Didn’t See This Comin’ Now, Didja’?

“Twenty-five billion dollars is obviously going to help the folks who are struggling more than Chase,” he began. “What we do think it will help us do is perhaps be a little bit more active on the acquisition side or opportunistic side for some banks who are still struggling. And I would not assume that we are done on the acquisition side just because of the Washington Mutual and Bear Stearns mergers. I think there are going to be some great opportunities for us to grow in this environment, and I think we have an opportunity to use that $25 billion in that way and obviously depending on whether recession turns into depression or what happens in the future, you know, we have that as a backstop.”

Read that answer as many times as you want – you are not going to find a single word in there about making loans to help the American economy. On the contrary: at another point in the conference call, the same executive (who I’m not naming because he didn’t know I would be listening in) explained that “loan dollars are down significantly.” He added, “We would think that loan volume will continue to go down as we continue to tighten credit to fully reflect the high cost of pricing on the loan side.” In other words JPMorgan has no intention of turning on the lending spigot.

(So When Will Banks Give Loans?, NY Times, 10/24/08)

And this post isn’t going to get any prettier …

First, the $700 billion rescue for the economy was about buying devalued mortgage-backed securities from tottering banks to unclog frozen credit markets.

Then it was about using $250 billion of it to buy stakes in banks. The idea was that banks would use the money to start making loans again.

But reports surfaced that bankers might instead use the money to buy other banks, pay dividends, give employees a raise and executives a bonus, or just sit on it. Insurance companies now want a piece; maybe automakers, too, even though Congress has approved $25 billion in low-interest loans for them.

(Deciding how to use bailout funds, Philadelphia Enquirer, 10/26/08)

“It’s clear that the government would like us to use the money to make loans,” said JPMorgan Chase & Co.’s CEO Jamie Dimon at a recent earnings conference call with analysts. “I don’t think the government is telling us what to do with the capital.”

(Temptation for banks to risk bailout funds, SF Chronicle, 10/19/08)

“We will have the opportunity to redeploy that (bailout funds),” John Thain, chief executive officer of Merrill Lynch (NYSE:MER), told The New York Times. (NYSE:NYT) “But at least for the next quarter, it’s just going to be a cushion,” he said.

Other bankers privately made similar remarks, the Times reported Friday.

(Banks may hoard bailout funds, UPI, 10/17/08)

Oh, and about those preferred shares we, the people, are ostensibly getting in return for our donations to the rich and powerful of the financial industry and Wall Street?

(My bold emphasis)

PNC Financial Services Group Inc., which acquired Baltimore’s Mercantile Bankshares last year, said yesterday that it is acquiring Cleveland-based National City Corp. for $5.58 billion, becoming the first bank to use fresh investments from a federal bailout program to make an acquisition.

The deal came within hours of PNC Financial receiving approval for $7.7 billion in cash from the government under the $700 billion government program aimed at relieving the continuing credit crisis.

. . .

The government will receive warrants to acquire a 15 percent stake in PNC Financial. The warrants will be good for 10 years unless retired by PNC, the company said.

(PNC using bailout funds to acquire National City, Baltimore Sun, 10/26/08)

Don’t know what those “warrants” are? They’re nothing more than a temporary promissory note … ie, for the next ten years we, the people, will have a legal right to 15% of PNC Financial, and then after ten years that all goes buh bye. (See this link for some discussion of warrants.)

Democratic Surrender, copyright Rama Schneider, 2007

We’ll just keep surrendering ’till we got ’em on the run

Just like we tucked our tails when this dumb ol’ war begun

When they’re sick of winning it all

We’ll watch them turn and flee

Yeah, we’ll just keep surrendering our way to election victory

“In our days of glory,” said the Democratic pol to me

“Everything that George Bush wants, you can be sure he’ll receive”

“We’re gonna end this Iraq war, of that you have no fear”

“It’s just gonna take a lot time, maybe we’ll start in a year”

We’ll just keep surrendering ’till we got ’em on the run

Just like we tucked our tails when this dumb ol’ war begun

When they’re sick of winning it all

We’ll watch them turn and flee

Yeah, we’ll just keep surrendering our way to election victory

“What’s a few more billion?” said the Democratic pol to me

“And who really cares about some ol’ Iraqi family”

“And the folk of our America who we send to kill and die”

“We all know they’ll keep doing their job without ever asking why”

We’ll just keep surrendering ’till we got ’em on the run

Just like we tucked our tails when this dumb ol’ war begun

When they’re sick of winning it all

We’ll watch them turn and flee

Yeah, we’ll just keep surrendering our way to election victory

“The important thing is next year,” said the Democratic pol to me

“If things are bad it only helps my electability”

“Cause I know I can scare you into joining my failed fold”

“I’ll scream your only option is the Republicans of old”

We’ll just keep surrendering ’till we got ’em on the run

Just like we tucked our tails when this dumb ol’ war begun

When they’re sick of winning it all

We’ll watch them turn and flee

Yeah, we’ll just keep surrendering our way to election victory

I posted some of this back in May about the last days of the Clinton campaign.  This new edition is about the McCain Campaign.

If you study behavioral psychology, you’ll learn about a concept called “the extinction burst.”  

The specific example I use when I teach is this:

You’ve got a child who is throwing tantrums.  In the past, the tantrums have gotten the child attention, which is exactly what the child wants.  Therefore, you have been providing positive reinforcement to that child’s behavior.  It’s “positive” because you’re adding something (attention), not because it’s good.  It’s “reinforcement” because it increases the behavior.

The much more effective approach to reducing tantrums is negative punishment.  “Negative” because you’re removing something and “punishment” because it reduces the behavior.  When we talk about “punishment” in behavioral psychology we don’t necessarily mean anything specific; it’s just any act in a behavioral context which reduces the frequency of a given behavior.

But here’s why many parents don’t use negative punishment: the extinction burst.

You have a child who’s throwing tantrums and you decide to reduce the tantrums through not paying attention.  You try to ignore them completely.  This will generally work.  But before it works, it gets worse.  The child, knowing that the tantrums have worked in the past, thinks that the tantrums are just not loud enough.  

So they get worse, before they fade out entirely.

This last ditch effort to make the tantrums work is the aforementioned “extinction burst.”  It’s perfectly human: something that has worked in the past is losing its power so you don’t try something different.  You do what you’ve been doing all along, but push harder.

Here are some examples of the extinction burst in action:

Per CNN:

Several McCain advisers have suggested to CNN that they have become increasingly frustrated with what one aide described as Palin “going rogue.”

A Palin associate, however, said the candidate is simply trying to “bust free” of what she believes was a damaging and mismanaged roll-out.

McCain sources say Palin has gone off-message several times, and they privately wonder whether the incidents were deliberate. They cited an instance in which she labeled robocalls — recorded messages often used to attack a candidate’s opponent — “irritating” even as the campaign defended their use. Also, they pointed to her telling reporters she disagreed with the campaign’s decision to pull out of Michigan.

A second McCain source says she appears to be looking out for herself more than the McCain campaign.

“She is a diva. She takes no advice from anyone,” said this McCain adviser. “She does not have any relationships of trust with any of us, her family or anyone else.

John McCain just making crap up:

Per Yahoo News:

Pennsylvania Republicans are disavowing an e-mail sent to Jewish voters that likens a vote for Democratic presidential candidate Barack Obama to events that led up to the Holocaust.

“Jewish Americans cannot afford to make the wrong decision on Tuesday, November 4th, 2008,” the e-mail reads. “Many of our ancestors ignored the warning signs in the 1930s and 1940s and made a tragic mistake. Let’s not make a similar one this year!”

Per Huffington Post:

Sarah Palin had a few memorable moments during her campaign stop in Des Moines, Iowa, on Saturday. But the most eye-opening of them all came, it would appear, when the Alaska Governor somehow drew a connection between Barack Obama’s tax policy and an encroaching, nightmarish, communist government. The Illinois Democrat, she hysterically suggested, would, through his proposals, create a country “where the people are not free.”

Per Raw Story:

After several political signs were stolen or vandalized from his front yard, a Missouri man installed video cameras in an attempt to catch the vandals in the act.

And that’s exactly what he did.

A video below shows a woman stepping out of a truck and kicking Mike Brown’s Obama/Biden political signs before running away.

“I’m just a guy who has a sign in his yard, and this is the first election that I have ever felt was important enough for me to voice my opinion in the form of a yard sign,” said Brown.

Hey, let’s pretend terrorism isn’t terrorism:

Hey, what about Ayers?:

ust 28% of voters believe that John McCain’s campaign has been helped by talking about the relationship between Barack Obama and William Ayers. A Rasmussen Reports national telephone survey found that 50% believe talk of that issue has hurt McCain’s effort while 15% say it has had no impact.

How about we play the POW card and lie about Obama’s record?

Finally, per Talking Points Memo:

John McCain’s Pennsylvania communications director told reporters in the state an incendiary version of the hoax story about the attack on a McCain volunteer well before the facts of the case were known or established — and even told reporters outright that the “B” carved into the victim’s cheek stood for “Barack,” according to multiple sources familiar with the discussions.

John Verrilli, the news director for KDKA in Pittsburgh, told TPM Election Central that McCain’s Pennsylvania campaign communications director gave one of his reporters a detailed version of the attack that included a claim that the alleged attacker said, “You’re with the McCain campaign? I’m going to teach you a lesson.”

Verrilli also told TPM that the McCain spokesperson had claimed that the “B” stood for Barack. According to Verrilli, the spokesperson also told KDKA that Sarah Palin had called the victim of the alleged attack, who has since admitted the story was a hoax.

Stay classy, McCain campaign!

The Nuclear Free Jubilee was a smash today. Approximately 900 people showed up to watch or be part of the Bread & Puppet procession down Main Street. The parade ended on the Brattleboro Common and Bread & Puppet founder Peter Schumann led a performance that ended in casting away Entergy Vermont Yankee.

Following Bread & Puppet was the amazing Reverend Billy. Reverend Billy delivered… and exorcized Vermont Yankee from Windham County, “Nuclearluja!”

After Reverend Billy came Deb Katz of Citizens Awareness Network, Peter Shumlin, Anthony Pollina, Gaye Symington and many others. Narissa and Katryna Nields also did a spectacular show that ended with people jumping on stage for their final song.

A great event on a great autumn day. Here’s a snapshot of today’s events. Hope you enjoy.

– Christian