Does the GOP still believe in representative government? Campaign For Liberty on problems in Arizona’s 4th Legislative District:

A large group of Constitutional Republican Reformers including many Ron Paul supporters showed up and established a clear majority. The flustered chair, upon realizing his predicament, gaveled the meeting to a close without electing delegates at all

It sure does not seem like it. How can anyone support the rampant corruption in the GOP?

Does Bob Burges believe in liberty or the rule of law? It does not seem like it. I hope he has an explanation.

I read yesterday that each active GM or Ford employee must produce enough for nearly 10 people:

GM, Ford, and Chrysler employ 240,000. They provide healthcare to 2 million, pension benefits to 775,000

That is unsustainable and unfair to young workers.

People who believe it essentially to support this business model are missing an important point. People will always want to get around — and that probably includes cars — but every dollar the federal government spends supporting insolvent companies like GM is a dollar that someone else cannot spend building a better car company to build better cars.

The Ayn Rand Institute captures the importance of failures succinctly:

Overlooked here is that in a free market business failures are not just normal, they’re crucial for the best products and ideas to emerge. Most restaurants fail in their first three years because customers have other preferences. Many mom-and-pop grocers go out of business because Walmart offers better selection and lower prices. Even whole industries–think typewriters, 8-tracks and horses and buggies–vanish because new inventions and competitors arise.

None of these failures are a problem, nor do they threaten the system. On the contrary, they are an inherent part of the progress which only capitalism makes possible.

Well said.

It is sad that people view Bush as a champion of free-market economics. The Bush administration expanded government interference into US citizens’ private affairs, both social and economic, more than any other. Bush nationalized our financial system and is replacing what is left of our meritocracy with a kleptocracy:

Mr. Paulson under George Bush in 2008 is looking like the U.S. counterpart to Anatoly Chubais under Boris Yeltsin in 1996. Just as Russian neoliberals led by Chubais were promoted by Clinton Treasury Secretary Robert Rubin of Goldman Sachs, today’s Wall Street power grab to replace the government as the economy’s central planner is being orchestrated by another Treasury Secretary from Goldman Sachs, empowered to decide which kleptocrats are to receive what public resources and on what terms, aided by “Helicopter” Ben Bernanke at the Federal Reserve. Mr. Bernanke’s famous quip about helicopters dropping money to get the economy moving seems to be limited to Wall Street for use in buying financial assets, not real goods and services for the population at large.

Naked Capitalism is one of my favorite blogs. On Tuesday the principal contributor to the blog, Yves Smith, wrote that she was upset at banks’ new ability to purchase losses by acquiring another bank.

Like most, I believe that the producer (the bank in this instance) is the rightful owner of any production. What is wrong with discovering a way to keep a larger amount of one’s production? Unless one believes the government is the rightful owner of all production, I see nothing wrong with maximizing the amount the producer keeps.

I believe this sort of anger displayed at Naked Capitalism stems from revulsion at the special treatment banks receive. I also agree that banks should get no special treatment. So how about extending a similar the benefit to all? Many Americans are suffering massive losses from say their home, IRAs and 401Ks, let’s allow them to deduct these passive losses from their active income!

You can find out how your Senator voted on the bailout here.

If your senator voted against the bailout, replace him or her as soon as possible!

Congressman Dave Reichert represents people in Washington state’s 8th district. Reichert voted against the bailout on Monday and again on Friday. Reichert explains his no vote:

There’s a better way to get this done than to rush to authorize an unprecedented sum of taxpayer dollars for which we have little assurance that it addresses the real illness in our financial system, and not just a symptom of it. This proposed remedy could be more harmful than the illness.

Very true.

An organic and environmentally-friendly way to clean your feet involves allowing tiny fish to eat your dead skin cells. This is a popular treatment in Japan:

The fish pedicure trend has reached this side of the pacific. Salons across the United States now offer the service.

Or maybe not. The Sound Business Journal reports that the Department of Licensing banned the treatment:

A King County salon had offered the service, in which tiny fish eat dead skin cells, but no longer. State officials require all tools and implements used in a pedicure to be sanitized, disinfected or disposed of after using.

Why does the Washington State Department of Licensing need to force salons to use harsh, abiotic chemicals that harm the environment?

A customer has the moral right to request an organic treatment and the salon has the moral right to provide it.

A few years ago JP Morgan Chase talked about buying Washington Mutual:

Dimon expects the New York powerhouse to be able to make a major purchase in mid-2006. He stops short of saying that’s what he is shooting for.

Dimon likes the West Coast and Southeast banking markets. WaMu is one of the few banks in both areas.

“The only way to get the West Coast is WaMu, unless you think Bank of America or Wells Fargo is for sale,” said Frederick Cannon, an analyst at Keefe, Bruyette & Woods in San Francisco.

Those banks are not for sale, and JPMorgan could not afford them if they were.

Neither is WaMu, Killinger said, but the company’s relatively low value on the stock market — $43.8 billion — indicates it could be within reach of the New York financial giant.

If JPMorgan cannot persuade WaMu to sell, other possible acquisition targets include Golden West, U.S. Bancorp and Wachovia

Apparently JPMorgan had a better plan to access the west coast market than spending $40b to purchase Washington Mutual’s assets.

Instead they sent an employee, Steve Rotella, to become president of Washington Mutual in 2005. Rotella went to work and quickly destroyed the company. A mere 3 years after joining, the firm is worthless.

This week, JPMorgan bought WaMu’s branches and assets for 95% less than they could in 2005, a mere $2b. Rotella lost everything for Washington Mutual shareholders. $2b does not even cover their debts. Thousands of WaMu employees will lose their jobs and possibly their promised pensions.

What does Steve Rotella receive for his hard work? A 20 million dollar golden parachute from JPMorgan Chase; thanks for a job well done:

Washington Mutual President Steve Rotella — who joined the bank from JPMorgan Chase — has been ousted as a result of his former company’s acquisition of the Seattle bank.

Rotella, who is eligible for a $19 million cash severance, is part of an executive shuffle announced by JPMorgan Chase & Co.
[...]
Rotella, who could receive millions more in noncash severance, joined WaMu in early 2005 from JPMorgan, where he worked from 1998 until the end of 2004.

Instead of purchasing WaMu for $40 billion they paid one of their employees $0.02 billion after he reduced the price by $38 billion.

I wish I knew how Washington state Senator Patty Murray explains her pro-bailout vote after reading this.

The Puget Sound business journal is reporting some bad news for Seattle and Washington Mutual employees:

Washington Mutual employees will not find out for another two months whether they have a job.
[...]
WaMu employs about 43,000 employees nationwide — including 3,500 in downtown Seattle.
[...]
[JPMorgan Chase’s Retail Financial Services head, Charlie Scharf] said employees’ pension plans are part of WaMu’s business that’s held up in Chapter 11 bankruptcy, so it’s not JPMorgan’s responsibility to honor them.

Thousands of people losing their retirement and job in downtown Seattle will put a lot of downward pressure on the housing market.

Based on the terms of their purchase, JPMorgan estimates that home prices have another 20% to fall:

JPMorgan Chase says it will pay $1.9 billion to the FDIC to acquire WaMu’s deposits, branches and a loan portfolio valued at $176 billion. JP Morgan anticipates write-downs of about $34 billion on the loans. The leftover assets and liabilities, including subordinated debt, corporate debt and shares, along with the $1.9 billion payment from JP Morgan, will remain in the holding company, Seattle-based Washington Mutual Inc.

More info about JPMorgan’s home price projections at Calculated Risk.

JP Morgan will be the biggest beneficiary of President Bush spending tax dollars to inflate Seattle home prices. The more JP Morgan writes down the cost of their mortgages the less you will spend to purchase your next gallon of gas, bag of groceries or home.

The more we support JP Morgan, the harder it will be for WaMu employees to find a new job. Resources a software, industrial or agricultural company spends supporting JP Morgan are resources that firm cannot spend expanding its payroll and business.

It makes no sense for Seattle to support bailing out JP Morgan.

Remember that just like WaMu, Bear Stearns was a bailout of JP Morgan:

the bailout is financed by the Federal Reserve. JP Morgan Chase is buying Bear Stearns’ assets and debts, but they are taking *ZERO* downside risk. If the assets turn out to be worthless, the Federal Reserve will take the loss. When inflation runs its course and JP Morgan Chase profits, all the upside accrues to JP Morgan Chase.
[...]
JP Morgan Chase’s profits aren’t free. They’re paid by everyone else as inflation.

That is not free-market capitalism. It is fascism, the worst kind of socialism: private gain and social loss.

On Monday, Jim McDermott said that his friendship with Nancy Pelosi was more important than protecting the interests of his constituents in Seattle.

By Friday, Jim McDermott changed his mind:

There is no question that we need a rescue plan, but the Senate has just made matters worse - and that is pretty hard to do in this economy. Government has a role to play in calming the markets and addressing the economic crisis, but the more we learn, the more convinced I am the latest Senate plan is taking us in the wrong direction.

McDermott voted against the bailout Friday.

This is exactly why the Bush administration pushed to rush this bill through the house and senate.

The more people reflect on the consequences of this bailout, the more unanswered questions people have; the less people support the plan.

Why are people so confident this plan will work? How do they think this plan will stop the price of homes from falling? How will this plan make more credit available to consumers and businesses? How can more debt solve the problems of debt?

The fact is people make irrational decisions when they are afraid and rushed. This includes Senators and Congressmen. Bush used this irrationality to gain authority to start the Iraq War.

I am sure our complaints, Senator Maria Cantwell’s speech and resolve to vote no helped give McDermott the courage to stand up to this corruption and fear mongering.

If you contacted any of your Senators or Representatives this past couple weeks congratulate yourself. Continue to do so in the future.

In this time of crisis for our constitutional republic, Senator Patty Murray gave the Bush administration’s Treasury Secretary imperial power in exchange for a tax break on companies that make wooden arrows for children. She was not alone.

Senate Republicans supported the bill. Senate Democrats supported the bill. House Democrats supported the bill. House Republican leadership supported the bill.

Unfortunately I am sad to say the bailout bill passed in the House today, 263-171.

Apparently Congress learned nothing from the run up to the Iraq war. Fear and pork kowtowed them into supporting another one of Bush’s half-baked plans.

Let us hope this plan will be less disastrous. I am not holding my breath.