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Latest Obama Cave-in Is Likely To Further Erode His Base

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Well, he did it again.  Despite the fact that President Obama had vowed to veto the 2012 National Defense Authorization Act (NDAA), which allows for indefinite detention of American citizens without trial, the White House announced that the President will breach yet another promise and sign the controversial bill.

Jeremy Herb at The Hill reported on the administration’s concern that if Obama were to veto the bill, there might not have been enough votes in Congress to prevent an override of that veto.  In other words:  Obama was afraid of being embarrassed.  The report noted the defensive language contained in the official White House spin, to the effect that some minor changes in wording were made to satisfy the President:

The White House backed down from its veto threat of the defense authorization bill Wednesday, saying that the bill’s updated language would not constrain the Obama administration’s counterterrorism efforts.

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The administration won some changes in conference committee, which wrapped up Monday, including the addition of a clause stating that FBI and local law enforcement counterterrorism activities would not be altered by the law.

Big deal.  Let the outrage begin!  At the Huffington Post, Michael McAuliff noted that the President had already decided to back down on his veto threat before the House of Representatives passed the bill:

The switch came just before the House voted 283-136 to pass the National Defense Authorization Act despite impassioned opposition that crossed party lines, with Democrats splitting on the bill and more than 40 Republicans opposing it.  Numerous national security experts and civil liberties advocates had argued that the indefinite detention measure enshrines recent, questionable investigative practices that are contrary to fundamental American rights.

At the Human Rights Watch website, no punches were pulled in their criticism of Obama’s latest betrayal of those very principles his supporters expected him to advance:

The Obama administration had threatened to veto the bill, the 2012 National Defense Authorization Act (NDAA), over detainee provisions, but on December 14, 2011, issued a statement indicating the president would likely sign the legislation.

“By signing this defense spending bill, President Obama will go down in history as the president who enshrined indefinite detention without trial in US law,” said Kenneth Roth, executive director of Human Rights Watch.  “In the past, Obama has lauded the importance of being on the right side of history, but today he is definitely on the wrong side.”

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The far-reaching detainee provisions would codify indefinite detention without trial into US law for the first time since the McCarthy era when Congress in 1950 overrode the veto of then-President Harry Truman and passed the Internal Security Act.

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“It is a sad moment when a president who has prided himself on his knowledge of and belief in constitutional principles succumbs to the politics of the moment to sign a bill that poses so great a threat to basic constitutional rights,” Roth said.

Many people might not know that quantitative equity research analyst and former hedge fund manager, Barry Ritholtz (author of Bailout Nation) is an alumnus of the Benjamin N. Cardozo School of Law in New York, where he served on the Law Review, and graduated Cum Laude with a 3.56 GPA.  Here are some of the recent comments made by Mr. Ritholtz concerning the National Defense Authorization Act:

While this is shocking, it is not occurring in a vacuum.  Indeed, it is part of a 30 year-long process of militarization inside our borders and a destruction of the American concepts of limited government and separation of powers.

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Other Encroachments On Civil Rights Under Obama

As bad as Bush was, the truth is that, in many ways, freedom and constitutional rights are under attack even more than during the Bush years.

For example:

Obama has presided over the most draconian crackdown on leaks in our history – even more so than Nixon.

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Furthermore – as hard as it is for Democrats to believe – the disinformation and propaganda campaigns launched by Bush have only increased under Obama.  See this and this.

And as I pointed out last year:

According to Department of Defense training manuals, protest is considered “low-level terrorism”.  And see this, this and this.

An FBI memo also labels peace protesters as “terrorists”.

At his blog, The Big Picture, Ritholtz made these points in a December 3 argument against the passage of this bill:

You might assume – in a vacuum – that this might be okay (even though it trashes the Constitution, the separation of military and police actions, and the division between internal and external affairs).

But it is dangerous in a climate where you can be labeled as or suspected of being a terrorist simply for questioning war, protesting anything, asking questions about pollution or about Wall Street shenanigans, supporting Ron Paul, being a libertarian, holding gold, or stocking up on more than 7 days of food.  And see this.

Once again, President Obama has breached a promise to his supporters out of fear that he could be embarrassed in a showdown with Congress.  Worse yet, Obama has acted to subvert the Constitutional right of Due Process simply because he wants to avoid the shame of a veto override.  As many commentators have observed, George W. Bush was not plagued by any such weakness and he went on to push a good number of controversial initiatives through Congress – most notably the Iraq War Resolution.  I find it surprising that so many of President Obama’s important decisions have been motivated by a fear of embarrassment, while at the same time he has exhibited no concern about exposing such timidity to both his allies and his opponents – wherever they may be.


 

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Congressional Sleaze In The Spotlight

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Last February, I wrote a piece entitled, “License To Steal”, concerning a certain legal loophole which allows members of Congress to trade stocks using “insider information”:

On January 26, 2009, Congressman Brian Baird introduced H.R.682, the “Stop Trading on Congressional Knowledge Act” (STOCK Act).  The bill was intended to resolve the situation concerning one of the more sleazy “perks” of serving in Congress.  As it presently stands, the law prohibiting “insider trading” (e.g. acting on confidential corporate information when making a transaction involving that company’s publicly-traded stock) does not apply to members of Congress.  Remember how Martha Stewart went to prison?  Well, if she had been representing Connecticut in Congress, she might have been able to interpose the defense that she was inspired to sell her ImClone stock based on information she acquired in the exercise of her official duties.  In that scenario, Ms. Stewart’s sale of the ImClone stock would have been entirely legal.  That’s because the laws which apply to you and I do not apply to those in Congress.  Needless to say, within six months of its introduction, H.R.682 was referred to the Subcommittee on the Constitution, Civil Rights, and Civil Liberties where it died of neglect.  Since that time, there have been no further efforts to propose similar legislation.

At a time when the public is finally beginning to understand how our elected officials are benefiting from a system of “legalized graft” in the form of campaign contributions, more attention is being focused on how the “real money” is made in Congress.  A new book by Peter Schweizer – Throw Them All Out – deals with this very subject.  The book’s subtitle is reminiscent of the point I tried to make in my February posting:  “How politicians and their friends get rich off insider stock tips, land deals and cronyism that would send the rest of us to prison”.

Peter J. Boyer wrote an article for Newsweek, explaining how Peter Schweizer came about writing this book.  Schweizer is the William J. Casey research fellow at the Hoover Institution and as Boyer pointed out, Schweizer is considered by liberal critics as a “right wing hit man”.  It’s nice to see someone from the right provide us with an important treatise on crony capitalism.  The book exposes insider trading by both Democrats and Republicans – hell-bent on profiteering from the laws they enact.  Boyer’s essay provided us with some examples of the sleazy trades made by Congress-cretins, as described in Throw Them All Out.  Here are a few examples:

Indeed, Schweizer reports that, during the debate over Obama’s health-care reform package, John Boehner, then the House minority leader, was investing “tens of thousands of dollars” in health-insurance-company stocks, which made sizable gains when the proposed public option in the reform deal was killed.

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One of the more dramatic episodes in the book recounts the trading activity of Republican Rep. Spencer Bachus, of Alabama, who, as the ranking member of the House Financial Services Committee, was privy to sensitive high-level meetings during the 2008 financial crisis and proceeded to make a series of profitable stock-option trades.

Bachus was known in the House as a guy who liked to play the market, and in fact he was pretty good at it; one year, he reported a capital gain in excess of $150,000 from his trading activities. More striking is that Bachus boldly carried forth his trading in the teeth of the impending financial collapse, the nightmarish dimensions of which he had learned about first-hand in confidential briefings from Treasury Secretary Henry Paulson and Fed chairman Ben Bernanke.  On Sept. 19, 2008, after attending two such briefings, Bachus bought options in an index fund (ProShares UltraShort QQQ) that effectively amounted to a bet that the market would fall.  That is indeed what happened, and, on Sept. 23, Bachus sold his “short” options, purchased for $7,846, for more than $13,000—nearly doubling his investment in four days.

Around the time Congress and the Bush administration worked out a TARP bailout, Bachus made another options buy and again nearly doubled his money.

*   *   *

After the first briefing from Bernanke and Paulson, brokers for Democratic Congressman Jim Moran, of Virginia, and his wife sold their shares in 90 companies, dodging the losses that others who stayed in the market would soon face. Republican Rep. Shelley Capito, of West Virginia, sold between $100,000 and $250,000 of Citigroup stock the day after the first meeting, recording capital gains on Citigroup transactions in that rocky period.

Peter Schweizer’s analysis of the bipartisan culture of corruption on Capitol Hill reinforces one of my favorite criticisms of American government:  Our Sham Two-Party System.  The Republi-Cratic Corporatist Party owes its allegiance to no population, no principle, no cause – other than pocketing as much money as possible.  Just as there have been some recent “pushback” efforts by outraged citizens, Schweizer is now advocating a “Throw Them All Out” campaign.  This could have a potentially significant impact on Congress, because the term of office in the House of Representatives lasts for only two years.  Consider Schweizer’s thought at the close of the Newsweek piece:

“I was troubled,” he says, “by the fact that the political elite gets to play by a different set of rules than the rest of us.  In the process of researching this book, I came to the conclusion that political party and political philosophy matter a lot less than we think.  Washington is a company town, and politics is a business. People wonder why we don’t get more change in Washington, and the reason is that the permanent political class is very comfortable.  Business is good.”

I concluded my February 28 posting with this point:

“Inside information” empowers the party in possession of that knowledge with something known as “information asymmetry”, allowing that person to take advantage of (or steal from) the less-informed person on the other side of the trade.  Because membership in Congress includes a license to steal, can we ever expect those same individuals to surrender those licenses?  Well, if they were honest  .   .   .

A successful “Throw Them All Out” campaign would obviate the necessity of attempting to convince this Congress to pass the “Stop Trading on Congressional Knowledge Act” (STOCK Act).  If the next Congress knows that its political survival is depending on its passage of the STOCK Act, we might see it become law.


 

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