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Formula For Failure

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The Democratic Party is suffering from a case of terminal smugness. Democrats ignored the warning back in 2006, when the South Park television series ran the episode, “Smug Alert”.

I recently came across a dangerous manifestation of  “The Smug” in a recent article written by Ed Kilgore for The New Republic, in which Mr. Kilgore complacently explained “why Obama won’t face a primary challenge”.  We are supposed to forget about the “shellacking” taken by Democrats in the mid-term elections.  We are to ignore the fact that “mischief-making pundits have seized on a couple of polls to burnish their narrative”.  In an act exemplifying what my late father described as “tempting fate”, Mr. Kilgore proceeded to belittle the most serious criticisms of the President, while daring lightening to strike:

Above all, primary challenges to incumbent presidents require a galvanizing issue.  It’s very doubtful that the grab-bag of complaints floated by the Democratic electorate — Obama’s legislative strategy during the health care fight; his relative friendliness to Wall Street; gay rights; human rights; his refusal to prosecute Bush administration figures for war crimes or privacy violations — would be enough to spur a serious challenge.  And while Afghanistan is an increasing source of Democratic discontent, it’s hardly Vietnam, and Obama has promised to reduce troop levels sharply by 2012.

The timing of Kilgore’s supercilious disregard of a challenge to Obama’s presence atop the 2012 ticket could not have been worse.  Thanks to the efforts of the late Mark Pittman, a Freedom of Information Act lawsuit filed by Bloomberg News has forced the Federal Reserve to disclose the details of its bailouts to those business entities benefiting from the Fed’s eleven emergency lending programs initiated as a result of the 2008 financial crisis. The Fed’s massive document dump on December 1 (occurring right on the heels of the WikiLeaks publication of indiscretions by Obama’s Secretary of State — Hillary Clinton) has refocused criticism of what Kilgore described as the President’s “relative friendliness to Wall Street”.  Although Mr. Obama had not yet assumed office in the fall of 2008, after moving into the White House, the new President re-empowered the same cast of characters responsible for the financial crisis and the worst of the bailouts.  The architect of Maiden Lane III (which included a $13 billion gift to Goldman Sachs) “Turbo” Tim Geithner, was elevated from president of the New York Fed to Treasury Secretary.  Ben Bernanke was re-nominated by Obama (over strenuous bipartisan objection) to serve another term as Federal Reserve Chairman.

In the 2008 Democratic Primary elections, voters chose “change” rather than another Clinton administration.  Nevertheless, what the voters got was another Clinton administration.  After establishing an economic advisory team consisting of retreads from the Clinton White House, President Obama has persisted in approaching the 2010 economy as though it were the 1996 economy.  Obama’s creation of a bipartisan deficit commission has been widely criticized as an inept fallback to the obsolete Bill Clinton playbook.  Robert Reich, Labor Secretary for the original Clinton administration recently upbraided President Obama for this wrongheaded approach:

Bill Clinton had a rapidly expanding economy to fall back on, so his appeasement of Republicans didn’t legitimize the Republican world view.  Obama doesn’t have that luxury.  The American public is still hurting and they want to know why.

The Pragmatic Capitalist criticized President Obama’s habitual reliance on members of the Clinton administration as futile attempts to bring about the same results obtained fifteen years ago.  Obama’s appointment of Erskine Bowles (Clinton’s former Chief of Staff) as co-chair of the deficit commission was denounced as a recent example.  Bowles’ platitudinous insistence that it’s time for an “adult conversation about the dangers of this debt” drew this blistering retort:

Yes.  America has a debt problem. We have a very serious household, municipality and state debt crisis that is in many ways similar to what is going on in Europe.   What we absolutely don’t have is a federal government debt problem.  After all, a nation with monopoly supply of currency in a floating exchange rate system never really has “debt” unless that debt is denominated in a foreign currency.  He says this conversation is the:

“exact same conversation every family, every single business, every single state and every single municipality has been having these last few years.”

There is only one problem with this remark.  The federal government is NOTHING like a household, state or municipality.   These entities are all revenue constrained.  The Federal government has no such constraint. We don’t need China to lend us money.  We don’t need to raise taxes to spend money.  When the US government wants to spend money it sends men and women into a room where they mark up accounts in a computer system.   They don’t call China first or check their tax revenues.   They just spend the money.

*   *   *
Mr. Bowles finished his press conference by saying that the American people get it:

“There is one thing I am absolutely sure of.  If nothing else, I know deep down the American people get it.   They know this is the moment of truth”

The American people most certainly don’t get it.  And how can you blame them?  When a supposed financial expert like Mr. Bowles can’t grasp these concepts how could we ever expect the average American to understand it?  It’s time for an adult conversation to begin before this misguided conversation regarding the future bankruptcy of America sends us towards our own “moment of truth” – a 1937 moment.

I hope it doesn’t take “a 1937 moment” for the Democrats to appreciate the very serious risk that the Palin family could be living in the White House in 2013.


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A Shocking Decision

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September 23, 2010

Nobody seems too surprised about the resignation of Larry Summers from his position as Director of the National Economic Council.  Although each commentator seems to have a unique theory for Summers’ departure, the event is unanimously described as “expected”.

When Peter Orszag resigned from his post as Director of the Office of Management and Budget, the gossip mill focused on his rather complicated love life.  According to The New York Post, the nerdy-looking number cruncher announced his engagement to Bianna Golodryga of ABC News just six weeks after his ex-girlfriend, shipping heiress Claire Milonas, gave birth to their love child, Tatiana.  That news was so surprising, few publications could resist having some fun with it.  Politics Daily ran a story entitled, “Peter Orszag:  Good with Budgets, Good with Babes”.  Mark Leibovich of The New York Times pointed out that the event “gave birth” to a fan blog called Orszagasm.com.  Mr. Leibovich posed a rhetorical question at the end of the piece that was apparently answered with Orszag’s resignation:

This goes to another obvious — and recurring — question:  whether someone whose personal life has become so complicated is really fit to tackle one of the most demanding, important and stressful jobs in the universe. “Frankly I don’t see how Orszag can balance three families and the national budget,” wrote Joel Achenbach of The Washington Post.

The shocking nature of the Orszag love triangle was dwarfed by President Obama’s nomination of Orszag’s replacement:  Jacob “Jack” Lew.  Lew is a retread from the Clinton administration, at which point (May 1998 – January 2001) he held that same position:  OMB Director.  That crucial time frame brought us two important laws that deregulated the financial industry:  the Financial Services Modernization Act of 1999 (which legalized proprietary trading by the Wall Street banks) and the Commodity Futures Modernization Act of 2000, which completely deregulated derivatives trading, eventually giving rise to such “financial weapons of mass destruction” as naked credit default swaps.  Accordingly, it should come as no surprise that Lew does not believe that deregulation of the financial industry was a proximate cause of  the 2008 financial crisis.  Lew’s testimony at his September 16 confirmation hearing before the Senate Budget Committee was discussed by Shahien Nasiripour  of The Huffington Post:

Lew, a former OMB chief for President Bill Clinton, told the panel that “the problems in the financial industry preceded deregulation,” and after discussing those issues, added that he didn’t “personally know the extent to which deregulation drove it, but I don’t believe that deregulation was the proximate cause.”

Experts and policymakers, including U.S. Senators, commissioners at the Securities and Exchange Commission, top leaders in Congress, former financial regulators and even Obama himself have pointed to the deregulatory zeal of the Clinton and George W. Bush administrations as a major cause of the worst financial crisis since the Great Depression.

During 2009, Lew was working for Citigroup, a TARP beneficiary.  Between the TARP bailout and the Federal Reserve’s purchase of mortgage-backed securities from that zombie bank, Citi was able to give Mr. Lew a fat bonus of $950,000 – in addition to the other millions he made there from 2006 until January of 2009 (at which point Hillary Clinton found a place for him in her State Department).

The sabotage capabilities Lew will enjoy as OMB Director become apparent when revisiting my June 28 piece, “Financial Reform Bill Exposed As Hoax”:

Another victory for the lobbyists came in their sabotage of the prohibition on proprietary trading (when banks trade with their own money, for their own benefit).  The bill provides that federal financial regulators shall study the measure, then issue rules implementing it, based on the results of that study.  The rules might ultimately ban proprietary trading or they may allow for what Jim Jubak of MSN calls the “de minimus” (trading with minimal amounts) exemption to the ban.  Jubak considers the use of the de minimus exemption to the so-called ban as the likely outcome.  Many commentators failed to realize how the lobbyists worked their magic here, reporting that the prop trading ban (referred to as the “Volcker rule”) survived reconciliation intact.  Jim Jubak exposed the strategy employed by the lobbyists:

But lobbying Congress is only part of the game.  Congress writes the laws, but it leaves it up to regulators to write the rules.  In a mid-June review of the text of the financial-reform legislation, the Chamber of Commerce counted 399 rule-makings and 47 studies required by lawmakers.

Each one of these, like the proposed de minimus exemption of the Volcker rule, would be settled by regulators operating by and large out of the public eye and with minimal public input.  But the financial-industry lobbyists who once worked at the Federal Reserve, the Treasury, the Securities and Exchange Commission, the Commodities Futures Trading Commission or the Federal Deposit Insurance Corp. know how to put in a word with those writing the rules.  Need help understanding a complex issue?  A regulator has the name of a former colleague now working as a lobbyist in an e-mail address book.  Want to share an industry point of view with a rule-maker?  Odds are a lobbyist knows whom to call to get a few minutes of face time.

You have one guess as to what agency will be authorized to make sure those new rules comport with the intent of the financial “reform” bill   .   .   .   Yep:  the OMB (see OIRA).

President Obama’s nomination of Jacob Lew is just the latest example of a decision-making process that seems incomprehensible to his former supporters as well as his critics.  Yves Smith of Naked Capitalism refuses to let Obama’s antics go unnoticed:

The Obama Administration, again and again, has taken the side of the financial services industry, with the occasional sops to unhappy taxpayers and some infrequent scolding of the industry to improve the optics.

Ms. Smith has developed some keen insight about the leadership style of our President:

The last thing Obama, who has been astonishingly accommodating to corporate interests, needs to do is signal weakness.  But he has made the cardinal mistake of trying to please everyone and has succeeded in having no one happy with his policies.  Past Presidents whose policies rankled special interests, such as Roosevelt, Johnson, and Reagan, were tenacious and not ruffled by noise.  Obama, by contrast, announces bold-sounding initiatives, and any real change will break eggs and alienate some parties, then retreats.  So he creates opponents, yet fails to deliver for his allies.

Yes, the Disappointer-In-Chief has failed to deliver for his allies once again – reinforcing my belief that he has no intention of running for a second term.




Senator Cantwell Stands Tough

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February 8, 2010

Back in June of 2008, when it became obvious that Hillary Clinton would not win the nomination as the Democratic Party’s Presidential candidate, Clinton’s despondent female supporters lamented that they would never see a woman elected President within their own lifetimes.  At that point, I wrote a piece entitled, “Women To Watch”, reminding readers that “there are a number of women presently in the Senate, who got there without having been married to a former President (whose surname could be relied upon for recognition purposes).”  One of those women, whom I discussed in that essay, was Senator Maria Cantwell of Washington.  Since that time, Senator Cantwell has proven herself as a defender of her constituents and an opponent of Wall Street.  Her bold criticism of the Obama administration’s handling of the economic crisis as well as her vocal opposition to the influence of lobbyists, motivated me to write a second piece about Senator Cantwell in November of 2009.  More recently, she voted against the confirmation of Ben Bernanke’s nomination to a second term as Federal Reserve chair and on February 2, Reuters reported that she was taking a stand against loopholes in proposed financial reform legislation.

On February 7, Les Blumenthal of the McLatchy Newspapers saw fit to highlight Senator Cantwell’s efforts at backing-up with real action, her tough stand against Wall Street:

To hear Sen. Maria Cantwell talk, another economic bubble is building as Wall Street banks — backed by taxpayer bailouts — continue to play the high-risk derivatives markets rather than extend credit to struggling businesses on Main Street.

Cantwell says that Congress and the Obama administration are just watching it happen.

*   *   *

“We are trying to keep the focus on what needs to be done to get credit flowing and avoid another bubble,” Cantwell said in an interview.  “Do I wish the White House team was more attuned to these issues?  Yes.”

*   *   *

White House officials have, at least twice, backed off commitments they made to her that they’d push for tougher regulations, Cantwell said.

“Their economic team is not living up to what they said they would,” Cantwell said.

Her criticism of the financial regulatory reform bill passed by the House — as being “riddled with loopholes” — was reminiscent of the widespread reaction to the disappointing failure of the Democrats to pass any significant healthcare reform legislation:

If the bills emerging from committees aren’t tough enough, Cantwell vowed a floor fight.  She said she had support from half a dozen senators, including Democrats Dianne Feinstein of California, Tom Harkin of Iowa, and Carl Levin of Michigan.

“People are going to have to ask themselves what’s better — a weak bill or no bill?” she said.

At a time when her peers are busy selling out to lobbyists, Senator Cantwell is continuing to reinforce her image as a reformer.  Her February 4 exchange with “Turbo” Tim Geithner, during his appearance before the Senate Finance Committee, was an example of the type of challenge that other Democrats are afraid to publicly vocalize when addressing members of the administration.  Cantwell emphasized that the President has the authority to act on his own (by issuing an Executive Order) to make $30 billion available to community banks, rather than waiting for Congress to pass legislation for such a rescue.  Her home state’s Lake Stevens Journal discussed that moment:

“If we don’t implement change right now, we are going to lose more jobs,” Cantwell told Geithner.  “Do not wait for legislation.  Come to terms with the community banks on reasonable terms that they can agree to — and I think that that we will be well on our way to getting Americans back to work.”

Maria Cantwell continues to exhibit a (sadly) unique toughness in standing up to those forces bent on preserving the destructive status quo.  As disgruntled supporters of Hillary Clinton wonder whether her intention to step down as Secretary of State in 2012 could signal another opportunity to elect America’s first female President —  they would be well-advised to consider Senator Cantwell as their best hope for reaching that historic milestone.



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No Free Pass For The Disappointer-In-Chief

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December 14, 2009

The election of Barack Obama to the Presidency was hailed by many as an event that “transcended race”.  Ever since Obama’s primary election victory in lily-white Iowa, the pundits couldn’t stop talking about the candidate’s unique ability to vault the racial barrier before Hillary Clinton could break through the glass ceiling.  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.

Charles Blow’s recent opinion piece for the December 4 edition of The New York Times, entitled:  “Black in the Age of Obama” shed some light on the racist backlash against the black population as a result of the election of our nation’s first African-American President.  Mr. Blow then focused on Obama’s approach to his sinking poll numbers:

This means that Obama can get away with doing almost nothing to specifically address issues important to African-Americans and instead focus on the white voters he’s losing in droves. This has not gone unnoticed.  In the Nov. 9 Gallup poll, the number of blacks who felt that Obama would not go far enough in promoting efforts to aid the black community jumped 60 percent from last summer to now.

*   *   *

The Age of Obama, so far at least, seems less about Obama as a black community game-changer than as a White House gamesman.  It’s unclear if there will be a positive Obama Effect, but an Obama Backlash is increasingly apparent.  Meanwhile, black people are also living a tale of two actions:  grin and bear it.

As Silla Brush reported for The Hill on December 2, ten members of the Congressional Black Caucus had threatened to withhold their votes on the financial reform bill, because the President had not been “doing enough to help African-Americans through the bleak economy”.

It has been easy to understand the dissatisfaction with Obama expressed by the Democratic Party’s liberal base.  In a piece entitled “The Winter of Liberal Discontent”, Louis Proyect incorporated the umbrage expressed by such notables as Tom Hayden and Michael Moore, while providing a thorough assessment of Obama’s abandonment of the Left.  He concluded the piece with a quoted passage from an essay written for The Huffington Post by Elizabeth Warren, chair of the Congressional TARP Oversight Panel.  Mr. Proyect quoted Ms. Warren’s reference to some brutally unpleasant statistics, raising the question of whether America will continue to have a middle class.  The theme of Mr. Proyect’s discussion was based on this point:

The chorus of disapproval is louder than any I have heard from liberal quarters since 1967 when another very popular Democrat did an about-face once he was in office.  When LBJ ran as a peace candidate, very few people — except unrepentant Marxists — would have anticipated a massive escalation in Vietnam.  It was well understood a year ago that Obama was committed to escalating the war in Afghanistan, but the liberal base of the Democratic Party was too mesmerized by the mantras of “hope” and “change” to believe that their candidate would actually carry out his promise.

There is a tendency to regard right-wing Republican presidents being replaced by idealistic-appearing Democrats who betray their supporters, thus enabling a new Republican candidate to take over the White House, as a kind of Western version of karma.  We are compelled by universal law in some way to undergo an endless cycle of suffering without hope of redemption short of Enlightenment.

The criticism of Obama expressed by African-American commentators underscores the President’s unique ability to alienate those who might support him on the basis of ethnic solidarity, just as thoroughly as he can antagonize the melanin-deficient “limousine liberals” of Park Avenue.  On December 11, Edward Harrison of Credit Writedowns made a point of letting us know that the complete text of Matt Taibbi’s recent Rolling Stone article, “Obama’s Big Sellout” is now available online.  Before quoting some of the discussion in Matt Taibbi’s essay, Mr. Harrison provided some hard-hitting criticism of the Obama administration’s financial and economic policy shortcomings.  You may note that the administration’s abandonment of the African-American base was not discussed.  It wouldn’t do justice to Mr. Harrison’s great work to quote a snippet of this because it’s too good.  I have to give you the whole thing:

As you probably know, I have been quite disappointed with this Administration’s leadership on financial reform.  While I think they ‘get it,’ it is plain they lack either the courage or conviction to put forward a set of ideas that gets at the heart of what caused this crisis.

It was clear to many by this time last year that the President may not have been serious about reform when he picked Tim Geithner and Larry Summers as the leaders of his economic team.  As smart and qualified as these two are, they are rightfully seen as allied with Wall Street and the anti-regulatory movement.

At a minimum, the picks of Geithner and Summers were a signal to Wall Street that the Obama Administration would be friendly to their interests.  It is sort of like Ronald Reagan going to Philadelphia, Mississippi as a first stop in the 1980 election campaign to let southerners know that he was friendly to their interests.

I reserved judgment because one has to judge based on actions.  But last November I did ask Is Obama really “Change we can believe in?” because his Administration was being stacked with Washington insiders and agents of the status quo.

Since that time it is obvious that two things have occurred as a result of this ‘Washington insider’ bias.  First, there has been no real reform.  Insiders are likely to defend the status quo for the simple reason that they and those with whom they associate are the ones who represent the status quo in the first place.  What happens when a company is nationalized or declared bankrupt is instructive; here, new management must be installed to prevent the old management from covering up past mistakes or perpetuating errors that led to the firm’s demise. The same is true in government.

That no ‘real’ reform was coming was obvious, even by June when I wrote a brief note on the fake reform agenda.  It is even more obvious with the passage of time and the lack of any substantive reform in health care.

Second, Obama’s stacking his administration with insiders has been very detrimental to his party.  I imagine he did this as a way to overcome any worries about his own inexperience and to break with what was seen as a major factor in Bill Clinton’s initial failings.  While I am an independent, I still have enough political antennae to know that taking established politicians out of incumbent positions (Joe Biden, Janet Napolitano, Hillary Clinton, Rahm Emanuel, Kathleen Sebelius or Tim Kaine) jeopardizes their seat.  So, the strategy of stacking his administration has not only created a status quo bias, but it has also weakened his party.

The magic of the Obama candidacy has vanished with the disappointments of the Obama Presidency.  His supporters have learned, the hard way, that talk is cheap.  The President’s actions during the next three years will not only impact the viability of his administration — they could undermine the careers of his fellow Democrats.



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Maria Cantwell In The Spotlight

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November 9, 2009

Meghan McCain’s recent lament in The Daily Beast struck me as rather strange.  She really should know better.  Ms. McCain expressed her frustration over mainstream media treatment of “two of the most prominent women in politics — Hillary Clinton and Sarah Palin”.  Ms. McCain felt the coverage received by those two politicians has been so misogynistic that she has nearly given up on the possibility that she may ever see a woman get elected to the Presidency:

It seems to me the male-dominated media suffers from a Goldilocks Syndrome that keeps women from shattering the glass ceiling.  Worse, I fear it will prevent tomorrow’s female leaders from even seeking office.

Of course, if one can see no further than Hillary Clinton or Sarah Palin when seeking female Presidential candidates, then despair is inevitable.  In the summer of 2008, after Ms.Clinton faced up to the reality that Barack Obama had won the Democratic nomination, we heard similar doubts expressed by many despondent female supporters of Hillary Clinton — that they would never see a female elected President within their own lifetimes.  At that point, I wrote apiece entitled “Women To Watch”, reminding readers that “there are a number of women presently in the Senate, who got there without having been married to a former President (whose surname could be relied upon for recognition purposes).”  One of those women, whom I discussed at that time, was Senator Maria Cantwell of Washington.  Maria Cantwell has been in the news quite a bit recently and the coverage has been favorable.  As I said in June of 2008, those holding out hope for a female Presidential candidate should keep an eye on her.

In our highly-partisan political climate, one rarely hears a national politician break from “party line” rhetoric and talking points while being interviewed by the news media or when writing commentary pieces for news publications and blogs.  Nevertheless, Senator Cantwell has taken the bold step of criticizing, not only the administration’s handling of the economic crisis, but the K Street payoff culture enlisting her fellow Democrats as enablers of the status quo.

On October 30, Senator Cantwell wrote a piece for The Huffington Post, decrying the fact that those financial institutions benefiting from the massive bailouts from TARP and the Federal Reserve “have resumed their old habit of using other people’s money to gamble with the same risky unregulated derivatives that led us into this crisis.”  The reason for the failure at every level of the federal government to even consider appropriate legislation or regulations to rein-in continuing irresponsible behavior by those institutions was candidly discussed by the Senator:

Look no further than the powerful lobbying arm of the financial services sector, which has spent at least $220 million this year lobbying Congress to stave off new rules to prevent another collapse.  That is over $500,000 in lobbying for every member of Congress, which might help explain why, to date, nothing has been fixed in our porous financial regulatory system.  Americans want to know when Congress will put an end to the Wall Street’s secret off-book gambling schemes and restore our capitalist system by requiring real transparency and true competition.

Senator Cantwell’s essay is essential reading, coming on the heels of a rebuke, by her fellow Democrats, against efforts at requiring transparency in the trading of credit default swaps:

Imposing full transparency and true competition will require moving derivative trades onto regulated exchanges.  That would mean full transparency of trading prices and volumes, reporting requirements for large trader positions, and adequate capital reserves to protect against a default.  The government needs full anti-fraud and anti-manipulation authority.  Giving regulators this power will ensure a transparent and competitive marketplace and will ensure that violators will go to jail.

On November 2, Senator Cantwell appeared on MSNBC’s Morning Meeting with Dylan Ratigan.  At that time, Mr. Ratigan had just written a piece for The Business Insider, expressing his outrage about recent statements by Treasury Secretary “Turbo” Tim Geithner, supporting House bank reform legislation allowing credit default swaps to continue being traded in secret.  Since Senator Cantwell had previously discussed that subject with him on October 16, Mr. Ratigan focused on Geithner.  Ratigan noted Geithner’s endorsement of the proposed House “banking  reform” legislation on the previous day’s broadcast of Meet The Press — despite the bill’s “massive exemptions” allowing opacity in the trading of credit default swaps.  Ratigan then asked Senator Cantwell why Tim Geithner still has a job, to which she replied:

I’m not sure because David Gregory had him almost — trying to get a straight answer out of him.  What the Treasury Secretary basically said was:  yes, banks should take more risks and we should continue the loopholes — and that is really appalling because, right now, we know that lack of transparency has caused this problem with the U.S. economy and Wall Street is continuing, one year later, continuing the same kind of loopholes.  And so if the Treasury Secretary doesn’t come down hard against these loopholes and advocate foreclosing them, then we’re going to have a tough time closing them in Congress.  So the Treasury Secretary is dodging the issue.

Senator Cantwell sure isn’t dodging any issues.  Beyond that, she is demonstrating that she has more cajones than any of her male counterparts in the Senate.  So far, all of the publicity concerning her position on financial reform has been favorable.  After all, she is boldly standing up to the lobbyists, the Congress they own and a White House that received nearly a million dollars in campaign contributions from Goldman Sachs.

Back in Senator Cantwell’s home state of Washington, The Seattle Times praised her co-sponsorship of Senate Bill 823, the Net Operating Loss Carryback Act, which has already been passed by both houses of Congress.  This bill increases the corporate income tax refunds for businesses that were making money during the pre-2008 era but now operate at a loss.  As the Seattle Times editorial explained:

The national unemployment rate is still rising.  It has just gone double-digit for the first time in 26 years, and is at 10.2 percent.

This is not recovery.

The new law does not have taxpayers underwrite credit default swaps or any of the other alchemic creations of Wall Street investment banks.  It is not more aid and comfort for the nationalized and quasi-nationalized corporate giants; it specifically exempts Fannie Mae, Freddie Mac and any company in which the Treasury has recently become an owner.

This law is for the businesses that suffer in the recession, not the ones that caused it.  It is one of the few things Congress has done that reaches directly to Main Street America. It is a big deal to many local businesses, including businesses here.

Congratulations, Senator Cantwell!

To Meghan McCain and other women remaining in doubt as to whether they will ever see a female sworn in as President:  Just keep watching Maria Cantwell as she continues to earn well-deserved respect.



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A Wake-up Call From Dennis Blair

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February 19, 2009

Although President Obama has been criticized for many of his appointments, the selection of retired Admiral Dennis Blair as Director of National Intelligence appears to have been a wise choice.  Blair graduated from the United States Naval Academy in 1968.  He attended Oxford University as a Rhodes Scholar contemporaneously with Bill Clinton.  (However, I doubt that Blair was standing next to Bill when the former President “didn’t inhale”.)  Blair retired from the Navy in 2002.

On Thursday, February 12, Blair appeared before the Senate Intelligence Committee and surprised his audience with his new threat assessment.  As Tom Gjelten reported for National Public Radio:

National Intelligence Director Dennis Blair’s dramatic report last week — that the economic crisis is now the United States’ top “near-term security concern” — caught some members of Congress by surprise.  But it makes sense.

The global economic downturn could easily change the world. Previously stable countries could become unstable.  The geopolitical lineup could shift sharply, some countries becoming more powerful while others get weaker.  Allies could turn into adversaries.

Pamela Hess of the Associated Press provided this account of the hearing:

Blair’s 49-page statement opened with a detailed description of the economic crisis.  It was a marked departure from threat briefings of years past, which focused first on traditional threats and battlefields like Afghanistan, Iraq and Pakistan.

“The primary near-term security concern of the United States is the global economic crisis and its geopolitical implications,” he said in a written statement for the committee.

Blair cited the inability of other nations to meet their humanitarian obligations and hostility toward the United States for causing this crisis as potential causes for unrest, as this AFP report disclosed:

“Statistical modeling shows that economic crises increase the risk of regime-threatening instability if they persist over a one to two year period,” Blair said.

“Besides increased economic nationalism, the most likely political fallout for US interests will involve allies and friends not being able to fully meet their defense and humanitarian obligations.”

*   *   *

“It already has increased questioning of US stewardship of the global economy and the international financial structure,” Blair said, with trading partners already upset over a “Buy American” provision in a US stimulus bill.

Rosalie Westenskow of UPI noted Blair’s concern that the impact of climate change, coinciding with the economic crisis, could provide a troublesome combination to facilitate government instability:

“The impacts (of climate change) will worsen existing problems such as poverty, social tensions, environmental degradation, ineffectual leadership and weak political institutions,” Blair told senators last week.

As temperatures rise, scientists predict natural disasters like floods and drought will also increase and government instability worldwide is likely to follow, he said.

On February 17, during an interview in Tokyo with Martha Raddatz of ABC News, Secretary of State Hillary Clinton ratified Blair’s concern about the security threat posed by the global economic crisis:

“Yes, we have to look at this as part of our threat matrix,” the secretary of state said.  “I know some people have criticized him and said, ‘what does the economy have to do with terrorism.’ That’s a very short-sighted view.  I think what director Blair was saying is that we get fixated sometimes on the headlines of dangers, and that is not in any way to underestimate the continuing threat from terrorism, the instability in the Middle East and Afghanistan and Pakistan and elsewhere.”

“But this economic crisis, left unresolved, will create massive unemployment,” she said.  “It will upend governments, it will unfortunately breed instability, and I appreciated his putting that into the context of the threat matrix.”

It’s nice to know that we have an intelligence director who is not wedded to the Bush administration’s fixation on September 11 -style attacks.  As this February 16 editorial from the San Francisco Chronicle pointed out:

The new threat isn’t as easy to identify – or vilify – as al Queda, but that doesn’t mean it’s any less serious.

*    *    *

No one knows what form the next wave of instability will take. The United States must start making preparations now – by shoring up our own flailing economy and supporting our allies as much as we possibly can.  Blair’s warning shows how dangerous it will be for Washington to continue battling along the same tired ideological lines that it has for the last several weeks.  This economic crisis could be putting more than our wallets at risk.

Of course, we don’t really need another reason to stay awake at night and worry.  Fortunately, we now have someone in a crucial position, capable of identifying and focusing on new threats.  Thanks for the “heads up” Admiral Blair!

Another Crisis On Obama’s Crowded Front Burner

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December 29, 2008

Barack Obama’s first day as President is still three weeks away.  Nevertheless, on that first day in the Oval Office, he will be expected to focus his attention on a number of crisis situations.  How many are there now?  First, we have the economic crisis and all of its subplots:  infrastructure spending and job creation, stopping the foreclosures, oversight of the TARP giveaway (which should include bringing the TARP thieves to justice), a new economic stimulus package, getting the Securities and Exchange Commission to start doing its job, responding to cries of help from state governments and deciding on what to do about the American automakers.  As if those economic emergencies weren’t enough, the new President will need to multitask his crisis management skills to take on a number of other issues.  These include health care reform, undoing all of Bush’s “midnight” Executive Orders, winding down the Iraq war, building up troop strength in the neglected Afghanistan war and, speaking of neglect, the age-old Israeli-Palestinian conflict, which has again reared its ugly head.

Jeremy Ben-Ami is the Executive Director of J Street, which he describes as “the political arm of the pro-Israel, pro-peace movement”.  On December 27, Mr. Ben-Ami issued the following plea to the Obama administration from the J Street website:

The need for diplomatic engagement goes beyond a short-term ceasefire.  Eight years of American neglect and ineffective diplomacy have led us directly to a moment when the prospects of a two-state solution to the Israeli-Palestinian conflict hang in the balance and with them the prospects for Israel’s long-term survival as a Jewish, democratic state.

We urge the incoming Obama administration to lead an early and serious effort to achieve a comprehensive diplomatic resolution to the Israeli-Palestinian and Arab-Israeli conflicts.

This is a fundamental American interest as we too stand to suffer as the situation spirals, rage in the region is directed at the United States, and our regional allies are further undermined.  Our goals must be a Middle East that moves beyond bloody conflicts, an Israel that is secure and accepted in the region, and an America secured by reducing extremism and enhancing stability.  None of these goals are achieved by further escalation.

The December 27 Israeli air strike on the Gaza Strip was code-named:  “Operation Cast Lead”.  Reaction to the strike from the Israeli media ran the spectrum from support to outrage.  On December 28, The Jerusalem Post ran a favorable editorial approving the attack:

The IDF’s mission is not to bring down the Hamas regime, but to bring quiet to the South.  In a sense we are asking Hamas to stop being Hamas. The Islamists need to decide whether they want to go down in flames or are prepared to take on the responsibilities that come with control over the Strip. T hey may give Israel no choice but to topple their administration.

On the other hand, Gideon Levy wrote a scathing commentary on the incident for the December 29 edition of Haaretz:

Once again the commentators sat in television studios yesterday and hailed the combat jets that bombed police stations, where officers responsible for maintaining order on the streets work.  Once again, they urged against letting up and in favor of continuing the assault.  Once again, the journalists described the pictures of the damaged house in Netivot as “a difficult scene.”  Once again, we had the nerve to complain about how the world was transmitting images from Gaza.  And once again we need to wait a few more days until an alternative voice finally rises from the darkness, the voice of wisdom and morality.

On December 28, Barak Ravid of Haaretz provided an excellent, objective “back-story” on the planning and execution of this air strike.  The article explained that prior to the offensive, Israeli Foreign Minister, Tzipi Livni, went to Cairo to inform Egypt’s president, Hosni Mubarak, of Israel’s decision to strike at Hamas.  Ms. Livni is the candidate from the centrist Kadima party who will oppose Likud party stalwart, Benjamin Netanyahu, in the February 10 election for the office of Prime Minister.  Netanyahu had been ahead in the polls, prior to the execution of Operation Cast Lead.  If Israel can avoid a ground war in Gaza, she may win the support of the more hawkish voters who would have voted for Netanyahu.  A televised broadcast by Haaretz in conjunction with Channel 10 News, reported that   “Palestinians said 180 of those killed were Hamas officials, the rest — civilians.”  As of the present time, the total death toll from the assault is believed to be 280.  If 180 of those individuals really were “Hamas officials”, this could work to Livni’s advantage in the upcoming election.

The Obama administration’s diplomatic initiative on this conflict will redefine America’s role in the Middle East.  A December 28 editorial in The Washington Post concluded that the Gaza incident could prove to be a costly distraction from the effort to curb Iran’s nuclear ambitions.  Nevertheless, if Hillary Clinton were to dispatch an envoy to Syria to engage the al-Assad regime in getting control over Hamas’ activities in Gaza:  Could this undermine Iranian hegemony in the area?  Ultimately, everyone in the world is hoping that the Obama administration will provide the aggressive diplomacy that has been lacking in the Middle East for the past eight years.  The pressure for immediate results will be just one more headache waiting for him on Day One.

The Biggest Challenge For Hillary

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December 1, 2008

The recent attacks in Mumbai, India focused international attention back to the continuing problem of organized terrorist activity.  As Hillary Clinton is presented to the world as our next Secretary of State, the more sensationalist elements of the media have their focus on terrorism.  Terrorism is highlighted to the exclusion of the other pressing matters to be faced during Secretary Clinton’s upcoming tenure, presiding over that all-important bureaucracy in the neighborhood known as “Foggy Bottom”.  Nevertheless, Secretary Clinton will have several other pressing issues on her agenda  — “leftovers” that have stumped the previous administration for the past eight years.  Among these abandoned, stinking socks on the floor of the Oval Office, the least fragrant involves the situation with Iran.  The Bush years took that bad situation and made it far worse.  A December 1 article in the Tehran Times focused on the remarks of Majlis Speaker, Ali Larijani, about what might lie ahead between the United States and Iran.  While suggesting that the Bush Administration “sabotaged” efforts to resolve the dispute over Iran’s nuclear program, the article mentioned Larijani’s criticisms of what was described as the Democrats’ Iran containment policy.

A report in the December 1 Los Angeles Times examined the expectations of Arabs and Israelis, with Hillary Clinton as Secretary of State.  Discussing various forecasts concerning American strategy towards Iran, the article noted:

Some analysts predict the Obama administration will try instead to broker an Israeli-Syrian accord, aimed at drawing Syria away from Iran’s influence and diminishing Iran as a threat to the Jewish state.

Elizabeth Bumiller’s article in the November 22 New York Times described the “working chemistry” that has developed between Barack Obama and Ms. Clinton.  This chemistry resulted in a softening of Clinton’s position, expressed during the primary season debates, about negotiating with Iran:

But although Mrs. Clinton criticized Mr. Obama for being willing to sit down and talk to dictators, he has said he would have a lower-level envoy do preparatory work for a meeting with Iran’s leaders first.  Mrs. Clinton has said she favors robust diplomacy with Iran and lower-level contacts as well.

In the November 24 Jerusalem Post, Douglas Bloomfield gave us a refreshing look at how the Obama – Clinton foreign policy team might function:

Hillary’s great challenge will be to remember who IS President, who ISN’T and who WAS.  She will have to focus on rebuilding relationships damaged during the Bush years of “my way or the highway” foreign policy, taking the lead from the man she once described as not ready to be president.

*  *  *

In the Middle East peace process, as in other policy areas, Obama seems intent on charting a pragmatic, centrist course.  While that will disappoint both the Jewish Right and Left, it could prove a welcome change after eight years of the Bush administration’s faith-based foreign policy and not-so-benign neglect of the peace process.

As Inauguration Day approaches, the Bush Administration’s legacy of complete incompetence in nearly all areas is being documented by countless writers around the world.  By invading Iraq, Bush-Cheney helped Iran realize its dreams of hegemony.  Bush’s mishandling of Iran’s rise as a nuclear power became the subject of a thought-provoking opinion piece by David Ignatius in the November 30 Washington Post.  Mr. Ignatius noted that Iran had neither enriched uranium nor the technology to enrich uranium (centrifuges) when Bush took power.  As Bush’s days in the White House wind down, we now see Iran with nearly 4,000 centrifuges and approximately 1,400 pounds of enriched uranium.  The 2006 precondition that Iran halt uranium enrichment before the United States would participate in diplomatic efforts to address this issue, exemplifies the handicapped mindset of the Bush-Cheney regime.  As Mr. Ignatius pointed out:

It’s impossible to say whether Iran’s march toward nuclear-weapons capability could have been stopped by diplomacy.  But there hasn’t yet been a good test.  Because of bitter infighting in the Bush administration, its diplomatic efforts were late in coming and, once launched, have been ineffective.

By the time we finally have a President and a Secretary of State who are capable of taking on the dicey task of negotiating with Iran on the nuclear issue, it may be too late.  Hillary Clinton’s biggest challenge in her new job has already been cut out for her by the Bush Administration’s nonfeasance.

Michelle In The Spotlight

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November 20, 2008

I receive many strange comments on this website that I simply delete.  Although I am a strong proponent of First Amendment rights, I exercise my option of deleting defamatory remarks, spam-based “comments” and miscellaneous lunacy.  That final category includes a comment I received a while ago from an alleged female, focused on Michelle Obama.  The rant included this statement:  “Someone should look into Michelle  …”   I felt inclined to reply with the following:

An obstetrician actually did look into her and found two African-American babies, who were sired by Barack Obama.  Are you scared yet?

Throughout the Presidential campaign, the crazy stuff about Michelle kept turning up all over the media.  Monday, November 17, was a landmark day for that ignominious chapter in “news” coverage.  You may remember Fox News anchor E.D. Hill, who, on June 6, called attention to Michelle’s “terrorist fist jab” with Barack.  Fox News subsequently removed Hill from its America’s Pulse program.  On November 17, TVNewser reported that the Fox News Senior Vice-President of programming, Bill Shine, informed TVNewser of his decision not to renew Hill’s current contract with Fox, which expires within the next few months.  A small step for Fox, but a giant leap for  …  uh …  Fox.

From a more rational perspective, another item about Michelle appeared on today’s Daily Beast website.  The article, “Michelle’s Closet Agenda”, was written by Geraldine Brooks.  Ms. Brooks summarized the theme of her posting with this statement:

The point of this long-winded anecdote is not to add more fuel to the bonfire of the vanities surrounding the fact that, my God, we’re finally gonna’ have another first lady like Jackie who knows how to dress.  The point is twofold:  Michelle seems to be able to do everything she sets her mind to, and to do it at a high level of excellence.  And, more importantly: she knows this, and isn’t about to be “handled” into any role in which she is not supremely confident and comfortable.

This point emphasizes an aspect about Michelle that many people find threatening.  They saw it all before with Hillary Clinton:  A woman who attended law school with her husband at Yale, who went on to have an active and successful legal career.  Although Barack is two years older than Michelle, she graduated from Harvard Law School three years before our President-elect graduated from that same institution.  While working as Vice-President for Community and External Affairs for the University of Chicago Hospitals, Michelle was earning approximately $273,000 per year, in comparison with Barack’s $157,000 salary as a United States Senator representing the State of Illinois.

Michelle’s stint as First Lady follows that of Laura Bush, who did not have much to say during her husband’s eight-year tenure.  Nevertheless, book publishers are stomping on each other’s toes in the quest to obtain the publishing rights to Laura’s memoirs.  As for Michelle, many are expecting a First Lady who might have a little more to say, than did Laura Bush.  There is a great deal of doubt as to whether Michelle will become as involved in government as was Hillary Clinton, during her days promoting expanded health care.  Despite that, many people are anxious to get a little more insight from Michelle than we heard from Laura Bush.  One of the first commentators to express this craving was Jason Zengerle.  After Michelle’s speech at the Democratic National Convention, Mr. Zengerle had this to say in the August 25 edition of The New Republic:

Michelle Obama introduced herself as a sister, a wife, a mother, and a daughter–which are all incredibly important identities.  But those identities don’t reveal her full person–the Princeton and Harvard Law grad, the corporate attorney, the hospital executive–which were parts of her life that she barely mentioned.  Instead, she gave us predictable pap like “the Barack Obama I know today is the same man I fell in love with 19 years ago.”

Many pundits are hungry for more incisive, quotable wisdom from our next First Lady.  They will surely get it.  They will know better than to scrutinize Michelle’s statements for gaffes.  Joe Biden has proven himself as the new administration’s most abundant source of those.  Why look elsewhere?

Fun With Bill And Hill

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I had always been one of the skeptics on the issue of what support Bill and Hillary Clinton would provide to Barack Obama’s Presidential campaign.  The fight for their party’s nomination lasted longer than it should have.  Hillary’s reluctance to concede defeat underscored longstanding doubts about whether she could ever support Obama as the inevitable Democratic Party nominee.  The most outspoken skeptic on this subject has been Maureen Dowd.  Her column in the New York Times on August 19 (just before the Democratic Convention) described a fictional meeting between John McCain and Hillary Clinton.  The article, entitled Two Against The One, described the following imaginary, conspiratorial conversation between Hillary and McCain:

“Oh, John, you know I love you and I’m happy to help,” Hillary says.  “The themes you took from me are working great — painting Obama as an elitist and out-of-touch celebrity, when we’re rich celebrities, too.  Turning his big rallies and pretty words into character flaws, charging him with playing the race card — that one always cracks me up.  And accusing the media, especially NBC, of playing favorites.  It’s easy to get the stupid press to navel-gaze; they’re so insecure.”

“They’re all pinko Commies,” McCain laughs.  “Especially since they deserted me for The Messiah.  Seriously, Hill, that Paris-Britney ad you came up with was brilliant.  I owe you.”

I had voiced my own doubts about whether the Clintons would support the Obama candidacy, back on June 5:

Whatever motivated her to continue on, ultimately resulted in the dissociative speech she gave on the night of Tuesday, June 3, 2008, when Barack Obama earned enough delegates to guarantee himself the Democratic Presidential nomination.   She spoke to her relatively small audience of sycophants and losers, as though she had just assured the nomination for herself.   On the following day, she was faced with conference calls from 28 House members and 8 Senators, both pledged delegates and superdelegates for Clinton.   According to Howard Fineman of Newsweek, these people made it clear that they were beyond disappointment that she had not given a concession speech.  They were outraged by her arrogance and gave her an ultimatum:  Hillary must release them as her delegates, or they would endorse Obama, regardless of her consent.  Hillary agreed to a concession event, to take place on Saturday, June 7, at which time she would formally endorse Obama.

My suspicions continued for another two months and on August 7, I wrote this about the upcoming convention:

Forget the OxyContin (at least for this weekend).  Rush Limbaugh is going to be on a “natural high”, because his favorite fantasy might just become reality.  The Clintons are in “full hostility” mode and the Hillarologists are planning a parade and more for the convention in Denver.  Limbaugh has attempted to claim credit for the likely showdown in Denver, with his own label:  “Operation Chaos”.

Nevertheless, by the time the Convention began, the Clintons were on board for Obama and both gave great speeches for the Obama – Biden ticket.  On August 28, I felt humbled enough to say this about Senator Clinton’s performance at that event:

After hearing her speech, I felt motivated to apologize for publicly doubting her loyalty to the Democratic Party.  She really did “deliver the goods” by giving what was, perhaps, her best speech on the campaign stump.  Although many of us were surprised by the substance of her speech, I was particularly impressed by her delivery.  Hillary had always addressed her audiences with Lieberman-esque stiffness.  Imagine someone saying “let us go forward” with a groaning, insincere tone for the 10,000th time.  That was the way Hillary used to speak.  In defeat, she really did find her voice.

Since that time, both Hillary and Bill Clinton have been working hard along the campaign trail, proving themselves as essential compatriots in the Obama – Biden campaign.  The best example of this took place on October 30, when Bill Clinton delivered his rousing speech in support of Obama, before a crowd of 35,000 in Kissimmee, Florida.  His remarks urging supporters to “get out the vote” for Obama, made it clear that he had no shortage of enthusiasm for this former foe:

So I want you to get on the phone, and I want you to stalk your neighbors on the street.  I want you to get on the Internet and say if you haven’t made up your mind you ought to vote for Barack Obama.  He’s got the best philosophies.  He’s got the best positions.  He definitely has the decision making ability.  And he is a great executor.

Folks, we can’t fool with this.  Our country is hanging in the balance and we have so much promise and so much peril.  This man should be our President, all of our President.

For a candid look at Hillary Clinton’s real attitude about the Obama campaign, the November 2 article by Carrie Budoff Brown and Glenn Thrush on the Politico website is essential reading.  The following passage described what was really going on in Hillary’s mind during the days before her concession speech:

Clinton, whose relationship with Obama was still tense and tentative at that moment, professed no great affection or admiration for Obama, whom she regarded as less qualified than herself.  But she would support him, body and soul, she said, because she was so terrified by the prospect of McCain sitting in the Oval Office.  And that was before the credit markets crashed, setting off a domino effect on the U.S. economy.

“John McCain’s my friend; I really like him,” she said, according to a person who was within earshot.  “But there’s just no way we can let him be president.”

Both Bill and Hillary Clinton surprised many of us with their tireless efforts for the Obama – Biden campaign, despite the “bad blood” that had been spilled during the primary season.  Their conduct will surely be viewed by history as an exemplary model for party unity.