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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.

*   *   *

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.”

*   *   *

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.

*   *   *

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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Disappointing Diatribe From A Disillusioned Dionne

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

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

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

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

*   *   *

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

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

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

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

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

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

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

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

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

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


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The Next Big Fight

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October 1, 2009

On Tuesday September 29, H. David Kotz, Inspector General of the Securities and Exchange Commission, issued two reports, recommending 58 changes to improve the way the agency investigates and enforces violations of securities laws, as a result of the SEC’s failure to investigate the Bernie Madoff Ponzi scheme.  The reports exposed a shocking degree of ineptitude at the SEC.  On September 10, Mr. Kotz testified before the Senate Banking Committee.  You can find the prepared testimony here.  (I suggest starting at page 8.)  Having read that testimony, I wasn’t too shocked at what Mr. Kotz had to say in Tuesday’s reports.  Nevertheless, as Zachery Kouwe explained in The New York Times, the level of bureaucratic incompetence at the SEC was underestimated:

Many on Wall Street and in Washington were surprised that some of Mr. Kotz’s proposals, like recording interviews with witnesses and creating a database for tips and complaints, were not already part of the S.E.C.’s standard practice.

The extent of dysfunction at the SEC has been well-documented.  Back on January 5, I wrote a piece entitled:  “Clean-Up Time On Wall Street”, expressing my hope that the incoming Obama administration might initiate some serious financial reforms.  I quoted from Steven Labaton’s New York Times report concerning other SEC scandals investigated by Mr. Kotz last year.  My posting also included a quote from a Times piece by Michael Lewis (author of Liar’s Poker) and David Einhorn, which is particularly relevant to the recent disclosures by Inspector General Kotz:

Indeed, one of the great social benefits of the Madoff scandal may be to finally reveal the S.E.C. for what it has become.

Created to protect investors from financial predators, the commission has somehow evolved into a mechanism for protecting financial predators with political clout from investors.

This sentiment was echoed on Tuesday by Barry Ritholtz at The Big Picture website:

The agency is supposed to be an investor’s advocate, the chief law enforcement agency for the markets.  But that has hardly been how they have been managed, funded and operated in recent years.

Essentially the largest prosecutor’s office in the country, the SEC has been undercut at every turn:  Their staffing was far too small to handle their jurisdiction — Wall Street and public Corporations.  Their budgets have been sliced, and they were unable to keep up with the explosion in corporate criminality.  Many key positions were left unfilled, and morale was severely damaged.  A series of disastrous SEC chairs were appointed — to be “kinder and gentler.”  Not only did they fail to maintain SEC funding (via fines), but they allowed the worst corporate offenders to go unpunished.

Gee, go figure that under those circumstances, they sucked at their jobs.

*   *   *

The bottom line of the SEC is this:  If we are serious about corporate fraud, about violations of the SEC laws, about a level playing field, then we fund the agency adequately, hire enough lawyers to prosecute the crimes, and prevent Congress critters from interfering with the SEC doing its job.

To be blunt:  So far, there is no evidence we are sincere about making the SEC a serious watchdog with teeth.

Congress sure hasn’t been.  Staffing levels have been ignored, budgeting has been cut over the years.  And it’s the sort of administrative issue that does not lend itself to bumper sticker aphorisms or tea party slogans.

Financial expert Janet Tavakoli explained in a presentation to the International Monetary Fund last week, that regulatory failures in the United States helped create an even larger Ponzi scam than the Madoff ruse — the massive racket involving the trading of residential mortgage-backed securities:

Wall Street disguised these toxic “investments” with new value-destroying securitizations and derivatives.

Meanwhile, collapsing mortgage lenders paid high dividends to shareholders (old investors) and interest on credit lines to Wall Street (old investors) with money raised from new investors in doomed securities.  New money allowed Wall Street to temporarily hide losses and pay enormous bonuses.  This is a classic Ponzi scheme.

*   *   *

Had regulators done their jobs, they would have shut down Wall Street’s financial meth labs, and the Ponzi scheme would have quickly choked to death from lack of monetary oxygen.

After the Savings and Loan crisis of the late 1980’s, there were more than 1,000 felony indictments of senior officers.  Recent fraud is much more widespread and costly.  The consequences are much greater.  Congress needs to fund investigations.  Regulators need to get tough on crime.

As Simon Johnson and James Kwak explained in The Washington Post, the upcoming battle over financial reform will be hard-fought by the banking industry and its lobbyists:

The next couple of months will be crucial in determining the shape of the financial system for decades to come.  And so far, the signs are not encouraging.

*   *   *

Even back in April, the industry was able to kill Obama’s request for legislation allowing bankruptcy judges to modify mortgages.  Five months of profits later, the big banks are only stronger.  Is Obama up for this fight?

Our new President must know by now, that sinking a three-point shot is much easier than the juggling act he has undertaken with health care reform, the wars in Iraq and Afghanistan as well as his recent quest to help Chicago win the bid for the 2016 Olympics.  If Mr. Obama can’t beat the health insurance lobby with both the Senate and Congress under Democratic control — how will the voters feel if he drops another ball in the fight for financial reform?   Thanks to Harry Truman, the American public knows where “the buck stops”.  The previously-quoted Washington Post commentary looked even further back in history to explain this burden of leadership:

During the reign of Louis XIV, when the common people complained of some oppressive government policy, they would say, “If only the king knew . . . .”  Occasionally people will make similar statements about Barack Obama, blaming the policies they don’t like on his lieutenants.

But Barack Obama, like Louis XIV before him, knows exactly what is going on.  Now is the time for him to show what his priorities are and how hard he is willing to fight for them. Elections have consequences, people used to say.  This election brought in a popular Democratic president with reasonably large majorities in both houses of Congress.  The financial crisis exposed the worst side of the financial services industry to the bright light of day.  If we cannot get meaningful financial regulatory reform this year, we can’t blame it all on the banking lobby.

Let the games begin!



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