Ungaming the System: Nevada Gaming Revenues and the Bigger Economic Picture

A reasonable conjecture might easily contend that a combination of stagnant wages, high food and fuel costs, and consumer indebtedness are beginning to show in the Nevada Gaming Commissions reports. [NGCpdf]

Statewide Numbers: May 2008 wasn’t an especially pretty month. “Total games” revenue was down 15.74%, with card games off 5.74%. The total from our one-armed bandits was down 15.08%. The first quarter showed “total games” down 7.57%, card games down by 7.96%, and slots off 7.40%. The yearly report was equally dismal. “Total games” declined 1.22%, card games were off 0.56%, and slots were down 1.56%. Thus much for the superannuated argument that gaming is recession proof.

High Food and Fuel Costs

National Numbers: Gaming depends on discretionary income that’s increasingly difficult to find for most Americans, especially with inflation rising at somewhat alarming levels. So far this year we’ve had a 5% annual increase in the Consumer Price Index, the largest such increase since 1991. [CNN] The internal numbers are bleaker still. [CPI] Food and beverages are up 5.0%, housing increased 5.2%, and medical care increased by 4% over June 2007. Transportation increased by 22.3% for the quarter, and 12% from June 2007. Energy costs increased 53.6% for the quarter, and 24.7% annually.

When these inflation figures are set alongside the Bureau of Labor Statistics employment numbers the picture doesn’t get any rosier. While the overall inflation rate increased 5% annually, and transportation and energy costs were soaring, average hourly earnings increased by $0.06, and average weekly earnings by $2.02 for the most recent quarter. [BLSpdf] An $8.00 increase per month in the paycheck equates to slightly less than 2 gallons of gasoline with which to make it from California to the Nevada gaming palaces? Little wonder traffic is down on I-15.

The nation’s cheerleader-in-chief offered his assessment of the U.S. economy that appears at variance with the numbers already cited: “(1)Our citizens are rightly concerned about the difficulties in the housing markets and high gasoline prices and the failure of the Democratic Congress to address these and other pressing issues. Yet, (2) despite the challenges we face, our economy has demonstrated remarkable resilience. (3) While the unemployment rate has risen, it remains at 5.5 percent, which is still low by historical standards. And the economy continued to grow in the first quarter of this year. The growth is slower than we would have liked, but it was growth nonetheless.” […] The bottom line is this: (4) We're going through a tough time. But our economy has continued growing, consumers are spending, businesses are investing, exports continue increasing, and American productivity remains strong.” [WaPo] We might want to look at this commentary from the perspective of a Nevadan, whose government services depend on the expansion of discretionary income, and significant numbers of fellow Americans leaving a portion of it on our tables and in our machines.

Stagnant Wages, Slowing Economy, Unemployment

(1) For a President who ascribes to a Unitary Executive Theory when it comes to everything BUT the economy, this is probably typical. Evidently, when things are going well (aka “The Surge Is Working” a questionable thesis in itself) all glory goes to the Executive Branch. However, when ‘things’ start to hit the skids, it’s the Democratic Party controlled Congress at fault. We do remember that this was the President who was going to “jawbone” the Saudis into increased oil production.

(2) “Resilience?” From what please? The housing market still hasn’t shaken out, nor have all the write-offs been taken from the SIV debacle on Wall Street. The airline industry is under serious pressure, and currently asking that Las Vegas put the brakes on terminal construction and improvements at McCarran International. [LV Sun]

(3) This is cherry picking at its finest. Yes, if we compare the current national 5.5% unemployment rate to the rate at the depths of the Great Depression in 1933 when it was a staggering 24.9% [BLS] that 5.5% doesn’t look too bad. As always, for a more realistic picture of the unemployment situation in the United States a look at the U-6 figure is essential. The total unemployed, including marginally attached workers, and those employed part time because they can’t find full time jobs, now stands at 9.9%.

Further, the President and his allies are relying on “growth” to support their contention that there is no recession – i.e. two consecutive periods of declining growth in the GNP. This nation would never have a recession if the definition were altered to read “a one hundred year period of continual decreases in the gross national product.”

(4) Once more with feeling – productivity numbers merely tell us that employees are working longer to produce more, i.e. we know the “unit labor costs” to employers. These numbers tell us absolutely nothing about the capacity of employees to make house payments, buy motor vehicles, or put some money in the slot machines. In fact, the latest BLS report shows that hours worked in nondurable goods manufacturing saw a 6.9 loss during the first quarter. Fewer hours = lower paychecks unless there is an outstanding increase in wages – which has not been the case.

Consumer Indebtedness

You can’t play what you’ve already spent. In 2003 Americans rang up about $2078.0 billion in total debt, by May 2008 the number was $2570.6 billion. As of 2003 consumer debt stood at a total of $2104.4 billion, by May 2008 the figure was $2555.4 billion. [FED]

Americans have also been tapping into their retirement accounts (410k’s) as a way to “bridge the gap between slow income growth and rapidly rising prices.” [CAP] In short, the gap between paychecks and living expenses have resulted in higher consumer debt, which in turn put pressure on families to try a variety of ways to keep afloat financially. Two income families are no longer the answer, nor can a family rely on home equity loans. So, the next step is dipping into retirement accounts. In the past 15 years loans against retirement accounts increased five-fold (adjusted for inflation) from $6 billion in 1989 to $31 billion in 2004. [CAP]

If we accept that about 70% of the U.S. economy is based on consumer spending, and 100% of the money spent at the gaming tables and tossed down the slots is based on consumer discretion, then, indeed, the stagnation of wages, increased unemployment, serious inflation in the cost of basics like food and fuel, and our burgeoning level of consumer indebtedness doesn’t bode well for the gaming industry in Nevada. Or, indeed, any other state’s economic outlook.

Relax, but Verify: How to check on your bank

In case anyone is getting edgy about banking in Nevada, the FDIC has a handy search tool labeled “Bank Find.” Type in the name of your bank, hit the “find” button, and one of the first things you’ll notice on the report is whether or not bank deposits are guaranteed by the FDIC.

Some banks are regulated by the Office of the Comptroller of the Currency. Others, like Great Basin Bank are regulated directly by the FDIC.

It’s always a good idea to ask, and then verify, that the products from the bank are insured. Checking, savings, trust, certificates of deposit, and IRA accounts are usually insured up to $100,000. IRA’s and Keogh’s are insured up to $250,000. [CNN]

Some other bank products such as mutual funds, annuities, life insurance policies, equities and bonds are not considered deposit investment products and therefore are not insured by the FDIC. The FDIC advises that people not confuse a money market mutual fund with an FDIC insured money market deposit account. [FDIC]

The stuff in a safe deposit box is not FDIC insured. If the bank fails the “acquirer” takes over the responsibility for the boxes, or if no “acquirer” can be found the FDIC would send boxholders instructions for removing the contents of their boxes. Those who are concerned about the contents should inquire about purchasing fire and theft insurance; generally speaking this insurance is part of a homeowner’s or tenant’s policy for a residence and its contents – but, check!

Bankrate.Com offers a “Safe and Sound” search tool. This is a proprietary system for rating banks using a star system – the more stars the better. The user is paged through a series of screens which narrow the search to an individual bank, thrift, or credit union. There are other proprietary rating services, but the Bankrate.Com site is the only one I’ve found so far that doesn’t charge for the information. One reason to check on a bank’s rating is that about 60% of a bank’s assets are usually comprised of real estate, and that market hasn’t shaken out yet. [CNN] The good news is that only about 1.1% (90) banks are on the FDIC ‘troubled’ list. [CNN]

McCain's Entitlement Program for the Entitled

Elites don’t sacrifice. Elites can comfortably believe that filling an SUV tank with $4.05 per gallon gas in Reno, NV [NVgas] is inconvenient, but not indicative of deep and abiding economic problems – a little drilling here, and little signal to the market there, and all will be right with the universe. The truly elite can go out and purchase a Tesla. Elites with multiple homes may watch their gross worth decline on paper, but the real estate is still there and still theirs. The elites, like Senator John McCain and his bevy of economic advisers, have another perspective appearing to have very little in common with the middle and working class citizens in this country.

Remember McCain’s “energy policy?” The one that calls for offshore drilling (which he once opposed). This is underpinned by just such a perspective. McCain’s theory of the financial universe holds that prices will come down if “the market gets a signal.” Note the focus: McCain is not talking about increased refinery capacity. McCain is barely talking about significant augmentations to alternative energy development. McCain is not talking at all about decreasing American demand by implementing conservation policies. These would require sacrifice – and, the elites don’t do sacrifice.

Back in 2000 and 2003 Senator McCain was all for closing the Enron Loophole and severely punishing those whom investigation showed were manipulating the commodities markets. [Time] In 2008 we are supposed to trust that Senator McCain’s would lead an administration vigorously investigating and prosecuting speculators and manipulators since he’s offered no specific examples of the “reforms” that ought to be made. [OilWtch]

However, how does one trust that he would, in actuality, conduct his administration with a close eye on market manipulation when former Senator Phil “Enron Loophole” Gramm is a valued economic adviser and has been mentioned as a possible Secretary of the Treasury in a McCain administration?

Remember McCain’s policy statements on the mortgage meltdown? “I have always been committed to the principle that it is not the duty of government to bail out and reward those who act irresponsibly, whether they are big banks or small borrowers,” McCain said. “Government assistance to the banking system should be based solely on preventing systemic risk that would endanger the entire financial system and the economy.” [Politico] It would be extremely difficult to find a statement more in line with the Deregulation School of Financial Operators than this. However, consider one of the sources.

It was none other than Texas Senator Phil Gramm who led the charge in 1999 to ‘reform’ U.S. banking laws, with deregulation and a focus on facilitating mergers rather than “creating an efficient regulatory framework.” [Politico] A year after the Gramm bill became law, UBS took over the Paine Webber brokerage house, and two years later Gramm became vice-chairman of UBS’s new investment operations. While Gramm was a lobbyist for UBS the mortgage industry sought Congressional roll backs of state rules restricting or proscribing predatory lending practices used to entice homeowners to take on high cost mortgages. Former Senator Gramm hasn’t been called “Foreclosure Phil” without cause.

A person seeking specific proposals for adequately regulating the mortgage and banking industries should be looking to FDIC Chairman Sheila Bair whose agency approved a proposal to provide bank examiners with better tools to determine the amount of deposits in the event of a bank failure, rather than to Senator McCain and his economic adviser Gramm. [SDUT]

“Foreclosure Phil” advocated diminishing the rules on predatory lending, so it has been left to the Federal Reserve System in the wake of the mortgage meltdown to announce changes that require the verification of assets, and curb penalties for prepayments. Fed Chairman Ben Bernanke, “It seems clear that unfair or deceptive acts and practices by lenders resulted in the extension of many loans, particularly high-cost loans, that were inappropriate for or misled the borrower.” [Blmbrg] Senator McCain’s emphasis on de-regulation is definitely at odds with the actions taken this week by the FDIC and the Federal Reserve.

Elites don’t worry about predatory lending practices; they have their real estate attorneys, their tax accountants and attorneys, and their financial advisers to assist them. Predatory loans happen to those “other” people, greedy little people who might want to live beyond their stations?

Elites sacrifice things like playing golf during war-time (unless it’s a fundraising session for the GOP and its candidates). Elites sell golf wear on their campaign web sites. Elites wonder why those little people want to regulate their industries and impinge on their quarterly profits. After all, aren’t they the Drivers and Captains of Industry entitled to their wealth and the influence it provides? Nothing causes the elites to squeal so vociferously than the mention that some of that influence to which they know themselves to be entitled might not be justified; or, Heaven Forbid, might be curtailed.

So, the elites can opine that conservation (of both money and gasoline) is a fine individual exemplar, but hardly the stuff of which growing consumer based economies are made. Therefore, it is for the rest of us little people sitting out here in the dark to reduce the amount of driving we do, slow down and use less gasoline, economize in our spending habits so we can (1) save for our privatized retirement accounts; (2) put the kids through college; (3) pay for the house; (4) buy our own health insurance; (5) pay our own medical bills; (6) fill our refrigerators and pantries; and (7) put enough gas in the vehicle to get to work – or to find work.

Meanwhile, we are to get out of their way – as the elites fill the tanks, consider their coupons, and check on their portfolios. We are not to consider any proposals that might, in any way, shape, or form, impinge on the influence to which our elites are entitled. After all, they’re elite and they have their candidate, a man ready and willing to perpetuate their sense of entitlement as he moves from one country club to the next receiving their donations.

Update: For an excellent example of the condescending, patronizing, view elite conservatives view the educational capacity of 'public school' children see Smintheus's post.

Coffee and the Papers: Soup to Nuts

** Term limits for public offices are very popular, except with the people who have to accept them. The Nevada Supreme Court is hearing arguments today concerning the constitutionality of the state’s limitations. The Secretary of State is questioning the eligibility of local and county officials, however the decision may end up affecting members of the state Assembly and Senate as well. [LVRJ]

A contrarian view: Term limits make all manner of superficially good sense. Theoretically the imposition of a limit prevents the accumulation of power in uncontested offices, and thereby protects democracy. As with many things in life, the theoretical often doesn’t take into consideration the practical ramifications. (1) Ultimately, term limitations are un-democratic; the voters aren’t allowed to determine when or if State Senator X will be retired from office – the term limit kicks in. (2) Ambivalence becomes a factor when local voters support term limits in general, but think that Assemblyman Y is doing a fine job for them and should be continued in office. (3) Given that power in the state legislature is often based on voter representation (large urban vs. small rural representatives) and seniority, term limits have the effect of transferring influence and authority to urban representatives often at the expense of rural members of the legislature. There are commentators who have a tendency to sneer at rural representatives as backwater buffoons, but the fact remains that since “one man one vote” changed Nevada legislative power structures, seniority is the only avenue along which a rural representative and his or her district achieves any kind of influence. (4) Term limits more severely constrict the participation of those in office having the longest constitutional terms. An Assemblyman, governed by 12 year term limits, may serve in more sessions than a state Senator. Legislative limitations, to be scrupulously fair, ought not to be based on time served.

** What goes around, comes around, and the budget slashing taken by mental health services during previous budget crises (and never fully re-funded) still haunts Nevada’s capacity to deal with a “critical lack of mental health resources” in rural Nevada. [RGJ] The case can also be made that the deficit isn’t confined to the rural side of the ledger.

** Jim Rogers (Rogers Holdings) calls the Bush Administration plan for Fannie and Freddie an “unmitigated disaster.” [Blmbrg]

** Militants “breached” a U.S. base in Afghanistan, killing nine U.S. soldiers. [BBC]
“Obama shifts focus from Iraq, eyes more troops for Afghanistan” [Blmbrg]
“Is Iraq serious about a U.S. withdrawal timetable?” [Reuters]

** “Surging food imports outpace inspection: safety concerns rise as FDA looks at Mexico as a source of salmonella tainted tomatoes.” [Phil Inq] Memory Lane: “Bush Administration’s Un-inspection System III” [DB] “Bush Administration Food Un-inspection: A night in the Senate Dining Room” [DB] “Tastes like chicken could be fish…” [DB]

** President Bush will lift the executive ban on off shore oil drilling this afternoon, and call on Congress to do likewise with the legislative one. [Reuters] The ban has been in place since 1990, signed by none other than President George H.W. Bush. [NYT]

** “Population boom will pressure forests: reports” [Reuters] As world population surges from 6 to 9 billion persons, there will be an “unprecedented and unsustainable demand on the world’s remaining forests.”

Overnight Express: Quick Edition

** There’s one subject on which the entire Nevada congressional contingent can agree – the need to promote tourism. So, score another one for Senator Tom Coburn (R-OK) who’s holding the one, and possibly only, bill Nevada members of the 110^th Congress all want, a measure creating a public-private corporation to promote the American tourism industry. Both Rep. Jon Porter (R-NV3) and Rep. Berkley (R-NV1) have signed on, as have Senators Reid and Ensign. [LV Sun] We can only hope they dump the proposed slogan?

** High school chums and cousins attempt to dig the Nevada Governor out of his self inflicted political quagmire. [LVRJ]

** And, then there’s Assemblyman John Carpenter (R-Cimarron Station) saying the statute concerning agriculture use tax breaks, à la the Governor’s Lamoille property, should be tightened up. [NV Appeal]

** Nothing like greasing the outstretched palms? “Money, was anything said about money? [WaPo] …As in securing promises of cash in exchange for access to Bush Administration officials, documented by the Times (UK). The Houston lobbyist who once raised more than $300,000 for Bush’s campaigns in 2000 and 2004 is now being called a “bit player” by the White House. But, then, the White House said Bush didn’t really know Jack (Abramoff) either?

** CNN must be having a tough time finding people willing to make fools of themselves denying human contributions to global warming – CNN News on Sunday evening featured former Rush Limbaugh ‘reporter and producer’ Marc Morano as the spokesperson for the Deniers. Morano is perhaps best remembered as the reporter for Cybercast News Service who was among the first to write about the Swift Boat Veterans, and who questioned the Purple Heart awards earned by Rep. John Murtha. Morano is now the communications director for Senate Republicans on the Environment and Public Works Committee, working for Senator James Inhofe (R-OK), the ranking member.

** Not a wonderful life? Analysts aren’t predicting anything like the Savings & Loan debacle of not so long ago, but the New York Times reports several are predicting more small and regional bank failures, as “lagging indicators” of the nation’s current financial mess. “How bank failures happen and what they mean” [USAT] “The Fannie Mae Scandal: A History” [WSJ]
“Treasury, Fed take bold steps to back Freddie and Fannie” [Reuters]

** Lockheed’s CEO calls the Tanker contract bidding brouhaha “not a trade issue as much as an acquisition issue.” [Reuters] “EADS takes aim at U.S. defense business” [BusWk] “Tanker contract protest sounds familiar in Tri-Cities” [TCHerld]

** MessO’Potamia: “US pleased, worried, by newfound Iraqi confidence” [NwsWk] “Iraq improves, but what’s the plan?” [USAT] “U.S. Iraq scale down negotiations over forces, long term agreement will fall to next president” [WaPo] “Iraqi election law still incomplete” [LAT] “What journalists should be asking about the no-bid Iraqi oil deals” [Salon]

** Politics as usual: “Defections rattle GOP” [Roll Call sub req] Medicare is the first major crack in the Republican ranks, as “loyal colleagues defected in the face of political headwinds.” “Medicare bill nearly law but lobbies stay focused” [The Hill] “Bush likely to lose on Medicare” [The Hill]
“Gramm’s role reduced” [WaPo]

** Mine safety: “State (Utah) gets first coal mine safety director” [SLTrib] “Mine operators appeal citations, thwarting MSHA safety efforts” (June 17^th) [SLTrib]

** Post Katrina: “New Orleans to begin citing residents of FEMA trailers” [USAT]

Overnight Express: Gaffes and Goofs

Lest we denizens of Nevada’s desert lands be thought ill-informed, or prone to obsess on AUMs and how to emulate the governor’s avoidance of taxes on retirement property in lovely Lamoille (and that canyon IS very pretty), we can spot a Friday document dump and Saturday newsprint fodder when we see it. To wit:

** The FEC may have additional information on Rep. Dean Heller’s campaign fund sources on July 14, 2008 – if the 2^nd District Congressman maintains the same schedule he did for the past two report filings. He filed on 7/14 in both 2006 and 2007. In the recent past Mr. and Mrs. Sheldon Adelson have been very interested in Rep. Heller’s election, each donating $4,600 on March 31, 2007 and April 18, 2007 respectively.

** The General Accounting Office has a report dated June 13, 2008 titled “FCC needs to improve performance management and strengthen oversight of the High Cost telecommunications program,” posted to its web page on July 11^th. One conclusion isn’t at all surprising: “The high-cost program's structure has resulted in the inconsistent distribution of support and availability of services across rural America. The program provides support to carriers in all states. However, small carriers receive more support than large carriers. As a result, carriers serving similar rural areas can receive different levels of support.”

** Peter Orszag, Director of the Congressional Budget Office, and Jeanne Lambrew, senior fellow, CAP associate professor, University of Texas, will testify on “Getting Better Value in Health Care,” to the House Committee on the Budget. The hearing will be held next Wednesday, July 16^th, at 10:00 a.m.

** The New York Times reports on some possible ramifications Freddie Mac and Fannie Mae’s problems for consumers and small businesses. Everyone seems to have taken a deep breath and calmed down about those two. [Forbes] However, the IndyMac Bank failure could cost the FDIC between $4 and $8 billion. [CNN] The Office of Thrift Supervision shut down the Pasadena, CA based bank and the Federal Home Loan Bank of San Francisco will work with the FDIC to administer the assets and liabilities. [MrkWtch]

** The McCain campaign may wish to put a muzzle on well meaning supporters of “Dr. Phil” Gramm. Amity Shlaes, economic historian and a recent speaker at a Mercatus Center event in conjunction with the Texas Public Policy Foundation which is chaired by Dr. Phil’s wife Wendy “Enron Loophole” Gramm, is on the Washington Post op-ed page declaring “Phil Gramm is Right.” (We ARE a nation of whiners!) One of her lines: “Social Security and Medicare also need rewriting -- and Gramm put forth one of the better proposals on Social Security in the 1990s.”

You can’t describe privatization any more clearly than Gramm’s bill. That “better proposal” would have been the “Social Security Preservation Act of 1998” sponsored by Senator Gramm and Senator Pete Domenici (R-NM). Gramm’s plan was to convert Social Security into an investment based program that would supposedly ‘fully fund people’s retirement by the year 2042. Taxpayers would have had the option to invest 3% of the 12.4% Social Security tax into “a broadbased portfolio of stocks and bonds.”

“To regulate the program, a governing board called the Social Security Investment Board would set guidelines and ethics codes for investment companies and individuals to abide by, Gramm said.” [LubbockTX] And this from the husband of the woman who was on Enron’s Auditing Committee?

There is nothing like being flung onto the Third Rail of American Politics by an enthusiastic supporter of your campaign co-chair? And here I was thinking that only Representative Dean Heller was infected with Ungula-Intra-Orem-itis?

** Pro Publica is currently headlining “Five Scandals of the Week.” Steve Benen has now documented 61 McCain Flip Flops, thus making for a very easy week to compose the Desert Beacon Sunday Deck Bass.

The House That Bush Built: Housing Bubble Impact Spreads, National and Regional Banks Affected

While Nevadans try to figure out what to do with the current 1 in 118 mortgage foreclosure rate, and national focus remains on the Big Institutions (Freddie Mac and Fannie Mae) or the “$5 trillion dollar mess,” [CNN] the economic debacle made by the securitized asset bubble has already spread to regional banks and lending institutions.

This situation isn’t exactly news. Morningstar reported on it about a month ago. The national media remains focused on Citigroup, Merrill Lynch, and Countrywide Financial, [NYT] but smaller lending institutions like Wachovia, KeyCorp, National City, SunTrust, Regions Financial, Fifth Third Bancorp, and Huntington Bancshares are also caught up in the mess, with their stocks down more than 20% during 2008.

California based Fremont General, an original mover in the subprime market, filed for bankruptcy a month ago as part of a plan to sell off its retail banking arm to CapitalSource Inc. [CNN]

The appearance of deep credit and cash flow problems at BOTH the top and the bottom of the financial food chain puts the American taxpaying public between a rock and hard place.

On one hand, while it’s essentially unpalatable to bail out bank after bank, lending institution after lending institution, [TBP] it’s equally unpleasant to think about what would happen to the U.S. financial system should the current ‘credit crisis’ spread even further. Already commercial bank loans outstanding have dropped to their lowest level since March, a fairly good sign that economic growth isn’t on the horizon. [Blmbrg] Nor is the news so encouraging that consumers offset declining enthusiasm for their spending capacity by taking advantage of deep discounts in goods last month. [Reuters]

The media crowd appears fixated for the moment on “Rumor” as the prime force causing problems for the banking and finance corporations, but as the Big Picture points out, the rumor factor is most often at play against firms that are “over-leveraged, under-capitalized, unhedged, and most poorly managed,” in the first place.

It’s all very tempting to see this as some sort of Morality Play, in which the excesses and avarice of the players in the financial markets over-stepped the boundaries of sanity and responsibility and should, therefore, be sent to their rooms without succor from the American taxpayer. It’s likely more reasonable to take a pragmatic view.

Not every support strategy for lending institutions is a “massive bailout,” and not every action by the Congress or the Federal Reserve is necessarily either Corporate Welfare or Congressional/Bureaucratic Interference. In fact, the “hands off” ideological approach by the Bush-Cheney Administration helped create this gargantuan mess.

The Pure Market folks argue that the current situation can be solved by allowing those “over-leveraged, under-capitalized, unhedged, and poorly managed” companies fail; thus teaching a market lesson to those who might be tempted during future booms; encapsulating the thinking of the Moral Hazard school.

The Pragmatist Argument contends that there are institutions underpinning the economic operations of the U.S. economy, and whether we like it or not they have the influence, size, or capacity to take our economy down with them should they fail. We have some evidence of how deep this quagmire is already, and how dismally the Bush-Cheney Administration has reacted.

November 15, 2007: Wells Fargo & Co. reports that the housing finance situation is the worst since the Great Depression. [Reuters] The day before the President was still talking his tax cuts, “"Since I took office, we've cut taxes for every American who pays income taxes. … [Congress' budget] allows the tax relief we delivered to be taken away.” [WHPR]

January 25, 2008: Sales of existing homes fell in December, the first decline in prices since the Great Depression. [MM.com] President Bush On January 30^th: “I hope you're confident about our economy. I am. We've got some short-term issues to deal with. Fourth quarter growth slowed to .6 percent. In other words, there are signs that our economy are slowing. There's some uncertainty in the economy. But in the long run you've got to be confident about your economy. Inflation is down, interest rates are low, productivity is high.” [WHPR]

February 11, 2008: Michigan reports that the state’s per capita income was 8% below the national average, the worst performance since the Great Depression. [Mlive]

February 21, 2008: The U.S. Department of Labor reports that Ohio job losses are the worst since the Great Depression. [OF.org] On February 28^th the President seemed to be announcing ‘success’ while turning “incent” into a verb: “ I don't think we're headed to a recession, but no question we're in a slowdown. And that's why we acted, and acted strongly, with over $150 billion worth of pro-growth economic incentives -- mainly money going into the hands of our consumers. And some money going to incent businesses to invest, which will create jobs.” [WHPR]

March 4, 2008: The chief economist for the National Association of Homebuilders calls the housing situation “the deepest, most rapid downswing since the Great Depression.” [MrktWtch] The President of the United States places his faith in a one shot economic stimulus bill: “There's a rough patch right now in our economy, but I'm confident in the long term we'll come out stronger than ever before. One of the most decisive actions a government can take is to give people their money back so they can spend it, and that's exactly what we've done.” [WHPR]

April 3, 2008: Investor George Soros calls the financial mess the worst crisis since the Great Depression. [Blmbrg] April 14^th the President offers his ideological response: “I mean, there's constructive things Congress can do that will encourage the housing market to correct quickly by encouraging -- helping people stay in their homes. I don't think we ought to be bailing out lenders or speculators. I think we need to be helping hardworking Americans who are creditworthy stay in their homes.” [WHPR]

April 25, 2008: Economist Joseph Stigliltz says this slowdown is based on ‘badly impaired’ banks and financial institutions, which are unable or unwilling to lend capital, causing one of the worst economic downturns since the Great Depression. [CNBC]

The President still hadn’t gotten the message by April 26^th: “Senate legislation that would ban risk-based pricing is a mistake. Moreover, the Senate bill would provide for $4 billion to states to purchase already foreclosed homes, which just helps banks, not people trying to stay in their homes. The Administration is working closely with Congress to try to improve the bill into something the President could sign.” [WHFS]

June 27, 2008: The Newark Star Ledger reports that the Dow Jones Industrial Average had the worst June since the Great Depression. Perhaps appropriately, the President’s weekly radio address for June 28, 2008 concerned Faith Based Initiatives. [WHPR]

Today’s economic news has some additional clinkers which are very likely to require more than ideological pontification, cheerleading assessments, or morality play mentality to address:
“U.S. consumers trade down as economic angst grows” [WSJ]
“Grubb & Ellis (real estate company) CEO resigns, dividends suspended” [Reuters]
“Lehman debt protection costs jump as shares dive” [Reuters]
“Americans use less gas, hurt highway trust fund: CBO” [Reuters]
“New Wachovia CEO admits problems; stock hits low” [McClatchy]

Meanwhile back at the White House, the President is threatening to veto housing measures as being, in the catch phrase of the day, “overly burdensome and prescriptive.” [OMB pdf]

So, we sit in Nevada, with the highest foreclosure rate in the nation, a sluggish economy, a burgeoning state budget crisis, watching the credit markets tighten while the Ideologues, Morality Play Actors, and Pragmatists fight it out like vultures over the remains of the U.S. economy. We could use a little foresight unencumbered by delusions.

----
Update: Hullabaloo has insightful commentary on the IndyMac failure.

McCain not an arithmetic expert either: Campaign and Budget Proposals don't add up

I have great respect for Senator John McCain’s military service to this country, however if I were to go to an unscrupulous livestock auction with the same ‘numeric acumen’ as the GOP presidential candidate, I would now be the proud owner of a blind mule, a dry cow, and a couple of under-weight heifers.

The Blind Mule: The McCain campaign and the RNC have claimed that Senator Obama voted “94 times for higher taxes.” Bless their hearts – they can’t count.
23 of the votes were for legislation that produced no tax increase at all; they were against proposed tax cuts.
7 of the votes would have resulted in lower taxes for most people, while raising them on a relative few (corporations, rich people)
11 of the votes would have increased taxes on those earning $1 million or more to fund Head Start, School Nutrition, and Veterans’ Health Care.
53 of the votes were on budget measures, not tax bills, and would have resulted in no change. 4 votes were on non-binding motions sent to conference committees.
The Republicans counted two, three and even four votes on the same measure, padding the overall total by 10. For all the numbers see: [FactCheck]

The Dry Cow:
The McCain campaign sought to convince Hispanic voters in Florida that the Colombian Free Trade Agreement would benefit the state. “But every number in the ad is wrong, except one, a prediction of job gains taken from a group favoring the trade deal.” [FactCheck] (emphasis added)

The Underweight Heifers:
McCain is claiming that Obama voted to raise taxes on individuals earning as little as $32,000 per year. S.Con. Res. 70 to which the campaign is referring took place on March 14, 2008 [rc 85] “The resolution would not have increased taxes on any single taxpayer making less than $41,500 per year, or any couple making less than $83,000.” [FactCheck] So, where did that $32,000 number come from? It might be an approximation of the taxable income of a single person making $41,500 after all deductions and exclusions. Read the FactCheck article linked and you’ll see immediately why I wouldn’t want Senator McCain doing my 1040 – no wonder the McCain’s had tax problems with the beach front condo in La Jolla. [HuffPo]

After FactCheck analyzed his tax cut numbers and couldn’t get them to add up, we can assume that the McCain campaign has given up on offering numbers that behave according to the standard rules of 3^rd grade arithmetic. This appears to be the case with his recent budget proposal. Reuters can’t make them add up. The New York Times can’t make them add up. Robert Reich can’t make them add up, and Bloomberg can’t make them add up.

Compounding this morass is McCain’s complaint that he never said he wasn’t an expert on economics. [TP] Perhaps he should flip flop back to the January 18, 2008 statement when he declared he wasn’t. [TP]

Coffee and the Papers: House Cleaning and Filibuster Flats

Backfire! The Gleaner reports that Rep. Jon Porter’s (R-NV) publicity stunt asking for disgruntled Nevadans to ‘send him their gas receipts,’ inspired a contingent from the Nevada Democratic Party to show up presenting the 3^rd District Congressman with a receipt for the $210,000 he accepted from the oil ‘bidness. A list of the industries supporting Porter’s 2008 efforts is located here.

The DeLay-ification of Nevada? The Grand Oil Party is reasonably sure it’s on the losing side with voters, and thus will concentrate on Plan B – controlling the redistricting process by concentrating on governorships. Of the 36 gubernatorial races in play in 2010, 32 will involve governors who have a hand in the redistricting process; one of which is Nevada. [HuffPo]

House Cleaning? Granted most of the action this week will be in the U.S. Senate, but members of the House will be voting on H.R. 5811, “the electronic message preservation act,” coming from Congressman Waxman’s Oversight and Government Reform Committee. The bill is currently scheduled to come up on Wednesday. [WL] Will GOP members of the Nevada congressional delegation vote to require the White House to retain its e-mail?

There are also some conservation and historical preservation items on this week’s agenda: H.R. 5741 amending the High Seas Driftnet Fishing Moratorium Act to improve shark conservation; H.R. 3981 creating the preserve America program; H.R. 4199 adding sites to the Dayton Aviation Heritage NP; H.R. 415 adding the Taunton River to the National Wild and Scenic Rivers program, H.R. 1286 on the Washington-Rochambeau Revolutionary Route National Historic Trail Designation; and, H.R. 3397 on lead-safe housing for children. [WL]

The Bush Administration has already signaled it will stall any agreements on global warming reduction at the upcoming G-8 summit. [CAP]

Filibuster Flats: The Senate will be considering H.R. 3221, the Housing Bill, today at 3:00 p.m. EDT. The big fight will be on the FISA legislation, now designated as H.R. 6304. [SenCal] There are three amendments to be considered. (1) Dodd-Feingold-Leahy, to strike the immunity provisions, (2) a “relevant amendment from Senator Specter, and an amendment (3) from Senator Bingaman regarding staying court cases against telecom companies. 60 vote thresholds are required for the Specter and Bingaman amendments.

Why are Senate Republicans so ardent about sustaining their filibuster of the Medicare Bill? (H.R. 6331) Ans: Because of a provision concerning the Medicare Advantage program through which Medicare beneficiaries can elect to receive coverage through private companies. “Private insurance companies were brought into Medicare to lower costs. MedPAC has found that the private plans in general receive 13 percent more, on average, than it would cost traditional Medicare to cover the same people. Last year the Congressional Budget Office estimated that these additional payments will cost Medicare $149 billion over the next ten years. MedPAC has warned that these costs are weakening Medicare’s financial stability.”[CBPP]

Senate Majority Leader Harry Reid (D-NV) has said there will be another attempt to break the GOP filibuster this week, likely on either Tuesday or Wednesday. Without Senate action there would be a 10.6% reduction to Medicare physicians’ fees scheduled to take effect next week. The delay appears to center around paying for the bill. Democrats want to pay for the bill by trimming Medicare Advantage payments. The White House and its Senate allies (Credit Card Republicans?) oppose the reduction in payments to private insurance companies. [Kaiser]

Speaking of Credit Card Republicans: Nevada Senator John Ensign continues to hold the housing bill hostage in the Senate over his amendment to provide ‘green tax credits,’ without providing for any offset to cover the costs. Full report Las Vegas Sun The move would force the House to reverse its pledge not to consider legislation which does not include a way to pay for itself. Ensign appears to be operating under the perpetual Republican delusion that any and all tax breaks will create revenue by “stimulating the economy.” The current economic situation in the U.S. after 8 years of Bush tax cuts, breaks, and incentives, ought to be sufficient reason to reject this attempt at rationalization. (See also RGJ]

Loopholes: MarketWatch provides a handy average-reader-friendly guide to the three loopholes that encourage speculation in commodities: Enron, London, Swaps.

Stake Fry: Merrill Lynch & Co. is considering selling ownership “stakes” in BlackRock Inc. and Bloomberg LP to cover as much as $6 billion in expected write-downs.
About time? “Courts may begin enforcing Truth In Lending Act,” [TBP]
“Still fooling some of the people some of the time,” explains that the way the Bush Administration is calculating the inflation rate is giving an inaccurate picture of the current situation. [TMTGM]
This analysis makes some sense in light of the fact that 52% of American households dipped into savings, investments, or retirement accounts during the last year to pay for “necessary living expenses.” The number was 43% last October. [CredSlps]
No surprise then that there are beginning to be more late payments on small business credit cards issued by major banks? [CalcRsk]

Vote Suppression: Leave it to the Las Vegas Review Journal to describe problems with ACORN’s voter registration drive as yielding “rampant fraud.” It’s interesting that the article doesn’t actually quote Clark County Registrar Larry Lomax as directly confirming there is “rampant fraud;” it carefully says “he sees rampant fraud.” In other words, it’s the LVRJ that’s filling in the “rampant” part.

There's no such thing as a "free" trade agreement: Ensign, McCain, Obama and the enforcement issue

Nevada, like the rest of the country, is an importer of goods and services; and, like the other states in the Union it is not immune from the effects of free trade agreements on its economy. However, unlike many other states it has a Senator (John Ensign) currently occupying a chair on the Senate Finance Committee which has before it a bill (S.1919) that seeks to improve the enforcement of free trade provisions. The committee has heard testimony on the bill, but thus far nothing substantive has happened. Manufacturing job losses, trade deficits, free trade agreement enforcement, and disposable income levels are all intertwined, and all have ramifications for Nevada, and her sister states, that should be addressed before the economic situation becomes even more problematic.

A Stake in the Issue

The Bureau of Economic Analysis reports that Nevada’s contribution to U.S. exports of manufactured goods amounted to about 0.5% of the cumulative total, and 0.4% of the cumulative total for non-manufactured goods to date. Bluntly speaking, the Silver State is dependent on the importation of stuff from around the rest of the country and from overseas, which puts the state into the general classification of “importer” along with the other 49. Nothing in these numbers should surprise anyone who resides here even overnight; the state is dependent on tourism, the military, agriculture, and mining; with the emphasis on tourism.

If this is the case, then why should Nevadans be concerned with the manufacturing import and export figures released by the Bureau of Economic Analysis? We should attend to the numbers because those tourists have to come from somewhere, with money to leave on our tables and in our slot machines.

Common sense dictates, and the numbers verify, that increasing the trade deficits for manufactured goods tends to depress wages and the creation of jobs paying a living wage. [EPI] The U.S. has already experienced the loss of about 2.8 million manufacturing jobs since 2000. [AFL-CIO] Drilling down into the general ‘manufacturing’ category, the Bureau of Labor Statistics reports 10,146,560 people engaged in “production occupations,” with median hourly wages of $13.53, and a mean hourly wage of $15.05. These figures yield a mean annual wage of approximately $31,310. This annual total obviously isn’t going to provide the average American “production worker” with much spare change to leave in Las Vegas. Creating a yet more dismal picture, the Bureau of Labor Statistics predicts that in spite of increases in real output, employment in the production sector is anticipated to decline by another 1.5 million jobs between 2006 and 2016. [BLSpdf]

Academic economists seeking to minimize the impact of the loss in manufacturing jobs often site increases in health care services and other occupations as a counter-balancing force. However, a person laid off from a production occupation job providing a $31,310 mean annual wage isn’t improving his or her financial outlook by taking a health care support job with a mean annual wage of $25,600. [BLS]

Worse yet, some of the specific manufacturing occupations are predicted to continue a declining pattern. The BLS projects that the employment for sewing machine operators will drop by 27% by the year 2016, electrical and electronic equipment assembling jobs will decline by 26%, and lathe and machine tool jobs will see a 23% loss. [BLS] The losses of construction jobs paying a $40,620 mean annual wage aren’t going to be balanced by the expected increase in service related employment, [BLS] such as protective services in which the mean annual wage is reported as $38,750. [BLS]

Beneath all the numbers is the haunting reality that trade deficits do matter.

“The rising trade deficit in manufactured goods accounts for about 58% of the decline in manufacturing employment between 1998 and 2003 and 34% of the decline from 2000 to 2003. This translates into about 1.78 million jobs since 1998 and 935,000 jobs since 2000 that have been lost due to rising net manufactured imports.” [EPI]

A quick look at the last Bureau of Economic Analysis report on U.S. import-export figures offers no solace that the trade deficit is narrowing. Most manufactured items fall into one of two classifications in Bureau of Economic Analysis reports: capital goods (industrial equipment) and consumer goods (household items). *

Exports of capital goods (excluding automobiles) [BEA] (millions of dollars)
YTD 2007 142,430
YTD 2008 156,592
Imports of capital goods (excluding automobiles) [BEA]
YTD 2007 144,342
YTD 2008 152,732

Our exportation of equipment looks a bit better than most categories, but the import-export ratio is still almost a wash.

Exports of automobiles, parts, and engines: [BEA]
YTD 2007 40,681
YTD 2008 38,236
Imports of automobiles, parts, and engines: [BEA]
YTD 2007 85,535
YTD 2008 85,624

There is no way to tout these numbers as any form of good news, our exports are down and the imports have increased.

Exports of iron and steel mill products: [BEA]
YTD 2007 2,704
YTD 2008 3,452
Imports of iron and steel mill products: [BEA]
YTD 2007 6,574
YTD 2008 6,848

These look like happy numbers, with the exports increasing from 2007 to 2008, until one looks at the importation figures which are nearly twice the export numbers.

Exports of consumer goods [BEA]
YTD 2007 47,147
YTD 2008 52,635
Imports of consumer goods [BEA]
YTD 2007 158,292
YTD 2008 159,774

How we expect to narrow the trade deficit when our imports of consumer goods are 3.03 times our exports is a mystery.

Between the Numbers and the Reality

There remains some controversy about the impact of free trade agreements on the U.S. manufacturing sector. However, the theoretical arguments holding that the free trade agreements would expand the U.S. manufacturing base by opening markets overseas [USTO] quickly fall victim to those pesky numbers. It is correct that U.S. exports to Canada and Mexico increased by 41% and 95.2% respectively. On the other hand the U.S. imported 195.3% more from Mexico, and 61.1% more from Canada under the NAFTA terms. [EPI]

These reports don’t necessarily argue for a return to a protectionist tariff policy, which has become a Republican ‘shorthand’ term applied to any criticism of free trade agreements. They may, however, argue for far more oversight and enforcement of the free trade agreements than the Bush-Cheney Administration has been inclined to pursue. Testimony from Lael Brainard of the Brookings Institution to the Senate Finance Committee concerning the Trade Enforcement Act (S. 1919) outlined two critical issues:

“With trade volumes shooting up, the disciplines covered by trade agreements spreading out, and trade agreements extending to countries with weaker oversight capacities, it would be natural to expect trade disputes and the associated enforcement actions to rise at least proportionally to exports. Yet, contrary to expectations, the administration is taking fewer enforcement actions per year—not more.” [BI]

“Despite the explosion in trade volumes, trade partners, trade agreements, and trade provisions, staffing levels with primary monitoring and enforcement responsibility have not increased since 2002. Static and inadequate levels of staffing are exacerbated by inadequate training and lack of coordination across the key agencies.” [BI]

Labor issues have become an integral part of free trade agreements, especially after the United States started negotiating treaties with less developed countries. Only those who are singularly focused on the “economic growth” and “productivity” figures have sought to minimize the observations that globalization has both costs and benefits. Pressure for low cost production can obviously lead to “downward pressure on wages and job displacement.” [CRS]

A February 2008 report to Congress from the Congressional Research Service listed enforcement issues to which attention needs to be paid:

(1) Under the terms of the agreements all commercial provisions are fully enforceable, but not all of the labor provisions;

(2) There are different enforcement procedures for and caps on penalties for violations of the labor provisions;

(3) There are limits placed on the scope of term definitions in labor provisions;

(4) There are “differentials” in federal resources available for labor as compared to commercial dispute resolution; and

(5) The pursuit of dispute resolutions involving labor provisions has not been a priority.

Which presidential candidate is the most likely to call for remedies to the situation described in the CRS report?

The Proposals

At the national level, GOP presidential candidate John McCain emphasized his “free trade” stance during his trip to Colombia and Mexico. It appears that he got no closer to referencing labor and human rights elements than an acknowledgment that Colombia has had past “human rights abuses by the paramilitaries.” [CNN] McCain offers: “Ninety-five percent of the world's customers lie outside our borders and we need to be at the table when the rules for access to those markets are written. To do so, the U.S. should engage in multilateral, regional and bilateral efforts to reduce barriers to trade, level the global playing field and build effective enforcement of global trading rules. These steps would also strengthen the U.S. dollar and help to control the rising cost of living that hurts our families.” It is of note in this explanation that Senator McCain apparently continues the Bush-Cheney Administration focus on the enforcement of the commercial “global trading rules” since there is no reference to labor and environmental provisions.

Democratic candidate Barack Obama has called for amending NAFTA, with his economic policy director noting that the benefits of NAFTA were “oversold.” [UPI] Senator Obama’s website explains: “Obama will fight for a trade policy that opens up foreign markets to support good American jobs. He will use trade agreements to spread good labor and environmental standards around the world and stand firm against agreements like the Central American Free Trade Agreement that fail to live up to those important benchmarks. Obama will also pressure the World Trade Organization to enforce trade agreements and stop countries from continuing unfair government subsidies to foreign exporters and nontariff barriers on U.S. exports.” The difference in emphasis between the two campaigns lies in the inclusion of specific references to labor and environment provision enforcement in the Obama statement.

One route by which the costs of free trade agreements can be ameliorated is the enforcement of the FTAs’ labor and environmental provisions. Senators McCain and Obama ought to be asked about their support for S. 1919; a question that could as easily be asked of Senator John Ensign and the other members of the Senate Finance Committee – because it would be nice if those who “Come to Vegas, Have Something to Leave in Vegas.”

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* One problem with analyzing these numbers is that while the products may be assembled in the U.S. the manufacturer is foreign based. For example, some models of Toshiba, Panasonic, and Sharp television sets are assembled in the United States, but are owned by foreign manufacturing companies. Zenith Corporation, which brought us the ‘remote control’ for the television set is now a subsidiary of the South Korean LG Group. The other side of the coin is that there are some American based companies that have their products manufactured assembled elsewhere. The EPI uses a “net export” model to differentiate between items manufactured domestically, from those re-exported. [EPI]

Presidential candidate old enough to know better flunks U.S. History

Tomorrow’s “the” historic day in our nation’s history, but the Republican Party can’t quite get the facts of our history to line up with their ideology – no matter, they recite their slogans as if they were historically justifiable pronouncements. Even a very cursory overview shows how demonstrably wrong they are.

Senator John McCain’s campaign released this statement today: “The American people cannot afford an economic agenda that will take our country in the wrong direction and cost jobs. At a time when our small businesses need support from Washington, (1) we cannot raise taxes, (2) increase regulation and (3) isolate ourselves from foreign markets. These are the same old siren songs that have failed the American people time and time again.” [BRBFox] (via TP) Let’s look at each of Senator McCain’s propositions.

(1) “We cannot raise taxes.” Wrong.

Not that anyone really wants to pay more taxes, but it can’t be argued that tax increases actually DO anything to jeopardize the economy; nor can the argument be sustained that tax decreases stimulate it.

Senator McCain is prefacing his arguments by claiming that small businesses generate more jobs. As much as we’d all like to believe that mom and pop enterprises and family farms are the backbone of the U.S. economy, recent studies suggest otherwise. (Armington, Odle 1982) (Davis, Haltiwanger, Shuh 1993) Most jobs are created by large businesses. [Urban.org]

Those who argued that the Reagan tax cuts brought the U.S. out of a recessionary period in the 1980’s conveniently used the worst year, 1982, on which to base their analyses, and those tax cuts were supposed to stimulate the underlying economic growth rate above the 2.1% projected at the time. The advocates of “no taxes” equally conveniently used 1989 as the cut off date, claiming that the growth rate during the period was 3.8%. At this point causal magic sets in – Who says those 1981 income tax cuts caused the underlying growth rate to be greater than it otherwise might have been? Ans: The people who wanted the tax cuts. [CBPP]

(2) “…increase regulation.” Wrong once more.

Regulating the auctioneers: The New York Stock Exchange was founded in 1792 when 24 merchants and brokers signed the Buttonwood Agreement. [NYSE] “We the Subscribers, Brokers for the Purchase and Sale of the Public Stock, do hereby solemnly promise and pledge ourselves to each other, that we will not buy or sell from this day for any person whatsoever, any kind of Public Stock, at least than one quarter of one percent Commission on the Specie value and that we will give preference to each other in our Negotiations. In Testimony whereof we have set our hands this 17th day of May at New York, 1792” [Wik] The establishment of the NYSE was founded on “regulation,” i.e. the members would only trade with each other (and not with the auctioneers), and they would agree to charge a one quarter percent commission.

Regulating Bucket Shops: In the late 1800’s Wall Street and the commodity markets were plagued by Bucket Shops catering to small investors gambling on the market. No real trades took place, and there were no margin calls, but if the bucket shop had a large position on a particular stock, it might sell thus causing the ticker to move down just enough to wipe out the clients’ margins – and “the bucket shop could take 100% of their investments.” By 1880 most states had outlawed the Bucket Shops as “gambling dens.” [HistCoop] The Federal government also stepped in and by 1920 the Bucket Shops were gone.

Blue Sky Laws: Kansas was the first state in the union to enact a “Blue Sky Law” in 1911. During the period between 1911 and 1933 forty-seven states (Nevada being the lone holdout) passed these statutes to prevent the sale of stocks Supreme Court Justice Joseph McKenna described in Hall v. Geiger-Jones Co. (242 U.S. 539) as “the language of a cited case, "speculative schemes which have no more basis than so many feet of 'blue sky'"; or, as stated by counsel in another case, "to stop the sale of stock in fly-by-night concerns, visionary oil wells, distant gold mines and other like fraudulent exploitations." [Wik]

The Creation of the SEC: The low margin stock bubble blowout of 1929 precipitated the Securities Act of 1933 and the Securities Exchange Act of 1934 “designed to restore investor confidence in our capital markets.”

Regulating Products: On June 30, 1906 the Pure Food and Drug Act forbid the “the manufacture, sale, or transportation of adulterated or misbranded or poisonous or deleterious foods, drugs, medicines, and liquors, and for regulating traffic therein, and for other purposes.” [MSUedu]

Regulating Insider Trading: February 12, 1990 Drexel, Burnham, Lambert filed for bankruptcy. The “junk bond innovations” of Boyd Jeffries, Marty Siegel, and Michael Milken brought the securities industry giant to the floor. [Mises.Org pdf] T