Wednesday, February 10, 2010

Team Obama is Bend-Fucked(TM) - Most Secretive President Since Nixson

Mad Magazine sums up the state of this Obama presidency. They accomplish what the entire chattering class of talking heads can’t in months of coverage. With Barack Obama we will have gone from Alfred E Newman on the bottom to the new Alfred E Newman on the top. Amazing.

Read and weep morons of Bend about your Bend-Fucked(tm) country.

“There is an old joke,” says Mr Gergen. “How many psychiatrists does it take to change a lightbulb? Only one. But the lightbulb must want to change. I don’t think President Obama wants to make any changes.”

Any serious survey of the Obama administration's accomplishments and setbacks over the last year has to conclude that the administration is deeply in the red.

If current trends continue, this once mesmerizing Camelot-ish operation will be be seen in the history books as the presidential administration that -- to distort slightly and inversely paraphrase Churchill -- never have so many talented people managed to achieve so little with so much.

At a crucial stage in the Democratic primaries in late 2007, Barack Obama rejuvenated his campaign with a barnstorming speech, in which he ended on a promise of what his victory would produce: "A nation healed. A world repaired. An America that believes again."

Just over a year into his tenure, America's 44th president governs a bitterly divided nation, a world increasingly hard to manage and an America that seems more disillusioned than ever with Washington's ways. What went wrong?

Pundits, Democratic lawmakers and opinion pollsters offer a smorgasbord of reasons - from Mr Obama's decision to devote his first year in office to healthcare reform, to the president's inability to convince voters he can "feel their [economic] pain", to the apparent ungovernability of today's Washington. All may indeed have contributed to the quandary in which Mr Obama finds himself. But those around him have a more specific diagnosis - and one that is striking in its uniformity. The Obama White House is geared for campaigning rather than governing, they say.

In dozens of interviews with his closest allies and friends in Washington - most of them given unattributably in order to protect their access to the Oval Office - each observes that the president draws on the advice of a very tight circle. The inner core consists of just four people - Rahm Emanuel, the pugnacious chief of staff; David Axelrod and Valerie Jarrett, his senior advisers; and Robert Gibbs, his communications chief.

Two, Mr Emanuel and Mr Axelrod, have box-like offices within spitting distance of the Oval Office. The president, who is the first to keep a BlackBerry, rarely holds a meeting, including on national security, without some or all of them present.

With the exception of Mr Emanuel, who was a senior Democrat in the House of Representatives, all were an integral part of Mr Obama's brilliantly managed campaign. Apart from Mr Gibbs, who is from Alabama, all are Chicagoans - like the president. And barring Richard Nixon's White House, few can think of an administration that has been so dominated by such a small inner circle.

"It is a very tightly knit group," says a prominent Obama backer who has visited the White House more than 40 times in the past year. "This is a kind of 'we few' group ... that achieved the improbable in the most unlikely election victory anyone can remember and, unsurprisingly, their bond is very deep."

John Podesta, a former chief of staff to Bill Clinton and founder of the Center for American Progress, the most influential think-tank in Mr Obama's Washington, says that while he believes Mr Obama does hear a range of views, including dissenting advice, problems can arise from the narrow composition of the group itself.

Administration insiders say the famously irascible Mr Emanuel treats cabinet principals like minions. "I am not sure the president realises how much he is humiliating some of the big figures he spent so much trouble recruiting into his cabinet," says the head of a presidential advisory board who visits the Oval Office frequently. "If you want people to trust you, you must first place trust in them."

The same [dismissal of his key policy advisers in lieu of his political entourage] can be observed in foreign policy. On Mr Obama's November trip to China, members of the cabinet such as the Nobel prizewinning Stephen Chu, energy secretary, were left cooling their heels while Mr Gibbs, Mr Axelrod and Ms Jarrett were constantly at the president's side.

The White House complained bitterly about what it saw as unfairly negative media coverage of a trip dubbed Mr Obama's "G2" visit to China. But, as journalists were keenly aware, none of Mr Obama's inner circle had any background in China. "We were about 40 vans down in the motorcade and got barely any time with the president," says a senior official with extensive knowledge of the region. "It was like the Obama campaign was visiting China."

But one thing essential to understand is that the kind of policy that smart strategists -- including by people like National Security Adviser Jim Jones, Defense Secretary Robert Gates and other advisers like Denis McDonough, Tom Donilon, James Steinberg, William Burns, (previously Gregory Craig) -- would be putting forward is getting twisted either in the rough-and-tumble of a a team of rivals operation that is not working, or is being distorted by the Chicago political gang's tactical advice that is seducing Obama towards a course that has not only violated deals he made with those who voted him into office but which is failing to hit any of the major strategic targets by which the administration will be historically measured.


At a crucial stage in the Democratic primaries in late 2007, Barack Obama rejuvenated his campaign with a barnstorming speech, in which he ended on a promise of what his victory would produce: “A nation healed. A world repaired. An America that believes again.”

Just over a year into his tenure, America’s 44th president governs a bitterly divided nation, a world increasingly hard to manage and an America that seems more disillusioned than ever with Washington’s ways. What went wrong?

Pundits, Democratic lawmakers and opinion pollsters offer a smorgasbord of reasons – from Mr Obama’s decision to devote his first year in office to healthcare reform, to the president’s inability to convince voters he can “feel their [economic] pain”, to the apparent ungovernability of today’s Washington. All may indeed have contributed to the quandary in which Mr Obama finds himself. But those around him have a more specific diagnosis – and one that is striking in its uniformity. The Obama White House is geared for campaigning rather than governing, they say.

In dozens of interviews with his closest allies and friends in Washington – most of them given unattributably in order to protect their access to the Oval Office – each observes that the president draws on the advice of a very tight circle. The inner core consists of just four people – Rahm Emanuel, the pugnacious chief of staff; David Axelrod and Valerie Jarrett, his senior advisers; and Robert Gibbs, his communications chief.

Two, Mr Emanuel and Mr Axelrod, have box-like offices within spitting distance of the Oval Office. The president, who is the first to keep a BlackBerry, rarely holds a meeting, including on national security, without some or all of them present.

With the exception of Mr Emanuel, who was a senior Democrat in the House of Representatives, all were an integral part of Mr Obama’s brilliantly managed campaign. Apart from Mr Gibbs, who is from Alabama, all are Chicagoans – like the president. And barring Richard Nixon’s White House, few can think of an administration that has been so dominated by such a small inner circle.

“It is a very tightly knit group,” says a prominent Obama backer who has visited the White House more than 40 times in the past year. “This is a kind of ‘we few’ group ... that achieved the improbable in the most unlikely election victory anyone can remember and, unsurprisingly, their bond is very deep.”

John Podesta, a former chief of staff to Bill Clinton and founder of the Center for American Progress, the most influential think-tank in Mr Obama’s Washington, says that while he believes Mr Obama does hear a range of views, including dissenting advice, problems can arise from the narrow composition of the group itself.

Among the broader circle that Mr Obama also consults are the self-effacing Peter Rouse, who was chief of staff to Tom Daschle in his time as Senate majority leader; Jim Messina, deputy chief of staff; the economics team led by Lawrence Summers and including Peter Orszag, budget director; Joe Biden, the vice-president; and Denis McDonough, deputy national security adviser. But none is part of the inner circle.

“Clearly this kind of core management approach worked for the election campaign and President Obama has extended it to the White House,” says Mr Podesta, who managed Mr Obama’s widely praised post-election transition. “It is a very tight inner circle and that has its advantages. But I would like to see the president make more use of other people in his administration, particularly his cabinet.”

This White House-centric structure has generated one overriding – and unexpected – failure. Contrary to conventional wisdom, Mr Emanuel managed the legislative aspect of the healthcare bill quite skilfully, say observers. The weak link was the failure to carry public opinion – not Capitol Hill. But for the setback in Massachusetts, which deprived the Democrats of their 60-seat supermajority in the Senate, Mr Obama would by now almost certainly have signed healthcare into law – and with it would have become a historic president.

But the normally liberal voters of Massachusetts wished otherwise. The Democrats lost the seat to a candidate, Scott Brown, who promised voters he would be the “41st [Republican] vote” in the Senate – the one that would tip the balance against healthcare. Subsequent polling bears out the view that a decisive number of Democrats switched their votes with precisely that motivation in mind.

“Historians will puzzle over the fact that Barack Obama, the best communicator of his generation, totally lost control of the narrative in his first year in office and allowed people to view something they had voted for as something they suddenly didn’t want,” says Jim Morone, America’s leading political scientist on healthcare reform. “Communication was the one thing everyone thought Obama would be able to master.”

Whatever issue arises, whether it is a failed terrorist plot in Detroit, the healthcare bill, economic doldrums or the 30,000-troop surge to Afghanistan, the White House instinctively fields Mr Axelrod or Mr Gibbs on television to explain the administration’s position. “Every event is treated like a twist in an election campaign and no one except the inner circle can be trusted to defend the president,” says an exasperated outside adviser.

Perhaps the biggest losers are the cabinet members. Kathleen Sebelius, Mr Obama’s health secretary and formerly governor of Kansas, almost never appears on television and has been largely excluded both from devising and selling the healthcare bill. Others such as Ken Salazar, the interior secretary who is a former senator for Colorado, and Janet Napolitano, head of the Department for Homeland Security and former governor of Arizona, have virtually disappeared from view.

The Hollywood touch

Political scientists credit Ronald Reagan with having managed the best transition from campaigning to governing when he moved to the White House in 1981. While lacking in intellectual skills, Reagan was often a shrewd judge of character. Following his victory in a bitter primary campaign with George H.W. Bush in 1980, Reagan promptly hired his defeated opponent’s campaign manager, James Baker, to be his first chief of staff. Understated but authoritative, Mr Baker is considered one of the most effective performers in that role, to which he brought a good managerial background and an ability to play honest broker.

Administration insiders say the famously irascible Mr Emanuel treats cabinet principals like minions. “I am not sure the president realises how much he is humiliating some of the big figures he spent so much trouble recruiting into his cabinet,” says the head of a presidential advisory board who visits the Oval Office frequently. “If you want people to trust you, you must first place trust in them.”

In addition to hurling frequent profanities at people within the administration, Mr Emanuel has alienated many of Mr Obama’s closest outside supporters. At a meeting of Democratic groups last August, Mr Emanuel described liberals as “f***ing retards” after one suggested they mobilise resources on healthcare reform.

“We are treated as though we are children,” says the head of a large organisation that raised millions of dollars for Mr Obama’s campaign. “Our advice is never sought. We are only told: ‘This is the message, please get it out.’ I am not sure whether the president fully realises that when the chief of staff speaks, people assume he is speaking for the president.”

The same can be observed in foreign policy. On Mr Obama’s November trip to China, members of the cabinet such as the Nobel prizewinning Stephen Chu, energy secretary, were left cooling their heels while Mr Gibbs, Mr Axelrod and Ms Jarrett were constantly at the president’s side.

The White House complained bitterly about what it saw as unfairly negative media coverage of a trip dubbed Mr Obama’s “G2” visit to China. But, as journalists were keenly aware, none of Mr Obama’s inner circle had any background in China. “We were about 40 vans down in the motorcade and got barely any time with the president,” says a senior official with extensive knowledge of the region. “It was like the Obama campaign was visiting China.”

Then there are the president’s big strategic decisions. Of these, devoting the first year to healthcare is well known and remains a source of heated contention. Less understood is the collateral damage it caused to unrelated initiatives. “The whole Rahm Emanuel approach is that victory begets victory – the success of healthcare would create the momentum for cap-and-trade [on carbon emissions] and then financial sector reform,” says one close ally of Mr Obama. “But what happens if the first in the sequence is defeat?”

Insiders attribute Mr Obama’s waning enthusiasm for the Arab-Israeli peace initiative to a desire to avoid antagonising sceptical lawmakers whose support was needed on healthcare. The steam went out of his Arab-Israeli push in mid-summer, just when the healthcare bill was running into serious difficulties.

The same applies to reforming the legal apparatus in the “war on terror” – not least his pledge to close the Guantánamo Bay detention centre within a year of taking office. That promise has been abandoned.

“Rahm said: ‘We’ve got these two Boeing 747s circling that we are trying to bring down to the tarmac [healthcare and the decision on the Afghanistan troop surge] and we can’t risk a flock of f***ing Canadian geese causing them to crash,’ ” says an official who attended an Oval Office strategy meeting. The geese stood for the closure of Guantánamo.

An outside adviser adds: “I don’t understand how the president could launch healthcare reform and an Arab-Israeli peace process – two goals that have eluded US presidents for generations – without having done better scenario planning. Either would be historic. But to launch them at the same time?”

Again, close allies of the president attribute the problem to the campaign-like nucleus around Mr Obama in which all things are possible. “There is this sense after you have won such an amazing victory, when you have proved conventional wisdom wrong again and again, that you can simply do the same thing in government,” says one. “Of course, they are different skills. To be successful, presidents need to separate the stream of advice they get on policy from the stream of advice they get on politics. That still isn’t happening.”

The White House declined to answer questions on whether Mr Obama needed to broaden his circle of advisers. But some supporters say he should find a new chief of staff. Mr Emanuel has hinted that he might not stay in the job very long and is thought to have an eye on running for mayor of Chicago. Others say Mr Obama should bring in fresh blood. They point to Mr Clinton’s decision to recruit David Gergen, a veteran of previous White Houses, when the last Democratic president ran into trouble in 1993. That is credited with helping to steady the Clinton ship, after he too began with an inner circle largely carried over from his campaign.

But Mr Gergen himself disagrees. Now teaching at Harvard and commenting for CNN, Mr Gergen says members of the inner circle meet two key tests. First, they are all talented. Second, Mr Obama trusts them. “These are important attributes,” Mr Gergen says. His biggest doubt is whether Mr Obama sees any problem with the existing set-up.

“There is an old joke,” says Mr Gergen. “How many psychiatrists does it take to change a lightbulb? Only one. But the lightbulb must want to change. I don’t think President Obama wants to make any changes.”

Tuesday, February 9, 2010

Self Righteous Christian Kidnappers in Haiti Dumped by Their Own Lawyer

This is all so fucking BEND-OREGON. Here in Bend 99% of the fraud was orchestrated by so called 'Bend Christians' during the great BEND RE BUBBLE circa 1998-2008.

It's not often that they self-righteous con-artists get busted for breaking the law. Just the other day Paulson who stole trillions while running the USA Treasury said "He had gone to Jesus" when asked about the failure in his legacy. Behind every fucking bandit in this country you find a Christian-Zionist.

Port-au-Prince, Haiti (CNN) -- A Haitian attorney representing 10 Americans charged with kidnapping for trying to take 33 children out of Haiti told CNN Sunday he has resigned.

Edwin Coq said he had quit as a lawyer for the Americans. It wasn't immediately clear who would replace him.

"I know that they have been looking at other lawyers," said Phyllis Allison, mother of one of those detained, Jim Allen. "They don't know what to do."

The 10 missionaries, including group leader Laura Silsby, were charged Thursday with kidnapping children and criminal association. Coq had said that court hearings would be held Monday and Tuesday for his clients, who have been split up at two prisons.

[ He has tried to get the Americans released, though he has also blamed Silsby for the missionaries' legal troubles. [ Tough when your own lawyers dumps your white ass. Reminds of when Cheney blew the face off his hunting partner. Cheney didn't even have a hunting permit. Didn't need one, cuz he's Christian. Same for this missionary, she could lie and steal children because she was WORK'in for JEEBUS, baby-Jeeebus. ]

Conviction on the kidnapping charge would carry a maximum penalty of life in prison; the criminal association charge would carry a penalty of three to nine years, according to a former justice minister.

The Americans were turned back a week ago as they tried to take the children across the border into the Dominican Republic without proper documentation. They said they were going to house them in a converted hotel in that country and later move them to an orphanage they were building there.

The Americans have said they were just trying to help the children leave the earthquake-stricken country. A January 12 earthquake flattened Haiti's capital and killed more than 200,000 people.

"Except for Laura -- the group's leader, who took the responsibility to displace these 33 children, fully knowing she didn't have any legal document that would allow her to do so -- the other nine American citizens didn't know anything about what was going on and I remain convinced that they would not have given their accord," Coq told CNN.

Coq added that Silsby "said she had no intention to do any harm."

[ No harm intended just round up a bunch of children, and create a website and let the money role in about all the good work that jeebus and his followers were doing. Trouble is these children were only used as pawns for the greater game of hustling people sympathetic to the tragedy in Haiti. Physical Harm? Emotional Harm? ... Well we can assume she didn't intend to physically harm them, ... just psychologically abuse them in endless photo sessions for promoting her 'Earthquake Orphanage'. ]

Some of the detained Americans have said they thought they were helping orphans, but their interpreters told CNN this week that they were present when group members spoke with some of the children's parents. Some parents in a village outside Port-au-Prince said they had willingly given their children to the Americans, who promised them a better life. The parents also said they were told they could see their children whenever they wanted. [ In other words these poor fucking parents were led to believe if they gave over their children, they would all get GREEN-CARDS to go to the USA or Dominican Republic. ]

The Dominican consul general has said he warned Silsby about trying to cross the border without proper documents.

Prime Minister Jean-Max Bellerive told CNN's "Larry King Live" Thursday that the judge in the case has three months to decide whether to prosecute. "We hope that he will decide long before those three months," he said. "He can release them, he can ask to prosecute them."

If a decision is made to prosecute, the case would be heard before a jury, he said.

Bellerive told CNN the Haitian government was open to the possibility of the case being transferred to a U.S. court, but he said the request would have to come from the United States. "Until now, I was not asked," he said.

Coq told CNN he had been hired by Eric Thompson, husband of Carla Thompson, one of the arrested missionaries, on behalf of the families.

Sixty Percent of British and US Citizens Now Not Recognize Their Country

Voters are deeply pessimistic about the state of Britain today, believing that society is broken and heading in the wrong direction, a Populus poll for The Times has found.

[ If you have traveled in Britain in the last 20 years you would know that the UK leads the USA in demise by 15 years. Now the British are finally finding their lives unbearable. Malaise & Demise is the future of Bend, so studying those on an accelerated slippery slope of decline is very important in order to understand our future. During the last decade Britain experience also a housing boom, the political elite opened the door to millions of immigrants that created a 'housing demand' and the majority of people enjoyed virtual equity, but today like Bend, they're under-water and very "pissed off" at the outcome of the 1998-2008 Real Estate Ponzi Bubble. ]

Nearly three fifths of voters say that they hardly recognise the country they are living in, while 42 per cent say they would emigrate if they could.

But worries over the pace of social change and dislocation are balanced by the belief that life will get better, according to the survey undertaken at the weekend.

It suggests that 70 per cent believe that society is now broken, echoing a Conservative campaign theme of the past two years, while 68 per cent say people who play by the rules get a raw deal and 82 per cent think it is time for a change.

The snapshot of Britain also confirms, however, that the battle between the parties has tightened with Labour two points up at 30 per cent.

Women, working-class people and Tory voters were more likely to say that they hardly recognise their own country.

Overall, 64 per cent think that Britain is going in the wrong direction and just 31 per cent believe it is on the right track.

This is a widely used measure of mood in the United States where 57 per cent of people think America is going wrong and 37 per cent believe it is on the right track.

[ Probably always been this way 2/3 saying that life sucks, and 1/3 saying that life is great. Well we know who has the good paying job, and who is getting shafted. Today's Bend the 1/3 are gubmint workers with the best pay and benefit, the 2/3 are the under-employed. Then there is the handful of elites like Hollern and Moss that rule the plantation and give orders to the Gubmint workers. Slavery in simply a new form, nothing new under the sun. ]

It is not all gloom. Three fifths (60 per cent) of those polled say they look to the future with optimism, against 38 per cent who are looking forward with anxiety. While 45 per cent say Britain’s best years are behind us, 50 per cent say that they are still to come.

More than half the public (55 per cent) say that their children’s lives will be better than their own, while 37 per cent say that they will be worse.

Voters’ main fire is directed at political institutions: 73 per cent say politics is broken in Britain and 77 per cent say there are far fewer people in public life that they admire than there used to be. The poll suggests anger at MPs who have had to repay expenses. A third say that they will vote against their local MP if he or she had been required to repay money.

[ Interesting that most blame for the demise is on immigrants. That the ruling party 'Labour' caters to immigrant votes. That the welfare class is now the most powerful voting block. I really think that Orygun could well elect 'poly-tickians' who provide the best 'comfort', e.g. food-stamps, free housing, free transportation. In other words destroy all incentive to work. We never really had jobs in Orygun, its now an exhausted resource state. Its funny that so many come to retire, but their children have no hope of employment. So in many ways I think that Bend is full of immigrants like Britain, and their spawn is like Bend children from California. Bored and un-employed. Bend is desert, its not the British isles, and Bend never ruled the world. But we ( city taxpayers ) have spent 100's of millions recruiting retirees to move here and buy houses ( Hollern ) too big for themselves. Now our poly-tickians cater to these retirees whose concern is their spawn is pampered. Should be an interesting future in Bend. In summary while HOLLERN & MOSS may have made Billions on the 1998-2008 Ponzi scheme of promoting "Bend as Paradise", the immigrants did not make this city a better place. ]

David Cameron claimed yesterday that his generation of Tories were better placed than the Government to “fix broken politics”, and unveiled new rules that would bar former ministers in the private sector from lobbying government for two years.

Sunday, February 7, 2010


Who's Killing Financial Reform?

Senator Chris Dodd, the chairman of the Senate Banking Committee, scolded Wall Street representatives at a hearing Thursday for sending "an army of lobbyists whose only mission is to kill the common-sense financial reforms" needed by the public. "The fact is," Dodd said, "I am frustrated, and so are the American people." He charged that Wall Street's intransigence was the reason for Congress's failure to pass any bill to regulate the Street. "The refusal of large financial firms to work constructively with Congress on this effort borders on insulting to the American people who have lost so much in this crisis."

In other words, it isn't Congress's fault. It isn't the Senate Banking Committee's fault. It certainly isn't Dodd's fault. The reason more than a year has passed since the biggest bailout in the history of the world and nothing has been done to prevent a repeat performance — even as the biggest banks are doling out more than $30 billion of bonuses, even as Goldman Sachs is awarding its big traders $16 billion in bonuses (more than the $13 billion Goldman collected from taxpayers via the bailout of AIG), even as AIG itself is handing out bonuses — the reason is … what, exactly, Senator? Because the Street has sent an army of lobbyists to Capitol Hill?

Call me old fashioned, but I thought Congress was in charge of passing legislation, not Wall Street.

Dodd left out the most telling detail, of course. Wall Street is where the campaign money is. Dodd of all people knows that. He's been on the receiving end of lots of it over the years.

Wall Street firms and their executives have been uniquely generous to both political parties, emerging recently as one of the largest benefactors of the Democratic Party. Between November 2008 and November 2009, Wall Street firms and executives handed out $42 million to lawmakers, mostly to members of the House and Senate banking committees and House and Senate leaders. During the 2008 elections, Wall Street showered Democratic candidates with well over $88 million and Republicans with over $67 million, putting the Street right up there with the insurance industry as among the nation's largest equal-opportunity donors.

Some Democrats are quietly grumbling that all the tough talk emanating from the White House in recent weeks — the President calling the Street's denizens "fat cats" and threatening them with limits on their size and the risks they can take, even waiving a watered-down version of Glass-Steagall in their faces — is making it harder to collect money from the Street this mid-term election year. And the Street is quietly threatening that it may well give Republicans more, if the saber-rattling doesn't stop.

Congress isn't doing a thing about Wall Street because it's in the pocket of Wall Street. Dodd's outburst at the Street is like the alcoholic who screams at a bartender "how dare you give me another drink when all I've done is pleaded with you for one!"

Dodd is right about one thing. The American people are frustrated, and the failure of Congress to pass real financial reform is insulting. But in trying to place responsibility for this appalling failure on Wall Street, Dodd insults us even more.

Sunday, February 15, 2009

Bender's Exhausted? $190k medians are HERE!!! Visit Bend

Outrage Exhaustion

I think Dunc used the phrase "Outrage Exhaustion" a few weeks back in the comments to describe the nature of the comments. He just had an entry on Pegasus that there were only 200+ comments over here. I guess I think that's a little funny; I don't know of any local blogs that get that many, but c'est la vie.

But that's probably how this thing will end, especially locally. With a whimper, not a scream.

People will just slowly mentally succumb to this thing. All the Merenda replacing will have failed. The hottest spot in the hottest town in the West will just be laughable. That Subway will probably hold on by it's fingernails, maybe. But the hoity-toity stuff will all go down hard, and finally no one will step up to replace it.

I even think the Old Mill will suffer a long-term erosion. Some big anchors will close. The Money Losing Trophy Property (MoLo TroPro) concept will die a certain death, and that's much of what's there. I can't see REI staying. Greg's Grill gone. Yumm Cafe, Alisons Kitchen, Community Flatbread... all gone.

And there are no jobs here. The nationwide unemployment rate came out this week at 7.6%. As recently as September, we were at 6.0% nationwide, and it appeared things were stabilizing.

No more. This is a statistic that hardly moves one way or another more than .2% in any given month. It's gone up an average of .5% for the last 3 months. Doesn't sound like much, but I haven't seen any similar period in modern history where unemployment has moved so much, up or down.

And here's a graph of recent unemployment figures for the USA, Oregon, and Bend. You don't have to be Kreskin to see where Bend is going.
Unemployment for USA, Oregon, and Bend; Jul 2008 to present.

I mean, look at that; you tell me where you think it's going. The top of that graph is 14%, and if Oregon stays in it's ways of outpacing the nation by almost double, and Bend outpaces Oregon by 50%, it seems like a slam Dunc that we'll hit 15% for this month. 13% for January seems also within reason.

Towns with 15-20% unemployment are just not vital hubs of commerce. Towns like that are usually in long term decline. Those are your little towns out 30-40 miles SW of Missoula or somewhere (ie Burns), that are just in a secular decline. Outdoor mecca? Beautiful? Nice to visit? Oh yeah, all that. But in long term decline nonetheless.

I saw many towns like this on my last vacation. Beautiful spots. Outdoor activities out the ying yang. I had a great time there too. But get on the outskirts, and it was all decay, rot, malaise, and abandoned malls. You could see it on people's faces, they were in existence mode, just surviving day to day.

Not dying, mind you. There was just this perceptible resignation to a fate that had no chance of any "upside". No excitement, no challenges. People had stopped that, because the remnants of failure were all around them.

I think Dunc had it right: The "excitement" of the decline will be replaced by a real sort of despair that things aren't EVER going to bounce right back. We will become like so many other places in the West: Beautiful, activity-rich, but caught in a molasses-like, moribund economic spiral downward.

And I'm not trying to "drag people down" to my way of thinking, or some such bullshit. I'm trying to talk people out of economic suicide. On the slopes of Everest, when Common Sense Caution is not heeded, people die. It's not so dramatic here. Well, except for the people who have died. My point is, the signs are all around us: STOP THE CLIMB.

Many are still not heeding the advice of the environment around them. Everything points to white-out, 100 below, killer conditions; but still people start to climb.

Why is Merenda II even being considered? Why? Because what killed the last guy, won't kill me. I'm better than him. I'll make it. This. Is. Bend.

It's really incredible. Pahlisch Homes has watched as their subdiv's have imploded (from BendBB):
Just noticed today that all Pahlisch signage has been removed from the Fieldstone Crossing development in Redmond. Looks like their model has been shut down completely. Their is no reference to Fieldstone Crossing on the Pahlisch website.

And yet Pahlish announced they have started building The Bridges At Shadow Glen this week.

Ahhh... the power of LLC's. Failure is not an option.

Even our public servants have jumped on the Bubble Bandwagon.

Bend police captain on leave amid FBI probe

Bend Police Capt. Kevin Sawyer has been placed on administrative leave as the FBI investigates one or more businesses Sawyer and wife Tami have been operating, the police chief confirmed Friday. "I am aware of an investigation going on by the FBI into the finances of a business or businesses that Captain Sawyer is associated with,"said Police Chief Sandi Baxter.

And so it goes. Everyday, we seem to find someone with their twig & berries exposed as the tide rushes out. First Summit, now this guy, and there are, like an iceberg, many others that we aren't even hearing about.

The relentlessness of the pain, the disbelief of the corruption, the resignation that we can't beat The Powers That Be, will finally be the nail in Bend's coffin. There won't be anymore excitement, no more challenges. People's outrage will succumb to despondency. We'll all just give up on this place.

Outrage Exhaustion. Great description. Because the vast majority of people in this town will realize at some point that there is an existing "Aristocracy" of sorts (GOB Network), and if you are not part of it, and you have Big Dreams for your life, that you will Not Make It In Bend. This is Not a meritocracy. Things are NOT done "for the People". They are done for a small inbred cadre of well-defined beneficiaries who rig every election.

That's how it is in Bend, Oregon.

Not real people. Not real children. Spending NOT real money, from not real jobs, in a not real place.

OK, enough bitching about that. I just have a teeny-tiny outrage against my own kind.

And I have to preface this with the idea that what is trying to be accomplished and the means by which so many think it will be acconomplished, is just sheer folly.

And it is the passage of The Bailout. It's not a bank bailout. Nor autos. Nor any other particular thing. It's a bailout of this country. We are falling into the Abyss.

And strangely enough there is an unassailable mentality that a BAILOUT will save us. OK, governements can produce nothing. Except money, which they can produce in unlimited quantities. And governments many times think the printing of it can cure all ills. Of course, that's ridiculous.

Our problems will not be undone, until housing hits bottom. The bailout, and many other government measures are doing everything possible to avoid that. Forebearance on loans, delaying foreclosures, loan renegotiations. All these are failed ideas, and simply prolong the pain.

And prolonging the pain, is just what the RePug's intend to do. These hypocritical, lying, thieving, conniving fuckers are as much to blame as the Lib's for this thing.

But what's just classic, is that BOTH parties agree that the bailout is our only salvation (ridiculous, of course, it will only make things worse). But even in their idiotic agreement, they have put partisan politics FIRST, and the perceived needs of the American people a distant second.

BOTH parties have done this. Yes hbm, BOTH.

This is indicative of a country in decline. The elected aristocracy could give a fuck about the rank-and-file. Even when they are implementeing the most ass-backwards stupid plans imaginable, partisan wrangling is far more important than saving their own civilization.

The most depressing part of this implosion will NOT be the dire & near-catastrophic economic consequences, it will be the loss of will, the loss of drive, the loss of cause-and-effect thinking that people have, where if they struggle, work hard, and strive against the odds, that they can make something of themselves in this country.

That is what we are losing. We are rewarding FAILURE, EXCESS and EXTRAVAGANCE, and punishing prudence, thrift, and spending within your means. We're sending a message here with this bailout: Graft, corruption, and theft will be rewarded.

We are a nation in decline.

OK, finally I want to do a little re-print of an MSN article. It's got good info, but I suppose the big shocker is that mainstream press is starting to use The D Word. There is actually starting to be an open debate about whether a modern-ear Depression is possible. Maybe you & I are getting a tin-ear to this, because I have been banging this drum for 2 years.

But you could NEVER find mainstream press even discussing it. NEVER. Until now.

THAT is how BAD it is. All the hopeful sentiment that we are about to bottom imminently, has been replaced by How Low Can We Go? I think the past 60 days have been a wakeup call.

Too late to avoid a depression?

Policymakers are quickly running out of time and room for error. And even a brilliant plan -- which we haven't seen yet -- could fail without some good luck.
By Jon Markman

Over the past week, the world's intellectual, business, government and philanthropic elite emerged from World Economic Forum meetings in Davos, Switzerland, with grim faces and warnings of financial doom.

You'd almost think they'd met to plot a suicide pact rather than global trade, as the headlines were so gory they could have been mulched into meals for vampires.
Are things really that bad? Maybe not.

Your contrarian antennae really have to go up in the face of consensus from a cohort of eggheads, politicos and jet-setters not exactly known for clairvoyance. Their big idea last year: that emerging markets' domestic economies had become so strong that a decline in U.S. and European growth would not derail them. Oops.

Credible economic analysts now say there is still a narrow window of time in which policymakers in the United States, Europe and Asia can avoid a meltdown over the next year by immediately coordinating the injection of real financial adrenaline to banks, companies, households and local governments -- not just rhetoric and indiscriminate spending.

Yet that window is closing fast, and if the right steps are not taken soon it may be shut for years.
But governments don't know which steps work because economic theory breaks down at the level of human psychology.

Given a set of stimuli -- ranging from tax cuts and longer unemployment benefits to new construction jobs and wider broadband access -- economists try to mathematically determine the choices citizens are likely to make, then use the results to recommend a policy mix to legislators.

The problem is that the models often fail to accurately forecast human behavior, and politicians regularly screw it all up by ignoring the data and diverting funds to pet projects.

History is rife with successful financial episodes, such as the New Deal, in which luck and coincidence are later misinterpreted as results of prescient planning.
Slim hopes of an end-zone dance To prove the Davos set wrong, in short, congressional leaders must make the right choices at warp speed under pressure from special interests.

It's a public-policy version of the Steelers' final drive Sunday with time running out in the Super Bowl. Pittsburgh quarterback Ben Roethlisberger, scrambling to elude a rush, had one good shot at throwing the football at an oblique angle to a receiver leaping among three defenders in the corner of the end zone.

In times like these, the result set is stark and binary: hero or goat in football, recovery or disaster in the economy.
The Davos pessimists' case for a severe economic dislocation over the next year -- let's go out to the extreme and call it a potential depression -- is easily made, as four key ingredients are in place.

Their recipe calls for a blend of cyclical recession, severe deleveraging, a shift of demographics favoring savings over consumption, and inappropriate fiscal and monetary responses by policymakers.
The first three are well under way, so the last one is the decider.

Looking back at the Great Depression of the 1930s and Japan's depression of the 1990s, it's clear that government leaders in each case failed to respond quickly enough, then overcorrected, and in general took steps that at the time were considered best economic practices but actually worsened the problems.

Our leaders will likewise now try to do the right thing based on currently popular theories, but we cannot confidently say whether they will turn out to be appropriate.

You just never know.

The only certainty is that measures must be taken immediately, and every day lost on minutiae such as bank executives' pay or Cabinet nominees' tax follies dampens the likelihood of success. Speed is of the essence, like putting up sandbags to stop a levee break, as we can see in daily headlines now that the darkness of Davos is descending.

The incredible shrinking economies
Layoff announcements over the past three months averaged 50,000 a week until they jumped to more than 100,000 last week. In an attempt to outrun revenue shortfalls, businesses are also cutting back on wages, travel and equipment purchases.

But it's a losing battle. ISI Group analysts figure that U.S. corporate profits will decline from their 2007 peak to a 2010 trough by a record 30%, though a 50% fall is not out of the question. They're already down 20%.
Customers are disappearing as wages and jobs falter and families raid their emergency funds. U.S. home equity decline has accelerated to a 30% annual rate, which combined with the stock market plunge, has slashed consumers' net worth by $12 trillion.

The pervasiveness of the plunge in demand that animates doomsayers is breathtaking. Reis, a real-estate research firm, this week said rents nationwide fell in 43% of buildings of all types in the fourth quarter, up from an average of 25% in the first nine months of the year. In New York, where financial layoffs are surging, rents fell in 75% of apartment buildings last quarter. This puts securitized loans on U.S. commercial and apartment buildings on track for a default rate of 6% this year, up from 1.1% at the end of 2008.

"We haven't seen this speed of decline before," one Reis analyst told Bloomberg.
In Asia, the momentum of deterioration and thus the need for policy speed is even more dramatic. Japan's industrial production is falling at a stunning 63% annual rate; in South Korea, it's falling at a 43% rate.

In China, real gross domestic production was unchanged in the fourth quarter, and ISI analysts expect it to be unchanged in this quarter, which would smash the GDP growth down to just 4% year over year, a stunning comedown for an economy that was growing at better than 10% last year and was once believed to be invulnerable.

In contrast, government leaders appear to be moving in slow motion. The Federal Reserve last week said it was "prepared" to buy Treasurys to push down interest-rate costs even though 10-year-note yields are up a lot in the past two months.

The Obama administration, meanwhile, has dawdled on plans to try to recapitalize the banking system or buy soured assets, and the fiscal stimulus package winding its way through Congress appears by independent estimates to be too small, insufficiently focused on real job creation and overly weighted on fiscal 2010 rather than 2009.

Meanwhile, the head of the European Central Bank is dragging his feet, stating that he would not back an interest-rate cut.
I would love to see the smug Davos crowd proved wrong, but the forces at work may have gone too far to be stopped. The nation may be on track now to spend $4 trillion -- more than on anything short of war -- to prevent the credit hole from getting so big we can't climb out.

It's especially worrisome to see so much money used to shore up the worst-managed banks, a misallocation of resources that could haunt us for decades.
In summary, total ruin can be averted and the Davos prophecy squelched if lawmakers seize the moment, aim true and get lucky.

Even if the result is low growth amid a newly chastened business and social culture, re-ranking of national priorities to celebrate saving over consumption and acceptance of a lower stature in the world, it's superior to depression and chaos.

Cross your fingers.

Oh right, I did want to let you guys in on a little secret: I was one of the attending physicians when Thomas Beatie gave birth to the first goat-human. There's been quite a bit of consternation about how someone could possibly push a goat out through their cock. I am here to tell you that after I, and assisting physician Neil Patrick Harris (aka Doogie Howser, MD) crammed a giant metal spear into that bastards cock, the end result was not pretty:
Asshole: The Other Pussy

I also want to address the delicate topic of where a man holds a baby goat. It's not in the belly, it's quite a bit lower. Here is a never-before-seen picture of Beatie posing completely naked, just prior to birth:
"Hi, I'm Thomas Beatie and there's a mother fuckin' goat in my nutsack! I'm calling Oprah!"

OK, I'll wrap it up by throwing Dunc a Betty Boop Pinup bone'r two here:
Please Dunc, don't hurt me!Dunc, I'm hankerin' for some spankerin'!
And squat, and thrust, and in and out!I wish someone would go apeshit on me right about now...
I wish there was a big strong Comic book retailer here to help me pet my pussy...

I'll give you this Dunc, She Hot. If I was born during the Civil War, I'd also find this 1930's style porno pretty hot. There ain't many chicks that look bad in a ball gag.

Friday, February 6, 2009

Cascade Bancorp Called Best Bank in USA by FDIC

Cascade Bancorp Seized By Regulators

I think one commenter put it best, we're seeing "The End of Days".

Over 2 years ago, when I picked up BEM's mantle, and started this blog, I only knew a few things:

  • We were at or near the top of the biggest Bubble of all time
  • Bend was one of the most heavily participating cities in the country
  • It would all end badly
But a lot of people like OR economist Tim Duy were still saying that things "could be" OK, or they might not be completely "OK", but there will be nothing catastrophic.

But I think the World is coming around to this blog & it's commenters way of thinking, that this thing is going to be disastrous. That this thing will redefine Moore's Law, and everything that can go wrong will go horribly wrong. And a whole bunch of stuff we never even thought about in the early days, will also go wrong.

Because if there is one thing we're all learning, implosions don't go "according to plan". "Project Management" won't help you during a catastrophe. Neither will Positive Thinking. In fact, positive thinking which leads to positive action can hurt you BADLY in many ways in our current circumstances.

And of course, that is exactly what we are seeing. Jay Audia being a prime example, among others. THIS is Not the time to be "Optimistic". We've got a ways to go.

And from the headline, you can see I've "taken a page" from The Bulletin, and put a somewhat misleading headline on this weeks post. Well, sorta, kinda. As the Bulletin always does. We will see CACB seized by bank regulators, sooner or later. NOW is the time to extract your funds. NOW.
CACB, 5 days

CACB is finally having it's Day of Reckoning; a time when we all realize that this Big Behemoth that represents our Diabolical Corporate Levaithan, is really just a decent sized fish in a very, Very small pond. CACB, while Big To Bendites, is Dogshit on a Shingle to the rest of the World, and the banking federales will have no compunction about swooping in and closing this beast one lovely Friday Morning.

In fact this past Friday, the FDIC saw fit to close 3 middling banks, but there was one point of interest in these closures: When shuttering the Magnet Bank in Salt Lake City, the FDIC found itself unable to find anyone willing to simply assume this business:

Utah's MagnetBank closed without an acquirer

FDIC shuts down three banks in one day amid ongoing credit crisis
By John Letzing, MarketWatch
Last update: 6:42 p.m. EST Jan. 30, 2009

SAN FRANCISCO (MarketWatch) -- Federal regulators closed three banks in a single day Friday, as the ongoing credit crisis showed no signs of abating.

Utah's MagnetBank became the fourth bank failure of the year, and the Federal Deposit Insurance Corp. was forced to directly refund depositors after being unable to find another institution willing to take over its operations.

That marked the first time the FDIC has been unable to find an acquirer for a failed bank in nearly five years, according to FDIC spokesman David Barr. "This bank did not have an attractive franchise value, and not many retail deposits or core deposits," Barr said. The FDIC had conducted an extensive marketing process for the bank's assets, he said.

Salt Lake City-based MagnetBank had total assets of $292.9 million as of Dec. 2, and
$282.8 million in total deposits. "It is estimated that the bank did not have any uninsured funds," the FDIC said in a statement.

The FDIC later said it has also closed Maryland-based Suburban Federal Savings Bank, and Florida's Ocala National Bank.

Suburban Federal had total assets of roughly $360 million as of Sep. 30, and total deposits of $302 million, the FDIC said in a statement. Tappahannock, Va.-based Bank of Essex agreed to assume all of the failed bank's deposits, the FDIC said.

Ocala National had $223.5 million in total assets as of Dec. 31, and $205.2 million in total deposits, the FDIC said. Winter Haven, Fla.-based CenterState Bank has agreed to assume all of the failed bank's deposits.

The closures mark the fourth, fifth and sixth bank failures of 2009, bringing the total to 31 since the start of the credit crisis.

The FDIC can almost always find someone willing to take over a banks operations. Almost Always. It's like getting the customers for free. All the bad stuff is wiped out. You just get a whole bunch of customers for almost nothing, and since they are free, you can cherry-pick and get rid of the crap, by imposing onerous fees, etc.

What will be interesting to see, is if they can find a buyer for poor, sad little Cracker Ass Cracker Broke. Let's face it, CACB does have a decent presence in this dust-ridden shithole. But that's about it. What we're seeing with Magnet Bank in UT is just the beginning; banking seems to be a business model that is again on the brink of complete failure.

We saw this in the early 90's. Of course, we saw it en masse during the Depression. Banking is a business model that simply is compelled to undo itself.

To become big, you must take risks & leverage to the hilt. You must participate in the bubble du jour, you must. Or you won't get big. But once the soup goes cold, you face calamitous implosion. And you are once again a nobody.

Unless. Unless you can convince someone that you are Too Big To Fail. Then you receive Corporate Welfare, your corpse has new life breathed into it, and you go on your merry way, doing as you've done before, driven towards ever-larger temporary Bubble-fueled successes and subsequent Taxpayer-fueled failure-bailouts. Always becoming Ever Too Big To Fail.

Which is where we are writ large. We've done this so often with banks, that it has now spread to autos. But NOT one auto maker. It's the industry that is failing. Like banks. It's the whole edifice that is crumbling. We can't move to another part of the cliff face & be safe, the whole thing is crumbling.

And so shall pass our "Civilization". America. This crazy 200+ year experiment seems to be itself collapsing. Like Krugman says: This isn't cyclical, this is structural. There is a fundamental flaw that seems to have rendered Unbridled Capitalism as a system with no fundamental equilibrium point. The pendulum swings. But the force of the feedback mechanism (Greed) is rendering the entire structure supporting the pendulum, unstable.

We've exceeded the engineering specs of capitalism. hbm may be right: Unbridled capitalism undoes itself. This got me to reading Marx:

Political economy

Marx argued that this alienation of human work (and resulting commodity fetishism) functions precisely as the defining feature of capitalism. Prior to capitalism, markets existed in Europe where producers and merchants bought and sold commodities. According to Marx, a capitalist mode of production developed in Europe when labor itself became a commodity—when peasants became free to sell their own labor-power, and needed to do so because they no longer possessed their own land. People sell their labor-power when they accept compensation in return for whatever work they do in a given period of time (in other words, they are not selling the product of their labor, but their capacity to work). In return for selling their labor power they receive money, which allows them to survive. Those who must sell their labor power are "proletarians". The person who buys the labor power, generally someone who does own the land and technology to produce, is a "capitalist" or "bourgeois". The proletarians inevitably outnumber the capitalists.

Marx distinguished industrial capitalists from merchant capitalists. Merchants buy goods in one market and sell them in another. Since the laws of supply and demand operate within given markets, a difference often exists between the price of a commodity in one market and another. Merchants, then, practise arbitrage, and hope to capture the difference between these two markets. According to Marx, capitalists, on the other hand, take advantage of the difference between the labor market and the market for whatever commodity is produced by the capitalist. Marx observed that in practically every successful industry input unit-costs are lower than output unit-prices. Marx called the difference "surplus value" and argued that this surplus value had its source in surplus labour, the difference between what it costs to keep workers alive and what they can produce.

Capitalism is capable of tremendous growth because the capitalist can, and has an incentive to, reinvest profits in new technologies and capital equipment. Marx considered the capitalist class to be the most revolutionary in history, because it constantly improved the means of production. But Marx argued that capitalism was prone to periodic crises. He suggested that over time, capitalists would invest more and more in new technologies, and less and less in labor. Since Marx believed that surplus value appropriated from labor is the source of profits, he concluded that the rate of profit would fall even as the economy grew. When the rate of profit falls below a certain point, the result would be a recession or depression in which certain sectors of the economy would collapse. Marx thought that during such a crisis the price of labor would also fall, and eventually make possible the investment in new technologies and the growth of new sectors of the economy.

Marx believed that increasingly severe crises would punctuate this cycle of growth, collapse, and more growth. Moreover, he believed that the long-term consequence of this process was necessarily the enrichment and empowerment of the capitalist class and the impoverishment of the proletariat. He believed that were the proletariat to seize the means of production, they would encourage social relations that would benefit everyone equally, and a system of production less vulnerable to periodic crises. In general, Marx thought that peaceful negotiation of this problem was impracticable, and that a massive well-organized violent revolution would be required, because the ruling class would not give up power without struggle. He theorized that to establish the socialist system, a dictatorship of the proletariat - a period where the needs of the working-class, not of capital, will be the common deciding factor - must be created on a temporary basis. As he wrote in his "Critique of the Gotha Program", "between capitalist and communist society there lies the period of the revolutionary transformation of the one into the other. Corresponding to this is also a political transition period in which the state can be nothing but the revolutionary dictatorship of the proletariat."[24] While he allowed for the possibility of peaceful transition in some countries with strong democratic institutional structures (such as Britain, the US and the Netherlands), he suggested that in other countries with strong centralized state-oriented traditions, like France and Germany, the "lever of our revolution must be force."[25]

Marx has a fairly compelling arguments here. The decline of Unions, the rise of vast capitalist fortunes. A lot seems to be going according to Marxist plans here.

But there is one problem with the Marxist thought of 150 years ago, and today: We have lowered the barrier to capitalist entry so low, that everyone is a Capitalist Proletariat.

Realtors. Graphic Designers. Web engineers. Even traditional employees. How many people do you know who have held their current position over 10 years? I never have.

Marx said that politicos & proletarians would ultimately revolt against capitalism. But who do we revolt against? The division is so unclear, that like a terrorist cell, it's hard to figure out who the enemy really is.

So we are headed towards something. I almost feel a sense of melancholy, watching as my beloved Capitalism dies a slow torturous death. Will it arise someday for my kids? Maybe. But it seems clear to me, that during the remainder of my working productive years, something will take its place.

I don't think it will be straight up Marxist Communism. But it will be governmentally managed. The Invisible Hand will be cuffed. We'll become more like Italy or (gag) France. We'll bleed the patient with leeches to ensure This Never Happens Again. Cure worse than the disease, as is the way in circumstances like this.

Nobody told me there'd be days like these
Nobody told me there'd be days like these
Nobody told me there'd be days like these
Strange days indeed, strange days indeed

... most peculiar mama

Moving on....

I've found myself headed towards the business listings on craiglist. The Bulletin will not tell us The Bad News of small and middling businesses closing, and so we have to rely on the businesses themselves. And many will either come right out and tell you that they are closing their doors:

The Children's Boutique on Kearney Ave is going out of business!

everything is for sale, even the fixtures.

I have two cash registers, credit card machines, slatwall, tagging supplies and more.
come by and see what we have. Last day Feb 10th

The Children's Boutique
325 ne Kearney
(across from Taco Bell)


Or you can sift through the vast picked-over carcasses of your favorite ex-retailer. There's a lot of stuff there. If you have a urgent fundamental need, you can get pretty good deals there. Not great, cuz after all, This Is Bend.

But people like Dunc, and other survivors can outfit the current shop at fairly decent prices.

Of course I raise my usual caveat: Don't Buy Anything Unless You Absolutely Have To. We are in what Krugman calls a deflationary spiral. Cash is becoming worth more, the stuff we bought on the way up like homes, cars, fake titties, Hummers, Volo, City Council Seats, CACB shares, botox, and the rest is becoming worth-less. OK, I can't resist re-prodicing a short reprint of Krugmans Dead On Analysis:

Nobel economist: 'Not your father's recession'

Krugman has a recurring economic nightmare involving a syndrome called a deflationary trap, something that could conceivably last a decade. "This has me very frightened," he says, "and it's just starting to get under way."

Deflation, the opposite of inflation, means that prices fall -- which might strike shoppers as a good deal. But as prices drop, consumers hold onto their money in hopes of even better bargains.

Reduced demand sends prices lower, triggering a downward spiral as factories close, employment shrinks and loans default. Pay cuts mean that homeowners, who thought rising incomes would reduce the bite of their mortgages, instead see their house payments effectively increase, boosting their debt load.

Japan suffered a lost decade or more to deflation after its 1980s economic bubble burst. Krugman says the current recession has disturbing parallels.

During Inflation, your money becomes worth-less, and so it is best employed in real goods. Holding cash simply impoverishes you. Deflation is the opposite: Holding onto your money and not spending it increases your wealth. It is the unfortunate side-effects that collapse the economy.

And spending DOES NOT REVERSE THE PROCESS. Same as holding cash during inflation doesn't STICK IT TO THE MAN or some such. You can't "reverse" deflation by spending. It's not an Entity, it's a state.

This brings me to my final thought: BEDROCK. Seems like people are starting to wonder if there is a "base" to this collapse. Is there a bottom. Will we ever stop falling?

I guess Great Minds Think Alike as Dunc had a recent post on this topic:

It's the psychology, stupid.

To follow up on the previous post, I'm starting to look at the psychology of the consumer again.

While I wouldn't put in the dire terms that Buster put in the comments, there is a fine line between having a wounded consumer and a mortally wounded consumer. To my mind, it's better to be informed and skeptical, but not panicked.

Last night, I began wondering about all those people who have secure jobs, or relatively secure jobs. This is probably the majority, even the vast majority of consumers.

But they've cut back, nevertheless. It's a natural response. But most of them are still coming in and getting their favorite comics, or buying a book, or pulling the trigger for a toy that wows them.

What would be very dangerous is if they didn't just cut back, but stopped spending altogether.

I think that's what all the stimulus package talk is all about. Maybe Buster is right, and little of it will reach Bend in truth. But as long as the 'impression' is out there that SOMETHING is being done, I believe that the consumer will continue to be careful, but not stop altogether.

Obama is a plus, because he holds out the potential for improvement. The stimulus package is a plus, because it looks as though something is being done. The bail-out -- god help me -- is a plus, at least psychologically -- because it keeps the Big Bank Fails headlines out of the paper.

On street level, I saw the immediate impact of Bears, Sterns going down. Then the even bigger impact of Lehman brothers, and Bernie Madoff was the nail. I suppose, Murphy being a tricky bastard, that I should expect at least one more real eye-opener, and hope the psychology doesn't turn permanently bearish.

The underlying conditions are stark, but I can deal with them as long as there isn't another total shift in psychology.

People will start asking this question: What is Bedrock in the American Economy? Where is the bottom? What is fake & what is real? For every Madoff, how many non-shysters are there? Are there any? Is Buffett real? Who can I trust? Can I trust anyone ever again?

Where's the Bedrock? There IS Bedrock in this country. OK, I sound pretty alarmist on here, I know. It's in large part because we are collectively being over-pacified by the local media, and someone needs to don some clapboards to raise awareness.

But even in a place like Bend, people have to eat, they need to sleep largely under a roof, they need clothes. There is a ROCK BOTTOM here. I don't think we'll end up like Fossil or worse.

But where is The Bottom? I don't know folks, but it seems to be that those who went up the most will fall the farthest. And No Where Went Up Farther And Faster Than Bend Oregon. No Where. And we've already seen that things are far worse than anyone thought possible even 1 year ago. A year ago McPain had a chance.

So when I and others in the comments talk about this town going back to 40-50,000 people, homes reverting back to $125K, and unemployment going to 20-25% (or more), this isn't panic-mongering; its just a reversion to Bends Bedrock. Its base. A place where people eat, drive, dress, work and otherwise live simply. It's not bad. It's our bedrock.

I'll end with a Bully piece about how bad this is already for select locals. And remember: This is the price we are paying for having as a community CHOSEN to have a 24 month unbridled Greed-fest primarily for those at the very top of our local socio-economic stratum. This is it. The hangover will affect everyone and will linger for a decade or longer. Was it worth it?

Meet the people behind the numbers

By Story by Lauren Dake Photos by Pete Erickson / The Bulletin
Published: February 01. 2009 4:00AM PST

Department of Human Services employees say they’ve never seen anything like it. Every month, the number of people seeking assistance rises. In December, 10,636 families in Central Oregon received food stamps. Statewide, they are calling it an emergency. But in Central Oregon, they are looking for an even stronger word. With a 29.5 percent increase in families receiving food stamps in December compared with December 2007, the tri-county area is the hardest hit in the state, when measured by the increased request for food stamps. Many families and individuals are seeking help for the first time in their lives, others are finding they need more. Below, a few of those people agreed to share their stories.

Jeff Johnson

Jeff Johnson’s chicken Parmesan dinner expired 22 days ago.

In about a month’s time, he went from buying fresh foods at the grocery store to getting free, slightly expired food.

A recent divorce came at a time when the 45-year-old, self-employed residential and excavation construction worker was experiencing slow times.

The Bend resident went from living in a 2,552-square foot, five-bedroom, three-bathroom home on 40 acres, to a 35-foot fifth-wheeler in his church’s parking lot.

Now, the man who lives in a $42,000, 2006 Weekend Warrior, which he bought with visions of traveling the state with his family, is answering questions he never dreamed someone would ask him.

“How are you meeting your basic needs?” asked Department of Human Services employee Sue McDonald — a stranger to Johnson.

His face flushed, Johnson shared the story of his first visit to the food bank, of living behind his church, of borrowing $20,000 from his parents.

“Do you have any income?” she asked. The answer was no.

She asks about assets.

“It’s kind of hard driving a 2006 Chevy pickup to a food bank,” he said.

He tried for military benefits but was told by officials in the Veterans’ Affairs office he was 33 days short of continuous active duty to qualify.

On Wednesday, he decided he needed more help than he could get from the food bank and applied for state assistance for the first time in his life.

McDonald gave him a list of resources, places to go for transitional housing, for clothes, for extra food.

“Food stamps weren’t intended to carry anyone through today’s economy,” McDonald told him. “They don’t last a month.”

In 2006, Johnson’s gross annual income was $170,000. His house, then appraised at nearly $1.2 million, was $70,000 away from being paid off.

“There have been slow stretches during the last couple of winters,” Johnson said. “But not like this. This is just incredible.”

It’s an odd feeling, Johnson said, to own expensive goods that aren’t worth anything. He tried selling his tools at Trade-N-Tools, where you can trade tools for money. But he quickly found out he wasn’t the first one with the idea; the place was inundated, he said.

He was never irresponsible with money. He planned ahead. He had a savings account, but that was wiped out by lawyer’s fees.

His parents, who also live in the area, are using their savings to help their son.

“I grew up with parents that never took vacation; we drove a station wagon with a red-front fender. It was all mismatched and had snow tires on it year round,” he said, adding he intends to pay back every dime his parents have given him.

Although Johnson never dreamed he would be in this position, he said, he’s being proactive about surviving. “There’s just no income. I just can’t get any money …” he said. “But it’s easy to find people in worse shape than me.”

Joel Hall

Joel Hall would like to leave Bend — but he can’t.

“There are more job opportunities elsewhere … But I can’t afford leaving,” he said. “The economy’s impact on a small town like this …”

When he first moved to the area, in 2005, 37-year-old Hall worked for the Bend-La Pine School District as a teaching assistant.

He has a bachelor’s degree in education from California State University- San Marcos.

Hall was laid off from that job. He was laid off from Flatbread Pizza. He’s been a bartender but was laid off there as well.

"It was tough five years ago finding a job in this town,” he said. “Now, this town that seemed to explode for a while, it’s just imploded.”

He’s getting by teaching snowboarding a few hours on Mt. Bachelor. But that’s only about two hours a week. And he hasn’t received unemployment benefits yet, because he’s been told it’s a four- to six-week wait.

“In the meantime, there’s no income,” he said while waiting in line for food stamps on Wednesday. He’s dressed in all black, with The North Face sneakers. He’s clutching an issue of National Geographic magazine. “I wouldn’t be standing in this line if that wasn’t the case.”

Hall has moved in with a friend to reduce expenses.

“Thank God I have good friends,” he said. “But they are losing their jobs, too, and they have educations. They are lawyers …”

Maybe, he said, it’s time for a career change.

“I would like to get into a field that can withstand this stuff,” he said, mentioning health care as a possibility.

Wednesday was his first time applying for food stamps.

“I never though there would be this many people here,” he said, after waiting in line for about 40 minutes. “But it seems to be hitting people from all directions.”

Although Hall said he’s determined to stay optimistic and keep his head up, it was a difficult decision for him to visit the DHS office.

“I’m totally embarrassed,” he said. “I didn’t want to come down here and wait in this line. But six weeks with no income … I check Craigslist and the paper all the time. There’s just not much out there.”

Kris Hakkila

As soon as Kris Hakkila, 44, of Bend, noticed his work drying up, he started applying for jobs.

He has yet to hear from anyone. In December alone, he sent out 40 résumés, looking for jobs at flooring manufacturing companies or as a project manager on different jobs — without a single call back.

“Not a thing, not a letter, not a call,” he said. “You just know they are being bombarded with applications.”

And so, on Wednesday, the self-employed hardwood floor contractor applied for food stamps for the first time.

His sentiments echoed many others at the DHS office.

“I’ve been through tough times,” he said. “But never this bad before.”

Along with his wife, who works as an assistant to a financial broker, Hakkila has two daughters, 14 and 17.

“All our money is going to pay our bills,” Hakkila said. “Soon, we’ll have absolutely nothing.”

Two years ago, his business was bringing in around $60,000. He has a job lined up in March, but other than that his income is close to zero.

He’s never even thought of applying for food stamps before. And he waited until there were no other choices.

“You know, it kind of sucks,” he said.

Karen Albert

Nearly every weekday morning, Karen Albert took the Les Schwab Tire Centers shuttle from Prineville to her office at the company’s new headquarters in Bend.

But last Friday, she decided to drive her own car.

An hour into her workday, at 8 a.m. her boss called Albert into an office. The human resource director was waiting.

“They told me they were letting me off due to the economy,” she said.

The 48-year-old didn’t see it coming.

“They told us they were done with layoffs.”

Albert was one of 25 people laid off a couple of weeks ago. Earlier this month, the company also laid off about 25 people.

“I just called my daughter and cried,” Albert said.

Since she drove her own car, she didn’t have to wait until her shift was over for the shuttle to arrive and ride home with her former co-workers.

“That was lucky,” she said. “I’m trying to find the blessings in all of this.”

She drove home and cleaned the house.

“And then I went online and applied for unemployment benefits,” she said.

Albert worked for the tire company — Central Oregon’s second-largest private employer — for five years.

A single mom with no other income, Albert immediately thought of her two children, ages 21 and 19. Her daughter, the oldest, has rheumatoid arthritis. And her youngest, a son, is a wrestler in college.

On Wednesday, Albert sat in the Prineville office filling out an application for the Oregon Health Plan.

“Amy can’t go without medical coverage, and my son is on the wrestling team,” she said. “If I don’t have coverage, I don’t care, but they need to be covered.”

Albert said she’s hoping the insurance coverage will be the only assistance she needs.

“I was raised in a family where you don’t ask for help. You take care of yourself,” Albert said. “So it’s rather humiliating. But you do what you have to do to take care of your family.”

Mona Meeds

Mona Meeds didn’t want her children to know.

But she mentioned food stamps while speaking to her husband, and her children heard.

“I didn’t want them to be embarrassed,” said the 31-year-old mother of four.

“If I hadn’t mentioned the Oregon Trail card, they wouldn’t know,” she said.

The Oregon Trail card is a debit-like card that makes food stamps available electronically.

When it became harder and harder for her husband, who owns his own heating and cooling business, to find work, Meeds knew she had to apply for help.

“The work just isn’t there,” she said. “During the housing boom, there was so much work.”

She applied for food stamps and signed her children up for the free and reduced-lunch program.

Without the aid, she’s not sure what would happen. Savings are gone, and her husband continues to take jobs farther and farther away from Prineville.

Even though she is constantly on the move, picking up and dropping off her children, ages 5, 11, 14 and 15, she applied for a job at Rite-Aid.

“It’s the only job I’ve seen posted,” Meeds said. “But they didn’t call.”

Four years ago, the family built a home and had money in the bank.

“Now, I try not to think about it,” she said.

Her children took the news well.

“I told them Dad doesn’t have much work and we’re getting assistance. When it gets better, we’ll get off of it,” she said.

With Crook County’s unemployment rate recently reaching 14 percent, Meeds said her children took it well, in part because they are familiar with tough times.

“They took it better than I thought,” she said. “They have a lot of friends that are having hard times too.”

Keshia Yaw

Keshia Yaw sat in the Department of Human Services office in Madras on Wednesday, waiting for her mother to pick her up.

“I know what I’m going to do,” said the 18-year-old single mom from Warm Springs. “I’m going to find a job, work on scholarship forms, get re-accepted to COCC (Central Oregon Community College) and transfer to Portland State.”

Maybe, she said, she would study something in the medical field.

Although, she doesn’t like asking for help, Wednesday was the first step in realizing her goals.

A blue folder, full of information, was on the table in front of her. Inside was information on how to receive cash assistance from a program called Temporary Assistance for Needy Families. The cash grants are $647 a month for families of four that earn less than $795 a month and have less than $2,500 in assets.

More than money, she’s hoping the program will help her get a job. The goal of the temporary assistance program is to create self-sufficiency for participants. To receive benefits, job searches are mandatory. And the individual must participate in the services available — such as job training classes that help with résumés.

Yaw lives with her mom, who receives food stamps and disability. She doesn’t have her driver’s license. It was too expensive, so any job needs to be near home.

“I don’t like it, depending on other people,” she said.

Yaw wasn’t the only young face at the Madras DHS office on Wednesday. Vicky Higgins, the operations manager, said her office serves a large teenage population.

In 2007, the office helped nearly 40 homeless teenagers.

“The biggest increase is those people who have never asked before,” Higgins said. “But the teen population is really increasing, too.”

Basilio Gomez

For the past 12 years, Basilio Gomez has worked at Bright Wood, in Madras.

He’s no stranger to the economy impacting the hours he works.

When times are good, the forklift driver is guaranteed 40-hour workweeks at the wood remanufacturing company. But lately it’s impossible to work enough hours to support his wife and four children.

On Wednesday, the 44-year-old applied for more food stamps and filled out the paperwork to put his two older children, ages 12 and 11, on the Oregon Health Plan.

The younger two children are already covered through the plan.

He has insurance through the wood manufacturing company, but the deductible is too high.

“It’s bad this year,” Gomez said.

Jaimie and Dave Crockett

Since September, Jaimie Crockett, 25, of Jefferson County, has been taking her résumé to any grocery store and gas station she can drive to.

“I’m trying to find anything,” she said.

Her husband, Dave, 36, was demoted from a salaried to hourly position at Bright Wood, Central Oregon’s third-largest private employer. During a recent week, he only worked 16 hours. He’s been with the company for 14 years.

The couple waited Wednesday in the lobby of the DHS office in Madras for an appointment with a caseworker, who will explain how to apply for food stamps.

Dave never imagined it would come to this point.

“A couple of years we went through this at Bright Wood,” he said. “But that was for a month.”

The couple has two daughters, ages 7 and 2.

“This is horrible,” Dave said. “I’ve never had to ask for help for anything.”

In September, Dave was bringing home about $3,000 a month. The money went to house payments and groceries. Last month, his income was $1,000.

Although Jaimie doesn’t like it, she has an easier time asking for help.

“I’m willing to do whatever to put a roof over our kids’ heads,” she said.

Dave is also studying accounting at Central Oregon Community College, so there are student loans to pay. He’s hoping it’s a recession-proof job.

As the mortgage payments pile up, the hardest part, Jaimie said, is not knowing if they will be able to stay in their house.

“We need to have a safe, comfortable place for our kids,” Jaimie said. “And that’s in jeopardy. If I didn’t have kids, it would be different.”

They are hoping the food stamps can alleviate some of the grocery bill costs so they can put more money toward paying off their house.

“I just kept thinking we could do this on our own,” Dave said.

But they couldn’t.

“We tried to put it off, but it caught up with us,” Jaimie said. “We couldn’t think about it anymore; we just had to do it. So here we are.”

(Kudos to The Bully for running this piece. Credit where it's due.)
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