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© 2008 – 2014 John T. Burke, Jr.

Hurricane Rick

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Be afraid.  Be very afraid.

In the aftermath of Hurricane Irene, there has been plenty of criticism directed at efforts by the media to amp-up the danger threat during the days before the storm made landfall.  Despite the fact that eleven people were killed by the hurricane, a wide assortment of commentators has seen fit to complain about the “hurricane hype”.  Here is a bit of what Howard Kurtz had to say at The Daily Beast:

But the tsunami of hype on this story was relentless, a Category 5 performance that was driven in large measure by ratings.  Every producer knew that to abandon the coverage even briefly – say, to cover the continued fighting in Libya – was to risk driving viewers elsewhere.  Websites, too, were running dramatic headlines even as it became apparent that the storm wasn’t as powerful as advertised.

The fact that New York, home to the nation’s top news outlets, was directly in the storm’s path clearly fed this story-on-steroids. Does anyone seriously believe the hurricane would have drawn the same level of coverage if it had been bearing down on, say, Ft. Lauderdale?

In fact, here in south Florida, we have become accustomed to the scare-mongering, which runs ahead of any tropical depression appearing west of the Cape Verde Islands.  Our local newscasters have an incentive to overstate the threat:  If they can scare the local politicians into ordering a mandatory evacuation – the story goes national and the networks provide some face time for the local correspondents.  At The Weather Channel, the incessant drumbeat warns:  Keep watching us or die!  I would be more than happy to cooperate if only they would feature Stephanie Abrams as often as they have Jim Cantore or Bryan Norcross on camera.

A similar fear-mongering strategy is becoming apparent in the Presidential campaign.  Before Rick Perry jumped into the race, disgruntled former Obama supporters saw the 2012 campaign as a choice between two nearly-indistinguishable corporatists.  With the ever-increasing likelihood that Rick Perry could become the Republican nominee, those ex-Obama fans are being constantly bombarded with reasons to be afraid  … be very afraid.  Are you going to just sit back and watch when President Perry declares war on Switzerland?

The most-frequently quoted observation about Rick Perry came from Bruce Bartlett, who served as deputy assistant secretary for economic policy at the Treasury Department, in the administration of President George H.W. Bush.  During a recent appearance on CNN’s American Morning, Bartlett remarked:

“Rick Perry is an idiot, and I don’t think anybody would disagree with that.”

At the Huffington Post, the fixation on Rick Perry’s intellectual limitations resulted in the publication of some information from the candidate’s college transcript:

A source in Texas passed The Huffington Post Perry’s transcripts from his years at Texas A&M University.  The future politician did not distinguish himself much in the classroom.  While he later became a student leader, he had to get out of academic probation to do so.  He rarely earned anything above a C in his courses — earning a C in U.S. History, a D in Shakespeare, and a D in the principles of economics.  Perry got a C in gym.

Perry also did poorly on classes within his animal science major. In fall semester 1970, he received a D in veterinary anatomy, a F in a second course on organic chemistry and a C in animal breeding.  He did get an A in world military systems and “Improv. of Learning” — his only two As while at A&M.

Josh Harkinson wrote an article for Mother Jones, recounting some episodes from Perry’s tenure as Governor of Texas.  In addition to discussing the infamous Trans-Texas Corridor fiasco, the essay provided these factoids:

In 2004, whistleblowers repeatedly informed Perry’s office that the Governor’s Texas Youth Commission hires and protects “known child abusers.”   His office ignored the warnings.  Three years later, the story broke that top officials with the TYC had learned of and done nothing to stop widespread child molestation at a juvenile detention facility in West Texas.

*   *   *

Last year, Perry called the BP oil spill an “act of God.”

*   *   *

Perry has accepted $1.2 million from Texas billionaire Harold Simmons, who is building a nuclear waste dump in West Texas over the objections of some of the state’s own environmental regulators.  In January, Texas’ Low-Level Radioactive Waste Disposal Compact Commission opened the door to allowing the dump to accept nuclear waste from around the country.  Six of of the commission’s seven members were appointed by Perry.

The passage from Harkinson’s article, striking fear into the hearts of Democrats, concerns a bit of history, which might repeat itself in the event that progressives should decide to support a third-party candidate:

Perry’s political associates, including top adviser Dave Carney, have been repeatedly accused of helping the Green Party qualify for the ballot in order to siphon votes away from Democratic candidates.

Could something similar happen in November of 2012?  Rick Perry is counting on it — and the media will incessantly remind you of that.

You’ve been warned!


 

From Disappointing To Creepy

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It was during Barack Obama’s third month in the White House, when I realized he had become the “Disappointer-In-Chief”.  Since that time, the disappointment felt by many of us has progressed into a bad case of the creeps.

Gretchen Morgenson of The New York Times has been widely praised for her recent report, exposing the Obama administration’s vilification of New York State Attorney General Eric Schneiderman for his refusal to play along with Team Obama’s efforts to insulate the fraud-closure banks from the criminal prosecution they deserve.  The administration is attempting to pressure each Attorney General from every state to consent to a settlement of any and all claims against the banksters arising from their fraudulent foreclosure practices.  Each state is being asked to release the banks from criminal and civil liability in return for a share of the $20 billion settlement package.  The $20 billion is to be used for loan modifications.  Leading the charge on behalf of the administration are Shaun Donovan, the Secretary of Housing and Urban Development, as well as a number of high-ranking officials from the Justice Department, led by Attorney General Eric Hold-harmless.  Here are some highlights from Ms. Morgenson’s article:

Mr. Schneiderman and top prosecutors in some other states have objected to the proposed settlement with major banks, saying it would restrict their ability to investigate and prosecute wrongdoing in a variety of areas, including the bundling of loans in mortgage securities.

*   *   *

Mr. Schneiderman has also come under criticism for objecting to a settlement proposed by Bank of New York Mellon and Bank of America that would cover 530 mortgage-backed securities containing Countrywide Financial loans that investors say were mischaracterized when they were sold.

The deal would require Bank of America to pay $8.5 billion to investors holding the securities; the unpaid principal amount of the mortgages remaining in the pools totals $174 billion.

*   *   *

This month, Mr. Schneiderman sued to block that deal, which had been negotiated by Bank of New York Mellon as trustee for the holders of the securities.

The passage from Gretchen Morgenson’s report which drew the most attention concerned a statement made to Schneiderman by Kathryn Wylde.  Ms. Wylde is a “Class C” Director of the Federal Reserve Bank of New York.  The role of a Class C Director is to represent the interests of the public on the New York Fed board.  Barry Ritholtz provided this reaction to Ms. Wylde’s encounter with Mr. Schneiderman:

If the Times report is accurate, and the quote below represents Ms. Wylde’s comments, than that position is a laughable mockery, and Ms. Wylde should resign effective immediately.

The quote in question, which was reported to have occurred at Governor Hugh Carey’s funeral (!?!)  was as follows:

“It is of concern to the industry that instead of trying to facilitate resolving these issues, you seem to be throwing a wrench into it.  Wall Street is our Main Street — love ’em or hate ’em.  They are important and we have to make sure we are doing everything we can to support them unless they are doing something indefensible.”

I do not know if Ms. Wylde understands what her proper role should be, but clearly she is somewhat confused.  She appears to be far more interested in representing the banks than the public.

Robert Scheer of Truthdig provided us with some background on Obama’s HUD Secretary, Shaun Donovan, one of the administration’s arm-twisters in the settlement effort :

Donovan has good reason not to want an exploration of the origins of the housing meltdown:  He has been a big-time player in the housing racket for decades.  Back in the Clinton administration, when government-supported housing became a fig leaf for bundling suspect mortgages into what turned out to be toxic securities, Donovan was a deputy assistant secretary at HUD and acting Federal Housing Administration commissioner.  He was up to his eyeballs in this business when the Clinton administration pushed through legislation banning any regulation of the market in derivatives based on home mortgages.

Armed with his insider connections, Donovan then went to work for the Prudential conglomerate (no surprise there), working deals with the same government housing agencies that he had helped run.  As The New York Times reported in 2008 after President Barack Obama picked him to be secretary of HUD, “Mr. Donovan was a managing director at Prudential Mortgage Capital Co., in charge of its portfolio of investments in affordable housing loans, including Fannie Mae and the Federal Housing Administration debt.”

Obama has been frequently criticized for stacking his administration with people who regularly shuttle between corporations and the captured agencies responsible for regulating those same businesses.  Risk management guru, Christopher Whalen lamented the consequences of Obama’s cozy relationship with the Wall Street banks – most tragically, those resulting from Obama’s unwillingness to adopt the “Swedish solution” of putting the insolvent zombie banks through temporary receivership:

The path of least resistance politically has been to temporize and talk.  But by following the advice of Rubin and Summers, and avoiding tough decisions about banks and solvency, President Obama has only made the crisis more serious and steadily eroded public confidence.  In political terms, Obama is morphing into Herbert Hoover, as I wrote in one of my first posts for Reuters.com, “In a new period of instability, Obama becomes Hoover.”

Whereas two or three years ago, a public-private approach to restructuring insolvent banks could have turned around the economic picture in relatively short order, today the cost to clean up the mess facing Merkel, Obama and other leaders of western European nations is far higher and the degree of unease among the public is growing.  You may thank Larry Summers, Robert Rubin and the other members of the “do nothing” chorus around President Obama for this unfortunate outcome.

We are now past the point of blaming Obama’s advisors for the President’s recurrent betrayal of the public interest while advancing the goals of his corporate financiers.  Yves Smith of Naked Capitalism has voiced increasingly harsh appraisals of Obama’s performance.  By August 22, it became clear to Ms. Smith that the administration’s efforts to shield the fraud-closure banks from liability exposed a scandalous degree of venality:

It is high time to describe the Obama Administration by its proper name:  corrupt.

Admittedly, corruption among our elites generally and in Washington in particular has become so widespread and blatant as to fall into the “dog bites man” category.  But the nauseating gap between the Administration’s propaganda and the many and varied ways it sells out average Americans on behalf of its favored backers, in this case the too big to fail banks, has become so noisome that it has become impossible to ignore the fetid smell.

*   *   *

Team Obama bears all the hallmarks of being so close to banks and big corporations that it has lost all contact with and understanding of mainstream America.

The latest example is its heavy-handed campaign to convert New York state attorney general Eric Schneiderman to a card carrying member of the “be nice to our lords and masters the banksters” club.  Schneiderman was the first to take issue with the sham of the so-called 50 state attorney general mortgage settlement.  As far as the Administration is concerned, its goal is to give banks a talking point and prove to them that Team Obama is protecting their backs in a way that the chump public hopefully won’t notice.

*   *   *

Yet rather than address real, serious problems, senior administration officials are instead devoting time and effort to orchestrating a faux grass roots campaign to con a state AG into thinking his supporters are deserting him because he has dared challenge the supremacy of the banks.

I would include Eric Schneiderman in a group with Elizabeth Warren and Maria Cantwell as worthy challengers to Barack Obama in the 2012 Presidential Election.  I wish one of them would step forward.


 

Left Out

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Support for President Obama’s re-election bid is in disarray.  His sinking poll numbers have left many Democrats hoping for a miracle (i.e. some degree of economic recovery before November of 2012).  A significant component of the party’s progressive bloc is looking for a challenger to step forward – as can be seen at the StopHoping.org website.  One of the bloggers at Corrente – Hugh – recently had a good laugh at those who were anticipating a possible Primary challenge to Obama from former Wisconsin Senator Russ Feingold.  Here is some of what Hugh had to say:

The point is that Feingold could have been, and should have been, if he were legit, a focus for progressive organizing.  But he wasn’t.  . . . Feingold could have been the voice of opposition to Bush and his policies, but the silence from the Wisconsin Senator’s office was deafening.  He could have played the same role opposing Obama’s right wing corporatist agenda.  He did not.  Indeed he lost his Senate seat largely because of his failure to distance himself from Obama.

There are other reasons to dislike Feingold and question his progressive credentials.  He voted for John Roberts as Chief Justice of the Supreme Court. He voted for Obamacare.  And he is a deficit hawk.

Many left-leaning commentators have been offering suggestions to the President as to what actions he should be taking – as well as what message he should be delivering.  Experience has demonstrated that Obama never pays attention to well-intentioned, sensible advice.  How many times has Robert Reich written a roadmap for the President to use toward saving the economy as well as Obama’s own Presidency – only to be ignored?  As the campaign drags on, try to keep count of how many commentaries are written under the theme:  “What Obama Needs to Say and Do Right Now”.  Rest assured that he won’t say or do any of it.

Meanwhile, Republican voters are currently flocking to the standard-bearer du jour, Texas Governor Rick Perry.  Alexander Cockburn of CounterPunch wrote a great essay about Perry’s unmatched political instincts and the challenges ahead for both parties in the upcoming Presidential race:

The obvious question is whether Perry, having won the right, can clamber back along the kook branch towards something vaguely resembling the solid timber of sanity, to capture the necessary independents and disillusioned folk who bet on Obama in 2008.  Hard to say.  Perry is pretty far out on the limb.  Reagan, with the strenuous help of the press, managed the crawl back in 1980, amid widespread disappointment and disgust with Jimmy Carter.  Disappointment and disgust with Barack Obama?  The president has slithered down in the most recent polls, and now is just above the 50 per cent disapproval rating.  There are still around 30 million Americans without work, or enough work. There’s the endlessly cited observation that no president presiding over more than a 7 per cent jobless rate can hope for a second term.

The progressive sector is already rallying the Obama vote by pounding out the unsurprising message that Perry is a shil and errand boy for corporate America, Amazing! Imagine that a conservative Texas Republican would end up in that corner, arm in arm with Barack Obama, messenger of hope and change, also shil and errand boy for corporate America, starting with the nuclear industry, the arms sector, the ag/pesticide complex and moving on through Wall Street and the Fed, and equipped with truly noxious beliefs about fiscal discipline, the merits of compromise.  He’s a far more dangerous man to have in the Oval Office than Perry.  We need a polarizer to awaken the left from its unending, unbreakable infatuation with our current president, despite all the horrors he has perpetrated and presided over, most significantly the impending onslaught on Social Security and Medicare.

Any Republican who wants to maintain a viable candidacy will be forced to start taking some hard swings at Rick Perry.  Jon Huntsman has already started to do so.  Michele Bachmann might not, if she wants a shot at becoming Perry’s running mate.  It won’t matter what Ron Paul says … because the mainstream media are pretending as though he doesn’t exist.  If you haven’t seen it yet, Jon Stewart ran a superb piece, exhibiting how all of the major news outlets – including Fox – were apparently reading from the same script after Congressman Paul came within 100 votes of beating Michele Bachmann in the Iowa Straw Poll.  Watching those reports could have led one to believe that Ron Paul had dropped out of the race.  On August 17, Tara Sartor of the Pew Research Center’s Project for Excellence in Journalism provided this analysis of how the television news organizations squelched Ron Paul’s near-victory in Iowa:

In a further attempt to gauge the post-straw poll attention to Paul’s campaign, PEJ also used the Snapstream server’s closed captioning capability to assess the candidates’ television coverage in the first few days after that balloting.

The sample included the three network Sunday morning panel shows on August 14, the morning and evening network news programs on August 15 and four hours of prime-time cable and one hour of daytime from each of the three major cable news networks on August 15.

According to that analysis, Paul was mentioned just 29 times. By comparison, Perry was mentioned 371 times, Bachmann was mentioned 274 times, and Romney was mentioned 183 times.

I hope that the anti-Paul conspiracy helps to energize those voters who had been ambivalent about supporting the “other Texan” in the race.

At some point, the progressive Democrats are going to be faced with the ugly reality that they don’t have a candidate in the 2012 Presidential campaign.  As has been the case with Ron Paul and his supporters – the Left will be left out.


 

Obama Presidency Continues To Self-Destruct

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It’s been almost a year since the “Velma Moment”.  On September 20, 2010, President Obama appeared at a CNBC town hall meeting in Washington.  One of the audience members, Velma Hart, posed a question to the President, which was emblematic of the plight experienced by many 2008 Obama supporters.  Peggy Noonan had some fun with the event in her article, “The Enraged vs. The Exhausted” which characterized the 2010 elections as a battle between those two emotional factions.  The “Velma Moment” exposed Obama’s political vulnerability as an aloof leader, lacking the ability to emotionally connect with his supporters:

The president looked relieved when she stood.  Perhaps he thought she might lob a sympathetic question that would allow him to hit a reply out of the park.  Instead, and in the nicest possible way, Velma Hart lobbed a hand grenade.

“I’m a mother. I’m a wife.  I’m an American veteran, and I’m one of your middle-class Americans.  And quite frankly I’m exhausted.  I’m exhausted of defending you, defending your administration, defending the mantle of change that I voted for, and deeply disappointed with where we are.”  She said, “The financial recession has taken an enormous toll on my family.”  She said, “My husband and I have joked for years that we thought we were well beyond the hot-dogs-and-beans era of our lives.  But, quite frankly, it is starting to knock on our door and ring true that that might be where we are headed.”

The President experienced another “Velma Moment” on Monday.  This time, it was Maureen Dowd who had some fun describing the confrontation:

After assuring Obama that she was a supporter, an Iowa mother named Emily asked the president at a town hall at the Seed Savers Exchange in Decorah what had gone wrong.

*   *   *

“So when you ran for office you built a tremendous amount of trust with the American people, that you seemed like someone who wouldn’t move the bar on us,” she said.  “And it seems, especially in the last year, as if your negotiating tactics have sort of cut away at that trust by compromising some key principles that we believed in, like repealing the tax cut, not fighting harder for single-payer.  Even Social Security and Medicare seemed on the line when we were dealing with the debt ceiling.  So I’m just curious, moving forward, what prevents you from taking a harder negotiating stance, being that it seems that the Republicans are taking a really hard stance?”

President Obama can no longer blame the Republicans and Fox News for his poor approval ratings.  He has become his own worst enemy.  As for what Obama has been doing wrong – the title of Andrew Malcolm’s recent piece for the Los Angeles Times summed it up quite well:  “On Day 938 of his presidency, Obama says he’ll have a jobs plan in a month or so”.

Lydia Saad of the Gallup Organization provided this report on the President’s most recent approval ratings:

A new low of 26% of Americans approve of President Barack Obama’s handling of the economy, down 11 percentage points since Gallup last measured it in mid-May and well below his previous low of 35% in November 2010.

Obama earns similarly low approval for his handling of the federal budget deficit (24%) and creating jobs (29%).

*   *   *

President Obama’s approval rating has dwindled in recent weeks to the point that it is barely hugging the 40% line. Three months earlier, it approached or exceeded 50%.

The voters have finally caught on to the fact that Barack Obama’s foremost mission is to serve as a tool for Wall Street.  In Monday’s edition of The Washington Post, Zachary Goldfarb gave us a peek at Obama’s latest gift to the banksters:  a plan to provide a government guarantee of mortgage backed securities:

President Obama has directed a small team of advisers to develop a proposal that would keep the government playing a major role in the nation’s mortgage market, extending a federal loan subsidy for most home buyers, according to people familiar with the matter.

The administration’s reaction to curiosity about the plan was a tip-off that the whole thing stinks.  Mr. Goldfarb’s article included the official White House retort, which was based on the contention that the controversial proposal is just one of three options outlined earlier this year in an administration white paper concerning reform of the housing finance system:

“It is simply false that there has been a decision to move forward with any particular option,” said Matt Vogel, a White House spokesman.  “All three options remain under active consideration and we are deepening our analysis around how each would potentially be implemented.  No recommendation has been made to the president by his economic advisers.”

And if you believe that, you might be interested in buying some real estate located in  . . .

Zachary Goldfarb explained the plan:

Fannie, Freddie or other successor firms would charge a fee to mortgage lenders and banks and use the money to create an insurance pool to cover losses on mortgage securities caused by defaults on the underlying loans.  The government would be the last line of defense in case of another housing market meltdown, using taxpayer money to cover losses only if the insurance pool ran dry.

The Washington Post report inspired economist Dean Baker to expose the ugly truth about this scheme:

It would be difficult to find an economic rationale for this policy other than subsidizing the financial industry. The government can and does directly subsidize the purchase of homes through the mortgage interest deduction.  This can be made more generous and better targeted toward low and moderate income families by capping it and converting it into a tax credit (e.g. all homeowners can deduct 15 percent of the interest paid on mortgages of $300,000 or less from their taxes).

There is no obvious reason to have an additional subsidy through the system of mortgage finance.  Analysis by Mark Zandi showed that the subsidy provided by a government guarantee would largely translate into higher home prices.  This would leave monthly mortgage payments virtually unaffected.  The diversion of capital from elsewhere in the economy would mean slower economic growth and would kill jobs for auto workers, steel workers and other workers in the manufacturing sector.

For these reasons, if President Obama was really against big government and job killing measures, he would oppose this new scheme to subsidize mortgage securitization.  On the other hand, if the goal is to ensure high profits and big salaries for top executives in the financial sector, then a government subsidy for mortgage securitization is good policy.

Frustration with the inevitability that the 2012 Presidential Election will ultimately become a choice between two corporatists has inspired a movement to encourage a Democratic Primary challenge to Obama.  The organization – StopHoping.org – is based on this simple objective:

The majority of U.S. citizens favor protecting Social Security, Medicare, and Medicaid; taxing the rich; cutting military spending; and protecting the environment.  We don’t have a candidate . . . yet.  Potential candidates supported on this site will be notified and encouraged to run.

I hope they succeed!


 

GOP Unable To Wash Away Santorum

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After his disappointing loss to Michele Bachmann in the Iowa Straw Poll, Former Minnesota Governor Tim Pawlenty officially withdrew from the 2012 Presidential campaign.  Pawlenty finished third with 14% of the votes.  Bachmann picked up 28% and Congressman Ron Paul was right behind her with 27%.  Despite the fact that Rick Santorum finished fourth with a paltry 9.8%, the Pennsylvanian has not discussed abandoning his own Presidential bid.

Santorum has not held public office since his humiliating defeat in the 2006 election, at which point he lost his Senate seat to Democrat Bob Casey, Jr. by a 59%-41% margin – the worst defeat for an incumbent Senator since 1980.  One might assume that such a bidetory washout would forever purge Santorum from that zone within the Beltway.  Nevertheless, Santorum apparently believes he will have greater success with a national campaign in post-Tea Party America.

Strangely enough, Santorum’s fourth-place finish in the Ames Straw Poll is being spun as a victory.  Dan Hirschhorn reported for Politico that Santorum’s fourth-place showing helped grease the candidate’s fundraising efforts:

Still underfunded, the campaign enjoyed its strongest overnight online money haul in the hours after the straw poll, and is planning to step up its fundraising efforts in Pennsylvania, his financial home base after two Senate terms.

Nevertheless, as Daniel Larison discussed in The American Conservative, Santorum’s fourth-place finish was solely a result of the candidate’s persistent, lingering presence in Iowa:

The reality is that Santorum has been living and campaigning full-time in Iowa for weeks, he ought to be rallying social conservatives to him in much larger numbers than he does, and his fourth-place finish out of a field of six direct competitors is confirmation that his campaign is going nowhere.  Beating out Herman Cain and Thad McCotter on the ground does not mean much at all.  His presidential bid has always seemed to be a vain effort to re-fight the battles of his failed 2006 re-election campaign.

Michael Falcone of ABC News observed that Santorum “has been languishing near the bottom of national polls”.  The question remains as to whether a candidate, whose agenda is so tightly focused on conservative “values voters” could gain momentum in a campaign dominated by financial issues.  As George Will pointed out, Santorum has repeatedly emphasized that “… America’s debt crisis is, at bottom, symptomatic of a failure of self-control  …”

Dan Hirschhorn noted at the conclusion of his Politico report, that Santorum’s “end game” remains a mystery.  I suspect that Santorum’s true objective could be to secure the number two place on the Republican ticket as the GOP’s Vice-Presidential candidate.

It’s reasonable to assume that the presence of Santorum on the back end of the Republican ticket could provide their campaign with a frothy mixture of enthusiasm, including support from social conservatives who would not otherwise vote for a less-polarizing Presidential nominee.

Meanwhile, Santorum continues to swim upstream, while jumping down the throat of the hard right’s newest rising star, Texas Governor Rick Perry, who refused to advocate a relativistic interpretation of the Tenth Amendment.  Governor Perry provided this response to Santorum’s blast:

“You either have to believe in the 10th Amendment or you don’t,” Perry told reporters after a bill signing in Houston Wednesday.  “You can’t believe in the 10th Amendment for a few issues and then [for] something that doesn’t suit you say, ‘We’d rather not have states decide that.’”

You can probably see the problem exposed by this dust-up.  If the Republican Party can’t wash out Santorum, the remaining GOP Presidential hopefuls will begin to appear liberal.


 

Barack Oblivious

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As I’ve been discussing here for quite a while, commentators from across the political spectrum have been busy criticizing the job performance of President Obama.  The mood of most critics seems to have progressed from disappointment to shock.  The situation eventually reached the point where, regardless of what one thought about the job Obama was doing – at least the President could provide us with a good speech.  That changed on Monday, August 8 – when Obama delivered his infamous “debt downgrade” speech – in the wake of the controversial decision by Standard and Poor’s to lower America’s credit rating from AAA to AA+.  This reaction from Joe Nocera of The New York Times was among the more restrained:

When did President Obama become such a lousy speech-maker?  His remarks on Monday afternoon, aimed at calming the markets, were flat and uninspired — as they have consistently been throughout the debt ceiling crisis.  “No matter what some agency may say,” he said, ”we’ve always been and always will be a triple-A country.”  Is that really the best he could do?  The markets, realizing he had little or nothing to offer, continued their swoon.  What is particularly frustrating is that the president seems to have so little to say on the subject of job creation, which should be his most pressing concern.

Actually, President Obama should have been concerned about job creation back in January of 2009.  For some reason, this President had been pushing ahead with his own agenda, while oblivious to the concerns of America’s middle class.  His focus on what eventually became an enfeebled healthcare bill caused him to ignore this country’s most serious problem:  unemployment.  Our economy is 70% consumer-driven.  Because the twenty-five million Americans who lost their jobs since the inception of the financial crisis have remained unemployed — goods aren’t being sold.  This hurts manufacturers, retailers and shipping companies.  With twenty-five million Americans persistently unemployed, the tax base is diminished – meaning that there is less money available to pay down America’s debt.  The people Barry Ritholtz calls the “deficit chicken hawks” (politicians who oppose any government spending programs which don’t benefit their own constituents) refuse to allow the federal government to get involved in short-term “job creation”.  This “savings” depletes taxable revenue and increases government debt.  President Obama — the master debater from Harvard – has refused to challenge the “deficit chicken hawks” to debate the need for any sort of short-term jobs program.

Bond guru Bill Gross of PIMCO recently lamented this administration’s obliviousness to the need for government involvement in short-term job creation:

Additionally and immediately, however, government must take a leading role in job creation.  Conservative or even liberal agendas that cede responsibility for job creation to the private sector over the next few years are simply dazed or perhaps crazed.  The private sector is the source of long-term job creation but in the short term, no rational observer can believe that global or even small businesses will invest here when the labor over there is so much cheaper.  That is why trillions of dollars of corporate cash rest impotently on balance sheets awaiting global – non-U.S. – investment opportunities.  Our labor force is too expensive and poorly educated for today’s marketplace.

*   *   *

In the near term, then, we should not rely solely on job or corporate-directed payroll tax credits because corporations may not take enough of that bait, and they’re sitting pretty as it is.  Government must step up to the plate, as it should have in early 2009.

Back in July of 2009 – five months after the economic stimulus bill was passed – I pointed out how many prominent economists – including at least one of Obama’s closest advisors, had been emphasizing that the stimulus was inadequate and that we could eventually face a double-dip recession:

A July 7 report by Shamim Adam for Bloomberg News quoted Laura Tyson, an economic advisor to President Obama, as stating that last February’s $787 billion economic stimulus package was “a bit too small”.  Ms. Tyson gave this explanation:

“The economy is worse than we forecast on which the stimulus program was based,” Tyson, who is a member of Obama’s Economic Recovery Advisory board, told the Nomura Equity Forum.  “We probably have already 2.5 million more job losses than anticipated.”

Economist Brad DeLong recently provided us with a little background on the thinking that had been taking place within the President’s inner circle during 2009:

In the late spring of 2009, Barack Obama had five economic policy principals: Tim Geithner, who thought Obama had done enough to boost demand and needed to turn to long-run deficit reduction; Ben Bernanke, who thought that the Fed had done enough to boost demand and that the administration needed to turn to deficit reduction; Peter Orszag, who thought the administration needed to turn to deficit reduction immediately and could also use that process to pass (small) further stimulus; Larry Summers, who thought that long-run deficit reduction could wait until the recovery was well-established and that the administration needed to push for more demand stimulus; and Christina Romer, who thought that long-run deficit reduction should wait until the recovery was well-established and that the administration needed to push for much more demand stimulus.

Now Romer, Summers, and Orszag are gone.  Their successors – Goolsbee, Sperling, and Lew – are extraordinary capable civil servants but are not nearly as loud policy voices and lack the substantive issue knowledge of their predecessors.  The two who are left, Geithner and Bernanke, are the two who did not see the world as it was in mid-2009.  And they do not seem to have recalibrated their beliefs about how the world works – they still think that they were right in mid-2009, or should have been right, or something.

I fear that they still do not see the situation as it really is.

And I do not see anyone in the American government serving as a counterbalance.

Meanwhile, the dreaded “double-dip” recession is nearly at hand.  Professor DeLong recently posted a chart on his blog, depicting daily Treasury real yield curve rates under the heading, “Treasury Real Interest Rates Now Negative Out to Ten Years…”  He added this comment:

If this isn’t a market prediction of a double-dip and a lost decade (or more), I don’t know what would be.  At least Hoover was undertaking interventions in financial markets–and not just blathering about how cutting spending was the way to call the Confidence Fairy…

President Obama has been oblivious to our nation’s true economic predicament since 2009.  Even if there were any Hope that his attentiveness to this matter might Change – at this point, it’s probably too late.


 

Drew Westen Nails It Again

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Dr. Drew Westen is a Professor of Psychology and Psychiatry at Emory University.  After receiving his Bachelor of Arts degree at Harvard, Westen picked up a Master’s in Social and Political Thought from the University of Sussex in England.  He earned his PhD in Clinical Psychology at the University of Michigan.

In 2007, Dr. Westen wrote a book entitled, The Political BrainHere’s how the book was described by the publisher, PublicAffairs:

The idea of the mind as a cool calculator that makes decisions by weighing the evidence bears no relation to how the brain actually works.  When political candidates assume voters dispassionately make decisions based on “the issues,” they lose.      .   .   .

In politics, when reason and emotion collide, emotion invariably wins. Elections are decided in the marketplace of emotions, a marketplace filled with values, images, analogies, moral sentiments, and moving oratory, in which logic plays only a supporting role.     .   .   .   The evidence is overwhelming that three things determine how people vote, in this order:  their feelings toward the parties and their principles, their feelings toward the candidates, and, if they haven’t decided by then, their feelings toward the candidates’ policy positions.

The people at Fox News have been operating from this premise for years.  On Fox, the news is presented from an emotional perspective (i.e.  fear and outrage about terrorism, indignation about government spending, patriotic devotion to whomever or whatever principle is singled out for such allegiance).  Opposition political candidates (Democrats) are usually portrayed as contemptible, flawed individuals.  As a result, Fox has enjoyed tremendous success at shaping public opinion and influencing the electorate.  Dr. Westen’s book appears likely to help one understand why.

The 2008 candidacy of Barack Obama presented a unique challenge to Fox News:  A Democrat finally had a campaign based on an emotional appeal, conveyed with the single word, “Hope”.  Despite the rational campaign strategy developed by Mark Penn for Hillary Clinton, (and continued by the McCain campaign) which posed the question:  “Who is Barack Obama?” – the voters followed their emotions and voted for “Hope”.

At this point in the Obama Presidency, people from across the political spectrum (especially the Left) are still pondering Mark Penn’s 2008 question:  “Who is Barack Obama?”  As I have frequently pointed out on this website, Obama has been repeatedly criticized (by his former supporters) as a cynical, narcissistic individual, who has carefully created a Rorschach-esqe public image, shaped by whatever characteristics the individual audience members would choose to project back onto their perception of the man himself.  Obama has been able to conceal his flexible, mercenary agenda behind the Rorschach screen and until recently, few have bothered to peek behind it.

David Sirota recently wrote an insightful essay about Obama which began with these words:

Barack Obama is a lot of things – eloquent, dissembling, conniving, intelligent and above all, calm.  But one thing he is not is weak.

I was particularly impressed by an essay about our President, written by the aforementioned Dr. Drew Westen, which appeared in The New York Times on August 6.  The article was entitled, “What Happened to Obama?” and it was absolutely magnificent.  Dr. Westen began by taking us back to January of 2009, when we were still in the depths of the financial crisis, shocked by the unemployment tsunami and looking to our new President for effective leadership through a gauntlet of bank bailout schemes and economic stimulus proposals.  Unfortunately, what America heard from Barack Obama during his Inaugural Address was a big nothing.  As Dr. Westen explained, the disappointment of Obama’s Inaugural Address was emblematic of the disappointment we experienced throughout the ensuing months:

The president is fond of referring to “the arc of history,” paraphrasing the Rev. Dr. Martin Luther King Jr.’s famous statement that “the arc of the moral universe is long, but it bends toward justice.”  But with his deep-seated aversion to conflict and his profound failure to understand bully dynamics – in which conciliation is always the wrong course of action, because bullies perceive it as weakness and just punch harder the next time – he has broken that arc and has likely bent it backward for at least a generation.

*   *   *

When Dr. King spoke of the great arc bending toward justice, he did not mean that we should wait for it to bend.

*   *   *

IN contrast, when faced with the greatest economic crisis, the greatest levels of economic inequality, and the greatest levels of corporate influence on politics since the Depression, Barack Obama stared into the eyes of history and chose to avert his gaze. Instead of indicting the people whose recklessness wrecked the economy, he put them in charge of it.  He never explained that decision to the public – a failure in storytelling as extraordinary as the failure in judgment behind it.  Had the president chosen to bend the arc of history, he would have told the public the story of the destruction wrought by the dismantling of the New Deal regulations that had protected them for more than half a century.  He would have offered them a counternarrative of how to fix the problem other than the politics of appeasement, one that emphasized creating economic demand and consumer confidence by putting consumers back to work.  He would have had to stare down those who had wrecked the economy, and he would have had to tolerate their hatred if not welcome it.  But the arc of his temperament just didn’t bend that far.

But why did Obama turn out to be such a disappointment?  Is he simply weak – or is Obama actually the inverse Franklin Delano Roosevelt described by David Sirota as “Bizarro FDR”?  From his unique perspective as a clinical psychologist, Dr. Westen is well-qualified to provide us with a valid opinion.  After first expressing the requisite ethical disclaimer (rarely heard from TV and radio “shrinks”) that he would “resist the temptation to diagnose at a distance”, Westen put on his “strategic consultant” hat to “venture some hypotheses”:

The most charitable explanation is that he and his advisers have succumbed to a view of electoral success to which many Democrats succumb – that “centrist” voters like “centrist” politicians.  Unfortunately, reality is more complicated.  Centrist voters prefer honest politicians who help them solve their problems.  A second possibility is that he is simply not up to the task by virtue of his lack of experience and a character defect that might not have been so debilitating at some other time in history. Those of us who were bewitched by his eloquence on the campaign trail chose to ignore some disquieting aspects of his biography:  that he had accomplished very little before he ran for president, having never run a business or a state; that he had a singularly unremarkable career as a law professor, publishing nothing in 12 years at the University of Chicago other than an autobiography; and that, before joining the United States Senate, he had voted “present” (instead of “yea” or “nay”) 130 times, sometimes dodging difficult issues.

A somewhat less charitable explanation is that we are a nation that is being held hostage not just by an extremist Republican Party but also by a president who either does not know what he believes or is willing to take whatever position he thinks will lead to his re-election.

*   *   *

Or perhaps, like so many politicians who come to Washington, he has already been consciously or unconsciously corrupted by a system that tests the souls even of people of tremendous integrity, by forcing them to dial for dollars – in the case of the modern presidency, for hundreds of millions of dollars.

With the passing of time, the likelihood that Barack Obama will be a single-term President increases dramatically because Americans are now scrutinizing him from a more judicious perspective.  Who will become the Independent candidate to return that forgotten emotion of hope to the disillusioned electorate?


 

Secret Phone Call

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I’ve been reading a great number of articles by commentators who have expressed outrage concerning President Obama’s shocking capitulation in the negotiations involving the debt ceiling bill.  Despite the Democratic Party’s tactic of blaming the “Tea Party terrorists” for the all cuts – no revenue, pro-billionaire legislation, a few pundits have seen through this fog to point out that Obama actually got the bill he secretly wanted all along.  Glenn Greenwald presented a solid case for this theory at Salon.

Polling guru Nate Silver wrote two items on August 1, in which he analyzed the Congressional voting and demonstrated that President Obama – despite having been afforded the opportunity to include provisions in the bill to make it more economically stimulative and less onerous for those experiencing the greatest hardship from the economic crisis – decided to leave some available provisions “on the table”.

Nate Silver initially made this observation:

Fiscal austerity at a time of economic distress, and on largely Republican terms, is not what Democrats thought they were getting when they elected Mr. Obama in 2008.  Mr. Obama might have done more to make short-term stimulus – like further reductions to the payroll tax, which would not have violated the Republicans’ ostensible goals – the  price for long-term austerity.

Although it is impossible to prove one way or the other, I am not persuaded by the notion that Mr. Obama could not have delivered a better result to Democrats had he done more to stand his ground.  Despite the dissent in the Republican caucus, which had originally seemed like a tactical victory for Democrats, the compromise wound up looking more like Mr. Boehner’s original bill than Mr. Reid’s.

Later that evening, Mr. Silver provided an analysis, which exposed Obama’s abandonment of the objectives he was elected to promote:

These results seem to suggest that Mr. Obama left something on the table.  That is, Mr. Obama could have shifted the deal tangibly toward the left and still gotten a bill through without too much of a problem.  For instance, even if all members of the Tea Party Caucus had voted against the bill, it would still have passed 237-to-193, and that’s with 95 Democrats voting against it.

Specifically, it seems likely that Mr. Obama could have gotten an extension of the payroll tax cut included in the bill, or unemployment benefits, either of which would have had a stimulative effect.

*   *   *

With that payroll tax cut, the deal becomes a much easier sell to Democrats – and perhaps also to swing voters, particularly given that nobody spent much time during this debate talking about jobs.  Plus, it would have improved growth in 2012 and, depending on how literally you take the economic models, improved Mr. Obama’s re-election chances.

As many observers have noted, the plutocracy has been able to accomplish much more with Obama in the White House, than what would have been achievable with a Republican President.  This latest example of a bipartisan effort to trample “the little people” has reinforced my belief that the fake “two-party system” is a sideshow – designed to obfuscate the insidious activities of the Republi-Cratic Corporatist Party.

What follows is the transcript of an imaginary telephone conversation between President Obama and Roger Ailes of Fox News:

Obama:  Hi Rodge!

Ailes:  Hi Barry!  Congratulations on the debt ceiling bill!  Great work!

Obama:  Thanks.  I won’t have to renew the Bush tax cuts again until after the election.  That’s a relief!  Unfortunately, we’re getting some bad polling numbers now.  Problems with the base.  I need you guys to lean on the “liberal” stuff a little harder.  Both O’Reilly and Hannity have been doing OK on it – but I just wish they would get back to some more of the “socialist” accusations.  That would really help rehabilitate my cred with my estranged base.

Ailes:       The “socialist” shtick was more Beck’s routine – but I’ll get them on it.

Obama:   I found some old pictures of myself with Bill Ayers that you guys might want to use    . . .

Ailes:       Ayers is sooooo 2008!  We need something new.  We need to get you to Syria for a meeting with Bashar al-Assad.  When you shake hands with him – make sure you bow!  We can get a lot of mileage here from that!

Obama:   No!  That will piss off too many liberals – especially the Jews.  I’m trying to keep the smart people in my corner!

Ailes:       OK.  OK.  We just really need to get you on some sort of apology tour or something.  You could start traveling around to abortion clinics and promising them some federal aid  .  .  .

Obama:   Great one, Rodge!  I love that!

Ailes:       I’ll plant some of our protesters along the way – the ones who’ve already been cleared by the Secret Service.

Obama:   Yeah!  Bring back that guy with the fake assault rifle!  He was a trip!

Ailes:       I have someone better.  This guy has been posing as a “Tea Party activist” at “town meetings”.  He’s a great new talent!

Obama:   We could set up another “Joe the Plumber”-type of confrontation with that guy!

Ailes:       Definately!  I’ll have my people put a script together.  That story will have some legs that will carry us all the way to the election!  . . .  Speaking of legs – I’m getting some good numbers in on Bachmann!

Obama:   How’s our girl doing?

Ailes:       Great!  She’s really gonna’ kick some ass in Iowa!

Obama:   I saw her on with Sean the other day.  She’s doing a great job!  Are you guys going to start a scandal involving Mitt?

Ailes:       I need to maintain plausible deniability about what Rupert’s operatives are up to.  You know  .  .  .

Obama:   Gotcha!  ‘Nuff said!

Ailes:       Well, I’ll let you get back to work.  You must have loads of angry campaign donors trying to bend your ear right about now  . . .

Obama:   Yeah  . . .  But that’s not where the real money is.

Ailes:       Amen!


 

Disappointing Diatribe From A Disillusioned Dionne

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Poor E.J. Dionne!  He is suffering through the same transition process experienced by many Obama supporters who have been confronted with the demise of the President’s phony “populist” image.  The stages one passes through when coping with such an “image death” are identical to those described in the Model of Coping with Dying, created in 1969 by Psychiatrist, Dr. Elisabeth Kübler-Ross. For example, a few weeks ago, Bill Maher was passing through the “Bargaining” stage – at which point he suggested that if we elect Obama to a second term in the White House, the President will finally stand up for all of those abandoned principles which candidate Obama advocated during the 2008 campaign.  As we saw during Friday’s episode of Maher’s Real Time program on HBO, the comedian has now progressed to the “Acceptance” stage, as demonstrated by his abandonment of any “hope” that Obama’s pseudo-populist image might still be viable.

Meanwhile E.J. Dionne appears to be transitioning from the “Denial” stage to the “Anger” stage – as exemplified by his dwelling on the issue of who is to blame for this image death.  Dionne’s conclusion is that “Centrists” are to blame.  Dionne’s recent Washington Post column began with the premise that “centrism has become the enemy of moderation”.  While attempting to process his anger, Dionne has expounded some tortured logic, rambling through an elaborate “distinction without a difference” comparison of “Centrists” with “Moderates”, based on the notion that Moderates are good and Centrists are bad.   Dionne’s article was cross-posted at the Truthdig blog, where many commentors criticized his argument.  One reason why so many Truthdig readers had less trouble accepting the demise of Obama’s false “populist” image, could have been their exposure to the frequent criticism of Obama appearing at that website – as exemplified by this cartoon by Mr. Fish, which appeared immediately to the left of Dionne’s article on Saturday.

An easy way to make sense of Dionne’s thought process at this “Anger” stage is to replace any references to “centrists” or “centrism” by inserting Obama’s name at those points.  For example:

Because centrism Obama is reactive, you never really know what a centrist Obama believes.  Centrists are Obama is constantly packing their his bags and chasing off to find a new location as the political conversation veers one way or another.

*   *   *

Yet the center’s devotees, in politics and in the media, Obama fear(s) saying outright that by any past standards—or by the standards of any other democracy—the views of this new right wing are very, very extreme and entirely impractical.  Centrists Obama worr(ies) that saying this might make them him look “leftist” or “partisan.”

Instead, the center Obama bends.  It He concocts deficit plans that include too little new tax revenue.  It He accepts cuts in programs that would have seemed radical and draconian even a couple of years ago.  It He pretends this crisis is caused equally by conservatives and liberals when it is perfectly clear that there would be no crisis at all if the right hadn’t glommed onto the debt ceiling as the (totally inappropriate) vehicle for its anti-government dreams.

It’s time for moderates to abandon centrism Obama and stop shifting with the prevailing winds.  They need to state plainly what they’re for, stand their ground, and pull the argument their way. Yes, they would risk looking to “the left” of where the center Obama is now – but only because conservatives have pulled it him so far their way.

Toward the end of the piece we see how Dionne is getting some glimpses of the fact that Obama is the problem:

But when this ends, it’s Obama who’ll need a reset.  At heart, he’s a moderate who likes balance.  Yet Americans have lost track of what he’s really for. Occasionally you wonder if he’s lost track himself.  He needs to remind us, and perhaps himself, why he wants to be our president.

In reality, Barack Obama was able to deceive Americans by convincing them that he was for populist causes rather than corporatist goals.  The President never “lost track of what he’s really for”.  He has always been Barry O. Tool – a corporatist.

At the conclusion of Dionne’s essay we learn that – contrary to what we were told by Harry Truman – “the buck” stops at the desks of Obama’s “centrist advisers”:

His advisers are said to be obsessed with the political center, but this leads to a reactive politics that won’t motivate the hope crowd that elected Obama in the first place.  Neither will it alter a discourse whose terms were set during most of this debt fight by the right.

We’ve heard the “blame the advisers” rationale from others who passed through the Kübler-Ross phases at earlier points during the Obama Presidency:  There were those who sought to blame Rahm Emanuel when the “public option” was jettisoned from Obama’s healthcare bill.  We then heard from the “Hope fiends” who blamed Larry Summers, Tim Geithner and Peter Orszag for Obama’s refusal to seriously consider the “Swedish solution” of putting the zombie megabanks through temporary receivership.  In fact, it was Obama making those decisions all along.

I’m confident that once E.J. Dionne reaches the “Acceptance” stage, we will hear some refreshing, centered criticism of President Obama.