Bank Bailout: When a Bonus Exceeds Earnings, How is It Not Fraud?

Bank Bailout: When a Bonus Exceeds Earnings, How is It Not Fraud?: "

via dunwoodynorth

New York State Attorney General Andrew Cuomo put out a report called ‘No Rhyme or Reason,’ which demonstrates that the 'Too Big To Fail' banks that got all that lovely tax payer money last Fall—when Hank Paulsen pulled his little bait and switch maneuver on Congress (you know, asking for trillions to help out homeowners by buying up toxic mortgages, while instead handing over the money to the banks with virtually no strings attached?)—have paid out MORE in bonuses to their top executive, than they actually made. (By the way, the report's title really does sum up what happened.)

Got that?

Citigroup and Merrill Lynch each lost more than $27 billion (a total of at least $54 billion if my math is correct), and were bailed to the tune of $55 billion in taxpayer money. Yet, they chose to pay out bonuses of $5.3 billion and $3.6 billion respectively. That is $8.9 billion in your tax dollars that passed directly through these banks and into the hands of the Masters of the Universe who control those banks.

Goldman Sachs, Morgan Stanley, and J.P. Morgan Chase paid out bonuses that totaled much more than the bank actually earned. (Go read the WaPo article for the dollar amounts.)

I do not want to hear the ‘we had to pay the bonuses to keep key people’ crap. If none of the banks had paid bonuses, since no bonuses were justified for poor performance, than no key people would have had incentive to leave in a fit of pique.

But much more important, not paying out the bonuses would have driven home the lesson to the MOTU class that actions have consequences, and taking crazy risk that makes ordinary homeowners suffer and throws thousands of people out of work also will cause Wall Street to suffer. By insulating the risk takers from the consequences of their own actions, the Government has guaranteed that the MOTU will take those same kinds of irresponsible, crazy risks again. And continue to whine every time someone uses the word ‘regulation.’

I’m sorry, can somebody explain to me how calling these payments a ‘bonus,’ which implies that it is a reward for good performance, is not a fraud?"

(Via Firedoglake.)

Three Good Reasons to Liquidate Our Empire

Chalmers Johnson: Three Good Reasons to Liquidate Our Empire: "However ambitious President Barack Obama's domestic plans, one unacknowledged issue has the potential to destroy any reform efforts he might launch. Think of it as the 800-pound gorilla in the American living room: our longstanding reliance on imperialism and militarism in our relations with other countries and the vast, potentially ruinous global empire of bases that goes with it. The failure to begin to deal with our bloated military establishment and the profligate use of it in missions for which it is hopelessly inappropriate will, sooner rather than later, condemn the United States to a devastating trio of consequences: imperial overstretch, perpetual war, and insolvency, leading to a likely collapse similar to that of the former Soviet Union.
"

(Via Huffington Blog.)

Create a Secretary of Manufacturing

Gilbert B. Kaplan: Create a Secretary of Manufacturing: "

Three events in the last few months highlight why the United States needs a Secretary of Manufacturing, who will sit at the Cabinet Table with as much sway and importance as the Secretary of Agriculture, the Secretary of Defense, or any other Cabinet Officer.

The first was the cancellation of the Presidential helicopter program, a cancellation that will throw about 1,000 aerospace specialists out of work in Owego, New York. The President canceled the VH-71 helicopter project after being criticized for the program by Senator McCain. Sure, we do not want needless pork. But what sense does it make to throw these people out of work when we are spending close to a trillion dollars to create jobs in this country?

We need to create jobs that have a multiplier effect and that build on our comparative advantage. For example, we need to create jobs in aerospace. These jobs enhance our manufacturing and engineering prowess and increase our ability to compete internationally. They are a better place for American tax dollars to be invested than what I saw on one parkway in Washington, D. C. recently: a big sign announcing that stimulus funds were being used to replace a row of streetlights.

When we think about where to put stimulus funds or other United States investments, someone has to stand up for manufacturing. We have lost seven million manufacturing jobs in this country since 1969, and the manufacturing sector is close to a tipping point. Speak to any mid-level manager in an American manufacturing company and you will hear the same story. The effect of this off-shore movement of jobs is cascading.

Suppliers of input products to OEM manufacturers -- things like semiconductors or glass companies -- are all moving off-shore. The companies that create complex end products -- computers and PDA and cell phone manufacturers -- are all moving off-shore. And the great big investments in the next cycle of technology improvement -- like three and a half billion dollar semiconductor fabrication plants -- are all moving off-shore, largely to South Asia. So as a mid-level manager, if you're tasked with sighting a plant, you have to go where the input suppliers are, where the OEM customers are, and where the technology is -- namely, outside the United States.

A second significant event was an off-hand comment by the Untied States Trade Representative, Ron Kirk, the former mayor of Dallas. Speaking to House Democrats about three free trade agreements pending before Congress, he said, 'Well, if we're not passing trade agreements, then what's the purpose of me being USTR? I might as well pack my bags and go back to Dallas.' Ambassador Kirk is focused and will do a good job. He recently announced a trade law enforcement initiative which should be helpful for U. S industry. But the statement about trade agreements is revealing. Many trade agreements have probably not in fact helped U. S. manufacturers. They have allowed large amounts of imports of low priced products from China and elsewhere to come into this country and led to the shutdown of manufacturing plants.

Many economists would say low-cost imports are good for the economy even if they throw manufacturing employees out of work. But someone in the government needs to be responsible for reviewing these trends and doing something about them. To like effect, the Secretary of Commerce, who is often said to be in charge of manufacturing issues, has hundreds of other issues on his plate and little real authority over anything to do with manufacturing. In fact, two of the largest units within Commerce are the weather bureau and the Census.

A cabinet level official needs to be responsible for coordinating tax, trade, labor, spending, investment and technology policy as it relates to manufacturing. We have a Secretary of Agriculture, but the agricultural sector is much smaller than the manufacturing sector, even with its recent declines, in terms of both output and employment.

The third recent event was a conversation I had with my manicurist. Being an international trade lawyer, half way through my manicure and pedicure (something I recommend every red blooded American try), the conversation naturally turned to the declines in the industrial prowess of America. 'My husband and I used to have a beauty supply business,' my manicurist Annie said, 'but then all the beauty supplies started coming from China. Companies that bought from the Chinese could sell product in the United States for less than we could buy it for from U. S. companies. So we had to close the business and I went back to what I was doing 20 years ago. Being a manicurist.'

This kind of story is being replicated every day in this country. But the main point is that we are no longer talking about high-profile and glitzy industries being displaced and leading to job losses -- things like steel or computers or autos. Now, almost every industry is being displaced. I recently finished a trade case on something called light weight thermal paper. This is the paper used in ATM machines and for gas station receipts. Who ever even thinks about this product? Well it turns out the Chinese government has been subsidizing the production of this product in China for years and building up its industry at the expense of U. S. manufactures who used to make it.

Someone in the United States government has to monitor these trends and develop a long term, comprehensive response to them. There is no one magic bullet. We have lost millions of manufacturing jobs and entire American industries over the last four decades. It is time to designate someone whose main job it is to bring these back.

Gilbert B. Kaplan was formerly Deputy Assistant and Acting Assistant Secretary of the U. S. Department of Commerce. He is a partner in the international trade firm of King & Spalding in Washington, D. C. He filed the first successful anti-subsidy case by any U. S. industry against China, which led to large anti-subsidy duties on imports of Chinese pipe into the United States in 2008. On behalf of the United States government, he was one of the negotiators of the U. S./Japan Agreement on Trade in Semiconductors and the U. S. Agreement on lumber trade with Canada.

"

(Via Huffington Blog.)

The Chinese Come Calling

The Chinese Come Calling: "

By Robert Scheer

What a hoot. The Chinese Communists invaded Washington on Monday demanding not that we sacrifice our freedoms but rather that we balance our budget. Creditors get to make that kind of call. And the Marxists of Beijing, who have turned out to be the world’s most prudent bankers, are worried about their assets invested in our banana republic.'

READ THE WHOLE ITEM"

(Via Truthdig: Drilling Beneath the Headlines.)

The Debtor's Dance: the U.S.-China Exchange

Robert L. Borosage: The Debtor's Dance: the U.S.-China Exchange: "

Obama's opening speech set the stakes: 'The relationship between the United States and China will shape the 21st century, which makes it as important as any bilateral relationship in the world.' (emphasis added) The U.S., the world's largest debtor, met this week with the confident leaders of its largest creditor, the communist government of China.

What took place over the last two days was hailed by Secretary of State Hillary Clinton as 'unprecedented,' the 'largest gathering ever of top leaders from our two countries,' addressing an 'unparalleled' range of issues.

The American press, of course, was more focused on Sarah Palin's departure than the Chinese arrival. Neither the New York Times nor the Washington Post managed a report on the discussions in the Wednesday paper.

This isn't surprising since any conversations that were candid were private, and there was little of substance to announce.

But the exchange was revealing in its own way. President Obama, exercising his remarkable gift for presenting a sea change as a gentle current, laid out the fundamental challenge almost in passing:

Going forward, we can deepen this cooperation. ....And as Americans save more and Chinese are able to spend more, we can put growth on a more sustainable foundation -- because just as China has benefited from substantial investment and profitable exports, China can also be an enormous market for American goods.

This has been Obama's revolutionary message to the leaders of the world. The U.S. cannot go back to the old economy where we borrowed $2 billion a day, largely from the Chinese, to be the consumer of the world by living far beyond our means. We must consume less, produce more, and sell more abroad and balance our trade.

Therefore, the nations that have pursued export led growth -- notably the Chinese, Japan, the Asian tigers, as well as Germany and others, will have to develop new strategies. The Chinese, the administration argues, will have to save less, consume more at home, and rely less on exports to generate jobs and growth.

This represents a staggering transformation that will require stark changes in policy across the world. The U.S. will need an industrial policy, a more aggressive trade strategy, higher top end taxes to reduce private consumption and balance our fiscal budgets, a smaller financial sector, and a dramatic change in our consumer driven and debt laden economy. The Chinese will need to develop a new social contract -- health care, pensions, higher wages, paid vacations -- for its workers, transform its domestic banking system, dismantle its mercantilist trade practices, invest massively in domestic infrastructure.

This is the right moment to undertake this necessary transformation. Trade has collapsed in the Great Recession. U.S. trade deficits have declined as exports and imports plummeted. U.S. consumers have gone from spending more than they earned to saving, as families struggle to recover from the trillions of wealth lost in the decline of home values and retirement savings. The Chinese have joined the U.S. in a major domestic stimulus plan, investing hundreds of billions in infrastructure and other projects to keep their economy moving and people working.

But these are elements of the crisis or responses to it. The obvious question is what are the policies that will drive this transformation as the economy recovers?

Here the Chinese were, even in the midst of diplomatic niceties, brutally clear. They plan to increase domestic demand, to move aggressively on energy efficiency. They believe the industrial countries should bear the burden of dealing with global warming, but are happy to capture the industries and technologies involved. They also want the U.S. to keep the dollar strong (read -- will continue to undervalue their currency), and will sustain the mercantilist practices -- from controlling access to their market, to formal and informal buy China policies, to buying or stealing technology -- that have been central to their remarkable economic growth.

What is the U.S. strategy? President Obama suggested in his speech that 'We can pursue trade that is free and fair, and seek to conclude an ambitious and balanced Doha Round agreement.' And we can cooperate to transform our energy economies: 'We can expand joint efforts at research and development to promote the clean and efficient use of energy; ...And the best way to foster the innovation that can increase our security and prosperity is to keep our markets open to new ideas, new exchanges, and new sources of energy.'

But this isn't a new course -- it is a return to the pieties and shibboleths of the old policies that helped make us the world's largest debtor. The Doha Round offers nothing but a symbolic curtsy to the old trade dialogue. 'Joint efforts at research and development' are fine, as long as we realize that the Chinese will use the technology, limit access to their market, and aggressively try to capture the export markets in solar, wind and next generation to come. Keeping 'our markets open to new ideas, new exchanges, and new sources of energy' sounds good, but ignores the extent to which the Chinese seek to control access to their markets and ours.

This is not a serious policy agenda; it is the noblesse oblige of a wealthy nation unwilling or unable to understand how deep a hole it is in, and how much it has to change.

If Obama's agenda seemed musty, Treasury Secretary Geithner's seemed oblivious. What are the 'structural policies' to lay the foundation for 'a more sustainable and balanced trajectory of growth'' According to Geithner, they've largely already happened. 'We've already seen a pretty substantial increase in private savings. Our current account and balance has fallen sharply.' And we'll move to reduce our public deficits once the economy gets going.

But we ran budget surpluses under Clinton and still racked up rising trade deficits and foreign debt. Recession isn't really a sustainable answer, we hope. Perhaps the shock of the Great Depression will make affluent Americans -- those who make over $100,000 a year and account for over half of all consumption -- buy less. But if the economy does come back, will personal austerity be sustained? (And if it is, how will the economy come back?). The tarnished icons of the Wall Street -- Goldman Sachs and JPMorgan -- reveal the lure of the old ways. Although still dependent on public subsidies, they are already back to high leveraged, computer driven gambling, and pocketing millions in bonuses from trading profits.

As for China, Geithner's summary remarks at the end of the discussions recycled the boilerplate of the old era:

We reaffirmed our very important commitment to an open, rules-based, multilateral regime for trade and investment. We reiterated our commitment to avoid protectionist measures to bring about a success -- and to bring about a successful conclusion to the Doha round. China and the United States committed to treating firms with foreign ownership operating in our markets exactly as we do domestically owned firms when it comes to government procurement.

Nonsense. China has progressed largely by ignoring the rules that got in its way. It has developed -- as the U.S. did as a rising power -- by skillful use of mercantilist trade policies. Ask European manufacturers of wind turbines with plants in China how committed China is to treating 'firms with foreign ownership operating in our markets exactly as we do domestically owned firms.'

No one expects public remarks to be candid. But papering over differences is a far remove from suggesting that black is white.

So what do we make of these 'unprecedented' talks with the 'most important bilateral relationship in the world?' The private discussions with the Chinese leaders no doubt were far more candid and far tougher than the public statements. We can be thankful that Obama has put before the Chinese and the world the reality that the U.S. cannot go back to being the consumer of the world on borrowed money.

But what is most apparent is that the Chinese have a policy that has worked well for them thus far. They will evolve according to their own interests. What isn't apparent is whether this administration has a policy to get us where it sensibly says we must go. Embrace of Doha and platitudes about 'open, rules-based' trade, ritual denial of reality surely won't get us there."

(Via Huffington Blog.)

How America's rising income inequality figures in to the debate over health care.

How America's rising income inequality figures in to the debate over health care.: "The debate about bank bailouts and health care is missing a critical piece of context: The American economy hasn't been working for the working- and middle class for decades. It is impossible to determine who should pay for what or whether it is 'fair' to ask the wealthy to contribute more to the health care of those who are uninsured, without better understanding the winners and losers in the U.S. economy over the past several decades.

[more ...]"

(Via Slate Magazine.)

Putting Gates In Perspective

Putting Gates In Perspective: "

Conor Friedersdorf does it:

Wrongly arrest a black men who happens to be a Harvard professor, release him without filing charges, and the national press corps asks the president to comment. Wrongly imprison for years on end a black man who happens to be working class and without celebrity, and the national press corps continues to utterly ignore a criminal justice system that routinely convicts innocent people. Apportioning blame for this sorry state of affairs isnt as important as recognizing that the news we get on these matters reflects a value system that is seriously flawed, and that news consumers bear blame for too.

Seriously, there are much, much greater instances of injustice out there. Its past time we all start paying attention to them.

--Jason Zengerle

"

(Via The Plank.)

Harry Shearer: Why the Birthers?

Harry Shearer: Why the Birthers?: "

Okay, I admit it, it may be my fault, I've watched Chris Matthews for three straight nights, and each evening he's sent the same question out into querulous cablespace: why the birthers?

Matthews, like many liberals, paleo-liberals and neo-liberals, chooses to seem baffled by the phenomenon of people insisting that whatever proof Barack Obama, the state of Hawaii, and others have provided of his native-born status, this is not sufficient. And yet, it's not that hard to understand.

I'm not arguing for Obama's otherness, which seems to be the surface point of the birther movement. He seems as American as, say, any other Chicago pol.

The reason for the growth of birtherism, I'm suggesting, lies in the history of the last two presidencies. Bill Clinton was reviled by Republicans, partly because he won and partly because he won with the aid of a third-party candidate (Ross Perot), meaning that he enjoyed a plurality, but not a majority of the popular vote. George W. Bush was reviled by Democrats because he didn't win the popular vote at all, and was handed the electoral vote by a 5-4 decision of a Supreme Court so unsure of its reasoning that it insisted its decision in Bush v. Gore not be used as precedent.

The opposition, in both cases, was fueled, energized, and supercharged to a point of near mania by the whiff of illegitimacy. Both the opposition to Clinton and the opposition to Bush drew power, endurance, and bile from the feeling that the incumbent was a rank usurper.

That's heady stuff, and it goes far, I think, to explain the toxic nature of recent American politics. If a putative democracy has been hijacked, of course normal civility in opposition seems pathetic and pusillanimous.

Enter Barack Obama. One could be satisfied with opposing him on issues, as I do on the lunacy of the Afghanistan venture (al Qaeda has long since moved its leaders to Pakistan and its recruiting to Somalia) and the vacancy of his response to the continuing federal betrayal of New Orleans. But events show you can't turn out livid opponents to town hall meetings on those policy grounds. You can generate mouth-foamers, however, with the question of his nation of birth. Republicans, dependent on consultants to advise them on the exquisite variety of methods of nay-saying, gaze longingly at the emotional power of a charge of illegitimacy. The birthers are their wind turbines.

Questioning the legitimacy of a president, like questioning the legitimacy of your best friend's children, is a sure-fire way to get sparks going, to fire up the base, to turn a torpid opposition into a pitchfork brigade. We've twice tasted this heady brew, and both enjoyed and recoiled at its bitter high. In this light, it's easy to understand why some opponents to a still-popular president would be drawn to a cause that once again allows the suggestion of illegitimacy to trump disagreement with policy."

(Via Huffington Blog.)

Bill Maher: New Rule: Not Everything in America Has to Make a Profit

Bill Maher: New Rule: Not Everything in America Has to Make a Profit:

"How about this for a New Rule: Not everything in America has to make a profit. It used to be that there were some services and institutions so vital to our nation that they were exempt from market pressures. Some things we just didn't do for money. The United States always defined capitalism, but it didn't used to define us. But now it's becoming all that we are.

Did you know, for example, that there was a time when being called a 'war profiteer' was a bad thing? But now our war zones are dominated by private contractors and mercenaries who work for corporations. There are more private contractors in Iraq than American troops, and we pay them generous salaries to do jobs the troops used to do for themselves ­-- like laundry. War is not supposed to turn a profit, but our wars have become boondoggles for weapons manufacturers and connected civilian contractors.

Prisons used to be a non-profit business, too. And for good reason --­ who the hell wants to own a prison? By definition you're going to have trouble with the tenants. But now prisons are big business. A company called the Corrections Corporation of America is on the New York Stock Exchange, which is convenient since that's where all the real crime is happening anyway. The CCA and similar corporations actually lobby Congress for stiffer sentencing laws so they can lock more people up and make more money. That's why America has the world;s largest prison population ­-- because actually rehabilitating people would have a negative impact on the bottom line.

Television news is another area that used to be roped off from the profit motive. When Walter Cronkite died last week, it was odd to see news anchor after news anchor talking about how much better the news coverage was back in Cronkite's day. I thought, 'Gee, if only you were in a position to do something about it.'

But maybe they aren't. Because unlike in Cronkite's day, today's news has to make a profit like all the other divisions in a media conglomerate. That's why it wasn't surprising to see the CBS Evening News broadcast live from the Staples Center for two nights this month, just in case Michael Jackson came back to life and sold Iran nuclear weapons. In Uncle Walter's time, the news division was a loss leader. Making money was the job of The Beverly Hillbillies. And now that we have reporters moving to Alaska to hang out with the Palin family, the news is The Beverly Hillbillies.

And finally, there's health care. It wasn't that long ago that when a kid broke his leg playing stickball, his parents took him to the local Catholic hospital, the nun put a thermometer in his mouth, the doctor slapped some plaster on his ankle and you were done. The bill was $1.50, plus you got to keep the thermometer.

But like everything else that's good and noble in life, some Wall Street wizard decided that hospitals could be big business, so now they're run by some bean counters in a corporate plaza in Charlotte. In the U.S. today, three giant for-profit conglomerates own close to 600 hospitals and other health care facilities. They're not hospitals anymore; they're Jiffy Lubes with bedpans. America's largest hospital chain, HCA, was founded by the family of Bill Frist, who perfectly represents the Republican attitude toward health care: it's not a right, it's a racket. The more people who get sick and need medicine, the higher their profit margins. Which is why they're always pushing the Jell-O.

Because medicine is now for-profit we have things like 'recision,' where insurance companies hire people to figure out ways to deny you coverage when you get sick, even though you've been paying into your plan for years.

When did the profit motive become the only reason to do anything? When did that become the new patriotism? Ask not what you could do for your country, ask what's in it for Blue Cross/Blue Shield.

If conservatives get to call universal health care 'socialized medicine,' I get to call private health care 'soulless vampires making money off human pain.' The problem with President Obama's health care plan isn't socialism, it's capitalism.

And if medicine is for profit, and war, and the news, and the penal system, my question is: what's wrong with firemen? Why don't they charge? They must be commies. Oh my God! That explains the red trucks!

Bill Maher, host of HBO's Real Time with Bill Maher airs live tonight at 10pm"

(Via Huffington Blog.)

Harold Meyerson - The Blue Dogs' Can't-Do Attitude and the Health-Care Debate - washingtonpost.com

Harold Meyerson - The Blue Dogs' Can't-Do Attitude and the Health-Care Debate - washingtonpost.com: "Watching the centrist Democrats in Congress create more and more reasons why health care can't be fixed, I've been struck by a disquieting thought: Suppose our collective lack of response to Hurricane Katrina wasn't exceptional but, rather, the new normal in America. Suppose we can no longer address the major challenges confronting the nation. Suppose America is now the world's leading can't-do country."

(Via.)

Obama’s Ad Hoc Strategy to Reverse Manufacturing’s Fall - NYTimes.com

Obama’s Ad Hoc Strategy to Reverse Manufacturing’s Fall - NYTimes.com: "The United States ranks behind every industrial nation except France in the percentage of overall economic activity devoted to manufacturing — 13.9 percent, the World Bank reports, down 4 percentage points in a decade. The 19-month-old recession has contributed noticeably to this decline. Industrial production has fallen 17.3 percent, the sharpest drop during a recession since the 1930s.

So far, however, Mr. Obama’s administration has not come up with a formal plan to address the rapid decline. Instead, it has pursued ad hoc initiatives — bailing out General Motors and Chrysler, for example, and pushing green energy by supporting the manufacture of items like wind turbines and solar panels."

(Via .)

Robert L. Borosage: Making It in America

Robert L. Borosage: Making It in America: "China is intent on dominating the new energy markets of the future. If its past practices are any indication, it will subsidize exports, manipulate its currency, buy China at home, force multinationals to transfer technology and partner with Chinese companies, and engage in industrial piracy to make its way.

If the U.S. wants new energy to be the centerpiece of a new economy in which -- in the president's words, the U.S. 'consumes less and produces more,' then it will have to have an industrial strategy. It doesn't have to mimic the Chinese, but it has to respond to them, rather than invoking old shibboleths about 'free trade,' and ignoring the reality of the world marketplace."

(Via Huffington Blog.)

Experts float debt-bubble fears

Experts float debt-bubble fears: "Economists worry about a potentially devastating new problem for American economy: a debt bubble."

(Via Politico.com: Politics '08.)

Jonathan Turley: Obama Top Ten List

Democrats Denounce Obama for Bush-Like Signing Statement That He Is Not Bound By Federal Legislation: "

Four House Democrats have finally stepped forward to denounce the Bush-like policies of President Obama, particularly his recent signing statement proclaiming that he is not bound by federal legislation. The letter was signed by Reps. David Obey of Wisconsin, chairman of the House Appropriations Committee; Barney Frank of Massachusetts, chairman of the House Financial Services Committee; and subcommittee chairs Reps. Nita Lowey and Gregory Meeks of New York. The letter breaks from the lockstep loyalty shown Obama despite his adoption of many of Bush’s most controversial positions.

The four democrats expressed how they were ‘surprised’ and ‘chagrined’ by Obama’s declaration in June that he does not have to comply with provisions in a war spending bill restricting $106 million aid provided to the World Bank and International Monetary Fund.

This signing statement followed a similar signing statement declaring that he was not bound by limitations in the $410 billion omnibus spending bill. The signing statement on that bill occurred two days after Obama promised to depart from the abuses of signing statements by Bush.

The House has voted to oppose Obama’s signing statements, here.

Just to keep a rough score, here is the top ten list of Obama’s rollback on civil liberties and constitutional principles:

1. Issued signing statements asserting that he is not subject to the limitations set by Congress (despite his campaign promises opposing such statements);

2. Opposed any investigation into the torture program (here) and alleged war crimes of the Bush Administration;

3. Opposed any investigation into the unlawful surveillance program;

4. Preserved the surveillance programs of the Bush Administration;

5. Withheld photographs of the abuse of detainees to prevent ‘embarrassment’ to the nation as well as White House logs;

6. Promised CIA employees that they will not be investigated or prosecuted for any crimes that they allegedly committed as part of the torture and surveillance programs;

7. Asserted that, even if acquitted in court, he would retain the right to hold detainees indefinitely and will preserve the Bush tribunal system;

8. Delayed his own deadline for a report on the future for Guantanamo Bay and detainees and opposed the right of detainees to challenge their confinement;

9. Asserted executive privilege arguments in court that go beyond prior Bush claims; and

10. Secure the dismissal of dozens of civil liberties lawsuits designed to uncover unlawful conduct and deprivation of privacy rights.

In his morphing into Bush, Obama has even outdone Bush on references to Jesus — while expanding his faith-based initiatives.

Many Democrats appear blind to the hypocrisy shown in the treatment of Obama and the media on civil liberties. When Bush took these positions, he was rightfully denounced. Yet, the opposition to Obama is far more muted and nuanced. I supported Obama. However, he has abandoned not only campaign promises but basic principles of human rights and civil liberties in these policies. Democrats are showing the same cult of personality that destroyed the Republicans in their blind loyalty to George Bush.

For the story, click here."

(Via JONATHAN TURLEY.)

War Without Purpose

War Without Purpose: "

Al-Qaida could not care less what we do in Afghanistan. We are fighting with the wrong tools. We are fighting the wrong people. We are on the wrong side of history. And we will be defeated in Afghanistan as we will be in Iraq.

READ THE WHOLE ITEM"

(Via Truthdig: Drilling Beneath the Headlines.)

Michael Brenner: The Blame Should Be Placed Squarely Where It Belongs: The Oval Office

Michael Brenner: The Blame Should Be Placed Squarely Where It Belongs: The Oval Office: "

Let's summarize the record. Obama knowingly appointed as his senior officials people who were intimately connected to the old system -- professionally and intellectually. That is one. He exiled Paul Volcker because Volcker had convictions and ideas that ran against the grain of Obama's own thinking. That's two. Obama gave no support to promoters of bankruptcy law reform or a workable program to aid home debtors in risk of foreclosure. That's three. Obama has curried favor with the big boys on Wall Street while savaging the managers of GE and Chrysler. The latter were poor executives but neither dishonest nor calculated schemers at the expense of the public interest. He clearly identifies with the former socially and intellectually. That's four.

"

(Via Huffington Blog.)

Robert Kuttner: Smoking the Green Shoots

Robert Kuttner: Smoking the Green Shoots: "

Question for the day: Where is the economic recovery going to come from?

We are still at the stage of the recession where economic downdrafts are producing more downdrafts. Reduced purchasing power leads to fewer retail and factory sales and more layoffs, further reducing consumer demand. The Obama stimulus package, about 2.5 percent of GDP for each of two years, doesn't make up enough of the difference. But the federal deficit, caused mainly by falling revenues and not by increased public spending, is alarming the budget hawks. The administration worries, correctly, that deficits will be high for several years to come and wonders who will keep lending Uncle Sam the money. Yet cutting back spending before recovery comes would be suicidal.

In addition, the financial sector has not yet returned to health, despite outsized profits (and bonuses) reported by the likes of Goldman Sachs. This is the kind of purely financial engineering that caused the collapse. The fevered activity at Goldman is a sign of lingering economic illness, not economic health. The rest of the economy, which depends on the financial sector for real investment capital, is still deeply depressed.

Louis Uchitelle's piece in Sunday's New York Times provides some instructive numbers.

Every major sector that reflects the purely private economy has been losing jobs, the only exception being energy extraction plus a tiny increase in computer systems design and management consulting. All of the other expanding sectors that are actually adding jobs reflect government spending - education, health, general government. But the declines in the workhorse parts of the private economy such as manufacturing, construction, and retailing are huge.

With purchasing power still declining and unemployment still rising, where will the recovery come from? White House economic chief Lawrence Summers, in a major speech at the Peterson Institute July 17, emphasized the good news.

'We were at the brink of catastrophe at the beginning of the year but we have walked some substantial distance back from the abyss,' he said. And, ever the empiricist, Summers reported that a Google search revealed that 'hits for economic depression have returned to baseline levels.' That's nice, but what Summers did not forecast was a robust recovery.

And if we stay on the present path, recovery will not come for a long time. Federal deficits will be large enough to raise questions about who will keep lending us the money - but not large enough to power a real recovery that increases real incomes and provides good jobs. The last time we had a massive financial meltdown like this, it took the hyper-stimulus of a war - World War II - to recapitalize industry and re-employ workers.

What, then, is the moral equivalent of war for the 21st century? Let's think way, way outside the box.

We might begin with a serious strategy for rebuilding American manufacturing. American corporations and politicians have been cavalier about just letting manufacturing go. Uniquely among advanced and developing nations, we have no national strategy for nurturing manufacturing at home. There's even an office in the Commerce Department that helps companies outsource.

As a result, even a modest uptick in purchasing power will not produce enough American jobs because there are so many things that America no longer makes.

We could start with clean energy, and move on to mass transit, and reclaim America's capacity to make things. Right now, even if we massively shifted to wind and solar energy, other nations would get most of the production jobs because most solar panels and wind turbines are not made here, while Americans would just get the temporary installation jobs.

We could also get serious about insisting that other trading nations not coerce or bribe our manufactures to locate facilities overseas as a condition of doing business - a flagrant violation of trade law. We could start having a real industrial policy for commercial industry in the way that we have long had a tacit industrial policy for products deemed essential to the military.

The administration is confused about how to reconcile industrial goals with trade law. It had to do a lot of backing and filling so that tens of billions of taxpayer dollars to modernize the auto industry didn't end up subsidizing more outsourcing of jobs to China. If trade law interferes with our ability to revive American manufacturing, then there's something wrong with trade law and let's change it.

For a fine summary on how to revive domestic manufacturing, take a look at the new book, Manufacturing a Better Future for America, edited by Richard McCormack and written by some of America's best experts on reviving manufacturing.

The book is published by the Alliance for American Manufacturing.

After manufacturing, we need to get serious about investing in a new generation of public infrastructure - everything from smart-grid electrical systems to broadband and modern water and sewer and transportation systems. That will produce lots of good jobs, and make for a more efficient and productive economy.

As far as the deficit is concerned, it will probably need to get bigger before it gets smaller. During World War II, when the nation was a lot poorer and nearly half of our national output went to defeat the Axis powers, my parents and grandparents and tens of millions of Americans like them bought war bonds.

We didn't depend on foreign borrowing, even though the deficits were far larger. Today, the government should create Recovery Bonds and market them to Americans, so that we can finance our own social investment and cease to be financial wards of foreign dictatorships.

The good people at Goldman Sachs can demonstrate their patriotism - not by offering to make money as financial middlemen - but by buying the first issue of these bonds as an investment. The government needs no investment bankers to market these bonds. It can sell them directly to citizens

Gentle reader, we are in a national economic emergency. This is not just about talking up the economy by emphasizing good news. The administration needs to stop smoking its own green shoots and offer strategies equal to the magnitude of the crisis.

Robert Kuttner is co-editor of The American Prospect, and a Senior Fellow at Demos. His latest book is Obama's Challenge.

"

(Via Huffington Blog.)

Sarah Palin should just go home

Sarah Palin should just go home: "President? Get real. Sarah Palin couldn't manage a Wal-Mart."

(Via Salon.)

Chutzpah on Steroids

Op-Ed Columnist: Chutzpah on Steroids: "We’re reaching a new level of chutzpah. The financial industry is fighting against an agency that would protect consumers, while scrambling to raise fees on the taxpayers who came to their rescue."

(Via NYT > Opinion.)

Confirmation Remarks Worth Revisiting

Confirmation Remarks Worth Revisiting: "

Supreme Court confirmation hearings are as much about politicians grabbing a little face time as they are investigating the nominee’s legal philosophy. Amid all the posturing and finger-wagging Monday, Sen. Sheldon Whitehouse spoke rather eloquently about what the Court has become, and what it should be: ‘... a place ... where the comfortable can be afflicted and the afflicted find some comfort ... .’

Below are Whitehouse’s remarks, minus the introductory pleasantries. For the full transcript, including statements by other senators, click here.

Sen. Sheldon Whitehouse (via LA Times):

[...] In the last two and a half months, my Republican colleagues have talked a great deal about judicial modesty and restraint. Fair enough to a point, but that point comes when these words become slogans, not real critiques of your record. Indeed, these calls for restraint and modesty, and complaints about ‘activist’ judges, are often codewords, seeking a particular kind of judge who will deliver a particular set of political outcomes.

It is fair to inquire into a nominee’s judicial philosophy, and we will have serious and fair inquiry. But the pretence that Republican nominees embody modesty and restraint, or that Democratic nominees must be activists, runs counter to recent history.

I particularly reject the analogy of a judge to an ‘umpire’ who merely calls ‘balls and strikes.’ If judging were that mechanical, we wouldn’t need nine Supreme Court Justices. The task of an appellate judge, particularly on a court of final appeal, is often to define the strike zone, within a matrix of Constitutional principle, legislative intent, and statutory construction.

The ‘umpire’ analogy is belied by Chief Justice Roberts, though he cast himself as an ‘umpire’ during his confirmation hearings. Jeffrey Toobin, a well-respected legal commentator, has recently reported that ‘in every major case since he became the nation’s seventeenth Chief Justice,

Roberts has sided with the prosecution over the defendant, the state over the condemned, the executive branch over the legislative, and the corporate defendant over the individual plaintiff.’ Some umpire. And is it a coincidence that this pattern, to continue Toobin’s quote, ‘has served the interests, and reflected the values of the contemporary Republican party’? Some coincidence.

For all the talk of ‘modesty’ and ‘restraint,’ the right wing Justices of the Court have a striking record of ignoring precedent, overturning congressional statutes, limiting constitutional protections, and discovering new constitutional rights: the infamous Ledbetter decision, for instance; the Louisville and Seattle integration cases, for example; the first limitation on Roe v. Wade that outright disregards the woman’s health and safety; and the DC Heller decision, discovering a constitutional right to own guns that the Court had not previously noticed in 220 years.

Over and over, news reporting discusses ‘fundamental changes in the law’ wrought by the Roberts Court’s right wing flank. The Roberts Court has not lived up to the promises of modesty or humility made when President Bush nominated Justices Roberts and Alito. Some ‘balls and strikes.’

So, Judge Sotomayor, I’d like to avoid codewords, and look for a simple pledge: that you will decide cases on the law and the facts; that you will respect the role of Congress as representatives of the American people; that you will not prejudge any case, but listen to every party that comes before you; and that you will respect precedent and limit yourself to the issues that the Court must decide; in short, that you will use the broad discretion of a Supreme Court Justice wisely and in keeping with the Constitution.

Let me emphasize that broad discretion. As Justice Stevens has said, ‘the work of federal judges from the days of John Marshall to the present, like the work of the English common-law judges, sometimes requires the exercise of judgment – a faculty that inevitably calls into play notions of justice, fairness, and concern about the future impact of a decision.’

Look at our history. America’s common law inheritance is the accretion over generations of individual exercises of judgment. Our Constitution is a great document that John Marshall noted leaves ‘the minor ingredients’ to judgment, to be deduced by our Justices from the document’s great principles. The liberties in our Constitution have their boundaries defined, in the gray and overlapping areas, by informed judgment. None of this is ‘balls and strikes.’

It has been a truism since Marbury v. Madison that courts have the authority to ‘say what the law is,’ even to invalidate statutes enacted by the elected branches of government when they conflict with the Constitution. So the issue is not whether you have a wide field of discretion: you will. As Justice Cardozo reminds us, you are not free to act as ‘a knight-errant, roaming at will in pursuit of [your] own ideal of beauty or of goodness,’ yet, he concluded, ‘[w]ide enough in all conscience is the field of discretion that remains.’

The question for this hearing is: will you bring good judgment to that wide field? Will you understand, and care, how your decisions affect the lives of Americans? Will you use your broad discretion to advance the promises of liberty and justice made by the Constitution?

I believe that your diverse life experience, your broad professional background, your expertise as a judge at each level of the federal system, in short your accrued wisdom, will enrich your judgment as a Supreme Court justice. Justice Alito told this Committee that he brings his perspective as the grandson of immigrants to decisions in that area of the law. I am glad he does. As Oliver Wendell Holmes, Jr. famously said, the life of the law has not been logic, it has been experience.

If your wide experience brings life to a sense of the difficult circumstances faced by the less powerful among us:

the woman being shunted around the bank from voicemail to voicemail as she tries to save her home from foreclosure;

the family struggling to get by in the neighborhood the police only come to with raid jackets on;

the couple up late at the kitchen table after the kids are in bed sweating out how to make ends meet that month;

the man who believes a little differently, or looks a little different, or thinks things should be different;

the voice no one listens to when the elected branches are deafened by monied interests;

if you have empathy for those people in this job, you are doing nothing wrong. It is far better to listen for those unheard voices, and to seek to understand their points of view, than to ignore them in favor of a particular ideology, or corporation, or just the status quo.

The Founding Fathers set up the American judiciary as a check on the excesses of the elected branches, and as a refuge when those branches are corrupted, or consumed by passing passions.

Courts were designed to be our guardians against what Hamilton in the Federalist Papers called ‘those ill humors, which the arts of designing men, or the influence of particular conjunctures, sometimes disseminate among the people . . . and which . . . have a tendency . . . to occasion ? serious oppressions of the minor party in the community.’

In present circumstances, those oppressions tend to fall on the poor and powerless, those without voice or influence. But as Hamilton noted, ‘[c]onsiderate men, of every description, ought to prize whatever will tend to beget or fortify that temper in the courts: as no man can be sure that he may not be tomorrow the victim of a spirit of injustice, by which he may be a gainer to-day.’

A little skepticism of the status quo, an ear for challenges to the prevailing power structure, an extra effort to hear the side of a party who is out-spent and out-gunned—there is no shame in that for a judge. It is exactly what the Founders intended in an American judge.

The courtroom can be the only sanctuary for the little guy when the forces of society are arrayed against him, when proper opinion and elected officialdom will lend him no ear. This is a correct, fitting, and intended function of the judiciary in our constitutional structure, and the empathy President Obama saw in you has a constitutionally proper place in that structure.

If everyone on the Court always voted for the prosecution against the defendant, for the corporation against the plaintiffs, and for the government against the condemned, a vital spark of American democracy would be extinguished. A courtroom is supposed to be a place where the status quo can be disrupted, even upended, when the Constitution or laws may require; where the comfortable can be afflicted and the afflicted find some comfort, all under the shelter of the law.

It is worth remembering that judges of the United States have shown great courage over the years, courage verging on heroism, in providing that sanctuary of careful attention, what James Bryce called ‘the cool dry atmosphere of judicial determination,’ amidst the inflamed passions or invested powers of the day.

Judge Sotomayor, I believe your broad and balanced background and empathy prepare you well for this constitutional and proper judicial role. So again, I join my colleagues in welcoming you to the Committee and I look forward to your testimony."

(Via Truthdig: Drilling Beneath the Headlines.)

Health Care’s Infectious Losses

Op-Ed Contributor: Health Care’s Infectious Losses: "With a few small steps, we would no longer have the suffering and death associated with infections acquired in hospitals and we would save tens of billions of dollars every year."

(Via NYT > Opinion.)

Robert Kuttner: 3 Reasons We Need an Economic Wake Up Call

Robert Kuttner: 3 Reasons We Need an Economic Wake Up Call: "Several events of the past week should be a wake-up call to the Obama administration. Bottom line: the medicine isn't working. Stronger stuff is needed."

(Via Huffington Blog.)

Will We Be Buying Our Energy Future From China?

Op-Ed Columnist: Can I Clean Your Clock?: "

“China is moving,” says Hal Harvey, the chief executive of ClimateWorks, which shares clean energy ideas around the world. “They want to be leaders in green technology. China has already adopted the most aggressive energy efficiency program in the world. It is committed to reducing the energy intensity of its economy — energy used per dollar of goods produced — by 20 percent in five years. They are doing this by implementing fuel efficiency standards for cars that far exceed our own and by going after their top thousand industries with very aggressive efficiency targets. And they have the most aggressive renewable energy deployment in the world, for wind, solar and nuclear, and are already beating their targets.”

"

(Via NYT > Opinion.)

Op-Ed Columnist: Behind the Facade

Op-Ed Columnist: Behind the Facade: "In many ways society has descended into a Michael Jackson-esque fantasyland, trying to leave the limits and obligations of the real world behind."

(Via NYT > Opinion.)

Op-Ed Columnist: That ’30s Show

Op-Ed Columnist: That ’30s Show: "Does failing to learn from history mean we are doomed to repeat it? Not necessarily, but it’s up to Washington to ensure that 1937 doesn’t happen all over again."

(Via NYT > Opinion.)

Our Jobless Recovery

Our Jobless Recovery: "Leo Hindery Jr. and Leo w. Gerard With unemployment hitting a twenty-six-year high it has become more evident that the solution to the jobs crisis depends on trade policy and manufacturing reform."

(Via The Nation: Top Stories.)