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Obama Backpedals To Save His Presidency

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President Obama’s demotion of his Chief of Staff, Bill Daley, has drawn quite a bit of attention – despite efforts by the White House to downplay the significance of that event.  The demotion of Daley is significant because it indicates that Obama is now trying to back away from his original strategy of helping Wall Street at the expense of Main Street.  This move appears to be an attempt by Obama to re-cast himself as a populist, in response to the widespread success of the Occupy Wall Street movement.

In September of 2010, I wrote a piece entitled, “Where Obama Went Wrong”.  Despite the subsequent spin by right-wing pundits, to the effect that voters had been enamored with the Tea Party’s emphasis on smaller government, the true reasons for the mid-term disaster for the Democrats had become obvious:

During the past week, we’ve been bombarded with explanations from across the political spectrum, concerning how President Obama has gone from wildly-popular cult hero to radioactive force on the 2010 campaign trail.  For many Democrats facing re-election bids in November, the presence of Obama at one of their campaign rallies could be reminiscent of the appearance of William Macy’s character from the movie, The Cooler.  Wikipedia’s discussion of the film provided this definition:

In gambling parlance, a “cooler” is an unlucky individual whose presence at the tables results in a streak of bad luck for the other players.

*   *   *

The American people are hurting because their President sold them out immediately after he was elected.  When faced with the choice of bailing out the zombie banks or putting those banks through temporary receivership (the “Swedish approach” – wherein the bank shareholders and bondholders would take financial “haircuts”) Obama chose to bail out the banks at taxpayer expense.  So here we are  . . .  in a Japanese-style “lost decade”.  In case you don’t remember the debate from early 2009 – peruse this February 10, 2009 posting from the Calculated Risk website.  After reading that, try not to cry after looking at this recent piece by Barry Ritholtz of The Big Picture entitled, “We Should Have Gone Swedish  . . .”

Back in December of 2009, Bill Daley – a minion of The Dimon Dog at JPMorgan Chase – wrote an op-ed piece for The Washington Post, which resonated with Wall Street’s tool in the White House.  Daley claimed that Obama and other Democrats were elected to office in 2008 because voters had embraced some pseudo-centrist ideas, which Daley referenced in these terms:

These independents and Republicans supported Democrats based on a message indicating that the party would be a true Big Tent — that we would welcome a diversity of views even on tough issues such as abortion, gun rights and the role of government in the economy.

*   *   *

All that is required for the Democratic Party to recover its political footing is to acknowledge that the agenda of the party’s most liberal supporters has not won the support of a majority of Americans — and, based on that recognition, to steer a more moderate course on the key issues of the day, from health care to the economy to the environment to Afghanistan.

Unfortunately, Obama was pre-disposed to accept this rationale, keeping his policy decisions on a trajectory which has proven as damaging to his own political future as it has been to the future of the American middle class.

On November 8, Jonathan Chait wrote a piece for New York magazine’s Daily Intel blog, wherein he explained that the demotion of Bill Daley revealed a “course correction” by Obama, in order to a pursue a strategy “in line with the realities of public opinion”.  Jonathan Chait explained how the ideas espoused by Daley in his 2009 Washington Post editorial, had been a blueprint for failure:

Daley, pursuing his theory, heavily courted business leaders.  He made long-term deficit reduction a top priority, and spent hours with Republican leaders, meeting them three-quarters of the way in hopes of securing a deal that would demonstrate his centrism and bipartisanship.  The effort failed completely.

The effort failed because Daley’s analysis – which is also the analysis of David Brooks and Michael Bloomberg – was fatally incorrect.  Americans were not itching for Obama to make peace with corporate America.  Americans are in an angry, populist mood – distrustful of government, but even more distrustful of business.  In the most recent NBC/The Wall Street Journal poll, 60 percent of Americans strongly agreed with the following statement:

The current economic structure of the country is out of balance and favors a very small proportion of the rich over the rest of the country.  America needs to reduce the power of major banks and corporations and demand greater accountability and transparency.  The government should not provide financial aid to corporations and should not provide tax breaks to the rich.

At the website of economist Brad DeLong, a number of comments were posted in response to Jonathan Chait’s essay.  One can only hope that our President has the same, clear understanding of this situation as do the individuals who posted these comments:

Full Employment Hawk said:

.   .   .   The defeat of the Democrats was due to the fact that the Obama administration did too little, not because it did too much.

Daley’s view that it was because the moderately progressive policies of the Obama administration were too far left for the center was totally wrong.  And listening to Daley’s advice to further shift from job creation to deficit reduction was a major blunder that reinforced the blunder of the first two years of dropping the ball on making the economy grow fast enough for the unemployment rate to be coming down significantly by the time of the Fall election.

In reply to the comment posted by Full Employment Hawk, a reader, identified as “urban legend” said this:

Obama should have been making the point over and over and over and over that getting more money into the hands of more Americans — principally right now by creating jobs — is the most pro-business stance you can take.  Continuing to let the 1% dictate everything in their favor is the most anti-business thing you can do.  We are the ones who want demand to rise for the goods and services of American business.  Right-wingers don’t care much about that.  What they do care about is maintaining their theology against all the evidence of its massive failure.

At Politico, Jonathan Chait’s essay provoked the following comment from Ben Smith:

It is entirely possible that no staff shift, and no ideological shift, can save Obama from a bad economy.  You don’t get to run controlled experiments in politics.

But it does seem worth noting that this argument pre-dates Daley: It’s the substance of the 2008 debate between Hillary Clinton and Obama, with Clinton portraying Obama as naive in his dream of bipartisan unity, and the Republicans as an implacable foe.  It’s the Clinton view, the ’90s view, that has prevailed here.

Indeed, it would be nice for all of us if Obama could get a “Mulligan” for his mishandling of the economic crisis.  Unfortunately, this ain’t golf.


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Transparent Dishonesty

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Immediately after assuming office, President Obama promised to provide a greater degree of transparency from his administration:

Transparency and the rule of law will be the touchstones of this presidency.

Since that moment, an enormous list of broken campaign promises has buried those false assurances of transparency.  Pondering over the heap of Obama’s discarded “bait and switch” enticements can cause a person to wonder how this man expects to get re-elected  … until the Republican aspirants come into view.

A recent gimmick of the current administration has been the “We the People” initiative.  This project resulted in the creation of a platform on the White House website, allowing for citizens to create petitions requesting government action on certain issues:

The We the People platform on WhiteHouse.gov gives Americans a new way to create, share, and sign petitions that communicate your views about your government’s actions and policies.

A signature threshold was established, requiring 5,000 on-line “signatures” within a 30-day period.  The threshold has subsequently been increased to 25,000 signatures in a month:

If a petition meets the signature threshold, it will be reviewed by the Administration and an official response will be issued.  And we’ll make sure that the petition is sent to the appropriate policy makers in the Administration.

The White House began responding to those petitions on October 26.  On November 5, Nancy Atkinson reported for Universe Today that We the People are interested in UFOs and space aliens:

The White House has responded to two petitions asking the US government to formally acknowledge that aliens have visited Earth and to disclose to any intentional withholding of government interactions with extraterrestrial beings.  “The U.S. government has no evidence that any life exists outside our planet, or that an extraterrestrial presence has contacted or engaged any member of the human race,” said Phil Larson from the White House Office of Science & Technology Policy, on the WhiteHouse.gov website.  “In addition, there is no credible information to suggest that any evidence is being hidden from the public’s eye.”

5,387 people had signed the petition for immediately disclosing the government’s knowledge of and communications with extraterrestrial beings, and 12,078 signed the request for a formal acknowledgement from the White House that extraterrestrials have been engaging the human race.

The denials made by Phil Larson are as false now as they were many years ago, when a 15-year-old high school student named John Greenwald, Jr. began sending Freedom of Information Act requests to the Pentagon, Air Force and numerous government agencies to ascertain what our officials had learned about those Unidentified Flying Objects, which have aroused so much curiosity since the advent of the Internet.  Over the years, John Greenwald has amassed a collection of over 600,000 pages of documents, which are available for free on his website, The Black Vault.

I was amused by John Greenwald’s lecture, recounting how – as a teenager – he made fools of the bureaucrats, who were charged with the responsibility of stonewalling any inquiries concerning the UFO phenomenon.  At his website, Greenwald recounted some of the highlights of this experience:

When I started researching this phenomenon fifteen years ago, you quickly learn that the government and military alike dismiss the entire topic, deny any involvement or interest in it, and they claim they could explain the mystery after their official investigation back in 1969 – and haven’t collected anything since.  Nothing could be further from the truth.

John Greenwald hit paydirt when he came across a document entitled “Air Force Instruction 10-206” or “AFI 10-206” (a 2008 edition can be seen here).  Here is Greenwald’s explanation (in the third person) of where this lead took him:

In the regulation entitled, “Operational Reporting,” chapter 5 outlines procedures for cataloguing different types of sightings, including the third on the list, “Unidentified Flying Objects” or UFOs.  Although this reference to UFOs is not a reference to alien spacecraft, the fact remains that this publication shows that the military does have an interest in the phenomena, whatever it might be.

*   *   *

Upon further investigation, Greenewald uncovered that the reports made under this Air Force document were called CIRVIS, or Communication Instructions for Reporting Vital Intelligence Sightings, reports.  He noted that they are filed and sent to the NORAD installation –which he then found out when he filed a FOIA request for the records – that NORAD was not subject to the FOIA.  This was due to the fact that it was under control by both Canadian and U.S. forces – therefore excluding it from U.S. law.

But “in good faith” the request was processed under a special NORAD instruction allowing access to their documents, but they claim they found “no records.”

Pushing forward, a simple phone call by Greenewald to the Department of National Defence (DND) in Canada yielded more than 100 pages of UFO / CIRVIS reports. According to NORAD – there was nothing.  According to Canada – there was a pile of records.

On September 2, 2011 Lee Speigel of The Huffington Post interviewed John Greenwald about the extent of UFO information obtained for The Black Vault by way of the Freedom of Information Act.  Lee Speigel provided this account of what happened after that interview:

On Sept. 2, The Huffington Post made inquiries to the Air Force about the UFO directives.  A spokesman said he’d arrange an interview with an appropriate officer.  But before the interview was set up, the 111-page instruction manual was revised on Sept. 6, and the UFO instructions were deleted, as were other portions of the document, now shortened to 40 pages.

*   *   *

For several weeks, military officials failed to respond to HuffPost inquiries about the rewritten manual, which included changes to areas unrelated to UFOs.

Finally, on Oct. 5, after several follow-up calls, an Air Force major emailed a response, informing HuffPost that UFO reporting is not a duty of the armed forces branch.  He denied any cover-up, and instead said it was a coincidence that the document was updated after this news organization asked for an explanation.

The Huffington Post piece included the reaction from John Greenwald:

“They’ve had many opportunities to take [the UFO reference] off of this publication and now look at what happens,” said Greenewald.  “All of a sudden, when a major news outlet like Huffington Post starts asking questions about why UFOs are still on the books — to have that media outlet not get a fast response, number one; and number two, the military completely re-writes the regulation, changes it and UFOs are nowhere to be found — that’s a fascinating coincidence.”

Obama’s promised “transparency” seems to have befallen the same fate as “hope” and “change”.  President Clinton’s former Chief of Staff, John Podesta, is now a Visiting Professor of Law at the Georgetown University Law Center.  Here is a video clip of John Podesta, making the case for disclosure of data compiled by the United States government on the subject of UFOs.  In a speech before the National Press Club on November 14, 2007, Mr. Podesta said this:

“I think it’s time to open the books” (on government investigations of UFOs).    .  .  .  “We ought to do it because it’s right.  We ought to do it because the American people, quite frankly, CAN handle the truth and we ought to do it because it’s the law.”

Yes, Mr. Podesta  . . .  but it’s so much easier for our officials to just lie.  They lie about everything else.  Why should this subject be treated any differently?


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Abundance Of Goofiness

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The world is beset by a plague of goofiness.  I thought it was limited to the United States until recent events demonstrated that goofiness has become a worldwide phenomenon.  Premature European austerity programs, commenced before unemployment subsided, have led to higher deficits, elevated bond yields and more recession.  Although sober-minded economists warned against implementation of austerity measures until justified by economic circumstances, there was this itch that politicians had to scratch.  Now they have a nice infection.

In America, everyone had some good laughs of this video clip of President Obama’s discovery that he was locked out of the White House upon his return from Brazil.  Although it was widely reported that the White House staff was “caught off guard” by the First Family’s early return from their Brazilian vacation, I don’t believe it.  Such things don’t happen by accident.  My suspicion is that Chief of Staff, Bill Daley and his real boss, The Dimon Dog, deliberately locked Obama out of the White House as an admonition against cracking down on the megabanks, increasing taxes on the rich and empowering Elizabeth Warren.

Our President has been busy puzzling over the situation in Libya, where he (with authorization from the United Nations) has joined in on the “kinda-sorta” invasion.  Few people have dared to suggest that interloping in the Libyan civil war is sheer goofiness.  Many Republicans, such as Newt Gingrich, were in favor of intervention until Obama made the decision to launch air strikes.  Gingrich and his contrarian cohorts suddenly found it necessary to do a 180 on the issue.  Meanwhile, the smart conservative, George Will, was asking all the right questions.  I’ll reprint just a few of them here – but be sure to read his complete list.  These questions are among those that remain unanswered:

  • The world would be better without Gaddafi. But is that a vital U.S. national interest? If it is, when did it become so? A month ago, no one thought it was.

*   *   *

  • Presumably we would coordinate aid with the leaders of the anti-Gaddafi forces. Who are they?
  • Libya is a tribal society.  What concerning our Iraq and Afghanistan experiences justifies confidence that we understand Libyan dynamics?

More recently, George Will wrote an essay raising the question, “Is it America’s duty to intervene wherever regime change is needed?”  Consider this point:

.  .  .  America has intervened in a civil war in a tribal society, the dynamics of which America does not understand. And America is supporting one faction, the nature of which it does not know.  “We are standing with the people of Libya,” says Secretary of State Hillary Clinton, evidently confident that “the” people are a harmonious unit.  Many in the media call Moammar Gaddafi’s opponents “freedom fighters,” and perhaps they are, but no one calling them that really knows how the insurgents regard one another, or understand freedom, or if freedom, however understood, is their priority.

While many commentators have been busy condemning Bradley Manning as a “terrorist” and the worst American traitor since John Anthony Walker, few of those hypocrites would admit that the “people power” revolutions now taking place throughout the Middle East have resulted from the publication of Manning’s purloined files by WikiLeaks.  Beyond that, few – if any – of those self-righteous journalists have hesitated to quote from those leaked documents in their own essays.  A look at one of those leaked cables (dated February 15, 2008 and originating from the American Embassy in Tripoli) gives us a better understanding of who some of those Libyan “freedom fighters” really are:

xxxxxxxxxxxx partly attributed the fierce mindset in Benghazi and Derna to the message preached by imams in eastern Libyan mosques, which he said is markedly more radical than that heard in other parts of the country. xxxxxxxxxxxx makes a point of frequenting mosques whenever he visits Libya as a means to connect with neighbors and relatives and take the political pulse.  Sermons in eastern mosques, particularly the Friday ‘khutba’, are laced with “coded phrases” urging worshippers to support jihad in Iraq and elsewhere through direct participation or financial contributions.  The language is often ambiguous enough to be plausibly denied, he said, but for devout Muslims it is clear, incendiary and unambiguously supportive of jihad.  Direct and indirect references to “martyrdom operations” were not uncommon.  By contrast with mosques in Tripoli and elsewhere in the country, where references to jihad are extremely rare, in Benghazi and Derna they are fairly frequent subjects.

The foregoing cable was discussed in a recent piece by Alexander Cockburn of CounterPunch.  Mr. Cockburn also focused on some information contained in the so-called Sinjar Records, which American forces retrieved from an Al Qaeda stronghold in northern Iraq during 2007:

The West Point study of the Iraqi Sinjar Records calculates that of the 440 foreign al-Qaeda recruits whose hometowns are known, 21 came from Benghazi, thereby making it the fourth most common hometown listed in the records.  Fifty-three of the al-Qaeda recruits came from Darnah, the highest total of any of the hometowns listed in the records.  The second highest number, 51, came from Riyadh, Saudi Arabia.  Darnah (80,000) has less than 2 per cent the population of Riyadh.  Darnah contributed “far and away the largest per capita number of fighters.”

The Embassy cable from February of 2008 and the Sinjar Records provide some useful information to consider when pondering the questions raised by George Will.  Is Team Obama “up to speed” on any of this?

The aforementioned CounterPunch article by Alexander Cockburn covered another episode of tragic goofiness – the Fukushima power plant disaster.  As I previously discussed here and here, the feeble information flow concerning this crisis has been downright sleazy.  Mr. Cockburn provided a must read critique of how this critical situation has been mishandled and misrepresented by the media:

Amid reasonable suspicions that leading news media might have been in receipt of informal government advisories to stop creating panic, it became much harder to find credible bulletins on what was actually happening.  In fact careful perusal of the daily briefings at the  Vienna hq of the UN’s International Atomic Energy Agency in Vienna disclosed absolutely no substantive progress and indeed discreet admissions that “[this was on March 23)  the “Agency still lacks data on water levels and temperatures in the spent fuel pools at Units 1, 2, 3 and 4.”

*   *   *

On our own website, by contrast, several articles and interviews stressed what Hirose Takashi said:

“All of the information media are at fault here I think.  They are saying stupid things like, why, we are exposed to radiation all the time in our daily life, we get radiation from outer space.  But that’s one millisievert per year.  A year has 365 days, a day has 24 hours; multiply 365 by 24, you get 8760.  Multiply the 400 millisieverts by that, you get 3,500,000 the normal dose.  You call that safe?  And what media have reported this?  None.  They compare it to a CT scan, which is over in an instant; that has nothing to do with it.  The reason radioactivity can be measured is that radioactive material is escaping.  What is dangerous is when that material enters your body and irradiates it from inside.   .  .  .”

Allow me to repeat Hirose Takashi’s question:  “And what media have reported this?  None.”  That’s because the media are incapable of covering serious (non-goofy) subjects.  Unfortunately, those vested with positions of responsibility and authority all over the world are impaired by a degree of goofiness, leaving them incapable of making the right decisions or taking the necessary steps to protect public safety and welfare.  Is this a permanent situation or just a temporary condition?


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Jeremy Grantham And Ike

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As an avid reader of Jeremy Grantham’s Quarterly Letter, I was surprised when he posted a Special Topic report on January 14 — so close to release of his Fourth Quarter 2010 Letter, which is due in a couple of weeks.  At a time when many commentators are focused on the 50th anniversary of John F. Kennedy’s historic Inaugural Address, Jeremy Grantham has taken the opportunity to focus on President Dwight Eisenhower’s Farwell Address of January 17, 1961.  (Grantham included the full text of Ike’s Farwell Address at the conclusion of the Special Topic essay.)

One passage from Ike’s Farwell Address seemed particularly prescient in the wake of the TARP bailout (which was not a success) and the “backdoor bailouts” including the Maiden Lanes (which were never to be repaid) as well as the cost of approximately $350 billion per year to investors and savers, resulting from the Federal Reserve’s zero-interest-rate-policy (often referred to as “ZIRP”).  Keep those Wall Street bailouts in mind while reading this passage from Ike’s speech:

Crises there will continue to be.  In meeting them, whether foreign or domestic, great or small, there is a recurring temptation to feel that some spectacular and costly action could become the miraculous solution to all current difficulties.  A huge increase in newer elements of our defense; development of unrealistic programs to cure every ill in agriculture; a dramatic expansion in basic and applied research – these and many other possibilities, each possibly promising in itself, may be suggested as the only way to the road we wish to travel.

But each proposal must be weighed in the light of a broader consideration:  the need to maintain balance in and among national programs – balance between the private and the public economy, balance between cost and hoped for advantage – balance between the clearly necessary and the comfortably desirable; balance between our essential requirements as a nation and the duties imposed by the nation upon the individual; balance between actions of the moment and the national welfare of the future.  Good judgment seeks balance and progress; lack of it eventually finds imbalance and frustration.

In his Special Topic report, Jeremy Grantham focused on the disappointing changes that caused Ike’s America to become 21st Century America.  After quoting Ike’s now-famous admonition about the power of the military-industrial complex (for which the speech is frequently quoted) Grantham pointed out that the unrestricted influence of corporate power over our government has become a greater menace:

Unfortunately, the political-economic power problem has mutated away from the military, although it has left important vestiges there, toward a broader problem:  the undue influence of corporate America on the government, and hence the laws, taxes, and social policies of the country. This has occurred to such a degree that there seems little real independence in Congress, with most Congressmen answering first to the desire to be reelected and the consequent need to obtain funding from, shall we say, sponsors, and the need to avoid making powerful enemies.

*   *   *

The financial resources of the carbon-based energy companies are particularly terrifying, and their effective management of propaganda goes back decades.  They established and funded “independent” think tanks and even non-profit organizations that have mysteriously always come out in favor of policies favorable to maintaining or increasing the profits of their financial supporters.  The campaign was well-organized and has been terrifyingly effective.

*   *   *

The financial industry, with its incestuous relationships with government agencies, runs a close second to the energy industry.  In the last 10 years or so, their machine, led by the famously failed economic consultant Alan Greenspan – one of the few businessmen ever to be laughed out of business – seemed perhaps the most effective.  It lacks, though, the multi-decadal attitude-changing propaganda of the oil industry.  Still, in finance they had the “regulators,” deregulating up a storm, to the enormous profit of their industry.

Grantham concluded his report with a suggestion for the greatest tribute we could give Eisenhower after America ignored Ike’s warnings about the vulnerability of our government to unrestricted influences.  Grantham’s proposed tribute to Ike would be our refusal to “take this 50-year slide lying down”.

To steal a slogan from the Tea Party, I suggest the voters need to “take America back” from the corporations which bought off the government.  Our government has every intention of maintaining the status quo.

In the 2010 elections, voters were led to believe that they could bring about governmental reform by voting for candidates who will eventually prove themselves as protectors of the wealthy at the expense of the disappearing middle class.  In the 2008 elections, Barack Obama convinced voters that he was the candidate of change they could believe in.  In the real world of 2011, economist Simon Johnson explained what sort of “change” those voters received, as exemplified by the President’s appointment of his new Chief of Staff:

Let’s be honest.  With the appointment of Bill Daley, the big banks have won completely this round of boom-bust-bailout.  The risk inherent to our financial system is now higher than it was in the early/mid-2000s.  We are set up for another illusory financial expansion and another debilitating crisis.

Bill Daley will get it done.

Just as Jeremy Grantham explained how Eisenhower’s concerns about the military-industrial complex were materialized in the form of a corporate-controlled government, another unholy alliance was discussed by Charles Ferguson, director of the documentary film, Inside Job.  Ferguson recently offered an analysis of the milieu that resulted in President Obama’s appointment of Larry Summers as Director of the National Economic Council.  As Larry Summers announced plans to move on from that position, Ferguson explained how Summers had been granted the opportunity to inflict his painful legacy upon us:

Summers is unique but not alone.  By now we are all familiar with the role of lobbying and campaign contributions, and with the revolving door between industry and government.  What few Americans realize is that the revolving door is now a three-way intersection.  Summers’ career is the result of an extraordinary and underappreciated scandal in American society:  the convergence of academic economics, Wall Street, and political power.

America needs new leaders who refuse to capitulate to the army of lobbyists on Capitol Hill.  Where are they?


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