Chicago Daily Observer

10) Community organizing takes up a lot of time.

9) Jeremiah Wright vouched for him.

8) I’ve always been a supporter of Don’t Ask Don’t tell.

7) There was nothing about it in the Indonesian Press at the time.

6) It wasn’t on the teleprompter.

5) I thought Republicans would like him because he’s bitter and into guns.

4) I was busy that day picking up my $105,849 check from Fannie Mae with my good buddies Doodad Pro and Good Will.

3) I thought terrorists all had names that sounded like…well…mine.

2) How was I supposed to know? After all, he looked like all the other guys on the dollar bill.

1) I really did know and I’m LYING.

In order to promote a much smoother functioning of the financial system, it is paramount to distinguish between the immediate steps needed to cope with the present crisis and the long-run reforms needed to reduce the likelihood of future crises. Let’s start with the short-run fixes.

First of all, the magnitude of this financial disturbance should be placed in perspective. Although it is the most severe financial crisis since the Great Depression of the 1930s, it is a far smaller crisis, especially in terms of the effects on output and employment. The United States had about 25% unemployment during most of the decade from 1931 until 1941, and sharp falls in GDP. Other countries experienced economic difficulties of a similar magnitude. So far, American GDP has not yet fallen, and unemployment has reached only a little over 6%. Both figures are likely to get quite a bit worse, ... Read More...

The Obama campaign raised some eyebrows the other day by suggesting that Obama didn’t know who Bill Ayers was, and David Axelrod clarified a bit today, Carrie Budoff Brown reports. He said Obama didn’t know about Ayers’ background when he attended a meet-and-greet at his house in advance of his first state Senate race, but he learned afterward.

Martin Sullivan, former chief executive of AIG, the insurance giant that was rescued by the US government, on Tuesday blamed a single accounting rule for the company’s travails.

In written testimony released before he was set to testify before Congress, Mr Sullivan said that “multiple actions by multiple parties” created the “unprecedented financial market disruption” that caused his firm’s near-collapse and eventual $85bn bail-out by the US Treasury.

U.S. consumers reduced their debt load by a record amount in August, the Federal Reserve reported Tuesday. Total seasonally adjusted consumer debt dropped by $7.9 billion, or a 3.7% annual rate, in August to $2.58 trillion. This was the first decline since January 1998. Consumer credit rose 2.4% in July. Non-revolving credit – such as auto loans, personal loans and student loans – dropped sharply by $7.3 billion, or 5.4%, to $1.61 trillion, after rising 0.9% in July. Credit-card debt dropped by $612 million, or 0.8%, in August to $969 billion

The Washington Post has an explanation for Wachovia receiving bids from Wells Fargo over Citibank in its buyout competition: Tax Relief. A change in the tax laws gives Wells Fargo an advantage over Citi, allowing Wells Fargo to book losses at Wachovia versus gains at other part of the business, thus reducing taxable income.

As opposed to the Citi bid, Wells Fargo does not rely on an FDIC bailout, rather accepting losses and gains, much like any other business. “This agreement won’t require even a penny from the FDIC,” Wells Fargo chairman Richard Kovacevich said.

But then the Post throws a curveball, suggesting that avoiding corporate taxes on losses somehow shortchanges the IRS.

“Experts in tax law said the Wells Fargo deal actually was likely to be more expensive for the government. Losses on Wachovia’s portfolio of bad loans would have been absorbed by the Read More...

The $700 billion financial bailout may be the biggest flimflam ever pulled on the American public. It has all the earmarks of a good con: Bankers and assorted Wall Street grifters will make off with hundreds of billions of dollars, abetted by Washington politicians, while we get stuck with the tab.

We can thank Wells Fargo & Co, a big Western bank, for exposing this swindle for what it was by agreeing to buy Wachovia Corp., a troubled Eastern bank, thereby rescuing it from a government-arranged shotgun marriage with Citigroup Inc.

SCARBOROUGH: Did Barack Obama know that William Ayers was a terrorist when William Ayers introduced him to Chicago politics in 1995 in his home?

GIBBS: OK, I listened to the question and the answer is still he didn’t.

SCARBOROUGH: He did not know Ayers was a terrorist?

GIBBS: And that’s what David said yesterday.

SCARBOROUGH: OK, very good.

GIBBS: Right.

Three days after the Cook County Health and Hospitals System publicly debated and passed a “billion-dollar budget,” it continued Monday to refuse to present the document to the public.

The failure to produce the document also comes three days after Cook County Chief Financial Officer Donna Dunnings promised a reporter the document would be produced Monday.

Forget he was terrorist for a moment. Bill Ayers’ Annenberg Challenge provided Barack Obama with sole executive experience before heading his own presidential campaign and his most extensive venture into educational reform. Sol Stern tells us something about Ayers as a school reformer:

Calling Bill Ayers a school reformer is a bit like calling Joseph Stalin an agricultural reformer. . . For instance, at a November 2006 education forum in Caracas, Venezuela, with President Hugo Chávez at his side, Ayers proclaimed his support for “the profound educational reforms under way here in Venezuela under the leadership of President Chávez. We share the belief that education is the motor-force of revolution. . . . I look forward to seeing how you continue to overcome the failings of capitalist education as you seek to create something truly new and deeply humane.” Ayers concluded his speech by declaring that “Venezuela is poised to ... Read More...

In a survey taken by the Kauffman Foundation to measure the reaction of the public to the recent financial turmoil, 35% of respondents identified Higher Taxes at the the “greatest threat to your own economic situation”.

Link to survey opens new file

Dec 2008 89.40

Jan 2009 88.95

Feb 2009 89.13

Mar 2009 89.25

April 2009 89.42

RBOB Petroleum Nov 2008 2.1190