Reagan Budget Director: Romney-Ryan Plan Is "Fairy Tale"

Today's Republican party doesn't look much like it did in Ronald Reagan's day

One thing about the Tea Party-Republican extremists holding elected office now-a-days is their compulsion to follow partisan marching orders, no matter how dangerous and extreme.

This dynamic is worrying to some past Republicans such as Reagan budget director, David Stockman (1981–1985), who blasted the current GOP ticket's fiscal plan, such as it is, in a New York Times op-ed.

The Times column—likely not widely read among the rural, white working class sought by Romney and Ryan—ought to at least stimulate some thought before voters consider casting their votes for this most radical and least rational-minded presidential ticket in modern American history.

Writes Henry Blodget at Tech Ticker:

Stockman calls the budget an "empty conservative sermon" and "fairy tale" and says it will "do nothing to reverse the nation's economic decline and arrest its fiscal collapse."

Stockman's main complaint about the Ryan budget, which reflects his broader frustration with today's Republican party, is that it preserves massive and, in his view, unnecessary spending on Defense and other programs while screwing people who actually need help by cutting food stamps, Medicaid, and other efforts that lessen the pain of poverty.

Stockman also rails against the new "Wall Street-coddling" bailout Republicans like Ryan, who stand by and let the Federal Reserve fix interest rates, encourage speculators, crush savors, encourage overconsumption, and punish thrift.

Specifically, Stockman observes, Ryan's "phony" budget plan:

• Maintains Defense spending that is nearly twice the $400 billion (adjusted for today's dollars) that General Eisenhower spent in the 1960s
•  Shreds the safety net provided by $100 billion in food stamps and $300 billion in Medicaid
• Does not cut one dime from Medicare or Social Security for another decade
• Includes no serious plan to create jobs
• Radically cuts taxes on the richest Americans while eliminating tax breaks that mostly help the middle class
• Fails to even consider a "value-added sales tax," which is the only way the country can begin to climb out of its budget hole

In short, Stockman says, Ryan's plan is "devoid of credible math or hard policy choices." Harsh words coming from a fellow Republican. But, then, today's Republican party doesn't look much like it did in Stockman and Reagan's day.

Econ Wm Black: Treasury plan is 'greatest boondoggle in history'

Reading finance analysts Blodget-Black-Krugman-Stiglitz-Shiller-Johnson-Roubini-DeLong, an Obama supporter is left with the feeling: Jesus, I hope these guys are wrong about what Treasury Secretary Timothy Geithner is doing.

One of the problems is Geithner's Public-Private Investment Program (PPIP).

From TechTicker:

While much of the focus is on the stress tests and banks' efforts to raise cash, the real story is Geithner's Public-Private Investment Program (PPIP), says William Black, an Associate Professor of Economics and Law at the University of Missouri - Kansas City.

The PPIP is the 'greatest boondoggle in the history of the world,' says Black, a former bank regulator who was counsel to the Federal Home Loan Bank Board during the S&L crisis. As occurred during the S&L era, Black says the PPIP will allow banks to exchange 'trash for cash' and turn 'real losses into faulty gains.'

If the goal of Tim Geithner and other regulators was 'to rip off the American taxpayer for the benefit of the least-deserving wealthiest people you can imagine, well - mission accomplished,' Black says.

Among the masses and a growing number of economists is the distinct sentiment that what Obama and Geithner are doing is in a word: Wrong.

And boondoggling. Isn't that what the Republican geniuses who got us into this mess do?

What does that mean? That banks make a lot of money and the rules of the game have always favored capital?

We know that, that's kind of why many people get into finance: To make money. If this seems unfair, change the rules and start gearing American capitalism towards the middle class. Like soon.

One thing certain is that Obama needs to rebut these economists who are scaring the hell of a growing number of his supporters who just don't feel sufficiently conversant to understand or much less defend what is going on in the financial temples. And looking to the Recovery Accountability and Transparency Board doesn't seem all that revealing.

And by anecdote, some dudes sure seem confident that the DOW is going back down to 6,500 in the foreseeable future.

How bad is it? Tell me right away.

Merrill Lynch's John Thain: Villain of the Century

Update II: Obama Calls Wall Street Bonuses ‘Shameful’

Update: John Thain's Top Ten Greatest Moments

Can you believe this? Sick.

Merrill Lynch, with CEO John Thain presiding, paid fifteen billion dollars in bonuses in December with public money. This news is sure to be iconic.

As in outrageously sociopathic, meet the Jeffrey Dahmer of finance: Merrill Lynch CEO John Thain.

From Clusterstock.com, read John Carney's Wall Street’s Sick Psychology of Entitlement

Writes Carney:

The news that Merrill Lynch paid out $15 billion in bonuses is sure to ignite new questions about the wisdom of bailing out Wall Street. Merrill Lynch took $10 billion from the TARP, allegedly to fill holes in its balance sheet. But instead of using that to repair its financial health, it simply put the money into the pockets of its employees. There is no way to defend this disgusting payout.

But that won’t stop Bank of America, which now owns Merrill, from
defending the bonuses. And across Wall Street there are lots of people who actually believe that Merrill did the right thing.

How can so many smart people be so dumb?

Easily.

There is a sick psychology of entitlement on Wall Street that was created during the bubble years. Many simply cannot believe that they do not deserve huge pay packages. Their brains have (not) caught up with the idea that they are working in broken institutions that would
be unable to pay to keep the lights on if not for the fact that Washington has given them billions of taxpayer dollars.
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See also Henry Blodget's 75% Of Latest Bank Of America Bailout Used To Pay Merrill Lynch Bonuses (BAC):

Remember the latest Bank of America (BAC) bailout, the one we were all so steamed about last week? (The $20 billion of cash and $100+ billion of trash-asset guarantees that absolutely had to be given or else Bank of America shareholders might have lost everything?)

Yes, well, you probably thought that that cash would be used to bolster the bank's capital or something. (We know you weren't dumb enough to think it might have been used to make loans).

Alas, it wasn't used for that. It was used to pay Merrill Lynch executives the huge bonuses they deserved for unloading their balance sheet on for-some-reason-not-yet-fired Bank of America CEO Ken Lewis.*

*BOFA will say that the cash used to pay the bonuses was not the actual cash received from taxpayers. Please. Cash is cash. What BOFA and Merrill are already saying in their defense is that the bonuses were accrued (and mostly paid) all year and that Merrill just shelled out the last $4 billion in December...a month before the latest bailout funds arrived.

But that's ridiculous. ...

From a political perspective, Obama can propose and pass just about any regulatory framework to hold these guys accountable.

This is the 911 of Wall Street greed. CEO John Thain, this is the *$^&* who will make Enron's Kenneth Lay look like Jesus Christ.