A response from a friend (and Obama voter) regarding the CNN gotcha video.

John,

The YouTube video you posted on Logpundit of the nervous (and stupid) CNN reporter is a good catch.

I can’t believe that she tried to write the entire crowd off as Fox News right-wingers. What poor reporting.

CNN: 0, Bloggers: 1

I really agree with the angry woman’s implied point: it isn’t so much that I object to federal income taxes, per se, but rather than neither I nor any other citizen has any real say in how they are spent. I would feel a good deal different if there was some real transparency with washington’s finances, starting w/lobbyists and their capitol hill donations. Maybe the ‘net will make things different, though I’m not yet convinced that it will. Certainly, it can, at least in principle…

My biggest wish would be to encourage as many people as possible to have ZERO taxes withheld throughout the year, so that they would have to pay their taxes all in lump sum payments during April.

My response:

Yeah, when the dude had the sign that said, “Republicans suck too” with “Ban the Federal Reserve” underneath it, I’m sure that made the reporter feel small. I also thought that “the ban the fed” stuff would never be shown on any news channel…and it wasn’t, as this is on YouTube.

I looked at the news…the story was hard to find in the NY Times, and non-existent in the money hemorrhaging Boston Globe. I heard NBC was being confrontational as well. Fox had a few stories, but less than I thought. National Review, much the mouthpiece of the GOP, did link that video I showed you, but otherwise the response from them was VERY muted. In other words, no featured articles on the Tea Parties. The editors had a pro-bailout stance when it hit the fan last fall, sounded like a bunch of welfare queens. You could tell William F Buckley, Jr. was long gone at this point. So, I don’t know if they pulled back coverage because of concerns of astroturf (i.e. media fed fake “grassroots”), but I think the more likely explanation is that Fox and National Review don’t want to see anti-bank, anti-fed signs. It’s all about socialism, see. I was a little surprised that the video slipped through the cracks at National Review, but sometimes it happens.

Thing is, Obama didn’t even raise taxes yet…just wait until next year.

I’m sure most protestors pay their taxes in full in April, or pay quarterly. I’ve heard about people who have been waiting for a substantial refund and have been delayed for at least a month, they are worried they won’t get it back.

Populism has long been about the struggle between citizens and the banks, not so much with employers (unionism). Right now the Dems are very beholden to the banks (Chris Dodd as head of banking and commerce, is particularly egregious) but so are the GOP. That’s why the mainstream spin is so ridiculous. At this point nationalism of failed banks (Citibank, Goldman Sachs) isn’t such a bad idea. Pay the bankers what I make, a government employee wage and if they want to make more money let them risk rich people’s extra money, but don’t mess with our pensions. That way if they fail they fail. But if it’s too big to fail, then, like the Hoover Dam, it is property of the US government.

I mean, at this point, could a bunch of Timmy Geithner’s do worse than ruin the economy of the entire world?

Qualifier: OK Free Marketeers, I’m open to suggestions. This is an open forum. Persuade me that I’m wrong.

Update: I don’t have cable. It seems that Fox News TV was saturating the airwaves with Tea Party newscasts, but there were few reports on the site about it. So Fox provided more than ample coverage. I just saw the outrageous video on MSNBC and I have to say they have no class.

Now, on principle, I’m against bailing out any industry that isn’t viable in the marketplace.  I agree with Senator Shelby, who debated the auto bailout with Barney Frank recently on Charlie Rose.  He said the US government should not be in charge of picking winners and losers in the marketplace, essentially.  Shelby stood by his principles and voted against the bank bailout as well.  But this weekend (notice it is always the weekend, while the football games are on) the congress made significant “progress” in the passing the auto bailout.  The details of this story are worth parsing.  For background, considering watching the Richard Shelby-Barney Frank debate on Charlie Rose.

This all has horrible roots in the bank bailout.  The banks were given a blank check by Ben Bernanke and Henry Paulsen with the intention that they would keep the credit pump primed.  Well, the banks responded by either sitting on the cash, or worse, doubling down on credit default swaps.  At least, the big banks are not lending to the auto industry.  So, now the car companies come hat in hand for credit from the government.  The congress already issued $25 Billion in loans to the auto industry earlier this autumn to pay for converting cars to hybrids.  Now, Nancy Pelosi and the San Francisco wing of the democratic party was wanting to take money out of the TARP funds to pay for the auto bailout.  Now, the $700 billion of TARP funds is already a done deal, and the $25 billion for the auto companies is a done deal.  Conservatives like me can only whine and complain at this point.  Marginally, it is a small victory that Pelosi had to take money out of the hybrid fund to pay for viability of the industry it is designed for.  I mean, if there is no one building American vehicles, who will Pelosi and Waxman browbeat into making cheap shoddy cars no one wants?  So, the attempt at taking money out of the TARP fund was a noble one, but as you can see the government must never renegue it’s commitment to those most holy financial institutions…it’s easy to see who holds the cards here, and it ain’t Joe the car-manufacturer and last in line is Joe the Taxpayer.

Another wrinkle in the story is that many, many credit default swaps have been bought on GM in the last year.  Someone is standing to make a big profit if GM goes bankrupt.  Consider this blurb:

The rapid increase in the price of GM CDSs this year, coupled with the decrease in notional amount outstanding, implies that sellers of protection have been buying up protection in the over-the-counter market, presumably to set off against their sales of protection. The AIGs and Citigroups of the world are the sellers of protection, and they’re busy sending money to the buyers of protection, both directly through purchases of gambling CDSs and indirectly through posting collateral for their sins. And we all know where that money is coming from: Henry Paulson and Ben Bernanke. If the bailout comes, and the bankruptcy doesn’t, the prices of GM CDSs will fall quickly. The recent purchasers will be hurt, and maybe that will include AIG and Citi.

So, the average Joe might want to ask if this a fight between automakers and taxpayers or a fight between automakers and banks, and then decide who they will support.

Funny how if you bet on failure enough, it becomes a self-fulfilling prophecy. Former bankers in our treasury and in our federal reserve have sold out our financial sovereignty in order to honor their most important commitments, to pay out on credit default swaps. So many rules have been broken in the last few months in order to “save our economy”. What harm would it do to our economy if all of the individuals and institutions that gambled in an attempt to profit on the failure of the American economy, with no stake in our success, were told, “No, you cannot have it”?

Listen to Nassim Taleb, my friends. Cash out your “moderately risky investments” now and buy gold or real estate, or a safe at your house. Too many people at the top, in charge of printing money and setting interest rates, are too cozy with too many people betting on our failure for this economic problem to end soon, or prettily.

The reluctance of banks to lend these days has me curious.  When capital becomes more scarce, does not it’s value intrinsically rise?  In the case of money, the reluctance of banks to lend, which seems to stem from not knowing how many bad assets are held by trading partners, should and does lead to higher interest rates.  However, Bernanke and company are keeping rates low, and keep the shell game going by injecting capital into 9 big banks regardless of their assets.  My open question is whether holding down the interest rates has any economic standing whatsoever, or is it simply to keep the adjustable rates mortgages from going up and more homes from foreclosing?  Isn’t the right thing to do to let rates go up and let this adjustment work it’s way through the market?  Once we find out who are the winners (Wells Fargo?) and losers (Citibank?) we can more quickly park money in safer harbors.

Oh, I guess we should just let the government choose winners and losers.