Wednesday, December 31, 2008

Michael Tomasky: Welcome to America's hall of shame

At the British news (paper? foundation?) organization, the Guardian, Michael Tomasky: Welcome to America's hall of shame.

It is an interesting exercise, as the country struggles to throw off the corrupt and incompetent elite, who, at least theoretically, have been ousted from domination of some of the constitutional offices of political power.

The Perfect Storm came, brought political change, and now we are trying to write the moral of the story, the lesson to be learned.

It is telling that this column appears in a British publication, and an independent, non-profit one, at that, rather than an American outlet.

Moral Clarity

The Israeli attacks on the Gaza Strip have become an interesting feature of the interregnum, when there's no American President to restrain Israel from ill-considered violence. At the heart of the Israeli justification for its attacks is an echo of the Bush Doctrine, and righteous insistence that what it is doing is morally justifiable, even if the results are gruesome and the strategic rationale is hard to find.

The fundamental derangement of moral analysis of foreign policy and war policy, that Bush brought to full flower, and which was greeted by his supporters as a refreshing "moral clarity" is getting a much needed critique, now, with Israel filling the role of proxy for the U.S.

I'm feeling under the weather (bad cold), so I'm going to be lazy about this, even though I think I ought to be ambitious in documenting what I take to be a very hopeful trend, in advance of the coming to power of a new, more liberal American Administration.

To represent the range of viewpoints, viewpoints I regard as somewhat morally confused, at best, I offer David Bernstein: "Boy, am I already getting tired of hearing this. The basic claim is that since the thousands of rockets that Hamas has lobbed into southern Israel have caused relatively few death and injuries--just some deaths and injuries, along with massive panic, children living in bomb shelters, thousands of shock victims, etc.--Israel has no right to respond with overwhelming force." David, a denizen of Volokh Conspiracy is fairly vicious, but he's bright and mostly rational. Somewhat to his left, Jonathan Zasloff at The Reality-Based Community has the same basic moral hangup, which is Hamas intransigent hostility to Israel's existence.

George Washington's warnings and U.S. policy towards Israel - Glenn Greenwald -

Matthew Yglesias » Problem Solvers:
. . . throwing up our hands and saying “it’s too hard!” isn’t an option. We can decide we don’t want to be involved, which would mean unwinding the ties of collaboration and assistance between the US and Israel, or we can try to play a constructive role in bringing an end to the conflict. I’m not personally sure of how you do that. But I’m quite certain that the first step would be pressing Israel — hard — to stop expanding settlements in the West Bank and start dismantling them. To show to Palestinians interested in a two-state solution (perhaps including some Hamas people or perhaps not) that there’s credibility on the other side. I think Israelis wouldn’t welcome such action by us, but ultimately it would be in their own best interests. On the other hand, those who really do think the best thing for the United States is to just wash our hands of the whole mess have an obligation to really stand behind that belief and urge us to wash our hands of the situation. But just proclaiming a pox on both houses while in practice heavily subsidizing one side isn’t a viable option.

EzraKlein | The American Prospect goes right to the core of moral clarity:
the intellectual clarity of the distinction is so far from the lived experience from the Palestinians as to be meaningless. He says Hamas would kill more children if they could. The Palestinians say the Israelis kill more children. Which is why Israel's attack on Gaza was so unwise. The Palestinians just watched the Israelis slaughter dozens of children, mothers, and other innocents. Protestations that they deserved it because Hamas threatens to kill Israeli innocents will not make sense to them. And so the battle will continue, with Israel's supporters comforting themselves by looking at Hamas's stated intentions and Hamas's supporters justifying themselves by pointing towards the fresh graves of their dead. I don't know how you reconcile the interests of a threatened nation with an occupied one. But you have to start by recognizing the lived experience on both sides, not just one.

This is such an important issue, I wish I was a better blogger, and healthier at the moment, so that I could pull together better this critically important discussion.

Saturday, December 27, 2008

Lesson of the Day: Stop Being Stupid -

Bob Herbert - ". . . we should stop squandering the nation’s wealth on unnecessary warfare overseas and mindless consumption here at home and start making sensible investments in the well-being of the American people and the long-term health of the economy."

Saturday, December 20, 2008

Could that really happen again?

Leonard Downie Jr., executive editor of The Washington Post for 17 years, through the Clinton Administration and most of the Bush Administration, recites, "If". Or something equally clueless. Could We Uncover Watergate Today? -
" . . . two young local reporters chasing hunches and scraps of information about a criminal conspiracy involving the highest officials in government, including the president? Could that really happen again?

There's no reason why not, even though so much has changed since 1972. New technology actually makes investigative reporting somewhat easier. We can now use computers and the Internet to search records and other information, and we can use pre-paid cell phones for conversations with confidential sources. Of course, an administration under siege would also have more sophisticated resources for investigating leaks and marshaling counter-attacks in the news media and the blogosphere.

Reporters working today on a story such as Watergate would be unlikely to be left relatively alone, along with their sources, for as long as Bob and Carl were. Now, from day one, the story would be all over the Internet, and hordes of reporters and bloggers would immediately join the chase. The story would become fodder for around-the-clock argument among the blowhards on cable television and the Internet. Opinion polls would be constantly stirring up and measuring the public's reaction.

So the conspiracy and the cover-up would unravel much more quickly -- and their political impact would probably be felt much sooner. Nixon was re-elected five months after the burglary in 1972, and Watergate was not much of an issue during the campaign. That would not happen today.

In an age when the media have been turned upside-down by the biggest shifts in audiences and economic models since the advent of television, my two biggest questions about whether we could still pursue a story like Watergate center on resources and verification. Many Americans, including opinion leaders in Washington and elsewhere, simply didn't or wouldn't believe The Washington Post's reporting about Watergate during its early months -- not until we were joined by the New York Times, Newsweek, CBS News, Judge John J. Sirica, the Senate Watergate committee and the special Watergate prosecutor.

In today's cacophonous media world, in which news, rumor, opinion and infotainment from every kind of source are jumbled together and often presented indiscriminately, how would such an improbable-sounding story ever get verified?

As newsrooms rapidly shrink, will they still have the resources, steadily amassed by newspapers since Watergate, for investigative reporting that takes months and even years of sustained work."

The News Media was handmaiden to the bogus Whitewater scandal, right through impeachment, and completely deaf to one huge Bush scandal after another. Words fail me.

The Rise (and Fall?) of Rove's Republic

Very much worth reading, to put the last twenty years, and maybe the next, in perspective.

Stirling Newberry: The Rise of Rove's Republic

Thursday, December 18, 2008

The Dollar Crashes?

Jerome a Paris: "we're getting overwhelming evidence that the 'success' of the Anglo economies in recent years was counterfeit, that GDP growth was fake (even if its increasingly unequal sharing was very real), and that a lot of dollar-based and pound-based value is dubious."

There's some dispute about whether the dollar is really crashing, now. I have my doubts, but little expertise, so I will shrug my shoulders. But, the hard reality is the prosperity of the American economy under Bush has been exposed as a total fraud. The days of the dollar as a reserve currency are numbered, and the risk of massive sloshing about of accumulated dollars and dollar securities is very real.

Wednesday, December 17, 2008


digby at Hullabaloo:
"The essential problem is that we all give the press the power to run our politics, both during campaigns and after. We applaud them when they go after those we hate and excoriate them when they go after those we like. And so does the other side. In the end, the media remain in the driver's seat, ginning up controversy and indulging their passion for worthless speculation and scandalmongering. We give them their power by not holding them to a common standard.

I'm as guilty of this as anyone, but I regret it. They are always going to be harder on Democrats than Republicans because there are corporate pressures as well as institutional and social pressures to do so. And frankly, DC Dems just don't have the killer instinct or the establishment clout to put the same kind of "pressure" on the press as the Republicans do. Until the press is reformed it remains an albatross around the neck of the American body politic."

The corporate Media, in all their hideous incompetence, were left unscathed by the fall of Bush in the election of 2008. They were left untouched by the political storm that followed as a consequence of bad policy on every front in the Bush Administration.

The Media were at fault in electing Bush (and defeating Gore). The Media were complicit in promoting the War in Iraq. But, more than anything else, the Media have prevented real scandal and moral outrage from having more of a political effect.

Media reform is critical to the country having a functional political discourse.

Tuesday, December 16, 2008

Finding the exit

James Hamilton:
"Why does this matter for what we do next? One view of the current situation is that the core problem at the moment is that consumers are too frightened to spend and banks too hamstrung to lend. If that was your view, you might think that the goal of policy is to spur households back into borrowing and banks back into lending. . . . my reaction is that it's neither feasible nor desirable to return to the . . . the low saving and high leverage that we saw in 2005, [which] were an anomalous departure from the likely sustainable steady-state values, and there will be no road that leads back to those from here.

If that's the case, then resuming economic growth requires replacing spending on consumption and residential fixed investment with nonresidential investment and net exports. But charting a course for how to get there is profoundly challenging-- what firm would want to invest in the current environment, and which country is in a position to increase their purchases from us?

So Plan B, at least in the interim, would seem to be an increase in the fraction of GDP devoted to government investment."

Not being able to return to the status quo ante leaves macroeconomic policy with no easy, conventional path forward. It's an ugly world, as Nouriel Roubini points out:
"The latest macroeconomic news from the United States, other advanced economies and emerging markets confirm that the global economy will face a severe recession in 2009. In the United States, the recession started in December 2007, and it will last at least until December 2009 -- the longest and deepest U.S. recession since World War II. By the time it is over, the cumulative fall in gross domestic product could easily exceed 5 percent. . .

With a global recession and fall in aggregate demand a near certainty, deflation -- rather than inflation -- will become the main concern for policy-makers. Rising unemployment rates will cap wage and labor costs, and further falls in commodity prices -- already down 30 percent from their summer peaks -- will only add to these deflationary pressures.

Policy-makers will have to worry about a strange beast called "stag-deflation" -- a recessionary combination of economic stagnation and deflation. . . .

Likewise, with household consumption and business investment collapsing, governments will soon become the spenders of first and only resort, stimulating demand and rescuing banks, firms and households. The long-term consequences of the resulting surge in fiscal deficits are serious. If the deficits are monetized by central banks, inflation will follow the short-term deflationary pressures. If they are financed by debt, the long-term solvency of some governments may be at stake unless medium-term fiscal discipline is restored.

Nevertheless, in the short run, very aggressive monetary and fiscal policy actions -- both traditional and nontraditional -- must be undertaken to ensure that the inevitable stag-deflation of 2009 does not persist into 2010 and beyond."

Politically, the turnover among Senate Democrats brought about by Obama's cabinet appointments means that the 2010 mid-term elections have considerable potential to bring back the idiot Republicans back to power in short order, if they fall short thru timidity or other unwisdom.

As far as I can tell, the American People have, by a margin of 7% or so decided, after the unfortunate experiment with George W. Bush, to give liberalism (at least the weak tea version of centrist, plutocrat-friendly Democratic Party liberalism represented by Obama) its chance, but Plan B, being readied as an alternative by the Republicans is an ugly American fascism, where the poor, gay marriage, reality and logical thought are the enemy. Its a narrow window of opportunity, politically for what must be an economic policy of the long-term.

In that light, Free exchange at labels James Hamilton's advice as Do Not Resusitate, and offers this sage observation:
"[Hamilton's observations] would seem to get at the heart of the various stimulus proposals. Some would have the government cut taxes, in an effort to boost private consumption or investment. As Mr Hamilton notes, however, we don't simply want to return consumption to previous, unsustainable levels. And savings rates are already quite high; new private saving would simpy add more money to the piles of reserves sitting limply in bank vaults, held there by terrified lenders. And then there's infrastructure spending.

It's interesting; much of the comparison of different stimulus options has focused on multipliers. But that variable alone leaves important variables out, namely, the state of the economy upon recovery. It could be poised for additional, and painful, adjustments of lingering imbalances. Or it could be buoyed by long-term investments made while borrowing is cheap. This seems like something worth considering."

Monday, December 15, 2008

The Seven Deadly Deficits

Joe Stiglitz:
"The good news about today's bad economic news is that we're being forced to curb our material consumption. If we do it in the right way, it will help limit global warming and may even force the realization that a truly high standard of living might entail more leisure, not just more material goods.

The laws of nature and the laws of economics are unforgiving. We can abuse our environment, but only for a while. We can spend beyond our means, but only for a while. We can free ride on the investments made in the past, but only for a while. Even the richest country in the world ignores the laws of nature and the laws of economics at its peril."

What If the Analogy is Wrong?

Economist's View: Fed Watch: What If the Analogy is Wrong?: "the coming massive US policy response is a desperate attempt to maintain a global economic structure that is fundamentally broken."

Friday, December 12, 2008

Domestic Transformation

Charles Krauthammer:
"Obama has the political power that comes from a smashing electoral victory. It not only gave him a personal mandate. It increased Democratic majorities in both houses, thereby demonstrating coattails and giving him clout. And by running on nothing much more than change and (often contradictory) hopes, he has given himself enormous freedom of action.

Obama was quite serious when he said he was going to change the world. And now he has a national crisis, a personal mandate, a pliant Congress, a desperate public -- and, at his disposal, the greatest pot of money in galactic history. (I include here the extrasolar planets.)

It begins with a near $1 trillion stimulus package. This is where Obama will show himself ideologically. It is his one great opportunity to plant the seeds for everything he cares about: a new green economy, universal health care, a labor resurgence, government as benevolent private-sector "partner." The first hint came yesterday, when Obama claimed, "If we want to overcome our economic challenges, we must also finally address our health care challenge" -- the perfect non sequitur that gives carte blanche to whatever health-care reform and spending the Obama team dreams up. It is the community organizer's ultimate dream.
. . . .

With the country clamoring for action and with all psychological barriers to government intervention obliterated (by the conservative party, no less), the stage is set for a young, ambitious, supremely confident president -- who sees himself as a world-historical figure before even having been sworn in -- to begin a restructuring of the American economy and the forging of a new relationship between government and people.

Don't be fooled by Bob Gates staying on. Obama didn't get elected to manage Afghanistan. He intends to transform America. And he has the money, the mandate and the moxie to go for it."

Ordinarily, I regard Krauthammer as borderline insane, but, in madness there is truth, and we live in hope. Maybe he's correct this time. Let's hope so.

Thursday, December 11, 2008

Could Detroit Trigger a New Global Meltdown? - The Daily Beast

Steven R. Weisman - The Daily Beast: "Could Detroit Trigger a New Global Meltdown?"

Not an interesting article, really, and personally, I would be more worried about a domestic meltdown, but, yeah, a GM bankruptcy would be a devastating thing, with highly unpredictable knock-on effects in the present fragile economy.

Conventional Wisdom

Kevin Drum - Mother Jones Blog: Obama and Afghanistan: "This has now become conventional wisdom: the real problem is Pakistan. So far, however, in the same way that plans for rescuing General Motors rely mostly on handwaving about 'restructuring,' plans for solving the Pakistan problem rely mostly on handwaving about 'getting tough.' Unfortunately, hardnosed details on how this is actually going to work are pretty thin on the ground. If Obama wants public support for an escalation of the war in Afghanistan, his national security team better start providing those details pretty quickly."

The conventional wisdom on many of the country's problems is empty of critical thought. We've come to the point, where mere poses pass as policy advocacy. The parallel between Pakistan and General Motors covers a great breadth and depth of inanity.

It might be noted that the Bush Administration pretty much ignored both problems for eight years. Michigan has been in an economic depression for years. General Motors was losing buckets of money several years ago. And, Pakistan? Long before the "Axis of Evil" speech focused attention elsewhere, it was obvious that Pakistan was the principal source of nuclear proliferation, as well as the sponsor of the Taliban in Afganistan, among other sins.

But, the deeper problem, imho, is the complete absence of critical analysis and elementary fact verification in discussing these issues. It is all handwaving and dramatic poses -- that's all there is: attitude.

Presidents and the economy

One of the obstacles to accountability in politics is the adamant refusal of some pundits and academics to admit that politics has something to do with policy, and policy has consequences.

The increasing concern with income inequality has combined with the recognition that Democrats and Republicans are on opposite sides of a whole variety of issues that touch on income growth and stability. Duh.

But, progress in accepting reality runs up against strong prejudice in the form of what Andrew Gelman calls: "the general sense that presidents don't have much control over the economy"

\Gelman reflects on his own attitudes: "in 2006, I wrote, 'since 2000, we've returned to the general attitude that both parties have essential competence but have different goals. . . . we're used to thinking of presidents as fairly powerless surfers on the global economy, able to tinker with tax rates but not much more. . .' Things sure have changed in 2 1/2 years!"

Wednesday, December 10, 2008

Are Our Children Learning, Yet?

digby at Hullabaloo: "Democrats are working very hard to discredit the very concept of ideology in favor of technocratic competence. And I would guess most Americans find that to be something of a relief by now. But I think it's as much a mistake to sweep this under the rug as it is to let bygones be bygones on the torture regime. There is ideology and then there is ideology and people should know the difference. These dogmatic deregulators and market fundamentalists ran a decades long experiment that failed on an epic scale. If the country doesn't understand what went wrong here -- if they get confused by complexity and propaganda --- there is every reason that the free lunch mentality these ideologues promoted will make a comeback the minute we see the light at the end of the tunnel. Ideology matters." and the first Obama scandal

How tall was King Kong? Correct answer: 13.5 inches

We've just had the genuine perfect political storm -- the inevitable blowback from abysmally bad policymaking creating a political backlash against bad politicians and bad political ideas, complete with failed wars and a collapsing economy, not to mention successful terror attacks and failed response to natural diaster. Now comes the synthetic political storm -- the hollywood sound stage version, created in miniature, with a fictional script, but videotaped with dramatic music and voiceover narration.

digby at Hullabaloo examines the's plan for the first of the Obama scandals:
"There you have it. The call to 'release documents.' The anonymous Democratic backstabber. The Republicans insisting on keeping the prosecutor (as if anyone's suggested anything different.) The thinly veiled accusation of stone walling.

This story seems to have hit at a perfect moment, when the press and the country are bored with bad news. So, perhaps it really will have legs. It's hard for me to see that, but the press is reporting this as if they are innocent bystanders when they are the one's trafficking in rumor and innuendo, so I'm not quite as sanguine as I was yesterday.

The question will be if the new president's enemies have any ability to keep the press fed. In that regard, Fitzgerald is a poor choice. He doesn't leak. Not that it will stop them from making stuff up."

The is staffed by journalists, who first achieved professional prominence manufacturing Clinton scandals in 1996-97. So, this shouldn't be a surprise. But, we will rue the day that the perfect political storm of 2008 stopped short of sweeping away the corrupt, incompetent Media establishment.

Tuesday, December 9, 2008

Capitalist Fools!

Joseph E. Stiglitz learns from the Perfect Storm:
"Was there any single decision which, had it been reversed, would have changed the course of history? Every decision—including decisions not to do something, as many of our bad economic decisions have been—is a consequence of prior decisions, an interlinked web stretching from the distant past into the future. You’ll hear some on the right point to certain actions by the government itself—such as the Community Reinvestment Act, which requires banks to make mortgage money available in low-income neighborhoods. (Defaults on C.R.A. lending were actually much lower than on other lending.) There has been much finger-pointing at Fannie Mae and Freddie Mac, the two huge mortgage lenders, which were originally government-owned. But in fact they came late to the subprime game, and their problem was similar to that of the private sector: their C.E.O.’s had the same perverse incentive to indulge in gambling.

The truth is most of the individual mistakes boil down to just one: a belief that markets are self-adjusting and that the role of government should be minimal. Looking back at that belief during hearings this fall on Capitol Hill, Alan Greenspan said out loud, “I have found a flaw.” Congressman Henry Waxman pushed him, responding, “In other words, you found that your view of the world, your ideology, was not right; it was not working.” “Absolutely, precisely,” Greenspan said. The embrace by America—and much of the rest of the world—of this flawed economic philosophy made it inevitable that we would eventually arrive at the place we are today."

hattip to Mark Thoma and Economist's View

A National Disaster

CNN Senior Political Analyst Bill Schneider: "'An Obama job approval rating of 79 percent! That’s the sort of rating you see when the public rallies around a leader after a national disaster. To many Americans, the Bush Administration was a national disaster.'"

Hattip to Steve Benen

Monday, December 8, 2008

Trouble in the Obama Coalition

Obama's election was the climax of a process of political realignment in the U.S. Not so much a realignment of the Parties, as a realignment of the governing leadership.

The gradual morphing of governing coalitions is a constant in American politics. In 1992, Ross Perot stepped in from the center-Right and opened the door to Bill Clinton's President. Clinton was the last representative of the strategy of Democrats putting forward a relatively conservative, while Southerner to lead a Party that was increasingly liberal and non-white and culturally anti-Southern. Clinton was popular, but never got an electoral majority, and I am not one of those, who think Perot drew support from both Parties -- Perot drew away "independents" who would have voted Republican on election day, no matter what they may have told pollsters.

The 1994 Gingrich revolution was not just the triumph of the Republican Party, it signalled the triumph of the reactionary wing of the Republican Party. The post-WWII Republican Party was an alliance between conservatives and reactionaries, in which the reactionaries were mostly kept hidden. The experience of Goldwater in 1964 convinced many that the reactionaries were electoral poison, and, well in the 1970's and 1980's, a fair number of reactionaries were still voting Democratic for historical and cultural reasons. The "Southern Strategy" and the appeal to blue-collar, Irish-catholic "Reagan Democrats" gradually consolidated the reactionaries in the Republican Party. In the meantime, moderate, rational secular Republicans -- the realistic "liberal Republicans" like Nelson Rockefeller and Tom Dewey and moderates like Gerald Ford and Bob Dole, were becoming an increasingly extinct species. Gingrich's triumph signalled the ascendancy of reactionaries to the leadership of the Republican Party; the business wing stayed around to reap the benefits, but leadership in governance was in the hands of Tom DeLay, not Bob Michel.

The ascendancy of reactionary leadership in the Republican Party would continue, and was reinforced by the selection of George W. Bush as President, and Karl Rove's discovery that "the base" -- the authoritarian conservative Christian base -- could be motivated to vote in large enough numbers to win elections on the national level.

Governance in the U.S. since 1968, and even before, has been a "bi-partisan" affair. In FDR's World War II, bi-partisanship was national unity, and it was also a way to isolate the reactionaries and crazies, who were divided between the Parties. LBJ was still doing that to isolate the white supremacists in the Democratic Party, by working with liberal and moderate Republicans, to manage a centrist foreign policy and advance civil rights. Nixon and Reagan turned it around, and got into the habit of peeling off conservative Democrats in Congress to create majorities for conservative Republican economic programs. Bush enjoyed the support of corrupt, conservative Blue Dog Democrats.

Consigned to minority status, the Democratic Party became more purely ideologically liberal or progressive. But, the experience of Bush's Presidency, and its accelerating corruption and incompetence opened an opportunity to create a governing coalition in the Democratic Party, consisting of the progressive base, married to a moderate/conservative center. Obama was a master at cultivating an appeal to that moderate, secular pro-business segment of the political elite, which was disgusted with the Republican Right and ready to move into the Democratic Party.

The Democrats have a governing majority because the secular, rational, pro-business conservatives have moved into the Democratic Party from the Republican Party. And, because the liberals and progressives in the Democratic Party just managed to keep the Democratic Party a credible alternative to the Republicans, during the years when the moderates and conservatives in the Democratic Party were lending support to every crazy, stupid policy Bush proposed.

In other words, the Democrats, are, today, a governing Party coalition of liberals and progressives with moderate conservatives. Ideology in the Democratic Party is a two mode distribution. And, the Democrats got there, by, first, a long period in the wilderness, during which the progressive half of the Party was right about everything, preserving the Democrats as a viable alternative, despite the best efforts of Hillary Clinton and others to the contrary, and, second, by the willingness of principled, secular conservatives to migrate into the Democratic Party.

The struggle, now, is over who will lead in the dance between liberals and moderates in the Democrats' governing coalition. Will this be progressives leading conservatives? Or, moderates tolerating liberals along for the ride?

But, there are tensions.

Steve Hildebrand: A Message to Obama's Progressive Critics: "This is not a time for the left wing of our Party to draw conclusions about the Cabinet and White House appointments that President-Elect Obama is making. Some believe the appointments generally aren't progressive enough. Having worked with former Senator Obama for the last two years, I can tell you, that isn't the way he thinks and it's not likely the way he will lead. The problems I mentioned above and the many I didn't, suggest that our president surround himself with the most qualified people to address these challenges. After all, he was elected to be the president of all the people - not just those on the left."

Open Left:: Mandate Watch: Were Democrats Elected to Attack "The Left?" Part II:
"Most progressives questioning Obama have done so rather gently, and have done so on the pragmatic substance. For instance, people wondering about the appointment of Larry Summers to a top economic position in the White House have wondered whether it's such a good idea to empower an ideological free market fundamentalist (pro-free trade, pro-deregulation) whose policies as Bill Clinton's Treasury Secretary played a major role in creating the economic crisis. That is, most have wondered why Obama thinks that kind of ideologue is 'the most qualified person' to deal with our economic situation, rather than, say, a pragmatist like James Galbraith or Joseph Stiglitz who has been right all along."

Same thing for progressives concerned about the Iraq War. They have wondered whether the ideologues who got us into the war - who got us into the war on wholly ideological and non-pragmatic grounds - are really "the most qualified people" to get us out of that war. They believe that perhaps the pragmatists who opposed the war on the basis of a factual analysis of intelligence might be better suited to the task.

Are such questions really the inappropriate queries of a bunch of radical revolutionaries from "the left?" Or are the real fringe radicals - the real ideologues - those who say that we should all STFU and bow down to the Dear Leader? I think the latter, not the former - and I think Democrats (and especially the Obama team) who rightly protested Republican efforts to tar and feather Obama as a "socialist" should know better than to echo such silly, fact-free talking points. . . .

Last I checked, "the left wing of the Democratic Party" forced Democrats to take a stronger position against the war in 2006 and that was the key reason Democrats won Congress that year. Last I checked, "the left wing of the Democratic Party" has been the only voice in America that has been right all along in demanding more fair economic policies, an end to the war, better environmental laws, better diplomacy, etc. That is, as opposed to the Very Serious and Very Important D.C. elite who have been doggedly pursuing ideological ends, it has been "the left wing of the Democratic Party" whose policy demands have long been the most pragmatic, the most correct, and now not just positions held by those on "the left" but positions held by the vast majority of America.

Indeed, post-election polls suggest that because "the left wing of the Democratic Party" has been proven correct, Democrats are now in power.

digby at Hullabaloo on Hildebrand's letter: "Instead of writing a letter to, say, the actual people that are going to obstruct Obama's agenda, like the ones who will filibuster the auto industry rescue, Hildebrand finds it important to break up all gatherings of five hippies in a field. That's important to the survival of the nation. That's worth the effort."

TPM Election Central | Talking Points Memo | Top Obama Adviser Hits "The Left Wing Of Our Party" For Criticizing Cabinet Picks: "Really, one has to ask if Hildebrand is really trying to reassure 'the left wing of our party,' or whether he's trying to stir them up further out of some unknown political calculation or other. After all, many on 'the left' have also made Hildebrand's point: They've noted that Obama should be allowed to let his actual policies do the talking, while simultaneously asking completely legit questions about what his choices portend about the future direction of his administration. If merely asking such questions is enough to incite an attack on 'the left' from someone in Obama's inner circle, it seems reasonable to conclude that the motive here isn't to mend fences at all."

Sunday, December 7, 2008


Atrios links to Calculated Risk links to Charlie Rose interviewing Nassim Taleb: "Dr. Doom is an optimist!"

The basic message: "It is going to happen very quickly. It's going to be a lot worse."

Signs of the Apocalypse

In Hard Times, Is Best Buy’s Best Good Enough? -
“Out of this storm comes new operating models,” Mr. Dunn says. “The ecosystem is going to change. We see storefronts closing.”

For now, though, Best Buy has a potent weapon in its battle with the discounters and online sellers: its staff. Members of Best Buy’s sales staff, a k a “Blue Shirts,” go through a 20-hour training program, then spend two weeks shadowing an experienced sales staff member around the floor. Historically, the Best Buy training program has been so strong, some people in the industry say, that competitors often waited for Best Buy to let staff go after Christmas, and then snap them up.

Ms. Di Folco, the actress, says: “Most of the time, I find really informed people who can actually answer my questions. It’s like they seem to be electronic junkies versus kids wasting time at a part-time job they don’t enjoy.”

Its sales force may give Best Buy a competitive advantage even in a holiday season when many customers are interested in rock-bottom prices.

“The importance of the salesperson is directly related to the price of the product being sold,” says Chris Denove, vice president at J. D. Power & Associates, the consumer research firm. “If you’re talking about toothpaste or pencils, the salesperson is immaterial, but when you’re talking about high-end electronics such as flat screen TVs, the salesperson can be critical.”

20 hours of "training" is now an historically strong training program, and Best Buy's staff leads the industry. Good lord!

Wednesday, December 3, 2008

Into the Pit of Darkness

Econbrowser: The auto downturn is very serious: "The wrenching changes that might be immediately ahead could mark the beginning of a frightening new phase in the economic downturn."

Friday, November 14, 2008


Talking Points Memo reader: "Here is something progressives really need to address. On Sunday morning political shows, three Democrats are confirmed as guests: Carl Levin, Barney Frank, and Charlie Rangel. It's as if Democrats didn't just win huge electoral advances in the Presidential, House, and Senate elections. So we get the same thing we've had the past 8 years--republican hegemony on Sunday. Kyl? Check. Gingrich? Check. Steele? Check. Jindal and Shelby? Check and check? Just look at The Page for the whole list. When is the 'liberal media' going to give some of the oxygen to Democrats?"

The perfect storm of the election did not reach the Media. And, it is a serious problem. Tellingly, TPM doesn't put its own voice forward -- it uses "a reader" to make this point.

The corporate Media is a right-wing propaganda operation, which poisons the political discourse. This is a serious problem.

Is Your Money Safe?

Felix Salmon: "Is Your Money Safe at Citibank?"

If you have to ask . . .

Saturday, November 8, 2008

Truth and Consequences

James Wimberley:
"will Obama undo Bush's legacy and restore America to its previous prestige and hegemony?

No. . . .

Sometime around 1991, shortly before fairly amicable splitting up of Czechoslovakia, I found myself talking to a group of Czechoslovak university rectors. I hit on a metaphor for their moral condition: the folk tale of the Sleeping Beauty. She had been, like the countries of the Soviet empire, bound in lethargy and illusion by the spells of wicked magicians. The enchantment breaks, and the young woman wakes up. But she does not wake up to the world of her memories. Time is not cheated; the light of day is harsh; the world has changed, and is indifferent to her pathetic story. Her hope of survival and happiness depends on her accepting that there is no going back.

I think this applies to the USA today. George Bush and Osama bin Laden have between them blown the American moment of hyperpower glory. Relative decline was as inevitable as in 1945, but while Truman, Acheson, and Marshall delayed it by trading hard for soft power in a web of new global and transatlantic institutions, Bush and the neocons accelerated it by hubris and stupidity. Obama's administration will start with a lot of goodwill, but it should not mistake this for a willingness to put the clock back.

The always grandiloquent epithet "Leader of the Free World" now fails the giggle test. And Larry Summers would be a bad choice for a job that will involve a regular diet of humble pie.

After the Storm . . . another storm?

Hullabaloo: "this time, instead of a mere womanizing good old boy from Arkansas, we will have a president who these people literally believe is a foreign, barbaric, baby killing, communist, Muslim terrorist. They think the liberals have illegitimately taken over the political system and are literally endangering the country in order to force their foreign philosophy on Real Americans. They believe that violence is always the best way to deal with enemies, lest they live to fight another day. They are hoarding guns. You do the math."

The rump of the Republican Party -- especially in greater Appalachia and (the white-supremacist parts of) the Deep South -- notably including the Republican caucus in Congress -- is Stupid and Crazy. Shorn of the parental supervision usually provided by Responsible Rich, who have migrated to the Democratic Party, they will stand ready to resume Power as a neo-Populist fascism, and if Obama is killed, or makes some serious policy errors, they may just get the chance.

Tuesday, November 4, 2008

Matthew Yglesias » Beyond “Bias”

Dialectic lives in the blogosphere.

Below Matthew Yglesias and Kevin Drum discuss the perils and shortfalls of "objective" journalism:

Matthew Yglesias » Beyond “Bias”: "I don’t, for example, think I ever saw a television network or mass-media publication provide a cogent explanation of the differences between Barack Obama’s climate change proposal and John McCain’s climate change proposal even though the proposals contained some important differences. I have no idea whether this was attributable to “bias” or even how I would know. Nor am I sure which candidate would benefit from exploring this question. I am, however, sure that I’ve several times seen their plans described as being the same on the grounds that they’re both “cap and trade” plans. That’s false. Does the habit of saying it reflect bias? And bias toward whom? Who knows and who cares? What matters is the information — accurate information about important topics should be conveyed in a clear manner."

Kevin Drum - Mother Jones Blog: Cap and Fade: "The biggest difference between the two cap-and-trade plans, of course, is that Obama seems to actually believe in his proposal whereas McCain pretty plainly doesn't. For him, it's just window dressing that would almost certainly have been forgotten as soon as he got in office.

But how do you get that across? I'm pretty sure I'm right about this, but I certainly can't prove it. And any straight news reporters who took my line would (rightfully) be accused of massive bias."

Matthew Yglesias » Beyond “Bias”: "Simply put, it’s not possible for working journalists to purge themselves of bias, nor is it possible for readers or critics to adduce definitive proof of bias. Making spurious claims of bias in order to try to get journalists to pursue the impossible task of eliminating their mental biases is impossibility squared. It’s an intellectually bankrupt dead-end."

Yes, it is Matthew. "Just the facts" is not a real option. The facts, as the joke has it, have a well-known liberal bias. And, the campaign against the "liberal bias" in the Media is part of an effort to make of the corporate Media, a reliable right-wing propaganda operation -- a largely successful operation, by the way.

Thursday, October 23, 2008


digby at Hullabaloo comments on Greenspan's reckoning with consequences: "This is the fundamental problem with Randian thinking. They really do believe that capitalism is a moral system in which the people become wealthy because they are morally and intellectually superior to those who don't. Why, it would be wrong for them to not self-regulate and endanger the whole economy, right? It wouldn't make any sense."

Except, well, there's this:
"Let's hope we are all wealthy and retired by the time this house of cards falters," wrote [an analyst] in an email obtained by Waxman's committee.
Being able to pass on all your risk to someone else while personally coming out on top is a pretty glaring and obvious flaw in the system unless you think that wealthy people are too wise and moral to ever do such a thing. The only people who believe that are Randians and Joe the Plumber. Everybody on Wall Street certainly seemed to know the score and acted accordingly.

Wednesday, October 22, 2008

Our Whole Industrial and Financial Class

Michael O'Hare watches Frontline's Heat: "I kept saying to myself as I watched this show, and watched the lords of Wall Street amid their own wreckage the last few weeks, is that these guys seem to absolutely suck at what they do! Without a Niagara of public welfare payments and public protection from the marketplace they profess to worship, they can't make a dime on a long-term basis nor build enduring enterprises. What a bunch of overpaid jerks. It wasn't just the government being trashed by smirking, self-satisfied incompetents prating ideological nonsense these last couple of decades, it was our whole industrial and financial leadership class."

The (re)Birth of the Conservative

Tony Blankley -
"With the rise to enduring power of President Franklin Roosevelt's New Deal in 1933, a new type of Republican emerged in reaction to FDR's attractive and overawing power: the me-too Republican. Until the election of President Reagan five decades later, these me-too Republicans supported, rather than opposed, Democratic Party policies but claimed they would administer them better. Of course, this led to a half-century of Democratic dominance of American government and politics."

I cannot vouch for the genuineness of Blankeley's quoting of FDR, below, but it is among the best summaries I've ever seen of Nixon's politics, shorn of its anti-communist hysteria and Southern Strategy racism.
"FDR himself cruelly mocked this pathetic breed of spineless, protect-your-career-at-any-cost Republican politicians:
'Let me warn the nation against the smooth evasion which says: 'Of course we believe all these things. We believe in Social Security; we believe in work for the unemployed; we believe in saving homes. Cross our hearts and hope to die, we believe in all these things; but we do not like the way the present administration is doing them. Just turn them over to us. We will do all of them; we will do more of them; we will do them better; and best of all, the doing of them will not cost anybody anything.''

Here's the good part, though -- the projection forward of the Republican politics of the next few years.
Sarah Palin . . . will be among the leaders of the about-to-be-reborn conservative movement. I suspect that the conservative movement we start rebuilding on the ashes of Nov. 4 . . . will have little use for overwritten, over-delicate commentary. The new movement will be plain-spoken and socially networked up from the Interneted streets, suburbs and small towns of America. It certainly will not listen very attentively to those conservatives who idolatrize Obama and collaborate in heralding his arrival. . . .

The new conservative movement will be facing a political opponent that will reveal itself soon to be both multiculturalist and Eurosocialist. We will be engaged in a struggle to the political death for the soul of the country. As I did at the beginning of and throughout the Buckley/Goldwater/Reagan/Gingrich conservative movement, I will try to lend my hand. I certainly will do what I can to make it a big-tent conservative movement. But just as it does in every great cause, one question has to be answered correctly: Whose side are you on, comrade?

Obama's campaign, from its very beginnings, has played a strategically brilliant game, targeting that slice of rational, reality-based, secular conservatives, who were most repulsed by Bush, and by the descent of the Republican Party into the hands of religious reactionaries. The Party of Gerald Ford and Bob Dole, of Kevin Phillips and Colin Powell, has been alienated from the GOP. And, that is a major reason that Obama will win, and the Democrats will win Congress, where Gore and Kerry could not win, and the Democrats could not achieve a working majority in Congress after 1994.

And, it is a major reason, why the swing away from the Democrats after Nov 4 will be slow and muted. Tony Blankeley tells us why the secular Republicans will not be rejoining their Party any time soon: they will not be welcome.

The Republicans, after Nov 4, should be blaming Sarah Palin and "the base" of religious reactionaries, who required McCain to ruin his own brand in a series of awkward flip-flops and betrayals. That's what the polls will show. But, mostly, they won't. They will be busily "forgetting" that George W. Bush ever existed, or was ever their wetdream come alive, of a decisive President. And, they will blame McCain, who represents Republican moderation, to the Republican Right. The Republican Party that was ruthlessly pursuing a "permanent majority" will busy itself pursuing "permanent minority" status. The internal dynamics of collapse and defeat will make it difficult to rebuild the Republican brand and coalition.

The secularists will want to go back, but will do so, only if they are handed control. And, they won't. On the other side -- the right-wing reactionary side -- the Republican Right will have largely lost in this election the decisive asset built by Rove and talk radio: the base of authoritarian voters, who didn't vote before, but who turned out in 2000 and 2004 in record numbers. They are not voting this time, Palin notwithstanding. This is obvious in the early voting in Virginia, North Carolina and Colorado. (Obama is up only 5% in Colorado in the public opinion polls, a State with a large number of these authoritarian, religious-right voters, but McCain's campaign is already giving up; early voting is telling the tale.)

The Republican coalition has broken.

Friday, October 17, 2008

Tribune endorsement: Barack Obama for president --

One of the more interesting aspects of the political campaign for me has been the way that Barack Obama has masterfully co-opted the secular conservative wing of the Republican Party. The key to the overwhelming election victory now in prospect for the Democratic Presidential Candidate and his Party has been the shift of a small, but vital slice of the Republican electorate out of the Republican Party and into support of the Democrats. Today, the Chicago Tribune endorsed a Democrat for the first time, since its founding in 1847. "We are proud to add Barack Obama's name to Lincoln's in the list of people the Tribune has endorsed for president of the United States."

In its way, this is just stunning, and a measure of the completeness of the political storm that is sweeping the country in this election.

Tuesday, October 14, 2008

"The liberals were right."

Ezra Klein on the latest bailout:
. . . my take on this will make David Broder cry: The liberals were right. Not the Democrats. The liberals. They were right that deregulation had gone too far. They were right when they spent the last few years offering unpopular predictions that the Housing Bubble would pop. They were right that a liquidity problem had become a solvency problem. They were right that government intervention on a massive scale was needed to stabilize the capitalist system. They were so right, in fact, that Hank Paulson and George W. Bush couldn't hold the line, and will now sign into law the most profoundly socialist measure this country has seen since the 1930s.

I make this point not to wrap myself in a warm blanket of Schadenfreude -- there's little joy in seeing your allies proven perspicacious by a catastrophe -- but because it's actually important. The liberal understanding of the economy and its problems has been, in recent months and years, superior to the conservative understanding of the country and its problems. And this has only sharpened in recent weeks, as the Republican Party has spun off into the Gamma Quadrant with laughable theories about ACORN and Fannie Mae and Freddie Mac and the Community Reinvestment Act of 1977. Their argument isn't wrong in the sense that it's a serious engagement with the situation that happens to be less empirically sound than competing theories. It's just nonsense. And this isn't a time when we can afford governance powered by nonsense. We need governance by people who understood the magnitude and nature of the problem, and have some idea how to go forward fixing it.

Halfway home

We've gotten thru the fourth wave of the financial crisis, but most of the recession is still in front of us, as well as at least half of the losses, which must be realized on mortgages. Worldwide: "Roubini said total credit losses resulting from the meltdown of the subprime mortgage market will be ``closer to $3 trillion,'' up from his previous estimate of $1 trillion to $2 trillion. The International Monetary Fund estimated $1.4 trillion on Oct. 7. Financial firms have so far reported $637 billion in losses, according to data compiled by Bloomberg."

''The stock market is going to stop rallying soon enough when they see the economy is really tanking,'' Roubini added.

Saturday, October 11, 2008 Worldwide

Fannie and Freddie become TARP

Rats . . . Ship . . . Sinking

As McCain Goes Negative, a GOP Senator Makes a Positive Turn | The Trail | "[Minnesota Senate candidate]Coleman told reporters that he would not be appearing at a planned rally with McCain this afternoon."

A bit of horserace commentary — Crooked Timber:
"I hear (via a prominent member of the sane Republican faction) that the word on the right side of the street is that the Republican National Committee is about to pull the plug on its joint ads with the McCain campaign, and devote its resources instead to trying to save a couple of the senators who are at serious risk of losing their seats. Now this is gossip, albeit of the high class variety; take it with the requisite pinch of salt. But it points to some real vulnerabilities in the McCain campaign’s finances. McCain’s decision to opt for public funding has meant that he’s had enormous difficulty competing with the Obama money raising machine. He’s been able to partly compensate by co-financing ads with the RNC (this skirts the limits of the legislation that he himself co-wrote but is just about legal). This has kept him competitive in TV advertising, albeit still significantly outgunned. But if the Republicans are as worried as they should be about the impending elections, there will be a lot of calls on that money, and the RNC is going to have to make some tough choices.
Should it keep spending money on the presidential campaign in the hope that McCain will win despite the polls, or should it instead try to minimize the damage of a McCain defeat by doing its best to stop the Democrats from making big gains in the Senate? Decisions, decisions …" Electoral Projections Done Right: Does McCain Have Cooties?: "There are at least three groups of Republicans that might have an interest in distancing themselves from John McCain. Firstly, purple-state moderates like Coleman and Gordon Smith who don't like the campaign's tone. Secondly, the anti-bailout economic populists in the House who might be looking ahead to 2010 and 2012. And thirdly, true conservatives who never trusted McCain that much to begin with.

Far more so than Obama, McCain is dependent on the goodwill of fellow Republicans. With McCain having opted for public financing, RNC funds are an important part of his advertising budget. Because he's way behind Obama on McCain-branded field offices and ground operatives, he is depending on assistance from state and local party organizations. Republican enthusiasm lags behind that of Democrats, and so volunteer resources are scarcer; conservative activists will need to decide if they're going to make phone calls to support McCain or to help save their local Republican Congressman"

It's Over

David Brooks: [Sarah Palin] "represents a fatal cancer to the Republican party"

David Brooks is a reliable Republican mouthpiece. Last week, he was spinning the V-P debate in Palin's favor. This week, evidently, he has other marching orders.

Saturday, October 4, 2008

GOP Strategists Whisper Fears

GOP Strategists Whisper Fears -

Republican strategists fear that an outpouring of public anger generated by Congress's struggle to pass a rescue package for the financial industry may contribute to a disaster at the polls for the GOP in November.

"The crisis has affected the entire ticket," said Jan van Lohuizen, a Republican consultant who handled the polling for President Bush's reelection campaign. "The worse the state's economy, the greater the impact."

Republicans are trying to defend at least 18 House seats in Michigan, Ohio, Pennsylvania and Florida, economic trouble spots that double as election battlegrounds. Rising unemployment, the meltdown in the housing market, and a credit crunch besieging consumers and manufacturers alike were factors in Sen. John McCain's decision Thursday to pull campaign resources out of Michigan. The McCain campaign's exit from the state leaves a pair of vulnerable Republicans, Reps. Tim Walberg and Joe Knollenberg, with a weakened party infrastructure heading into Nov. 4. . . .

In the Senate, . . . , Republican incumbents are suddenly teetering in North Carolina, Kentucky and Georgia because of the economic crisis, . . . .

The pessimism in the GOP ranks reflects a striking shift in momentum in the four weeks since the Republican National Convention, . . .

"If you turn the clock back two or two and half weeks, you could make a plausible argument that if a couple of things go our way we will lose three to four Senate races," said one Republican strategist. "Now we will lose six to eight." Polling in most Senate races over the past 14 days has shown a five-point decline for the Republican candidate, the strategist said.

The picture in the House is similar. The generic ballot test -- a traditional measure of broad voter attitudes -- has also moved decisively in Democrats' direction in recent days. The latest NBC-Wall Street Journal and Associated Press polls showed voters favoring a generic Democratic candidate for Congress over a generic Republican by 13 points, while a recent Time magazine poll gave Democrats a 46 percent to 36 percent edge. . . .

In the most recent Washington Post-ABC News national poll, more than half of all voters said they were "very concerned" that the failure of the first bailout vote would cause a "severe economic decline." By a ratio of 2 to 1, they blamed the legislations' defeat on Republicans.

Neil Newhouse, a partner in the Republican polling firm Public Opinion Strategies, echoed van Lohuizen's sentiment. "The bailout crisis has had a corrosive effect on the national political environment, and that impacts not just John McCain, but GOP candidates up and down the ticket," he said.

The proximity to the election added to the chaos on Capitol Hill this week as lawmakers sought to pass a $700 billion package to stabilize banks and financial markets. In the House, most vulnerable Republicans opposed the version that failed on Monday, as well as the revamped legislation that passed easily yesterday. But in the Senate, which voted Wednesday, just two vulnerable Republicans, Sens. Elizabeth Dole (N.C.) and Roger Wicker (Miss.), opposed the bill (along with the only Democrat who is seen as endangered, Louisiana Sen. Mary Landrieu).

Seven Republicans who are being targeted for defeat by Democrats backed the plan: Senate Minority Leader Mitch McConnell (Ky.), and Sens. Saxby Chambliss (Ga.), Ted Stevens (Alaska); Norm Coleman (Minn.); Gordon Smith (Ore.), Susan Collins (Maine) and John E. Sununu (N.H.). . . .

. . . the current financial crisis provided a new opportunity to remind voters that President Bush remains the leader of the Republican Party. "The 'GOP candidate equals George Bush' argument was growing stale in the absence of any fresh proof points," said Singer, [a campaign adviser to several Democrats]. . . .

Compounding Republican problems is a continued fundraising deficit that has left the party largely powerless to defend its congressional candidates against a televised Democratic onslaught. At the start of September -- the last time financial figures were available -- the Democratic Congressional Campaign Committee held a $40 million cash-on-hand edge over its GOP counterpart and was advertising in 41 House districts, compared with just two districts in which the National Republican Campaign Committee was on the air.

The gap was less daunting on the Senate side, where the Democratic Senatorial Campaign Committee held a $7 million cash edge over the National Republican Senatorial Committee at the start of September. However, the DSCC spent $13.6 million in August -- largely on television ads -- while the NRSC dropped just $3.6 million.

That spending deficit and the economic reverberations are being felt most strongly in North Carolina, where Hagan appears to have moved into a lead over Dole. The DSCC has spent more than $3.5 million on ads painting Dole as out of touch with average North Carolina voters, and even Republicans acknowledge that the attacks have taken their toll. Independent polling puts Hagan's lead at three to eight points.

In Oregon, state House Speaker Jeff Merkley (D) has taken to the television airwaves to attack Sen. Gordon Smith (R) for his vote in favor of the rescue plan. "In this economy, who is really on your side?" asks the narrator in Merkley's ad, saying that Smith supported a "trillion-dollar blank check for Wall Street." Polling in that race shows a virtual dead heat.

This is a classic political storm, which has been long postponed by the fecklessness the Media, but, which, with the full accumulation of failure, goes from strength to strength.

They don't want what you want

The Perfect Storm has come at last, which makes the rationale for this blog somewhat tenuous.

But, even as we confront the bad consequences of bad policy, it is interesting to see revealed the preferences and prejudices of the Right.

The Problem Is Still Falling House Prices - Martin Feldstein thinks peonage will help: "The federal government would offer any homeowner with a mortgage an opportunity to replace 20% of the mortgage with a low-interest loan from the government, subject to a maximum of $80,000. This would be available to new buyers as well as those with mortgages. The interest on that loan would reflect the government's cost of funds and could be as low as 2%. The loan would not be secured by the house but would be a loan with full recourse, allowing the government to take other property or income in the unlikely event that the individual does not pay. It would by law be senior to other unsecured debt and not eligible for relief in bankruptcy."

The problem, to Feldstein, is not the ill-gotten gains of the banks and rich folks, or the oppression of the merely middle-class. The problem is that the middle class are feckless. You cannot build a reliable financial pyramid scheme on the foundation of people, who might walk away from a bad investment. The people at the bottom have to be made to pay. No bankruptcy for them.

Thursday, October 2, 2008

Stiglitz: Bailout Blues - The Bruce Blog - San Francisco Bay Guardian

Stiglitz: Bailout Blues: "There is a growing consensus among economists that any bailout based on Paulson’s plan won’t work. If so, the huge increase in the national debt and the realization that even $700 billion is not enough to rescue the US economy will erode confidence further and aggravate its weakness.
But it is impossible for politicians to do nothing in such a crisis. So we may have to pray that an agreement crafted with the toxic mix of special interests, misguided economics, and right-wing ideologies that produced the crisis can somehow produce a rescue plan that works – or whose failure doesn’t do too much damage."

Tuesday, September 23, 2008

This is It.

A few months ago, I noted that the impotence of the Democratic Party and the fecklessness of the Media had stifled any chance to have a perfect political storm over Iraq, or the corruption of the Republican Congress and Administration, or Bush's aggression against the Constitution and the rule of law. Torture and Katrina came and went, without Congress ever managing to assert its power even to subpoena an Administration official, or the Judiciary enforcing Habeas Corpus, the Great Writ.

It has been a sad failure, but the last bastion of democracy remains the November election. Even if the Media elite and the professional politicians in Washington cannot manage the necessary level of sustained outrage on any other occasion, an election provides a focus, and a moment of participation by the People, which can overwhelm the elite and its complacency. So, the Perfect Storm -- that moment of moral self-awareness for the body politic, in which account is taken of policy and its consequences -- has fallen back on the election. The Election.

And, right on cue, the essential element of a real, Perfect Political Storm -- an economic crisis of the 1st order, after festering for over a year, has arrived at a climactic moment.

Shall we also expect some dramatic moment in Pakistan, Afganistan or Iraq? That might be a bit too much drama.

But, the country is paying attention to the financial crisis. Really paying attention. On the eve of The Election.

This is It.

Monday, September 15, 2008

Bernanke and Paulson Gamble Depositor’s Money

The dominant news narrative today was that the Federal government had not stepped in to bail out Lehman. That's techically true, but misleading, Ian Walsh, Paul Krugman and others have tried to point out.

The most troubling thing to me was the Fed's decision to further relax Rule 23a, which limits how much much of a commercial bank's insured deposits can be diverted to finance the activities of affiliated enterprises, like, say, an investment bank subsidiary.

Ian Walsh at Firedoglake explains: "But Bernanke and Paulson are really going all in on this, they're letting banks play with depositor money . . . "

"This is a dangerous game, because instead of firewalling that money away from investment subsidiaries, it allows banks to gamble that with depositor money they may be able to turn it around. This was exactly the sort of thing that Glass-Steagall was designed to make impossible - banks to not be in the brokerage business, insurance companies not in banking, and so on. Glass-Steagall was partially repealed in 1980 (part of what made possible the Savings and Loan fiasco), further parts in 99 under Clinton, and now the Fed has violated the fundamental principle that banks shouldn't be gambling with depositor money. Because, be real clear, if you don't really know how much in the hole you are, or how much further you could get, lending money to the unit that's in the hole is gambling.

"It's also putting the FDIC (the organization which insures deposits) even more on the hook, and the FDIC does not have infinite money except in the sense that the Treasury can lend it infinite money. At this point the FDIC has about 50 billion. Banks have about 4.7 trillion in insured deposits. Yes, that's a bit of a gap."

There Will Be Blood

There Will Be Blood Steven M. Davidoff attempts to formulate the conventional wisdom from the present, gathering financial/economic storm.

Mostly, total nonsense, of course.

Monday, September 8, 2008

Your Liberal Media

Glenn Greenwald - "The right dictates MSNBC's programming decisions"

Glenn analyzes the implications of NBC removing Keith Olbermann as an anchor of its political coverage.

The corporate news Media is a right-wing, Republican Propaganda Operation, and this is a moment in which we can see the gears in operation.

The dynamics result in a stunted range of opinion: the Right is amply represented, a certain kind of idiotarian "independent" partisan neutrality is modeled as well, but actual liberals are mostly excluded or represented by faux progressives, chosen for their ineffectiveness.

Kick the Can Down the Road Worldwide: "The U.S. Treasury's takeover of Fannie Mae and Freddie Mac is aimed at keeping the companies going into 2009, while leaving the next president and Congress to decide their long-term structure."

Sunday, September 7, 2008

The Real Third Party

Decisions, Decisions 2008

Atrios of Eschaton writes of an encounter with the real opposition party in American politics: "While chatting a man came up and . . . seemed . . . interested in proudly trumpeting his Hamletesque indecision as a mark of principled independence or something. Apparently had Obama chosen Clinton, but, well, now he likes Palin..."

"Anyway, he was clearly a member of that segment of the population for whom politics is just another reality TV show, and his vote is simply about which of the candidates is his 'favorite' and who will spend the next 4 years entertaining him as the star of The Presidency. Many Villagers are like this too, and they look forward to being extras in the show.

"It's probably completely rational for many people to approach politics this way. They're in a class and at a point in life such that actual policies are unlikely to impact them directly very much. Add in a touch of narcissism and a lack of empathy, and the choice really does come down to who you want to see on the teevee.

"It's David Broder's world. We just live in it."

It is worth remembering that there is a perpetual third Party in American politics, and it, frequently, holds the balance of power, but never assumes responsibility for governing. It is the ignoramus, complacent "independent" voter, and the superficiality of much political news reporting and commentary is written by, and written for, voters loyal to this third Party.

"Learning the Lessons of Iraq"

Economist's View: "Learning the Lessons of Iraq":
I don't think we will know if the war in Iraq was a success or not until many years, decades even, after we are gone. If, for example, a few years after we leave, Iraq breaks down terribly and alliances that are very much against our geopolitical interests are formed, that won't be a success, will it? We just don't know yet if it is a success or not, and furthermore, if things do break down, we will have no way of knowing if an alternative path would have produced a better outcome -- we can't run the alternative scenario and find out.

I hope it is a success, let there be no mistake about that, but I just don't see how we can say anything beyond so far so good, and we'll see how it goes from here.

So, there we have it. The consequence of the Perfect Storm that never came. The Republicans used the Surge™ successfully as a propaganda tactic to postpone political reckoning for losing a costly war. And, at least part of the liberal blogosphere, apparently, is primed to blame the Democrats, who withdraw, for the civil war that follows. When the Iraqi Civil War breaks out, the American Media, of course, will focus on the destruction of bloody destruction of Iraq and its society, in a way that they never, ever did during the years in which the American Occupation was destroying that unfortunate country.

"Hoping" that Iraq "has been a success" reveals a weak-mindedness in Mark Thoma of the Economist's View, shared by, unfortunately, an apparent majority, including a large number of Democrats.

We know right now, if we are willing, morally, to face the simple, hard facts, that the War in Iraq has been a catastrophic failure, enormously costly in blood, honor and money, and unproductive in anything but corruption and destruction.

Iraq may well recover to some degree in the future, and in the interim, absent an American occupation, Iraq may well have its civil war. Neither eventuality is properly an outcome measure for the U.S. The outcome of the Iraq War is now. The outcome is the need to recover, and the apparent inevitability of a civil war.

Personally, I am no pacifist, nor am I an isolationist. I actually think the U.S. should have a foreign policy, which is not so different from the foreign policy George W. Bush says we have: promoting democracy, ready to oppose military dictatorships with international cooperation and even armed force, etc. My objections are not to what Bush says, but to what Bush has us do. I object to the cynical corruption, which directs a war to profit Halliburton, a company that wasn't even willing to remain American. I object to torture as a policy. I object to the cavalier disregard and disrespect for international treaties, obligations and institutions. Above all, I object to the incompetence and stupidity and irresponsibility with which great power has been exercised.

I am disappointed with Mark Thoma's willingness to go along with the Bush propaganda, which asserts the narrative trope that we cannot know the outcome, as a way for distracting attention from the reality in front of our eyes. We can know the outcome. The outcome is now. The only question is whether we have the moral substance to face the realization of the consequences of our evil.

I've watched the news media bully Barack Obama on "the success of teh Surge" and am disappointed that the Democrats have not found any way to puncture this propaganda offensive. The Surge has been successful, alright, in the only way it was intended to be successful, as a way of extending the war long enough, that Bush would not be forced to withdraw within his term of office.

Mark Thoma asks if we will learn the right lessons from Iraq. I am afraid he answers that himself, and in the negative. The Surge was intended to prevent the American People from learning the outcome of the War in Iraq and from blaming the politicians most responsible. In that it succeeded. It succeeded as a public relations offensive, even if it accomplished no more than a costly delay, from a military perspective.

After a Democratic Administration withdraws American troops from Iraq, the full power of the right-wing propaganda machine will be turned on the Democrats, to prove that Obama "lost Iraq", snatched defeat from the jaws of victory, wasted the sacrifice of the brave troops whose Veteran's Benefits the Republicans have been trying to cut, etc. No matter how brief the inevitable Iraqi civil war may be, it will be treated in the news Media as bloody and destructive, in ways never acknowledged in U.S. Media for the bloody and destructive Occupation. That Civil War will be an "outcome" of the withdrawal, but, somehow, not the long-postponed "outcome" of the American invasion and occupation, which did so much to destroy the civil institutions, infrastructure and economy of the country.

I have some reserve hope that Americans may be gradually awakening to how easily they are manipulated by these propaganda narratives, and an escalation in critical thought, fed in part by the blogosphere, will change what the body politic "learns". But, today, I am a bit discouraged.

Tuesday, August 19, 2008

The Audacity of Hype?

The Audacity of Hype?: "Is Barack Obama exaggerating when he compares his campaign to the great progressive moments in US history?"

I guess we'll see, if this election fulfills its early promise to be a seachange in political power and governance.

digby at Hullabaloo: "I think the most interesting thing about the answers is the degree to which just about everyone sounds ambivalent or confused. It's a very odd array of answers from people who are immersed in politics and history and who should be able to rattle off a compelling rationale for the candidate without any problem, even if they disagree with the notion that it's a movement on par with civil rights or the labor movement. I think all of the people queried want Obama to win, but virtually none of them seem to be sure what he's going to do."

I think Obama regards his role as being to preside. He wants to be in a position to give permission for progressive reform. The right question, in Obama's view, is: "What are you going to do, when you can?"

Just like him?

Jack McCafferty - CNN: "I am sick and tired of the president of the United States embarrassing me. The world we live in is too complex to entrust it to someone else whose idea of intellectual curiosity and grasp of foreign policy issues is to tell us he can look into Vladimir Putin's eyes and see into his soul."
"George Bush's record as a student, military man, businessman and leader of the free world is one of constant failure. And the part that troubles me most is he seems content with himself.
"He will leave office with the country $10 trillion in debt, fighting two wars, our international reputation in shambles, our government cloaked in secrecy and suspicion that his entire presidency has been a litany of broken laws and promises, our citizens' faith in our own country ripped to shreds. Yet Bush goes bumbling along, grinning and spewing moronic one-liners, as though nobody understands what a colossal failure he has been.
"I fear to the depth of my being that John McCain is just like him."

Sunday, July 20, 2008

Real Men

Sometimes, it helps to have a clear view of the Right's point of view. Hattip to digby

Lou Aguilar on John McCain on National Review Online: "Real Men Vote for McCain"

Real Men Vote for McCain
Top 10 reasons why.

By Lou Aguilar

1. Barack Obama spent 20 years sitting in church while his preacher and others bad-mouthed the United States of America. Navy pilot John McCain spent five years being tortured in the Hanoi Hilton, and refused a chance to walk out ahead of fellow POWs with more seniority.

2. Obama wants to cut and run from Iraq regardless of conditions on the ground or future consequences. McCain took on the president and secretary of defense in demanding more troops for Iraq, a policy that is inarguably winning the war. He also has two sons who fought in Iraq.

3. McCain supports nuclear power. Obama backs wind energy.

4. Obama wants restrictive gun control because only economically depressed middle-Americans “cling to God and guns.” McCain unwaveringly supports the Second Amendment.

5. McCain has deviated from his party’s conservative base on several occasions (McCain-Feingold Bill, Gang of 14, McCain-Kennedy Bill, opposition to torture). Obama has voted the left-wing line every single time, and been designated the most liberal Senator in Congress.

6. Obama is willing to meet with hostile state leaders like Ahmadinejad and Hugo Chavez without preconditions. McCain will set conditions first, talk later — maybe.

7. Obama is married to a bitter, angry lawyer who became “proud” of her country for the first time this year. McCain’s wife is a beer heiress who founded an organization to provide MASH-style units to disaster-torn world regions. Did I mention that she’s a beer heiress?

8. Obama supports higher taxes for a government-run nanny state that will coddle all Americans like babies. McCain trusts people to spend their less-taxed money however they wish.

9. The name John McCain sounds like “John McClain,” the action hero played by Bruce Willis in the manly Die Hard series. “Barack Obama” sounds like the kind of elitist villain John McClain has to outwit and defeat.

10. McCain is endorsed by Clint Eastwood, Sylvester Stallone, and Arnold Schwarzenegger. Obama gets support from Leonardo DiCaprio, Matt Damon, Oprah Winfrey, Tom Hanks, and every weenie in Hollywood. Plus, Susan Sarandon has vowed to leave the country if McCain gets elected. Case closed.

Lou Aguilar is a fiction writer and former Washington Post video critic, Washington Times television critic, and USA Today reporter.

Good Lord, save us. Is parody even possible?

Sunday, July 13, 2008

Putting out the Fire

The News Media has a compulsive need to make the Democratic and Republican candidates seem alike. It is all about eliminating policy choice from politics.

Los Angeles Times: Obama, McCain agree on many once-divisive issues

Sure they do.

McCain and Obama: two peas in a pod. . . . NOT!

Here are a couple of take-downs:
The Carpetbagger Report: The drive to downplay differences between Obama, McCain — redux

The Reality-Based Community: Los Angeles Times: Sub-zero stupid

Digby at Hullabaloo is more optimistic: " . . . the LA Times is signaling that it believes that non-proliferation, global warming, stem cell research and comprehensive immigration reform are safe middle of the road positions. Even on the war, they seem to be admitting that 100 years in Iraq and the whole 'victory' concept is an extreme right wing position."

One of the most disturbing lines in this general, coordinated effort to neuter this election will be the effort of the Bush Administration to create the impression that the U.S. is about to declare victory and get out of Iraq, and in Atrios's words, "suggest Obama is a big spoilsport for wanting to 'surrender.' " Atrios points to this piece in the International Herald Tribune, as an example of the genre.

More aggressive is Martha Raddatz: Obama's Iraq Plan: Mission Impossible?. Raddatz quotes various officers in Iraq, asserting progress on the ground, rejecting a timetable for withdrawal and, finally, asserting that withdrawal might be logistically "impossible". It is all crap, and the usual "he said, she said" convention of allowing contrary voices is, of course, thrown aside, for this, from General Jeffrey Hammond:
I'll speak for the coalition forces, men and women of character and moral courage; we have a mission, and it's not until the mission is done that I can look my leader in the eye and say, 'Sir, Ma'am, mission accomplished,' and I think it is dangerous to leave anything a little early."

Saturday, July 12, 2008

Your Liberal Media at Work

Daily Kos: John McCain's assigned reporter
Ms. Howell (Washington Post ombudsman) gave her usual tortured rationalizations to excuse shoddy reporting. But there was one interesting bit in her explanation:

The Post has teams of reporters on each candidate. Stephens, who came from the investigative unit, has been assigned to report on Obama; another reporter, Kimberley Kindy, is doing the same on McCain.

Joe Stephens is an investigative reporter who has won three Polk Awards, and is a two-time finalist for the Pulitzer Prize. And Kimberly Kindy? She was hired by the Washington Post in May and hasn’t been heard from since writing two articles about McCain at the end of May.

Thursday, July 10, 2008

The Financial Crisis is BACK!!

U.S. Considers Takeover of Two Mortgage Giants -
Alarmed by the growing financial stress at the nation’s two largest mortgage finance companies, senior Bush administration officials are considering a plan to have the government take over one or both of the companies and place them in a conservatorship if their problems worsen, people briefed about the plan said on Thursday.

The companies, Fannie Mae and Freddie Mac, have been hit hard by the mortgage foreclosure crisis. Their shares are plummeting and their borrowing costs are rising as investors worry that the companies will suffer losses far larger than the $11 billion they have already lost in recent months. Now, as housing prices decline further and foreclosures grow, the markets are worried that Fannie and Freddie themselves may default on their debt.

Under a conservatorship, the shares of Fannie and Freddie would be worth little or nothing, and any losses on mortgages they own or guarantee — which could be staggering — would be paid by taxpayers.

I've written many times that the Perfect Storm must have an economic basis. Economic pain is a required element, even if it seems tangential to policy problems or personalities.

Gas prices, alone, would be enough to sink John McCain's increasingly ridiculous Presidential campaign.

The failure of Fannie Mae and Freddie Mac could easily take down the mortgage market, ending all house buying for a time, and threatening the solvency of the U.S. banking system, which is already in serious doubt. Yet, rescue would involve vast sums, and could well imperil the credit of the Federal government. And, of course, rescue is unmistakeably an act of class warfare.

Good times!

Wednesday, June 25, 2008

Congress abolished; President rules by decree

Bipartisan Group to Speak Out on Detainees -
"A bipartisan group of 200 former government officials, retired generals and religious leaders plans to issue a statement on Wednesday calling for a presidential order to outlaw some interrogation and detention practices used by the Bush administration over the last six years. . . .
"A White House spokesman, Tony Fratto, noted that Mr. Bush last year issued an executive order on interrogation that outlawed torture and other abuses while preserving the C.I.A.’s right to use some coercive interrogation methods. He said Qaeda terrorists should not be treated the same way uniformed soldiers were."

An Executive Order is now necessary to "outlaw" torture, because Congress is no longer the legislature, I guess.

Monday, June 23, 2008


Kevin Drum: "It's as if McCain is trying to become a parody of himself . . . "

Indeed, he does. It is a truly remarkable development: I have seen several newscasters on television remark that this is the first Presidential election in their memory where the choices and contrasts were so stark and divergent. And, it is true: usually, the candidates are at least pretending to be like one another. "I care about the environment, too." or "I am strong on Defense, too."

Nixon was a master at this: he always, always posed in public as being just as committed to the goals of the New Deal as any Democrat, he was just differing as to methods and means. It was a wonderfully subversive approach, and one that George W. Bush was still following in the 2000 campaign against Gore.

But, somehow the mask has fallen askew.

The Media Won't Care

Ezra Klein notes that McCain's tax plan would reduce Cindy McCain's taxes by almost $400,000: "Sigh. It's hard to know how to write these posts sometimes. Is snark really enough? This sort of thing should be a scandal. Yet the media won't care. Catty reporters will not emblazon $373,000 into voters minds In 2000, everyone know the line (or a misrepresentation of the line) 'I took the initiative in creating the Internet.' In 2004, everyone was aware that Kerry said 'I voted for it before I voted against it.' Yet there's no way that reporters will stitch '$373,000' into the DNA of this election. But they should. McCain is running for president, during a war, despite a deficit, amidst a likely recession, on a plan that gives him and his incredibly rich family almost $400,000 in tax cuts. It's absurd."

Media delenda est.

Sunday, June 22, 2008

Media delenda est

The news Media must be destroyed.

A recognition has been growing over a number of years that the news Media -- broadcast television networks, cable news nets, mass-market radio and leading newspapers -- have evolved into a monolithic platform for corporate and right-wing propaganda, the most visible feature of which is an elite corps of pundits and celebrity-journalists, who are incompetent and untrustworthy.

The underlying problem is not just, say, "Maureen Dowd’s wholehearted failure as a person." Maureen Dowd has attracted the attention of a wide variety of critics. The Times' own Public Editor allowed that she "went over the top this election season." That sort of makes it official. But, the official version is that the problem is "sexism" or other impolite language. The deep problem with Maureen Dowd, and the corporate Media, in general, is that it fails to inform and that it misinforms.

The choice of "personalities" is, itself, part of the misinformation involved. Riffing off of the London Telegraph's list of the 50 most influential American pundits, Digby at Hullabaloo had this to say:
"I have long held that the reason so many people hate liberals in this country is because the right convinced them that all of those pictured above [the Telegraph's choices for the top ten most influential U.S. pundits] who are not right wing icons --- are liberal. No wonder they hate us. With the exception of Jon Stewart, they are all immense jackasses.

The list includes a few Democratic political operatives and a handful of intelligent liberals like Paul Krugman and Rachel Maddow who are listed at 48 and 50, but for the most part they are rich, mainstream gasbags and conservative dickheads. . . .

When three of the top liberal pundits in the country are actually comedians (no matter how funny), you know there's a problem.

But hey, the fact that a sociopath like Michael Savage even makes the list should tell you just how screwed up our national discourse really is."

But, the essence is the misinformation.

Truly stupid arguments are given prominent play. (See "Supply-side economics")

And, the Right-Wing gets to have its own truthiness and facts.

This isn't just about low-information voters. This is about a Justice of the Supreme Court basing his opinion on an "urban legend". Think Progress » Report: Scalia’s Claim That Released Gitmo Prisoners Have Killed Americans Is An ‘Urban Legend’

Update and Self-comment: Trying to write a cogent, coherent blogpost of finite length is hard work. Never have I admired the work of Digby more than when I got to the end of writing this abject failure of a post.

If anyone should read this, I apologize. I use this blog as a kind of diary, where I take notes. Oh, well.

Saturday, June 21, 2008


Atrios at Eschaton: "Democrats will regret embracing the expansion of executive power because a President Obama will find his administration undone by an 'abuse of power' scandal. All of those powers which were necessary to prevent the instant destruction of the country will instantly become impeachable offenses. If you can't imagine how such a pivot can take place then you haven't been paying attention."

I echo this comment from the perspicacious Atrios, because I agree with it. And, because I am always amazed at how poorly Democrats play this game.

Republicans knew that they were immunizing Bush, when Ken Starr was abusing the office of Independent Prosecuter to death, and when the House Republicans impeached Clinton, they knew they were taking impeachment off the table.

Republicans have been playing a long game, in terms of building up an authoritarian government, for, literally, decades. The Federalist Society, which, thanks to Bush, now peoples the Federal judiciary with authoritarians, who would not know a genuine principle of law, if it hit them over the head, will do everything to blockade the Democrats.

The Iraq War was played with a brazenness, which often took my breath away. Bald-faced deception in the State of the Union. Lying to the United Nations Security Council. But, the fix was in. The Media Pundits played their assigned parts. (I am so glad Tim Russert is still dead.) And, Democrats like Hillary Clinton could not seem to see their way through the fog. Idiots. And, did the Democrats learn anything; when the Surge came along, it was obvious that they had not learned anything whatsoever.

The thin thread of hope is that Republicans have overplayed their hand a bit, maybe messed up the timing slightly. But, when Democrats play so badly, with so little institutional awareness, it is quite discouraging to watch. And, hard to believe that small slips in timing will make any difference.