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Charade Ends For Pseudo-Populists

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The Occupy Wall Street protest has exposed the politicians – who have always claimed to be populists – for what they really are:  tools of the plutocracy.  Conspicuously absent from the Wall Street occupation have been nearly all Democrats – despite their party’s efforts to portray itself as the champion of Main Street in its battle against the tyranny of the megabanks.  As has always been the case, the Democrats won’t really do anything that could disrupt the flow of bribes campaign contributions they receive from our nation’s financial elites.

The “no show” Democrats reminded me of an article which appeared at Truthdig, written by Chris Hedges, author of the book, Death of the Liberal Class.  In his Truthdig essay, Chris Hedges emphasized how the liberal class “abandoned the human values that should have remained at the core of its activism”:

The liberal class, despite becoming an object of widespread public scorn, prefers the choreographed charade.  It will decry the wars in Iraq and Afghanistan or call for universal health care, but continue to defend and support a Democratic Party that has no intention of disrupting the corporate machine.  As long as the charade is played, the liberal class can hold itself up as the conscience of the nation without having to act.  It can maintain its privileged economic status.  It can continue to live in an imaginary world where democratic reform and responsible government exist.  It can pretend it has a voice and influence in the corridors of power.  But the uselessness and irrelevancy of the liberal class are not lost on the tens of millions of Americans who suffer the indignities of the corporate state.  And this is why liberals are rightly despised by the working class and the poor.

If it had not been obvious before the 2010 elections, it should be obvious now.  Back in July of 2010, I was busy harping about how the Obama administration had sabotaged the financial “reform” bill:

As I pointed out on July 12, Mike Konczal of the Roosevelt Institute documented the extent to which Obama’s Treasury Department undermined the financial reform bill at every step.  On the following day, Rich Miller of Bloomberg News examined the results of a Bloomberg National Poll, which measured the public’s reaction to the financial reform bill.  Almost eighty percent of those who responded were of the opinion that the new bill would do little or nothing to prevent or mitigate another financial crisis.  Beyond that, 47 percent shared the view that the bill would do more to protect the financial industry than consumers.

Both healthcare and financial “reform” legislation turned out to be “bait and switch” scams used by the Obama administration against its own supporters.  After that double-double-cross, the liberal blogosphere was being told to “pay no attention to that man behind the curtain”.

In an earlier posting, I discussed the sordid efforts of the Democratic-controlled Senate to sabotage the financial reform bill:

The sleazy antics by the Democrats who undermined financial reform (while pretending to advance it) will not be forgotten by the voters.  The real question is whether any independent candidates can step up to oppose the tools of Wall Street, relying on the nickels and dimes from “the little people” to wage a battle against the kleptocracy.

Since the Occupy Wall Street demonstration has gained momentum, a number of commentators have analyzed the complicity of hypocritical Democrats in ceding more unregulated power to the very culprits responsible for causing the financial crisis.  The most important of these essays was an article written by Matt Stoller for Politico.  Stoller began the piece by debunking the myth that the cancer known as “financial deregulation” was introduced to the American system by the Reagan administration:

Like President Bill Clinton before him, Obama and his team believe in deregulation and are continuing a “let them eat cake”-style social contract that solidified during Ronald Reagan’s presidency.  As this contract has fallen apart, so has the strong coalition behind Obama’s presidency.

We haven’t seen a challenge to the bank-friendly Democratic orthodoxy for 40 years.  The progenitor of this modern Democratic Party was Jimmy Carter. Though Reagan and Clinton helped finish the job, it was Carter who began wholesale deregulation of the banking industry – as Jeff Madrick details in his new book, “The Age of Greed.”

In signing the landmark Depository Institutions Deregulation and Monetary Control Act of 1980, which lifted usury caps, Carter said, “Our banks and savings institutions are hampered by a wide range of outdated, unfair and unworkable regulations.”

Stoller provided some hope for disillusioned former supporters of the Democratic Party by focusing on three Democratic state attorneys general, who have been investigating possible fraud in the securitization of trillions of dollars of mortgages.  Matt Stoller referred to these officials – Eric Schneiderman of New York, Catherine Cortez Masto of Nevada and Beau Biden of Delaware – as the “Justice Democrats”.  As Stoller observed, a number of other officials have been influenced by the noble efforts of these Justice Democrats:

There are other politicians following this path.  Jefferson Smith, an Oregon state representative now running for mayor of Portland, successfully fought legislation to make foreclosures easier in that state.  Register of Deeds Jeff Thigpen in North Carolina took on banking interests by fighting foreclosure fraud.  Maryland Rep. Elijah Cummings has been dogged in his investigations of mortgage servicers.

It should not be surprising that these officials have been getting quite a bit of pushback from their fellow Democrats – including Delaware Governor Jack Markell as well as a number of high-ranking officials from the Justice Department, led by Attorney General Eric Hold-harmless.

When the Occupy Wall Street protest began on September 17, what little coverage it received from the mainstream media was based on the “giggle factor”.  With the passing of time, it becomes increasingly obvious that the news media and our venal political leaders are seriously underestimating the ability of the “little people” to fight back against the kleptocracy.


 

Left Out

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Support for President Obama’s re-election bid is in disarray.  His sinking poll numbers have left many Democrats hoping for a miracle (i.e. some degree of economic recovery before November of 2012).  A significant component of the party’s progressive bloc is looking for a challenger to step forward – as can be seen at the StopHoping.org website.  One of the bloggers at Corrente – Hugh – recently had a good laugh at those who were anticipating a possible Primary challenge to Obama from former Wisconsin Senator Russ Feingold.  Here is some of what Hugh had to say:

The point is that Feingold could have been, and should have been, if he were legit, a focus for progressive organizing.  But he wasn’t.  . . . Feingold could have been the voice of opposition to Bush and his policies, but the silence from the Wisconsin Senator’s office was deafening.  He could have played the same role opposing Obama’s right wing corporatist agenda.  He did not.  Indeed he lost his Senate seat largely because of his failure to distance himself from Obama.

There are other reasons to dislike Feingold and question his progressive credentials.  He voted for John Roberts as Chief Justice of the Supreme Court. He voted for Obamacare.  And he is a deficit hawk.

Many left-leaning commentators have been offering suggestions to the President as to what actions he should be taking – as well as what message he should be delivering.  Experience has demonstrated that Obama never pays attention to well-intentioned, sensible advice.  How many times has Robert Reich written a roadmap for the President to use toward saving the economy as well as Obama’s own Presidency – only to be ignored?  As the campaign drags on, try to keep count of how many commentaries are written under the theme:  “What Obama Needs to Say and Do Right Now”.  Rest assured that he won’t say or do any of it.

Meanwhile, Republican voters are currently flocking to the standard-bearer du jour, Texas Governor Rick Perry.  Alexander Cockburn of CounterPunch wrote a great essay about Perry’s unmatched political instincts and the challenges ahead for both parties in the upcoming Presidential race:

The obvious question is whether Perry, having won the right, can clamber back along the kook branch towards something vaguely resembling the solid timber of sanity, to capture the necessary independents and disillusioned folk who bet on Obama in 2008.  Hard to say.  Perry is pretty far out on the limb.  Reagan, with the strenuous help of the press, managed the crawl back in 1980, amid widespread disappointment and disgust with Jimmy Carter.  Disappointment and disgust with Barack Obama?  The president has slithered down in the most recent polls, and now is just above the 50 per cent disapproval rating.  There are still around 30 million Americans without work, or enough work. There’s the endlessly cited observation that no president presiding over more than a 7 per cent jobless rate can hope for a second term.

The progressive sector is already rallying the Obama vote by pounding out the unsurprising message that Perry is a shil and errand boy for corporate America, Amazing! Imagine that a conservative Texas Republican would end up in that corner, arm in arm with Barack Obama, messenger of hope and change, also shil and errand boy for corporate America, starting with the nuclear industry, the arms sector, the ag/pesticide complex and moving on through Wall Street and the Fed, and equipped with truly noxious beliefs about fiscal discipline, the merits of compromise.  He’s a far more dangerous man to have in the Oval Office than Perry.  We need a polarizer to awaken the left from its unending, unbreakable infatuation with our current president, despite all the horrors he has perpetrated and presided over, most significantly the impending onslaught on Social Security and Medicare.

Any Republican who wants to maintain a viable candidacy will be forced to start taking some hard swings at Rick Perry.  Jon Huntsman has already started to do so.  Michele Bachmann might not, if she wants a shot at becoming Perry’s running mate.  It won’t matter what Ron Paul says … because the mainstream media are pretending as though he doesn’t exist.  If you haven’t seen it yet, Jon Stewart ran a superb piece, exhibiting how all of the major news outlets – including Fox – were apparently reading from the same script after Congressman Paul came within 100 votes of beating Michele Bachmann in the Iowa Straw Poll.  Watching those reports could have led one to believe that Ron Paul had dropped out of the race.  On August 17, Tara Sartor of the Pew Research Center’s Project for Excellence in Journalism provided this analysis of how the television news organizations squelched Ron Paul’s near-victory in Iowa:

In a further attempt to gauge the post-straw poll attention to Paul’s campaign, PEJ also used the Snapstream server’s closed captioning capability to assess the candidates’ television coverage in the first few days after that balloting.

The sample included the three network Sunday morning panel shows on August 14, the morning and evening network news programs on August 15 and four hours of prime-time cable and one hour of daytime from each of the three major cable news networks on August 15.

According to that analysis, Paul was mentioned just 29 times. By comparison, Perry was mentioned 371 times, Bachmann was mentioned 274 times, and Romney was mentioned 183 times.

I hope that the anti-Paul conspiracy helps to energize those voters who had been ambivalent about supporting the “other Texan” in the race.

At some point, the progressive Democrats are going to be faced with the ugly reality that they don’t have a candidate in the 2012 Presidential campaign.  As has been the case with Ron Paul and his supporters – the Left will be left out.


 

Defending Reagan

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June 4, 2009

In case you’ve wondered whether Nobel laureates ever emit brain farts, Paul Krugman answered that question in the May 31 edition of The New York Times.  His column of that date targeted former President Ronald Reagan for causing our current economic crisis:

There’s plenty of blame to go around these days.  But the prime villains behind the mess we’re in were Reagan and his circle of advisers — men who forgot the lessons of America’s last great financial crisis, and condemned the rest of us to repeat it.

I was never a big fan of Ronald Reagan.  My reaction to his nomination as the Republican Presidential candidate in 1980, conjured up James Coburn’s sarcastic line from the movie In Like Flint:  “An actor for President!“  Reagan’s legacy was exaggerated — which is why the book, Tear Down This Myth by Will Bunch, is available on this site, under the “Featured Books” section on the left side of this page.  I never believed that Reagan deserved all the credit he was given for the collapse of the former Soviet Union.  In my opinion, that distinction belongs to Lech Walesa, leader of Solidarity (the former Soviet bloc’s first independent trade union) and his old buddy, Karol Wojtyla, who later became Pope John Paul II.  In fact, former Soviet leader Mikhail Gorbachev admitted that the demise of the Iron Curtain would have been impossible without John Paul II.

Another literary deflation of that aspect of the Reagan legend can be found in The Rebellion of Ronald Reagan:  A History of the End of the Cold War by James Mann.  In his review of that book for The Washington Post, Ronald Steel noted how James Mann addressed the claim that Reagan broke up the Soviet Union:

And in 1991 the Soviet Communist Party disintegrated and with it ultimately the Soviet Union itself.  Did Reagan make it happen?  This would be too strong, Mann insists.  The Cold War ended largely because Gorbachev “had abandoned the field.”

Despite my own feelings about the Reagan legacy, upon reading Paul Krugman’s attempt to blame Ronald Reagan for the economic meltdown, I immediately rejected that idea.  What became interesting was that in the aftermath of that article, commentators from “left-leaning” news sources voiced objections to the piece.  For example, William Greider is the national affairs correspondent for The Nation.  On his own blog, Greider wrote an essay entitled:  “Krugman Gets His History Wrong”.  While upbraiding Krugman, Mr. Greider took care to note the complicity of the Democrats in causing the current economic crisis:

What Krugman leaves out is that financial deregulation actually started two years earlier — before the Gipper got to Washington.  A Democratic Congress and Democratic president (Jimmy Carter) enacted the Monetary Control Act of 1980 which removed all remaining controls on interest rates and repealed the federal law prohibiting usury (note that sky-high interest rates and ruinous predatory lending have been with us ever since).  It was the 1980 legislation that took the lid off banking and doomed the savings and loan industry, the mainstay that used to provide housing loans and home mortgages.  The thrifts were able to raise capital because they were allowed to pay a half percent more in interest to depositors.  Bankers wanted them out of the way.  The Democratic party obliged.

Robert Scheer is the editor of Truthdig.  The columns he writes for Truthdig regularly appear in The Nation.  (He is famous for getting Jimmy Carter to admit for Playboy magazine, that Carter often “lusts in his heart for other women”.)  Mr. Scheer’s reaction to Krugman’s vilification of Reagan as the saboteur of the economy includes such words as “disingenuous” and “perverse”.  Beyond that, Sheer lays blame for this crisis where it properly belongs:

Reagan didn’t do it, but Clinton-era Treasury Secretaries Robert Rubin and Lawrence Summers, now a top economic adviser in the Obama White House, did.  They, along with then-Fed Chairman Alan Greenspan and Republican congressional leaders James Leach and Phil Gramm, blocked any effective regulation of the over-the-counter derivatives that turned into the toxic assets now being paid for with tax dollars.

*    *    *

How can Krugman ignore the wreckage wrought during the Clinton years by the gang of five?  Rubin, who convinced President Clinton to end the New Deal restrictions on the merger of financial entities, went on to help run the too-big-to-fail Citigroup into the ground.  Gramm became a top officer at the nefarious UBS bank.  Greenspan’s epitaph should be his statement to Congress in July 1998 that “regulation of derivatives transactions that are privately negotiated by professionals is unnecessary.”  That same week Summers assured banking lobbyists that the Clinton administration was committed to preventing government regulation of swaps and other derivatives trading.

Thank goodness Eliot “Socks” Spitzer is still around, writing for Slate.  His most recent article about the economy not only provides an accurate assessment of the cause of the problem  –  it also suggests some solutions:

We have had a fundamentally misguided industrial policy over the past decade.  Yes, industrial policy is a dirty phrase to many, some of whom would argue that we haven’t had one, and indeed shouldn’t.  But the truth is we did have one:  to leverage up and guarantee the bets of a financial services sector that has now collapsed and left nothing of value in its wake.

What would be a better approach?  A policy to support those sectors that actually create goods and value.  Investment in transformational technology and infrastructure are core national needs.  So why not start with a government order for 500,000 electric cars, subject to an RFP two years from now, by which time a true electric car prototype will have been developed?  It should be open to any manufacturer, as long as 75 percent of the value of the car is domestically produced.  I don’t care if the name on the plate is GM or Toyota, as long as the value added is here.  (I prefer a “Toyota” produced in Tennessee to a “GM” produced in China.  Why struggle to save the shell of a company –GM– that intends to ship jobs overseas anyway?)  Guaranteeing an order of 500,000 will give manufacturers the needed scale to generate profits and reassure private customers that service and support will be around for the long haul.  And the federal government could also issue an RFP for recharging stations, to be built by private companies, along the interstate highway system, wherever there is a traditional filling station, so that recharging will be possible.

(By the way:  An “RFP” is a Request for Proposals, or bids, on a government project — just in case you were thinking it might mean “request for prostitutes”.)

I have always been a fan of Socks Spitzer.  His personal story underscores the simple truth that all of us, regardless of our accomplishments, are only human and we all make mistakes  –  even Nobel Prize winners such as Paul Krugman.

A Page From The Jimmy Carter Playbook

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March 30, 2009

When Barack Obama began his Presidential campaign, I was initially skeptical.  Here was another guy from “out of the blue” pursuing a bid for the White House.  I was reminded of Jimmy Carter:  a man who had served a term as Governor of Georgia, who began his Presidential campaign with little name recognition.  Carter’s Presidency was marked by rampant inflation and an ill-advised decision to allow Iran’s ailing, deposed Shah into the United States (from exile in Mexico) to die here.  That move resulted in the attack on the U.S. Embassy in Iran, and the holding of 52 American diplomats as hostages until the end of Carter’s term in office.  Teddy Kennedy unsuccessfully challenged Carter for the Democratic nomination in 1980, knowing that Carter had little chance of re-election.   After serving only one term as President, Carter was voted out of office.

At the outset, Carter’s Presidential campaign got a lot of traction from the widespread belief among young voters that Carter would do something to change our nation’s marijuana laws.  Not only did Carter lack the political courage to take such a stand once he became President, he did the opposite.  Carter authorized the use of an herbicide called Paraquat, to be sprayed on marijuana fields in Colombia and Mexico.  Upon realizing that their crops were sprayed with this substance, the sleazy pot farmers quickly harvested the contaminated weed and sent it to market in the United States.  As a result, many Americans developed permanent respiratory problems.

Now that the Obama Administration has taken a “States’ rights” position on medical marijuana laws (by refusing to continue the Bush administration’s tactic of prosecuting medical marijuana facilities) proponents for repeal of pot prohibition, have stepped up their campaign.  Given the current economic crisis, now might be the time for the government to consider legalizing marijuana and taxing it, as is done with the more dangerous ethyl alcohol.

On Thursday, March 26, President Obama held a “town hall” meeting in the East Room of the White House.  Although there were only 100 audience members in the East Room, viewers were invited to submit questions over the Internet.  Nearly 100,000 questions were submitted on-line in response to this invitation.  As John Ward Anderson reported for Politico:

In this moment of national economic crisis, the top four questions under the heading of “Financial security” concerned marijuana; on the budget, people voted up questions about marijuana to positions 1-4; marijuana was in the first and third positions under “jobs”; people boosted a plug for legalizing marijuana to No. 2 under “health care reform.”  And questions about decriminalizing pot occupied spots 1 and 2 under “green jobs and energy.”

After taking questions lower on the list, Obama addressed the pot issue head-on, noting the huge number of questions about marijuana legalization and remarking with a chuckle, “I don’t know what that says about the online audience.”

“The answer is no, I don’t think that is a good strategy to grow our economy,” he said, as the audience in the room applauded and joined him in a laugh.

Although the enthusiastic sycophants in the audience shared a chuckle with the President, many commentators took a dim view of Obama’s discourteous response.  Conservative pundit Andrew Sullivan was particularly incensed by the President’s affront to “the online audience”:

The chuckle suggests a man of his generation.  The dismissiveness toward the question of ending Prohibition as both a good in itself and a form of tax revenue is, however, depressing.  His answer was a non-answer.  I’m tired of having the Prohibition issue treated as if it’s trivial or a joke.  It is neither.  It is about freedom and it’s deadly serious.  As for your online audience, Mr president, have you forgotten who got you elected?

On his blog at Salon.com, Pete Guither took stock of reactions to the President’s superciliousness from across the blogosphere.  Many of the rejoinders he quoted came from people at The Huffington Post.  I will include some of them here.

Jim Gilliam said:

Pot saved my life. It’s a miracle drug, even the crappy non-organic kind made in a lab.

The President will be asked this question again, and maybe next time he won’t laugh at us.

Sam Stein’s retort included the reaction of a law enforcement professional:

Jack Cole, executive director of Law Enforcement Against Prohibition (LEAP), said in response:

“Despite the president’s flippant comments today, the grievous harms of marijuana prohibition are no laughing matter. Certainly, the 800,000 people arrested last year on marijuana charges find nothing funny about it, nor do the millions of Americans struggling in this sluggish economy.  It would be an enormous economic stimulus if we stopped wasting so much money arresting and locking people up for nonviolent drug offenses and instead brought in new tax revenue from legal sales, just as we did when ended alcohol prohibition 75 years ago during the Great Depression.”

Dan Sweeney had this to say:

According to Arizona Attorney General Terry Goddard fully 75 percent of Mexican drug cartels’ cash comes from the sale of marijuana.  Legalizing marijuana would, of course, take away that massive source of income for the cartels, just as ending prohibition cut bootlegging as a source of revenue for La Cosa Nostra.

Combining all of the above effects, the legalization of marijuana means billions of dollars saved or made, the creation of jobs and the curbing of violence along the Mexican border, which in turn means saving thousands of lives.

Barack Obama can certainly be against legalization, but he owes it to nonviolent drug offenders caught in the horror show that is the U.S. prison system, the families of innocent victims of the Mexican drug wars and economically bloodied U.S. taxpayers to explain why. Ganja may cause the giggles, but legalization shouldn’t be a laughing matter.  And it certainly shouldn’t be treated as cavalierly as it has by the current administration, especially when it has been proven to be a popular issue every time Obama has tried to go straight to the people.

President Obama’s expressed position on the marijuana issue demonstrates the same political cowardice America witnessed in Jimmy Carter.  If you want to read an uplifting story about political courage, Constitutional law and civil rights attorney, Glenn Greenwald, wrote an excellent piece concerning Virginia Senator Jim Webb’s political courage for Salon.com.  Not surprisingly, the example Mr. Greenwald chose to contrast with Jim Webb’s political bravery was President Obama’s “adolescent, condescending snickering when asked about marijuana legalization”.  The marijuana controversy presents our new President with the opportunity to demonstrate the same degree of political courage exhibited by Jim Webb.  He ought to give it a try.

The Big Bite

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March 12, 2009

As President Obama’s “big bang” agenda gets underway (wherein the government is simultaneously tackling the problems of the economy, health care, education and energy) criticism of this strategy is beginning to mount.  Commentators from the conservative end of the spectrum are, not surprisingly, the most vocal in their admonitions that these other issues are detracting attention from the most pressing issue facing America and the world:  the economy.  As William Galston pointed out in The New Republic, Obama’s “big bang” strategy runs the risk of repeating Jimmy Carter’s failed attempt to push a far-reaching agenda at the beginning of his term:

It is time for President Obama to focus his considerable leadership and communication skills on the financial crisis–to speak candidly with the people about the magnitude of pthe roblem, to embrace a solution commensurate with the problem, and to do whatever it takes to persuade Congress and the people to accept it.  If he does not, he could end up where another highly intelligent, self-disciplined, and upright president did three decades ago.

Conservative pundit, Tony Blankley, expressed similar dismay that not enough thought and effort have been dedicated to this urgent problem.  He added that this sentiment is not limited to those on the “far right”:

Obama not only is failing to focus more or less exclusively on protecting the financial system and the economy that depend on it but also is letting his ideological ardor drive him to expend both his own and his administration’s attention, along with the vast new tax dollars, on those programs rather than on the financial and economic crises.

Thus — and here is his political danger — if the financial system fails (and much of the economy along with it), it will be a fair, true and politically lethal charge against Obama that he didn’t do all he could as soon as he could to protect us from the catastrophe.  It was this decision that shocked even some of his moderate supporters, such as David Gergen, David Brooks and others, who are muttering in private.

And this misjudgment is only compounded by the slow and inept start of Treasury Secretary Timothy Geithner, the man who has the line responsibility to fix it and who only this past weekend got around to nominating some of his vital sub-Cabinet officials.  The failure of both Obama and Geithner, in the five months since the election, to come up with a plan to deal with the toxic assets and insolvency of major financial institutions may well look even more irresponsible than it already does if the derivatives crisis in fact hits the world.

Most of the anxiety over the Obama administration’s economic plan (or lack thereof) concerns its lack of disclosed details and the administration’s apparent decision to ignore the warnings of prominent economists about the urgency of taking the only logical action:  put the “zombie” banks through receivership to purge them of their “toxic assets” (most notably mortgage-backed securities).  The scant information disclosed about Treasury Secretary, “Turbo” Tim Geithner’s Financial Stability Plan is that it involves “stress testing” the banks to determine their true financial condition and creating some sort of investment fund by which private investors would be enticed to purchase the toxic assets with taxpayer money being used to guarantee the value of those assets.

Turbo Tim has repeatedly stated that he is opposed to “nationalization” of the functionally insolvent banks.  This position is in direct opposition to the warnings of two Nobel laureates and countless other Economics professors, including Dr. Nouriel Roubini, who predicted the economic crisis back on September 7, 2006.  As Steve Coll discussed on The New Yorker‘s Think Tank blog:

To compound all this, Geithner, Bernanke, and the President seem to have organized themselves as a determined minority in resistance to the gathering view among mainstream economists, even Alan Greenspan, that the best solution to the bank problem, at this point, is, in fact, temporary receivership — on the model of the Resolution Trust Corporation that cleaned up the savings-and-loans industry in the early nineteen-nineties, or the more routine receivership processes of the Federal Deposit Insurance Corporation.  Is this resistance by Geithner, Bernanke, and the President genuine and fully determined, or is it part of the political and confidence equation above, and therefore susceptible to change?  In the President’s case, it’s hard to be sure.  In Geithner’s case, he seems to be saying what he means. Where is Larry Summers, the top White House economic adviser, on this critical question?  Also hard to tell.  Perhaps, like Alan Greenspan, he is privately leaning toward receivership; if so, his position would be complicated by the fact that his younger, former protege, Geithner, who now holds a more visible position than his own, thinks otherwise.  Anyway, the facts about the health of the banks are not yet officially in hand — that is the purpose of the “stress tests” that are now being administered, to analyze which of the country’s largest nineteen banks are in the strongest positions, and which are in the weakest.  Policy options are still being developed. The likelihood of various economic forecasts is still being debated.  And so we endure more Kremlin-like opacity.

Is Turbo Tim simply “playing it close to the chest” by holding off on announcing any plans to put zombie banks into receivership, so as to prevent a “run” on more healthy institutions and the destruction of what is left of their stock value?  Although I would like to believe that, those more knowledgeable than myself are quite skeptical.  Columbia University Professor Joseph E. Stiglitz (2001 recipient of the Nobel Prize in Economics) pointed out in the March 29 issue of The Nation, that placing the insolvent banks into receivership must be done immediately.  The process of endless bailouts for these banks is a waste of money that appears to be solely for the benefit of the banks’ shareholders:

It has been obvious for some time that a government takeover of our banking system–perhaps along the lines of what Norway and Sweden did in the ’90s–is the only solution.  It should be done, and done quickly, before even more bailout money is wasted.
*    *    *
The politicians responsible for the bailout keep saying, “We had no choice. We had a gun pointed at our heads.  Without the bailout, things would have been even worse.”  This may or may not be true, but in any case the argument misses a critical distinction between saving the banks and saving the bankers and shareholders.  We could have saved the banks but let the bankers and shareholders go.  The more we leave in the pockets of the shareholders and the bankers, the more that has to come out of the taxpayers’ pockets.
*    *    *
By these standards, the TARP bailout has so far been a dismal failure. Unbelievably expensive, it has failed to rekindle lending.  Former Treasury Secretary Henry Paulson gave the banks a big handout; what taxpayers got in return was worth less than two-thirds of what we gave the big banks–and the value of what we got has dropped precipitously since.

Since TARP facilitated the consolidation of banks, the problem of “too big to fail” has become worse, and therefore the excessive risk-taking that it engenders has grown worse.  The banks carried on paying out dividends and bonuses and didn’t even pretend to resume lending.

The most recent recipient of the Nobel Prize in Economics, Paul Krugman, has become increasingly vocal in his criticism of the Obama administration’s approach to this problem:

A real fix for the troubles of the banking system might help make up for the inadequate size of the stimulus plan, so it was good to hear that Mr. Obama spends at least an hour each day with his economic advisors, “talking through how we are approaching the financial markets.”  But he went on to dismiss calls for decisive action as coming from “blogs” (actually, they’re coming from many other places, including at least one president of a Federal Reserve bank), and suggested that critics want to “nationalize all the banks” (something nobody is proposing).

As I read it, this dismissal — together with the continuing failure to announce any broad plans for bank restructuring — means that the White House has decided to muddle through on the financial front, relying on economic recovery to rescue the banks rather than the other way around.  And with the stimulus plan too small to deliver an economic recovery … well, you get the picture.

Is the administration’s approach to the financial crisis being handicapped by an over-extension of resources because of the overwhelming demands of the “big bang” strategy?  Whether or not that is the case, the administration’s current solution to the bank problem is drawing criticism from both the left and the right.  If President Obama stays with the course charted by “Turbo” Tim Geithner, odds are that our new President will be restricted to a single term in The White House.

From St. Paul to Ron Paul

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September 11, 2008

The first time I ever voted in a Presidential election was when I decided to vote for the Libertarian candidate, Roger MacBride.  I agreed with the principles of the Libertarian Party.  They had good writers, putting their message together in a way that could gain the enthusiasm of those not electrified by “Oatmeal Man” Gerald Ford, or by the tranquil Jimmy Carter.  Although they have not managed to get many charismatic candidates to act as their standard-bearers, the Libertarians finally have one this year.  Bob Barr served in Congress as the Representative for Georgia’s 7th Congressional District from 1995 to 2003.  In Congress, he served as a senior member of the Judiciary Committee, as Vice-Chairman of the Government Reform Committee, as a member of the Committee on Financial Services and the Committee on Veteran’s Affairs.  Although he was a harshly partisan antagonist of Bill Clinton during the impeachment promotion, he subsequently took on a relaxed, charming demeanor, winning over the usually “cold room” for conservatives on HBO’s Real Time with Bill Maher.  In 2004, he left the Republican Party to join the Libertarian Party.

Bob Barr is now running for President, as the candidate of the Libertarian Party.  In 1988, Ron Paul was the Libertarian Party’s Presidential candidate.  You may remember Ron Paul from the 2008 Republican primaries, occasionally beating Rudy Giuliani and the other “also-rans” of this past spring.

On September 10, Barr’s campaign manager, Bob Varney, issued a press release, disclosing that Bob Barr has invited GOP Congressman Ron Paul to be his running mate in the upcoming Presidential election.  The press release disclosed that:

In a letter sent to Paul, Barr called Paul one of the “few American patriots” who exist in today’s society, and asked him to “seriously consider this final offer as an opportunity to show true, lasting leadership beyond party politics”.

Wayne Allyn Root, who has been Barr’s running mate in this election, was quoted in the press release as expressing support for the selection of Ron Paul as Barr’s new running mate:

Understanding Dr. Ron Paul’s reputation and name recognition in the freedom movement, I am willing to step aside as Libertarian vice presidential candidate if he would be willing to take my place.  I will pledge to work day and night, just as I have as the vice presidential nominee, to support Dr. Paul.  I believe this is a wonderful opportunity for the Libertarian and freedom movements.  I encourage Dr. Paul to accept Congressman Barr’s offer.

Many might consider this entire idea as the daydream of some “fringe” political group.  Nevertheless, you may want to look down the road (as the Libertarians obviously are) to a scenario wherein Sarah Palin, for whatever reason, alienates the centrist Republicans and independents, who may have otherwise voted for McCain.  These people might then vote for Bob Barr.  Add to the mix, those not currently enthusiastic about a McCain Presidency, who just can’t get motivated to vote for Barack Obama (for whatever reason).  With Ron Paul on his ticket, Barr has the possibility of winning enough electoral votes to prevent McCain or Obama from winning a majority of Electors as a result of the general election, in the event that “wild card” Palin turns out to be a disaster.  If that happens and no single candidate has a majority of Electors in the Electoral College, the Twelfth Amendment requires that the Presidential election shall be decided in the House of Representatives.  Since Bob Barr and Ron Paul both served in the House, unlike Barack Obama, there is a chance that Barr could win the Presidency.  The mere fact that the Democrats have a majority in the House is of no consequence.   The Twelfth Amendment requires that each State shall vote in the House as a single delegation, with each State having only one vote.  That vote would be determined by the majority of a State’s Representatives voting for a particular candidate.  He who has 26 States, wins.  (The Vice-President is elected by the Senate, making a  McCain/Paul administration  possible.)  With Sarah Palin as McCain’s running mate, a Barr/Paul Libertarian ticket could get some breathing room.  If there is enough breath to carry that ticket out of the Electoral College, we could be in for some wild times.

The High Road To Nowhere

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August 21, 2008

He’s blowing it.  With each passing day, the opinion polls show increasing momentum by the McCain campaign.  For their part, the Democrats have put together a lineup of really uninspiring orators for next week’s Convention.  The schedule for this event will include such former stars as Jimmy Carter, Bill Clinton and John Kerry.  (At least they had the sense to leave Mike Dukakis and Walter Mondale off the program.)  What is Jimmy Carter going to discuss?  … “How to Facilitate Runaway Inflation”?  Is Bill Clinton going to explain “How to Beat a DNA Test”?  (John Edwards will be listening to that one with abated breath.)  We can count on John Kerry to present a coma – inducing diatribe about “How to Snatch Defeat from the Jaws of Victory”.  Meanwhile, Obama appears to be writing his own handbook on that subject.  After folding on the FISA (wiretap) bill and capitulating to the public’s ignorance on the offshore oil drilling controversy, he now appears ready to undermine his campaign theme of Change, by selecting a running mate, who has spent nearly his entire adult life in the Senate:  Joe Biden.

Obama would be better off running with his best choice: Virginia Governor Tim Kane.  Does Barack really believe that some chucklehead, watching “reality TV”, is going to be concerned about whether Kane has the adequate foreign policy acumen to attend the funerals of foreign dignitaries on behalf of the United States?  The people of Virginia will support the team that includes a fellow Virginian.   Southern voters will not vote for a ticket consisting of two individuals who put sugar on their grits.  Catholics will vote for the candidate with a Catholic running mate, despite McCain’s anti-abortion pander.

At this point in the campaign, the often – repeated mantra of the commentators is that “negative campaigning works”.  Obama has expressed his belief that by taking the “high road”, he will somehow be immune to any negative attacks.  If he wants to win this election, he must face up to the need to launch his own negative character attack against McCain.  For starters, he must restrain himself from saying nice things about his opponent.  He should then draw some attention to the following issues:

1.)  McCain’s divorce from his first wife, Carol, and Ross Perot’s feelings about that.  In the June 8 issue of Britain’s Daily Mail, Sharon Churcher discussed Perot’s reaction to how McCain ditched Carol upon his return from Viet Nam, when he first learned of her crippling injuries:

But Ross Perot, who paid her medical bills all those years ago, now believes that both Carol McCain and the American people have been taken in by a man who is unusually slick and cruel – even by the standards of modern politics.

“McCain is the classic opportunist.  He’s always reaching for attention and glory,” he said.

“After he came home, Carol walked with a limp.  So he threw her over for a poster girl with big money from Arizona. And the rest is history.”

2.)  McCain’s involvement in the “Keating Five” scandal.  In 1991, McCain was criticized by the Senate Ethics Committee as having exercised “poor judgment” in connection with the Federal Home Loan Bank Board’s investigation of Lincoln Savings and Loan.

3.)  Obama’s staffers should contact McCain’s fellow inmates from the Hanoi Hilton, to obtain a little more information than “no comment” as to their feelings concerning McCain’s candidacy.

4.)   Get in touch with McCain’s Vietnamese captors to find out whether he provided them with any worthwhile information, justifying  the reason for their offer of early repatriation, which he declined.

There’s a dirt in them there hills.  Obama’s camp has to go dig for it.  If they find it  . . .  they damned – well better use it.

It’s a dirty world out there, with such dirty players as: Vladimir Putin, Hugo Chavez and the Chinese baseball team.  Unless he really can perform a miracle, the guy with the halo over his head won’t be moving into 1600 Pennsylvania Avenue.  Of course, he could always trade in the halo for a nice set of darts.