times review told a somewhat different story: “‘Jazz Singer’ Scores a Hit-Vitaphone and Al Jolson Responsible, Picture Itself Second Rate.” Photoplay dismissed Jolson as “no movie actor. Without his Broadway reputation he wouldn’t rate as a minor player.”

The Daily Late Nightly Show (Wet Start)

The New Kid

Web Exclusive!

You know, cinnamon and nutmeg can be a year round thing.

But aren’t they all?

Not a terrible start about which I may talk more about later but I am not in the mood for today.  Seth Rogen is utterly unmemorable and pretty much an ignorable asshole after The Interview which was not only offensive but also boring and unfunny.  The only good that came of it was the Sony Hack leaks which prove that Sony is a horrible company that discriminates against women and produces other pieces of crap like Paul Blart: Mall Cop parts 1 and 2 and has ruined the XMen, Spiderman, and The Fantastic Four for a generation of comic book readers.

This week’s guests-

Trevor Noah

The New Continuity

General Regina Stalwart

Umm… Who blows up Médecins Sans Frontières hospitals again?  Why, that would be the United States of America.

We should all feel very proud that we murdered doctors and children to kill some “Taliban” who were wounded.

You know, we executed Germans and Japanese for less, about which we should feel very proud also.  USA!  USA!  USA!

Bitter?  Moi?  Not any more than Denatonium.

Tonightly’s panel is Mike Yard, Rory Albanese, and Ashleigh Banfield.  We will be talking about the Oregon shootings.

The Dancing Man

You know we only deal in the rankest most scurrilous rumors here and this one has been debunked more than once by the same “official” sources that claim “several” individuals were killed as the result of “collateral damage” in Kunduz, but the story goes like this-

Far from being a glamourous fighter jock, John “Wet Start” McCain drove an A-4 Bomb Truck because his Daddy was an Admiral and they figured that was where he could do the least harm.  Among his favorite things to do was “Wet Start” his airplane which means he dumped a lot of fuel in his engine and took off the deck with a long tail of trailing flame.  He was doing this on the U.S.S. Forrestal and accidentally cooked off a Zuni rocket on the plane behind him in the flight line which struck his jet and ignited a fire that killed 134 sailors.

He’s the most prolific guest in D.C.

Also on tonight are Yo-Yo Ma, and Misty Copeland.

This Week’s guests-