Give Him a Break: "What else do we want from Obama, really? Since the whole scheme to refloat the American boat is, at best, inspired guesswork, the assignment last night was to radiate confidence without seeming to sell snake-oil."
David Brooks calls Jindal's response a "disaster for the Republican Party": "
LEHRER: Now that, of course, was Gov. Bobby Jindal, the governor of Louisiana, making the Republican response. David, how well do you think he did?
DAVID BROOKS: Uh, not so well...I oppose the stimulus package because I thought it was poorly drafted but to come up at this moment in history with a stale 'government is the problem, we can't trust the federal government,' it's just a disaster for the Republican Party. The country is in a panic now. They may not like the way the Democrats have passed the stimulus bill. But the idea that we're just going to... That government will have no role, the federal government has no role in this, that in a moment when only the federal government is big enough to actually do stuff- to just ignore all that and just say 'government is the problem, corruption, earmarks, wasteful spending,' it's just a form of nihilism. It's just not where country is it's not where the future of the country is. There's an intra-Republican debate: some people say the Republican Party lost its way because they got too moderate, some people say they got too weird or too conservative. He thinks they got too moderate. And so he's making that case. I think it's insane. I just think it's a disaster for the [Republican] Party. I just think it's unfortunate right now. "
(Via Crooks and Liars.)
Epic Fail, SOTU Rebuttal Version: "Is there a more dangerous assignment for a rising party star to accept than a State of the Union rebuttal? Seriously, it’s hemlock. Tonight, in all fairness, would’ve been tough to pull off even if Bobby Jindal didn’t sound like Kenneth from ‘30 Rock,’ or, in my favorite metaphor analogy of the evening, a third grader performing in his Thanksgiving play: Obama’s favorables are still roughly comparable to delicious, delicious beer’s; Republicans are widely perceived to be obstructionist naysayers; and, as Jon Cohn notes below, Americans are scared enough these days to prefer policy solutions to partisan sniping. But, holy crap, did Jindal blow it. I don’t even want to rehash the deadly obvious reasons why--just check out what the people who were supposed to like it are saying. "
(Via The Plank.)
A reader captures it:
'Americans can do anything'. This was the title of Jindal's speech and its refrain. I'm almost too exhausted by it all to work up an appropriate amount of outrage. But come on!
When will everybody let go of these vacuous, egotistical stabs at patriotism. Americans can't do anything. And it is the notion that we can (democracy in the Middle East, pyramid schemes on Wall Street, deficits don't matter) that has gotten us into the problems we have now.
What was a necessary pep-talk in the 1980s from Reagan became calcified into a dogma that verges on national self-idolatry. The point of the American founding was not that Americans are somehow better than any other people on earth, but that they had figured out a way to make government more amenable to freedom, stability and prosperity. Many other countries have figured this out too. But not many others have dug themselves into the ditch the US now inhabits. I don't think more cant on the Jindal lines helps."
Aaron Zelinsky: Obama's Rhetorical Inspirations: Presidents, Poets, and Hobbits: "
President Obama's speech to Congress stood on the shoulders of prophets, playwrights, and hobbits. From J.F.K. to an Australian Pop Band, here are the ten sources behind the most memorable lines of Obama's recent address:
1) 'Madame Speaker, Mr. Vice President, Members of Congress, and the First Lady of the United States: I've come here tonight not only to address the distinguished men and women in this great chamber, but to speak frankly and directly to the men and women who sent us here.'
This rhythmic lead in echoes the one the most famous openers of all time: Mark Antony's monologue in Shakespeare's Julius Caesar: 'Friends, Romans, countrymen, lend me your ears; I come to bury Caesar, not to praise him.' After mimicking Antony's direct address (a rhetorical device called apostrophe), Obama inverts the Shakespearean phrasing, placing the negation ('I've come here not') at the beginning of the sentence.
2) 'Well that day of reckoning has arrived, and the time to take charge of our future is here.'
While Obama's inaugural invoked the Sermon on the Mount, this speech draws to a darker and more foreboding biblical image. This phrase comes from the Book of Isaiah, 2:12: 'For the Lord of hosts will have a day of reckoning.' The ancient Hebrew does not contain a reference to 'reckoning' but speaks only of a 'Day to God.' No matter what text you use, it's clear what this signals: Serious crunch time.
3) 'As we stand at this crossroads of history, the eyes of all people in all nations are once again upon us -- watching to see what we do with this moment; waiting for us to lead.'
This line quotes John F. Kennedy. If Obama's inaugural address focused on Washington, this speech channels Kennedy, looking forward, cautiously, hopefully, and optimistically, with firm resolve in the character of America. Kennedy is referenced three times in the speech. This line echoes Kennedy's 1960 speech to the Los Angeles NAACP, when he declared 'the eyes of that world are upon us.' In 1961, he echoed these lines again at the Massachusetts State House: 'Today the eyes of all people are truly upon us.' Kennedy himself owed the line to the seventeenth century American preacher John Winthrop, who famously declared 'We shall be as a city upon a hill. The eyes of all people are upon us.'
4) 'The weight of this crisis will not determine the destiny of this nation. The answers to our problems don't lie beyond our reach.'
Here, the antecedent exceeds its progeny. William Jennings Bryan put it more succinctly in his 1900 Baltimore speech: 'The nation's destiny is what the nation makes it.'
5) 'And a twilight struggle for freedom led to a nation of highways, an American on the moon, and an explosion of technology that still shapes our world.'
This is the second Kennedy reference of the speech, echoing a term Kennedy coined in his inaugural address: 'Now the trumpet summons us again -- not as a call to bear arms, though arms we need; not as a call to battle, though embattled we are -- but a call to bear the burden of a long twilight struggle, year in and year out, rejoicing in hope, patient in tribulation.' An ambitious crash program for sustainable and independent fuel sources has already been dubbed the 'energy moon shot' by some in the administration and press.
6) 'But in my life, I have also learned that hope is found in unlikely places; that inspiration often comes not from those with the most power or celebrity, but from the dreams and aspirations of Americans who are anything but ordinary.'
Fear not, Hobbit-fans. You have not been left out of the speech! J. R. R. Tolkien is this phrase's progenitor. In The Fellowship of the Ring, Gildor Inglorion declares that, 'Courage is found in unlikely places.'
7) 'And to encourage a renewed spirit of national service for this and future generations, I ask this Congress to send me the bipartisan legislation that bears the name of Senator Orrin Hatch as well as an American who has never stopped asking what he can do for his country -- Senator Edward Kennedy.'
The third Kennedy reference of the night, this one a double. Obama again alludes to John F. Kennedy's famous inaugural '[A]sk not what your country can do for you -- ask what you can do for your country' to describe Senator Kennedy.
8) 'The only way this century will be another American century is if we confront at last the price of our dependence on oil and the high cost of health care; the schools that aren't preparing our children and the mountain of debt they stand to inherit.'
Time founder Henry Luce 1941 coined the term 'American Century' in a February 1941 editorial in Life Magazine (which he also founded). Notably, the article called for the United States to take its place as the world leader and transform the international system by spreading 'American principles.'
9) 'As we meet here tonight, our men and women in uniform stand watch abroad and more are readying to deploy. To each and every one of them, and to the families who bear the quiet burden of their absence, Americans are united in sending one message: we honor your service, we are inspired by your sacrifice, and you have our unyielding support.'
In the most oddball of the contributions of the speech, this line originates from the Australian pop band The Guild League on their album, Inner North: 'The shirtless sky, the burning bricks. The quiet burden of your absence.' I'll put down money that this song is on the Ipod of Obama's twenty-seven year old speechwriter, John Favreau.
10) 'And if we do -- if we come together and lift this nation from the depths of this crisis; if we put our people back to work and restart the engine of our prosperity; if we confront without fear the challenges of our time and summon that enduring spirit of an America that does not quit, then someday years from now our children can tell their children that this was the time when we performed, in the words that are carved into this very chamber, 'something worthy to be remembered.''
This line quotes Daniel Webster's Bunker Hill Monument speech of 1825: 'Let us develop the resources of our land, call forth its powers, build up its institutions, promote all its great interests, and see whether we also, in our day and generation, may not perform something worthy to be remembered.'
(Via Huffington Blog.)
Robert Scheer: Getting Warmer: "We are lucky to have Barack Obama as president. I write that even though I believe the content of his Tuesday evening speech deserved no more than a B+/A-, for its failure to seriously address the origins of the banking crisis and for only hinting at the severe military budget cuts required to get close to his goal of reducing the federal deficit by the end of his first term.
But first the positives, which were stunning, and I am not referring only to his superb delivery, which thankfully is logical and informed and inspires without pandering. The one truly memorable, historically significant line -- unfortunately desperately needed because of the shameful actions of his predecessor -- was: '... I can stand here tonight and say without exception or equivocation that the United States does not torture.'"
(Via Huffington Blog.)
Why American Industry (and its Future) Matters: "Holstein is using GM as a symbol for whether it makes sense for the U.S. to bother with manufacturing. That might sound odd for a country that for now probably remains the world’s largest manufacturing economy. But Holstein argues that our political and financial leaders don’t get manufacturing, and don’t think it’s important. This is the crux of the Main Street vs. Wall Street debate, and it is shaping up as the core fight of economic policy over the next few years: do we get a justifiable return if we invest in making things, or should we focus on information-driven innovation?
Holstein seems to represent the argument that information-driven companies — such as financial services firms — simply cannot sustain our economy by themselves, and we must continue to be able to manufacture. In fact, he does directly argue that GM can now manufacture head to head with Toyota, and he might be right."
(Via Firedoglake.)
Obama Introduces Win-Win-Win Budgeting: "
The Times reports today that Obama and budget director Peter Orszag are'experimenting with'something'fairly new'in preparing their budget: honesty.
For his first annual budget next week, President Obama has banned four accounting gimmicks that President George W. Bush used to make deficit projections look smaller. The price of more honest bookkeeping: A budget that is $2.7 trillion deeper in the red over the next decade than it would otherwise appear, according to administration officials.
The new accounting involves spending on the wars in Iraq and Afghanistan, Medicare reimbursements to physicians and the cost of disaster responses.
But the biggest adjustment will deal with revenues from the alternative minimum tax, a parallel tax system enacted in 1969 to prevent the wealthy from using tax shelters to avoid paying any income tax.
Its tough to'overstate how smart a move this is. For one thing, its'kinda helpful to have a budget that actually means something when youre debating public policy, so the substantive merits speak for themselves. But the politics of this are also inspired. Why not make the long-term deficit look as large as possible at the beginning of your term?'Not only can you fairly blame your predecessor at that point; the bigger'the deficit'looks, the easier it is to show progress, which Obama will need to do as he runs for re-election.'To take one'example, you cant claim savings from drawing down in'Iraq if you dont put Iraq spending on the budget in the first place (which Bush mostly didnt).
On top of which, everyone will rightly applaud your honesty and transparency, as Im doing here. Its as close to a no-brainer as you get in politics, which is why its utterly mystifying'that so few presidents have done it.'
The only downside is that reporters will be keen to bust you for hypocrisy if you fudge the numbers in 2012, which is when you have a real political incentive to do so.
--Noam Scheiber
"
(Via The Plank.)
Recession Economics - How Do We Repay the Stimulus Spree?: "In January, Suze Orman, the blonde financial adviser who's all over TV telling you to cut up your credit cards, went on 'Oprah' to discuss how to cope with the recession. Orman recommended not eating in restaurants for a month. The appalled National Restaurant Association pointed out that if every 'Oprah' watcher took this advice, it would cost 53,000 jobs.
"
(Via washingtonpost.com - Michael Kinsley (washingtonpost.com).)
I posted Leon Wieseltier's defense of liberalism earlier because it was elegantly written and because I think his logic is now irrefutable. We are entering a liberal era and I suspect it will get more ambitious as the economic crisis deepens. But in one respect, Leon was unfair to conservatism. Money quote:
Ronald Reagan, when he proclaimed categorically, without exception or complication, that 'government is not the solution to the problem, government is the problem,' was a fool.
But, of course, the most famous invocation of this formula - in the 1981 Inaugural - specifically did have an exception and complication. In fact, it had more than a complication, it had a context:
In this present crisis, government is not the solution to our problem; government is the problem.
Some conservatives have indeed forgotten that essential caveat, which rescues conservatism from a dogma into a temperament - and made it particularly effective against the deadly liberal buildup of the 1970s. But not all conservatives. And not Reagan:
Now, so there will be no misunderstanding, it's not my intention to do away with government. It is rather to make it work--work with us, not over us; to stand by our side, not ride on our back. Government can and must provide opportunity, not smother it; foster productivity, not stifle it.
Lebanese in Shock Over Arrest of an Accused Spy - NYTimes.com: ""
One of Mr. Jarrah’s cousins, Ziad al-Jarrah, was among the 19 hijackers who carried out the terrorist attacks of Sept. 11, 2001, though the men were 20 years apart in age and do not appear to have known each other well.Today in The Nation: COP on the Beat: "Christopher Hayes Tough love from the Congressional Oversight Panel involves ripping the Band-Aid--otherwise known as TARP--off the mortally wounded banking system.
"Someone said to me, You're describing ripping the Band-Aid off all at once, and we're saying how 'bout we just keep peeling the corners off a little at a time--ouchy, ouchy, ouchy--and maybe we can adjust as we go along," Warren tells me. "Sweden ripped the Band-Aid off all at once, and Japan took ten years. But the Band-Aid had to come off."
"Who are we trying to protect here?" she asks. "Is it a banking system that is in service to American families and the economy, or is it the American families and the economy in service to a banking system? I know what I think the answer should be."
(Via The Nation: Top Stories.)
re: Mortgage Bailout: "What's interesting, though, is that having $50 million less in the till would seem to make some of the more 'creative' approaches toward leveraging TARP funds to recapitalize the banks that much more difficult to accomplish. And it's certainly not going to be easy to get any further such appropriations through the Congress. Does this then imply that Obama and Geithner are tipping their hand in terms of steering toward some sort of nationalization plan on the banks?"
Bonus Bull: "P.T. Barnum may have coined the phrase 'There's a sucker born every minute,' but Wall Street titans have leveraged that principle and banked it in the Caymans. And don't think that the recent stimulus package provision aimed at reining in CEO compensation is going to stop them."
(Via MotherJones.com.)
Today in The Nation: Good Money After Bad: "Robert Scheer Obama's stimulus bill is far too modest to arrest an economy in free fall. But if it were up to the GOP, which largely created the mess, we'd be doing nothing at all.
"
(Via The Nation: Top Stories.)
Geithner’s Plan Seemed So Bad Last Week Because Geithner Did Not Really Have A Plan: "
he Washington Post has an extraordinary article today about why Tim Geithner’s press conference to unveil the administration’s bank rescue plan last week seemed to… suck? Is that the word? Well it wasn’t the plan, so much — as best we understood this vague monstrosity, it was something like, ‘Public private money tax blah blah uhhh force lending guarantee toxic gas blah blah blah uhhhhh TWO TRILLION DOLLARS,’ so fair enough — so much as it was Geithner himself, who appeared to have no confidence in himself, the plan, or America. The Post reports that this is probably because he had ditched a different plan a few days earlier, and what you heard at the press conference was just some unreadable gibberish he threw together on the john a few minutes before taking the podium.
Just days before Treasury Secretary Timothy F. Geithner was scheduled to lay out his much-anticipated plan to deal with the toxic assets imperiling the financial system, he and his team made a sudden about-face.
According to several sources involved in the deliberations, Geithner had come to the conclusion that the strategies he and his team had spent weeks working on were too expensive, too complex and too risky for taxpayers.
They needed an alternative and found it in a previously considered initiative to pair private investments and public loans to try to buy the risky assets and take them off the books of banks. There was one problem: They didn’t have enough time to work out many details or consult with others before the plan was supposed to be unveiled.
[...]
Meanwhile, the sources said, Obama’s senior economic advisers were hobbled in crafting the plan by a shortage of personnel. To date, the president has not nominated any assistant secretaries or undersecretaries at the Treasury, and the handful of mid-level staffers who have started work were still finding their offices and getting their building passes and BlackBerrys.
The Obama people probably had orders to leak this stuff to the Post as a way of telling Washington and the public, ‘just forget that thing Geithner did last week — he had no staff and was going nuts getting confirmed, right? — and in a few weeks we’ll start over with a well developed, confident and far-reaching new plan to destroy America.’
Geithner. We do not trust this guy very much. And we definitely don’t trust his little friend, Larry Summers, always sneaking, sneaking. These two are best friends with every leading asshole on Wall Street. Coincidentally, the New York Times has a cozy profile of Summers this morning in which both he and Geithner play down any notion that they’re waging ‘turf wars’ against each other. This is not the first time that these imaginary Summers-Geithner Intergalactic Wars have been treated with breathtakingly unnecessary detail. And yet we do not hear quite enough about what may be the actual ‘turf wars,’ with the Geithner-Summers team on one side and happiness on the other.
Late Change in Course Hobbled Rollout of Geithner’s Bank Plan [WP]
In a World Not Wholly Uncooperative, Obama’s Top Economist Makes Do [NYT]
Dan Solin: The Zenith of Congressional Hypocrisy: "
I was riveted by Harry Markopolos' testimony before the House Financial Services Committee about his unsuccessful efforts to alert the SEC to the Madoff scheme. Too bad that Jimmie Stewart is no longer available to play him in the inevitable movie.
Mr. Markopolos testified about what many of us already knew: The SEC is a captive of the industry it is supposed to regulate. At one point he stated: 'You could fly the entire staff of the SEC down to Fenway Park in Boston, have them spend the afternoon there, and they still couldn't find first base.'
The cruelest blow was reserved for FINRA which purports to be '...the largest independent regulator for all securities firms doing business in the United States.' Harry would '...give the SEC an A+ for incompetence and FINRA an A+ for corruption.'
The Committee then heard the pathetic testimony of SEC officials, who were like lambs led to the slaughter. The tension and outrage in the room was palpable.
Where's the hypocrisy?
Mary Schapiro, formerly the head of the 'corrupt' FINRA, recently was unanimously confirmed by the Senate as the new Commissioner of the SEC.
Ms. Schapiro has never seen a pro-investor regulation she did not shoot down. Under her tenure, FINRA ran a biased and rigged mandatory arbitration system which victimized investors who suffered due to broker misconduct. When academics sought access to arbitration data from FINRA, Ms. Schapiro refused to provide it. She knew what would be exposed in the broad daylight of public scrutiny.
Now that posturing for the cameras is over, it will be business as usual at the SEC.
"(Via Huffington Blog.)
From R.J. Matson at the St. Louis Post Dispatch. (click image for larger) Open Thread below...
(Via Crooks and Liars.)
Today in The Nation: Labor's Man Joins Treasury Team: "William Greider Ron Bloom, an I-banker with the head and heart of a union man, is tapped to advise the Treasury on the auto bailout. Let's hope they listen to him.
(Via The Nation: Top Stories.)
A Semi-Defense of Geithner: "In the last few days, two prominent financial columnists have suggested the reaction to Tim Geithner's speech last Tuesday was unfair. The Times Gretchen Morgenson says President Obama put Geithner in an impossible position with his persistent expectation-raising. Jim Cramer writes that the Geithner plan is fundamentally sound--it resists the temptation of nationalization, which would be a fiasco in practice, and has the potential to remedy the situation at a fraction the cost of the alternatives, like a 'bad bank.'"
(Via The Plank.)
Jane Hamsher: DC Journalists Love GOP Obstructionists, But Americans Don't: "There appears to be a pretty big gap between what DC journalists think Americans think, and what Americans actually think. No better example of this can be found than the 'winners' and 'losers' that DC media are proclaiming in the wake of the passage of the stimulus bill, and what DailyKos/Research 2000 polling on the subject indicates."
(Via Huffington Blog.)
Historians rank Bush in the top 10 of America’s worst presidents.: "
Today, C-SPAN released its second Historians Survey of Presidential Leadership, in which ‘65 presidential historians ranked the 42 former occupants of the White House on ten attributes of leadership.’ Coming in first was Abraham Lincoln, followed by George Washington, Franklin D. Roosevelt, Theodore Roosevelt, and Harry Truman. Finishing last was James Buchanan. George W. Bush came in 36th, just beating out Millard Fillmore, who ranked 37th. A look at how historians judged Bush on measures such as his ‘economic management’ and ‘moral authority’:
Looks like Sen. Joe Lieberman (I-CT) was wrong when, in 2007, he predicted that Bush’s ‘ratings among the historians will be greater than his ratings in the polls today.’
"(Via Think Progress.)
Anthony Citrano: An Opportunity For President Obama: Change America's Status Quo on Drug Policy: "As the Great Depression ravaged our society in the 1930s, we came to realize that alcohol prohibition was creating more problems than it solved. A perfect parallel, the War On Drugs is socially, morally, and economically unsustainable, and the time has come to end it."
(Via Huffington Blog.)
Robert Kuttner: Obama's Next Challenge: "Unemployment is increasing at an accelerating rate. It is very likely to be in double digits by summer. A second stimulus package, at least as large as the first, will be needed later this spring. And the politics will be even uglier. Republicans will point to the worsening economy and declare, 'See, it didn't work.'"
(Via Huffington Blog.)
Wheels Turning: "There was a very odd moment on This Week this morning when Rep. Maxine Waters (D-CA) and Sen. Schumer (D-NY) both said they opposed bank nationalization only to be followed by Sen. Lindsey Graham (R-SC) who said that, painful as it is to contemplate, we need to seriously consider doing so."
(Via Talking Points Memo.)
The War On Terror Is A Hoax: "The 'war on terror' is a hoax that fronts for American control of oil pipelines, the profits of the military-security complex, the assault on civil liberty by fomenters of a police state, and Israel's territorial expansion."
(Via Populist Party .)
Ann Pettifor: Blaming the Victims: Heroic American Consumers: "Decision-makers in government and at the Fed, seduced by their economic theories -- decided that it would be better and more profitable if Americans stopped producing and making things. They argued that there was no harm in the United States relocating 4.5 million jobs abroad -- mainly to China -- between 2001 and 2009. US workers could switch to service jobs such as hairdressing, retail and real estate -- with long working hours."
(Via Huffington Blog.)
Alexander Cockburn: On the Rocks: "Obama’s Treasury Secretary Tim Geithner tried to sell his bank bail-out plan earlier this week. He deservedly drew an F because in his mumbled prospectus he conceded he didn’t actually have a plan, but was toiling night and day to come up with one. Markets duly plunged. In outline, the prospective trillion-plus plan has the usual forced perspective of a banker, whose idea of rescue is to lend people money, thus drowning them in even more debt. Americans don’t need more debt. They need debt relief."
(Via CounterPunch.)
Dale Gieringer: The Opium Exclusion Act of 1909: "Seen in retrospect, drug prohibition ranks as one of the great man-made disasters of the 20th century. "
(Via CounterPunch.)
Today in The Nation: Cut the Military Budget: "Barney Frank Americans are far more threatened by cuts in Social Security and Medicare than the cancellation of ineffectual weapons systems.
It is possible to debate how strong America should be militarily in relation to the rest of the world. But that is not a debate that needs to be entered into to reduce the military budget by a large amount. If, beginning one year from now, we were to cut military spending by 25 percent from its projected levels, we would still be immeasurably stronger than any combination of nations with whom we might be engaged.
(Via The Nation: Top Stories.)
FT.com / UK - China to stick with US bonds: ""
Luo Ping, a director-general at the China Banking Regulatory Commission, said after a speech in New York yesterday that China would continue to buy Treasuries in spite of its misgivings about US finances.(Via Financial Times.)
Where's The Outrage?: "Despite the downward economic spiral, there is no clear plan to pull us out. Dan Rather on why he's finally getting angry about it.
In this week of seismic economic news, I had the opportunity to talk to one of the very few people who seems to..."
Israel's Angry Elections - TIME: "It will be much harder now for the U.S. to continue its unambiguous support if Israel's government prominently features a blatantly anti-Arab party. The ripples of Israeli intolerance will reverberate through the Middle East. It will make cooperation with Israel more difficult for moderate neighbors like Egypt and Jordan; it would make reconciliation with Israel impossible for Syria and Saudi Arabia.
There is an alternative, of course: a centrist coalition of Kadima, Likud and Labor. But that would require some real moderation and common sense, qualities overwhelmed by weariness and resentment in Israel's dour winter of victory."
(Via Time.)
William K. Black: The Audacity of Dopes: "We are being played for chumps. The Bush and Obama plans could only have been designed by failed bankers -- for their principal beneficiaries are failed bankers. We already know enough to confirm that the Bush administration made us the 'fool' in the market by massively overpaying for assets. The Obama administration is about to compound that scandal with a 'guarantee' program. The bankers that caused the crisis designed both programs. The senior officers at big bank aren't very good lenders, but they are expert in maximizing their compensation."
(Via Huffington Blog.)
Peter Ferrara: Reaganomics vs. Obamanomics: "The current president wants higher taxes, more regulation, more spending and loose money.
Robert Scheer: No Tough Love for Wall Street: "If like me you still get those chatty e-mails from the Obama campaign, it is time to remind them that we voted for the caring community organizer from the streets of Chicago and not some hack carrying water for the predators of Wall Street."
(Via Huffington Blog.)
Johann Hari: Obama Must End the War on Drugs -- or Mexico and Afghanistan Will Collapse: "Which country was just named by the US Joint Chiefs of Staff as the most likely after Pakistan to suffer a 'rapid and sudden collapse'?
Most of us would guess Iraq. The answer is Mexico. The death toll in Tijuana today is higher than in Baghdad. The story of how this came to happen is the story of this war -- and why it will have to end, soon."
(Via Huffington Blog.)
Phil Bronstein: Obama and the Press Play Wiffle Ball While Americans Strike Out?: "
During his second take-it-to-the-people appearance this morning in Ft. Myers, Fla, President Obama mentioned that 'last night, I addressed the nation...'
Really? And all along I thought that was supposed to be a press conference, not a speech. But, while every president has tried to use every public forum to make points, the president's first official face-off with the White House press corps was another swoon in the fascinating, often collaborative drama of the new no-drama-Obama world.
(Via Huffington Blog.)
Is there intelligent life in Washington, DC? Not a speck of it. The US economy is imploding, and Obama is being led by his government of neconservatives and Israeli agents into a quagmire in Afghanistan that will bring the US into confrontation with Russia, and possibly China, American’s largest creditor. FULL ARTICLE
(Via Populist Party .)
Columns: Letters at 3AM - The Austin Chronicle: ""
Fact: At present, the dollar is, in effect, backed by China – an increasingly reluctant China. Every dollar we print is a prayer that China won't turn us away. "The value of outstanding American Treasury bills now reaches $10.6 trillion. ... Worry centers on the possibility that foreigners could come to doubt the American wherewithal to pay back such an extraordinary sum" (The New York Times, Dec. 28, 2008, p.WK1). How will a country that's lost its manufacturing base pay back $10.6 trillion and counting? It is not possible. When the world faces that fact is when our troubles really start. What's happened so far is mere rehearsal.(Via The Austin Chronicle.)
The Old Banks Are Busted, Why Not Create New Ones?: "
Stanford economist Paul Romer unveils an innovative credit-crisis fix in todays Journal:
The government has $350 billion in Troubled Asset Relief Program (TARP) funds that it can use to encourage new bank lending. If this money is directed to newly created good banks with pristine balance sheets, it could support $3.5 trillion in new lending with a modest 9-to-1 leverage. Right out of the gate, the newly created banks could do what the Fed has already been doing -- buying pools of loans originated by existing banks that meet high underwriting standards. ...
If the government lets new banks provide the new lending that the economy needs, it could return to clearly stated and familiar policies for bank regulation. The government could announce that it will not invest any new capital in a troubled bank that it hasnt yet taken over. Nor will it offer troubled banks any transfers or implicit subsidies. It can stick to a policy of assigning accurate values to assets as new information comes in. It can follow the usual FDIC procedures for protecting depositors and taxpayers and for deciding when to take over a distressed bank, and managing careful workouts that avoid the turmoil that a Lehman-style bankruptcy proceeding can cause.
Im not sure how'easy it is'to simply set up a handful of new banks--seems like the practical complications are potentially endless. At the very least it would probably take longer than would be ideal. But, analytically, this doesnt seem that different from taking over a handful of banks, capitalizing them well, and letting them get on with the business of lending, while treating the remaining banks as Romer suggests.
--Noam Scheiber
(Via The Plank.)
The Sausage Emerges: "
The looming financial reform package must be seen as part of the rescue. If Obama can find a center for serious long-term entitlement reform, then the long-term consequences of more debt in the stimulus bill will be drastically mitigated. Again, true fiscal conservatives will focus on entitlement reform as the balance to this bill - not stupid posturing over trivial issues like pork.
Ross on the stimulus:
It's certainly possible to imagine - and hope for, from this administration - a liberalism that's more pragmatic and evidence-based than was George W. Bush's conservatism. But the debates that have dominated the first two weeks of the Obama Presidency ought to be an object lesson in why ideological preconceptions always matter, no matter how empirically-minded you aspire to be.
Ideology is also easier.
Steve Rosenbaum: "Stimulus? The Dollar Is Toast" Says Harvard MBA Juan Enriquez: "Said Enriquez: 'We're living in a debt crisis not a liquidity crisis. The fundamental problem is too much debt. And now we're adding debt and adding debt and adding debt. We're adding that debt in places that are not going to generate more jobs or economic output.'
What is critical here is to know that Enriquez isn't preaching pop-economics. Rather, he's presenting a deeply analytical and carefully researched argument. And with his triple threat background in business, economics, and science - he's got the processing power to actually lay out a cool and calculated argument that bears investigation. In his view, the stimulus is going to pour gasoline on the fire. Otherwise, in his words: 'the Dollar is toast.'"
(Via Huffington Blog.)
Edging towards a depression.: "
The current recession that the United States economy finds itself in is, by far, dramatically worse than the recessions of 1990-91 and 2001. How much worse? The economy has lost 3.6 million jobs in the last 13 months. The Gavel compares these numbers to the two most recent recessions:
(Via Think Progress.)
As the senate version of the economic recovery package makes its way through Congress, a significant (though misguided) criticism of the package from Senate Republicans is that it is ‘too big.’ For example, Senate Minority Leader Mitch McConnell (R-KY) claimed, ‘from the very first moment of this debate, there’s been strong bipartisan agreement on one thing: the original version of this bill was too big.’
Similarly, Sen. Lindsey Graham (R-SC) lamented, ‘[T]his bill spends far too much,’ while Sen. Jon Kyl (R-AZ) said, ‘It’s very wasteful…if you throw in the interest it’s about $1.3 trillion.’ Sen. Jeff Sessions (R-AL) called passing such a large package this week ‘just unthinkable.’ Watch a compilation of these and other complaints about the size of the package:
Such objections are indeed ironic coming from some of the greatest advocates for President Bush’s $1.35 trillion tax cut package in 2001. Indeed, when Bush introduced his tax cuts he declared, ‘A warning light is flashing on the dashboard of our economy, and we just can’t drive on and hope for the best. We need tax relief now.’ The Republicans who now call the $800 billion recovery package ‘too big’ jumped on the Bush bandwagon claiming his $1.35 trillion in tax cuts were just what was needed to jump start a sluggish economy:
Kyl: ‘I was there when the president signed into law the tax cut. … [I]f that isn’t one of the best things we can do to get this economy going again, then it seems to me that the American people might well lose confidence in what we’re doing, which would be the worst thing to do for the economy.’ [Finance Committee Hearing, 10/3/2009]Ensign: ‘Well, I don’t know that we’re going to get to the — you know, the total $1.3 trillion tax cut. I do think the tax cuts are necessary right now.’ [CNN, 1/3/01]
Graham thought the cuts were so effective he wanted to make them permanent. But the tax cuts they championed proved to be extremely ineffective, leading to the slowest period of economic growth in decades.
If you compare the condition of the economy in 2001 to the current state of the economy, the numbers show that those who now call the recovery package too big, were willing to spend far more when the economic situation wasn’t nearly as precarious:
| 2001 | 2009 | |
| Cost of package: | $1.35 trillion | $900 billion |
| Unemployment: | 4% | 7.6% |
| Percent of Population Living In Poverty: | 12.7% | 17% |
| Foreclosure Rates: | .48% | 1.19% |
| Americans Relying On Food Stamps: | 17 million | Over 30 million |
(Via Think Progress.)
Welcome America to Your Sizzlin’ Larry Summers Shitburger: "Instead of taking a single approach, the Obama administration plans to divide assets and other loans into three categories, each with its own solution, according to sources familiar with the discussions, speaking on condition of anonymity because the details are not finalized.
The government would buy and hold on to those assets whose falling prices are putting banks under the most pressure. Officials want to limit these purchases because of the vast expense.
The centerpiece of the plan would be a guarantee to limit losses on a second group of troubled assets that can be kept by the banks because they have more stable prices.
And it would allow banks to retain and profit from their healthiest assets.
Which means you, America, get shit. Do you get to have better healthcare, more public transit, clean air, better schools or more jobs if the banks you've invested so heavily in make money?
No! The bankers who built this shitpile get to keep that. You just get the losses."
(Via Firedoglake.)
Robert L. Borosage: Bank On It No More: "Why is Washington filled with faux populist promises about curbing bonuses, capping executive pay, forcing banks to lend, even as the managers that drove the banks off the cliff are still keeping their jobs, collecting their paychecks and issuing their bonuses and dividends?
One reason might be that these same bankers and financiers are leading donors to both political parties. Thus far, they've been getting an amazing return on investment with a few million in political contributions yielding hundreds of billions to keep them breathing."
(Via Huffington Blog.)
Stiglitz: Bad Bank? Bad Idea: "
Another Nobel Prize-winning economist checks in! Joseph Stiglitz echoes Krugman on the idea of establishing a so-called bad bank, in which the federal government would subsidize toxic assets:
Feb. 1 (Bloomberg) -- Nobel laureate Joseph Stiglitz said any decision by President Barack Obama to establish a so-called bad bank to rid financial companies of toxic assets risks swelling the national debt.
Obama’s administration is moving closer to buying the illiquid assets currently clogging bank’s balance sheets and preventing them from boosting lending, people familiar with the matter said this week.
That amounts to swapping taxpayers’ ‘cash for trash,’ Stiglitz said yesterday in a panel discussion at the World Economic Forum in Davos, Switzerland. ‘You shouldn’t chase good money after bad. We’re talking about a national debt that’s very hard to manage.’
Stiglitz, a professor at Columbia University in New York and a former adviser to President Bill Clinton, says the plan would leave taxpayers paying for years of excess lending by banks. It would also deprive the government of money that would have been better spent shoring up Social Security, he said.
(Via Crooks and Liars.)
Senate GOP’s ‘stimulus plan’ costs 3.5 times as much as Obama’s.: "
This morning, Senate Minority Leader Mitch McConnell (R-KY) said that President Obama’s recovery package, priced at roughly $819 billion, is too expensive. GOP ‘members’ believe that they can pass a ‘very robust’ stimulus at a cheaper price.
But McConnell’s cheaper plan doesn’t exist. Sen. Jim DeMint (R-SC) is pushing the Senate GOP’s only alternative, ‘American Option: A Jobs Plan That Works.’ A new Wonk Room analysis finds that DeMint’s plan will cost $3.1 trillion over ten years, more than 3.5 times the cost of Obama’s:
Not surprisingly, DeMint’s plan consists of permanent tax breaks for corporations and lowering income tax for the wealthy. For the Senate GOP, it seems that deficit spending is permissible as long as it is done via tax cuts for the rich.
(Via Think Progress.)
Obama Financial Team to Taxpayers: You’ll Get Nothing, and Like It: "
As a business person, Warren Buffet quite rightly wanted something for his money when he bought up failed banks that couldn't get help anywhere else. In fact, he wanted a lot. He expected to have the ability to make sure the same crooks executives weren't pulling down the same salaries for making the same mistakes, and that the business plan changed. It was pretty basic, a bedrock principle of capitalism, the ability to exercise control appropriate to one's share of ownership.
We're about to buy ourselves some failed banks, but we can't get what Warren Buffet gets because nobody wants to mention the 'n' word, nationalization:
One part of that strategy will be addressing the toxic assets that are clogging lenders’ balance sheets and preventing them from expanding credit, people familiar with the matter said last week. Likely approaches include a government-run bad bank to buy and hold some of the securities, and insurance of other assets that remain on banks’ books.
As Dean Baker says, 'many, if not most, of our banks are in fact bankrupt... the scope of the toxic asset 'problem' has reached $2 trillion... this sum vastly exceeds the capital of the banking system.'
But our money somehow isn't as good as Warren Buffet's -- all we get for it is the 'toxic assets':
[T]he Obama administration is looking to hand taxpayer dollars to the banks through a variety of complex mechanisms. The main reason for using complex mechanisms (rather than simply seizing bankrupt institutions) seems to be to conceal the fact that we are handing taxpayer dollars to bank shareholders and the wealthy executives who run them.
Krugman calls it 'lemon socialism': 'taxpayers bear the cost if things go wrong, but stockholders and executives get the benefits if things go right.' Or as Joseph Stiglitz says, it's 'trash for cash.'
It's almost inconceivable that anyone would try to sell this as a good deal for taxpayers, but that's where we are. Krugman:
‘We have a financial system that is run by private shareholders, managed by private institutions, and we’d like to do our best to preserve that system,’ says Timothy Geithner, the Treasury secretary — as he prepares to put taxpayers on the hook for that system’s immense losses.
Meanwhile, a Washington Post report based on administration sources says that Mr. Geithner and Lawrence Summers, President Obama’s top economic adviser, ‘think governments make poor bank managers’ — as opposed, presumably, to the private-sector geniuses who managed to lose more than a trillion dollars in the space of a few years.
And this prejudice in favor of private control, even when the government is putting up all the money, seems to be warping the administration’s response to the financial crisis.
So Ronald Reagan tells us that government is the 'problem,' and George Bush proves it's true by running the country into the ground. What that really means is that you should never put people in charge of something who philosophically don't believe that it's possible to do their jobs well. It doesn't mean we should be making irrational business deals out of a commitment to the failed ideologies of people who, you know, failed.
We're paying to nationalize the banks all right, we just can't talk about it -- nor can we profit from it -- because the very idea is 'socialist' and sits firmly within Jay Rosen's 'sphere of deviance.'
According to Rebecca Christie at Bloomberg, they'll try to put a few band aids on the bill limiting executive 'pay' (not compensation) and dividends, and require banks to step-up lending. But when Timothy Geitner appears before the Senate Banking Committee on February 10, or the House Financial Services Committee shortly thereafter, don't expect anyone to be offering the Americans footing the bill for this deal anything other than the unwanted detritus of the banks. Our representatives don't think we deserve to get for our money what Warren Buffet gets for his.
If his banks make money, Warren Buffet makes money. He gets to be richer and his shareholders get to be richer. If our banks get richer, we don't get to have the schools and green energy and healthcare and SUPERTRAINS that the profits could (and should) pay for -- that goes to fois gras and Cristal and Gulf Stream jets for the bankers who created this mess. We just get to keep a big pile of shit. Because suggesting anything else is 'deviant.'
(Via Firedoglake.)
