"It's called plutocracy"

Karl Rove visited UC Merced recently, at the invitation of the campus Republicans. It is hard enough to imagine a UC student as completely subsidized as these are by the faded ideals of a once proud, rich and generous state being so ignorant and stupid that they would make such an idiotic invitation. But, on the other hand, UC is no longer, strictly speaking, that great product of those great, faded ideals, which last saw the light of day when Jerry Brown's father was governor. Today, UC has been absorbed by corporations. Nevertheless, it doesn't take a junior rocket scientist to suck up to power.
The problem is the nature and direction of that power. Rove wants the US to return to the age of the robber barons, the trusts, control of Wall Street by one or two forces, and the administration of President William McKinley...a plutocracy it took most of the 20th century, including two world wars and the Great Depression to dismantle. Yet, 80 years into the century, the plutocracy began to be reassembled around the leadership of Ronald Reagan, California's other gift to the nation, who began his political career as governor of the state, soon after inauguration sending helicopters with tear gas against UC students demonstrating against the Vietnam War. 
You cannot make up the level of stupidity and ignorance of UC students that would welcome Karl Rove to their campus.  Author John Le Carre put it best when this decade of war was beginning: "America has gone mad again."
Only this time, thanks to 30 years of rabid anti-intellectualism on campus, it's much worse.
Badlands Journal editorial board
10-19-10
CommonDreams.org
The Perfect Storm
by Robert Reich
http://www.commondreams.org/view/2010/10/19-1
It’s a perfect storm. And I’m not talking about the impending dangers facing Democrats. I’m talking about the dangers facing our democracy.
First, income in America is now more concentrated in fewer hands than it’s been in 80 years. Almost a quarter of total income generated in the United States is going to the top 1 percent of Americans.
The top one-tenth of one percent of Americans now earn as much as the bottom 120 million of us.
Who are these people? With the exception of a few entrepreneurs like Bill Gates, they’re top executives of big corporations and Wall Street, hedge-fund managers, and private equity managers. They include the Koch brothers, whose wealth increased by billions last year, and who are now funding tea party candidates across the nation.
Which gets us to the second part of the perfect storm. A relatively few Americans are buying our democracy as never before. And they’re doing it completely in secret.
Hundreds of millions of dollars are pouring into advertisements for and against candidates  — without a trace of where the dollars are coming from. They’re laundered through a handful of groups. Fred Maleck, whom you may remember as deputy director of Richard Nixon’s notorious Committee to Reelect the President (dubbed Creep in the Watergate scandal), is running one of them. Republican operative Karl Rove runs another. The U.S. Chamber of Commerce, a third.
The Supreme Court’s Citizens United vs. the Federal Election Commission made it possible. The Federal Election Commission says only 32 percent of groups paying for election ads are disclosing the names of their donors. By comparison, in the 2006 midterm, 97 percent disclosed; in 2008, almost half disclosed.
We’re back to the late 19th century when the lackeys of robber barons literally deposited sacks of cash on the desks of friendly legislators. The public never knew who was bribing whom.
Just before it recessed the House passed a bill that would require that the names of all such donors be publicly disclosed. But it couldn’t get through the Senate. Every Republican voted against it. (To see how far the GOP has come, nearly ten years ago campaign disclosure was supported by 48 of 54 Republican senators.)
Here’s the third part of the perfect storm. Most Americans are in trouble. Their jobs, incomes, savings, and even homes are on the line. They need a government that’s working for them, not for the privileged and the powerful.
Yet their state and local taxes are rising. And their services are being cut. Teachers and firefighters are being laid off. The roads and bridges they count on are crumbling, pipelines are leaking, schools are dilapidated, and public libraries are being shut.
There’s no jobs bill to speak of. No WPA to hire those who can’t find jobs in the private sector. Unemployment insurance doesn’t reach half of the unemployed. 
Washington says nothing can be done. There’s no money left.
No money? The marginal income tax rate on the very rich is the lowest it’s been in more than 80 years. Under President Dwight Eisenhower (who no one would have accused of being a radical) it was 91 percent. Now it’s 36 percent. Congress is even fighting over whether to end the temporary Bush tax cut for the rich and return them to the Clinton top tax of 39 percent.
Much of the income of the highest earners is treated as capital gains, anyway — subject to a 15 percent tax. The typical hedge-fund and private-equity manager paid only 17 percent last year. Their earnings were not exactly modest. The top 15 hedge-fund managers earned an average of $1 billion.
Congress won’t even return to the estate tax in place during the Clinton administration – which applied only to those in the top 2 percent of incomes.
It won’t limit the tax deductions of the very rich, which include interest payments on multi-million dollar mortgages. (Yet Wall Street refuses to allow homeowners who can’t meet mortgage payments to include their primary residence in personal bankruptcy.)
There’s plenty of money to help stranded Americans, just not the political will to raise it. And at the rate secret money is flooding our political system, even less political will in the future.
The perfect storm: An unprecedented concentration of income and wealth at the top; a record amount of secret money flooding our democracy; and a public becoming increasingly angry and cynical about a government that’s raising its taxes, reducing its services, and unable to get it back to work.
We’re losing our democracy to a different system. It’s called plutocracy.
10-16-10
Sacramento Bee
Paul Krugman: Legacy of bubble era - a mortgage morass...Paul Krugman writes for the New York Times.
http://www.sacbee.com/2010/10/16/v-print/3108073/legacy-of-bubble-era-a-mortgage.html
American officials used to lecture other countries about their economic failings and tell them that they needed to emulate the U.S. model. The Asian financial crisis of the late 1990s, in particular, led to a lot of self-satisfied moralizing.
Thus, in 2000, Lawrence Summers, then the U.S. Treasury secretary, declared that the keys to avoiding financial crisis were "well-capitalized and supervised banks, effective corporate governance and bankruptcy codes, and credible means of contract enforcement." By implication, these were things the Asians lacked but we had.
We didn't.
The accounting scandals at Enron and WorldCom dispelled the myth of effective corporate governance. These days, the idea that our banks were well-capitalized and supervised sounds like a sick joke. And now the mortgage mess is making nonsense of claims that we have effective contract enforcement – in fact, the question is whether our economy is governed by any kind of rule of law.
The story so far: An epic housing bust and sustained high unemployment have led to an epidemic of default, with millions of homeowners falling behind on mortgage payments. So servicers – the companies that collect payments on behalf of mortgage owners – have been foreclosing on many mortgages, seizing many homes.
But do they actually have the right to seize these homes? Horror stories have been proliferating, like the case of the Florida man whose home was taken even though he had no mortgage.
More significantly, certain players have been ignoring the law. Courts have been approving foreclosures without requiring that mortgage servicers produce appropriate documentation; instead, they have relied on affidavits asserting that the papers are in order. And these affidavits were often produced by "robo-signers," or low-level employees who had no idea whether their assertions were true.
Now an awful truth is becoming apparent: In many cases, the documentation doesn't exist. In the frenzy of the bubble, much home lending was undertaken by fly-by-night companies trying to generate as much volume as possible. These loans were sold off to mortgage "trusts," which, in turn, sliced and diced them into mortgage-backed securities.
The trusts were legally required to obtain and hold the mortgage notes that specified the borrowers' obligations. But it's now apparent that such niceties were frequently neglected. And this means that many of the foreclosures now taking place are, in fact, illegal.
This is very, very bad.
For one thing, it's a near certainty that significant numbers of borrowers are being defrauded – charged fees they don't actually owe, declared in default when, by the terms of their loan agreements, they aren't.
Beyond that, if trusts can't produce proof that they actually own the mortgages against which they have been selling claims, the sponsors of these trusts will face lawsuits from investors who bought these claims – claims that are now, in many cases, worth only a small fraction of their face value.
And who are these sponsors? Major financial institutions – the same institutions supposedly rescued by government programs last year.
So the mortgage mess threatens to produce another financial crisis. What can be done? True to form, the Obama administration's response has been to oppose any action that might upset the banks, like a temporary moratorium on foreclosures while some of the issues are resolved.
Instead, it is asking the banks, very nicely, to behave better and clean up their act. That's worked so well in the past, right?
The response from the right is, however, even worse. Republicans in Congress are lying low, but conservative commentators like those at the Wall Street Journal's editorial page have come out dismissing the lack of proper documents as a triviality. In effect, they're saying that if a bank says it owns your house, we should just take its word. To me, this evokes the days when noblemen felt free to take whatever they wanted, knowing that peasants had no standing in the courts. But then, I suspect that some people regard those as the good old days.
What should be happening? The excesses of the bubble years have created a legal morass, in which property rights are ill defined because nobody has proper documentation. And where no clear property rights exist, it's the government's job to create them. That won't be easy, but there are good ideas out there. For example, the Center for American Progress has proposed giving mortgage counselors and other public entities the power to modify troubled loans directly, with their judgment standing unless appealed by the mortgage servicer. This would do a lot to clarify matters and help extract us from the morass. One thing is for sure: