Thursday, June 25, 2009

GOP Sex scandals

Republican Sex Scandals

2009

Governor Mark Sanford Admits to affair after missing for 4 days... http://www.nytimes.com/2009/06/25/us/25sanford.html?_r=1

(Full list of scandals at Moral Values)

2008


Bruce Barclay, former Cumberland County commissioner, videotaped hundreds of sexual encounters — many with male escorts — using cameras hidden throughout his Monroe Township home.[1]

Matthew Joseph Elliott, former aide to Republican presidential candidate Mitt Romney, was convicted of sexual exploitation of a child.[2]

Vito Fossella, the only Republican member of Congress from New York City, admitted to police to having a child out-of-wedlock when stopped for drunk driving.[3]

Robert McKee, Republican delegate from Western Maryland, announced his resignation after authorities seized two computers, videotapes and printed materials from his Hagerstown home in a child pornography investigation. McKee also resigned his position as executive director of Big Brothers Big Sisters of Washington County.[4]

Daniel Dean Thompson, 31, a Utah retailer of "family-friendly" tapes and DVDs (Hollywood films with the "dirty parts" cut out of them), arrested and booked into the Utah County jail on charges of sexual abuse and unlawful sexual activity with a 14-year-old.[5]

Derek Walker, former Eagle Scout and candidate seeking the GOP nomination in a race for north-central Pennsylvania district, was charged with felony burglary and criminal trespass stemming from an encounter last year with an ex-girlfriend, during which he allegedly broke into her home and used his cell phone to videotape her engaged in an intimate moment with another man.[6]

2007

Robert "Bob" Allen, Florida state Rep. Arrested in the afternoon at a Veteran's Memorial Park for solicitation of prostitution from an undercover male officer inside a restroom. According to the papers Bob "offer[ed] to perform oral sex for $20". Bob Later claimed that his offer had something to do with his being afraid of black people.[7]

John David Roy Atchison, Republican prosecutor, was arrested for soliciting sex from a 5-year old girl, then killed himself three weeks later. At the time of his arrest, Atchison was an "assistant U.S. attorney" appointed by President Bush's attorney general.[8]

E. Ozwald Balfour, chairman of the Utah Republican Black Assembly and elected to the Republican State Central Committee in 2007, even though he was awaiting trial on four felony counts of forcible sex abuse dating back to his arrest in February, 2005.[9]

John Bryan, Republican city councilman, killed himself after police began investigating allegations that he had molested three girls, including two of his adopted daughters, ages 12 and 15.[10]

Larry Craig Republican Senator for Idaho, was arrested on July 11, 2007, by plainclothes police officer investigating complaints of lewd behavior in a Minneapolis-St. Paul International Airport airport men's room. On August 8 in Hennepin County Municipal Court in Bloomington, Minnesota, Craig entered a guilty plea and paid a $500 fine.[11]. On September 1st, Craig subsequently announced his retirement from the Senate[12]. Five days later, Craig changed his mind, renounced his retirement and began a battle to have his guilty plea overturned.[13]

John R. Curtin, Monroe County state Republican committeeman, was convicted of molesting an underage teenage boy and sentenced to serve six to 18 months in prison.[14]

Richard Curtis, Washington State Rep., resigned from the House after reports of his sexual encounter with a male escort became public.[15]

Donald Fleischman, Brown County, WI, Republican Party Chairman, resigned his post after he was charged with two counts of child enticement, two counts of contributing to the delinquency of a child and a single charge of exposing himself to a child.[16]

Larry Dale Floyd, Republican Constable in Denton County, Texas Precinct Two. Arrested for allegedly crossing state lines to have sex with an 8-year old child and was charged with 7 related offenses. Age 62 at time of arrest.[17]

Ted Klaudt, former South Dakota State Rep., found guilty of four counts of second-degree rape of two teenage foster daughters.[18][19]

Ronald C. Kline, Republican Judge in Orange County, CA, pleaded guilty to possession of child pornography on his home computer after six years of legal wrangling. In 2002, charged with child molestation and under house arrest on federal charges of possessing child pornography, political analysts still gave him a 50-50 chance of winning the March 5 primary for the Orange County Superior Court seat. He lost the election to a write-in candidate.

Joseph M. McDade, 75, was issued a summons on a charge of exposure of sexual organs, a misdemeanor that carries up to a year in jail and a $1,000 fine. The longtime Pennsylvania Republican congressman who served for 36 years in the House and now works for a Washington lobbying firm, has been accused of exposing his private parts to two women at a beach resort on Sanibel Island. [20]

Patrick Lee McGuire, former former Flagler County Commissioner, surrendered to police after allegedly molesting girls between the ages of 8 and 13.[21]

Jon Matthews, Republican talk show host in Houston, was indicted for indecency with a child, including exposing his genitals to a girl under the age of 17.[22]

Joseph Monteleone Jr., Elyria city councilman, was found guilty of fondling underage girls and asking them, to have sex with him.[23]

Glenn Murphy Jr., chairman of the Clark County Republican Party and president of the Young Republican National Federation, resigned both posts, after the Clark County Sheriff’s Department began investigating Murphy for alleged criminal deviate conduct. A 22-year-old man claimed that Murphy performed an unwanted sex act on him while the man slept in a relative’s Jeffersonville home. During the investigation, a similar accusation from 1998 came to light.[24]

Armando Tebano, Schenectady County Republican Chairman, pleaded guilty to fondling a 14-year-old girl.[25]

David Vittner, junior Senator from Louisiana, became one of the few high-profile politicians to be implicated as a client of "D.C. Madam" Deborah Jeane Palfrey.[26]

2006

Steve Aiken, campaign manager for a Republican candidate for Congress in Arizona, former Quakertown, PA, police officer and self-proclaimed reverend, was convicted of having sex with two underage girls.[27]

Louis Beres, chairman of the Christian Coalition of Oregon. 3 of his family members accuse him of molesting them when they were pre-teens. In August 06, Beres confessed.[28]

Howard L. Brooks, Republican legislative aide and adviser to a California assemblyman, was charged with molesting a 12-year old boy and possession of child pornography. [29]

Randall Casseday, Washington Times newspaper executive, pleaded guilty to soliciting sex from a 13-year old girl on the internet.[30]

Larry Corrigan, Republican operative and Director of Operations and Budget at King County Prosecutor's Office, OR, was arrested for soliciting sex from 13-year old girls.[31]

Carey Lee Cramer Political consultant and anti-Kerry ad producer, tried for molesting two young girls, one of whom lived with him, and was 8 yrs old; the other starred in an anti-Kerry commercial. Diary [32]

Mark Foley, Republican Representative, Florida Sixteenth Congressional District. Resigned after trying to solicit sex from male congressional pages via an instant messenger program. The conversations included his asking a sixteen-year-old "stud" whether his penis was erect and requesting that he take out and measure his penis. The cover-up involved Republican House Majority Leader John Boehner, Ohio Eighth Congressional District and Republican House Speaker Dennis Hastert, Illinois Fourteenth District.[33]

Jim Gibbons, then US Rep. and Republican candidate for governor, was accused by a Las Vegas casino cocktail waitress of grabbing her, shoving her against a wall and threatening her after she rebuffed his advances.[34][35] Since elected Governor, Gibbons is under investigation by the FBI on corruption charges and is embroiled in what looks set to become a very messy divorce.[36]

Ted Haggard, was fired as pastor of the New Life Church and resigned from his position as president of the National Association of Evangelicals in November 2006 after a former male prostitute alleged they had a cash-for-sex relationship. The man also said he saw Haggard use methamphetamine. Haggard confessed to undisclosed “sexual immorality” and said he bought meth but didn’t use it.[37]

Don Haidl, Assistant Sheriff of Orange Country, in violation of California's rape shield law, led a smear campaign against the child his son poisoned and then violently gang-raped on videotape, adding up to 24 felony counts. He said that his son "acted accordingly" because the child was a "slut".[38][39]

Jeffrey Ray Nielsen, Christian conservative activist and lawyer with close ties to Republican Congressman Dana Rohrabacher and Scott Baugh, head of the Orange County Republican Party, was arrested for having sex with a 14-year old boy.[40]

Jeffrey Patti, Republican Committee Chairman, was arrested for distributing what experts call "some of the most offensive material in the child pornography world" - a video clip of a 5-year-old girl being raped.[41]

Brent Schepp, Republican County Board Candidate was charged with molesting a 14-year old girl and killed himself three days later.[42]

2005

Adelphia Communications Corp.: Donated large sums of money to some of the most conservative members of Congress. They are also the first cable company to offer hard-core adult movies to subscribers.[43]

John Collins, of Eatontown, NJ, former music teacher and city councilman, pleaded guilty to sexually molesting 13 and 14 year old girls.[44]

John Gosek Republican Mayor of Oswego, N.Y.was arrested after paying a confidential informant $250 to introduce him to two 15-year-old girls at a hotel.[45]

Dr. W. David Hager Bush appointee, member of Focus on the Family's Physician Resource Council, player in movement to ban the morning-after-pill. Had an adulterous affair, before divorcing his wife he sexually abused her, including sodomizing her in her sleep.[46]

Russell Harding, president of the New York City Housing Development Corp. under then-mayor Rudolph Giuliani, pleaded guilty to stealing more than $400,000 for his personal use and possessing child pornography.[47]

Neal Horsley has called for the arrest of all homosexuals. During an interview with Alan Colmes on the Fox News Radio's The Alan Colmes Show, he admitted to having engaged in sex with a mule at age 11. "When you grow up on a farm in Georgia, your first girlfriend is a mule," he said. He then credited Jesus with forgiving and cleansing him of his "sin."

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Jeff Miller, (R-Cleveland), Senate Republican Caucus Chairman in Tennessee and the sponsor of Tennessee’s Marriage Protection act, getting divorced (as of April 2005) because of an affair he was having with an office aid. Miller described the Tennessee Marriage Protection Act as a means of preserving the sanctity of marriage. He opposed an amendment, however, which stated that “Adultery is deemed to be a threat to the institution of marriage and contrary to public policy in Tennessee.”

Dennis L. Rader, AKA, The BTK Killer, Republican zoning supervisor, Boy Scout leader and Lutheran church president, pleaded guilty to performing a sexual act on an 11-year old girl he murdered.[48]

Jeffrey Kyle Randall, Republican Mayor of Clarkfield, Minnesota, was sentenced to 275 days in jail for molesting two boys--ages ten and 12--during a six-year period.[49]

Jean Schmidt, OH-2, though not herself implicated, employed a campaign manager (Joe Braun) in her 2005 election who once wrote an article condemning gay men for running sex ad profiles, and who was then accused of running his own sex profile on Collarme, an S&M sex site. The profile called for "submissives" to wear only a collar and handcuffs and to have hot wax dripped on them.[50]

Mark Seidensticker, Republican campaign worker, is a convicted child molester.[51]

Don Sherwood, Republican member of the U.S. House of Representatives. Eventually admitted to an affair with a woman 30 years younger than him, after she accused him of physical abuse and attempting to choke her. [52]

Fred C. Smeltzer, Jr., Republican City Councilman, pleaded no contest to raping a 15 year-old girl and served 6-months in prison.[53]

Jim Stelling, Seminole County Republican Party chairman who believes in "family values", as he told a judge. Filed a defamation lawsuit against Nancy Goettman, a former county GOP executive committee member, for falsely claiming he had been married six times. Stelling has been married 5 times. [54]

Bobby Stumbo, former Floyd County, KY, Republican Party leader, was arrested for having sex with a 5-year old boy.[55]

Jim West, Spokane Mayor. Supported a bill, which failed, would have barred gays and lesbians from working in schools, day-care centers and some state agencies. Voted to bar the state from distributing pamphlets telling people how to protect themselves from AIDS. Proposed that “any touching of the sexual or other intimate parts of a person” among teens be criminalized. Had a sexual affair with an 18 year old boy.[56]

2004

Edison Misla Aldarondo, Republican former speaker of Puerto Rico's house of representatives, was sentenced to 13 years in prison after pleading guilty to charges of intoxicating his stepdaughter and her 17-year-old friend and attempting to rape the friend.[57]

Paul Crouch Televangelist, Former President of Trinity Broadcasting Network (TBN). Paid $425,000 in hush money in an attempt to cover up a gay affair.[58]

Richard A. Dasen Sr., Republican benefactor of conservative Christian groups, convicted of sexual abuse of children, promotion of prostitution and several counts of solicitation, enough to add up to a sentence of 126 years in prison. Investigators estimated that he spent at least $5 million.[59][60][61]

Peter Dibble, Republican legislator pleaded no contest to having an inappropriate relationship with a 13-year-old girl. [62]

Jeff Gannon, partisan blogger with no journalism credentials and a fake name who got invited to Bush's Press conferences. Is also a pimp and a gay prostitute.[63]

Mike Hintz, a First Assembly of God youth pastor, introduced by Bush on the campaign trail, and promoted his policies. Says he supports Bush's values. Two months later, this married father of four turned himself into police, charged with the sexual exploitation of a child.[64][65]

Also signed an ad (that called for criminally prosecuting business that sell porn), along with another pastor who was repeatedly busted for public masturbation.

Mark Pazuhanich, Republican judge, pleaded no contest to fondling his 10-year old daughter and was sentenced to 10 years probation.[66]

Donald Rumsfeld, Republican Defense Secretary, may have authorized the rape of children in Iraqi prisons in order to humiliate their parents into providing information about the anti-American insurgency. See excerpt of one prisoner's report here and his full report here.[67]

Jack Ryan, 2004 Republican nominee for US Senate from Illinois, pressured his wive, actress Jeri Ryan, to have sex with other men. Tricked her into visiting sex clubs, where he asked her to have sex with him while others watched.[68]

Ed Schrock, two-term republican congressman, with a 92% approval rating from the Christian Coalition. Cosponsor of the Federal Marriage Amendment, consistently opposed gay rights. Married, with wife and kids. Withdrew his candidacy for a third term after tapes of him soliciting for gay sex were circulated.[69]

David Swartz, Republican Commissioner, of Richland County, Ohio pleaded guilty to molesting two girls under the age of 11 and was sentenced to 8 years in prison.[70]

Robin Vanderwall, Republican strategist and director of Faith & Family Alliance, (a Christian Coalition spin off), was convicted in April 2004 on five counts of computer solicitation of a minor and one count of attempted indecent liberties with a child.[71]

2003

John Allen Burt, Republican anti-abortion activist, convicted of sexually molesting a 15 year old girl at the home for troubled girls that he ran. [72]

Neil Bush, brother or G. W. Bush, in a March 2003 divorce deposition, admitted repeatedly having sex with strange women who just showed up at his room while on an Asian business trip. (Overshadowing the sex scandal; the business scandal--see link.) [73]

Richard A. Delgaudio, Republican fund-raiser and Bush pioneer, was found guilty of child porn charges. [74]

Jack W. Gardner, Republican Councilman, had been convicted of molesting a 13-year old girl. when the Republican Party, knowing of these crimes, put him on the ballot.[75]

Philip Giordano, Republican mayor sentenced to 37 years for forcing two 8 and 10 year old girls to perform oral sex on him in his City Hall office.[76][77]

Rush Limbaugh, triple-divorcee[78], 30-pill a day drug addict.[79]. In 2006, returning from a trip to the Dominican Republic, Limbaugh was detained by customs agents for several hours after they found a bottle of Viagra prescribed to someone else in his luggage.[80]

Pat McPherson, Douglas County Election Commissioner, resigned a day after being ticketed on suspicion of fondling a 17-year-old girl who was dressed as a restaurant mascot.[81]

Brent Parker Utah State Representative. Arrested for soliciting sex from an undercover officer posing as a male prostitute.[82]

Stephen White, infamous for preaching against homosexuality and sexual promiscuity at Yale and other college campuses, was arrested after allegedly offering $20 to a 14-year-old boy for permission to perform oral sex on him.[83]

2002

Andrew Buhr, Republican politician, former committeeman for Hadley Township Missouri, was charged with two counts of first degree sodomy with a 13-year old boy.[84]

Richard Gardner, a Nevada State Representative (R), admitted to molesting his two daughters. 34% of those who voted in Assembly District 34 preferred Gardner to the Democratic candidate.[85]

Howard Scott Heldreth, anti-abortion activist who gained fame during the Shiavo media-circus, was convicted of two charges of raping a child in 2002.[86]

Tom Randall, Republican petition drive manager of Orange County, CA, pleaded guilty to molesting two girls under the age of 14, one of them the daughter of an associate in the petition business.[87]

Keith Westmoreland, a Tennessee state representative (R), was arrested on seven felony counts of lewd and lascivious exhibition to minors under 16 (i.e. exposing himself to children).[88] Not long afterwards, Westmoreland committed suicide.[89]

2001

Randal David Ankeney, Republican activist, arrested on suspicion of sexual assault on a child with force. He faces 6 charges related to getting a 13-year-old girl stoned on pot and then having sex with her. [90] Also accused of sexually assaulting another girl. [91]

Parker J. Bena, Republican activist and Bush Elector, pleaded guilty to possession of child pornography (including children as young as 3 years old) on his home computer and was sentenced to 30 months in federal prison and fined $18,000. [92]

Kevin Coan, Republican St. Louis Election Board official, arrested and charged with trying to buy sex from a 14-year-old girl whom he met on the Internet. [93]

John Fund, of the Wall Street Journal, a prominent anti-abortion columnist and GOP fund raiser. He lost his position after it was revealed that he impregnated the daughter of an old girlfriend and then encouraged her to abort his child.[94]

Donald "Buzz" Lukens, Republican Congressman from Ohio, was found guilty of having sex with a minor - a girl he was accused of sleeping with since she was 13.[95] Lukens was convicted in March, 1996, on five counts of bribery and conspiracy related to actions he took while in Congress.[96]

Nicholas Morency, Republican anti-abortion activist, pleaded guilty to possessing child pornography on his computer and offering a bounty to anybody who murders an abortion doctor [97].

Larry Jack Schwarz, Republican parole board officer and former Colorado state representative, fired after child pornography was found in his possession. [98] With his political career over, he went to work in the hard-core pornography industry for Platinum X Pictures, owned by his daughter, porn starlet Jewel De'Nyle (Stephany Schwarz). [99]

Tom Shortridge. Republican campaign consultant, was sentenced to three years probation for taking nude photographs of a 15-year old girl. [100]

2000

Keola Childs, Republican County Councilman, pleaded guilty to sexual assault in the first degree for molesting a male child.[101]

Matthew Glavin, president and CEO of the Southeastern Legal Foundation, big player in the Clinton Impeachment, and many anti-gay jihads, has been arrested multiple times for public indecency, one time fondling the crotch of the officer who was arresting him.[102]

Earl Kimmerling, sentenced to 40 years in prison after he confessed to molesting an 8-year old girl after he attempted to stop a gay couple from adopting her.[103]

1999

George Roche III president of conservative Hillsdale College, MI, divorced his wife of 44 years (who had cancer) and remarried five months later. Apparently shocked and upset by the presence of a new woman in her father-in-law's life, Roche's daughter-in-law Lissa revealed that she and her father-in-law had been off-and-on lovers for 19 of the 21 years she and her husband had been married. Shortly thereafter, Lissa took her own life.[104]

1998

Merrill Robert Barter, Republican County Commissioner, pleaded guilty to unlawful sexual contact and assault on a teenage boy. [105]

Dan Burton, Republican Congressman who, while married, fathered a child by another woman. [106]

Dan Crane, Republican Congressman, married, father of six. Received a 100% "Morality Rating" from Christian Voice. Had sex with a minor working as a congressional page.[107] On July 20, the House voted for censure Crane, the first time that censure had been imposed for sexual misconduct.[108]

Helen Chenoweth, Congresswoman (R-Id.). In 1995, Chenoweth had denied having an affair when asked about it by The Spokane Spokesman-Review. In 1998 she called (in a campaign ad) for Bill Clinton's resignation saying "I believe that personal conduct and integrity do matter". Days later she admitted to a six-year adulterous affair with a married associate. but now she claims a pardon from a higher authority: "I've asked for God's forgiveness, and I've received it," she revealed.

Henry Hyde, Judge who oversaw Clinton's impeachment proceedings, prominent opponent of reproductive rights, who had an extramarital affair with a woman who was married and had three children, during the course of which she and her husband were divorced. [109]

1997

Mike Bowers Former State Attorney General, prosecuted the famous Bowers vs. Hardwick case, based on Georgia anti-sodomy laws. Admitted to a 10-year adulterous affair.[110]

1996

John Hathaway, Republican Senate candidate, was accused of having sex with his 12-year old baby sitter and withdrew his candidacy after the allegations were reported in the media.[111]

I. Lewis Libby, former Assistant to the President and Chief of Staff to Vice President Dick Cheney. In 1996 published a novel containing bizarre sexual content, including bestiality and pedophillia.[112]

1995

Newt Gingrich, married three times. Gingrich campaign worker Anne Manning admitted that she gave Newt oral sex while he was still married to his first wife. Informed one wife he was filing for divorce while she was in the hospital recovering from cancer treatments.[113]

Beverly Russell, county chairman of the Christian Coalition and county coordinator of the South Carolina Citizens for Life[114], sexually molested his step-daughter, Susan Smith, who later drowned her two children.[115]. Mr. Russell continued to serve on the executive committee of the state G.O.P. as late as six months after his stepdaughter's confession of murder had brought their sexual history to light.

1994

Jim Bunn Congressman of Oregon: With his success due in great part to support from the Christian Coalition, Bunn won his congressional seat, then immediately ditched his wife (and mother of his five children), married a staffer, and put his new wife on the state payroll for the unheard-of salary of $97,500. [116]

1993

Ken Calvert, Congressman (R-Ca), champion of the Christian Coalition and its "family values." Sued as an alimony deadbeat by his ex-wife. Said "We can't forgive what occurred between the President and Lewinsky." In 1993 he was caught by police receiving oral sex from a prostitute and attempted to flee the scene.[117]

1990

Jon Grunseth, Republican businessman and candidate for Minnesota governor, withdrew his candidacy after allegations surfaced that he went swimming in the nude with four underage girls, including his daughter, and tried to grope one. "I've made some mistakes," he said.[118]

1989

Paul Ingram, Republican Party leader of Thurston County, Washington, pleaded guilty to six counts of raping his daughters and served 14 years in federal prison.

Sue Myrick, Republican mayor of Charlotte, NC, self-described "devout Christian", during her run for reelection news reports revealed that she committed adultery with a married man in 1973. Myrick admitted the adultery and won reelection. She was later elected as congresswoman for North Carolina's 9th district.

1988

Jim Bakker, televangelist with Pat Robertson at Robertson's Christian Broadcasting network. Committed adultery with Jessica Hahn [119] and then used charitable donations to pay her hush money[120]. Fellow televangelists say he's gay. [121][122] Convicted on 24 federal charges of fraud and conspiracy charges. [123].

1986

Roy Cohn, continually condemned gays and gay rights. Was a closet gay who died of AIDS. [124]

1982

John Scmitz, right-wing republican congressman, who had had his committee chairship taken away from him in the California State Senate after issuing a press release attacking Jews, feminists and gays. Forced out of office in 1982 for having an adulterous affair and fathering two children out of wedlock with one of his students. He was caught because his baby was admitted to hospital for having hair tied so tightly around his penis that it was almost severed. His daughter, Mary Kay LeTourneau, was convicted of having an adulterous affair with one of her students, and giving birth to two of his children. [125]

1980

Robert Bauman, Republican congressman and anti-gay activist, was charged with having sex with a 16-year-old boy he picked up at a gay bar. [126]

1973

Ted Bundy, the notorious serial rapist who murdered 16 women. Bundy worked on the re-election campaign of Washington's Republican Governor Dan Evans. Evans was elected and he appointed Bundy to the Seattle Crime Prevention Advisory Committee.[127]

Wednesday, June 24, 2009

GOP

Gov.Mark Sanford is having / has had an affair. Sen. Ensign had an affair -- and both his honey, her husband, and their son were / are on his payroll.

Don't you love the party of "family values" -- and homophobic outbursts?

Sanford went to Argentina to see his honey (ex-honey?) over FATHERS DAY weekend -- telling neither his wife, nor sons (four) where he was, or when he'd return.

Sanford only owned up after he was caught. With Republicans that's considered being a "stand-up guy" -- no wonder none of them serve in the Armed Forces -- they don't have a clue what being "stand-up" means.

I'm looking forward to more on this very incomplete story.

Hypocrites!

Wednesday, June 17, 2009

Revisionism From Wall Street - From Brad DeLong

We Are Live at The Week with: A Wall Street Fairy Tale

A Wall Street Fairy Tale - THE WEEK: The story we tell ourselves about what happened to the financial markets last fall is vitally important. It will determine what form financial market regulation takes in the next few decades, and how vulnerable we will be to the next disruption. At this moment, a relatively calm one, a fictional version of last fall's events is gaining traction. So let's review a few foundational facts.

September, 2008 was a busy month. On Sunday, the 7th, the U.S. government nationalized the two large government-sponsored mortgage enterprises, Fannie Mae and Freddie Mac, which had been privatized in 1968. The following Sunday, the investment-banking house of Merrill Lynch was forcibly merged into Bank of America. The next day, Lehman Brothers simply did not open. The old-line investment bank went into an uncontrolled and unsupervised bankruptcy, and all financial-market expectations that the Federal Reserve and the Treasury would guarantee the unsecured debt of every substantial investment bank in America, as they had for Bear Stearns, went out the window. Wednesday, September 17, saw the nationalization of the American International Group, which, unlike Lehman, was deemed too big to fail. Government-injected cash went straight through AIG and out the other end—like grain through a goose. The forced feeding may total $300 billion before we are through.

The bankruptcies of Fannie, Freddie, Lehman, and AIG; the fall in the prices of risky assets worldwide; the shutdown of the flow of funds through financial markets as trust evaporated and everyone presumed that whoever they entrusted their money to might go bankrupt—this was September's harvest. Risk tolerance collapsed. People became much less willing to hold risky assets at any price. The interest rate on 30-year Treasury bonds fell to less than 3 percent. And it was presumed that every large bank in America would be bankrupt if they were forced to mark to market.

The banks' survival depended on their (a) not having to sell assets until asset prices rebounded, and (b) the availability of enough government money, at cheap enough prices, to enable them to avoid selling any assets at fire-sale prices.

This troubling tale led to the largest recession in post-war history. Yet if you go to the big banks of Wall Street right now, most of them will say: "What is the problem?" They will deny that any changes in the way they run their businesses are called for. "Sure there were a few scary moments," they say, "but big shocks cause scary moments. And our fundamental business model is sound."

Indeed, as Paul Kedrosky points out, if you look at the stock prices of Goldman, JPMorgan Chase, Barclays, and Morgan Stanley, they are back where they were in late August, 2008 before the worst unpleasantness began. (Citi, however, is still down 75 percent and Bank of America is off 67 percent.) So, they say, there is no need for government investments in, or control over, their businesses; no need for restrictions on how much they can pay whom or for what; no need to restrict how much leverage they assume or what they invest in or how much capital they must hold. The smart banks, they say, figured out that the mortgage market was headed for a crash and managed to profit from the boom without being destroyed by the bust. It was only the dumb banks, they say—Bear-Stearns, Lehman, AIG, Fannie, Freddie, and to a lesser degree, Citi and Bank of America—that suffered severely. That's how the market works.

This is a fairy tale.

Suppose for a moment, that things had been handled differently last September. Suppose that the Federal Reserve had announced not that it was buying up the stock of AIG and that it would make sure that all of AIG's debts were paid, but rather that AIG was bankrupt. Suppose the Federal Reserve said it would rescue AIG's bank clients by paying out cash at par for contracts with AIG-provided that it also got (a) upside warrants in the bank and (b) an illiquid, long-dated note, the value of which would be determined by formula after the crisis passed.

In that case, Goldman, JPMorgan, Barclays, Morgan Stanley, Citi, and Bank of America would still have been able to function—they would have had enough cash to pay their bills and enough assets to match their liabilities—but they would now be owned by the federal government. Because all the money passed through AIG to the banks would not be a loss for the government but would rather have been in the form of government investments in still-solvent banks. The resulting expansion of the banks' share issue would have left their stock prices today a shadow of their values last August.

When American high finance hedged its mortgage risk by buying derivatives from AIG, it did not perform due diligence to figure out if AIG could in fact meet its obligations. This failure cost American high finance an amount that may ultimately reach $300 billion. And it would have been fatal had the government not come to their rescue.

Had the government stepped in by discounting AIG paper in return for warrants and notes at fair market values, the banks' life support apparatus would have been obvious. It is only because the government stepped in by nationalizing AIG and guaranteeing its debts that American high finance now has healthy stock prices, and that the senior executives of the big banks—except Citi, Bank of America, Lehman, and Bear-Stearns—are congratulating themselves for their skillful navigation through the crisis.

The fact that the rescue of the banking system took the form of nationalization of AIG, and the honoring of its paper, rather than equity investments by the government in the banks, and the discounting of AIG paper, has encouraged a bout of revisionism in which most of Wall Street and at least a third of Congress now embrace a fairy tale. They tell themselves—and us—a story of a banking system that was fundamentally sound, that merely needed a little temporary liquidity to tide itself over a panic. But the true story is one of an overleveraged banking system that was insolvent save for a $300 billion gift from American taxpayers.

In September, Wall Street was overrun with bears. Now it seems Goldilocks has taken up residence there, too.

Monday, June 15, 2009

From Joe. My. God.: This Week In Holy Crimes

Sunday, June 14, 2009

This Week In Holy Crimes

Over the last seven days...

Tennessee: Pastor Shane West convicted of prescription drug fraud.
Kentucky: Pastor Daniel Gabbard charged with wanton murder in fatal DUI crash.
North Carolina: Rev. John Schneider charged with obstructing justice for purging child pornography from the home computer of his church's music minster.
Ontario: Rev. William Major sentenced to two years in prison for sexual assault.
Florida: Pastor
Darrell Gilyard sentenced to three years in prison for lewd molestation.
North Carolina: Pastor John David Maisenhelder charged with molesting three children.
Ottawa: Man sues Ottawa Archdiocese for $2M for molestation that occurred over 25 years ago.
Texas: Pastor Matthew Anderson sentenced to five consecutive life sentences for child molestation. Anderson used passages from the Bible to convince his prey that he and they should get closer.

This week's winner:
California: Father and son con artists Pastor Richard Cunningham and Pastor Jonathan Cunningham were convicted of stealing over $1M from the Yorba Linda Baptist Church and transferring it into their private accounts. The pair had originally stolen $3,669,376 but paid back part of that theft by deeding property over to the church - property that they had likely purchased with stolen church money, but that had greatly increased in value over the years. "The Cunninghams, who each earned less than $100,000 a year on the books, between them owned six homes, two timeshares and cars that included a Cadillac and a Mercedes-Benz."

Saturday, June 13, 2009

New forms of downsizing

Dozens of US cities may have entire neighbourhoods bulldozed as part of drastic "shrink to survive" proposals being considered by the Obama administration to tackle economic decline.

House under demolition, USA: US cities may have to be bulldozed in order to survive
The US government is looking at expanding a pioneering scheme in Flint, one of the poorest US cities, which involves razing entire districts and returning the land to nature Photo: GETTY

The government looking at expanding a pioneering scheme in Flint, one of the poorest US cities, which involves razing entire districts and returning the land to nature.

Local politicians believe the city must contract by as much as 40 per cent, concentrating the dwindling population and local services into a more viable area.

The radical experiment is the brainchild of Dan Kildee, treasurer of Genesee County, which includes Flint.

Having outlined his strategy to Barack Obama during the election campaign, Mr Kildee has now been approached by the US government and a group of charities who want him to apply what he has learnt to the rest of the country.

Mr Kildee said he will concentrate on 50 cities, identified in a recent study by the Brookings Institution, an influential Washington think-tank, as potentially needing to shrink substantially to cope with their declining fortunes.

Most are former industrial cities in the "rust belt" of America's Mid-West and North East. They include Detroit, Philadelphia, Pittsburgh, Baltimore and Memphis.

In Detroit, shattered by the woes of the US car industry, there are already plans to split it into a collection of small urban centres separated from each other by countryside.

"The real question is not whether these cities shrink – we're all shrinking – but whether we let it happen in a destructive or sustainable way," said Mr Kildee. "Decline is a fact of life in Flint. Resisting it is like resisting gravity."

Karina Pallagst, director of the Shrinking Cities in a Global Perspective programme at the University of California, Berkeley, said there was "both a cultural and political taboo" about admitting decline in America.

"Places like Flint have hit rock bottom. They're at the point where it's better to start knocking a lot of buildings down," she said.

Flint, sixty miles north of Detroit, was the original home of General Motors. The car giant once employed 79,000 local people but that figure has shrunk to around 8,000.

Unemployment is now approaching 20 per cent and the total population has almost halved to 110,000.

The exodus – particularly of young people – coupled with the consequent collapse in property prices, has left street after street in sections of the city almost entirely abandoned.

In the city centre, the once grand Durant Hotel – named after William Durant, GM's founder – is a symbol of the city's decline, said Mr Kildee. The large building has been empty since 1973, roughly when Flint's decline began.

Regarded as a model city in the motor industry's boom years, Flint may once again be emulated, though for very different reasons.

But Mr Kildee, who has lived there nearly all his life, said he had first to overcome a deeply ingrained American cultural mindset that "big is good" and that cities should sprawl – Flint covers 34 square miles.

He said: "The obsession with growth is sadly a very American thing. Across the US, there's an assumption that all development is good, that if communities are growing they are successful. If they're shrinking, they're failing."

But some Flint dustcarts are collecting just one rubbish bag a week, roads are decaying, police are very understaffed and there were simply too few people to pay for services, he said.

If the city didn't downsize it will eventually go bankrupt, he added.

Flint's recovery efforts have been helped by a new state law passed a few years ago which allowed local governments to buy up empty properties very cheaply.

They could then knock them down or sell them on to owners who will occupy them. The city wants to specialise in health and education services, both areas which cannot easily be relocated abroad.

The local authority has restored the city's attractive but formerly deserted centre but has pulled down 1,100 abandoned homes in outlying areas.

Mr Kildee estimated another 3,000 needed to be demolished, although the city boundaries will remain the same.

Already, some streets peter out into woods or meadows, no trace remaining of the homes that once stood there.

Choosing which areas to knock down will be delicate but many of them were already obvious, he said.

The city is buying up houses in more affluent areas to offer people in neighbourhoods it wants to demolish. Nobody will be forced to move, said Mr Kildee.

"Much of the land will be given back to nature. People will enjoy living near a forest or meadow," he said.

Mr Kildee acknowledged that some fellow Americans considered his solution "defeatist" but he insisted it was "no more defeatist than pruning an overgrown tree so it can bear fruit again".

No new failed banks this Friday

Saturday, June 6, 2009

#37

The press release tells it all


Press Releases


Republic Bank of Chicago, Oak Brook, Illinois, Assumes All of the Deposits of Bank of Lincolnwood, Lincolnwood, Illinois

FOR IMMEDIATE RELEASE
June 5, 2009
Media Contact:
LaJuan Williams-Dickerson
(202) 898-3876

Bank of Lincolnwood, Lincolnwood, Illinois, was closed today by the Illinois Department of Financial and Professional Regulation, Division of Banking, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Republic Bank of Chicago, Oak Brook, Illinois, to assume all of the deposits of Bank of Lincolnwood.

Bank of Lincolnwood's two offices will reopen on Saturday as branches of Republic Bank of Chicago. Depositors of Bank of Lincolnwood will automatically become depositors of Republic Bank of Chicago. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers of both banks should continue to use their existing branches until Republic Bank of Chicago can fully integrate the deposit records of Bank of Lincolnwood.

Over the weekend, depositors of Bank of Lincolnwood can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.

As of May 26, 2009, Bank of Lincolnwood had total assets of approximately $214 million and total deposits of $202 million. Republic Bank of Chicago agreed to purchase approximately $162 million in assets. The FDIC will retain the remaining assets for later disposition.

Customers who have questions about today's transaction can call the FDIC toll-free at 1-800-591-6727. The phone number will be operational this evening until 9:00 p.m., Central Daylight Time (CDT); on Saturday from 9:00 a.m. to 6:00 p.m., CDT; on Sunday from noon to 6:00 p.m., CDT; and thereafter from 8:00 a.m. to 8:00 p.m., CDT. Customers who would like more information about today's transaction can also visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/lincolnwood.html.

The FDIC estimates that the cost to the Deposit Insurance Fund will be $83 million. Republic Bank of Chicago's acquisition of all the deposits was the "least costly" resolution for the DIF compared to alternatives. Bank of Lincolnwood is the 37th FDIC-insured institution to fail in the nation this year and the sixth in Illinois. The last bank to fail in the state was Citizens National Bank, Macomb, on May 22, 2009.

Thursday, June 4, 2009

The View From Your Recession

I realize this will get much more exposure on "The Daily Dish", but if one person reads this and passes it on, there might be greater understanding of the problems we face as a nation. Stuff like this is not just happening to one family, one person -- it's all around us, we just won't, or can't, see it.

The View From Your Recession

A reader writes:

I live in suburban Orange County, California, which is great place for my family and the weather can't be beat. I grew up near Edinburgh, Scotland and moved to the US in the late '80s, when the UK was just a mess. Orange County is one of the most conservative, wealthier counties in the US. Even so, I had an unbelievable experience the other day that brought home the recession in a way that still upsets me.

While on a lunch break I pulled into a gas station in Irvine to gas up. While I was standing around waiting for my gas guzzler to fill up I heard a small boy crying. Over in the far corner of the parking lot was a fairly nice sedan, late '90s model, perhaps a Lexus. It was parked next to the air-and-water pump. I could not see anyone but I could still hear a child crying from somewhere near the car. Then I heard something like "No, Daddy, that hurts." Well, this got my attention real quick, so I wandered around the back of my car to get a better look.

Two small good looking young boys, ages roughly 3 and 7 were being bathed in the free water pump by their parents. The young kid was crying as the water was cold and the dad was attempting to rinse the shampoo from his son's hair The mom was trying to comfort the young one. When I looked at the car again I noticed it was absolutely packed with clothes, etc. It hit me right away that this family was homeless.

I could just see the sadness and desperation on the mom's face. I felt a chill inside. I walked up to the dad and offered him all the cash I had - about $30. The look in his eyes was something I will always remember: grateful, yet ashamed. A sad, sad situation. And for this to happen in Orange County is just remarkable.

Makes you think

This is from someone who is very skeptical about global warming. Even those who do not believe it must see how our world has been degraded fisheries overexploited, etc., etc., etc.

From "When Giants Fall":

June 03, 2009

Makes You Think

I am skeptical of some of the claims made by "peak everything" and climate change fanatics. That said, I'm not sure how anyone could look around at all the poisoned rivers, lakes, and oceans, the polluted skies, and the once fertile lands that have been turned into deserts, and not think about the now extinct civilizations described in books like Jared Diamond's Collapse: How Societies Choose to Fail or Succeed -- especially after you read reports like the following, entitled "Temple Timbers Trace Collapse of Mayan Culture," from the New Scientist:

THE builders of the ancient Mayan temples at Tikal in Guatemala switched to inferior wood a few decades before they suddenly abandoned the city in the 9th century AD. The shift is the strongest evidence yet that Mayan civilisation collapsed because they ran out of resources, rather than, say, disease or warfare.

Researchers led by David Lentz, a palaeoethnobotanist at the University of Cincinnati in Ohio, sampled wooden beams and lintels from all six major temples and two palaces within the ancient city of Tikal. The first three temples, built before AD 741, used only large, straight logs of the sapodilla tree - a particularly strong wood that is nevertheless easy to carve with ceremonial inscriptions.

But after that date, large sapodilla logs were almost entirely replaced in temple construction by logwood, a smaller, gnarly tree that is almost impossible to carve. "It's definitely an inferior material," says Lentz, who reasons that the temple-builders would only have accepted logwood if they had run out of suitable sapodilla trees to harvest (Journal of Archaeological Science, DOI: 10.1016/j.jas.2009.01.020).

Earlier studies of pollen deposits have suggested that deforestation and soil erosion were increasing in the region as Mayan civilisation neared its collapse. But the temple timbers of Tikal are the first to show that ecological overexploitation directly affected Mayan culture.