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Circular Firing Squad

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I knew this would happen.  Near the end of Obama’s first year in office, I anticipated that the President’s polling numbers would eventually sink and his reelection campaign would face strong headwinds.  By that point – on the eve of his reelection campaign – someone would blame the defection of white voters for Obama’s failure to win a second term.  In December of 2009, I wrote a piece discussing how the “race card” would not serve as a “free pass” for the Disappointer-In-Chief.  I referenced critiques, written by several African-American commentators, who were more-than-a-little upset with Obama’s job performance during that first year.

As expected, once Obama’s approval rating dropped to 40%, it didn’t take too long for someone to step forward with the “blame whitey” meme.  Melissa Harris-Perry, a professor of political science at Tulane University, recently wrote an article for The Nation, wherein she blamed racism for Obama’s declining popularity:

The 2012 election may be a test of another form of electoral racism:  the tendency of white liberals to hold African-American leaders to a higher standard than their white counterparts.  If old-fashioned electoral racism is the absolute unwillingness to vote for a black candidate, then liberal electoral racism is the willingness to abandon a black candidate when he is just as competent as his white predecessors.

*   *   *

President Obama has experienced a swift and steep decline in support among white Americans – from 61 percent in 2009 to 33 percent now.  I believe much of that decline can be attributed to their disappointment that choosing a black man for president did not prove to be salvific for them or the nation.  His record is, at the very least, comparable to that of President Clinton, who was enthusiastically re-elected.  The 2012 election is a test of whether Obama will be held to standards never before imposed on an incumbent.  If he is, it may be possible to read that result as the triumph of a more subtle form of racism.

Despite the fact that Obama has yet to lose the 2012 election, Professor Harris-Perry has already seen fit to assemble a “circular firing squad” to assign blame for the Obama campaign’s inevitable failure.  Her theory about racism drew quick fire from more-intelligent commentators, who exposed the absurdity of her claim.  Corey Robin, who earned a PhD in Political Science from Yale, did a thorough job of debunking Professor Harris-Perry’s claim.  Among the points made by Dr. Robin, was this:

In fact, according to this September Washington Post story, “Five months ago, 83 percent of African Americans held ‘strongly favorable’ views of Obama, but in a new Washington Post-ABC news poll that number has dropped to 58 percent.”  That’s why, according to this piece, Obama has made special outreach efforts to blacks:  he’s worried about their dwindling support.  But as the Post also goes onto explain, “That drop is similar to slipping support for Obama among all groups.”

The most important point made by Corey Robin was his focus on the overarching problem of Obama’s politics:

But when we assess Obama, like any other president, we’re not thinking about his skills and talents; we’re thinking about what we call his “politics” and, even more important, how his politics reflect larger forces and structures in American society: corporate power, neoliberal ideology, declining organizational capacity on the left, and so on.  We see him, often, as a symptom of those forces, not a challenge to them.  Not, again, because of any lack of intelligence or ability on his part, but because, in part, he is a product of the structure (with all its failings) we would like to see dismantled.

Yves Smith of Naked Capitalism ripped Professor Harris-Perry’s article to shreds.  Ms. Smith concluded her essay by placing blame back on the man himself:

It took most people far too long to get that Obama was a phony because the presumption that a black man would be sympathetic to the fate of the downtrodden is a deeply embedded but never voiced prejudice (and this bias is exploited successfully by the right in depicting Obama as a socialist).

*   *   *

These traditional iconic symbols of liberalism – secular urban elitism, blackness, technocratic skill, micro-issue identity based political organizing groups – have been fully subverted in the service of banking interests.  Obama is the ultimate, but not the only, piece of evidence that these symbols are now used simply to con the Democratic base out of their support and money.  The task of moving forward will require rebuilding the symbolic vocabulary of the defenders of the middle class.

Melissa Harris-Perry is forgetting that Barack Obama is only half  black.  In fact, many of us are blaming Obama’s white half for breaking so many campaign promises and for his selling out to the plutocracy.


 

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Obama Will Lose In 2012

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The criticisms voiced by many of us during President Obama’s first year in office are finally beginning to register with the general public.  Here’s an observation I made on December 14, 2009:

As we approach the conclusion of Obama’s first year in the White House, it has become apparent that the Disappointer-in-Chief has not only alienated the Democratic Party’s liberal base, but he has also let down a demographic he thought he could take for granted:  the African-American voters.  At this point, Obama has “transcended race” with his ability to dishearten loyal black voters just as deftly as he has chagrined loyal supporters from all ethnic groups.

On June 11 2010, Maureen Dowd gave us some insight as to what it was like on Obama’s campaign plane in 2008:

The press traveling with Obama on the campaign never had a lovey-dovey relationship with him.  He treated us with aloof correctness, and occasional spurts of irritation.  Like many Democrats, he thinks the press is supposed to be on his side.

The patrician George Bush senior was always gracious with reporters while conveying the sense that what we do for a living was rude.

The former constitutional lawyer now in the White House understands that the press has a role in the democracy.  But he is an elitist, too, as well as thin-skinned and controlling.  So he ends up regarding scribes as intrusive, conveying a distaste for what he sees as the fundamental unseriousness of a press driven by blog-around-the-clock deadlines.

The voting public is just beginning to digest the sordid facts of the Solyndra scandal.  Rest assured that the Republican Party will educate even the most intellectually challenged of those “low information voters” as to every detail of that rotten deal.  The timing of the Solyndra exposé couldn’t be worse for Team Obama.

On August 15, the Gallup Organization reported that during the week of August 8-14, Obama’s job approval rating dropped to 40% – the lowest it had been since he assumed office.  Another Gallup poll, conducted with USA Today during August 15-18 revealed that, for the first time, a majority of Americans – 53% – blame Obama for the nation’s economic problems.  Forty-seven percent still say he is “not much” (27%) or “not at all” (20%) to blame.

A new McClatchy-Marist poll, taken on September 14-15, revealed that Obama’s sinking popularity has placed him just 5 points ahead of non-candidate Sarah Palin (49-44 percent).  The Miami Herald noted that the poll results show the President just 2 points ahead of Mitt Romney (46-44):

Overall, the gains among Republicans “speak to Obama’s decline among independents generally, and how the middle is not his right now,” said Lee Miringoff, director of the Marist College Institute for Public Opinion, which conducted the national survey.

“This will require him to find ways to either win back the middle or energize his base in ways that hasn’t happened so far,” Miringoff said.

By a margin of 49 percent to 36 percent, voters said they definitely plan to vote against Obama, according to the poll.  Independents by 53 percent to 28 percent said they definitely plan to vote against him.

With that sentiment permeating the electorate a little more than a year before the general election, most Americans think Obama won’t win a second term.

By 52 percent to 38 percent, voters think he’ll lose to the Republican nominee, whoever that is.  Even among Democrats, 31 percent think the Republican nominee will win.

The most devastating development for Obama has been the public reaction to Ron Suskind’s new book about the President’s handling of the economy, Confidence Men.  Berkeley economics professor, Brad DeLong has been posting and discussing excerpts of the book at his own website, Grasping Reality With Both Hands.  On September 19, Professor DeLong posted a passage from Suskind’s book, which revealed Obama’s expressed belief (in November of 2009) that high unemployment was a result of productivity gains in the economy.  Both Larry Summers (Chair of the National Economic Council) and Christina Romer (Chair of the Council of Economic Advisers) were shocked and puzzled by Obama’s ignorance on this subject:

“What was driving unemployment was clearly deficient aggregate demand,” Romer said.  “We wondered where this could be coming from.  We both tried to convince him otherwise.  He wouldn’t budge.”

Because of Obama’s willful refusal to heed the advice of his own economic team, our nation’s unemployment problem has persisted at levels of 9% and above (with worse to come).  As Ron Suskind remarked in that passage:

The implications were significant.  If Obama felt that 10 percent unemployment was the product of sound, productivity-driven decisions by American business, then short-term government measures to spur hiring were not only futile but unwise.

There you have it.  Despite the efforts of Obama’s apologists to blame Larry Summers or others on the President’s economic team for persistent unemployment, it wasn’t simply a matter of “the buck stopping” on the President’s desk.  Obama himself has been the villain, hypocritically advocating a strategy of “trickle-down economics” – in breach of his campaign promise to do the exact opposite.

Reactions to the foregoing passage from Confidence Men – appearing as comments to Brad DeLong’s September 19 blog entry – provide a taste of how the majority of Obama’s former supporters will react when they learn the truth about this phony politician.  Here are a few samples:

moron said…

.  .  .   This disgraceful shill for global capital has destroyed the Democratic party for a generation.

kris said…

The President sure does come across as awfully arrogant, dogmatic and not very smart from this excerpt (and as someone who does not like to listen to his advisors- especially the female ones.).

mike said…

Wow. Romer was oh so right. And Obama was oh, so so wrong… What a pathetic display of arrogance and bad leadership.      .   .   .

Th said…

And I was always joking about Obama as the “Manchurian Candidate” from the U of Chicago. Productivity? Really?

Dave said…

I’ve lost any last shred of respect for Mr. O.

Now that Confidence Men and the Solyndra scandal are getting increased publicity, we can expect that large numbers of voters will be losing their “last shred of respect” for Mr. Obama.  It’s past time for the Democratic Party to face reality:  If they seriously want to retain control of the Executive branch – someone will have to ask Obama to step aside.  DNC Chair, Debbie Wasserman-Schultz is obviously not up to this task.


 

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Congress Could Be Quite Different After 2012 Elections

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They come up for re-election every two years.  Each of the 435 members of the House of Representatives is in a constant “campaign mode” because the term of office is so short.  Lee White of the American Historical Association summed-up the impact of the 2010 elections this way:

On Tuesday, November 2, 2010, U.S. voters dramatically changed the landscape in Washington.  Republicans gained control of the House and, although the Democrats retained control of the Senate their margin in that body has been reduced to 53-47.

*   *   *

Clearly the most dramatic change will be in the House with new Republican committee and subcommittee chairs taking over.

Voter discontent was revealed by the fact that just before the 2010 elections, the Congressional approval rating was at 17 percent.  More recently, according to a Gallup poll, taken during April 7-11 of 2011, Congressional job approval is now back down to 17 percent, after a bump up to 23 percent in February.  Of particular interest were the conclusions drawn by the pollsters at Gallup concerning the implications of the latest polling results:

Congress’ approval rating in Gallup’s April 7-11 survey is just four points above its all-time low.  The probability of a significant improvement in congressional approval in the months ahead is not high. Congress is now engaged in a highly contentious battle over the federal budget, with a controversial vote on the federal debt ceiling forthcoming in the next several months.  The Republican-controlled House often appears to be battling with itself, as conservative newly elected House members hold out for substantial cuts in government spending.  Additionally, Americans’ economic confidence is as low as it has been since last summer, and satisfaction with the way things are going in the U.S. is at 19%.

At this point, it appears as though we could be looking at an even larger crop of freshmen in the 2013 Congress than we saw in January, 2011.  (According to polling guru, Nate Silver, the fate of the 33 Senate incumbents is still an open question.)

One poster child for voter ire could be Republican Congressman Spencer Bachus of Alabama.  You might recall that at approximately this time last year, Matt Taibbi wrote another one of his great exposés for Rolling Stone entitled, “Looting Main Street”.  In his exceptional style, Taibbi explained how JPMorgan Chase bribed the local crooked politicians into replacing Jefferson County’s bonds, issued to finance an expensive sewer project, with variable interest rate swaps (also known as synthetic rate swaps).  Then came the financial crisis.  As a result, the rate Jefferson County had to pay on the bonds went up while the rates paid by banks to the county went down.  It didn’t take long for the bond rating companies to downgrade those sewer bonds to “junk” status.

JPMorgan Chase unsuccessfully attempted to dismiss a lawsuit arising from this snafu.  Law 360 reported on April 15 that the Alabama Supreme Court recently affirmed the denial of JPMorgan’s attempt to dismiss the case, which was based on these facts:

Jefferson County accuses JPMorgan of paying bribes to county officials in exchange for an appointment as lead underwriter for what turned out to be a highly risky refinancing of the county’s sewer debt, which caused Jefferson County billions of dollars in losses.  According to the complaint, JPMorgan, JPMorgan Chase and underwriting firm Blount Parrish & Co. handed out bribes, kickbacks and payoffs to swindle the county out of millions in inflated fees.

JPMorgan claimed that only the Governor of Alabama had authority to bring such a suit.  I wonder why former Alabama Governor Bob Riley didn’t bother to join Jefferson County as a party plaintiff, making the issue moot and saving Jefferson County some legal fees, before the case found its way to the state Supreme Court?

Joe Nocera of The New York Times recently put the spotlight on another character from Alabama politics:

Has Spencer Bachus, as the local congressman, decried this debacle?  Of course – what local congressman wouldn’t?  In a letter last year to Mary Schapiro, the chairwoman of the S.E.C., he said that the county’s financing schemes “magnified the inherent risks of the municipal finance market.”

*   *   *

Bachus is not just your garden variety local congressman, though.  As chairman of the Financial Services Committee, he is uniquely positioned to help make sure that similar disasters never happen again – not just in Jefferson County but anywhere.  After all, the new Dodd-Frank financial reform law will, at long last, regulate derivatives.  And the implementation of that law is being overseen by Bachus and his committee.

Among its many provisions related to derivatives – all designed to lessen their systemic risk – is a series of rules that would make it close to impossible for the likes of JPMorgan to pawn risky derivatives off on municipalities.  Dodd-Frank requires sellers of derivatives to take a near-fiduciary interest in the well-being of a municipality.

You would think Bachus would want these regulations in place as quickly as possible, given the pain his constituents are suffering.  Yet, last week, along with a handful of other House Republican bigwigs, he introduced legislation that would do just the opposite:  It would delay derivative regulation until January 2013.

As Joe Nocera suggested, this might be more than simply a delaying tactic, to keep derivatives trading unregulated for another two years.  Bachus could be counting on Republican takeovers of the Senate and the White House after the 2012 election cycle.  At that point, Bachus and his fellow Tools of Wall Street could finally drive a stake through the heart of the nearly-stillborn baby known as “financial reform”.

On the other hand, the people vested with the authority to cast those votes that keep Spencer Bachus in office, could realize that he is betraying them in favor of the Wall Street banksters.  The “public memory” may be short but – fortunately – the term of office for a Congressman is equally brief.


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Wealth Redistribution

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One of the sleaziest, most disingenuous arguments exploited by politicians is the “wealth redistribution” theme.  Whenever an influential corporate sponsor of some creepy politician is confronted with proposed legislation, which might change the status quo by reducing unconscionable profiteering, we are told that the new bill is a “socialist” attempt at “wealth redistribution”.  Unfortunately, there are too many sheeple who don’t realize that “wealth redistribution” already happened.

The recent uprisings in the Middle East have demonstrated how difficult it can be to maintain a plutocracy in the modern world.  As the American voting public becomes more familiar with the economic circumstances which led to the Egyptian turmoil, attention gradually gets refocused on how our domestic situation compares with Mubarak’s dystopia.  Blogger “George Washington” (a former law school professor) of Washington’s Blog recently wrote a piece concerning how the “Gini coefficient” demonstrates that America’s upward wealth redistribution has reduced this nation to banana republic status:

Egyptian, Tunisian and Yemeni protesters all say that inequality is one of the main reasons they’re protesting.

However, the U.S. actually has much greater inequality than in any of those countries.

Specifically, the “Gini Coefficient” – the figure economists use to measure inequality – is higher in the U.S.

*   *   *

Gini Coefficients are like golf – the lower the score, the better (i.e. the more equality).

According to the CIA World Fact Book, the U.S. is ranked as the 42nd most unequal country in the world, with a Gini Coefficient of 45.

In contrast:

  • Tunisia is ranked the 62nd most unequal country, with a Gini Coefficient of 40.
  • Yemen is ranked 76th most unequal, with a Gini Coefficient of 37.7.
  • And Egypt is ranked as the 90th most unequal country, with a Gini Coefficient of around 34.4.

And inequality in the U.S. has soared in the last couple of years, since the Gini Coefficient was last calculated, so it is undoubtedly currently much higher.

So why are Egyptians rioting, while the Americans are complacent?

Well, Americans – until recently – have been some of the wealthiest people in the world, with most having plenty of comforts (and/or entertainment) and more than enough to eat.

But another reason is that – as Dan Ariely of Duke University and Michael I. Norton of Harvard Business School demonstrate – Americans consistently underestimate the amount of inequality in our nation.

Ariely and Norton’s paper, based on their 2005 poll of 5,522 citizens about their preferences for wealth division, has been the subject of much commentary.  Last fall, Bruce Watson wrote an article for Daily Finance discussing Ariely and Norton’s report.  As Watson explained, the following empirical data compiled by Professor Edward Wolff, (and incorporated into the Ariely-Norton paper) portrayed the “real world” wealth distribution in America:

Currently, 85% of America’s wealth, which is defined as total assets minus total liabilities, is held by the country’s richest 20%.  Meanwhile the upper middle class holds 11%, the middle class has 4%, and the lower class and poor share an anemic 0.3%.

Here’s how Watson summarized the results of the Ariely-Norton research:

In the poll, the vast majority of Americans across the political, gender and wealth spectrum displayed a markedly skewed understanding of how America’s money is divided.  On average, respondents thought that the rich hold only 58% of the nation’s wealth, 32% less than their actual holdings.  They thought that the middle class controls 13% of the country’s wealth, more than three times their actual holdings.  As for the bottom 40% of the population, the assumption was that the lower class and poor own a measly 9% of the country’s wealth.  In reality, these two groups control about one thirtieth of that amount.

Who Should Get the Money?

Although the perception that America’s wealth distribution is unfair cut across partisan lines, Republicans and Democrats disagreed about the ideal distribution.  People who voted for George Bush believed that the richest 20% of the population deserved roughly 35% of the nation’s wealth.  Kerry voters radically disagreed:  they felt that the rich deserved only about 30%. When it came to the country’s poorest citizens, Bush voters felt that they deserved about 9% of the country’s assets; Kerry voters preferred to give them 12%.

Respondents making over $100,000 per year, the group most heavily skewed toward a top-heavy distribution of wealth, advocated a system in which the top 20% received about 40% of the country’s assets and the bottom 20% got roughly 7%.  Yet even this comparatively Dickensian wealth distribution still gave America’s rich less than half of their current holdings, while giving the poorest more than twenty times their current holdings.

In October of 2008, before the full extent of the Wall Street megabank bailouts had been completely understood by most Americans (and before those multi-million-dollar bonuses had been awarded to the malefactors who caused the financial crisis) the Gallup Organization conducted a poll on the subject of wealth redistribution.  This is what they observed:

A majority of Americans (58%) say money and wealth should be more evenly distributed among a larger percentage of the people, although slightly less than half (46%) go so far as to say that the government should redistribute wealth by “heavy taxes on the rich.”

*   *   *

Still, in each of the four times Gallup has asked this question in recent years, between 45% and 51% of Americans have gone so far as to agree with the fairly harsh-sounding policy of “redistribut[ing] wealth by heavy taxes on the rich.”

Because the polls discussed above reveal that the current wealth distribution is unacceptable to most Americans, the “wealth redistribution” argument — as it is often used by politicians – should be a non-starter.  Perhaps a program of  “enhanced tax incentives for generosity” might enjoy more widespread acceptance than Gallup’s “heavy taxes on the rich” – to the point where an overwhelming majority of Americans would support it.

Unfortunately, unless that “overwhelming majority of Americans” has an army of lobbyists to advance such an initiative, the cash registers politicians portraying the effort as “socialism” will be the only voices that matter.


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Trouble Ahead For Congressional Democrats

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September 2, 2010

Quite a number of commentators have expressed shock in reaction to a recent Gallup Poll pitting a “generic Democrat” against a “generic Republican” for Congress.  As of August 30, the Democrat was trailing by a huge, 10-point margin (51% to 41%).  Gallup described it as “the largest in Gallup’s history of tracking the midterm generic ballot for Congress”.  An examination of the graph reveals that the hypothetical Democrat’s 49-43 lead in mid-July was lost approximately one week later.

There has been widespread speculation as to the cause of this reversal of fortune.  Byron York wrote a piece for The Washington Examiner, which considered a more recent Gallup Poll, pinpointing the particular issues where the Republican position was more popular.  Mr. York then provided his own opinions as to why and how the “generic Democrat” was faltering on some of these issues.  With respect to the economy, York said this:

In October 2006, Democrats held a 53 to 37 lead over Republicans on the issue.  Now, after Democrats passed an $862 billion stimulus bill and touted 2010 as the “summer of recovery,” Republicans hold a 49 to 38 lead.  Democrats have gone from having a 16 point lead to being 11 points behind.

As for the problem of corruption in government, York gave this interpretation of the polling results:

Back in ’06, a large majority — 51 percent to 28 percent — trusted Democrats more than Republicans to deal with the issue.  Now, with Democrats facing high-profile ethics proceedings in Congress, Republicans hold a 38 to 35 lead.

The subject of terrorism was another area where Mr. York offered his opinion on the public’s renewed preference for Republican stewardship:

Just before the ’06 elections, Democrats held a 47 to 42 lead on protecting against terrorism.  Now, after Ft. Hood, Detroit, and the Times Square bombing attempt, Republicans hold a 55 to 31 lead.

I have a different perspective on what has been motivating the voters to favor a “generic Republican” candidate.  Given the format of the poll, I believe the responses are rooted in archetypal motivations rather than the positions and actions of individual candidates on particular issues.  For example, consider the timing:  Late July was when President Obama was taking his umpteenth vacation and playing golf for the zillionth time.  Democrats from the Senate (more so than Congressional Dems) had just sold out to Wall Street by completely eviscerating the so-called, financial “reform” bill, making it as much of a farce as their healthcare “reform” artifice.  The two “reform” shams were widely perceived as a betrayal of the Democratic Party “base” by both houses of Congress as well as the Obama administration.  The aggregate impact of those two legislative hoaxes impacted the public’s understanding of the extent to which corruption and economic irresponsibility were apparent in their Democratic leaders.  I don’t believe it’s so much a problem with excessive spending (i.e. stimulus efforts) as it is with plain-old sleaziness.  “Countrywide Chris” Dodd’s skullduggery is more likely seen as a serious problem than the antics of Charlie Rangel and company.

President Obama’s inability to take a decisive position on anything – his constant attempts to travel up the fork in the road – are recognized as weak leadership, which is then reinforced as a trait of all Democrats.  The constant golfing and vacationing during this crucial period have helped augment the image of a dilettante — as well as an ineffective and/or unconcerned official.  As a result, voters are less confident that these leaders can protect them from terrorism.  When a terrorist succeeds, that event magnifies the perceived weakness, regardless of whether and how many other attempted terrorist schemes may have been thwarted under the current administration.

Meanwhile, pollster Nate Silver has come along to tell us that we’re all reading too much into those recent Gallup Polls.  In an article for The New York Times, Mr. Silver benefited the rest of us with his unique Brainiac perspective:

The reasons for the Democrats’ decline are, as we say in the business, overdetermined.  That is, there are no lack of hypotheses to explain it:  lots of causes for this one effect.  The economy?  Sure.  Unpopular legislation like health care?  Yep.  Some “bad luck” events like the Gulf Oil spill?  Mmm-hmm.  The new energy breathed into conservatives by the Tea Party movement?  Uh-huh.

And this hardly exhausts the theories.  An inexperienced White House that has sometimes been surprisingly inept at coping with the 24/7 news media cycle?  The poor optics associated with Democrats having had a filibuster-proof majority in theory, but not always in practice?  All of the above.

These causes can’t be so easily untangled on the basis of polling evidence; there’s really no basis on which to evaluate the competing hypotheses.  This is particularly so given that different types of political events aren’t isolated from one another — health care reform might have been unpopular, for instance, but the reason for its unpopularity may ultimately have been the economy.

For this reason, we can be skeptical of two types of analysis: claiming that Factor X definitely isn’t contributing to the Democrats’ troubles, and asserting that it definitely is.

Regardless of the cause, the Democrats are headed for serious trouble in November.  As far as I’m concerned:  It serves them right.




Keeping Americans Dumb

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August 26, 2010

Much has been written lately about the fact that Americans are becoming increasingly dumb.  How has this happened?  Some commentators have expressed the opinion that young people spend too much time playing video games and not enough time reading.  Whatever the cause, the statistics are shocking.  Lloyd de Vries recently did a report for CBS News concerning a Roper Poll of people aged 18-24, conducted for National Geographic.  Despite the wall-to-wall coverage of Hurricane Katrina, one-third of those polled could not locate Louisiana on a map.  Only 50 percent could locate New York State on a map.  Sixty percent could not locate Iraq on a map of the Middle East.  A recent Gallup Poll revealed more of the same:

When Americans are asked to identify the country from which America gained its independence, 76% correctly name Great Britain.  A handful, 2%, think America’s freedom was won from France, 3% mention some other country (including Russia, China, and Mexico, among others named), while 19% are unsure.

*   *   *

Only 66% of those aged 18-29 know that America gained its independence from England, compared to 79% of those aged 30 and older.

My favorite result from that poll was the revelation that 18 percent of the respondents believe that the sun revolves around the earth.  Roll over, Copernicus!

After reading so much of the news coverage concerning the Deepwater Horizon catastrophe in the Gulf of Mexico (it’s west of Florida and south of the Alabama – Mississippi border) I’m beginning to suspect that the news and entertainment industries are responsible for dumbing-down Americans.  While we’re at it – we should be mindful of the role of the United States government in this effort.  Consider what our President said on August 4th:

“A report out today by our scientists shows that the vast majority of the spilled oil has been dispersed or removed from the water,” Obama said.

Beth Daley of the Boston Globe gave us another example of what our government told us about all that oil:

Earlier this month, Jane Lubchenco, National Oceanic and Atmospheric Administration chief, declared that “at least 50 percent of the oil that was released is now completely gone from the system, and most of the remainder is degrading rapidly or is being removed from the beaches.’’

On August 20, we learned about the falsity of the government’s claims that the oil had magically disappeared.  The Washington Post put it this way:

Academic scientists are challenging the Obama administration’s assertion that most of BP’s oil in the Gulf of Mexico is either gone or rapidly disappearing — with one group Thursday announcing the discovery of a 22-mile “plume” of oil that shows little sign of vanishing.

As time drags on, it is becoming more apparent that both BP and the federal government are deliberately trying to conceal the extent of the damage caused by the Deepwater Horizon blowout.  Lisa Hooper-Bui is a professor of entomology at Louisiana State University.  She recently wrote an op-ed piece for The New York Times, discussing the frustration experienced by scientists (including herself) who are attempting to measure the impact of this event on the environment.  As it turns out, unless you know “the secret handshake” – you might as well give up because you ain’t findin’ out nuttin’:

The problem is that researchers for BP and the government are being kept quiet, and their data is unavailable to the rest of the community.  When damages to the gulf are assessed in court or Congress, there might not be enough objective data to make a fair judgment.

*   *   *

Independent researchers like me and my team — we study the effect of things like oil and dispersants on insects — have had to rely on the meager discretionary funds provided by our university departments, particularly in the early weeks of the disaster.  And, as the weeks have rolled into months, we have found ourselves blocked from a widening list of sites, all of which are integral to completing our investigations.

America’s dumbed-down “sheeple” have been conditioned by the news media to disregard accounts of cover-ups, unless such accounts have been authorized by the corporate sponsors of those news outlets.  The expression “conspiracy theory” is invoked to serve as a stamp of falsehood on any factual account running contrary to a mainstream-approved narrative.  The usual tactics involve the use of such terms as “grassy knoll” or “Oliver Stone” as though the evidence disputing the “single bullet theory” of President Kennedy’s assassination has been conclusively discredited and that anyone who rejects the Warren Report is a fool.  (In fact, the most recent of the thousands of books on this subject —  Head Shot by physicist G. Paul Chambers, PhD — demonstrates that the physics behind the lone-gunman theory is not only wrong — but scientifically impossible.)

Uncritical reliance of the authority of the “mainstream” news media (and – for that matter – whatever can be found on the Internet) has also served to “dumb-down” Americans in a big way.  The horizons of our reality have been crimped to exclude “troublesome” information and our attention has been focused on American Idol drivel.  I was reminded of another example of the “conspiracy theory” stigma when I stumbled across this piece, appearing in the Financial Times, which was co-authored by President Clinton’s former Chief of Staff, John Podesta.  The article presented a great argument for allowing the Bush tax cuts to expire for the wealthiest two percent of households.  When I saw Podesta’s name, I was reminded of his position on another so-called, “cover-up conspiracy theory” —  the subject of UFOs and what the government really knows about them.  Here is a video clip of John Podesta making the case for disclosure of data compiled by the United States government on the subject.  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, the truth is out there  —  but if you limit your information intake to what you are fed by the mainstream media (or any other authoritarian source) – you might not find it.



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Not Getting It Done

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August 9, 2010

Are the Democrats trying to lose their majorities in both the Senate and the House in November?  Their two biggest accomplishments, the healthcare “reform” bill and the financial “reform” bill haven’t really impressed the electorate.  According to a Gallup Poll, voter reaction to the passage of the “Affordable Healthcare Act” is 49 percent contending that the bill is a “good thing” as opposed to 46 percent who believe it is a “bad thing”, with 5 percent undecided.  Criticism of the “Wall Street Reform and Consumer Protection Act of 2010” has been widespread, as I have previously discussed here, here and here.  The latest critique of the bill came from Professor Thomas F. Cooley, of the Stern School of Business at NYU.  His Forbes article entitled, “The Politics Of Regulatory Reform”, was based on this theme:

The awareness of how close we came to paralyzing the financial system created an opportunity to do something truly significant to make the system safer and more in tune with the needs of our economy.  Sadly, because all things in Washington are political, we fumbled the ball.

Rahm Emanuel’s infamous doctrine, “You never want a serious crisis to go to waste” is apparently being disregarded by Rahm Emanuel and company at The White House.  Of course, the entire economic catastrophe has provided the Obama administration with a boatload of crises – most of which have already gone to waste.  For example, consider this fiasco-in-progress:  The “small business” sector plays such an important role in keeping Americans employed, a bill to facilitate lending to small businesses has been sponsored by Senator Mary Landrieu (D-Louisiana).  An August 7 report by Sharon Bernstein of the Los Angeles Times provided this update on the status of the measure:

The small business loan assistance ran into trouble in the Senate when members from both parties began attaching amendments to support their favored causes.

The ineffective efforts of Senate Democrats are unfairly souring public opinion on their more unified counterparts in the House.  In attempt to redeem the image of Congressional Dems, House Speaker Nancy Pelosi scheduled a special session of Congress for Tuesday, August 10, (an interruption of their August recess) to pass a $26-billion bill to avert public employee layoffs.

With the passing of time, it has become more obvious that President Obama’s biggest mistake since taking office was his weak leadership in promoting the economic stimulus effort.  Many commentators have expressed the opinion that Christina Romer’s resignation as chair of the President’s Council of Economic Advisors was based on her frustration with the under-funded stimulus program.

I recently wrote an “I told you so” piece, referencing my July, 2009 prediction that it would eventually become necessary for President Obama to introduce a second stimulus bill because the $787 billion proposal would prove inadequate.  At his blog, liberal economist Paul Krugman similarly reminded readers of his prediction about the consequences for failing to pass an effective stimulus bill:

So here’s the picture that scares me:  It’s September 2009, the unemployment rate has passed 9 percent, and despite the early round of stimulus spending it’s still headed up.  Mr. Obama finally concedes that a bigger stimulus is needed.

But he can’t get his new plan through Congress because approval for his economic policies has plummeted, partly because his policies are seen to have failed, partly because job-creation policies are conflated in the public mind with deeply unpopular bank bailouts.  And as a result, the recession rages on, unchecked.

The reality has turned out even worse than Krugman’s prediction because we are now approaching September 2010 – an election year – and the unemployment rate is being understated at 9.5 percent.  The conflation Krugman discussed has manifested itself in the narrative of the Tea Party movement.  In September of 2009, I discussed why Obama should have been listening to Australian economist Steve Keen, who – by that point – was saying basically the same thing:

So giving the stimulus to the debtors is a more potent way of reducing the impact of a credit crunch — the opposite of the advice given to Obama by his neoclassical advisers.

Economist Joseph Stiglitz recently provided us with this update about how the global financial crisis is affecting Australia in August of 2010:

Kevin Rudd, who was prime minister when the crisis struck, put in place one of the best-designed Keynesian stimulus packages of any country in the world.  He realized that it was important to act early, with money that would be spent quickly, but that there was a risk that the crisis would not be over soon.  So the first part of the stimulus was cash grants, followed by investments, which would take longer to put into place.

Rudd’s stimulus worked:  Australia had the shortest and shallowest of recessions of the advanced industrial countries.

Meanwhile, President Obama and the Democrats have decided to utilize a mid-term campaign strategy of assessing all of the blame for our current financial chaos on President George W. Bush.  Criticism of this approach has been voiced by people outside of the Republican camp.  Frank Rich of The New York Times lamented the lack of message control exercised by the Democrats and their ill-advised focus on the Bush era:

But rather than wait for miracles or pray that Bushphobia will save the day, Democrats might instead start playing the hand they’ve been dealt.  Elections, the cliché goes, are about the future, not the past.  At the very least they’re about the present.

At this point in American history, it’s becoming more obvious that the two-party system has served no other purpose than to perpetuate the careers of blundering grafters.  The voting public must accept the reality that the only way it will be honestly and effectively represented in Washington is by independent candidates.  The laws that keep those independents off the ballots must be changed.




Wading In Quicksand

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July 12, 2010

The recent Gallup Poll, revealing that President Obama’s approval rating has dropped to 38% among independent voters, has resulted in an outpouring of (unsolicited) advice offered to the President by numerous commentators.  As I pointed out in my last posting, Matt Miller’s July 8 Washington Post article set out a really great plan, which he described as “a radically centrist ‘Jobs Now, Deficits Soon’ package”.   Nevertheless, Mr. Miller’s piece was not written as advice to the President, as some of the more recent articles have been.  I recently read one of those “advice to Obama” pieces that the President would do well to ignore.  It was written by a former Bill Clinton pollster named Douglas Schoen for the New York Daily News Schoen’s plan focused on this premise:

The independent swing voters who hold the fate of the Democratic Party in their hands are looking for candidates and parties that champion fiscal discipline, limited government, deficit reduction and a free market, pro-growth agenda.

Not true.  The independent swing voters are disappointed with Obama because the candidate’s promise of “hope and change” turned out to be a “bait and switch” scam to sell the public more cronyism.  At this point, it appears as though the entire Democratic Party will suffer the consequences in the 2010 elections.

The shortcomings of the Obama administration were more accurately summed up by Robert Kuttner for The Huffington Post:

But even a dire economic crisis and a Republican blockade of needed remedies have not fundamentally altered the temperament, trajectory, or tactical instincts of this surprisingly aloof  president.  He has not been willing or able to use his office to move public opinion in a direction that favors more activism.  Nor has Obama, for the most part, seized partisan and ideological opportunities that hapless Republicans and clueless corporate executives keep lobbing him like so many high, hanging curve balls.

*   *   *

But despite our hopes, Barack Obama is unlikely to offer bolder policies or give tougher speeches any time soon, even as threats of a double-dip recession and an electoral blowout in November loom.  This is just not who he is.  If the worst economic crisis in eight decades were going to change his assumptions about how to govern and how to lead, it would have done so by now.

*   *   *

I have also watched Obama’s loyal opposition –people like Joseph Stiglitz, Paul Krugman, Elizabeth Warren, Sheila Bair — be proven right by events, again and again.  So there are alternative paths, as there always are.  But the White House has disdained them.

And I’ve noticed that it is the populists among Democratic elected officials who are best defended against defeat in November.  That tells you something, too.  Why should the project of rallying the common people against elites in Washington, on Wall Street, and in the media, be ceded to the far right?  But that is what this White House is doing.

E. J. Dionne of The Washington Post demonstrated a good understanding of why independent voters have become fed up with Obama and how this has ballooned into a larger issue of anti-Democrat sentiment:

On the one hand, independent voters are turning on them.  Democratic House candidates enjoyed a 51 percent to 43 percent advantage over Republicans in 2008.  This time, the polls show independents tilting Republican by substantial margins.

But Democrats are also suffering from a lack of enthusiasm among their own supporters.  Poll after poll has shown that while Republicans are eager to cast ballots, many Democrats seem inclined to sit out this election.

The apathy of the rank-and-file Democrats and the alienation of the independents is best explained by the Administration’s faux-reform agenda.  The so-called healthcare “reform” bill turned out to be a giveaway to big pharma and the health insurance industry.  Worse yet, the financial “reform” bill not only turned out to be a hoax – it did nothing to address systemic risk.  In other words, if one of those five “untouchable” Wall Street banks fails, it will take the entire financial system down with it — in the absence of another huge, trillion-dollar bailout from the taxpayers.

Mike Konczal of the Roosevelt Institute documented the extent to which Obama’s Treasury Department undermined the financial reform bill at every step:

Examples?  Off the top of my head, ones with a paper trail:  They fought the Collins amendment for quality of bank capital, fought leverage requirements like a 15-to-1 cap, fought prefunding the resolution mechanism, fought Section 716removed foreign exchange swaps and introduced end user exemption from derivative language between the Obama white paper and the House Bill, believed they could have gotten the SAFE Banking Amendment to break up the banks but didn’t try, pushed against the full Audit the Fed and encouraged the Scott Brown deal. spinning out swap desks,

You can agree or disagree with any number of those items, think they are brilliant or dumb, reasonable or a pipe dream.  But what is worth noting is that they always end up leaving their fingerprints on the side of less structural reform and in favor of the status quo on Wall Street.

The Obama administration is apparently operating from the mistaken perspective that the voters are too stupid to see through their antics.  Sending Joe Biden to appear on Jay Leno’s Tonight Show to dissuade the public from considering the motives of politicians will not solve the administration’s problem of sinking approval ratings.




2009 Jackass Of The Year Award

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December 31, 2009

Well, it’s that time once again!  The 2008 competition brought us a robust field of candidates, probably because it was an election year.  This year, I’ve decided to ignore the one-event wonders and stick with nominees demonstrating a consistent pattern of jackass behavior.  The isolated exhibitions of foolishness illustrated by Richard Heene’s “balloon boy” hoax and Janet Napolitano’s “the system worked” gaffe, just don’t rise to the level of an award-winning honor.  I’m also avoiding individuals categorized as “the usual suspects” — the media darlings who are already getting beaten-up in the 2009 retrospective shows.  That list includes such notables as Tiger Woods, Carrie Prejean and “The Undiebomber” (Umar Mutallab).

This year I have narrowed the competition down to two people.

In just a few short weeks, our first nominee will be celebrating the anniversary of his inauguration as President of the United States.  During his early days in office, he enjoyed an approval rating as high as 69 percent, according to Gallup.  By early December, Gallup reported that his approval rating had taken a 22-point drop to 47 percent.  At that time, Rasmussen Reports revealed that not only had the President’s approval rating dropped to 48 percent — his disapproval rating actually reached 52 percent! On December 9, Quinnipiac University published the results of a poll conducted during December 1 – 6.  The results gave the President a job approval rating of only 46 percent, and those disapproving Obama’s performance amounted to 44 percent.  The Ipsos/McClatchy Poll taken during that period, disclosed that the President received his highest “unsatisfactory” rating on the issue of “jobs and the economy” with 45 percent giving the President an unsatisfactory grade (D or F) while only 36 percent gave him a satisfactory grade (A or B) and 19 percent gave him a C.

Many commentators have pondered over the reasons for President Obama’s decreasing approval ratings.  I have previously discussed the subject here, here and here.  In doing so, I found the criticism of Obama’s performance as expressed by Edward Harrison of Credit Writedowns, to be particularly insightful.  In his December 27 posting, Mr. Harrison posed a question that has obviously been on the minds of many disappointed Obama supporters:

The question is this:

  • Did President Obama sell out (i.e. he was a good guy but has been corrupted in short order) or;
  • Did Obama find out he couldn’t change the status quo so easily (i.e. he was a good guy who was naive about the President’s real power)or;
  • Did the President simply bamboozle us (i.e. he was a bad guy who tricked the electorate with his silver tongue)?

Mr. Harrison contended that the foregoing inquiry is actually irrelevant because it involves ascribing an intent behind the President’s behavior, when we should be looking at either motive or outcome.  Mr. Harrison eventually focused on a recent op-ed piece by Ross Douthat of The New York Times entitled:  “The Obama Way”.  Obama’s track record of broken campaign promises, including “no more trickle-down economics” and those documented on The Obameter, is something that obviously weighs on the minds of dispirited Obama supporters.  Ross Douthat explained how the President’s leadership style is itself a broken campaign promise:

He’s a doctrinaire liberal who’s always willing to cut a deal and grab for half the loaf.  He has the policy preferences of a progressive blogger, but the governing style of a seasoned Beltway wheeler-dealer.

*   *   *

It’s also puzzling because Obama promised exactly the opposite approach while running for the presidency.  He campaigned as a postpartisan healer who would change the cynical ways of Washington — as a foe of both back-room deals and ideology-as-usual.  But he’s governed as a conventional liberal who believes in the existing system, knows how to work it and accepts the limitations it imposes on him.

*   *   *

The upside of this approach is obvious:  It gets things done.

*   *   *

The downside, though, is that sometimes what gets done isn’t worth doing.  The assumption that a compromised victory is better than no victory at all can produce phony achievements — like last week’s “global agreement” on climate change — and bloated, ugly legislation.  And using cynical means to progressive ends (think of the pork-laden stimulus bill or the frantic vote-buying that preceded this week’s Senate health care votes) tends to confirm independent voters’ worst fears about liberal government:  that it’s a racket rigged to benefit privileged insiders and a corrupt marketplace floated by our tax dollars.

Ross Douthat’s conclusion implied that it’s still too early determine whether Obama’s political approach will ultimately result in success or failure.  By this time next year, the mid-term elections will be over.  If the careers of many Democratic politicians are over at that point, we will then have to assess whether President Obama’s leadership style helped to bring them down.  As a result, we will have to defer to next year’s competition before deciding whether our new President rates the title “Jackass of the Year”.

Our second nominee is the so-called “Supreme Leader” of Iran, Ali Khamenei.  Khamenei decided to rig the June elections to ensure that his tool, the equally crazy Mahmoud Ahmadinejad, would be re-elected.  The resulting public outrage was escalated by Khamenei into a bloodbath.  Since that time, Khamenei’s ham-handed tactics in attempting to squelch opposition have only made things worse.  A recent New York Times editorial entitled “Iran’s War on Its People” put it this way:

Iran’s leaders are so desperate to repel a rising tide of popular unrest that even Ashura — which marks the death of Shiite Islam’s holiest martyr — is no longer sacred.

The anniversary, which fell on Sunday, is supposed to be a time of peaceful commemoration.  Even during war, Iranian governments have honored the prohibitions against violence during a two-month period surrounding Ashura.  Tehran’s current rulers have proved again that their only belief is in their own survival.

On Sunday, the police opened fire on a crowd of protesters, reportedly killing at least 10 people, and arrested hundreds more.  Government forces are also believed to be behind the assassination of Ali Moussavi, nephew of the opposition leader Mir Hussein Moussavi, the leading candidate in June’s fraudulent presidential election.

*   *   *

The government still appears to have firm control of the main levers of power, including the brutish Revolutionary Guard and the Basij militia.  But Ayatollah Khamenei — who helped lead the 1979 revolution against the shah — should not ignore the echoes of history when protesters defy the death blows of security forces and chant “Death to the dictator” on the streets of Tehran.

Al Jazeera’s Teymoor Nabili reported that Baqer Moin, London-based analyst and Ayatollah Khomeini biographer, explained that Iran’s opposition party, the Greens, would still settle for modest reform, if the regime would compromise.  Nevertheless, Mr. Nabili’s report quoted other sources who expressed concern that the upcoming anniversary of the revolution could be “the next potential spark”.  Will the Supreme Leader negotiate?  Based on his record over the past six months, there is no reason to believe that he will.  His strategy of cracking down on the Greens with more deadly repression is exactly the approach that could lead to the regime’s demise.  Mr. Nabili added this insight to an already gloomy picture:

A contact in Iran tells me that, given the arrests over the past two days, the trend points to the possibility that the regime is slowly tightening the screws, and that before then we might see martial law and the arrest of Mousavi and/or Karroubi/Khatami/Rafsanjani’s daughter (Rafsanjani himself is still beyond the pale, it would seem.)

Brilliant plan, huh?  Another Al Jazeera report revealed that the Iranian government’s desperate actions are a sign of weakness that could ultimately lead to the end of Khamenei’s days as “Supreme Leader”:

Fatemeh Haghighatjoo, a former member of the Iranian parliament, told Al Jazeera that the government faced a fundamental crisis.

“They can’t control the events so they made the Ashoura incidents as a scenario that could give [them] enough confidence to crack down on the [Green] Movement,” she said from Massachusetts in the United States.

“They think that if they could use more violence, they can stop the movement … if this strategy continues I think we could see the collapse of the government.”

After George W. Bush overthrew the regime of Saddam Hussein in Iraq, many commentators expressed concern that this development could bring about an era of Iranian hegemony in the Middle East.  Nevertheless, Iran’s relentless efforts to create a nuclear arsenal and the craziness of its Supreme Leader, who would likely detonate an atomic bomb in Israel if he had such a weapon, have apparently made the Iranian people more than a little uncomfortable with their government.  The events since June could only serve to underscore fears that the Khamenei regime would attempt a nuclear strike on Israel, resulting in a retaliatory move that would wipe Tehran off the map.  The Iranian people are obviously not going to sit on their hands and wait for that to happen.  Al Jazeera’s Teymoor Nabili provided us with some insight on the current mood of the Iranian protesters:

To outside observers, though, the protestors have defied expectations.  Their continued willingness to make themselves targets has been a surprise; now it seems as if they are willing to take it even further, protesting not only against the election result but against the very essence of the regime.

Although it may be too early to celebrate the demise of the Khamenei regime, the time is certainly right to honor Iran’s Supreme Leader, Ali Khamenei, with TheCenterLane.com‘s Jackass of the Year Award.   Congratulations, Jackass!



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Ron Paul Struts His Stuff

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August 17, 2009

Republican Congressman Ron Paul of Texas has become quite a popular guy, lately.  Back on February 26, he sponsored his own bill, the Federal Reserve Transparency Act, (HR 1207) which would give the Government Accountability Office authority to audit the Federal Reserve and its member components, requiring a report to Congress by the end of 2010.  On July 29, a Rasmussen poll revealed that 75 percent of those surveyed were in favor of auditing the Federal Reserve, with only 9 percent opposed to such a measure.  Lew Rockwell’s website recently featured an article by Anthony Gregory, discussing the Rasmussen poll results and the popularity of Ron Paul’s proposed legislation:

While much of the hostility toward Obama’s domestic policy might be seen in partisan terms, distrust of the Fed completely transcends typical ideological or partisan lines.  While all Congressional Republicans support Ron Paul’s bill to audit the Fed, so do more than a hundred Democrats, demonstrating the impact of the wide public outrage over the Washington-Wall Street shenanigans since the financial downturn.

The Federal Reserve, a centerpiece in the bipartisan establishment, an essential component in both war finance and economic management, is now the least trusted government agency.  More than two thirds of Americans do not believe the Fed is doing a good job.  Two years ago, virtually no one even talked about the Fed; it was an obscure institution assumed to be necessary, wise and uninteresting.  Anyone who brought it up was accused of being outside the sphere of respectable opinion.  Now its champions are on the defensive, and they are desperately scrambling to restore public awe for the central bank behind the curtain.

But the opposition to Obama’s economic policies, both on the right and on the anti-corporate left who view his ties to the banking industry with suspicion, along with a growing disappointment on the left as it concerns civil liberties and war, may eventually constrain Obama.

The mistrust of the Fed, discussed by Mr. Gregory, was based on a Gallup Poll, also conducted during July, which revealed that the Federal Reserve is now “the least trusted” of all government-related entities.

Despite protests from the academic world and an unsupportive editorial from The Washington Post, support for Ron Paul’s bill continues to gain momentum.  Howard Rich, Chairman of Americans for Limited Government, wrote a favorable commentary on this proposal, pointing out that he initially thought it was a rather strange idea.  He eventually looked at the situation with this rationale:

From its founding in 1913, the Fed has existed as an island of almost total independence — setting interest rates, managing inflation and regulating banks according to the will of its Chairman and seven-member Board of Directors.

It cannot be audited. Its ledger is not disclosed. Its meetings are private. Its decisions are not up for debate.

Of course, this ongoing shroud of secrecy ignores the fact that the Fed — as it exists today — is a completely different animal than it was even two years ago.

No longer merely a “regulatory” agency, the Fed has used the current economic crisis as an excuse to dramatically expand its role.  With zero transparency, accountability and effectiveness, it has printed and loaned trillions of dollars since mid-2007 in a costly and unsuccessful effort to mitigate fallout from the sub-prime mortgage crisis.

The question of where those trillions of dollars went is exactly what is on the minds of most people demanding more accountability from the Fed.  Was any favoritism involved in determining what banks received how much money?  Dean Baker wrote an opinion piece for The Guardian, arguing against the re-appointment of Ben Bernanke for another term as the Fed chairman.  The subject of favoritism in the Fed’s response to last fall’s financial meltdown was apparently a matter of concern to Mr. Baker:

By this measure, Bernanke’s performance is very poor.  He has refused to provide the public, or even the relevant congressional committees, with information on the trillions of dollars in loans that were made through the Fed’s special lending facilities.  While anyone can go to the Treasury’s website and see how much each bank received through Tarp and under what terms, Bernanke refuses to share any information on the loans that banks and other institutions received from the Fed.

Where we do have information, it is not encouraging.  At the peak of the financial crisis in October, Goldman Sachs converted itself from an investment bank into a bank holding company, in part so that it could tap an FDIC loan guarantee programme.  Remarkably, Bernanke allowed Goldman to continue to act as an investment bank, taking highly speculative positions even after it had borrowed $28bn with the FDIC’s guarantee.

The idea that the Federal Reserve could loan trillions of dollars to unidentified beneficiaries on secret terms has resulted in outrage from across the political spectrum.  In his rebuttal to The Washington Post‘s editorial criticizing Ron Paul’s Fed transparency initiative, Independent (and self-avowed socialist) Senator Bernie Sanders of Vermont had this to say:

This legislation wouldn’t undermine the Fed’s independence, and it wouldn’t put Congress in charge of monetary policy.  An audit is simply an examination of records or financial accounts to check their accuracy.

We must not equate “independence” with secrecy.  No matter how intelligent or well-intentioned the Fed chairman and his staff may be, it isn’t appropriate to give a handful of people the power to lend an unlimited supply of money to anyone it wants without sufficient oversight.

Absolute power corrupts absolutely.  The American people have a right to know what is being done with their hard-earned taxpayer dollars.  This money does not belong to the Fed; it belongs to the American people.

The tremendous upsurge in support for the Federal Reserve Transparency Act was obviously what motivated Ron Paul to write an essay on the matter for Sunday’s edition of The Philadelphia Inquirer.  With such a strong wind at his back, he confidently trashed the arguments of his opponents and began the piece with this assertion:

The Federal Reserve’s unprecedented intervention into the U.S. economy has inflamed more Americans than almost any other issue in recent memory.

Congressman Paul then proceeded to pound away at the criticism of his bill, reminding me of a boxer, who sees blood flowing down into his opponent’s eyes:

The most conservative estimates place the potential cost of the Federal Reserve’s bailouts and guarantees at about $9 trillion. That is equivalent to more than 60 percent of the U.S.economy, all undertaken by one organization, and almost all of those transactions are exempt from congressional oversight and public scrutiny.

The Fed and its apologists are using bogeymen to deflect criticism.  If the Fed were audited, they argue, monetary policy would be compromised as Congress tries to direct the Fed’s actions, and the Fed’s record of economic stability and low inflation would come to an end.  Nothing could be further from the truth.

*   *   *

The Fed’s mismanagement created the Great Depression, the stagflation of the 1970s, and now our current economic crisis. Over the nearly100 years of the Fed’s existence, the dollar has lost nearly 95 percent of its purchasing power.  A “mild” rate of inflation of 2 percent per year means that a baby born today will see the dollar’s purchasing power erode by a further 75 percent over his lifetime.  If this boondoggle is the Fed’s definition of stability and sound management of the dollar, I would hate to see what instability looks like.

Yet that is exactly what we face today and in the near future with a federal government and a Federal Reserve working hand in hand to bail out favored Wall Street firms with sums of money that have quickly reached absurd proportions.

*   *   *

The fact that a single entity, the Federal Reserve, has dominated monetary policy for so long has been detrimental to the economy.  As long as we try to keep up the fictions that the Federal Reserve works to benefit the American people, that attempting to fix interest rates will not distort the economy, and that the Fed can end a recession by injecting liquidity, we will never free ourselves from the boom and bust of the business cycle.

A necessary first step to restoring economic stability in this country is to audit the Fed, to find out the multitude of sectors in which it has involved itself, and, once the audit has been completed, to analyze the results and determine how the Fed should be reined in.

When one sees a former Republican Presidential primary contender enjoy this type of momentum, the inevitable question is whether Ron Paul might make another run for the White House.  Justin Miller had this on his mind last month when he discussed this subject for The Atlantic:

Paul is just as plausible a candidate to run for the Republican nomination as are Mitt Romney, Sarah Palin, or Mike Huckabee who were tested in polls this month.  Like them, Paul’s run for the White House (twice) before and has said he isn’t opposed to doing it again, albeit he said it’s “unlikely.”  What’s more likely, based on the circumstantial evidence, is that the Republican voters would receive Paul better than they did last year.  Feature him in polls from now on and we can test this hypothesis.

As President Obama continues to alienate the liberal base of the Democratic Party, Ron Paul might be just the person the Republicans would want to nominate in 2012.  He’ll be 77 years old at that point — just in time for a single term.