Worst, er, Best Idea of the Week: No Blagojevich!

Former Illinios governor and current punchline, Rod Blagojevich, was my surefire pick for Worst Idea of the Week. Yes, I know--his despicable, profanity-laden scandal regarding the sale of President Obama's former Senate seat dominated headlines several months ago.

But this week Blagojevich returned to the esteemed pages of, uh, Entertainment Weekly as a potential contender for NBC's upcoming reality bomb, I'm a Celebrity...Get Me Out of Here (a show popularized in Britain that strands D-list celebrities in a remote location while TV viewers (if there are any) vote on which people to keep around until a winner is announced.)

Blagojevich is a casting faux pas on so many levels. Firstly, I consider Blah Blah Blago to be infamous, not famous--certainly not a celebrity! (His hair style definitely didn't set any style trends.) But more importantly, what kind of message are we sending by letting a recently impeached, disgraced governor earn and compete for cash (reportedly, $80,000 per week!) on TV? Sure, he has the right to but...

...actually, breaking news: a judge has denied Blagojevich the opportunity to jet off to a Costa Rican jungle with other fame-starved no-names like Geraldo Rivera for I'm a Celebrity! U.S. District Judge James Zagel just turned down the request by Blagojevich, according to reports in Chicago newspapers. "I don't think this defendant in all honesty...fully understands the position he finds himself in," Zagel said. Blagojevich still faces federal corruption charges.

Zagel believes it to be a bad idea to modify the terms of BlagojevichÕs bail to allow him to travel to Central America. He said the governor should stay in the U.S. and review the government evidence against him so he will be better able to understand the jeopardy he is in.

Previously, Blagojevich hinted that his participation in the reality show was a bit dubious. "It's not my first choice, but it's a living," he said. Better than auctioneer of Senate seats, I wonder?

Therefore, the best idea of the week goes to U.S. Judge Zagel for denying Illinois' ill-minded Blago a first-class ticket to beautiful Costa Rica and dirty reality TV cash.

TARP cop turns up heat on Treasury chief

Neil M. Barofsky, the special inspector general appointed by President Bush in November to oversee the government's Troubled Asset Relief Program, issued a scathing 250-page report today that ripped the Treasury Department's plans to bail out the nation's banks.

Barofsky told Congress that what began as a $700-billion bailout last fall has evolved into a $3-trillion bonanza that is being administered with little oversight and almost no information about what the banks are doing with the taxpayer funds they are receiving.

Barofsky also warned that Treasury Secretary Tim Geithner's plan to have the government fund $1-trillion in ''partnerships'' with private investors to take a mountain of toxic assets off the books of major banks is ''inherently vulnerable to fraud and should not be started without stronger safeguards.''

According to a report in today's New York Times, Barofsky was particularly critical of the Treasury Department's refusal to demand detailed information from banks and other financial institutions about what they are doing with the money they receive from the government.

''The American people have a right to know how their tax dollars are being used,'' the federal watchdog stated in his report, the second he has issued since his appointment to the post.

Barofsky added that Treasury officials are ''jeopardizing the credibility of their efforts'' by not requiring more transparency from the banking industry regarding its use of government bailout bucks.

The inspector general raised several red flags concerning Geithner's scheme -- known as TALF (Term Asset-Backed Securities Loan Facility) -- to jump-start an auction of toxic mortgage-backed securities with a $100-billion down-payment from Treasury, to be followed with up to $1-trillion in low-interest ''loans'' to private investors from the Federal Reserve. The Fed recently increased the money supply by $1 trillion to prepare for this program.

Barofsky said GeithnerÕs plan poses ''significant fraud risks'' because rather than buy up the toxic assets directly, the government intends to loan money to investors without examining the poorly documented mortgage-backed securities, relying instead on the evaluation of the major credit rating agencies who not only failed to warn against the dangers of sub-prime mortgages, but actually awarded toxic assets their prized triple-A ratings.

''Credit ratings, cited as one of the primary credit protections in TALF as currently configured, have been proven to be of questionable value,'' Barofsky's report stated. ''The wholesale failure of the credit rating agencies to rate adequately such securities is at the heart of the securitization market collapse, if not the primary cause of the credit crisis.''

Barofsky noted that, under Geithner's plan, private investors will be able to acquire ''nonrecourse'' loans from the government which will permit them to walk away from the loans if the investments fail to generate profits, sticking taxpayers with the bill.

Barofsky, a 38-year-old former federal prosecutor from New York who specialized in tracking down white-collar criminals, also disclosed that he has opened 20 criminal investigations and six audits into whether tax dollars are being stolen or wasted in the big bank bailout program.

Mr. Geithner had no initial comment on Barofsky's report, but he undoubtedly will be questioned about it when he appears this afternoon before a Congressional panel that oversees the financial bailout program.

Worst Idea of the Week: Texas or Somalia?

Last Wednesday, I blogged about the Worst Idea of the Week--a new FOX reality TV show that will allow small businesses to vote on which employee they want to lay off each week. The following day, Thursday, National Public Radio even covered the atrocity (now, I'm not saying that Business Facilities beat NPR to the scoop but...well, okay, I am saying that.)

Following FOX's small-minded idea, the race for this week's Worst Idea comes down to two drastically different recent news figures: the governor of Texas and the Somalian pirates.

First up: the esteemed Texas Gov. Rick Perry, often heralded in the pages of Business Facilities for his economic successes. However, his recent, bizarre comments about Texas seceding from the United States are just unfathomable. Perry's original quote in Austin on Wednesday: "There's a lot of different scenarios. We've got a great union. There's absolutely no reason to dissolve it. But if Washington continues to thumb their nose at the American people, you know, who knows what might come out of that." Since, Perry has said his comments have been misinterpreted and, to some extent, they have been. I chalk this up to an off-the-cuff remark gone terribly, terribly wrong. Even while Texas' economy is massive and more robust than most other countries' economies around the world, even a hint of ejecting itself from the United States is a bad idea. Period. Particularly at a time when the U.S. needs solidarity--a view I truly believe Perry holds--the governor needs to choose his words more carefully. I'm sure he will do so at future "tea parties."

But I have to give the award for Worst Idea of the Week to the Somalian pirates that unsuccessfully hijacked a vessel, packed with U.S. sailors, delivering food to Kenya. They did, however, manage to take the ship's captain hostage for a few days before U.S. sharpshooters skillfully plugged three bullets into the pirate's heads and rescued the captain. Now, I feel bad for Somalia; in fact, I blogged about the escalating piracy issue way back in December (see second post, Piracy: The Illegal Incentive). An impoverished, lawless nation that has been victimized and neglected for decades, many Somalians actually support and idolize their homegrown pirates for bringing money into the country and feeding their citizens. Yes folks, in this struggling country, piracy is a distorted, albeit inexcusable, form of economic development. As a result, the modern pirates ransacking the waters of the Gulf of Aden get my vote for Worst Idea of the Week. Trying to overtake and hold ransom a U.S. vessel, let alone one delivering aid to Africa, is idiotic, at best. Somalia is in dire circumstances and my heart hurts for my fellow humans there, but the pirates who put a gun to the back of an innocent U.S. citizen got what they deserved: shot dead.

TGIF.

Moody's to U.S.: Drop Dead

The bank frauds that brought the financial system to its knees have been the object of public scorn for several months.

They have been paraded before Congressional committees; their obscene compensation packages have been the subject of continuous public outrage; they have been TARPed, TALFed and stress-tested; the mountain of toxic assets they built continues to loom over all of us like a stinking planetary landfill.

Yet standing behind these disgraced barons of finance are a faceless group of villains with nary a scratch on them. Their complicity in the global fiscal calamity cannot be disputed, but they continue to function as respected oracles and arbiters of the fiscal landscape.

It is not an exaggeration to say that without the major credit rating agencies -- Standard and Poor's, Moody's and Fitch, to name the biggest -- the financial catastrophe that destroyed the global economy last fall likely would have been avoided.

It was their pristine AAA ratings that put the seal of approval on the exotic speculative financial instruments that brought down the global banking system. Toxic mortgage-backed securities were bundled with solvent loans by the bank criminals and spoon-fed to other banks and investors all over the world. Everyone opened wide and feasted as soon as they saw the big triple-A from the rating titans.

So what happens to a rating agency that is exposed to everyone on the planet as a corrupt fraud with zero credibility? Since credibility is the core of its business model, one would assume that it would cease to exist, or at least be relegated to calculating the value of '56 Chevys on the streets of Havana.

One would be wrong. The rating agencies are still in business. Last week, one of them put on a noisy display of reminding us how big and powerful it remains.

Moody's cleared its throat and downgraded its credit rating for every municipal government in the United States.

The same people who told us last summer that Lehman Brothers was only stopping to pick up some ice for its $1,000 bottles of Cristal now are warning us to stay away from municipal bonds, once thought to be the safest investment haven.

The same people who facilitated trillions of dollars in bad debt tied to fraudulently priced mortgages in the overheated real estate market are warning us not to invest in our towns and cities.

The same people who destroyed our immediate future are telling us not to believe that the communities in which we live have any future. Or, to put it in Moody-speak, the creditworthiness of the good old U.S.A. has been ''assigned a negative outlook.''

So Moody's is still in the rating biz. Well, here's something we'd like them to rate:

We suggest they send their analysts to every medium-security prison in the United States. Let them measure the cells, try out the cots, eat the prison food.

While they are busy assessing the value of these facilities, we'll have the warden sneak up behind them and lock them in.

We'll call these rating fakes ''prisoner no. AAA.'' As to when they might get sprung, from where we sit the outlook is going to be negative for a long, long time.

Worst Idea of the Week: Recession on FOX?

Here's my nomination for the Worst Idea of the Week--and yes, it's only Wednesday but I'm confident this gem will not lose its luster before next Monday.

You probably know this: the recessed U.S. economy is plagued by layoffs; a staggering 663,000 jobs were shaved away by employers in March alone, bumping the national unemployment rate to 8.5%. Many projections forecast that 1 in 10 people will be without work in the U.S. by the end of 2009.

But you may not know this: the Fox network acknowledged today that it is making a reality show out of the troubled economy. An upcoming series titled "Someone's Gotta Go" lets employees of a small business decide which one of its colleagues will be laid off. Each week, a different company lays off an employee.

Fox says it has no air date yet for the series, which is being developed by the production company behind reality borefest "Big Brother" and the no-talent-or-skill-required game show, "Deal or No Deal." Fox also wouldn't reveal the new show's host, which it says is a business consultant who will offer advice to participating companies.

So, as millions of Americans worry about their job security or are unable to find employment, TV execs expect us to tune in weekly to a reality show that will glorify layoffs? Are we supposed to find suspense or humor in watching fellow citizens not only receive their pink slips, but do so while being humiliated by coworkers voting them out of their offices?

Or wait, maybe Fox will put some heartfelt spin on this show and turn it into a sappy, corporate version of "Extreme Makeover: Home Edition." Even if the network finds a way to not make the tone of this show so appalling, the very basis still is exploitive and mean-spirited, no?

Here's what I'm curious to see: no, not "Someone's Gotta Go." Rather, what companies are going to buy commercial airtime during this series?! Are struggling car makers going to advertise their new hybrids in between cliffhanging segments? Retail chains in foreclosure are going to announce their everything-must-go liquidation sales? Chain restaurants are going to offer 2-for-1 appetizers to families that can't afford to go out to eat? I certainly hope that companies have the foresight to dodge advertisements that would support this show.

And I hope that, if the show makes it to prime time, a hard-hit, weary American workforce collectively turns off its television sets.

Epiphany

The last time we saw Hank Paulson, he was directing traffic in front of the U.S. Treasury.

Like the famous scene in Patton, Paulson in his last act as Treasury chief was making sure that Brinks trucks filled with crisp new Franklins did not collide with each other as they rushed out to deliver booty to Hank's crooked pals on Wall Street.

On January 20th, Paulson left town. He hasn't been seen since -- until today. You may find this hard to believe, but we ran into Hank at a local soup kitchen this morning.

He was wearing an Old Navy sweatshirt with cutoff sleeves, and he was peeling potatoes for today's free lunch. He looked like he hasn't shaved since January. Paulson resembled Father Time, if Father Time was a cross between a Serbian war criminal and Jethro Tull's grungy Aqualung.

We struck up a conversion with Hank while he ripped open a huge sack of Idaho spuds and methodically began stripping the skins off them with an old Bic pocket knife.

Frankly, we didn't expect it to be much of a conversation. The last time we heard Paulson speak, he was mumbling incoherent evasions in front of a Congressional panel.

But, amazingly, this strange, new Hank was positively effusive. He insisted that we take a seat next to him, telling us he ''really needs to unburden my soul.''

Then it all came gushing out of him, like the Benjamins spewing forth from one of Treasury's overheated printing presses.

''I woke up in a cold sweat on the night of January 19th and it hit me like a lightning bolt,'' he said, his eyes bulging with messianic fervor. ''I realized my entire life has been a sham.''

''All that greed. All that worthless paper. All those $1,000 bottles of Cristal and Dom. All those criminals in pin-striped suits.''

Paulson said he jumped out of bed that fateful night and began pacing the plushly carpeted floor of his $1,000-a-night suite at the Jefferson Hotel in DC.

''Then I saw them,'' he said, his voice cracking. ''Millions of them, walking in unemployment lines like zombies, staring at me mournfully. Families, with children, being dragged out of their foreclosed houses.''

Paulson put down the knife and stared at the half-peeled potato in his hand. Suddenly, he looked up and there were tears in his bloodshot eyes.

''It was the children that really got to me,'' he said, his voice barely a whisper.

The former U.S. treasury head almost ended it all that chilly night in January. ''I grabbed a crisp new Benjamin from the nightstand and started to hack at my wrists,'' he said, hanging his head in shame. We looked down at his arms and saw the faint scars of a series of paper cuts.

''But then, I saw those words -- In God We Trust-- and the road to salvation just came to me.'' Paulson began to smile. He finished cleaning the spud, rocking back and forth in his newfound serenity.

''This is where I belong now,'' Hank Paulson told us. He dropped the naked potato into a huge vat of chicken soup.

As we walked away, we saw Hank watching the ripples on the surface of the soup, staring intently at a withered piece of parsley as it bobbed gently in the center of the schmaltz-laden broth.

The parsley bobbed up and down, like the lone survivor of some great disaster at sea who had jumped overboard as a titanic ship went down and found himself adrift in an endless ocean that was cold and indifferent to his fate, with only the damaged core of his soul to cling to.