A persistent feature of the 2016 Presidential election campaign has been Donald Trump’s steady stream of promises to “make America great again”. The constant repetition of that mantra has motivated me to look back to the time when America was great – and to take another look at how our President was motivating everyone in this country to make such significant strides.
Although television has provided us with constant reminders of President Kennedy’s great oratory skills, that medium has offered us little of what his predecessor, President Dwight Eisenhower offered by way of motivational elocution. After all, the years of the Eisenhower Presidency (1953 – 1961) marked the era when America’s middle class strengthened to the level where young families were buying newly-constructed, air-conditioned homes – as well as shiny, new cars – on a grand scale.
In honor of Ike’s birthday (October 14, 1890) it seems only fitting that we should look back at some of his most noteworthy statements:
Ike gave a speech before the National Association of Newspaper Editors on April 16, 1953. Joseph Stalin had just died on March 5 of that year, and there was heightened pressure for increased military spending, as a result of the burgeoning arms race with Russia. The never-ending debate on whether government expenditures should favor “guns or butter” became the key subject of this speech:
“Every gun that is made, every warship launched, every rocket fired signifies in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed. This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children. This is not a way of life at all in any true sense. Under the clouds of war, it is humanity hanging on a cross of iron.”
The ever-expanding rift between the Republican Party’s so-called “Freedom Caucus” and the mainstream Republicans has prompted many GOP commentators to quote the wisdom of President Eisenhower, when discussing this subject:
“Extremes to the right and to the left of any political dispute are always wrong.”
Many of the obnoxious political bloviators, who pollute the airwaves with their toxic commentary, would be wise to take heed of this sage advice from Ike:
“Never question another man’s motive. His wisdom, yes, but not his motives.”
President Eisenhower offered us another bit of important advice to keep in mind during an election year:
“Never let yourself be persuaded that any one Great Man, any one leader, is necessary to the salvation of America. When America consists of one leader and 158 million followers, it will no longer be America.”
When you ask most people to recall a quote made by President Eisenhower, the usual response is a reference to his warning about the unrestrained power of the military-industrial complex. Those remarks were included in Ike’s farewell address, which he presented on television, when he left office on January 17, 1961 – three days before his term expired. I suggest watching the entire speech. It lasts only fifteen minutes and it has remained every bit as relevant today as it was in 1961.
The perspective on the Greek crisis, fed to most Americans by way of the megabank-controlled, mainstream news media, has been based on criticism of a “leftist” or “socialist” Greek government. The magic words, leftist and socialist are intended to portray the Greeks as the bad guys in the picture, whereas those characterized as the “good guys” – die Erbsenzähler (led by German Finance Minister Wolfgang Schäuble) are portrayed as patiently leading the petulant Greeks toward the path of financial responsibility.
Nothing could be further from the truth. For starters, Alexis Tsipras of the Syriza party was not elected Prime Minister of Greece until January 26, 2015. His predecessor, Antonis Samaras was a member of the New Democracy party.
Many bloggers and financial writers have been criticizing the European Central Bank’s handling of the Greek financial crisis since 2010. Edward Harrison has written extensively on the subject at his Credit Writedowns blog. On June 29, Mr. Harrison provided a history on the crisis:
First, let’s remember that back in 2010, most of the creditors to Greece were in the private sector, many of them banks in other Eurozone countries. At that time, the fragility of the European and global economy, and of the European banking system was much greater than it is now. And this caused Europe to panic. What’s more is the EU was able to corral the IMF into joining the EU in bailing Greece out, even though doing so broke its own rules and disregarded the analysis of its own economists. This was the original mistake and the whole chain of events since then has been a futile attempt to justify that original decision.
* * *
The most obvious answer is the weak banks. The now deceased former German Central Bank Head Karl Otto Pöhl said at the time that it was all about rescuing weak German and French banks – and rich Greeks too. This is most definitely true. For example, back in 2012, the FT’s James Mackintosh quoted JPMorgan which reckons only 15 billion euros of 410 billion in ‘bailout’ funds actually went to the Greek economy. The rest went to creditors of the Greek government.
The ongoing intransigence of the troubled nation’s troika of creditors (European Central Bank, the International Monetary Fund and the European Union) has drawn harsh criticism from a wide assortment of astute individuals. From here in the States, Mike Shedlock (a/k/a “Mish”) has been a frequent – yet well-reasoned and balanced – critic of the Eurogroup’s stance. Here is what Mish had to say on July 10:
German chancellor Angela Merkel has stated many times recently that Greeks got generous terms on its alleged bailout.
Merkel is either a blatant liar or dumb as a rock. I believe the former. It is the bailed out banks in Germany and France that got generous terms.
To save French and German banks of €60 billion or so in losses on Greek bonds they never should have purchased in the first place, eurozone taxpayers are now on the hook for at least €326 billion.
Draghi’s famous “whatever it takes” speech should have been suffixed with “to save the banks”.
Greek and eurozone taxpayers got the shaft and remain at risk.
On July 12, Mish shared his reaction to “THE Final Offer Before Grexit”, as presented by the Eurogroup:
The wording of this document makes it clear Germany wants to push Greece out of the eurozone.
Please review the final sentence of the proposal. Here it is again: “In case no agreement could be reached, Greece should be offered swift negotiations on a time-out from the euro area, with possible debt restructuring.”
If Greece turns down the offer, it gets “swift” negotiations on a “temporary time out“, including the possibility of restructuring.
In contrast Greece has no chance of restructuring if it accepts all of the above demands.
Tsipras would be a fool to accept this proposal.
As I have said all along, Greece’s best chance is to default, not pay back a cent, and initiate the reforms it needs to grow over the long haul.
Greece does not need the euro. No country does.
Economist Steve Keen did a wonderful job debunking all of the falsehoods, which have been relied upon to justify the imposition of an absurd austerity regimen on Greece. Dr. Keen also pointed out why the troika – rather than the Greek government – would be at fault in the event of a Grexit. Here is his July 6 BBC interview.
The Eurocrats are pressing their luck too far. If this stupidity persists, we should expect some awful consequences.
It’s time once again for the politicians and other attention-seekers from the lunatic fringe to return to the spotlight. Politicians who intend on running for the Presidency in 2016 are already preparing to launch their primary campaigns. Because 2014 is a “midterm” year, the only voters who can be expected to vote in November will be the political zealots. Despite the fact that Congressional terms last only two years, the cretins in Congress are confident that the only people who will bother to vote in their gerrymandered districts will be the dependable hard core.
Unfortunately, we cannot assume that Americans will wise-up and respond to the recent plea from Dallas Federal Reserve President Richard Fisher, by going to their local polling places to address the problem.
Meanwhile, those intent on becoming the Republican Party’s 2016 Presidential nominee are busy currying favor with the two men who dictate the party’s agenda: Roger Ailes and Rush Limbaugh. As a result, there is no such thing as too extreme in crafting a campaign message to voters. With the midterms’ bringing increased attention to the lunatic fringe voters, politicians who are posturing themselves as Presidential candidates are busy preaching to the crazy choir. This effort usually involves making personal appearances with the most polarizing, controversial individuals who haunt the airwaves with outrageous statements. The logical consequence of this practice brought the Republicans their “Ted Nugent Moment” this past week.
In their desperation to find a “rock star” who could serve as a dependable spokesperson for Republican political candidates, somebody came up with the idea of appointing Ted Nugent to that role. Nugent has “jammed” with fellow quasi-musician, Mike Huckabee and he has taken the stage with countless politicians from the far-right.
During the past week, a good deal of attention was focused on some choice remarks made by Nugent during a January 18 interview with guns.com. During the course of the interview, Nugent infamously said:
I have obviously failed to galvanize and prod, if not shame enough Americans to be ever-vigilant not to let a Chicago communist-raised, communist-educated, communist-nurtured subhuman mongrel like the Acorn community organizer – gangster Barack Hussein Obama – to weasel his way into the top office of authority in the United States of America.
Given the fact that Nugent himself bears a rather close physical resemblance to our simian ancestors, there was more than a little irony here.
After a number of news outlets seized upon Nugent’s remarks, those Republicans who know that support from the lunatic fringe is no guaranteed ticket to the White House were quick to put some distance between themselves and Nugent.
Nevertheless, as I pointed out on October 16, because Roger Ailes has made it the mission of Fox News to promote the wingnuts of the GOP, is the party becoming marginalized? Will we soon hear from Nugent apologists who believe that there are elections to be won by speaking out in favor of some patriot who was forced to apologize for speaking his mind?
On the other hand, will the Republican Party’s “Ted Nugent Moment” be the first in a series of such events which motivate would-be Republican Presidential candidates to distance themselves from extermists?
Meanwhile, the Democrats appear resigned to accepting Hillary Clinton as their 2016 Presidential nominee. We can assume that Hillary’s sycophants in the news media will attempt to portray anyone who dares to oppose her as some sort of “extremist”. The cult of people I referred to in 2008 as the Hillarologists – those who believe that Hillary Clinton offers them the only hope of seeing a woman in the White House during their lifetimes – will be ready for a fight.
Will another women rise up to challenge Hillary for the Democratic nomination? I hope so.
You can’t avoid reading about it. The stock market is sinking . . . Treasury bond yields are spiking . . . The TAPER is coming!
The panic began in the wake of Jon Hilsenrath’s May 10 Wall Street Journal report (after the markets closed on that Friday afternoon) concerning a new strategy by the Federal Reserve to “wind down” its quantitative easing program. The disclosure was carefully timed to give investors an opportunity to process the information and get used to the idea before the next opening bell of the stock market.
By the time the stock market reopened on Monday, May 13 – the first trading day after Jon Hilsenrath’s article – there was a surprising report on April Retail Sales from the Commerce Department’s Census Bureau. The report disclosed that retail sales had unexpectedly increased by 0.1 percent in April, despite economists’ expectations of a 0.3 percent decline. As a result, the Taper report had no significant impact on stock prices – at least on that day.
The Wall Street Journal report carried plenty of weight because of Jon Hilsenrath’s role as de facto “press secretary” for Ben Bernanke, as I discussed in my last posting. Since the WSJ article’s publication, there has been a steady stream of commentary about the threats posed by the Taper. Nevertheless, the word “taper” was never used in Hilsenrath’s article. In fact, the article included an explanation by Philly FedHead (and FOMC member) Charles Plosser, that the Fed has “a dial that can move either way”. The dial could be set to a particular level with either an increase or a decrease.
Regardless of whatever the Fed may have planned, the flow of commentary has focused on the notion that the Fed is about to taper back on its bond buying. The current incarnation of quantitative easing (QE 4) involves the Fed’s purchase of $45 billion in bonds and $40 billion in mortgage-backed securities every month. We are supposed to believe that the Fed will gradually ease back on the bond purchases – whether it might begin with a reduction to $40 billion or $35 billion in monthly purchases . . . the Fed will gradually taper the amount down to zero.
Despite what you may have read or heard about the taper, it’s not going to work that way. Beyond that, taper is not really an appropriate way to describe the Fed’s plan. In other words:
There was one thing Jon Hilsenrath did say in my interview with him on TV last night that I think is very important and clears up a big misconception. He explained that Bernanke himself will not be using the term “taper” that everyone else is bandying about. The reason why is that the Fed does not want to create the impression that one policy move will necessarily be attached to three or four others. In other words, suppose the Fed were to drop its rate of monthly asset purchases from $85 billion to some less number in one of the next meetings. This could be a one-off action with nothing else behind it, designed to temper the market’s expectations and gauge the effects.
I’d remind you that what Bernanke, as a self-styled “student of the Depression” fears the most, is a premature tightening a la FDR in 1937-1938, just as the nation was finally on the mend. If you think that this central bank, which has just spent the last six years patiently reflating the economy, is about to yank the rug out from under it at the last moment, then you haven’t been paying attention.
The wave of panic which followed Jon Hilsenrath’s May 10 article about the Fed’s plans for its quantitative easing program has yet to be calmed by Hilsenrath’s clarification about how the Fed’s new strategy is likely to proceed. As Napoleon once said:
“Men are Moved by two levers only: fear and self interest.”
Obama is back giving Centrism a bad name. His budget proposal has drawn criticism because it incorporates a mechanism for reducing Social Security Cost-of-Living benefits called the “chained CPI”, which ties those adjustments to the inflation rate. Obama’s inclusion of the chained CPI has drawn harsh criticism from Progressives as well as the Liberal base of the Democratic Party. Although the President and his sycophants characterize this proposal as an example of “Centrist” politics, it is actually an example of the economic neoliberalism which the Disappointer-in-Chief has advanced since taking office in 2009.
Despite its liberal slant, the FiredogLake blog has been critical of Obama since the beginning of his first term. A recent article by Jon Walker at FDL presents an unvarnished look at Obama’s motives for including the chained CPI in his budget:
Obama didn’t put chained-CPI in for Republicans, regardless what he may claim. While Republicans like to talk a big game on entitlements they have shown no real interest in cutting benefits for current retirees, who are the most important part of their base.
The comments to Walker’s piece give us a look at how a good number of liberals are finally seeing through the man who was advertised as an agent of Hope and Change. I was particularly impressed by the following comment from a reader identified as “coloradoblue”:
War criminal
Mass murderer
Crimes against humanity
Crimes against the American people
Crimes against the constitution he swore to uphold
Failure to investigate, prosecute and punish the war criminals of the last administration
Failure to investigate, prosecute and punish the crimes of wall street
Destroyer of the legacy of FDR and LBJ and the dem party
Liar
Failure
Hell of legacy you’ve got there Barry. Hell of a legacy.
Oh, Snap!
Lest I repeat the entire batch of comments, I’ll include just one more. Reading through them provides one with the opportunity to understand the extent of disappointment in Obama, as expressed by those who voted for him. This comment was from an individual using the name, “BearCountry”:
o was never really the “capitulator in chief.” He has worked to destroy the safety net since he became pres. When I voted for him in ’08 I knew he was not going to be a savior for the nation, but I didn’t realize how bad he would be. He is worse than w because he knows full well what he is doing. Those that defend him or blame the repugs are simply deluding themselves.
Progressive Democrats chose Obama over Hillary Clinton because they wanted to avoid electing a President who would advance the same neoliberalism we saw from Bill Clinton, the man who signed the Commodity Futures Modernization Act of 2000 into law. Bill Clinton’s enactment of that legislation completely deregulated derivatives trading, eventually giving rise to such “financial weapons of mass destruction” as naked credit default swaps, which brought us the 2008 financial crisis.
When Hillary begins her run for the 2016 Democratic Nomination, it will be interesting to see whether any of her opponents exploit the photo of Bubba and Blankfein in Boca. On February 19 of 2012, The Business Insider published this photo of Bill Clinton having lunch with Goldman Sachs CEO, Lloyd Blankfein at the Boca Raton Resort and Country Club. Obama’s function as a tool of the Wall Street megabanks will provide an ongoing reminder to anyone entertaining the thought of supporting Hillary, as to what they could expect from another Clinton administration.
Meanwhile Barry O. Tool is gonna’ have some ’splianin’ to do about his chained CPI proposal. His angry former supporters will want some answers.
On January 23-27 the World Economic Forum held its tres chicannual meeting in Davos, Switzerland. Admission was by invitation only. Nick Paumgarten of The New Yorker offered the following explanation of how different segments of society view the annual Davos event:
People like to project onto Davos their fears and fantasies about the way the world works. Right-wingers see insidious, delusional liberalism, in its stakeholder ethos and its pretense of world improvement. They picture a bunch of Keynesians, Continentals, and self-dealing do-gooders participating in some kind of off-the-books top-down command-control charade. Left-wingers conjure a plutocratic cabal, a Star Chamber of master puppeteers, the one per cent – or .01 per cent, really – deciding the world’s fate behind a curtain of heavy security and utopian doublespeak. The uninvited, the refuseniks, and even many of the participants see a colossal discharge of hot air, a peacock strut. They all deploy, with a sneer, the term Davos Man, coined by the late political scientist Samuel Huntington, who decried a post-national wealthy globe-trotting élite. Davos Man can be either a capitalist oppressor or a Commie conspirator. Either way, he is a windbag, a pedant, and a hypocrite. Businesspeople who have never been to Davos find many ways to be dismissive of it: “I can’t do business there.” “It’s too political.” “It’s not what it used to be.” The translation may be that that person has not been invited.
The World Economic Forum’s website explained the role of its official communities:
A key part of the Forum’s activities is the creation of distinctive communities of Member and Partner companies as well as leaders from civil society for more informal opportunities for interaction.
I would assume that at this year’s meeting, one of the most popular topics must have been risk management – including risk aversion. Ever since the financial crisis, the world has been on the verge of economic chaos. The possibility that Silvio Berlusconi could return to power in Italy has heightened concerns that the European sovereign debt crisis could reverse course from its current recovery trajectory and head into oblivion.
One of the World Economic Forum’s communities is the Risk Response Network. The RRN “was launched to provide private and public sector leaders with an independent, impartial platform to map, monitor and mitigate global risks.” It is comprised of individual representatives of leading global corporations, research institutions, media outlets, governments and NGOs. The Risk Response Network released a 78-page report for this year’s annual meeting entitled, Global Risks 2013 — Eighth Edition. The report’s topics included: Testing Economic and Environmental Resilience, Digital Wildfires in a Hyperconnected World, The Dangers of Hubris on Human Health and Building National Resilience to Global Risks.
I found Section 5 of Global Risks 2013 to be particularly interesting. It begins on page 55 of the report and is entitled, “X Factors”. The report described this section in the following terms:
In this section, developed in collaboration with Nature, a leading science journal, the Risk Response Network asks readers to look beyond our high-risk concerns of the moment to consider a set of five X factors and reflect on what countries or companies should be doing to anticipate them.
* * *
X factors are serious issues, grounded in the latest scientific findings, but somewhat remote from what are generally seen as more immediate concerns such as failed states, extreme weather events, famine, macroeconomic instability or armed conflict. They capture broad and vaguely understood issues that could be hatching grounds for potential future risks (or opportunities).
The five X Factors discussed in the report were these:
– Runaway climate change: Is it possible that we have already passed a point of no return and that Earth’s atmosphere is tipping rapidly into an inhospitable state?
– Significant cognitive enhancement: Ethical dilemmas akin to doping in sports could start to extend into daily working life; an arms race in the neural “enhancement” of combat troops could also ensue.
– Rogue deployment of geoengineering: Technology is now being developed to manipulate the climate; a state or private individual could use it unilaterally.
– Costs of living longer: Medical advances are prolonging life, but long-term palliative care is expensive. Covering the costs associated with old age could be a struggle.
– Discovery of alien life: Proof of life’s existence elsewhere in the universe could have profound psychological implications for human belief systems.
My favorite was the last X Factor: Discovery of alien life. Although the report focused on the notion that astronomers involved in the study of exoplanets could find spectral information revealing chemical signs of life, the last paragraph of the section provided some insights on the fear which has been keeping this subject under wraps for years:
Through basic education and awareness campaigns the general public can achieve a higher science and space literacy and cognitive resilience that would prepare them and prevent undesired social consequences of such a profound discovery and paradigm shift concerning mankind’s position in the universe.
So The Powers That Be are worried about “undesired social consequences” and “paradigm shift”. Why is that not a surprise?
Two years ago, I was inspired to write a piece entitled, “Justice Denied” after seeing hedge fund manager, David Einhorn interviewed by Charlie Rose. I also discussed an essay Jesse Eisenger wrote for the DealBook blog at The New York Times entitled, “The Feds Stage a Sideshow While the Big Tent Sits Empty”. The piece reinforced my suspicion that the “insider trading” investigation which received so much publicity in December of 2010 was simply a diversionary tactic to direct public attention away from the crimes which caused the financial crisis.
Since that time, a good deal of commentary has been written, lamenting the fact that no criminal charges have been brought against the miscreants who caused the financial crisis. Unfortunately, Attorney General Eric Hold-Harmless has taken no action against those responsible, while the time for bringing those charges within the applicable Statutes of Limitations was allowed to tick away.
With the expiration of the relevant Statutes of Limitations, the next question becomes: Does the failure to prosecute those cases rise to the level of obstruction of justice? Although President Obama has repeatedly insisted that “no crimes were committed” which could have caused the financial crisis, we are now learning that such was not the case.
Jesse Eisenger recently wrote another piece for the Deal Book blog at the New York Times entitled, “Financial Crisis Lawsuit Suggests Bad Behavior at Morgan Stanley” which appeared on January 23. In that essay, Eisenger discussed how the discovery process in civil lawsuits against the Wall Street Banks involved in the creation of the collateralized debt obligations (CDOs) based on subprime mortgages, revealed that those CDOs were known to be toxic at the time they were marketed.
The Naked Capitalism website has provided and excellent roadmap to the skulduggery involving the role CDOs played in causing the financial crisis.
Matt Taibbi has written another magnum opus on the financial crisis, this time focusing on sleazy conduct which took place after the meltdown. In his article for Rolling Stone entitled, “Secrets and Lies of the Bailout”, we were reminded how the bank bailouts not only unjustly enriched the culprits who caused the problem – but they also provided the opportunity for those too-big-to-fail institutions to become even bigger while facilitating the cover-up of how the original mess occurred:
The public has been lied to so shamelessly and so often in the course of the past four years that the failure to tell the truth to the general populace has become a kind of baked-in, official feature of the financial rescue. Money wasn’t the only thing the government gave Wall Street – it also conferred the right to hide the truth from the rest of us. And it was all done in the name of helping regular people and creating jobs. “It is,” says former bailout Inspector General Neil Barofsky, “the ultimate bait-and-switch.”
Despite so many efforts to hide the truth from “the little people”, the truth is slowly leaking out as a result of the dogged investigation by journalists and bloggers. As discovery proceeds in the civil lawsuits against the megabanks, revealing the extent of criminal activity which brought about the most catastrophic economic disaster since the Great Depression, people will begin to ask: “How did they get away with this?” Perhaps the best way to answer that question would be to bring criminal charges against those who allowed the perpetrators to get away with it.
It’s already time to announce the winner of TheCenterLane.com’s fifth annual Jackass of the Year Award. This was another one of those years when we had a last-minute contestant, who tried to his best to snatch the award away from those who had been working all year for the honor.
In the aftermath of the tragic mass-murder of 26 young children at the Sandy Hook Elementary School, the National Rifle Association’s vice-president, Wayne LaPierre, held his infamous press conference on December 21, wherein he blamed everything except guns for the killings. LaPierre blamed television violence, video games, hurricanes, “other natural or man-made disaster(s)”, terrorist attacks, and numerous other scapegoats. Did he blame porn? I can’t remember. After the press conference, even Rupert Murcoch’s New York Post saw fit to trash the guy with its headline: “Gun Nut: NRA Loon In Bizarre Rant Over Newtown”. The New York Daily News ran a headline describing LaPierre as a “vile NRA nut”, and the “Craziest Man on Earth”. Although I lack the professional credentials to render a diagnosis on the sanity of any individual, I do know a jackass when I see one. Wayne LaPierre is such a severe jackass that he deserves serious consideration as our 2012 Jackass of the Year.
Every year I have to resist the temptation to nominate Stuart Varney of Fox News. Varney is the senior business commentator for the Fox News Network. It seems as though Jon Stewart runs at least one video clip per week of Varney making a fool of himself. Varney is an unabashed hater of solar power and most other sources of “green energy”. He frequently refers to advocates of green energy as “greenies”, as though such an approach were something shameful. Nevertheless, Varney was able to dodge the award this year with his recent interview with Tommy Chong. The interview wasn’t that great, but it was good enough to warrant sparing Varney the indignity of this award.
Unfortunately, there is no single individual whom we can blame for the December 21 hysteria. The Vancouver Sun ran an interesting article about a local author named Brad Carrigan, who did his part to promote a good bit of the December 21 foolishness through a website where he sold books, videos, his own seminars and sessions at his “spiritual retreat centre in the mountains”. Unfortunately, Carrigan did not become prominent enough to earn our Jackass of the Year Award.
In an election year, the candidates are usually too easy to single out for this award. Nevertheless, the 2012 Presidential Campaign brought us this year’s Jackass of the Year Award winner: Donald Trump. His idiotic “birther-ism” served no other purpose than to motivate 400,000 people to sign a petition, requesting Macy’s to abandon its relationship with Trump. A good place to find a handy list of reasons why Trump deserves this award can be found at the New York Daily News website. There you will find a link to Penn Jillette’s book excerpt at Salon about Trump and what it was like to appear on Celebrity Apprentice. According to Jillette, Trump really cares about the things insignificant bloggers have to say about him. As one such insignificant blogger, all I can say is: Congratulations, Jackass!
By now, you’ve heard about it dozens of times. Mitt Romney is taking heat for remarks he made at a private fundraiser in Boca about the 47 percent of Americans who won’t vote for him because they enjoy taking handouts from the government. In response to the dustup, the Romney camp has focused on remarks made by Barack Obama during the 2008 campaign about people who “cling to their guns and religion”. Obama’s discussion with “Joe the Plumber” about “spreading the wealth around” has been cited as another example of Obama’s favoritism of one population segment over another. Nevertheless, as Brit Hume explained to Greta on Fox News, the Republicans’ focus on those remarks did not work during the 2008 campaign and there is no reason to believe that it will gain any more traction during the current election cycle.
Actually, there is a better example of Obama’s expression of contempt for a bloc of voters during a fundraiser, which is somewhat analogous the situation involving Romney in Boca. During the mid-term election campaign in September of 2010, Obama managed to alienate a good number of his own supporters during an event at the home of the appropriately-named Rich Richman. The event demonstrated how politicians – from either party – will speak more candidly and cynically about the “little people” when talking to their fat cat contributors. Nevertheless, the Republicans will not likely exploit Obama’s remarks at the Rich-man event. Of course, Obama supporters would be reminded that their candidate is not a significantly different alternative to Romney. However, by the same token, Romney supporters would be reminded that their candidate does not offer a significantly distinct alternative to Obama. As a result, the Republicans will never use it.
Let’s jump into the time machine and look back at how I discussed the Richman event on September 20, 2010:
President Obama recently spoke at a $30,000-per-plate fundraising event for the Democratic National Committee at the home of Richard and Ellen Richman. (Think about that name for a second: Rich Richman.) Mr. Richman lives up to his surname and resides in the impressive Conyers Farm development in Greenwich, Connecticut. Christopher Keating of the Capitolwatch blog at courant.com provided us with the President’s remarks, addressed to the well-heeled attendees:
. . . Democrats, just congenitally, tend to get – to see the glass as half empty. (Laughter.) If we get an historic health care bill passed – oh, well, the public option wasn’t there. If you get the financial reform bill passed – then, well, I don’t know about this particularly derivatives rule, I’m not sure that I’m satisfied with that. And gosh, we haven’t yet brought about world peace and – (laughter.) I thought that was going to happen quicker. (Laughter.) You know who you are. (Laughter.)
The tactlessness of those remarks was not lost on Glenn Greenwald of Salon.com. Mr. Greenwald transcended the perspective of an offended liberal to question what could possibly have been going on in the mind of the speaker:
What’s most striking about Obama’s comments is that there is no acceptance whatsoever of responsibility (I’ve failed in some critical areas; we could have/should have done better). There’s not even any base-motivating vow to fight to fix these particular failures (we’ll keep fighting for a public option/to curb executive power abuses/to reduce lobbyist and corporate control of our political process). Instead, he wants you to know that if you criticize him — or even question what he’s done (“well, I don’t know about this particular derivatives rule, I’m not sure that I’m satisfied with that”) – it’s your fault: for being some sort of naive, fringe-leftist idiot who thought he would eliminate the Pentagon and bring about world peace in 18 months, and/or because you simply don’t sufficiently appreciate everything he’s done for you because you’re congenitally dissatisfied.
* * *
Sitting at a $30,000 per plate fundraising dinner and mocking liberal critics as irrational ingrates while wealthy Party donors laugh probably does wonders for bruised presidential egos, but it doesn’t seem to be a particularly effective way to motivate those who are so unmotivated. Then again, Barack Obama isn’t actually up for election in November, so perhaps the former goal is more important to him than the latter. It certainly seems that way from these comments.
Of course, liberals weren’t the only Obama supporters who felt betrayed by the President’s abandonment of his campaign promises. In fact, Obama owed his 2008 victory to those independent voters who drank the “Hope and Change” Kool-Aid.
Glenn Greenwald devoted some space from his Salon piece to illustrate how President Obama seems to be continuing the agenda of President Bush. I was reminded of the quote from former Attorney General John Ashcroft in an article written by Jane Mayer for The New Yorker. When discussing how he expected the Obama Presidency would differ from the Presidency of his former boss, George W. Bush, Ashcroft said:
“How will he be different? The main difference is going to be that he spells his name ‘O-b-a-m-a,’ not ‘B-u-s-h.’ ”
One important difference that Ashcroft failed to anticipate was that Bush knew better than to disparage his own base.
By the onset of the 2012 Presidential Campaign, many of Obama’s 2008 supporters had become ambivalent about their former hero. As I pointed out on August 13, once Romney had named Paul “Marathon Man” Ryan as his running mate (rather than Ohio Senator Rob Portman), he provided Democrats with a bogeyman to portray a Romney Presidency as a threat to middle-class Americans:
As the Democratic Party struggled to resurrect a fraction of the voter enthusiasm seen during the 2008 campaign, Mitt Romney came along and gave the Democrats exactly what they needed: a bogeyman from the far-right wing of the Republican Party. The 2012 campaign suddenly changed from a battle against an outsourcing, horse ballet elitist to a battle against a blue-eyed devil who wants to take away Medicare. The Republican team of White and Whiter had suddenly solved the problem of Democratic voter apathy.
Nevertheless, some degree of disillusionment experienced by Obama’s supporters continues. Consider the final paragraph from a September 20 essay by Robert Reich:
And even if Obama is reelected, more hard work begins after Inauguration Day – when we must push him to be tougher on the Republicans than he was in his first term, and do what the nation needs.
In other words, it will be up to the voters to make sure they aren’t betrayed by Obama as they were during his first term.
Quantitative easing is back. For those of you who still aren’t familiar with what quantitative easing is, I have provided a link to this short, funny cartoon, which explains everything.
The first two phases of quantitative easing brought enormous gains to the stock market. In fact, that was probably all they accomplished. Nevertheless, if there had been no QE or QE 2, most people’s 401(k) plans would be worth only a fraction of what they are worth today. The idea was that the “wealth effect” provided by an inflated stock market would both enable and encourage people to buy houses, new cars and other “big ticket” items – thus bringing demand back to the economy. Since the American economy is 70 percent consumer-driven, demand is the engine that creates new jobs.
It took a while for most of us to understand quantitative easing’s impact on the stock market. After the Fed began its program to buy $600 billion in mortgage-backed securities in November of 2008, some suspicious trading patterns began to emerge. I voiced my own “conspiracy theory” back on December 18, 2008:
I have a pet theory concerning the almost-daily spate of “late-day rallies” in the equities markets. I’ve discussed it with some knowledgeable investors. I suspect that some of the bailout money squandered by Treasury Secretary Paulson has found its way into the hands of some miscreants who are using this money to manipulate the stock markets. I have a hunch that their plan is to run up stock prices at the end of the day before those numbers have a chance to settle back down to the level where the market would normally have them. The inflated “closing price” for the day is then perceived as the market value of the stock. This plan would be an effort to con investors into believing that the market has pulled out of its slump. Eventually the victims would find themselves hosed once again at the next “market correction”.
Felix Salmon eventually provided this critique of the obsession with closing levels and – beyond that – the performance of a stock on one particular day:
Or, most invidiously, the idea that the most interesting and important time period when looking at the stock market is one day. The single most reported statistic with regard to the stock market is where it closed, today, compared to where it closed yesterday. It’s an utterly random and pointless number, but because the media treats it with such reverence, the public inevitably gets the impression that it matters.
In March of 2009, those suspicious “late day rallies” returned and by August of that year, the process was explained as the “POMO effect” in a paper by Precision Capital Management entitled, “A Grand Unified Theory of Market Manipulation”.
By the time QE 2 actually started on November 12, 2010 – most investors were familiar with how the game would be played: The New York Fed would conduct POMO auctions, wherein it would purchase Treasury securities – worth billions of dollars – on an almost-daily basis. After the auctions, the Primary Dealers would take the sales proceeds to their proprietary trading desks, where the funds would be leveraged and used to purchase stocks. Thanks to QE 2, the stock market enjoyed another nice run.
This time around, QE 3 will involve the purchase of mortgage-backed securities, as did QE 1. Unfortunately, the New York Fed’s new POMO schedule is not nearly as informative as it was during QE1 and QE 2, when we were provided with a list of the dates and times when the POMO auctions would take place. Back then, the FRBNY made it relatively easy to anticipate when you might see some of those good-old, late-day rallies. The new POMO schedule simply informs us that “(t)he Desk plans to purchase $23 billion in additional agency MBS through the end of September.” We are also advised that with respect to the September 14 – October 11 time frame, “(t)he Desk plans to purchase approximately $37 billion in its reinvestment purchase operations over the noted monthly period.”
It is pretty obvious that the New York Fed does not want the “little people” partaking in the windfalls enjoyed by the prop traders for the Primary Dealers as was the case during QE 1 and QE 2. This probably explains the choice of language used at the top of the website’s POMO schedule page:
In order to ensure the transparency of its agency mortgage-backed securities (MBS) transactions, the Open Market Trading Desk (the Desk) at the New York Fed will publish historical operational results, including information on the transaction prices in individual operations, at the end of each monthly period shown in the table below.
In other words, the New York Fed’s idea of transparency does not involve disclosure of the scheduling of its agency MBS transactions before they occur. That information is none of your damned business!
TheCenterLane.com offers opinion, news and commentary on politics, the economy, finance and other random events that either find their way into the news or are ignored by the news reporting business. As the name suggests, our focus will be on what seems to be happening in The Center Lane of American politics and what the view from the Center reveals about the events in the left and right lanes. Your Host, John T. Burke, Jr., earned his Bachelor of Arts degree from Boston College with a double major in Speech Communications and Philosophy. He earned his law degree (Juris Doctor) from the Illinois Institute of Technology / Chicago-Kent College of Law.
intend on running for the Presidency in 2016 are already preparing to launch their primary campaigns. Because 2014 is a “midterm” year, the only voters who can be expected to vote in November will be the political zealots. Despite the fact that Congressional terms last only two years, the cretins in Congress are confident that the only people who will bother to vote in their gerrymandered districts will be the dependable hard core.