Vanilla Iced

I love plain vanilla ice cream.  Love it.  My favorite is the soft serve vanilla at Carvel's.  The rest of my family doesn't understand my vanilla compulsion.  My husband is a ice-cream omnivore.  My oldest daughter favors the fruity sherbets, and my youngest has already demonstrated a strong disposition towards anything that includes chocolate.

I am simple, uncomplicated.  And to me, it is the simple, and uncomplicated repetition of vanilla that draws me to it again, and again, and again.  I know what I'm paying for, and I know what I'll get.

So needless to say, that I took it as a personal affront this week when my favorite comedian-politician, Barney Frank, announced that the House has revised the administration’s proposal for a new consumer financial protection agency by removing the requirement that banks and other financial services companies offer "plain vanilla products", like 30-year fixed mortgages and low-interest, low-fee credit cards.  My favorite comedian-secretary, Timothy Geithner, came around quickly, announcing the administration's acquiescence in the deletion.

On what planet does it make sense that I could walk into any ice cream store tomorrow and find out that vanilla is no longer available?

A '10 Senate Race to Watch: Democrats Gillibrand and Maloney Vie in NY

                   

Left, Sen. Kirsten Gillibrand, D-NY                 Right, Congresswoman Carolyn Maloney, D-NY

For liberal New Yorkers mulling the fall 2010 special election race to fill the U.S. Senate seat currently occupied by  Senator Kirsten Gillibrand (D-NY), the declaration of Congresswoman Carolyn Maloney's (D-NY) campaign for it represents an interesting wrinkle. Under state rules governing a vacated Senate position, Governor Paterson chose Gillibrand to fill what had been former Senator Hillary Clinton's seat for a portion of the time remaining in her term when Clinton joined Obama's cabinet. In 2010, the U.S. Senate seat goes wide open to both major political parties, and there's tremendous interest among Democrats in retaining the seat with, naturally, the strongest possible challenger to whoever the Republicans put up.* In this case, it's generally accepted that the Democratic aspirant will likely be a woman. What's unusual is that in addition to the question of who's more "electable" (and why), there's the additional question, who has the better feminist record?

Bonfire of the A.I.G.

The Congressional hearing over the AIG bonuses today may have been the most circus-like experienced by the normally staid House Financial Services Committee.  But theatrics aside, what we find is a deeply nuanced situation, full of half-details suggesting shady subterfuge, and not a person to trust as far as the eye can see.

First, the $165 million in bonuses/retention fees paid to employees (and apparently, a handful of ex-employees) of AIG.  There is an enormous amount of public outrag at this incomprehensible rewarding of the very people who have contributed (and not in a small way) to the financial crisis (certainly, on a per head basis, are far more culpable that the irresponsible mortgage holder that those of other side of the political spectrum love to hate). 

But peel aside the outrage and this is the situation we are left with: if we assume that AIG has a contractual obligation to fulfill the terms of what can only be characterized as criminally generous compensation contracts (and you can read this op-ed, as well as this recent post by Pundit Mom, for some critical discussion about the legal grounds which AIG may have to not perform on their obligations), then (1) breaking that contract may in fact cost AIG more than simply paying out on the obligation and (2) the government has already tied its hands with respect to the degree of its involvement allowed.

Econ 101: Crisis of Credit

For those readers out there who are still unsure about how housing, investment banks, your 401(k) and the economy are all tied together, this is a wonderful tutorial I found today at NPR's Planet Money. 

The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.

Kady also blogs at Wonkess.

Missing Kyoto

Found this very interesting study via Clusterstock.  In a report released by the Centre for Industrial Economics at the Ecole des Mines in Paris, a strong correlation was found between ratification of the Kyoto Protocol (yeah, the one that Bush didn't) and green technology innovation.

The researchers first looked at the effect of Kyoto on the speed of development of climate-related technologies compared to all technologies (based on number of patent filings), and this is what they found across all countries:

Great, so the Kyoto Protocol spurred innovation in climate change technologies.

TARP-ageddon Part the Deux

We are soooo screwed.

The Washington Post reported some leaked details of the new administration’s plan to rescue the U.S. banking system on Wednesday. According to the WaPo, the plan, which Treasury Secretary Geithner is set to announce Monday:

Instead of taking a single approach, the Obama administration plans to divide assets and other loans into three categories, each with its own solution, according to sources familiar with the discussions, speaking on condition of anonymity because the details are not finalized.

The government would buy and hold on to those assets whose falling prices are putting banks under the most pressure. Officials want to limit these purchases because of the vast expense.

The centerpiece of the plan would be a guarantee to limit losses on a second group of troubled assets that can be kept by the banks because they have more stable prices.

And it would allow banks to retain and profit from their healthiest assets. Beyond these initiatives, the government also is likely to inject more capital into troubled institutions.

You know what, three crappy plans do not beget a good plan.  There is no multiplier effect on crap. 

This is not a plan to get our economy out of the toilet, but a disgusting convolution of the facts in order to throw money at the banks (and, in doing so, keep a bunch of wealthy bankers wealthy).

Econ 101: Stimulus

Momocrat Julie wrote a post earlier today, indignant over a member of the "Stimulati's" unfortunate characterization of the goals of the stimulus as spurring government spending instead of putting more dollars into the individual's hands "because...wait for it...we wouldn't spend it. Instead? We'd live on it."

We find ourselves in a precarious economic situation, and unfortunately, due to the bumbling idiocy that is Washington D.C., and the apparent impossibility of doing things in any way except the same old way, we are about to see our government take on a massive amount of debt in an attempt to "stimulate" ourselves out of this recession.

Now don't get me wrong.  Like Robert Reich, I'm dead-set against the Republican suggestion of all tax cuts all the time.  Tax cuts have their place, but it's hard to understand how anyone can justify tax cuts when we've had eight years of exuberant tax cutting which have gotten us to this very place.

On the other hand, we're clearly not in an era of post-partisanship when the ruling party (yes, Dems, I'm talking about you) takes a policy disagreement and turns it into a taunt, running as far in the other direction as possible, thumbing their noses all the while.

Prop 8, with Jazz Hands

Being a fan of musical theatre (and having participated in many a cheesy production myself), this just warms the cockles of my heart.

See more Jack Black videos at Funny or Die

Kady is on a holiday induced sabbatical over at Wonkess.

Citi Bailout. Fine, I surrender.

The Treasury, Fed and FDIC have issued a joint statement and term sheet regarding what will effectively be a bailout of Citigroup.

The U.S. government is committed to supporting financial market stability, which is a prerequisite to restoring vigorous economic growth. In support of this commitment, the U.S. government on Sunday entered into an agreement with Citigroup to provide a package of guarantees, liquidity access, and capital.

As part of the agreement, Treasury and the Federal Deposit Insurance Corporation will provide protection against the possibility of unusually large losses on an asset pool of approximately $306 billion of loans and securities backed by residential and commercial real estate and other such assets, which will remain on Citigroup's balance sheet. As a fee for this arrangement, Citigroup will issue preferred shares to the Treasury and FDIC. In addition and if necessary, the Federal Reserve stands ready to backstop residual risk in the asset pool through a non-recourse loan.

In addition, Treasury will invest $20 billion in Citigroup from the Troubled Asset Relief Program in exchange for preferred stock with an 8% dividend to the Treasury. Citigroup will comply with enhanced executive compensation restrictions and implement the FDIC's mortgage modification program. 

With these transactions, the U.S. government is taking the actions necessary to strengthen the financial system and protect U.S. taxpayers and the U.S. economy.

Econ 101: Bonds

I know I said that I'd be doing this only once a week, but this is too good not to share.  From Slate: