In my opinion, the likelihood of no candidate for Governor crossing the 50% threshold looms greater every day, meaning that the final decision goes into the Legislature’s hands. The two greatest impediments to convincing the Legislators to consider awarding the Governorship to the number two vote-getter in a close race – thereby respecting a voting majority’s rejection of incumbent Jim Douglas against the context of a split on the left are the Democratic Legislators and Anthony Pollina. That looks like it may be changing.

It’s common knowledge that Pollina and the Progressives were looking to such a scenario in his previous runs this decade – in 2000 and 2002. And yet, when asked about the topic this election season by Mark Johnson who was clearly on a tear to try and discredit the notion, he not only pulled a 180, but a full scale historical retcon when he said:

“The other thing is when you talk about, well, the legislature may elect the person who came in second – thats not a good signal to democracy, frankly. I don’t – I don’t – think – if that’s the strategy, then I think Vermonters ought to understand that the strategy is that Gaye Symington plans to come in second and expect the legislature to elect her. Boy I wouldn’t want to be the governor who came in second, to tell you the truth.”

Why the complete flip? I think this next line tells us:

“And the other thing is that that is totally contradictory to everything the Democratic Party said back in 2000 and 2002, when they made everyone commit to the idea that the highest vote getter should be the one who the legislature elects – that the highest vote getter should – and I agree with that, frankly. I don’t have a problem with that. But it would be interesting to me if now they would change their tune and say now – everybody – the legislature should elect the one who came in second.

I don’t know – to me thats exactly why – thats why I’m running, ’cause to me thats the kind of games that get played around politics which are why people dont pay attention and don’t get involved and not a good idea.”

As you can see, his continuing answer just turned into another garden-variety opportunity to criticize the Democratic Party. It seems likely that he saw the question as a chance to beat up on Dems, and who cares if, to do so, he had to contradict himself. Pollina has a hard time containing himself from rising to that that kind of bait – apparently even when doing so means a flip flop that works clearly against both his best interests as a candidate and those of Vermonters.

BUT…

…of the many things discussed in the VPR debate tonight – including many things of more substantive policy importance – the three candidates were asked where they stood on this very issue. Did Pollina respond as the candidate from 2000-2002, or was it the I-oppose-this-and-have-always-opposed-this/we-have-always-been-at-war-with-Eurasia Pollina of earlier this year?

Nope. His response was non-committal. Said he’d leave that up to the legislature, should it come to pass.

Now that’s progress. Time to work on the Legislature…

Burlington – The Vermont Workers’ Center’s “Healthcare is a Human Right” campaign is looking to hear from Vermonters about their healthcare horror stories.

For months volunteers for the Vermont Workers’ Center have been surveying Vermonters from all across the state, about their experience with the healthcare community. The results have been clear: Vermonters believe that healthcare should be a human right.

The state, however, has come up woefully short on this issue. More than 11 percent of all Vermonters are without health insurance, including more than 11,000 children. Thousands more are grossly under-insured, and cannot afford their costly premiums and co-pays,which are only rising as the cost of healthcare soars.

The Vermont Workers’ Center is currently undertaking its “Healthcare is a Human Right” campaign to help end this injustice. The goal of the campaign is to spread awareness and build a movement that can help reform the state’s system so it will guarantee care to all Vermonters, regardless of income. In order to better understand the system’s failings, the Workers’ Center is asking Vermonters to tell their stories about the healthcare system.

Have you ever been denied treatment or surgery does to a lack of money or insurance? Have you had to declare bankruptcy or put off needed medical care? Have you or anyone you know become sick due to a lack of access to quality, affordable healthcare? Any other ways you feel your

basic rights were denied under the current healthcare system?

If any of this applies to you, or if you have other experiences with the system that you would like to share, please call us toll free at 866-229-0009, or email healthcare@workerscenter.org and put “My Horror Story” in the subject line.

“In speaking to Vermonters, we have found that many have suffered greatly, both personally and physically, when they try to navigate through a a healthcare system that leaves so many behind,” said James Haslam, the director of the Vermont Workers’ Center. “We are asking Vermonters to help tell these stories, so we can better address this problem and fight to have healthcare be treated as a human right, and not as a commodity.”

Please join our effort to fight for a just healthcare system that

values human lives over profit.

For more information visit: www.workerscenter.org/healthcare.

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In yesterday’s installment, we drove around the world on dollar bills.

Today we’re going to play 2 more games: “Barrel Full o’ Dollars” and “One of These Days, Alice!”

Let’s start with the easy one.

Go get all the money you have in your house – dollar bills, pennies, whatever. Do me a favor and bring the coins to the bank and get ’em changed into bills – they get heavy. As a matter of fact, get everything converted into singles. Get everyone in your family to do the same.

Count that money.

Let’s say you have 100 dollars. Keep $7 of it, and put the other $93 into that big red wheelbarrow I’ve conveniently placed by your front door.

OK, I’m now taking the wheelbarrow to your neighbor’s house, and waiting while he does the same thing. Then to the next house, and so on. If I pass any homeless people, I’m taking their money, too. Ditto for apartment dwellers.

Done.

I’ve now got the biggest wheelbarrow to ever grace the face of the Earth. It’s REALLY big. This wheelbarrow is more than 250 feet wide, 200 feet deep, and 450 feet tall – plus a little extra for the handles and wheel.

Being about the size of a NYC block full ‘o skyscrapers, it’s a bit tipsy. Next time I’ll get one that’s wider and not so tall, and maybe add some more wheels…

There are 300 million people in the US, and I just took almost every penny they had – $0.93 from every $1. If everyone in the your family combines what’s left (unless you’re one of the homeless folks), you may be able to squeeze a nice last dinner out of the remainder.

What I took is $700,000,000,000.

Does that number look familiar?

It’s the amount being asked for in the bailout. Ironically, it turns out that there is currently $750,000,000,000 in circulation as cash in our economy.

Of course, since that $700,000,000,000 is a moving window, I should have taken the rest of your cash – because it will be taken as soon as the treasury gets around to it after the first round of bailing.

One interesting thing to note about the chart – it’s hard to see, but between roughly 1992 and 1999 there was a little bit of a plateau in the printing of money – it slowed a bit.

Then it skyrocketed again.

This means a couple of things – the treasury is using a LOT of ink (barrels full), and the “stable” stock market has actually been losing value due to inflation (let’s pretend it didn’t take a bath last week).

The stock market has been hovering around the same level for the entire Bush administration. Sometimes it spikes higher, sometimes it drops lower, but generally it stays in the same neighborhood. Maybe it has agoraphobia?

Anyway, the Dow, for example, has been somewhere around $10,000. It’s a nice round number to work with, so let’s use it.

If on November 2, 2000, you invested $10,000 in a fund that holds all 30 stocks traded on the Dow Jones, today you’d have had roughly $10,080 with little bumps up and down for the last 8 years.

Or would you? See, the Dow’s value isn’t listed in inflation-adjusted dollars.

That $10,000 in the Dow in 2008 is worth $7,860 year 2000 dollars. You’ve lost $2,140 in purchasing power. Oops!

But enough of that. I’m ready for a new Apollo Project…

Yesterday I mentioned the $10,000,000,000,000 (ten trillion) dollars of bets known as over-the-counter derivatives. They are in trouble, because an awful lot of these bets were bets that housing values would continue to go up. Then housing prices went down. So now a very large percentage of those bets went in favor of the house, and the bettors don’t have the cash to pay off their bookies.

Well, the casino has another cool game that became all the rage in the last few years: CDSs – Credit Default Swaps. You can kind of figure out their purpose from their name: If you give someone credit, and they default, you can swap it for something else. It’s insurance on debt – if the debt goes bad, the folks you bought the insurance from will make it up to you.

So say you loan your brother $10 and he doesn’t pay you back. If you bought a CDS at the same time, then the folks you bought the CDS from will pay you something equivalent to $10. (It may not be actual dollars, it could be some bonds, or something else of equivalent value.)

So let’s say that every time anyone who knew about this “insurance” bought insurance every time they issued or purchased debt, debt like the mortgage sludge on the merry-go-round, debt like municipal bonds, debt like credit card debt or car loans. Really, any debt instrument at all.

How much money in these CDS insurance policies would be floating around out there?

I’ll give you a hint: $62,000,000,000,000 ($62 trillion).

If you took each of those dollar bills and taped them together end-to-end, you could make a dollar bill rope 31,000,000,000,000 feet long (31 trillion – note: I’ve chopped .14″ off each bill to make them an even 6″). I’ll make it double-thickness, so it’ll be nice and sturdy. Now it’s only 15,500,000,000 (15.5 trillion) feet long.

I don’t know if you recall, but a few years ago, Bush proposed sending a manned space-craft to Mars. The moon had worked out so well for Kennedy, he figured that he’d be even MORE popular if he got someone to Mars, which is much further away (120 million miles). Apparently, Bush didn’t “get” that the whole purpose of the moon mission was to perfect the ability to get a rocket out of the atmosphere and back into the atmosphere – which would be necessary for long-range warheads. Sadly for Bush, going to Mars would do exactly nothing to further any technological needs, so no one wanted to do it – not even NASA… But I digress.

Since there’s no useful technological purpose to sending a manned rocket to Mars, we may as well save the rocket fuel.

Let’s get a Mars rover to tape one end of our double-thickness $62,000,000,000,000 rope to Mars.

The only problem: the rope would be WAAAAY too long. We could make 129 ropes that stretched all the way from Earth to Mars, and have a whole bunch left over.

Back to the Credit Default Swaps:

Every time a debt goes bad, someone is owed a piece of that 15-trillion foot long double-thick rope.

The 15-trillion foot long double-thick rope is not sitting in a bank vault (or even several thousand bank vaults) ready to be paid out if something goes wrong. As a matter of fact, most of it doesn’t even exist (remember there’s only one-bailout’s worth of actual printed cash in the entire economy).

It’s just a promise. A handshake. A deal between two people.

And now a lot of debts are going bad. Houses. Car loans. Credit Cards.

People are losing their ability to pay, and they’re defaulting in record numbers. Heck, an entire city recently declared bankruptcy.

Be sure to savor that meal you bought with your last $7.

I figured with the nonstop bad news everywhere, y'all could use a good laugh. The New York Daily News hired a Sarah Palin impersonator to go around New York City. Some of the comments from unsuspecting cityfolk:

“You're hot! But I hope you lose.”

“She seems smart. She likes hockey.”

“Obama '08!”

“If her parents see her with anyone who even looks like Palin, they'll strangle me.”

Interestingly enough, the comparison of the impersonator and the real deal show, well, a more worldy candidate in the impersonator. Probaby smarter, too.

There’s a line that threads its way through the recent spate of articles on our newest economic emergency … The Great Bailout of 2008 (yeah, the claimed credit crunch that will freeze the world under glaciers made of economic inactivity), and it goes something like this: “The lack of liquidity is making it impossible for banks to engage in intra-bank loans thus not enabling these same banks have the where-with-all to make loans to businesses and consumers (ya’ know … those bipeds that used to be considered people).”

You’ll see the above stated in various forms, but it’s almost always there.

Simple question: if banks are depending upon intra-bank loans to lend money to businesses and consumers (ya’ know … those bipeds that used to be considered people), who is supplying the input that banks are using as a basis for making these intra-bank loans? For that matter … is there any backing for these intra-bank loans?

Well yes, there is a backer for these intra-bank loans, and that backer is the same group who’re being asked to fund The Great Bailout of 2008. That, good people, is you and I and our family, neighbors, co-workers, acquaintences and others.

Trace these intra-bank loans back and you find all roads lead to the Federal Reserve Bank. This is the place where macro-liquidity (ie. system wide availability of cash) emanates from. This is why (when the time comes to fight wage inflation and protect stock market and financial instrument inflation) the Fed plays with base interest rates.

Raise the Fed rate and intra-bank loans get more expensive thus driving up the price of loans to businesses and consumers (ya’ know … those bipeds that used to be considered people). Lower the Fed rate and the opposite occurs. Higher rates will remove some of the capital liquidity (availability of cash) because fewer businesses/people will be applying for loans thus reducing the amount of cash running around … lower interest rates go the other direction.

IMPORTANT POINT: The Fed is backed by the full faith and credit of the United States, and thus any monies created by their loans has the same protection as that $10 bill, treasury note or other government issued financial instrument (including bailouts via credit financed purchases of bad debt related instruments).

What I’m describing above is nothing more nor less than a check kiting scheme. I write you a check that bounces, and when you complain I write another bad check to cover the one that bounced.

Under normal circumstances (ie. not involving the uber rich and powerful) once that second one bounced, I would be held legally and financially liable … you wouldn’t take any more checks from me, and life would go on.

With today’s intra-bank lending situation, however, people/businesses have been allowed to keep writing known bad checks to cover the last bad check. Out of liquidity? No problem … the Fed is keeping rates real nice and low just for you … and by the way … you can use those bad debt instruments that are making you run out of liquidity as collateral to borrow the cash you need for liquidity.

Not only can the banks continue kiting checks, but they can use the kited checks given them for intra-bank loans as collateral to cover their own kited checks.

And the buck does stop … not at the Fed, but at the taxpayer … because in the end we are on the hook because we’ve covered everything with the full faith and credit of the United States of America.

( – promoted by odum)

As usual flying under the radar Brian Dubie kicked off his campaign at what one newspaper is calling a quickly organized and quiet event. Dubie declared himself ready to “fill up his Saturn with gas ” and travel the state. A common criticism of Dubie is that he actually does very little in his post as Lt.Gov.and has few solid achievements to cite.

His website does make note among other things of his declaration of a symbolic heating emergency last summer or was it a symbolic declaration of a real heating emergency?  

From the Free Press:

To help voters learn more about the candidate’s records and ideas, Costello(Dubie’s Democratic challenger ) proposed weekly conversations among the four lieutenant governor candidates at locations across the state, starting Oct. 2 at Castleton State College.

“His Thursdays are booked,” said Susie Hudson, Dubie’s campaign manager. She complained that Costello set the schedule without consulting the Dubie campaign.

A check this morning shows his official State website calendar of events listing only April and March 2007. The campaign website lists no campaign events …..just keep a sharp eye out for a saturn full of gas coming to your town (unannounced) .

With the winds of change starting to threaten Jim Douglas’s job (where he doesn’t have to actually do anything), he’s upping the slime ante to a level not seen in Vermont politics up to this point. To get a sense of what he’s scared of, take a look:

Rothenberg Report: Race was re-rated from “Currently Safe” for Douglas down to to “Clear Advantage Incumbent Party.”

Stateline.org: Re-evaluated from “Safe Republican” to “Worth Watching.”

And Congressional Quarterly:

Vermont Gov. Jim Douglas’ politically moderate profile and modest personal manner have enabled him to win three two-year terms as a Republican, overcoming the strong partisan trend that has given the Democrats the upper hand in his home state’s politics. And his Democratic opponent, state lawmaker Gaye Symington has to worry about losing a chunk of the liberal vote to independent candidate Anthony Pollina, who has long been associated with Vermont’s left-leaning Progressive Party and who has received the backing of several unions in the state.

But at least some uncertainty about the outcome has been produced by Symington’s prominence as the state House Speaker, along with a Democratic voter turnout boost likely to be spurred by Barack Obama’s effort to run the party’s presidential winning streak in Vermont to five elections dating to 1992. CQ Politics, which had rated the race as Safe Republican, has changed its rating to Leans Republican.

And of course, only a day after I said the nasty ads should be coming any moment, they’re here (see diary below). But rather than mocking with namecalling, which is Douglas’s usual M.O., he’s moved up to outright lies. From the ad:

“She tried to pass off four years of bogus tax returns before the press caught her.”

The charge that Symington was passing bogus documents has clearly been demonstrated to be false, and not simply by this site, but by the very press Douglas is invoking. From Remsen:

The Burlington Free Press did not report that she filed separately, but did state — mistakenly — that the forms Symington provided were the actual tax returns she filed… The campaign also included a note on an accompanying e-mail to the media indicating that the documents were “pro-forma tax forms prepared by her accountant.”

Douglas and Casey know this, but put out this trash anyway. A naked lie – one that they couldn’t sell the press on at the time, but we’re in the era where McCain-style casual, routine lying is a bona fide communications strategy. After years where he’s derided his opponents as “flip floppers”, “Mr. Property Tax,” calling them Commies by tying them to Sandinistas and accusing them of “squealing like a stuck pig,” Douglas is showing he’s willing to join his presidential candidate in taking sleaze to this next level.

As a Vermonter, I am both ashamed and disgusted. Let’s get some letters to the editor calling Douglas out for exactly what he’s chosen to become.

Congresswoman Marcy Kaptur took only 5 minutes to describe the administration’s shell game, propose a solution that protects the American people and call for an independent counsel to investigate the architects of this colossal economic failure:

Oddly, she seems disinclined to give the architects of failure a building permit for more failure.

I like her proposal. A lot.

These people created the “$10 trillion global over-the-counter credit derivatives market.” $10,000,000,000,000,000 is a lot of money. It’s a whole lot more than $700,000,000,000. Here, I’ll line them up so you can see the difference:

700,000,000,000

10,000,000,000,000

Notice those extra zeroes? Not really impressive when you see it that way. Hmmm…

How about this:

If you had a 4″ stack of $1 bills, you’d have a million dollars. Imagine what you could buy with a million dollars!

Now, if you had a billion dollars, that stack would be 47.35 miles high. Your arm would get really tired.

If you stood all those $1 bills on their sides and packed them together, you could drive from Burlington to Montpelier and half way back without driving over the same bill twice.

Imagine how many bridges we could replace with all those $1 bills!

Now for the bailout: if you had 700 billion dollars in $1 bills, you could do two round-trips from Burlington, VT to Washington, DC on them, and still have enough left to make a few side trips to Allentown, PA (in case you wanted to see some abandoned steel mills), or a one-way trip to Boston, MA!

That’s just for the proposed bailout’s first installment or $700 billion dollars (remember, it’s a floating window. They can keep spending, but there can only be $700 billion outstanding at one time – so they sell something, pay back a part of the $700 billion, then turn around and buy something else to bring the total back up to $700 billion – it’s like a magical refilling debit card).

Now back to that $10 trillion dollars in voodoo they call “over-the-counter derivatives.” That’s the bailout times 14.29. You could drive around the earth 19 times on those $1 bills, plus a couple dozen side trips to Montpelier.

Most of those “derivatives” are really just bets that the value of mortgages would continue to go up.

But the bets weren’t placed against actual individual mortgages. Instead they were placed on collateralized mortgages. To collateralize mortgages, you take all the mortgages held by your bank, and toss them into a giant mortgage Cuisinart.

It doesn’t matter if the mortgage is good, bad, whatever – in it goes. The output is then divided up into “bad,” “not so bad,” and “looks good to me” batches, then those batches are sold off to the highest bidder.

The derivatives folks didn’t really want to buy the things, they only wanted to place a bet on the future value. Someone else owns the actual mortgage sludge, these guys simply own the right to make a profit if a buyer pays more for the sludge than the guy who bought it before them.

The sludge is passed around from investment bank to investment bank over and over: it’s a little merry-go-round o’ sludge. And the derivatives market places bets, takes profits, and everyone’s happy.

Until the day that someone says, “Gee, I don’t think this batch of sludge is worth that much. If you want me to take it off your hands, I’m only going to pay this much.”

Now all those bettors, who were betting on the value to go up owe their bookies. But see, the bets had very long odds. So now they owe their bookies a LOT. Like kajillions of dollars.

Sadly, between the derivatives, actual mortgages, CDOs, insurance swaps, and all the other weird unregulated debt vehicles the financial industry has created over the last decade or so, the amount owed is greater than the entire value of all the treasuries on the planet.

Oops.

It might not be so bad, if the bettors were just a bunch of numb-skulls betting their own money.

But they weren’t. They were investment banks. And they bet our money. Our pension plans, our 401ks, our municipal investment accounts, our IRAs, our CDs. Just about anything that had dollar signs attached was used as the downpayment, with the expectation of large returns.

Now the returns have dried up. And the stuff that’s been promised as collateral … well it doesn’t actually belong to the bettors. And the amount owed doesn’t actually exist on the planet – even if you put every penny from every treasury on the line.

This means someone’s taking a hit.

A really big hit.

And the bettors want it to be us.

And they’ve come up with all these reasons why it’s our fault. After all, we took out the mortgages on the houses whose values kept rising, enticing them to make the bets with the money they were holding in trust for us.

So they want us to refill their pockets with a portion of the money that is owed, so they can quickly pay off their bookie and only get knee-capped instead of being fitted for cement overshoes.

And they want to do it behind closed doors, so we can’t see that even after they pay off their bookies with enough $1 bills that you could drive back and forth from Burlington to DC twice (with side trips to Allentown) without touching the same bill twice, they will still owe enough tightly-packed $1 bills standing on their sides to travel around the world roughly 18.8 times (you’d only end up 4,980 miles from home on that final trip – which is only 700 miles longer from a trip to Wasilla, Alaska!).

Buckle Up, and Enjoy the Drive!

[UPDATE: I dug up the source for the original math – they’d made a boo-boo. So I went to a school web site and downloaded this PDF File and did my own math.

I also clarified that the derivatives are only one piece of the big pile of crud that exceeds the total money actually extant on the planet. Sadly, we’re still in very, very deep doo-doo. Certainly deeper than we’re going to get out of with a silly little $700,000,000,000 bailout, even if it’s a moving window.]

I guess we won’t be hearing much of anything about why Douglas deserves to be reelected, but at least we’ll get plenty of personal attacks on Symington:

So I was hovering around Huffington Post until I noticed their top story today. Check this out.

Jason Linkins writes:

“A critical – and radical – component of the bailout package proposed by the Bush administration has thus far failed to garner the serious attention of anyone in the press. Section 8 (which ironically reminds one of the popular name of the portion of the 1937 Housing Act that paved the way for subsidized affordable housing ) of this legislation is just a single sentence of thirty-two words, but it represents a significant consolidation of power and an abdication of oversight authority that’s so flat-out astounding that it ought to set one’s hair on fire.”

It definitely set my hair on fire. Are you all ready? Here’s what the bailout text says:

So the mother of all bailouts CANNOT be challenged by the courts. Does that make any sense? Is this even legal? Some answers would be great.

Kudos to Huffington Post for finding this. Has anyone else been covering this aspect of the bailout? It looks like The American Prospect’s Robert Kuttner has delved into the issue… but not many.

Folks, this Section 8 of the bailout consolidates A LOT of power in the executive branch. I’m confident Leahy, Sanders, and Welch will vote against it but there’s got to be something we can do as bloggers to make sure this doesn’t pass. To read the Huffington Post article in full click here.

Scared yet?