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Left Out

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

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

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

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

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

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

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

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

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

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

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

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

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


 

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Obama And The TARP

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I always enjoy it when a commentator appearing on a talk show reminds us that President Obama has become a “tool” for the Wall Street bankers.  This theme is usually rebutted with the claim that the TARP bailout happened before Obama took office and that he can’t be blamed for rewarding the miscreants who destroyed our economy.  Nevertheless, this claim is not entirely true.  President Bush withheld distribution of one-half of the $700 billion in TARP bailout funds, deferring to his successor’s assessment of the extent to which the government should intervene in the banking crisis.  As it turned out, during the final weeks of the Bush Presidency, Hank Paulson’s Treasury Department declared that there was no longer an “urgent need” for the TARP bailouts to continue.  Despite that development, Obama made it clear that anyone on Capitol Hill intending to get between the banksters and that $350 billion was going to have a fight on their hands.  Let’s jump into the time machine and take a look at my posting from January 19, 2009 – the day before Obama assumed office:

On January 18, Salon.com featured an article by David Sirota entitled:  “Obama Sells Out to Wall Street”.  Mr. Sirota expressed his concern over Obama’s accelerated push to have immediate authority to dispense the remaining $350 billion available under the TARP (Troubled Asset Relief Program) bailout:

Somehow, immediately releasing more bailout funds is being portrayed as a self-evident necessity, even though the New York Times reported this week that “the Treasury says there is no urgent need” for additional money.  Somehow, forcing average $40,000-aires to keep giving their tax dollars to Manhattan millionaires is depicted as the only “serious” course of action.  Somehow, few ask whether that money could better help the economy by being spent on healthcare or public infrastructure.  Somehow, the burden of proof is on bailout opponents who make these points, not on those who want to cut another blank check.

Discomfort about another hasty dispersal of the remaining TARP funds was shared by a few prominent Democratic Senators who, on Thursday, voted against authorizing the immediate release of the remaining $350 billion.  They included Senators Russ Feingold (Wisconsin), Jeanne Shaheen (New Hampshire), Evan Bayh (Indiana) and Maria Cantwell (Washington).  The vote actually concerned a “resolution of disapproval” to block distribution of the TARP money, so that those voting in favor of the resolution were actually voting against releasing the funds.  Earlier last week, Obama had threatened to veto this resolution if it passed.  The resolution was defeated with 52 votes (contrasted with 42 votes in favor of it).  At this juncture, Obama is engaged in a game of “trust me”, assuring those in doubt that the next $350 billion will not be squandered in the same undocumented manner as the first $350 billion.  As Jeremy Pelofsky reported for Reuters on January 15:

To win approval, Obama and his team made extensive promises to Democrats and Republicans that the funds would be used to better address the deepening mortgage foreclosure crisis and that tighter accounting standards would be enforced.

“My pledge is to change the way this plan is implemented and keep faith with the American taxpayer by placing strict conditions on CEO pay and providing more loans to small businesses,” Obama said in a statement, adding there would be more transparency and “more sensible regulations.”

Of course, we all know how that worked out  .   .   .  another Obama promise bit the dust.

The new President’s efforts to enrich the Wall Street banks at taxpayer expense didn’t end with TARP.  By mid-April of 2009, the administration’s “special treatment” of those “too big to fail” banks was getting plenty of criticism.  As I wrote on April 16 of that year:

Criticism continues to abound concerning the plan by Turbo Tim and Larry Summers for getting the infamous “toxic assets” off the balance sheets of our nation’s banks.  It’s known as the Public-Private Investment Program (a/k/a:  PPIP or “pee-pip”).

*   *   *

One of the harshest critics of the PPIP is William Black, an Economics professor at the University of Missouri.  Professor Black gained recognition during the 1980s while he was deputy director of the Federal Savings and Loan Insurance Corporation (FSLIC).

*   *   *

I particularly enjoyed Black’s characterization of the PPIP’s use of government (i.e. taxpayer) money to back private purchases of the toxic assets:

It is worse than a lie.  Geithner has appropriated the language of his critics and of the forthright to support dishonesty.  That is what’s so appalling — numbering himself among those who convey tough medicine when he is really pandering to the interests of a select group of banks who are on a first-name basis with Washington politicians.

The current law mandates prompt corrective action, which means speedy resolution of insolvencies.  He is flouting the law, in naked violation, in order to pursue the kind of favoritism that the law was designed to prevent.  He has introduced the concept of capital insurance, essentially turning the U.S. taxpayer into the sucker who is going to pay for everything.  He chose this path because he knew Congress would never authorize a bailout based on crony capitalism.

Although President Obama’s hunt for Osama bin Laden was a success, his decision to “punt” on the economic stimulus program – by holding it at $862 billion and relying on the Federal Reserve to “play defense” with quantitative easing programs – became Obama’s own “Tora Bora moment”, at which point he allowed economic recovery to continue on its elusive path away from us.  Economist Steve Keen recently posted this video, explaining how Obama’s failure to promote an effective stimulus program has guaranteed us something worse than a “double-dip” recession:  a quadruple-dip recession.

Many commentators are currently discussing efforts by Republicans to make sure that the economy is in dismal shape for the 2012 elections so that voters will blame Obama and elect the GOP alternative.  If Professor Keen is correct about where our economy is headed, I can only hope there is a decent Independent candidate in the race.  Otherwise, our own “lost decade” could last much longer than ten years.


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Rare Glimpses Of Honesty And Sanity

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July 1, 2010

Too many of the commentaries we see these days are either motivated by or calculated to promote hysteria.  When someone expresses a rational point of view or an honest look at the skullduggery going on in Washington, it’s as refreshing as a cold beer on a hot, summer day.

With so much panic over sovereign debt and budget deficits afflicting the consensual mood,  it’s always great to read a piece by someone willing to analyze the situation from a perspective based on facts instead of fear.  Brett Arends wrote a great piece for MarketWatch, dissecting the debt panic and looking at the data to be considered by those implementing public policy on this issue.  His essay focused on “the three biggest lies about the economy”:  that unemployment is below ten percent, that the markets are panicking about the deficit and that the United States is sliding into socialism.  Here is some of what he had to say:

Most people have no idea what’s really going on in the economy.   They’re living on spin, myths and downright lies.  And if we don’t know the facts, how can we make intelligent decisions?

High unemployment exerts a huge deflationary force on the economy.  Beyond that, the income taxes those unemployed citizens used to pay are no longer helping to pick up the tab for our bloated budget.   Mr. Arends emphasized the importance of looking at the real unemployment rate – what is referred to as U6 – which includes those people deliberately disregarded when counting the “unemployed”:

For example it counts discouraged job seekers, and those forced to work part-time because they can’t get a full-time job.

That rate right now is 16.6%, just below its recent high and twice the level it was a few years ago.

*   *   *

Consider, for example, the situation among men of prime working age.  An analysis of data at the U.S. Labor Department shows that there are 79 million men in America between the ages of 25 and 65.  And nearly 18 million of them, or 22%, are out of work completely.  (The rate in the 1950s was less than 10%.)  And that doesn’t even count those who are working part-time because they can’t get full-time work.  Add those to the mix and about one in four men of prime working age lacks a full-time job.

In exploding the myth about claimed market panic concerning the debt, Arends dug back into his arsenal of common sense, explaining what would happen if the markets were panicked:

. . .  the interest rate on government bonds would be skyrocketing.  That’s what happens with risky debt:  Lenders demand higher and higher interest payments to compensate them for the dangers.

But the rates on U.S. bonds have been plummeting recently.  The yield on the 30-year Treasury bond is down to just 4%.  By historic standards that’s chickenfeed.  Panicked?  The bond markets are practically snoring.

The specious claims about domestic socialism don’t really deserve a response, but here is how Arends dealt with that narrative:

Meanwhile, federal spending, about 25% of the economy this year, is expected to fall to about 23% by 2013.  In 1983, under Ronald Reagan, it hit 23.5%.  In the early 1990s it was around 22%.  Some socialism.

Another prevalent false narrative being circulated lately (particularly by President Obama and his administration) concerns the hoax known as the “financial reform” bill.  Wisconsin Senator Russ Feingold gave us a rare, disgusted insider’s look at how Wall Street was able to get what it wanted from its lackeys on Capitol Hill:

Since the Senate bill passed, I have had a number of conversations with key members of the administration, Senate leadership and the conference committee that drafted the final bill.  Unfortunately, not once has anyone suggested in those conversations the possibility of strengthening the bill to address my concerns and win my support.  People want my vote, but they want it for a bill that, while including some positive provisions, has Wall Street’s fingerprints all over it.

In fact, reports indicate that the administration and conference leaders have gone to significant lengths to avoid making the bill stronger.

Lest we forget that the financial crisis of 2008 was caused by the antics of cretins such as “Countrywide Chris” Dodd, Senator Feingold’s essay mentioned that sleazy chapter in Senate history to put this latest disgrace in the proper perspective:

Many of the critical actors who shaped this bill were present at the creation of the financial crisis.  They supported the enactment of Gramm-Leach-Bliley, deregulating derivatives, even the massive Interstate Banking bill that helped grease the “too big to fail” skids.  It shouldn’t be a surprise to anyone that the final version of the bill looks the way it does, or that I won’t fall in line with their version of  “reform.”

As I discussed in “Your Sleazy Government at Work”, the voters will not forget about the Democrats (including President Obama) who undermined financial reform legislation, while pretending to advance it.  The Democratic Party has until early 2012 to face up to the fact that their organization would be better off supporting a Presidential candidate with the integrity of Russ Feingold or Maria Cantwell if they expect to maintain control over the Executive branch of our government.





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Banking Lobby Tools In Senate Subvert Reform

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May 20. 2010

The financial pseudo-reform bill is being exposed as a farce.  Thanks to its tools in the Senate, the banking lobby is on the way toward defeating any significant financial reform.  Although Democrats in the Senate (and the President himself) have been posing as reformers who stand up to those “fat cat bankers”, their actions are speaking much louder than their words.  What follows is a list of the Senate Democrats who voted against both the Kaufman – Brown amendment (to prevent financial institutions from being “too big to fail”) as well as the amendment calling for more Federal Reserve transparency (sponsored by Republican David Vitter to comport with Congressman Ron Paul’s original “Audit the Fed” proposal – H.R. 1207 – which was replaced by the watered-down S. 3217 ):

Akaka (D-HI), Baucus (D-MT), Bayh (D-IN), Bennet (D-CO), Carper (D-DE), Conrad (D-ND), Dodd (D-CT), Feinstein (D-CA), Gillibrand (D-NY), Hagan (D-NC), Inouye (D-HI), Johnson (D-SD), Kerry (D-MA), Klobuchar (D-MN), Kohl (D-WI), Landrieu (D-LA), Lautenberg (D-NJ), Lieberman (ID-CT), McCaskill (D-MO), Menendez (D-NJ), Nelson (D-FL), Nelson (D-NE), Reed (D-RI), Schumer (D-NY), Shaheen (D-NH), Tester (D-MT), Udall (D-CO) and Mark Warner (D-VA).

I wasn’t surprised to see Senator Chuck Schumer on this list because, after all, Wall Street is located in his state.  But how about Senator Claire McCaskill?  Remember her performance at the April 27 hearing before the Senate Permanent Subcommittee on Investigations?   She really went after those banksters – didn’t she?  Why would she suddenly turn around and support the banks in opposing those two amendments?   I suppose the securities and investment industry is entitled to a little payback, after having given her campaign committee $265,750.

I was quite disappointed to see Senator Amy Klobuchar on that list.  Back on June 19, 2008, I included her in a piece entitled “Women to Watch”.  Now, almost exactly two years later, we are watching her serve as a tool for the securities and investment industry, which has given her campaign committee $224,325.  On the other hand, another female Senator whom I discussed in that same piece, Maria Cantwell of Washington, has been standing firm in opposing attempts to leave some giant loopholes in Senator Blanche Lincoln’s amendment concerning derivatives trading reform.  The Huffington Post described how Harry Reid attempted to use cloture to push the financial reform bill to a vote before any further amendments could have been added to strengthen the bill.  Notice how “the usual suspects” – Reid, Chuck Schumer and “Countrywide Chris” Dodd tried to close in on Cantwell and force her capitulation to the will of the kleptocracy:

There were some unusually Johnsonian moments of wrangling on the floor during the nearly hour-long vote.  Reid pressed his case hard on Snowe, the lone holdout vote present, with Bob Corker and Mitch McConnell at her side.  After finding Brown, he put his arm around him and shook his head, then found Cantwell seated alone at the opposite end of the floor.  He and New York’s Chuck Schumer encircled her, Reid leaning over her with his right arm on the back of her chair and Schumer leaning in with his left hand on her desk.  Cantwell stared straight ahead, not looking at the men even as she spoke.  Schumer called in Chris Dodd, who was unable to sway her.  Feingold hadn’t stuck around.  Cantwell, according to a spokesman, wanted a guarantee on an amendment that would fix a gaping hole in the derivatives section of the bill, which requires the trades to be cleared, but applies no penalty to trades that aren’t, making Blanche Lincoln’s reform package little better than a list of suggestions.

*   *   *

“I don’t think it’s a good idea to cut off good consumer amendments because of cloture,” said Cantwell on Tuesday night.

Other amendments offered by Democrats would ban banks from proprietary trading, cap ATM fees at 50 cents, impose new limits on the payday lending industry, prohibit naked credit default swaps and reinstate Glass-Steagall regulations that prohibit banks from owning investment firms.

“We need to eliminate the risk posed to our economy by ‘too big to fail’ financial firms and to reinstate the protective firewalls between Main Street banks and Wall Street firms,” said Feingold in a statement after the vote.  Feingold supported the amendment to reinstate Glass-Steagall, among others.

“Unfortunately, these key reforms are not included in the bill,” he said.  “The test for this legislation is a simple one — whether it will prevent another financial crisis.  As the bill stands, it fails that test.  Ending debate on the bill is finishing before the job is done.”

Russ Feingold’s criticisms of the bill were consistent with those voiced by economist Nouriel Roubini (often referred to as “Doctor Doom” because he was one of the few economists to anticipate the scale of the financial crisis).  Barbara Stcherbatcheff of CNBC began her report on Dr. Roubini’s May 18 speech with this statement:

Current efforts to reform financial regulation are “cosmetic” and won’t prevent another crisis, economist Nouriel Roubini told an audience on Tuesday at the London School of Economics.

The current mid-term primary battles have fueled a never-ending stream of commentary following the same narrative:  The wrath of the anti-incumbency movement shall be felt in Washington.  Nevertheless, Dylan Ratigan seems to be the only television commentator willing to include “opposition to financial reform” as a political liability for Congressional incumbents.  Yves Smith raised the issue on her Naked Capitalism website with an interesting essay focused on this theme:

Why have political commentators been hesitant to connect the dots between the “no incumbent left standing” movement and the lack of meaningful financial reform?

Her must-read analysis of the “head fakes” going on within the financial reform wrangling concludes with this thought:

So despite the theatrics in Washington, I recommend lowering your expectations greatly for the result of financial reform efforts.  There have been a few wins (for instance, the partial success of the Audit the Fed push), but other measures have for the most part been announced with fanfare and later blunted or excised.  Even though the firestorm of Goldman-related press stiffened the spines of some Senators and produced a late-in-process flurry of amendments, don’t let a blip distract you from the trend line, that as the legislative process proceeds apace, the banks will be able to achieve an outcome that leaves their dubious business models and most important, the rich pay to industry incumbents, largely intact.

As always, it’s up to the voting public with the short memory to unseat those tools of the banking lobby.  Our only alternative is to prepare for the next financial crisis.



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The SEC Is Out To Lunch

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August 27, 2009

Back on January 5, I wrote a piece entitled:  “Clean-Up Time On Wall Street” in which I pondered whether our new President-elect and his administration would really “crack down on the unregulated activities on Wall Street that helped bring about the current economic crisis”.  I quoted from a December 15 article by Stephen Labaton of The New York Times, examining the failures of the Securities and Exchange Commission as well as the environment at the SEC that facilitated such breakdowns.  Some of the highlights from the Times piece included these points:

.  .  .  H. David Kotz, the commission’s new inspector general, has documented several major botched investigations.  He has told lawmakers of one case in which the commission’s enforcement chief improperly tipped off a private lawyer about an insider-trading inquiry.

*  *  *

There are other difficulties plaguing the agency. A recent report to Congress by Mr. Kotz is a catalog of major and minor problems, including an investigation into accusations that several S.E.C. employees have engaged in illegal insider trading and falsified financial disclosure forms.

I then questioned the wisdom of Barack Obama’s appointment of Mary Schapiro as the new Chair of the Securities and Exchange Commission, quoting from an article by Randall Smith and Kara Scannell of The Wall Street Journal concerning Schapiro’s track record as chair of the Financial Industry Regulatory Authority (FINRA):

Robert Banks, a director of the Public Investors Arbitration Bar Association, an industry group for plaintiff lawyers . . .  said that under Ms. Schapiro, “Finra has not put much of a dent in fraud,” and the entire system needs an overhaul.  “The government needs to treat regulation seriously, and for the past eight years we have not had real securities regulation in this country,” Mr. Banks said.

*   *   *

In 2001 she appointed Mark Madoff, son of disgraced financier Bernard Madoff, to the board of the National Adjudicatory Council, the national committee that reviews initial decisions rendered in Finra disciplinary and membership proceedings.

I also quoted from a two-part op-ed piece for the January 3  New York Times, written by Michael Lewis, author of Liar’s Poker, and David Einhorn.  Here’s what they had to say about the SEC:

Created to protect investors from financial predators, the commission has somehow evolved into a mechanism for protecting financial predators with political clout from investors.  (The task it has performed most diligently during this crisis has been to question, intimidate and impose rules on short-sellers — the only market players who have a financial incentive to expose fraud and abuse.)

Keeping all of this in mind, let’s have a look at the current lawsuit brought by the SEC against Bank of America, pending before Judge Jed S. Rakoff of The United States District Court for the Southern District of New York.  The matter was succinctly described by Louise Story of The New York Times:

The case centers on $3.6 billion bonuses that were paid out by Merrill Lynch late last year, just before that firm was merged with Bank of America.  Neither company disclosed the bonuses to shareholders, and the S.E.C. has charged that the companies’ proxy statement about the merger were misleading in their description of the bonuses.

To make a long story short, Bank of America agreed to settle the case for a mere $33 million, despite its insistence that it properly disclosed to its shareholders, the bonuses it authorized for Merrill Lynch & Co employees.  The mis-handling of this case by the SEC was best described by Rolfe Winkler of Reuters.  The moral outrage over this entire matter was best expressed by Karl Denninger of The Market Ticker.  Denninger’s bottom line was this:

It is time for the damn gloves to come off.  Our economy cannot recover until the scam street games are stopped, the fraudsters are removed from the executive suites (and if necessary from Washington) and the underlying frauds – particularly including the games played with the so-called “value” of assets on the balance sheets of various firms are all flushed out.

On a similarly disappointing note, there is the not-so-small matter of:  “Where did all the TARP money go?”  You may have read about Elizabeth Warren and you may have seen her on television, discussing her role as chair of the Congressional Oversight Panel, tasked with scrutinizing the TARP bank bailouts.  Neil Barofsky was appointed Special Investigator General of TARP (SIGTARP).  Why did all of this become necessary?  Let’s take another look back to last January.  At that time, a number of Democratic Senators, including:  Russ Feingold (Wisconsin), Jeanne Shaheen (New Hampshire), Evan Bayh (Indiana) and Maria Cantwell (Washington) voted to oppose the immediate distribution of the second $350 billion in TARP funds.  The vote actually concerned a “resolution of disapproval” to block distribution of the TARP money, so that those voting in favor of the resolution were actually voting against releasing the funds.  Barack Obama had threatened to veto this resolution if it passed. The resolution was defeated with 52 votes (contrasted with 42 votes in favor of it).  At that time, Obama was engaged in a game of “trust me”, assuring those in doubt that the second $350 billion would not be squandered in the same undocumented manner as the first $350 billion.  As Jeremy Pelofsky reported for Reuters on January 15:

To win approval, Obama and his team made extensive promises to Democrats and Republicans that the funds would be used to better address the deepening mortgage foreclosure crisis and that tighter accounting standards would be enforced.

“My pledge is to change the way this plan is implemented and keep faith with the American taxpayer by placing strict conditions on CEO pay and providing more loans to small businesses,” Obama said in a statement, adding there would be more transparency and “more sensible regulations.”

Although it was a nice-sounding pledge, the new President never lived up to it.  Worse yet, we now have to rely on Congress, to insist on getting to the bottom of where all the money went.  Although Elizabeth Warren was able to pressure “Turbo” Tim Geithner into providing some measure of disclosure, there are still lots of questions that remain unanswered.  I’m sure many people, including Turbo Tim, are uncomfortable with the fact that Neil Barofsky is doing “too good” of a job as SIGTARP.  This is probably why Congress has now thrown a “human monkey wrench” into the works, with its addition of former SEC commissioner Paul Atkins to the Congressional Oversight Panel.  Expressing his disgust over this development, David Reilly wrote a piece for Bloomberg News, entitled: “Wall Street Fox Beds Down in Taxpayer Henhouse”.  He discussed the cynical appointment of Atkins with this explanation:

Atkins was named last week to be one of two Republicans on the five-member TARP panel headed by Harvard Law School professor Elizabeth Warren.  He replaces former Senator John Sununu, who stepped down in July.

*   *   *

And while a power-broker within the commission, Atkins was also seen as the sharp tip of the deregulatory spear during George W. Bush’s presidency.

Atkins didn’t waver from his hands-off position, even as the credit crunch intensified.  Speaking less than two months before the collapse of Lehman Brothers Holdings Inc., Atkins in one of his last speeches at the SEC warned against calls for a “new regulatory order.”

He added, “We must not immediately jump to the conclusion that failures of firms in the marketplace or the unavailability of credit in the marketplace is caused by market failure, or indeed regulatory failure.”

When I spoke with him yesterday, Atkins hadn’t changed his tune.  “If the takeaway by some people is that deregulation is the thing that led to problems in the marketplace, that’s completely wrong,” he said.  “The problems happened in the most heavily regulated areas of the financial-services industry.”

Regulated by whom?

Just Keep Walking

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April 23, 2009

Peggy Noonan had an esteemed career as speechwriter to former Presidents Ronald Reagan and George H.W. Bush.  She now writes a weekly column for The Wall Street Journal and she frequently appears as a panelist on many television news programs.  She has been on the blogroll of this website since its inception.

On Sunday, April 19, she appeared as a panelist on ABC’s This Week with George Stephanopoulos.  During that program’s Roundtable discussion, the subject eventually turned to President Obama’s decision not to prosecute the CIA operatives involved in the torture of detainees in the “War on Terror” as well as the decision to release the so-called “torture memos”.  Those memos were prepared by the Office of Legal Counsel during the Bush administration.  They described the permissible use of such techniques as waterboarding, sleep deprivation, confinement in a box with insects and other sadistic acts, intended to get detainees to provide valuable information.  Roundtable panelist Sam Donaldson expressed his opinion that the operatives who administered these interrogation techniques were not “just following orders”; they believed they were following the law because they were relying on the legal opinions expressed in those memos.  However, as Donaldson explained, if the people who devised those methods and wrote the legal memos condoning their use were “just trying to find cover” and just trying to find a way to get around American law and the Constitution, they should be held accountable in a court of law.  Donaldson added that if the President wanted to pardon those people, he should do so, although it would be important for those individuals to be held accountable before a court.

Peggy Noonan then remarked:

Oh, I have reservations about all of this.  It’s hard for me to look at a great nation issuing these documents and sending them out to the world and thinking:  “Oh, much good will come of that?”  Sometimes in life you wanna’ just keep walkin’.

Sam Donaldson then interrupted with the question as to whether it was right “to let people walk who may have committed a crime”.  Noonan then replied:  “Some of life has to be mysterious”.

Noonan’s remarks drew immediate outrage from Senator Russ Feingold of Wisconsin.  As Sam Stein reported for The Huffington Post, Feingold was harshly critical of the rationalizations for avoiding prosecution of these people, as expressed by government officials as well as those in the news media.  Stein quoted the Senator’s expressed indignation:

“If you want to see just how outrageous this is, I refer you to the remarks made by Peggy Noonan this Sunday” …  “I frankly have never heard anything quite as disturbing as her remark that was something to the affect of:   ‘well sometimes you just have to move on’.”

Noonan’s opinion is emblematic of the mainstream media’s all-too-frequent response to scandalous events and it demonstrates why so many people have turned to the Internet to get the news.  If you overhear someone in a restaurant arranging a bribe with a politician:  Just keep walking.  If you discover information about illegal toxic dumping by one of your publication’s sponsors:  Just keep walking.  If Harry Markopolos approaches you and tries to explain how Bernie Madoff is running a Ponzi scheme:  Just keep walking.

Peggy Noonan’s statement wasn’t just a situation where she “misspoke”.  It was the expression of an arrogant attitude held by too many in the media who decide it is up to them to determine when the public deserves to know something and when it doesn’t.  After all:  “Some of life has to be mysterious”.

Shame on you, Peggy Noonan!  Shame on you!

The World Holds Its Breath

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January 19, 2009

All over the world, people are waiting with abated breath as the Obama Presidency begins.  Some thought it would never happen.  I have often wondered whether, at the last minute, the Bush-Cheney junta might decide that it does not want to give up its authority.  Would they contrive some sort of “national security emergency” as a pretext for declaring martial law and suspending the Constitution?  Such a tactic would be entirely consistent with what we have seen for the past eight years.  Surely, there must be some provision buried in the so-called “Patriot Act” allowing the Bush-Cheney regime to continue, despite the expiration of its Constitutionally-prescribed existence.  Constitutional restrictions to unlimited executive power have been ignored by the outgoing administration for the past eight years.  Why should now be any different?  My skepticism on this matter will continue until Barack Obama completes his recitation of the Presidential Oath.

In the mean time, there are those who question whether President Obama will really deliver on his promise of change.  From the liberal side of the political spectrum, plenty of opinions have been published (by reputable commentators) expressing apprehension as to what likely will happen and what actually may not happen during Obama’s tenure in the White House.

On January 18, Salon.com featured an article by David Sirota entitled:  “Obama Sells Out to Wall Street”.  Mr. Sirota expressed his concern over Obama’s accelerated push to have immediate authority to dispense the remaining $350 billion available under the TARP (Troubled Asset Relief Program) bailout:

Somehow, immediately releasing more bailout funds is being portrayed as a self-evident necessity, even though the New York Times reported this week that “the Treasury says there is no urgent need” for additional money.  Somehow, forcing average $40,000-aires to keep giving their tax dollars to Manhattan millionaires is depicted as the only “serious” course of action.  Somehow, few ask whether that money could better help the economy by being spent on healthcare or public infrastructure.  Somehow, the burden of proof is on bailout opponents who make these points, not on those who want to cut another blank check.

Discomfort about another hasty dispersal of the remaining TARP funds was shared by a few prominent Democratic Senators who, on Thursday, voted against authorizing the immediate release of the remaining $350 billion.  They included Senators Russ Feingold (Wisconsin), Jeanne Shaheen (New Hampshire), Evan Bayh (Indiana) and Maria Cantwell (Washington).  The vote actually concerned a “resolution of disapproval” to block distribution of the TARP money, so that those voting in favor of the resolution were actually voting against releasing the funds.  Earlier last week, Obama had threatened to veto this resolution if it passed.  The resolution was defeated with 52 votes (contrasted with 42 votes in favor of it).  At this juncture, Obama is engaged in a game of “trust me”, assuring those in doubt that the next $350 billion will not be squandered in the same undocumented manner as the first $350 billion.  As Jeremy Pelofsky reported for Reuters on January 15:

To win approval, Obama and his team made extensive promises to Democrats and Republicans that the funds would be used to better address the deepening mortgage foreclosure crisis and that tighter accounting standards would be enforced.

“My pledge is to change the way this plan is implemented and keep faith with the American taxpayer by placing strict conditions on CEO pay and providing more loans to small businesses,” Obama said in a statement, adding there would be more transparency and “more sensible regulations.”

Meanwhile, there is worldwide concern about what Obama and Secretary of State Hillary Clinton can accomplish in the foreign relations and anti-terrorism arenas.  As discussed in an editorial from the January 18 Times of London:

Mr Obama’s biggest immediate challenge is in Afghanistan.  The president is hoping a troop surge, which he opposed in Iraq, will work. However, the prospect of a military solution in Afghanistan is remote and he may learn that the hard way.  In the meantime, he has to hope Iraq does not flare up again and that the Iran nuclear question remains one for diplomacy rather than military conflict.  His drive for a Middle East peace deal is not the first by a US president and nor will it be the last.

As the sun finally rises over the Obama Presidency, there are still plenty of clouds in the sky.  Does this mean we are in for more turmoil?  Some people might take this as a sign that it’s about to start raining money.

Our Generation Got Old

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October 13, 2008

As John McCain’s Presidential campaign goes swirling down the toilet during the final desperate weeks of its existence, we see its surrogates cling to the non-issue of Obama’s contact with 1960s radical activist, Bill Ayers.  As I said on October 2, McCain missed his chance to take control of this race by opposing the 700-billion-dollar “bailout bill”, which has yet to inspire the confidence of the investing public, foreign markets or the banks.  By reuniting with his old ally from the “campaign finance reform” days, Democratic Senator Russ Feingold of Wisconsin, as well as Democratic rising star, Senator Maria Cantwell of Washington, the “Blue Dog” Democrats and the so-called “House Republicans” led by Jeb Hensarling and Mike Pence, McCain could have secured his position as the man who would take the Republican Party into the new century.  Instead, he chose to follow the advice of the lobbyists who run his campaign:  Steve “Skinhead” Schmidt and (Jeffrey Dahmer look-alike) Rick Davis.  These “Guys on the Plane” (if I may steal an expression from Peggy Noonan) have their careers rooted in the negative campaigning strategies created by Lee Atwater and refined by Karl Rove.  These operatives have no other cards to play.  They have no experience in successful reliance upon a strategy, based solely on portraying their own candidate in a positive way.

As the nation’s economic condition becomes more perilous, the McCain campaign leans more heavily on its claim that Obama’s contacts with Bill Ayers should determine the outcome of the 2008 Presidential election.

At this point it’s starting to get funny.  Worse yet  … it is an indicator (to me, at least) of how old I am and how old my generation has become.  Back in my old home town (a place called Chicago) there is a writer for a local paper called the Chicago Tribune.  His name is John Kass.  Kass is an outspoken opponent of Chicago’s current mayor, Richard M. Daley and Kass has a nickname for him, just as I have nicknames for such worthy characters as Senator Joe “The Tool” Lieberman.  On Sunday, October 12, Kass expressed his outrage that Marilyn Katz, Ayers’ fellow member of the 1960s radical group, Students for a Democratic Society (SDS), is involved in Obama’s Presidential campaign.  Kass took particular umbrage at the fact that Marilyn Katz now has a successful public relations firm called: MK Communications.  According to Kass, MK Communications now represents the Chicago Police Department, City Colleges of Chicago, the city’s “Law Department” (actually referred to as the Office of the Corporation Counsel for the City of Chicago), and numerous other city departments  … including the venerable “Streets and San”.  Kass seemed like a shoe salesman trying to fit an old foot that was accustomed to the “militant radical” style of the 1960s, into the new, 21st century, “Terrorist” model. It  doesn’t fit.  The militant radicals of the 1960s used small bombs to make political statements.  There is an absence of information about the number of alleged casualties or injuries resulting from such bombings.  Today, “terrorists” use small bombs to take down airplanes and they use airplanes to take down skyscrapers.  The use of the “terrorist” label to a 1960s radical is an obvious stretch.

The rant by the Tribune’s Kass about how former radical, Marilyn Katz, has become a “mainstream” figure in Chicago’s Public Relations business community, reminded me of an old song.  On August 17, 1969, Grace Slick and her band, Jefferson Airplane, woke up the crowd at the Woodstock Music and Arts Fair with what she described as “morning maniac music”: the title song from their upcoming album, Volunteers.  Included among the song’s lyrics was the following passage:

One generation got old.
One generation got soul.
This generation got no destination to hold.

The Marilyn Katz story and the Bill Ayers story tell me that our generation got old.  The former radicals of that era are now playing important roles within what they used to consider an archaic milieu, referred to as “the establishment”.  Nevertheless, many members of this latest “establishment” generation are in a fight to retain the claim of having “soul” by helping to bring an African-American to The White House for the first time in this nation’s history.  The crowds at the McCain and Palin rallies have expressed their fear of what an Obama Administration might bring to America.  These McCain supporters have been able to replace their fears of how they are going to economically survive from day to day and how to fund their retirement plans with the fears conjured up by Schmidt, Davis and their ilk.  The ball is now in the court of the Obama campaign to help establish a legacy for these people and all Americans – by righting the ship capsized by the “perfect storm” of greed, corruption and deregulation.  Another three-pointer would be nice.

McCain Loses His Chance

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October 2, 2008

It was the opportunity for a “game-changing move” in the 2008 Presidential campaign.  Just as John McCain was dropping back in the polls, providing Barack Obama the chance to “close the deal” even more decisively than he did with Hillary Clinton, McCain missed the opportunity to turn the game around.  Last week, he arrived in Washington (after the pseudo-suspension of his campaign) on a mission to save us all from the crisis declared by Treasury Secretary Henry Paulson.  After McCain arrived, he found a number of both Republican and Democratic members of the House of Representatives opposed to the revised, 110-page, economic “bailout bill” (the Emergency Economic Stabilization Act of 2008).  At that point in time, McCain had the opportunity to break with the unpopular Bush Administration and band together with the 133 Republican and 95 Democratic House members (who eventually voted against the bill) to form a “coalition of mavericks” (oxymoron, non-sequitur or both?) resisting this bailout of the big banks and other “fat cats” on Wall Street.  He didn’t.  He chose instead, to copy whatever Barack Obama was doing.  Besides, his move dovetailed well with the pseudo-“bipartisan” duet he had been playing, throughout the entire campaign, with Joe “The Tool” Lieberman.  Had McCain stood with those 133 young Republican members of the House and the 95 Democrats (many of whom consider themselves conservative, “Blue Dog” Democrats) he could have re-ignited his flatulent campaign.  (Is it really safe to do that?  —  Let’s ask Johnny Knoxville.)

Howard Fineman provided an interesting retrospective of this phase in the evolution the economic “bailout bill” at the Newsweek website on September 30:

The Paulson Plan is not great. Some two hundred academic economists have ridiculed it, and so have the House Republicans, by a 2-1 margin.  Public opinion (and not just the angry phone callers) is turning against the measure—to the extent that anybody understands it.

But the consensus is that Washington has to do something, and that the current version is far better than what the lawmakers started with.

McCain made a show of returning to Washington to try to jam the original measure through.  He deserves credit for the instinct. An old Navy motto is: Don’t just stand there, DO something!  That is McCain to the core, and so much the better for it.

But when he got to town, he realized something that no one had bothered to tell him, apparently:  the grassroots of his own party (the grassroots that has never really trusted him) hated the Paulson Plan.  They weren’t about to support it and risk their own necks.  McCain worked the phones, but fell back in the ranks.

When the second revision of this bill (at over 400 pages) finally made it to the Senate floor for the vote on Wednesday, October 1, there were 9 Democrats, 15 Republicans and Independent Senator Bernie Sanders of Vermont, voting against it.  McCain again missed the opportunity for a truly bipartisan resistance to this measure.  Such an act would have demonstrated genuine leadership.  He could have rejoined his old buddy, Wisconsin Senator Russ Feingold, as well as Florida Democrat Bill Nelson and rising Democratic star, Maria Cantwell from the State of Washington, all of whom voted against this measure.  Such a move would have emboldened resistance to the “bailout bill” in the House of Representatives, where the term of office lasts only two years.  (The short term results in greater accountability to American voters, who are believed to have notoriously short memory spans.)

Is this bill really necessary?  On the October 1 edition of MSNBC’s Countdown with Keith Olbermann, Paul Krugman, Economics Professor at Princeton University, admitted that:

…  it will be relatively ineffective, although rejecting it will cause a big run on the system.  Then we will come back and do it right in January or February  …

When Keith Olbermann asked Krugman about the likelihood that nothing consequential would happen if this bill did not pass, Krugman responded by saying that such possibilities have “shrunk in the past week”.  Krugman went on to claim that “the credit crunch has started to hit Main Street”, using, as an example, the rumor that: “McDonald’s has started to cut credit to its franchisees.”  McDonald’s has issued a press release stating that this was not the case.  What is really happening is that the banks are acting like spoiled children, holding their breath until the government gives them what they want, using the threat of unavailable credit as a gun to the head of Congress.

Public opposition to this bailout was best summed up by Peggy Noonan, when she appeared on The Daily Show with Jon Stewart on October 1:

But we are in a real economic crisis and the American political establishment said we must do A, B and C to deal with it and the American people  …  said:  “No.  We don’t trust you to handle this.  We don’t trust you to do the right thing.”

John McCain had the opportunity to stand with those people, as well as the 133 House Republicans and 15 Senate Republicans, to do “the right thing”.  He decided to forego that opportunity.  Barack Obama said, on the Senate floor Wednesday, that it was not worth risking the American economy and the world economy by challenging this bill.  John McCain decided that it was not worth risking his Presidential campaign on such a challenge.  That’s too bad for him.  The gamble probably would have paid off.

They’re At It Again

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June 23, 2008

The Democrats on the Hill are at it again, doing what they do best:  capitulating, sucking up, caving in, selling out and providing lame excuses for this conduct.  This latest round of misfeasance concerns the Congressional approval of what is being called the “FISA compromise bill”.  This bill is also known as the “wiretap bill” and the “telecom immunity bill”.  Last February, the Senate passed a version of this bill, giving the President broader, unchecked powers in ordering wiretaps on American citizens.  The current bill, intended to be a compromise, falls far short of the expectations of those concerned with protecting the right to privacy.  Senator Russ Feingold of Wisconsin summed up the widespread frustration over this bill with the following statement:

And under this bill, the government can still sweep up and keep the international communications of innocent Americans in the U.S. with no connection to suspected terrorists, with very few safeguards to protect against abuse of this power. Instead of cutting bad deals on both FISA and funding for the war in Iraq, Democrats should be standing up to the flawed and dangerous policies of this administration.

Throughout his campaign for the Presidency, Barack Obama has assured us that had he been a member of the United States Senate at the time, he would have voted to oppose the Joint Resolution for the Use of Military Force in Iraq.  That Resolution was passed because there were too many Democrats in Congress who believed a vote against the Resolution would make them appear weak on national security.  It is that same fear of appearing weak on national security that is driving Democrats to vote in favor of the current FISA bill.  Concern for appearing weak is itself a sign of weakness.  Obama’s support for this bill, out of concern for appearing weak on national security, gives us a more honest view of how he would have voted on the use of military force in Iraq.  His support for the FISA bill tells me that he would indeed have voted in favor of the Iraq Resolution.  Although Senator Obama has promised to remove the telecom immunity provisions from this bill, nobody believes this could be accomplished.  The telecom lobby has been driving this bill for the specific purpose of shielding that industry from lawsuits by American citizens, who became the subjects of illegal wiretaps.  Instead of promising to remove the telecom immunity provisions, Obama should be asserting this position on the bill:  “I am supporting this bill because, as President, I want to be able to tap the phones of my Republican opponents without court oversight.”  He might be able to scare some Republicans into voting against this bill.  That announcement might also give Hillary Clinton a strong reason to oppose it.

Obama’s stance on this bill is likely to do him more harm than good.  MoveOn.org has started an e-mail campaign for its members to contact Senator Obama and demand that he stick to his earlier promise that he would support the filibuster of any bill providing retroactive immunity for telecom companies that participated in Bush’s unauthorized wiretap program.  A more longstanding liberal organization, the American Civil Liberties Union, has also decried the impending passage of this bill:

More than two years after the President’s domestic spying was revealed in the pages of the New York Times, Congress’ fury and shock has dissipated to an obedient whimper. After scrambling for years to cover their tracks, the phone companies and the administration are almost there. This immunity provision will effectively destroy Americans’ chance to have their deserved day in court and will kill any possibility of learning the extent of the administration’s lawless actions. The House should be ashamed of itself. The fate of the Fourth Amendment is now in the Senate’s hands. We can only hope senators will show more courage than their colleagues in the House.

Will Obama alienate his “base” by supporting this bill?  He has promised his supporters “Change We Can Believe In”.  What kind of “change” is it when a Democratic Senator facilitates yet another controversial assault on the Bill of Rights by the Bush Administration, out of fear of appearing “weak” on national security?




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