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Electoral Fraud: Can Diebold do it again?

Team Obama appear to have the grass/netroots organisation, numbers and smarts to be able to deal with any Rove-stlye GOP electoral interference on Nov. 4. Considering the depths to which the GOP have previously descended in order to cling to power and thereby maintain their access to the Federal Trough, worst case scenarios should be fully prepared for, indeed, expected.

In the 2004 US Presidential Election G. W. Bush gained 286 Electoral College Votes (ECVs); John Kerry, 252. To become POTUS a Party’s Nominee must gain 270 ECVs. Each state has a number of electors equal to the number of its Senators and Representatives in the United States Congress which is proportional to the population as determined through a census taken every 10 years. CA for example has 55 ECVs, Nth Dakota, 3. Each State awards its ECVs on a winner take all basis of the popular vote except Maine and Nebraska which have minor idiosyncratic variations. To hardcore Bludgers, these things are “known knowns”.

State Governors have the executive power (which is an inordinate amount of clout) to determine how the popular vote is tallied in their States, eg, CO (Democratic Governor) now has all pencil and paper ballots, while FL (GOP Gov.) has widespread (ab)use of poorly scrutinised Diebold receiptless computer-touchscreen voting machines.

Diebold incidentally, make ATMs which produce receipts upon request but they just haven’t been able to employ that good ‘ol American know-how to manufacture a voting machine that would likewise supply a paper trail. Funny about that. Paper trails come in mighty handy in the event of disputed returns. As things stand, the word of the computer programmers is final. Verifiable democracy, it would seem, can take a hike! Diebold Corporation are major donors to the GOP, but that’s probably just a coincidence. Diebold computers tallied the vote in OHIO 2004 and the State was ruled by GOP Goveror, Bob Taft (ref. 20 Amazing Facts About Elections).

Had Kerry won OHIO’s 20 ECVs in 2004, he would have become POTUS.

Karl Rove has recently been subject to a surge of mentorial pride. Mr. Rove is former W.H. Deputy CoS and “architect” of President G.W. Bush’s electoral success. He presently is an artful dodger of Congressional subpoenas concerning the “letting go of” Federal Judges who, in Karl’s opinion, were not onside with his former master’s aims and objectives regarding the practicalities of maintaining the upper hand in matters of day to day rule.

Karl’s understudy, Steve “Schmuckens” Schmidt, has displayed prodigious talent already as a “draughtsman”. Mr.Schmidt has recently become prospective GOP Nominee John McCain’s chief campaign advisor. It would not be unreasonable to assume that Mr. Schmidt would be willing to employ all the wiles of his mentor in order to have Senator McCain “elected” POTUS.

Not unreasonably, with respect of the abovementioned developments, there are some amongst us who smell a rat and I am unabashedly one of those people. However, the political landscape has altered rather dramatically since 2004. Latest polling suggests that while the GOP is not likely to gain ANY States in Nov. 2008, Dems have excellent prospects in CO IN IA MT NM OH and VA (ref. electoral-vote.com). Of these States, all except Indiana have Democratic Governors, therefore the prospects of Schmidt & Co pulling an “OHIO 04” in those States are somewhat diminished (ref. Wikipedia: US Governors Map).

Despite the obvious fraud potential in Diebolds’ systems (ref. Lou Dobs on Dibold), the Democratic Leadership Council in its wisdom persisted in having the Dodgies from Diebold tally the N.H. primary which, contrary to all pre and exit polls, produced a stunning campaign-sustaining victory for “Beltway to her Bootstraps” HRC, and not the upstart Junior Senator from Illinois, BHO.

Just another coincidence, I guess.

There are many other methods of rorting US elections such as compulsory carrying of ID for voters in Indiana, and the methods addressed in the Wikipedia: 2004 US Presidential election controversy notes. In preparing this post I read literally scores of articles but had to stand in awe of the jounalistic and research skills of Maureen Farrell. For Bludgers interested in the subject, her work: “Another Rigged Election, The Elephant in the Booth”, is outstanding. Finally, despite the unfairness in our electoral system such as disproportionate Senate representation, our way of electing our representatives by the straightforward marking of paper ballots with a pencil seems to be comparatively tamper-proof.

371 replies on “Electoral Fraud: Can Diebold do it again?”

The system appears ready-made for rigging. I wonder if it is constitutionally possible for the US Congress to enact laws regulating the means by which elections will be conducted. I know the various states have the power to determine the boundaries of their respective federal electoral districts, which leads to malapportionment. Do we have any legal commentators among our numbers?

The Yanks would do well to look into our Electoral Election Commission. If they are serious, about electoral fraud.

They already have a collection of federal agencies that operate locally.

Think NTSB (the US National Transport Safety Bureau). A good organisation with sensible people. Diebold would die a very quick death if it were an aircraft manufacturer. It would be shut down and its ass would sued right off.

I think it’s just a lack of will to get it right. If and when Bazza gets into power he should establish an Electoral Commission such as ours.

BoBo, my knowledge of US Constitutional law is tangential at best, sfa to be precise. Perhaps jv and Ferny might have an opinion on the topic. It’s the individual State Govs who have the power to literally lay down the law re elections on their turf. Wiki gives a decent overview.
http://wiki.answers.com/Q/What_are_the_responsibilities_of_the_governor_of_a_US_state
———–
Sir Henry, stroke pullers are usually the last one’s to want their rorts shelved, and the AEC is a paragon of balloting rectitude compared to the dog’s breakfast that is American Way. Always difficult to tell our American cousins how to suck eggs, perhaps BHO will do something about it when he’s elected, but nothing has blipped the radar from him during the campaign so far.

There’s liitle doubt that if such enlightened measures where in place in 2004 and 2008, the US and the world would have been spared 8 years of near tyrannical rule from Bush43. And it ain’t quite over yet!

Little seems to have been done nationally, Cat and HW, between Jan. 2005 of The Nation article and the latest initiatives posted at Kos. Like the idea of a Wiki-style poll watch, where potential trouble spots could be scoped closely by lawyers and concerned citizens with cell phone cams who can instantly post abuses on high profile blogs and You Tube, so that experts could act quickly.

Couple of toonies for the road et jusqu’a demain, gang.
Say, maybe FISA could be outsourced to the Dems to monitor the election. The blighters wouldn’t miss a trick and Team Obi could certatainly afford them:)

http://editorialcartoonists.com/cartoon/display.cfm/56226

Geri-John Bomb-Bomb
http://editorialcartoonists.com/cartoon/display.cfm/56229

EC,
cracking post on a topic well worth serious scrutiny.
There’s a huge amount to consider in what you’ve written, but I’d like to raise one point for now. You wrote that….
“State Governors have the executive power (which is an inordinate amount of clout) to determine how the popular vote is tallied in their States”

I’m not sure that’s entirely correct. It’s my understanding that (in mosts U.S states) decisions about tallying procedures and a range of other relevant issues are made by the Secretary of State.

It might seem like a small point, but Sec. of State is an elected position in 35 U.S states. This means that you can often have a situation wherein the State Governor is politically opposed to the Secretary of State.

Examples would include Colorado where the Democrat, Bill Ritter is Governor, but electoral matters are decided by Sec. of State, Republican Mike Coffman. Similarly, Kansas Gov. Kathleen Sebilius is a Democrat, but the Kansas Sec. of State, Ron Thornburgh is a Republican. Democrat Debra Bowen is the current Sec. of Sate to Republican Governor Ahhhnie.

If Katherine Harris’ antics in Florida in 2000 taught us anything, it’s that it’s the Secretaries of State that you gotta keep the closest eye on.

Bo@ #1,
the Feds exercised considerable influence over the electoral process with the introduction of what’s commonly referred to as HAVA or the “Help America Vote Act, 2002” (I know, don’t you love it when they sugar-coat legislation with a pretty name? Reminds you there’s a dead rat under the marzipan.)

Wikipedia gives a good summary of the changes it made –

http://en.wikipedia.org/wiki/Help_America_Vote_Act

Greg Palast has done some brilliant work on these issues as have many others – sorry to be a nuisance, but I’m gonna go a little link-crazy here…

http://www.gregpalast.com/corporate-control-of-the-final-vote-count-centralized-voter-registration-databases/

http://www.truthout.org/article/does-hava-solve-voter-purging

http://www.blackboxvoting.org/

Optimist at 9

Don’t forget to register for your free Contributor account on the PB 2008 US Edition. Instructions available here. If EC can loose his virginity in less than 24 hours, so can you.

🙂

New Low for Bush Approval

Another month, another new low for George W. Bush: Just 28 percent in the new Post-ABC poll approve of the way the president is handling his job. This marks a new career low in Post polling, and is the 40th consecutive month his ratings have been under 50 percent.

His negative rating has also hit a record, with 69 percent saying they disapprove of his job performance. And the percentage holding “strongly” negative views is up to 56 percent, another new high, and nearly fives time the number who “strongly approve.”

And the good news just keeps coming….

http://blog.washingtonpost.com/behind-the-numbers/2008/07/new_low_for_bush_approval_1.html

Jen have a look at the Votemaster map and see how the north is turning blue. Toggle quickly between the previous map and the current one for a bit of fun. My last posting must have been quaranteened.

What I didn’t include in the above Washington post poll above is Obama leads by 8%. Also my missing post has George Bush at a new low in just about everything.

Catrina- thanks fpor Obama’s article on Iraq.
(Thank the gods we don’t now have to listen to the hysterical rantings about how he is “flip flopping” and interminable references to Pastorsauce gate as proof of his lack of spine.)
The position he takes is reasonable and strategically responsible considering the pointless bloodbath that Iraq has become.

I reckon the 3 Amigos must be absolutely fuming that they can’t spoil our fun. Guess what? It’s their own fault. Hi, Greensborough Growler.

Chris B,

That Washington Post poll says Obama has a lead of 8% amongst registered voters, but only has a lead of 3% amongst likely voters – which (I believe) is the more accurate measure in US elections…

Mornin’, All.
Thanks, Oppy at 9: Good point you raise about individual State SoS’s having the authority to determine tally methods and that in some States the SoS and the Govs are from opposing political camps. However, Governors have the power to veto State Bills, although a 2/3rds or 3/5ths majority of State legislators can in turn roll the Goverors on those vetos. Some info on this below and thanks for you kind words and great links. If you’ve not had time yet, the Maureen Farrell essay linked above is a corker.
And Oppy, what Cat says at 10, go for it! We’re all in this together.
“If EC can loose his virginity in less than 24 hours, so can you.”
And it was soooo good for me too. Didn’t feel a thing:)

“In the United States, the title governor refers to the chief executive of each state, not directly subordinate to the federal authorities, but the political and ceremonial head of the state……
In all states, the governor is directly elected, and in most cases has considerable practical powers, though this may be moderated by the state legislature and in some cases by other elected executive officials. They can veto state bills.”
http://en.wikipedia.org/wiki/Governor#United_States

Very kind of you, Chris at 12, but Oz MSM editors would have their pro journos going ballistic if they printed material from “amateurs and arrivistes”. Be more than happy if it gets a few links on the intertubes.

jen at 15, cheers and ta, ma’am:)

M.C. Escher goes to war:
http://editorialcartoonists.com/cartoon/display.cfm/56211
http://artamerica.com/a4s/esc-ano.shtml

http://editorialcartoonists.com/cartoon/display.cfm/56208

SL here’s the article. The article does not mention likely voters, even though it appears in the figures.

Obama Holds Lead Over McCain, Despite Doubts on Foreign Affairs.

Overall Obama holds an 8-point advantage among registered voters across the nation, lifted by a big advantage among women voters, and he has also regained an edge among political independents. But it is Obama’s lead on the economy that has become a particularly steep challenge for McCain.

http://www.washingtonpost.com/wp-dyn/content/article/2008/07/15/AR2008071502136.html

If it was the more accurate I suspect Washington Post would have lead with the article, as a well respected paper. My thoughts are that maybe when it comes to polling day registered voters a more likely to turn up than likely voters.

Thanks. I lean towards more registered voters than likely voters turning up. Although in this election, I suspect all records will be broken in voter participation.

Barack Obama can hardly wait to begin his European visit next week. What politician would not be pawing the ground in anticipation of massive, adoring crowds, providing a backdrop for photo ops that will help persuade the American people that he is “presidential”, capable of strutting on the world stage.

Oh, I can’t wait for this to start. That’s when the polls will really start to rise.

http://www.telegraph.co.uk/opinion/main.jhtml?xml=/opinion/2008/07/16/do1604.xml

The interesting thing is Obama’s campaign seem to be miles ahead on strategy. They have had the overseas legs of the campaign planned for months and, just when he needs to put a bit of weight into his credentials on foreign affairs, he will be able to play the role of a vibrant new Mr America in Europe.

It will make great visual material and will be perfect for American media, much to the detriment of McCain’s campaign. McCain seems less and less relevant as things progress. As a result the election is becoming a “get-to-know-me/get-with-me” process of seduction on Obama’s part.

Even McCain’s numbers among white-only voters are starting to wilt. He looks beaten already.

Then again, I am shamelessly partisan and have started count the days (112) till the righteous claimants for good overwhelm the malignant forces of evil…. can’t come soon enough for me.

SL and CB, it will be fascinating to see how Euro Obi’s tour plays domestically. Before The Imbecile was “elected” in 2000, he didn’t even know the name of Pakistan’s leader, Pervez Musharaff, referring to him when asked as, “You know, the General…General”, but such vagueness mattered bubkes among the vast majority of US voters who due to the superb efforts of those who like their consumers dumbed down and easy with the “fact” that America is the hub of the known universe. And when your Economy is in decine it’s hard to get away from the bread and butter stuff like “putting food on your family” and getting hit hit 150 smackeroonies for a gas tankfull.
otoh, there is little doubt that Bush has induced widespread loathing both domestically and abroad over the last 8 years, and while many in the MSM will be quick to amplify even the most minor of perceived “gotcha” grabs during the tour, there are others not polarised by the Red/Blue divide who will embrace the fact that The Kid is internationally esteemed.
Despite the braying triumphalism of many Americans, they are people too and would rightly feel proud when their future President is lauded in Europe.
BoBo at 38 says it well:
“It will make great visual material and will be perfect for American media, much to the detriment of McCain’s campaign.”
—————-
http://editorialcartoonists.com/cartoon/display.cfm/56220 NYer

http://editorialcartoonists.com/cartoon/display.cfm/56221 sophidticated people

http://editorialcartoonists.com/cartoon/display.cfm/56256 KKK NYer

Bugger! spaminated again. If not Englebert “please release me, let me go” Humperdinked by lunch time , will reply to SL, CB and BoBo de nouveau.

Some more interesting polls that may not have been discussed previously:

North Carolina (SurveyUSA): McCain +5
Washington (Moore): Obama +10

The poll in Washington is very good for Obama – Washington is pretty much a lock for him now – he’s been up by relatively big margins in every poll taken there since April.

The North Carolina poll isn’t so good – Obama seems to have stalled in this state. He’s only led in one poll in NC (a Zogby Interactive poll in June) and he’s been stuck about 5 points behind McCain in all the other polls since May. He may well have reached a support ceiling in NC – getting those extra 5-6 points there could be quite expensive/time-consuming. I reckon it’s better for him to spend that sort of money in locking up Virginia (which would effectively guarantee him a win in November)…

True SL at 46, Obama doesn’t need N.C. to nail a victory and his prospects in Virginia are better in these still relatively early days. CW suggests that most voters don’t fully engage till after Convention hullaballos. The more strategically adept Team Obi are at playing McAngry all over the electoral park as eg. El Rodente was played here last Nov. between Bennelong and the bush, then the more difficult it will be for Johnny Bomb-Bomb to gain traction in closer Battleground States.

Obama doesn’t need North & South Carolina to win in November. Sure, they’d be icing on the cake, but they aren’t as essential to his cause as Ohio, Florida, Iowa, Missouri and New Mexico.

Ah, a touch of blowback:

The Republican opposition threatened to incite an ugly intramural fight with the White House. In a high-stakes election year, the resistance reflected the deep fear among some lawmakers that the plan could set off a large taxpayer bailout, touching off a wave of voter anger in November.

For some lawmakers facing tough re-election contests, opposing the rescue plan is a way to reaffirm their identity as budget hawks while publicly breaking with a deeply unpopular lame-duck administration.

NYTimes

…rock and a hard place for the Whitehouse, huh? They can’ do nothing, and yet exposing the taxpayers to massive liabilities is certain to get the much suffering electors in a foul mood come November.

This is all pretty much what I expected, although the scale of the stock implosion on Freddie and Fannie was simply breathtaking.

Some of the more critical commentators are talking about these ‘rescues’ in terms of Banana Republic, and it’s fair to say it is NOT what you’d expect a well regulated modern economy would EVER need to do, but the rot has sunk the ship well and truly.

Years of heavy tactics from Wall Street to allow Freddie and Fannie to grease the flow of capital (at bugger all cost) was a simple transfer of massive profits into private hands until the tide turned. Now it’s the poor bloody taxpayer who gets to pick up the tab because, well, he isn’t given a choice.

It’s funny watching George trying to talk it up while Bernanke is waving the red flag! When it’s the white flag, lookout.

2 legacys of the Bush administration:
1. The quagmire of Iraq
2. An economic recession

Whatever the deficit hawks may say, the Federal Reserve will definitely do everything it can to prop up both Fannie Mae and Freddie Mac.

Why? Because they’re both far too big to fail – if they went under, virtually every bank with exposure to the US mortgage market would be under considerable financial distress.

As I read in an article last year, theoretically, the fact the the US government is bailing out private companies may offend the principles of good corporate governance – however, it was exactly this sort of strict adherence to theory without regard to the practical consequences that resulted in the Great Depression…

dogb at 54, don’t think the guy had an awful lot of circuitry to spare in the first place. For a dope-addled degenerate, Georgie boy sure “clung to” his born-again shot at redemption. Goes a ways towards understanding why he doesn’t do nuance very well, imo.

Progressive55, OH, IA, and NM are looking good.
FL and MO will be harder to some extent for reasons mentioned head of thread.
Too your 57, I’d add:
3. The trashing of The Constitution of “We The People”.
Good American voters are mighty touch about all 3, and then some.

Great to see you Kirri, saved these toons fer you.
A W.H. intramural skirmish must be where the West Wing lame ducks battle with the East Wing deficit hawks. In the end it will probably all come down to a matter of a pinion:)

http://editorialcartoonists.com/cartoon/display.cfm/56172

http://editorialcartoonists.com/cartoon/display.cfm/56223

“Swing Lowe……Whatever the deficit hawks may say, the Federal Reserve will definitely do everything it can to prop up both Fannie Mae and Freddie Mac.”

….
One practical problem is, however, Fannie and Freddie are too big for the Federal Reserve to handle. The Fed has a capital of 900 bill. A lot of it is already spoken for. The twin towers (thanks KR) have assets of about 6 trill. If, say, these assets suffer a 15% write-down, then the losses would absorb the entire capital of the Fed. The probability is that the write-down in mortgage-backed assets will run well beyond 15%. The US Treasury is going to have to ante-up. Otherwise the losses will swallow the Fed too.

Beyond this, providing loans to F&F is not really part of the charter of the Fed. It seems like a legal nicety, but these bodies are supposed to be bound by law. The Fed is not the answer to this one. George W is going to have to swallow his neocon principles, kiss goodbye to the Republican Party, confirm his place in history as the worst Pres since the Civil War, and formally adopt these wayward cousins. Of course, he has to get Congress on side, which poses its own challenges. Imagine, he may have to ask Obama for help to get him over the line in Congress! Too good.

hiya jen. The US Treasury has to take over F&F. They have to inject fresh shareholder capital (this will be at a price which assigns a very low value to currently issued shares) and extend a US-government-supported indemnity to anyone who now holds or in future buys debt issued by F&F.

They will then have to re-design F&F so that their future business is low-risk and they have a conservative capital structure. As the housing market returns to normailty – say over the next 3-5 years – private commercial lenders will return to the market and F&F will gradually become less important and represent less of a liability for the Government. In the menatime, you can expect the housing loan market to be very tentative, but not in terminal collapse.

There is very little choice about this. If F&F fail, then the mortgages they hold will become payable (heaven help the house-buyers/ borrowers) and their liabilities will also become due (heaven help the bond-holders/lenders). Such things are apocalyptic and wll be avoided if everyone keeps their cool.

Thanks Blindy – I know I am asking naive questions but i honestly am staggered that so-called Economists (after all they advise the poiliticians) could let this situation get to such a predicament,, so I can’t help but wonder how far it can go if things get even worse.

The Washington Post opinion poll had some interesting results. Eg McCain leads 63 to 26 on “has better knowledge of
world affairs” but trails 62 to 30 on “would do more to improve America’s image abroad”. Why on earth anyone would think McCain has better knowledge of world affairs is a mystery but then many Yanks think the world ends somewhere near Mexico so its always hard to tell.

I think the problem is the ideologues have been ignoring the economists for a long time, jen. I can recall – seems like an eternity ago – when the Congress repealed depression-era laws that would have helped prevent the housing bubble. There were warnings from economic historians and academic economists about the risks involved. But the de-regulation zealots of the time had the political intiative and were able to get their way. It’s high time for realism and an end to the laissez-faire dream.

61 Enemy Combatant I assume those cartoons have USA wide coverage, depending on the paper.

My neighbours are all over the news, tomorrows papers, lateline and radio. Antony and Christine are coming back from overseas to confront the Pope about the priest who raped his two daughters. One OD’d this year the other is in a wheelchair, I just spoke to her. Heavy stuff.

Jen @ 65,

Part of the problem lies with the Bush administration and its fetish for tax cuts and huge budget deficits (so-called big government conservatism). But most of the blame for the current crisis should rest with the Federal Reserve (and other central banks) for not putting interest rates up fast enough.

Because interest rates were kept so low, companies (and people) were able to borrow beyond their means. More importantly, banks, who were looking for any way to raise revenue, started lending money to people who shouldn’t have received any credit (the sub-prime borrowers). What made this worse was the presence of credit derivatives, which (through a fairly complex process that takes too long to explain here) managed to turn a bunch of low quality mortgages into higher (and supposedly safer) quality debt instruments.

Of course, this turned about to be absolute rubbish – bad debt is bad debt, no matter how well it is re-packaged. So now you have a heap of banks and FIs in the US carrying these sub-prime mortgages on their books, which means they are carrying effectively dead assets on their balance sheet. And because most banks have realised that people are starting to default on their debts, they are now no longer lending as much money as they used to – a huge problem as the main way in which banks get their financing from is by borrowing from other banks. What this eventually leads to is banks going bankrupt (see Bear Stearns) and the companies that rely on these banks (such as mortgage insurers like Fannie Mae and Freddie Mac) are also negatively affected.

That’s a short (and fairly convoluted) attempt at explaining what happened – blame the Fed Reserve first before blaming Bush, but Bush still carries part of the blame.

Blindoptimist,

I think that’s a bit unfair on Congress. The reason why there’s a credit crunch is not because of the housing bubble, but because of the amount of credit in the market – something that is in the sole jurisdiction of the Federal Reserve.

Think of this crisis as being similar to the one in the late 1980s – too much credit in the market leading to too many bad loans being made – the only difference being that the financial instrument of choice in the 1980s (which was responsible for all that credit being available) was the junk bond. In the 2000s, the equivalent instrument was the credit derivative. Other than that, there is very little difference between the two “crunches”.

SL, you’re right up to a point imho. The reality was that risk was being systematically mispriced. Who is responsible for this? The seller of the risk? The buyer? The regulator-and-buyer-of-last-resort? All three? They have all lost, so I guess you can say they all have contributed to the mess.

I think it calls for the roles of reserve-banking and regulating to be split up. Regulators should regulate. They should make sure that risk-takers have adequate capital and that they make adequate provisions to cover their losses. The Fed should not be allowed to support any risk-taker that doesn’t comply with tough prudential regulation, and risk-takers should not be allowed to participate in financial markets – home mortgages, commercial lending, official & sovereign debt, derivatives markets, etc etc – unless they are entitled to receive Fed support.

Think of it as being like Medical Practice Certificate. If you have a current certificate, you can practice. If you haven’t, you can do naturapathy, but you can’t go near a real patient in a real hospital.

Swing Lowe…”Blindoptimist, I think that’s a bit unfair on Congress…”

lol, you’re right, Congress is a handy whipping boy.

The problem is excess leverage: not enough underlying reserve capital. It makes the financial markets into giant ponzi schemes that must inevitably end in collapse. They are just rackets, in the end. I’m sure you’re right too about the Fed. They mismanaged the price, volume and the quality of risk in the system. Flogging is too good for them.

BO,

Actually, the US has some of the most stringent capital requirements in the world – mostly as a hangover from the Great Depression. Compared to Australia, US banks are positively hamstrung in respect of their capital requirements.

The banks, both in the US and Australia, have to comply with prudential regulation and this regulation is fairly onerous. However, it will never provide a failsafe safety-net, as these regulations are drawn up with the purpose of balancing the protection of the public with the need to allow banks and FIs to engage in profit-making activities. Increasing prudential regulation just makes banks and FIs more gun-shy about lending – which has the effect of reducing economic activity across the economy.

As for the Fed not supporting non-complying risk-takers, that’s fair enough in theory but could be disastrous in practice. If, for example, the Fed decided not to bail out Freddie Mac or Fannie Mae (or Bear Stearns or Northern Rock in the UK), the bank would collapse, which, as you explained @ 64, could have disastrous consequences for the economy as a whole.

So for the Fed, the choice is simple – use taxpayer money to bail out a failing bank (which may be politically unpopular) or let the bank fail and watch most of the economy collapse around it (which is even worse). For most central banks, it’s an easy choice…

63 jen

Thanks for asking Jen, and wish I could say well, but I had a seriously bad night, but have pulled out of it today. No one is quite sure why, but I put it down to being pumped full of creosote and being zapped! LOL

As for F&F, as Blindopt points out, the FR and Treasury are staking a massive liability if/when the losses start to pile up.

“Systemic risk” is not the term you usually expect to hear from the Chairman of the Fed, but these are NOT usual times. Now the wind has changed and they’re facing some rough storms.

Just some random senate polls that have gone (seemingly) unreported here:

Michigan (Rasmussen): Sen. Levin (D) +28
Louisiana (Rasmussen): Sen. Landrieu (D) +5
Minnesota (SurveyUSA): Sen. Coleman (R) +13
Minnesota (Rasmussen): Franken (D) +2

Michigan is going to be a safe retain for the Dems (no surprise there).

Louisiana is still close – it’s the only Democratic Senate seat that the GOP have a shot in and it’s still worth monitoring (no Obama coattails in Louisiana – last poll had him down 19 there)

The two Minnesota polls are perplexing at best. One is clearly rogue – but which one? IMHO, since Coleman has been leading in practically every poll for the last couple of months and since nothing seems to have happened in recent times to change the dynamics of this race, I’d have to say that it is the Rasmussen poll that is rogue here. Of course, I’d love to be proven wrong. 🙂

WWGB @ 67: The disparity is unwarranted. As I’m sure some wag before me has noted, both Obama and McCain have spent several years living in Asia!

CB at 61, some toons are local(Sacramento Bee) others like the ones from WaPo(Tom Toles) get wider coverage, but the dozens I trawl through happily most days are all on the web, so people with net access can peep at them from anywhere.
And you, dear Bludgers, are served up only the best. There’s no substitute for quality! Quite amazing really how some cartoonists have a bit of a purple patch then get a bit ordinary, while some are consistently brilliant. Full-on creatives like great writers suffer “blocks” from time to time. Immense talents like Wiley Reed (Non Sequitur) and Gary Trudeau(Doonsbury) because of the complexity, diversity and sheer weight of numbers of their “dramatis personae”, many of whom are developed and reinvented over many years, rarely fall flat.

Terrific stuff Swingers and BoBo.
Your link made my day Kirri. Op-Ed corroboration from the NYT the day after one’s debut post as Stephen Colbert might say is “chuffyness enhancing” 🙂

http://editorialcartoonists.com/cartoon/display.cfm/56225

http://editorialcartoonists.com/cartoon/display.cfm/56222

78 SimonH He did say “many Yanks”, considering more than 50% of Americans could not find the Pacific Ocean on a map, entirely warranted.

78 SimonH They have done research on Geography into how developed countries compare. The USA came second last, I forget who came last, it may have been Brazil or someone like that. Find the Pacific Ocean on a map was one of the many questions. From memory some Americans had trouble finding Canada.

The Chaser did a skit interviewing Americans in the USA. Part of the skit was saying Australia was Southern Afghanistan, they were believed.

Swing Lowe “…BO…Actually, the US has some of the most stringent capital requirements in the world – mostly as a hangover from the Great Depression. Compared to Australia, US banks are positively hamstrung in respect of their capital requirements…”
…
Good point, SL, but I think the capital requirements have to be widened to include all the risk-takers/market-makers, SL, not just the “banks”. The capital markets have really outgrown the traditional notions of banking. If F&F had been required to comply with tougher capital requirements, they could never have either taken on so many assets or issued so many new liabilities without also increasing their equity. Since equity is nearly always scarcer than debt, the brakes would have been on a long time ago. The same applies to all the other “non-banking” intermediation. The distinction is now pretty well useless from a system point of view.

Back to US politics, even more good news for Obama.

Obama well ahead in California, poll shows

California Democrats and independent voters who backed Sen. Hillary Rodham Clinton have gravitated in huge numbers to Sen. Barack Obama – a consolidation of support that has boosted him to a commanding 24-point lead over Republican rival John McCain in the nation’s most populous state, the latest Field Poll shows.

Putting an end to fears that Clinton’s supporters might hold out – or tip to McCain – in the general election after a contentious Democratic primary, the poll shows that the New York senator’s former backers now prefer Obama to McCain, 80 to 8 percent, and the Illinois senator now holds a 2-to-1 lead among California’s likely female voters.

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/07/15/MN2T11PHGD.DTL&tsp=1

BO @ 87,

Sorry, but I’ve got to clarify my post from above. When I said that the US has the most stringent capital requirements in the world, that applies to both banks and non-bank financial intermediaries (NBFIs).

As a result (and I’m trying to recall what I learnt during my finance degree), I believe firms such as Fannie Mae and Freddie Mac are covered by similar (if not exactly the same) capital requirements. The same thing goes for insurance companies and credit unions.

Must sign up for this one. NY Times excellent politics.

Obama Plays a Part in Contests in Georgia.

Vernon Jones, a black Democrat who voted for George W. Bush twice and then used Senator Barack Obama’s image on his campaign literature, led a crowded field on Tuesday in a primary race to challenge Senator Saxby Chambliss, a Republican.

Does this indicate how strong Obama’s influence is even in Georgia? More shivers down the spine of the Repugs.

http://www.nytimes.com/2008/07/16/us/politics/16georgia.html?ref=us

Swing Lowe All the US papers are reporting that poll as 8% or 50% to 42%. I don’t know which method is correct, but I understand you point.

Chris B @ 92,

I seriously doubt Sen. Saxby Chambliss is under threat in Georgia. The last poll for the Georgia Senate (Rasmussen on 29th June) has Chambliss leading Jones by 27 points.

I fear that Vernon Jones’ win today will ultimately be a Pyhrric victory…

Ecky, I thought you were just ahead of the zeitgeist on that Diebold rumination, and obviously you’ve tapped into a very live and worrying concern.

Of course everyone gets a vote in a democracy (unless they can stop you!), but hey, what does the constitution say about computerised malfeasance, eh? LOL

Here is better coverage of the polls.

Obama holds lead over McCain, but undecided voters increase.

Less than four months before the November 4 presidential election, Democrat Obama held a lead of six to eight points among registered voters in the three surveys — 50-42 percent in the Washington Post/ABC News poll, 44-37 percent in the Quinnipiac poll; and 45-39 percent in the CBS/New York Times results.

http://afp.google.com/article/ALeqM5gQlBI_WU4ZJLIlf4yaAfUwaV7eAw

Swing Lowe: there’s two broad issues in the US financial system,

One is the (hitherto) almost unfettered creation of credit, and the other, specifically regarding F&F has been the exponential leverage these two firms have been allowed to apply. This was fine until the endless creation of credit started bottom feeding to keep the ticket clippers rolling in commissions.

It was a game of ‘pass the parcel’ with F&F simply being buyer of last resort, returning the capital back to the banks and mortgage originators to do it all over again. Musical chairs UNTIL the music stops, of course.

And all the while F&F expanded their balance sheets at Wall Streets bequest. In fact Wall Street had spent a fortune over the years applying great lobbyist pressure to Washington to keep these game going in their interest.

All WAS fine and dandy except for the great economic maxim: what is unsustainable will eventually come to an end.

So endless creation of mortgages was the game, driving up home prices while lending safeguards went out the window as they raced to the bottom of viable borrowers. This was all aided and abetted by Alan Greenspan’s refusal to take away the punch bowl.

As Blindopt put it, it was ALWAYS a giant Ponzi scheme, and many well informed people have railed against it for many years.

None of this was not self-inflicted.

So now the taxpayer is exposed to massive risks of this regualotory debauchery and the whole financial system is at risk.

Banana Republics are reknown for this level of corrupt malpractice!

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