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.
Tuesday, September 23, 2008
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."
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.
Mostly, total nonsense, of course.
Monday, September 8, 2008
Your Liberal Media
Glenn Greenwald - Salon.com: "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.
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
Bloomberg.com: 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.
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":
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.
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.
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