A System of Fealty to Oligarchs

dday at Hullabaloo: "The system of government in this country has become a system of fealty to oligarchs."

What provoked dday today, was the failure in the U.S. Senate of a bankruptcy reform "to allow bankruptcy judges to modify loan terms on primary residences the way they can on second homes, yachts, cars, and other pieces of property".

"Nays included all Republicans and Baucus, Bennet, Byrd, Carper, Dorgan, Johnson, Landrieu, Lincoln, Nelson (NE), Pryor, Specter (awesome!), Tester. The Senators against this bill have lined up with the banksters, and for good reasons - they fund the campaigns, they throw the best parties, they share the interests and perspective of those disproportionately wealthy politicians." Roll Call Vote

So, there you have it: the Oligarchs control the Senate, approximately, 52-47. (3 Senators were absent, and not voting, but I made a good guess where they stand.)

Bankruptcy bill is a relatively minor issue, of course, even if the Rollcall is a good indicator of the balance of power.

ampersand commenting at Economist's View said today what no one in the news Media will say, the truth:

"Summers, Rubin, Geithner, Bernanke et al.

None of these people will admit to a recovery plan - which they pretend to want - and stick it to the oligarchs. All kinds of excuses abound for that. Sticking it to the oligarchs is 'moral hazard fundamentalism', there is no Senate support for it, 'first let us fix the economy' and so on. Remember [Brad] DeLong covering Geithners ass on the PIPP by crying "Voinovich, Voinovich"?

All these people push the line -like gospel truth - that breaking the oligarchy makes recovery impossible. This pretension that without the oligarchy, recovery is impossible fails the simple laugh test. Without this govt propping it up via bank bailouts, the oligarchy wont exist.

In reality, none of them want a recovery plan that breaks the oligarchy. None of them will _allow_ such a recovery plan.The current impasse and mind-numbing morass of dealing with the crisis and recovery planning is precisely because of the opposite. It is really hard to come up with a plan to save the oligarchs and have an economic recovery.

These people pretend the problem is the opposite - that it's hard to get a recovery plan that breaks the oligarchs."

We are tying ourselves into knots, wringing our hands over the impotence of economic policy, because such an attitude protects key powers-that-be.

I can stand it, too

Following Brad DeLong and Patrick Neilsen Hayden and Eric Alterman, I take note of hwat Charles Pierce has to say:

Slacker Friday:

"I have now lived through three major episodes in my life where the political elite have told me quite plainly that neither I nor my fellow citizens are sufficiently mature to suffer the public prosecution of major crimes committed within my government.

The first was when Gerry Ford told me I wasn't strong enough to handle the sight of Richard Nixon in the dock. (Ed. note--I would have thrown a parade.) Dick Cheney looked at this episode and determined that the only thing Nixon did wrong was get caught. The second time was when the entire government went into spasm over the crimes of the Iran-Contra gang and I was told that I wasn't strong enough to see Ronald Reagan impeached or his men packed off to Danbury. Dick Cheney looked at this and determined that the only thing Reagan and his men did wrong was get caught and, by then, Cheney had decided that even that wasn't really so very wrong and everybody should shut up. Now, Barack Obama, who won election by telling the country and its people that they were great because of all they'd done for him, has told me that I am not strong enough to handle the prosecution of pale and vicious bureaucrats, many of them acting at the behest of Dick Cheney, who decided that the only thing he was doing wrong was nothing at all, who have broken the law, disgraced their oaths, and manifestly belong in a one-room suite at the Hague. Not to put too fine a point on it, but I'm sick and goddamn tired of being told that, as a citizen, I am too fragile to bear the horrible burden of watching public criminals pay for their crimes and that, as a political entity, my fellow citizens and I are delicate flowers encased in candy-glass who must be kept away from the sight of men in fine suits weeping as they are ripped from the arms of their families and sent off to penal institutions manifestly more kind than those in which they arranged to get their rocks off vicariously while driving other men mad.

Hey, Mr. President. Put these barbarians on trial and watch me. I'll be the guy out in front of the courtroom with a lawn chair, some sandwiches, and a cooler of fine beer. I'll be the guy who hires the brass band to serenade these criminal bastards on their way off to the big house. I'll be the one who shows up at every one of their probation hearings with a copy of the Constitution, the way crime victims show up at the parole board when their attacker comes up for release. I'll declare a national holiday -- Victory Over Torture Day -- and lead the parade right up whatever gated street it is that Cheney lives on these days. Trust me, Mr. President. I can take it."

Why Ants would be Democrats and (some) People are Republicans

How house-hunting ants choose the best home:

Dr Elva Robinson and colleagues in the University's School of Biological Sciences fitted rock ants with tiny radio-frequency identification tags [see image], each measuring 1 / 2,000 (one two-thousandth) the size of a postage stamp, then observed as they chose between a poor nest nearby and a good nest further away. The ant colonies showed sophisticated nest-site choice, selecting the superior site even though it was nine times further away than the alternative. The best nest was chosen, despite the fact that very few individual ants made direct comparisons between the nest-sites. . . .

Dr Robinson said: "Each ant appears to have its own 'threshold of acceptability' against which to judge a nest individually. Ants finding the poor nest were likely to switch and find the good nest, whereas ants finding the good nest were more likely to stay committed to that nest. When ants switched quickly between the two nests, colonies ended up in the good nest. Individual ants did not need to comparatively evaluate both nests in order for the entire colony to make the correct decision.

"On the other hand, animals – including humans – who use comparative evaluation frequently make 'irrational' decisions, due to the context in which options are compared or by inconsistently ranking pairs of options, (for example option A preferred to B, B preferred to C but C preferred to A).

"The ants' threshold rule makes an absolute assessment of nest quality that is not subject to these risks, and circumvents the necessity for memorization and comparison of every site visited. Thus, simple individual behaviour substitutes for direct comparison, facilitating effective choice between nest sites for the colony as a whole."

Who is in Charge?

Banks Show Clout on Legislation to Help Consumers - NYTimes.com:

"During the presidential campaign, Mr. Obama made an issue of what he considered excessive credit card fees, but he has been largely silent on the matter since his arrival in Washington. As a candidate, he also favored legislation to make it easier for troubled homeowners to use bankruptcy court to ease the terms of their mortgages, a proposal he again endorsed last month.

Despite the president’s support and strong Democratic majorities in Congress, both proposals are in jeopardy because of lobbying by banks and their trade groups, particularly in the Senate. . .

The banking industry has also succeeded in working closely with Republicans to water down and then block a measure that would give bankruptcy judges greater authority to modify mortgages, including reducing principal payments. Senate Republican leaders say they have the support of all 41 of their members — enough to kill the provision by making it impossible to get the 60 votes necessary to cut off debate. . . Republican supporters of the industry have been helped in part by the decision by some Democratic campaign committees, fearful of voter reaction, to reject contributions from banks that have received bailout money.

Some prominent Democrats, including Nancy Pelosi, the House speaker, also are refusing donations from bank political action committees. Mr. Frank will not take money from employees of banks that received bailout funds.

Republicans “are never going to beat the Democrats in the fund-raising game in D.C. as long as they are the minority,” said Sam Geduldig, a lobbyist for several banking trade associations at Clark Lytle & Geduldig. “To the extent the Republicans can show they can impact policy, it causes professional donors and lobbyists to look at them in a different light, as opposed to when they just got bludgeoned” in the last election."

Partisan politics is a competition. As long as the Republicans can win this game, by serving the plutocracy, the plutocracy will be in charge.

Talk of the importance of campaign contributions is really just a sideward glance at the importance of the Media in campaigns, and the fecklessness of the People.

This blog had a simple premise: policy has consequences -- and the Bush Administration was engaged, in 2004 and earlier, in the worst of bad policy, policy bound to have bad consequences. Yet, Bush was elected in 2004. And, so the consequences would come, and create a political storm, and the political storm would consist of those consequences, and the moral fables told about those consequences: the People would learn once again, however imperfectly, some political wisdom. In the face of economic collapse, worry about gay marriage and the importance of torturing Al Quaeda suspects would lose some of its purchase.

The stories mediate the consequences. The political storm consists not of the raw consequences of bad policy, but of the stories: who gets blamed. The Right has invested in a massive industry of storytellers -- in the Media, in Academe, in the so-called think-tanks. Against them, the Left has had the rising blogosphere, and the Sword of Truth (they've been right about everything).

But, still the main action in politics remains campaign contributions.

The Media is the ultimate recipient of those contributions -- they buy advertising; much of the political news media exist to make campaign advertising absolutely necessary, by making sure no one has any idea what politicians of either Party are up to, in relation to the substance of politics. As long as the Media, in its self-appointed role as Tribunes of the People, can be so easily distracted by such controversies as whether Obama smiled when he shook hands with Chavez, and people are disinterested in, or simply confused by, the kind of straightforward political reporting that's been done in this article in the New York Times, then our politics will be dictated by cleverness in 30-second teevee ads.

Poltics is about money and power. Politics is about how much people pay in credit card fees and whether bankruptcy law is going to be fair and rational -- or cruel and arbitrary.

Too many people simply refuse to face the reality. And, too many turn away in righteous disgust. Too many simply do not get it. Too many do not see that they have a choice, here.

The Democrats are not saints, or monks. They are doing their best to make a "business model" based on actually caring, somewhat, about fairness to the middle class pay off in democratic politics, in a country where most people have no idea what is going on, because of 24/7 Cable News. The other side is working on a "business model", where they cater to the needs and interests of the class of overpaid corporate executives, who are the most active campaign donors, and where a bunch of morons, clinging to their bibles and guns can be manipulated by one transparent "outrage" after another, fed to them by Lou Dobbs or Rush Limbaugh or some idiot Christian preacher. And, if anything political or economic news gets past the "outrage" of the week, there's a handy second team of libertarians, many of them academics, willing to say anything to provide political cover and short-circuit informative debate, from their well-paid perches at the Council on Foreign Relations, the Hoover Institution, George Mason and the University of Chicago, Heritage and AEI, etc. And, should I mention the third team of neo-liberal chumps, paid to be interlocutors to the second team?

There's a process of electoral selection at work in democratic politics, and in a game of survival of the fittest, politicians, who serve the plutocracy feel fit, very fit indeed.

Compare and Contrast

Ben Bernanke -- April 17, 2009: "Yet with hindsight, we can see that something went wrong in recent years, . . . the damage from this turn in the credit cycle--in terms of lost wealth, lost homes, and blemished credit histories--is likely to be long-lasting. One would be forgiven for concluding that the assumed benefits of financial innovation are not all they were cracked up to be. . . . It seems clear that the difficulty of managing financial innovation in the period leading up to the crisis was underestimated."

Emperor Hirohito -- 14 August 1945:

"To strive for the common prosperity and happiness of all nations as well as the security and well-being of our subjects is the solemn obligation which has been handed down by our imperial ancestors and which we lay close to the heart.

Indeed, we declared war on America and Britain out of our sincere desire to insure Japan's self-preservation and the stabilization of East Asia, it being far from our thought either to infringe upon the sovereignty of other nations or to embark upon territorial aggrandizement.

But now the war has lasted for nearly four years. Despite the best that has been done by everyone--the gallant fighting of our military and naval forces, the diligence and assiduity of out servants of the State and the devoted service of our 100,000,000 people--the war situation has developed not necessarily to Japan's advantage, while the general trends of the world have all turned against her interest."

All the major groups

Shailagh Murray kisses the ass of Chief of Staff Rahm Emmanuel: "Emanuel also sits down once a week with a different committee chairman and ranking member to catch up on business before their panel. Obama attends at least part of those sessions. Emanuel brings in all the major groups: the Blue Dog budget hawks, the moderate New Democrats, the politically skittish House freshman class."

I don't know if this passage communicates more about Shailagh Murray, a right-wing hack journalist, or Rahm Emmanuel, a centrist hack politician.

Why?

Obama Stakes His Fortunes on Failed Banksters: Jonathan Weil - Bloomberg.com:

"Why doesn’t the Obama administration force insolvent banks and insurance companies to come clean about their losses first? It’s the “why” that’s so vexing. The who, what, when, and how are mere details, by comparison.

More than anyone else’s, it should be in Obama’s political self-interest to accelerate the worst of the financial crisis and get as much of the inevitable pain behind us as quickly as possible. Every day he waits is one less day he will have between the time we hit rock bottom and the next election. And yet, Obama and his minions are doing all they can to delay the reckoning, which only will make it worse. . . .

six months into the government’s Troubled Asset Relief Program, his administration’s approach to the financial crisis is largely indistinguishable from its predecessor’s. The only objective, it seems, is to buy time, in hopes that an economic recovery somehow will materialize and lift the financial system back to health.

The Obama administration’s “strategy,” for lack of a better word, is to keep plying broken financial institutions with as much taxpayer money as the government can print. And so the government will keep subsidizing failed mega-banks indefinitely, rather than placing any into receivership or liquidating them. . . .

why don’t Obama, Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke force the banks to write down their troubled assets first, as a condition of government assistance? We can only speculate, because their explanations so far have made no sense.

Perhaps they’re scared the markets would panic if large, insolvent financial institutions started telling investors just how undercapitalized they are. There’s the distinct chance some of Obama’s advisers are beholden to failed banksters, because they used to work for them and may want to do so again someday. . . .

There also could be a manpower problem. The government might not have enough employees to seize all those sickly banks and supervise the process of winding them down. Probably, it’s some combination of those and other factors.

Why else would the Treasury tell the 19 biggest U.S. banks to undergo “stress tests” of their financial health, and then put the banks in charge of performing the tests on themselves? Those reasons also might help explain why regulators pressured the board that sets U.S. accounting standards to weaken the rules on mark-to-market accounting, so the banks could hide their losses and show more capital.

Whatever the case, as long as the government refuses to remove the cancer of zombie banks from our financial system, there’s little hope the U.S. will return to robust economic growth anytime soon. And the longer our wounded banks are allowed to stagger along with no end-game in sight, the greater the risk for Obama that voters will conclude he’s as responsible for blowing the cleanup as others were for causing the crisis.

He’d better act soon. Time may not be our side any longer."

I've quoted this column at length, because it is such a concise, but complete statement of the skepticism about Obama's policy vis a vis the banks.

My own view is that Obama is guided by a political, not an economic necessity: a political necessity to accommodate the political power of the plutocracy. Obama's political power rests on having leveraged Bush's failures to pry a significant fraction of the corporate and financial elite away from the Republican Party. The shift of these "centrists" into the Democratic Party marked out money shift, which presaged the electoral shift of the last election.

Now, he must tread carefully, if he is not to lose them, while they are still politically powerful.

As the economic crisis drags on, the country, itself, may shift left, making it more practical to pursue more radical measures. And, more radical measures, taken in a timely way, may well drain the corporate plutocracy of a measure of its power.

We'll see how that goes.

One was not enough

Stirling Newberry:

"It is the death throes of empire: when the powers that run it try and save themselves from catastrophe, at any cost.

Any cost, that is, except relinquishing their own system of power."

Paul Krugman, writing on the dim prospects for banking reform: ". . . the current crisis won’t be a one-time event; it will be the shape of things to come."

One perfect storm was not enough.

Teh STupid takes on all comers, and finds fans and allies in the Media

Is it gub'mint that fumbles, or our nearly brain-dead politics?

Yesterday, Bob Gates, the conservative and Republican Defense Secretary startled the moderately liberal blogosphere with a Defense budget proposal that -- at least in regard to its internal allocation of resources -- was rational. The liberal blogosphere was, of course, putting aside its concern that the ("external") allocation of resources to Defense, already way too large by any reasonable assessment, will actually increase a bit, to marvel that the Defense Secretary was able to present a budget and strategy with face validity for its internal allocation of resources.

The Republicans in Congress, with support from the plutocrats' incompetent Media, of course, attacked Obama's "cuts" in Defense.

My point, in introducing this example, is not to open a discussion of defense spending, or give anne an opportunity to harangue us all with criticisms of Obama's excessive Defense spending. (While agreeing with anne and all sane people that U.S. Defense spending is wildly excessive in magnitude, I can see that Obama is moving in the right direction down the road of the politically possible; but that's not what I want to argue, here.)

My point is that the partisan divide in this country has the Republican/conservatives championing ignorance, corruption, stupidity and irrationality. Just notice that. On every issue, they are basically arguing for stupidity. On the stimulus, they take the "Treasury view", which is a logical fallacy, or they screw up Ricardian equivalence, or just spout nonsense. On global warming, they are "deniers" and liars (see Will, George - Washington Post). On Defense, they want to spend tens and even hundreds of billions on strategic missile defense, surely the stupidest military proposal made since the French Maginot Line.

This isn't a complaint about conservative philosophy, per se. This is about a Republican Party and conservative movement, which, for reasons of political dynamics, has made the strategic decision to adopt teh Stupid as a default political tactic, and a Media establishment that enables that tactic, by elevating mediocrities and incompetents to the journalistic elite and its punditocrisy, where they do nothing to make this reprehensible Republican tactic untenable. Cable news and major op-ed columns are fact-free zones, bereft of logic, while the "straight" news reporting is regularly faulty and corrupt -- respecting only the journalistic standards of pseudo-neutrality and "he said, she said" reporting, while perversely granting anonymity to protect the powerful.

Bob Gates is very conservative. It is possible for a conservative to be smart and rational about Defense spending, as he just demonstrated. Liberals and progressives would still disagree, but the debate would be a rational and sincere one, grounded in reality and some overlapping sense of common purpose.

On global warming, it is certainly possible to imagine conservative positions, founded on something other than an insincere denial of reality. It would be valuable to have a real debate over the right mix of self-restraint and adaptation, as the world develops institutions to responsibly manage the natural environment, globally. Really, it would.

But, not only are the Republicans going to be Stupid liars on Global Warming, but the centrist politically independent pundits -- Tom Friedman writes on cap-n-trade in the NY Times, today -- are going to be stupid as well, and will never, ever call the Republicans and the conservative movements out, on their destructive political tactics.

The same phenomenon dominates our politics across the full spectrum of issues. We cannot have a rational and humane health care system, because the Republicans are going to make completely irrational and idiotic charges, whenever they can spare some time from frightening their cable news and radio audience about liberal fascism and Obama's plan to take away their guns and make them marry gays.

Health Care Policy

Economist's View: "When it Comes to Healthcare, the U.S., Britain and Canada are Hurting": "'save-the-rustbelt', a commenter at Mark Thoma's Economist View, criticizes Ezra Klein, a young progressive pundit with an interest in health care policy: 'Most of the people driving health care reform, including Klein, know nothing about the nuts-and-bolts of the health care system and how it operates . . .'"

Klein has made himself more than fairly expert on the subject of health care policy, which has become its own cottage industry with its own esoterica, as a nation waits in frustration for humane rationality to have a hearing.

The actual administration of health care is so vast in its scope, no one -- literally no person anywhere -- is expert in the usual sense of being able to relate the high abstractions of policy to the operational details. And, health care policy, on the level Klein observes as a journalist, no one even tries any more: the policy proposals and outlines of policy entrepreneurs in Washington and academia are purely heuristic. That's not Klein's fault -- it is just the way things are. If we are going to have reform, it is by adopting a policy heuristic, and then elaborating a new organization from the consequences, which consequences will be almost entirely unforeseen by the policymakers. At best, one hopes that some kind of change at the top creates the kind of chaos down below, where local scope is sufficiently smaller, that there really are experts, and those local experts can leverage the chaos of changing institutional reform to cause something better to emerge.

I think some policy heuristics are better than others, but, obviously, lots of players in the political process are so stupid and have so much ill-will, that the political "debate" is completely pointless. The agenda can be controlled by the opposition of the right-wing and the "centrists", both of whom are strangers to reason.

It is a general problem, I suppose, of interest group politics, and of the domination of the state, by a reactionary plutocracy.

It is part of the zeitgeist of our moment, that this problem of teh stupid is emerging into such pure relief, as the shape of American politics.

We can see it in the economics of the stimulus, where winners of the Nobel Memorial Prize, demonstrate that they are incapable of passing Econ 101 at a community college, in order to give political cover for the stupidest, obstructionist elements of the Republican Party.

And, we see it in the Administration's advocacy of pointless giveaways to the banksters.

As far as health care is concerned, the shape of a health care policy reform almost doesn't matter. At the level of a Congressional enactment, all that is important is that the reform be sweeping enough to change the game and create the chaos necessary to make space for new organization and institutions to begin to emerge. It doesn't have to be sensible; it doesn't have to "work" in the sense of creating anything sustainable or functional -- it would almost be better if initial reform just accelerated the entropy of the existing system, bringing on a more acute failure, and undermining the interest groups that prevent rational policy choice.

If the "rational" choice is "irrational" policy to destroy an interest group blockade, it almost doesn't matter, if anyone doing health care policy knows how the system works. We know that, in important ways, the system doesn't work, and reforming it requires policy that further undermines it, before we will have any chance of substituting a better system.

In a topsy-turvy world, in which the "best" health policy proposals are judged good, to the extent to which they are fundamentally subversive, and politically palatable only to the extent that the hired guns of existing interests do not fully understand how subversive they are, Ezra is actually a pretty good guide. But, don't expect any map of Alice's world beyond the Looking Glass, or Ezra's health care policy universe, to have a lot of lines drawn with a straight-edge.

Logic

Words I never thought I'd hear from a Secretary of Defense - James Fallows: "For the moment, the simple logic of his statement is worth noting. As is the sense of shock at hearing something so logical as part of a budget presentation."

Calculated Risk: Employment: Comparing Recessions and Diffusion Index

Calculated Risk frequently reproduces this chart

Getting the Depression Right

tristero at Hullabaloo:

"It has often been noted that to the Right, 9/11 provided an opportunity to 'get Vietnam right,' by invading Iraq and 'winning' rather than ignominiously withdrawing. Despite the fact that by any rational metric, the Bush/Iraq war was an unmitigated disaster and the situation today is only slightly less anarchic than a Hobbesian State of Nature, it is a given among movement conservatives - and their enablers in the press - that the 'surge' worked and 'we' are winning in Iraq.

What if, . . . the current economic crisis is perceived by the Right as nothing less than a splendid opportunity to get the Depression right?"

tristero concentrates his attention on the harlequins of the Right -- jokesters like Rush Limbaugh, but he encapsulates much of the general character of the respectable and respected Right: people like Fed Chair Ben Bernanke, who imagines that he has a chance to get the Depression Right, by which, I think, he means to preserve the plutocracy through its crisis.