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Tsunami Of Disgust

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You can count me among those who believe that the non-stop Republican Presidential debates are working to President Obama’s advantage.  How many times have you heard some television news commentator remark that “the big winner of last night’s Republican debate was Barack Obama”?  As Julianna Goldman reported for Bloomberg BusinessWeek, two recent polls have revealed that Obama is no longer looking quite as bad as he did a few months ago:

Forty-nine percent of Americans approve of how Obama is handling his job, according to an ABC News/Washington Post poll and another conducted for CNN.  The rate was the highest in both surveys since a short-lived bump the president got following the killing of al-Qaeda leader Osama bin Laden in May.

Nevertheless, there is an unstoppable wave of criticism directed against the President by his former supporters as well as those disgusted by Obama’s subservience to his benefactors on Wall Street.   In my last posting, I discussed Bill Black’s rebuttal to President Obama’s most recent attempt to claim that no laws were broken by the banksters who caused the 2008 financial crisis.

The wave of disgust at Obama’s exoneration of the financial fraudsters has gained quite a bit of momentum since that outrageous remark appeared on the December 11 broadcast of 60 Minutes.  Matt Taibbi of Rolling Stone focused on the consequences of this level of dishonesty:

What makes Obama’s statements so dangerous is that they suggest an ongoing strategy of covering up the Wall Street crimewave. There is ample evidence out there that the Obama administration has eased up on prosecutions of Wall Street as part of a conscious strategy to prevent a collapse of confidence in our financial system, with the expected 50-state foreclosure settlement being the landmark effort in the cover-up, intended mainly to bury a generation of fraud.

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In other words, Geithner and Obama are behaving like Lehman executives before the crash of Lehman, not disclosing the full extent of the internal problem in order to keep investors from fleeing and creditors from calling in their chits.  It’s worth noting that this kind of behavior – knowingly hiding the derogatory truth from the outside world in order to prevent a run on the bank – is, itself, fraud!

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The problem with companies like Lehman and Enron is that their executives always think they can paper over illegalities by committing more crimes, when in fact all they’re usually doing is snowballing the problem so completely out of control that there’s no longer any chance of fixing things, thereby killing the only chance for survival they ever had.

This is exactly what Obama and Geithner are doing now.  By continually lying about the extent of the country’s corruption problems, they’re adding fraud to fraud and raising such a great bonfire of lies that they probably won’t ever be able to fix the underlying mess.

John R. MacArthur, president and publisher of Harper’s Magazine, caused quite a stir on December 14, when an essay he wrote – entitled, “President Obama Richly Deserves to Be Dumped” – was published by the The Providence Journal (Rhode Island).  For some reason, this article does not appear at the newspaper’s website.  However, you can read it in its entirety here.  MacArthur began the piece by highlighting criticism of Obama by his fellow Democrats:

Most prominent among these critics is veteran journalist Bill Moyers, whose October address to a Public Citizen gathering puts the lie to our barely Democratic president’s populist pantomime, acted out last week in a Kansas speech decrying the plight of “innocent, hardworking Americans.”  In his talk, Moyers quoted an authentic Kansas populist, Mary Eizabeth Lease, who in 1890 declared, “Wall Street owns the country.. . .Money rules.. . .The [political] parties lie to us and the political speakers mislead us.”

A former aide to Lyndon Johnson who knows politics from the inside, Moyers then delivered the coup de grace:  “[Lease] should see us now.  John Boehner calls on the bankers, holds out his cup, and offers them total obeisance from the House majority if only they fill it.  Barack Obama criticizes bankers as fat cats, then invites them to dine at a pricey New York restaurant where the tasting menu runs to $195 a person.”

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What’s truly breathtaking is the president’s gall, his stunning contempt for political history and contemporary reality.  Besides neglecting to mention Democratic complicity in the debacle of 2008, he failed to point out that derivatives trading remains largely unregulated while the Securities and Exchange Commission awaits “public comment on a detailed implementation plan” for future regulation.  In other words, until the banking and brokerage lobbies have had their say with John Boehner, Max Baucus, and Secretary of the Treasury Tim Geithner.  Meanwhile, the administration steadfastly opposes a restoration of the Glass-Steagall Act, the New Deal law that reduced outlandish speculation by separating commercial and investment banks.  In 1999, it was Summers and Geithner, led by Bill Clinton’s Treasury Secretary Robert Rubin (much admired by Obama), who persuaded Congress to repeal this crucial impediment to Wall Street recklessness.

I have frequently discussed the criticism directed at Obama from the political Center as well as the Left (see this and this).  I have also expressed my desire to see Democratic challengers to Obama for the 2012 nomination (see this and this).  In the December 20 edition of The Chicago Tribune, William Pfaff commented on John R. MacArthur’s above-quoted article, while focusing on the realistic consequences of a Democratic Primary challenge to Obama’s nomination:

John MacArthur’s and Bill Moyers’ call for the replacement of Barack Obama as the Democratic presidential candidate next year is very likely to fail, and any Democratic replacement candidate is likely to lose the presidency.  As a veteran Democratic Party activist recently commented, this is the sure way to elect “one of those idiots” running for the Republican nomination.  Very likely he is right.

However, the two may have started something with interesting consequences.  Nobody thought Sen. McCarthy’s challenge was anything more than a futile gesture.  Nobody foresaw the assassinations and military defeat to come, or the ruin of Richard Nixon.  Nobody knows today what disasters may lie ahead in American-supervised Iraq, or in the dual war the Pentagon is waging in Afghanistan and Pakistan.  The present foreign policy of the Obama government is fraught with risk.

As for the president himself, the objection to him is that his Democratic Party has become a representative of the same interests as the Republican Party.  The nation cannot bear two parties representing plutocratic power.

The current battle over the payroll tax cut extension reminded me of a piece I wrote last August, in which I included Nate Silver’s observation that it was President Obama’s decision to leave the issue of a payroll tax cut extension “on the table” during the negotiations on the debt ceiling bill.  My thoughts at that time were similar to William Pfaff’s above-quoted lament about the nation’s “two political parties representing plutocratic power”:

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.

It’s nice to see that the tsunami of disgust continues to flow across the country.


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Face It

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July 15, 2010

Despite Washington’s festival of self-congratulation, now that the so-called financial “reform” bill is finally becoming law, the public is not being fooled.  Rich Miller of Bloomberg News reported that almost eighty percent of the public accepts the premise I discussed on June 28 — that the financial “reform” bill is a hoax.  Mr. Miller examined the results of a Bloomberg National Poll, which measured the public’s reaction to the financial reform bill and here’s what was revealed:

Almost four out of five Americans surveyed in a Bloomberg National Poll this month say they have just a little or no confidence that the measure being championed by congressional Democrats will prevent or significantly soften a future crisis.  More than three-quarters say they don’t have much or any confidence the proposal will make their savings and financial assets more secure.

A plurality — 47 percent — says the bill will do more to protect the financial industry than consumers; 38 percent say consumers would benefit more.

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Skepticism about the financial bill, which may be approved this week, cuts across political party lines.  Seven in 10 Democrats have little or no confidence the proposals will avert or significantly lessen the impact of another financial catastrophe; 68 percent doubt it will make their savings more secure.

The Bloomberg poll also revealed that approximately 60 percent of the respondents felt that the $700 billion TARP bailout was a waste of money.  This sentiment was bolstered by a recent report from the Congressional Oversight Panel, disclosing that TARP did nothing for the 690 smaller banks, with assets of less than $100 billion each, which received TARP money.  Ronald Orol of MarketWatch provided this summary:

The report said “there is little evidence” that the capital injections led small banks to increase lending.

It also said small-bank TARP recipients have a disproportionately larger exposure to commercial real-estate losses than their big bank counterparts.  They are also having a difficult time making dividend payments to the government, a requirement of TARP, and this problem will increase over time, the report said.

The bottom line in reports such as these is usually a variation on the theme presented by pollster J. Ann Selzer, president of the firm that conducted the Bloomberg poll on public response to the financial reform bill:

“The mood of the American public is highly skeptical toward government and its ability to do right by the average person      . . .”

With the public mood at such a skeptical level about government, now is a good time to face up to the reason why our government has become so dysfunctional:  It is systemically corrupt.  Legalized graft has become the predominant force behind nearly all political decision-making.  If a politician has concerns that a particular compromise could upset his or her constituents, there will always be a helpful lobbyist to buy enough advertising propaganda (in the form of campaign ads) to convince the sheeple that the pol is acting in the public’s best interests.

Eric Alterman recently wrote a great (albeit turgid) article for The Nation, discussing institutionalized sleaziness in Washington.  Despite Alterman’s liberal bias, the systemic corruption he discusses should outrage conservative and independent voters as well as liberals.  Here are some of Alterman’s important points about ugly realities that the public has been reluctant to face:

Of course when attempting to determine why the people’s will is so frequently frustrated in our system, any author would be remiss if he did not turn first and foremost to the power of money.  The nonpartisan Center for Responsive Politics calculated that approximately $3.47 billion was spent lobbying the federal government in 2009, up from $3.3 billion the previous year.  By the final quarter of the year, lobbies were handing out $20 million a day.  The most generous spreaders of wealth were in the pharmaceutical and health products industries, whose $266.8 million set a record for “the greatest amount ever spent on lobbying efforts by a single industry for one year” according to CRP.  At one point, PhRMA employed forty-eight lobbying firms, in addition to in-house lobbyists, with a total of 165 people overall, according to the Sunlight Foundation’s Paul Blumenthal.

Max Baucus (D, Montana), who wrote the original Senate healthcare bill, raised roughly $2 million from the health sector in the past five years, according to opensecrets.org, despite running in a low-cost media market with marginal opposition.

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Financial power need not be justified merely on the basis of the votes it sways.  Rather, it can define potential alternatives, invent arguments, inundate with propaganda and threaten with merely hypothetical opposition.  Politicians do not need to “switch” their votes to meet the demands of this money.  They can bury bills; they can rewrite the language of bills that are presented; they can convince certain Congressmen to be absent on the days certain legislation is discussed; they can confuse debate; they can bankroll primary opposition.  The manner and means through which money can operate is almost as infinite as its uses in any bordello, casino or Wall Street brokerage.

The banal, pretexted debates, focused on liberal vs. conservative, left vs. right, etc. are simply smokescreens for the real problem:  the disastrous consequences that governmental  influence peddling has on society.  Political corruption is bipartisan and in Washington it is almost universal.   Campaign finance reform is just one battle to be fought in the war against institutionalized government corruption.  It’s time for all of the Jack Abramoffs and their elected cronies to be rounded-up and tossed into the slammer.  The public needs to face this ugly reality and demand that laws be enforced, loopholes be closed and bribery be stopped.  We are just beginning to taste the consequences of ignoring these problems.  Failure to take control of this situation now runs a serious risk of unimaginable repercussions.




A Love–Hate Situation For The Stimulus Bill

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February 2, 2009

As the Senate focuses its attention on the economic stimulus bill, Republicans are putting up a good fight, after the measure sailed through the House of Representatives, despite unanimous Republican opposition.  Time magazine reports that Republican Senator Mitch McConnell believes that the bill will fail in the Senate because it does not provide enough tax cuts.  The Republican insistence on tax cuts has already been addressed by President Obama, who included more tax cuts into the measure.  In an editorial for Bloomberg News, Michael R. Sesit complained:

Obama’s proposed cuts are politically motivated — a bone thrown to Republicans, who embrace lower taxes.  The president’s desire to promote bipartisanship is a laudable goal.  Yet pursuing it at the expense of sound economic policy is a high price to pay.  Obama has enormous public support and doesn’t need Republican cooperation to pass his stimulus program.

Tax cuts are also politically hard to reverse, which will eventually be necessary once the economy is back on its feet and inflation picks up.

The Time article quoted Massachusetts Representative Barney Frank’s response to the cry for even more tax cuts:

“I never saw a tax cut fix a bridge. I never saw a tax cut give us more public transportation.  The fact is, we need a mix,” Frank said.

In his January 29 op-ed column for the New York Times, David Brooks reflected on what Larry Summers (the newly-appointed head of the National Economic Council) had to say throughout 2008 about the nature of a large-scale stimulus package, such as the one under consideration.  Brooks noted “three clear guidelines” established by Summers for developing a plan such as this:

First, the stimulus should be timely.  The money should go out “almost immediately.”  Second, it should be targeted.  It should help low- and middle-income people.  Third, it should be temporary.  Stimulus measures should not raise the deficits “beyond a short horizon of a year or at most two.”

In criticizing this bill, Brooks argued that these parameters have been abandoned.  Among his suggested “fixes” would be the removal of the permanent programs built into the proposal.

Meanwhile, E. J. Dionne has written about how progressive Democrats are split into two camps, expressing different priorities for the measure:

One camp favors using the stimulus to focus on the needs of Americans of modest means.  The $819 billion stimulus bill that passed the House Wednesday night on a party-line vote, as well as the proposal being developed in the Senate, includes substantial new spending for the unemployed, for food stamps and for advances in health-care coverage.  The tax cuts in both versions tilt toward Americans with lower incomes.  Education programs also fare well.

But another group of progressives sees the bills as shorting investments for infrastructure:  roads, bridges and particularly mass transit.  This camp was buoyed by a report released Wednesday by the American Society of Civil Engineers concluding that it would take $2.2 trillion to bring the nation’s infrastructure into good repair.

Many sources, including the San Francisco Chronicle, have criticized this bill as being laden with “pork” projects, unlikely to spur economic growth or to create jobs.  Beyond that, Jeanne Cummings provided an interesting report on the Politico website, revealing how the business sector sees this “oversized legislation” as a “golden opportunity”.  The Democrats do not seem averse to this interest:

Senate Democrats, hoping to draw more bipartisan support, have already signaled they’re going to beef up the business provisions.  Versions of some of the most coveted tax breaks are already in the proposal by Senate Finance Committee Chairman Max Baucus (D-Mont.).

But business leaders and their trade representatives would like to see even more love in the stimulus.  And they’ve commissioned special studies, blanketed the committee with letters and recruited industry bigwigs to make their case.

In the face of this expanding government largesse, an editorial in Sunday’s Washington Post called upon President Obama to remind those in Congress “including leaders of his own party, who are cluttering his fiscal stimulus plan with extraneous and counterproductive provisions” of the admonition he gave to the bad actors on Wall Street.  In his disgust with the misappropriation of over $18 billion in TARP money for bonuses, the President said:  “show some restraint and show some discipline and show some sense of responsibility.”  In a passage reminiscent of David Brooks’ emphasis on the “three clear guidelines” established by Larry Summers, the Washington Post editorial noted that:

Instead of giving the economy a “targeted, timely and temporary” injection, the plan has been larded with spending on existing social programs or hastily designed new ones, much of it permanent or probably permanent — and not enough of it likely to create new jobs.

Former Clinton administration budget director Alice Rivlin fears that “money will be wasted because the investment elements were not carefully crafted.”  Former Reagan administration economist Martin Feldstein writes that “it delivers too little extra employment and income for such a large fiscal deficit.”  Columbia University’s Jeffrey D. Sachs labels the plan “an astounding mishmash of tax cuts, public investments, transfer payments and special treats for insiders.”

Let’s face it:  the Republicans aren’t the only ones who are upset about the excesses in this stimulus plan.  In fact, most Republican governors favor this bill.  Last week the National Governors Association called on Congress to pass the plan.  Beth Fouhy reported for the Associated Press that Florida Governor Charlie Crist and Vermont Governor Jim Douglas are pushing Republican Senators to pass the bill.  Although such a measure may be distasteful to Republican ideals, these hard times demand that Republican governors follow the procedure described by Rush Limbaugh as “bending over and grabbing your ankles”:

Minnesota Gov. Tim Pawlenty, who is widely viewed as a potential presidential contender in 2012, said governors have little choice but to accept the relief being offered.  “States have to balance their budgets,” he said.  “So if we’re going to go down this path, we are entitled to ask for our share of the money.”

As the stimulus bill makes its way through the Senate, it will be interesting to see whether the final version involves dispersal of more than or less than $826 billion.  Don’t be surprised if it hits the One Trillion mark.