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Talking To The Money

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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.

The Republican insistence on attempting to portray Obama as a “Socialist” rather than a disingenuous poseur has served no other purpose than to invite an eloquent smackdown from the namesake of the GOP’s Patron Saint.

Romney’s failure to win the Presidential Election will be more the result of ignored opportunities than the result of gaffes.


 

Geithner Redeems Himself – For Now

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I’ve never been a fan of Treasury Secretary Tim Geithner.  Nevertheless, I have to give the guy credit for delivering a great speech at the Economic Club of Chicago on April 4.  The event took place in a building which was formerly home to an off-track betting parlor, with an “upscale” section called The Derby Club (where Gene Siskel spent lots of time and money)  – in an era before discretionary income became an obsolete concept.

At a time when the U.S. Chamber of Commerce is suffering from “buyer’s remorse” after bankrolling the election of ideologues opposed to infrastructure spending, Geithner spoke out in favor of common sense.  We have come a long, painful way from the days when the Chamber of Commerce aligned itself against the interests of the “little people”.  As Keith Laing reported for The Hill, the Chamber no longer considers “stimulus” to be such a dirty word.  Laing discussed the joint efforts by the Chamber of Commerce and AFL-CIO executive Edward Wytkind to advance the transportation bill through a Congressional roadblock:

“We’re going to be pounding away during the recess to get House members to know they’ve got to check their party at the door,” Wytkind said of Republicans in the House who opposed accepting the Senate’s transportation bill.

Other transportation supporters were similarly pessimistic.  U.S. Chamber of Commerce executive director of transportation and infrastructure Janet Kavinoky said the 90-day extension could lead to a longer agreement, but only if lawmakers get right back to work after the two-week recess.

“No length of time is going to be good for construction or business, but at least 90 days provides a length of time Congress could get a long-term bill done,” Kavinoky said.  “But the House in particular is going to have their nose to the grindstone, or whatever metaphor you want to use, to get a bill off the House floor and into a conference.”

The timing could not have been better for someone in a position of national leadership to deliver a warning that premature austerity policies (implemented before economic recovery gains traction) can have the same destructive consequences as we are witnessing in Europe.  To his credit, Tim Geithner stepped up to the plate and hit a home run.  Here are his most important remarks, delivered in Chicago on Wednesday:

Much of the political debate and the critiques of business lobbyists misread the underlying dynamics of the economy today.  Many have claimed that the basic foundations of American business are in crisis, critically undermined by taxes and regulation.

And yet, business profits are higher than before the crisis and have recovered much more quickly than overall growth and employment.  Business investment in equipment and software is up by 33 percent over the past 2 ½ years.  Exports have grown 24 percent in real terms over the same period.  And manufacturing is coming back, with factory payrolls up by more than 400,000 since the start of 2010.

The business environment in the United States is in numerous ways better than that of many of our major competitors, as measured by international comparisons of regulatory burden, the tax burden on workers, the quality of legal protections of property rights, the ease of starting a business, the availability of capital, and the broader flexibility of the economy.

The challenges facing the American economy today are not primarily about the vibrancy or efficiency of the business community.  They are about the barriers to economic opportunity and economic security for many Americans and the political constraints that now stand in the way of better economic outcomes.

These challenges can only be addressed by government action to help speed the recovery and repair the remaining damage from the crisis and reforms and investments to lay the foundation for stronger future growth.

This means taking action to support growth in the short-term – such as helping Americans refinance their mortgages and investing in infrastructure projects – so that we don’t jeopardize the gains our economy has made over the last three years.

And it means making the investments and reforms necessary for a stronger economy in the future. Investments in things like education, to help Americans compete in the global economy.  Investments in innovation, so that our economy can offer the best jobs possible.  Investments in infrastructure, to reduce costs and increase productivity.  Policies to expand exports. And reforms to improve incentives for investing in the United States – including reform of our business tax system.

A growth strategy for the American economy requires more than promises to cut taxes and spending.

We have to be willing to do things, not just cut things.

To expand exports, we have to support programs like the Export-Import Bank, which provides financing at no cost to the government for American businesses trying to compete in foreign markets.

To make us more competitive, we have to be willing to make larger long-term investments in infrastructure, not just limp forward with temporary extensions.

Any credible growth agenda has to recognize that there are parts of the economy, like the financial system, that need reform and regulation.  Businesses need to be able to rely on a more stable source of capital, with a financial system that allocates resources to their most productive uses, not misallocating them to an unsustainable real estate boom.

Cutting government investments in education and infrastructure and basic science is not a growth strategy.  Cutting deeply into the safety net for low-income Americans is not financially necessary and cannot plausibly help strengthen economic growth. Repealing Wall Street Reform will not make the economy grow faster – it would just make us more vulnerable to another crisis.

This strategy is a recipe to make us a declining power – a less exceptional nation.  It is a dark and pessimistic vision of America.

Is this simply another example of the Obama administration’s habit of  “doing the talk” without “doing the walk”?  Time will tell.


 

More Favorable Reviews For Huntsman

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In my last posting, I focused on how Jon Huntsman has been the only Presidential candidate to present responsible ideas for regulating the financial industry (Obama included).  Since that time, I have read a number of similarly favorable reactions from respected authorities and commentators who reviewed Huntsman’s proposals .

Simon Johnson is the former Chief Economist for the International Monetary Fund (IMF) from 2007-2008.  He is currently the Ronald A. Kurtz Professor of Entrepreneurship at the MIT Sloan School of Management.  At his Baseline Scenario blog, Professor Johnson posted the following comments in reaction to Jon Huntsman’s policy page on financial reform and Huntsman’s October 19 opinion piece for The Wall Street Journal:

More bailouts and the reinforcement of moral hazard – protecting bankers and other creditors against the downside of their mistakes – is the last thing that the world’s financial system needs.   Yet this is also the main idea of the Obama administration.  Treasury Secretary Tim Geithner told the Fiscal Times this week that European leaders “are going to have to move more quickly to put in place a strong firewall to help protect countries that are undertaking reforms,” meaning more bailouts.  And this week we learned more about the underhand and undemocratic ways in which the Federal Reserve saved big banks last time around.  (You should read Ron Suskind’s book, Confidence Men: Wall Street, Washington, and the Education of a President, to understand Mr. Geithner’s philosophy of unconditional bailouts; remember that he was president of the New York Fed before become treasury secretary.)

Is there really no alternative to pouring good money after bad?

In a policy statement released this week, Governor Jon Huntsman articulates a coherent alternative approach to the financial sector, which begins with a diagnosis of our current problem:  Too Big To Fail banks,

“To protect taxpayers from future bailouts and stabilize America’s economic foundation, Jon Huntsman will end too-big-to-fail. Today we can already begin to see the outlines of the next financial crisis and bailouts. More than three years after the crisis and the accompanying bailouts, the six largest U.S. financial institutions are significantly bigger than they were before the crisis, having been encouraged by regulators to snap up Bear Stearns and other competitors at bargain prices”

Mr. Geithner feared the collapse of big banks in 2008-09 – but his policies have made them bigger.  This makes no sense.  Every opportunity should be taken to make the megabanks smaller and there are plenty of tools available, including hard size caps and a punitive tax on excessive size and leverage (with any proceeds from this tax being used to reduce the tax burden on the nonfinancial sector, which will otherwise be crushed by the big banks’ continued dangerous behavior).

The goal is simple, as Mr. Huntsman said in his recent Wall Street Journal opinion piece: make the banks small enough and simple enough to fail, “Hedge funds and private equity funds go out of business all the time when they make big mistakes, to the notice of few, because they are not too big to fail.  There is no reason why banks cannot live with the same reality.”

The quoted passage from Huntsman’s Wall Street Journal essay went on to say this:

These banks now have assets worth over 66% of gross domestic product—at least $9.4 trillion, up from 20% of GDP in the 1990s.  There is no evidence that institutions of this size add sufficient value to offset the systemic risk they pose.

The major banks’ too-big-to-fail status gives them a comparative advantage in borrowing over their competitors thanks to the federal bailout backstop.

Far be it from President Obama to make such an observation.

Huntsman’s policy page on financial reform included a discussion of repealing the Dodd-Frank law:

More specifically, real reform means repealing the 2010 Dodd-Frank law, which perpetuates too-big-to-fail and imposes costly and mostly useless regulations on innocent smaller banks without addressing the root causes of the crisis or anticipating future crises.  But the overregulation cannot be addressed without ending the bailout subsidies, so that is where reform must begin.

Beyond that, Huntsman’s Wall Street Journal piece gave us a chance to watch the candidate step in shit:

Once too-big-to-fail is fixed, we could then more easily repeal the law’s unguided regulatory missiles, such as the Consumer Financial Protection Bureau.  American banks provide advice and access to capital to the entrepreneurs and small business owners who have always been our economic center of gravity.  We need a banking sector that is able to serve that critical role again.

American banks also do a lot to screw their “personal banking” customers (the “little people”) and sleazy “payday loan”-type operations earn windfall profits exploiting those workers whose incomes aren’t enough for them to make it from paycheck-to-paycheck.  The American economy is 70 percent consumer-driven.  American consumers have always been “our economic center of gravity” and the CFPB was designed to protect them.  Huntsman would do well to jettison his anti-CFPB agenda if he wants to become President.

Mike Konczal of the Roosevelt Institute, exhibited a similarly “hot and cold” reaction to Huntsman’s proposals for financial reform.  What follows is a passage from a recent posting at his Rortybomb blog, entitled “Huntsman Wants to Repeal Dodd-Frank so he can Pass Title VII of Dodd-Frank”:

So we need to get serious about derivatives regulation by bringing transparency to the over-the-counter derivatives market, with serious collateral requirements.  This was turned into law as the Wall Street Transparency and Accountability Act of 2010, or Title VII of Dodd-Frank.

So we need to eliminate Dodd-Frank in order to pass Dodd-Frank’s resolution authority and derivative regulations – two of the biggest parts of the bill – but call it something else.

You can argue that Dodd-Frank’s derivative rules have too many loopholes with too much of the market exempted from the process and too much power staying with the largest banks.  But those are arguments that Dodd-Frank doesn’t go far enough, where Huntsman’s critique of Dodd-Frank is that it goes way too far.

Huntsman should be required to explain the issues here – is he against Dodd-Frank before being for it?  Is his Too Big To Fail policy and derivatives policy the same as Dodd-Frank, and if not how do they differ?  It isn’t clear from the materials he has provided so far how the policies would be different, and if it is a problem with the regulations in practice how he would get stronger ones through Congress.

I do applaud this from Huntsman:

RESTORING RULE OF LAW

President Huntsman’s administration will direct the Department of Justice to take the lead in investigating and brokering an agreement to resolve the widespread legal abuses such as the robo-signing scandal that unfolded in the aftermath of the housing bubble.  This is a basic question of rule of law; in this country no one is above the law. There are also serious issues involving potential violations of the securities laws, particularly with regard to fair and accurate disclosure of the underlying loan contracts and property titles in mortgage-backed securities that were sold.  If investors’ rights were abused, this needs to be addressed fully.  We need a comprehensive settlement that puts all these issues behind us, but any such settlement must include full redress of all legal violations.

*   *   *

And I will note that the dog-whistles hidden inside the proposal are towards strong reforms (things like derivatives reform “will also allow end-users to negotiate better terms with Wall Street and in turn lower trading costs” – implicitly arguing that the dealer banks have too much market power and it is the role of the government to create a fair playing field).  Someone knows what they are doing.  His part on bringing down the GSEs doesn’t mention the hobbyhorse of the Right that the CRA and the GSEs caused the crisis, which is refreshing to see.

If Republican voters are smart, they will vote for Jon Huntsman in their state primary elections.  As I said last time:  If Jon Huntsman wins the Republican nomination, there will be a serious possibility that the Democrats could lose control of the White House.


 

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.


 

Secret Phone Call

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I’ve been reading a great number of articles by commentators who have expressed outrage concerning President Obama’s shocking capitulation in the negotiations involving the debt ceiling bill.  Despite the Democratic Party’s tactic of blaming the “Tea Party terrorists” for the all cuts – no revenue, pro-billionaire legislation, a few pundits have seen through this fog to point out that Obama actually got the bill he secretly wanted all along.  Glenn Greenwald presented a solid case for this theory at Salon.

Polling guru Nate Silver wrote two items on August 1, in which he analyzed the Congressional voting and demonstrated that President Obama – despite having been afforded the opportunity to include provisions in the bill to make it more economically stimulative and less onerous for those experiencing the greatest hardship from the economic crisis – decided to leave some available provisions “on the table”.

Nate Silver initially made this observation:

Fiscal austerity at a time of economic distress, and on largely Republican terms, is not what Democrats thought they were getting when they elected Mr. Obama in 2008.  Mr. Obama might have done more to make short-term stimulus – like further reductions to the payroll tax, which would not have violated the Republicans’ ostensible goals – the  price for long-term austerity.

Although it is impossible to prove one way or the other, I am not persuaded by the notion that Mr. Obama could not have delivered a better result to Democrats had he done more to stand his ground.  Despite the dissent in the Republican caucus, which had originally seemed like a tactical victory for Democrats, the compromise wound up looking more like Mr. Boehner’s original bill than Mr. Reid’s.

Later that evening, Mr. Silver provided an analysis, which exposed Obama’s abandonment of the objectives he was elected to promote:

These results seem to suggest that Mr. Obama left something on the table.  That is, Mr. Obama could have shifted the deal tangibly toward the left and still gotten a bill through without too much of a problem.  For instance, even if all members of the Tea Party Caucus had voted against the bill, it would still have passed 237-to-193, and that’s with 95 Democrats voting against it.

Specifically, it seems likely that Mr. Obama could have gotten an extension of the payroll tax cut included in the bill, or unemployment benefits, either of which would have had a stimulative effect.

*   *   *

With that payroll tax cut, the deal becomes a much easier sell to Democrats – and perhaps also to swing voters, particularly given that nobody spent much time during this debate talking about jobs.  Plus, it would have improved growth in 2012 and, depending on how literally you take the economic models, improved Mr. Obama’s re-election chances.

As many observers have noted, the plutocracy has been able to accomplish much more with Obama in the White House, than what would have been achievable with a Republican President.  This latest example of a bipartisan effort to trample “the little people” has reinforced my belief that the fake “two-party system” is a sideshow – designed to obfuscate the insidious activities of the Republi-Cratic Corporatist Party.

What follows is the transcript of an imaginary telephone conversation between President Obama and Roger Ailes of Fox News:

Obama:  Hi Rodge!

Ailes:  Hi Barry!  Congratulations on the debt ceiling bill!  Great work!

Obama:  Thanks.  I won’t have to renew the Bush tax cuts again until after the election.  That’s a relief!  Unfortunately, we’re getting some bad polling numbers now.  Problems with the base.  I need you guys to lean on the “liberal” stuff a little harder.  Both O’Reilly and Hannity have been doing OK on it – but I just wish they would get back to some more of the “socialist” accusations.  That would really help rehabilitate my cred with my estranged base.

Ailes:       The “socialist” shtick was more Beck’s routine – but I’ll get them on it.

Obama:   I found some old pictures of myself with Bill Ayers that you guys might want to use    . . .

Ailes:       Ayers is sooooo 2008!  We need something new.  We need to get you to Syria for a meeting with Bashar al-Assad.  When you shake hands with him – make sure you bow!  We can get a lot of mileage here from that!

Obama:   No!  That will piss off too many liberals – especially the Jews.  I’m trying to keep the smart people in my corner!

Ailes:       OK.  OK.  We just really need to get you on some sort of apology tour or something.  You could start traveling around to abortion clinics and promising them some federal aid  .  .  .

Obama:   Great one, Rodge!  I love that!

Ailes:       I’ll plant some of our protesters along the way – the ones who’ve already been cleared by the Secret Service.

Obama:   Yeah!  Bring back that guy with the fake assault rifle!  He was a trip!

Ailes:       I have someone better.  This guy has been posing as a “Tea Party activist” at “town meetings”.  He’s a great new talent!

Obama:   We could set up another “Joe the Plumber”-type of confrontation with that guy!

Ailes:       Definately!  I’ll have my people put a script together.  That story will have some legs that will carry us all the way to the election!  . . .  Speaking of legs – I’m getting some good numbers in on Bachmann!

Obama:   How’s our girl doing?

Ailes:       Great!  She’s really gonna’ kick some ass in Iowa!

Obama:   I saw her on with Sean the other day.  She’s doing a great job!  Are you guys going to start a scandal involving Mitt?

Ailes:       I need to maintain plausible deniability about what Rupert’s operatives are up to.  You know  .  .  .

Obama:   Gotcha!  ‘Nuff said!

Ailes:       Well, I’ll let you get back to work.  You must have loads of angry campaign donors trying to bend your ear right about now  . . .

Obama:   Yeah  . . .  But that’s not where the real money is.

Ailes:       Amen!


 

Time For Some Serious Pushback

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The American people are finally getting angry.  I thought it would never happen.  In case you haven’t heard about it yet, the most popular topic on Twitter right now is:  #FuckYouWashington.  (For those who don’t like typing dirty words on their computer – there is the alternative #FYW.)  If you’re looking for some refreshing reading, which will reinforce your confidence in the people of this great country (especially after excessive exposure to the depressing, “debt ceiling” debate) be sure to check in on it.

Meanwhile, our fake, “two-party system” is facing a fresh challenge.  The Republi-Cratic Corporatist Party is being threatened by an Internet-based organization called, Americans Elect.  Here’s how the group describes itself:

Americans Elect is the first-ever open nominating process.  We’re using the Internet to give every single voter – Democrat, Republican or independent – the power to nominate a presidential ticket in 2012.  The people will choose the issues. The people will choose the candidates.  And in a secure, online convention next June, the people will make history by putting their choice on the ballot in every state.

*   *   *

We have no ties to any political group – left, right, or center.  We don’t promote any issues, ideology or candidates.  None of our funding comes from special interests or lobbyists.  Our only goal is to put a directly-nominated ticket on the ballot in 2012.

*   *   *

The goal of Americans Elect is to nominate a presidential ticket that answers to the people – not the political system.  Like millions of American voters, we simply want leadership that will work together to tackle the challenges facing our country.  And we believe a direct nominating process will prove that America is ready for a competitive, nonpartisan ticket.

Just when the Obama Administration was getting comfy with the idea that it could take the voters for granted  …  along came this new threat in the form of Americans Elect.  The timing couldn’t have been more appropriate.  A recent CNN poll revealed that Obama’s support among liberals has dropped to “the lowest point in his presidency”.  The man whom I characterized as the “Disappointer-In-Chief” during his third month in office, is now being referred to by The Nation as the “Compromiser-in-Chief”.  Ari Melber’s essay in The Nation provides a great summary of the criticism directed against Obama from the Left.  One example came from economist Paul Krugman, who described Obama as “President Pushover”.

In order to resist any new challenges to the status quo, the Republi-Cratic Corporatist Party is taking advantage of the proposed “debt ceiling” legislation to cement its absolute control over the United States government.  Ryan Grim of The Huffington Post provided us with the revelation of a bipartisan effort to create an authoritarian governing body, designed to circumvent Constitutionally-prescribed legislative procedures:

This “Super Congress,” composed of members of both chambers and both parties, isn’t mentioned anywhere in the Constitution, but would be granted extraordinary new powers.  Under a plan put forth by Senate Minority Leader Mitch McConnell (R-Ky.) and his counterpart Majority Leader Harry Reid (D-Nev.), legislation to lift the debt ceiling would be accompanied by the creation of a 12-member panel made up of 12 lawmakers — six from each chamber and six from each party.

Legislation approved by the Super Congress — which some on Capitol Hill are calling the “super committee” — would then be fast-tracked through both chambers, where it couldn’t be amended by simple, regular lawmakers, who’d have the ability only to cast an up or down vote.  With the weight of both leaderships behind it, a product originated by the Super Congress would have a strong chance of moving through the little Congress and quickly becoming law.  A Super Congress would be less accountable than the system that exists today, and would find it easier to strip the public of popular benefits.  Negotiators are currently considering cutting the mortgage deduction and tax credits for retirement savings, for instance, extremely popular policies that would be difficult to slice up using the traditional legislative process.

House Speaker John Boehner (R-Ohio) has made a Super Congress a central part of his last-minute proposal, multiple news reports and people familiar with his plan say.

Independents and “Third-Party” members of Congress would be excluded from this “Super Congress”, thus subverting any attempts by the “little people” to steal control of the government away from the Republi-Cratic Corporatist Party.  Concern about the upstart Americans Elect organization could have been the motivating factor which inspired the “Super Congress” plan.  Tom Friedman’s recent New York Times commentary must have set off a “treason alert” for the Congressional kleptocrats, who read this:

Write it down:  Americans Elect.  What Amazon.com did to books, what the blogosphere did to newspapers, what the iPod did to music, what drugstore.com did to pharmacies, Americans Elect plans to do to the two-party duopoly that has dominated American political life – remove the barriers to real competition, flatten the incumbents and let the people in.  Watch out.

The Republi-Cratic Corporatist Party is already watching out.  That’s why they are moving to create a new, imperial “Super Congress”.  Be sure to express your opposition to this power grab by logging-on to Twitter and sharing your feelings at #FuckYouWashington.


How States Can Save Billions

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We’ve been reading a lot about fallout lately.  The Fukushima power plant disaster is now providing a lasting legacy all over the world.  This animation from the French national meteorological service, Météo-France, illustrates how the spread of the Fukushima fallout is migrating.

For the past three years, we have been living with the fallout from a financial “meltdown”, which resulted from deregulation, greed and the culture of “pervasive permissiveness” at the Federal Reserve, as discussed in the Financial Crisis Inquiry Report.  The fallout from the financial meltdown has also spread across the entire world.  Different countries have employed different approaches for coping with the situation.  In Ireland, the banks were bailed out at taxpayer expense, crippling that nation’s economy for generations to come.  As a result, the Irish citizens fought back, went to the polls and ousted the perfidious politicians who helped the banks avoid responsibility for their transgressions.   On the other hand, in Portugal, the government refused to impose austerity measures on the citizens, who should not be expected to pay the price for the financial mischief that gave rise to the current economic predicament.  Given the additional fact that Portugal, as a nation, was not a “player” in the risky games that nearly brought down the world economy, the recent decision by the Portuguese parliament is easy to understand.

In our own country, the various states have found it quite difficult to balance their budgets.  High unemployment, which refuses to abate, and depressed real estate valuation have devastated each state’s revenue base.  Because the states cannot print money, as the Federal Reserve does in order to pay the federal government’s bills, it has become necessary for the states to rely on creative gimmicks to reverse their misfortunes.  Most states had previously deployed numerous “economic development projects” over the years.  Such projects are taxpayer-funded subsidies to attract corporations and entice them to establish local operations.  Rex Nutting of MarketWatch recently took a critical look at those programs:

And yet, study after study show that these subsidies create few, if any, net jobs.  For instance, California’s Enterprise Zone program – which is supposed to boost business in 42 economically distressed communities – has cost the taxpayers $3.6 billion over 27 years, but to no avail.  A legislative analyst report in 2005 found that “EZs have little if any impact on the creation of new economic activity or employment.” Read more from the legislative analyst report.

California Gov. Jerry Brown has proposed to kill the EZ program and the even-more expensive redevelopment agency program, but he faces an uphill fight in the Legislature.  Such subsidies are popular with the legislators who receive boatloads of campaign contributions from businesses lucky enough to find a government teat to latch on to.

Nationwide, such giveaways from state and municipal governments amounted to more than $70 billion in 2010, according to Kenneth Thomas, a political scientist at the University of Missouri at St. Louis, who has specialized in studying these subsidies.  That’s more than the states collect in corporate income taxes in a good year.  Read about Thomas’s book: “Investment Incentives and the Global Competition for Capital”

And that $70 billion is twice as much money as would be required to fully fund the pensions owed to state and local government workers, the very same pensions that budget-cutting politicians across the country claim are responsible for the fiscal hole we’re in.

What Rex Nutting has suggested amounts to the elimination of a significant number of corporate welfare programs.  He has also dared to challenge the corporatist mantra that corporate welfare “creates jobs”.  We are supposed to believe that the only way states can balance their budgets is through the imposition of draconian austerity programs, designed to force the “little people” to – once again – pay the tab for Wall Street’s binge.  Because the voters have no lobbyists to protect their own interests, venal state and local politicians have set about slashing public safety expenditures (through mass layoffs of police and firefighters), closing parks and libraries, as well as under-funding public school systems.

Never mind that state and local governments could save $70 billion by cutting just one form of corporate welfare.  They would rather let you watch your house burn down.  You can’t afford that house anyway.



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Taking The Suckers For Granted

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January 21. 2010

In the aftermath of Coakley Dokeley’s failed quest to replace Teddy Kennedy as Senator of Massachusetts, the airwaves and the blogosphere have been filled with an assortment of explanations for how and why the Bay State elected a Republican senator for the first time in 38 years.  I saw the reason as a simple formula:  One candidate made 66 campaign appearances while the other made 19.  The rationale behind the candidate’s lack of effort was simple:  she took the voters for granted.  This was the wrong moment to be taking the voters for chumps.  At a time when Democrats were vested with a “supermajority” in the Senate, an overwhelming majority in the House and with control over the Executive branch, they overtly sold out the interests of their constituents in favor of payoffs from lobbyists.  Obama’s centerpiece legislative effort, the healthcare bill, turned out to be another “crap sandwich” of loopholes, exceptions, escape clauses and an effective date after the Mayan-prophesized end of the world.  Obama’s giveaway to Big Pharma was outdone by Congressional giveaways to the healthcare lobby.

The Democrats’ efforts to bring about financial reform are now widely viewed as just another opportunity to rake in money and favors from lobbyists, leaving the suckers who voted for them to suffer worse than before.  Coakley Dokeley made the same mistake that Obama and most politicians of all stripes are making right now:  They’re taking the suckers for granted.  That narrative seems to be another important reason why the Massachusetts senatorial election has become such a big deal.  There is a lesson to be learned by the politicians, who are likely to ignore it.

Paul Farrell recently wrote an open letter to President Obama for MarketWatch, entitled:  “10 reasons Obama is now failing 95 million investors”.  In his discussion of reason number five, “Failing to pick a cast of characters that could have changed history”, Farrell made this point:

Last year many voted for you fearing McCain might pick Phil Gramm as Treasury secretary.  Unfortunately, Mr. President, your picks not only revived Reaganomics under the guise of Keynesian economics, you sidelined a real change-agent, Paul Volcker, and picked Paulson-clones like Geithner and Summers.  But worst of all, you’re reappointing Bernanke, a Greenspan clone, as Fed chairman, an economist who, as Taleb put it, “doesn’t even know he doesn’t understand how things work.”  And with that pick, you proved you also don’t understand how things work.

Another former Obama supporter, Mort Zuckerman, editor-in-chief of U.S. News and World Report and publisher of the New York Daily News, wrote a piece for The Daily Beast, examining Obama’s leadership shortcomings:

In the campaign, he said he would change politics as usual.  He did change them.  It’s now worse than it was.  I’ve now seen the kind of buying off of politicians that I’ve never seen before.  It’s politically corrupt and it’s starting at the top.  It’s revolting.

*   *   *

I hope there are changes.  I think he’s already laid in huge problems for the country.  The fiscal program was a disaster.  You have to get the money as quickly as possible into the economy.  They didn’t do that.  By end of the first year, only one-third of the money was spent.  Why is that?

He should have jammed a stimulus plan into Congress and said, “This is it.  No changes.  Don’t give me that bullshit.  We have a national emergency.”  Instead they turned it over to Harry Reid and Nancy Pelosi who can run circles around him.

As for the Democrats’ pre-sabotaged excuse for “financial reform”, the fate of the Consumer Financial Protection Agency is now in the hands of “Countrywide Chris” Dodd, who is being forced into retirement because the people of Connecticut are fed up with him.  As a result, this is his last chance to get some more “perks” from his position as Senate Banking Committee chairman.  Elizabeth Warren, the person likely to be appointed to head the CFPA, explained to Reuters that banking lobbyists might succeed in “gutting” the proposed agency:

“The CFPA is the best indicator of whether Congress will reform Wall Street or whether it will continue to give Wall Street whatever it wants,” she told Reuters in an interview.

*   *   *

Consumer protection is relatively simple and could easily be fixed, she said.  The statutes, for the most part, already exist, but enforcement is in the hands of the wrong people, such as the Federal Reserve, which does not consider it central to its main task of maintaining economic stability, she said.

Setting up the CFPA is largely a matter of stripping the Fed and other agencies of their consumer protection duties and relocating them into a new agency.

With all the coverage and expressed anticipation that the Massachusetts election will serve as a “wake-up call” to Obama and Congressional Democrats, not all of us are so convinced.  Edward Harrison of Credit Writedowns put it this way:

But, I don’t think the President gets it.  He is holed up in the echo chamber called the White House.  If the catastrophic loss in Massachusetts’ Senate race and the likely defeat of his health care reform bill doesn’t wake Obama up to the realities that he is not in Roosevelt’s position but in Hoover’s, he will end as a failed one-term President.

I agree.  I also believe that the hubris will continue.  Why would any of these politicians change their behavior?  The “little people” never did matter.  They exist solely to be played as fools.  They are powerless against the plutocracy.  Right?