Month: December 2008

Banking On Short-Term Memory

by dday

Paul Krugman appears to be in contact with the Obama transition team, which is very positive news. It may be why the recovery package is expanding in the face of more bad economic news:

Faced with worsening forecasts for the economy, President-elect Barack Obama is expanding his economic recovery plan and will seek to create or save 3 million jobs in the next two years, up from a goal of 2.5 million jobs set just last month, several advisers to Mr. Obama said Saturday.

Even Mr. Obama’s more ambitious goal would not fully offset as many as 4 million jobs that some economists are projecting might be lost in the coming year, according to the information he received from advisers in the past week. That job loss would be double the total this year and could push the nation’s unemployment rate past 9 percent if nothing is done.

The new job target was set after a meeting last Tuesday in which Christina D. Romer, who is Mr. Obama’s choice to lead his Council of Economic Advisers, presented information about previous recessions to establish that the current downturn was likely to be “more severe than anything we’ve experienced in the past half-century,” according to an Obama official familiar with the meeting. Officials said they were working on a plan big enough to stimulate the economy but not so big to provoke major opposition in Congress.

Mr. Obama’s advisers have projected that the multifaceted economic plan would cost $675 billion to $775 billion. It would be the largest stimulus package in memory and would most likely grow as it made its way through Congress, although Mr. Obama has secured Democratic leaders’ agreement to ban spending on pork-barrel projects.

We can’t afford to have a spending package less than this at this point. The economy has truly cratered nationwide, even in areas that didn’t experience a housing boom, as the slump ripples through the greater economy. They’re stopping jury trials because the states can’t afford them, for crying out loud (how exactly does that not violate due process?). This, by the way, is why direct aid for state and local governments is as crucial as these public works investments.

But what about the state of things AFTER two years of deficit spending? We will be facing a world much different from the one that fueled economic growth in the 1990s and the early part of this decade. The bubbles will have been stamped out and unlikely to resurface, at least for a while. Consumer spending as an engine covering 2/3 of economic growth, so that our collective future depends on whether or not kids like the newest Elmo doll, is unsustainable, and since wages are stagnant, unlikely to continue. What is going to take the place of these drivers of growth? Krugman looks at this today as well.

A few months ago a headline in the satirical newspaper The Onion, on point as always, offered one possible answer: “Recession-Plagued Nation Demands New Bubble to Invest In.” Something new could come along to fuel private demand, perhaps by generating a boom in business investment.

But this boom would have to be enormous, raising business investment to a historically unprecedented percentage of G.D.P., to fill the hole left by the consumer and housing pullback. While that could happen, it doesn’t seem like something to count on.

A more plausible route to sustained recovery would be a drastic reduction in the U.S. trade deficit, which soared at the same time the housing bubble was inflating. By selling more to other countries and spending more of our own income on U.S.-produced goods, we could get to full employment without a boom in either consumption or investment spending.

That is the answer, in my view – a reindustrialization of America. The hope is that the investments in areas like alternative energy will spur innovation and create new industries that America can export. But that’s not going to happen overnight. It’s going to take at least a decade to get manufacturing where it probably needs to be to bring the trade deficit back into balance. The other question, which Krugman addresses separately, is who gets stuck with decreasing trade surpluses in this zero-sum game. Clearly, if the exports are related to energy efficiency and aternative fuels, the answer is the Middle East. But if it relates to the source of most of our trade deficit, namely China, I don’t think they will allow it, and they’ve been buying up our debt for years and years to make sure they have at least a partial veto on the resurgence of American manufacturing.

Which means that restoring our economy will be a long, slow, drawn-out process, lasting not a year or two but much longer. And this entire time, Republican know-nothings will promote impatience and start blaming the solutions as the problem. You saw an early example of this when the right, aided by a compliant media, cherry-picked a large infrastructure request from US mayors, finding one or two pieces that are supposed to invalidate the entire idea of federal spending. There will be plenty more of that, solemn speeches on the floor of the Congress along the lines of John McCain’s “OMG $3 million for bear DNA!” nonsense. Plenty of hack groups like “Citizens Against Government Waste” will pop up with every spending request to call it wasteful, Republicans in the Oversight Committee of the House will demand hearings, the Pete Peterson Foundation will put out lamentation after lamentation about the soaring deficit, a newly energized set of conservative radio talkers will hammer these themes day after day, and conservative revisionist historians will influence media groupthink by questioning whether all this public works spending can even help the economy. By this time Republican candidates for national office will be getting lots of attention by slamming all the “pointless budget-busting porkbarrel spending” that is hurting the economy. And this will only get worse as the years go on:

But once the economy has perked up a bit, there will be a lot of pressure on the new administration to pull back, to throw away the economy’s crutches. And if the administration gives in to that pressure too soon, the result could be a repeat of the mistake F.D.R. made in 1937 — the year he slashed spending, raised taxes and helped plunge the United States into a serious recession.

The point is that it may take a lot longer than many people think before the U.S. economy is ready to live without bubbles. And until then, the economy is going to need a lot of government help.

This is not completely fated to happen, a technological breakthrough could spur new economic activity, and reducing wasteful health care or military spending would at least cool the deficit and make that money far more productive. But in general terms, failed conservative policies have put us into a ditch, and it’s going to take a long time to dig our way out. Human nature in general is not exactly oriented toward unlimited patience or long-term planning. Conservatives are practically counting on that.

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Coming Together

by digby

I have always been hard on Ann Coulter. (I think I once called her a gelatinous bag of offal.) But I realize that I probably owe her more respect than do simply because she provides a useful service by being a window into the conservative id.

Here’s a perfect example:

Sarah Palin wins HUMAN EVENTS’ prestigious “Conservative of the Year” Award for 2008 for her genius at annoying all the right people. The last woman to get liberals this hot under the collar would have been … let’s see now … oh, yeah: Me!

[…]

I assume Palin was chosen because McCain had heard that she was a real conservative and he had always wanted to meet one — no, actually because he needed a conservative on the ticket, but that he had no idea that picking her would send the left into a tailspin of wanton despair.

But if anyone on the McCain campaign chose Palin because she would drive liberals crazy, my hat is off to him!

[…]

It seemed like the media would introduce an all-new double standard each day throughout the two glorious months of Palin’s candidacy.

I don’t remember, for example, zealous inquiries into the supposedly peculiar religious practices of any candidates in past elections. No one in the press touched on Sen. Joe Lieberman’s religious beliefs when he was Kerry’s running mate [John Edwards is no doubt relieved about that — ed.] (Nor, while we’re on the subject, was the media particularly interested in the beliefs of the religion that inspired the 9/11 attacks on America.)

But the press snapped right back into their anti-religious hysteria for a candidate who was a Pentecostal! The same media that couldn’t be bothered to investigate Obama’s ties to former Weathermen or Syrian Nationalist Tony Rezko was soon hot on the trail of a rumor that Palin’s church had a speaker 30 years ago who spoke in tongues!

[…]

Liberals also suddenly decided that a woman with children could not handle the stress of higher office. Until Palin reared her beautiful head, this is precisely the sort of thinking liberals would have denounced as the Neanderthal, backwards, good old boy network attitude that had created a “glass ceiling.”

Let’s consider the facts: Palin’s oldest son was about to be under the tender care of Gen. David Petraeus after being shipped off to Iraq. Her next oldest child was about to be married and probably would prefer that her parents butt out. That left three children under the age of 15, which was almost the same as Obama had.

So Palin had one more child — and a lot more executive experience — than the guy at the top of the Democrats’ ticket. (I suspect what liberals were really mad about was that if Palin became Vice President, she probably would have hired a nanny who was a U.S. citizen.)

Having indignantly rejected experience as a presidential qualification in the case of Obama, liberals had to raise questions about Palin’s experience gingerly. But, in short order, they threw caution to the wind and began energetically criticizing Palin for her lack of experience. I call that two … two … two standards in one!

Like most Democrats, both Obama and Biden boasted of their humble beginnings, while having fully adopted the attitudes, pomposity and style of the elites.

Meanwhile, Palin is the sort of genuine American that brings out the worst, most egregious pomposity of liberals. For weeks, Carl Bernstein was showing up on TV to announce: “We still don’t have the date of first issuance of her passport.” Members of the establishment would be astonished to learn that more Americans have guns than passports.

Liberals were angry at Palin because they thought she should look and act like Kay Bailey Hutchinson: Upper crust, prissy and stiff.

Palin had a husband in the Steelworkers Union, a sister and brother-in-law who owned a gas station, and five attractive children — one headed for Iraq, one a Down’s syndrome baby and one the cutest little girl anyone had ever seen.

In a nutshell, Palin was everything Democrats are always pretending to be, but never are.

She didn’t have to conjure up implausible images of herself duck hunting as Hillary Clinton did. Nor was Palin the typical Democratic elected female official who went straight from college into politics, like Nita Lowey.

Despite their phony championing of “women’s issues” (i.e. abortion) there was not one Democrat woman who could win a head-to-head contest with Palin. Especially not if we got to see their faces. Democrats may have a fleet of women politicians, but they don’t have a deep bench of attractive ones. You don’t even think of most Democratic woman as women: Rosa Delauro, Nita Lowey, Patty Murray, Janet Napolitano — and the list goes on. Oh, sure, there are the odd female Democrat sex kittens — your Janet Renos, your Donna Shalalas — but they’re the exception to the rule.

[…]

In time, HUMAN EVENTS’ 2008 Conservative of the Year will be ready to be our President and someday can sweep into office and dismantle all the heinous government programs Obama and the Democrats are about to foist on the nation. Who knows? She might even be able to run as the candidate of “hope” and “change.”

The only thing Coulter really believes in all that is that Democratic women are hags and that the primary goal of conservatism is to piss off liberals. The rest of it is just puerile taunts and sarcastic bully blather. But that is the essence of Limbaugh conservatism and it is the foundation upon which their comeback will be built.

And it would be a mistake to underestimate the power of liberal hating as an organizing principle. The entire contemporary American political culture is based on it. Sadly for Coulter, that doesn’t necessarily translate into Republican success. After all, establishment Democrats are giving them quite a run for their money. And with our new directive to be tolerant of the bigots who despise us and everything we stand for, we’ll all soon be on exactly the same page and the country can come together in its mutual loathing for … us. It could work.

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Madoff-o-nomics

by dday

Paul Krugman had a piece last Friday on the Madoff economy where he asked the key question: “How different, really, is Mr. Madoff’s tale from the story of the investment industry as a whole?” The financial industry, after all, turned mortgages into mortgage-backed securities and sold them all over the world, based on the obviously false presumption that US mortgages would go up perpetually. They created exotic instruments and spread risk everywhere, covering their bets by over-leveraging and using the money to make side bets on the very securities they were parceling out. And while they were setting up the larger economy for a huge crash, they were drawing enormous salaries, taking fabulous trips and buying multiple homes. In fact, even NOW, after getting billions in taxpayer money in the bailout, they continue to fly corporate jets, evade their taxes and take billions in bonuses.

Banks that are getting taxpayer bailouts awarded their top executives nearly $1.6 billion in salaries, bonuses, and other benefits last year, an Associated Press analysis reveals.

The rewards came even at banks where poor results last year foretold the economic crisis that sent them to Washington for a government rescue. Some trimmed their executive compensation due to lagging bank performance, but still forked over multimillion-dollar executive pay packages.

Madoff eliminated the middle man, stealing from investors directly instead of tying them up in doomed securities while taking big profits. Whether they were con artists or honest businessmen gone wrong depends on whether you think they knew what they were doing was fated to fail. Either way, the result is essentially the same.

…and if you think you need to know where your taxpayer money is going once the banks get their hands on it, well, you don’t. Hope that clears things up.

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Bloggy Holiday Thank You

By digby

Thanks so much to all of you who have contributed to my little holiday fundraiser. This old country blogger is truly grateful for all the kind words and contributions. It means more than you know.

Feliz Navidad, Joyeux Noel, Happy Hannukah, Merry Kwanza, Joyous Festivus and Cheery Winter Solstice celebration to one and all.

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The Revolt Of The Generals

by dday

Wes Clark thinks that Democrats and the military can get along. It’s a curious construction – the idea that the military has to be cajoled and persuaded into standard compliance with the chain of command and the plan fact of a Democrat at the top of it. Most of the op-ed talks about how Democrats have to understand the culture of the military better, although there’s a smaller bit about the reverse:

But the military will have to show some understanding as well. We don’t have a monopoly on knowing what the nation’s best interests are. National security now involves such spheres as law enforcement, the economy, the nation’s industrial and scientific base and even such matters as health care and civil liberties. The military is just one voice among many.

Nor are our military plans and proposals beyond questioning. There’s a lot of judgment involved in strategy and operations, and not a lot of certainty. The military is a cautious institution, and plans and options sometimes reflect just the opinion of the most senior person in the room. Even hard military “requirements” should stand up to public scrutiny. So when new members of Congress, Hill staffers and political appointees question tactics, techniques, troop levels and programs, we have to continue to treat these questions seriously and answer them with respect and diligence.

I wonder how Gen. Clark would react to this news. It really doesn’t sound to be like the military is treating a signature campaign promise of the incoming President-elect with respect or diligence.

U.S. military leaders and Pentagon officials have made it clear through public statements and deliberately leaked stories in recent weeks that they plan to violate a central provision of the U.S.-Iraq withdrawal agreement requiring the complete withdrawal of all U.S. combat troops from Iraqi cities by mid-2009 by reclassifying combat troops as support troops.

The scheme to engage in chicanery in labeling U.S. troops represents both open defiance of an agreement which the U.S. military has never accepted and a way of blocking President-elect Barack Obama’s proposed plan for withdrawal of all U.S. combat troops from Iraq within 16 months of his taking office.

The New York Times picks this up by discussing the semantic games being played at the Pentagon to keep a substantial presence in Iraq.

Even though the agreement with the Iraqi government calls for all American combat troops to be out of the cities by the end of June, military planners are now quietly acknowledging that many will stay behind as renamed “trainers” and “advisers” in what are effectively combat roles. In other words, they will still be engaged in combat, just called something else.

“Trainers sometimes do get shot at, and they do sometimes have to shoot back,” said John A. Nagl, a retired lieutenant colonel who is one of the authors of the Army’s new counterinsurgency field manual […]

For his part, General Odierno made clear that the Iraqis still needed help — and that the United States would hardly disappear. “What I would say is, we’ll still maintain our very close partnership with the Iraqi security forces throughout Iraq, even after the summer,” he told reporters.

Military officials say they can accomplish that by “repurposing” whatever combat troops remain. Officially, a combat soldier is anyone trained in what are called combat-coded military occupation specialties — among them infantry, artillery and Special Forces — to engage the enemy. But combat troops can be given different missions. From the military’s point of view, a combat soldier is not so much what he is called but what he does.

You can argue that this is no different from what Obama promised during the campaign – he acknowledged that there would be residual forces after the removal of all combat troops within 16 months, and he did not commit to having all troops out by 2013. But that was before the SOFA signed by the President and the Iraqi government that set down a series of mandates, with troops out of major US cities by the summer, and completely gone by the end of 2011. While Obama has agreed with this in principle, either he or (I would argue) the military is jumping through hoops to try and technically keep to the agreement while in practice voiding it altogether. In fact, Gen. Odierno is adding responsibilities by replacing British troops in southern Iraq with US forces early next year.

Siun at FDL summarizes the state of things here.

So what’s the story? We know the Iraqis want us out – and they have just refused to approve any extension for troops from the UK and other countries. Any fair referendum in Iraq is most likely to do the same – and any extension of the occupation will draw intensified attacks from Iraqi nationalist forces. It’s not like Gates and crew won’t have a war to fight – in fact, the latest reports are that they are speeding up the deployment of US forces to Afghanistan. So why would US generals be so insistent on a longer occupation?

And more importantly, what is Obama going to do about it – and what are we going to do to make certain Obama knows we expect a full withdrawal – preferably starting yesterday.

I would add that these creative loopholes being applied to the SOFA just increases the anger at the US presence and the determination on the part of Iraqis to remove it. They have every reason not to believe that the US will live up to their obligations in the agreement, and at some point they will fight against it, whether at the ballot box if they get a chance to nullify the SOFA and expel US troops immediately, or more dangerously through the application of force and the resumption of hostilities.

I assume that the calculation on the part of the military is simply that they don’t want to be blamed for losing a war. There are issues of pride and honor at stake. If Obama rejects their planning and actually withdraws, they are well-positioned to blame him should things fall apart in Iraq. And by the way, things probably WILL fall apart – there isn’t much goodwill between the various parties, and while Maliki has been accumulating power, it was notable that his attempted purge of the Interior Ministry fell flat, with the Interior Minister freeing everyone captured and condemning his own government for the raid. And of course the shoe thrower has peeled back the discontent with the occupation from the surface. He is not in complete control, and since no effort has been made at political reconciliation, just for propping up a puppet and helping him become a strongman, there’s no way he will be in our absence.

That is not a compelling reason to stay. We have a signed agreement to leave in an orderly fashion, and failure to do so would be catastrophic for both the troops that are staying there in the face of betrayal, and for our image in dealing fairly with the Muslim world in a new Administration. If this is Obama directing this little two-step, then as Siun says, he needs to hear from us. If it’s the generals, then it’s the opening salvo in a predictable bit of brinksmanship, where the military tests the young leader to see how much they can bend him to their will. There are very large majorities who want us out of Iraq. Obama wouldn’t need to tap any political capital to keep his word. We’ll see if he’s as good as it.

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Capital Offense
by digbyThe latest taser death:

A man died Saturday after a Sonoma County Sheriff’s deputy responding to a violent attack in a Santa Rosa home stunned him three times with a Taser, according to the sheriff’s office. Nathan Vaughn, 39, was throwing and breaking things inside a home on Brighton Drive when the deputy arrived at the house, the sheriff’s office said in a statement today. The deputy stunned Vaughn once, then hit him two more times when Vaughn continued to fight. The deputy, who has not been named, was able to handcuff Vaughn, but shortly thereafter Vaughn showed signs of medical problems, according to the sheriff’s office. An ambulance crew already on the scene treated Vaughn and took him to Kaiser Permanente Medical Center, where he was pronounced dead. The incident started at about 10:30 a.m. Saturday when Vaughn’s mother, Doris Vaughn, called 911 and told a dispatcher that her son was “very violent” and was “destroying the house” and “hitting his dad,” according to the Sheriff’s Department. Vaughn’s father, Ronald Vaughn, suffered multiple cuts and bruises in the incident, none of which required immediate medical attention, according to the Sheriff’s Department. Investigators later learned that deputies had responded to another disturbance at the same house at 4:30 a.m. Friday. No one was arrested in that incident, but Nathan Vaughn was taken from the home to stay with friends. Shortly after deputies left Vaughn, he went to a pay phone and made several calls to 911 but hung up on dispatchers, according to the sheriff’s office. Deputies then arrested Vaughn for making repeated, unnecessary emergency calls. Vaughn was cited and released from Sonoma County Jail at about 1:30 p.m. Friday. Vaughn had an “extensive” history of arrests and convictions in a 15-page criminal history report, according to the sheriff’s office. He had been convicted multiple times for drug possession and being under the influence. He also had several theft-related convictions and had served time in state prison for burglary, according to the sheriff’s office.

He does sound like a very messed up guy and I don’t doubt that the officers were in a dangerous situation. But the last I heard we hadn’t yet instituted the death penalty for making unnecessary emergency calls, drug addiction, throwing stuff or even assault. And even then, I would expect they’d have some kind of due process. But with our wonderful non-lethal taser weapons, the state seems to be saving a lot of time and money by frequently electrocuting people to death right on the spot.

h/t to teddysanfran

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Disaster Christianity

by digby

Stirling Newberry has an interesting post up at FDL about Rick Warren’s African AIDS ministry. It’s always seemed obvious to me that this was a thinly disguised conversion effort and it appears to be true. That’s not to say that it isn’t doing some good work, but the work could just as easily be done withouet religious proselytizing. (The ABC method — abstinence, be faithful, use condoms — works fine as a secular public health message.)

The idea was supposed to be that because churches were already present, they could be the disseminators of the message. But that’s not actually how it’s working:

… let’s take another PEACE project, the community in the Philipines:

We shall help bring Christ into the lives of these people by insisting in them to form into small groups and study small group materials that would direct them to God and to growth in character. Hopefully, we can also assist in building a network of support (government and non-government) for these people from whom they can appeal for financing assistance (livelihood loans and funding) and other things that can add to the welfare of the community. This would include building a network of churches that would be ready to receive new attendees coming from the small groups we have formed.

After the recitation of facts, the core of their proejct is laid out: set up a community they control, including the political leaders, and make them meet every week to study the Bibles that they pass out and the materials they send. This is Disaster Christianity. Find hopeless people, give them a few goods and services, and then build a theocracy. It is the model of Hamas in Palestine.

The difference, of course, is that a large amount of the funding for the Warren project comes from taxpayers who don’t know that they are paying to convert the third world to evangelical Christianity as part of the plan. Not that they have a choice in the matter. Their tax dollars a spent on this religious project whether they like it or not.

Meanwhile, the conservative argument for everything from the Hyde Amendment to these new “conscience clauses” is that people should not have to pay or provide services for things they find morally objectionable. But that’s only for Real Americans. The rest of us just have to eat dirt and do what we’re told.

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Forgetting The Purpose

by digby

Jonathan at A Tiny Revolution gives PJ O’Rourke a well deserved wanker award.

According to PJ, the conservatives took their eyes off the ball and forgot the essential point of their ideology: hippie bashing. Big mistake.

Conservatism can never fail. It can only be failed.

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Pwnership Tick Tock

by digby

The New York Times published a great article this week-end about Bush’s contribution to the economic meltdown, specifically the measures his administration took in the housing sector. ( It’s in the business section instead of on the front page, unfortunately. It’s on the front page of the print edition, above the fold)

The global financial system was teetering on the edge of collapse when President Bush and his economics team huddled in the Roosevelt Room of the White House for a briefing that, in the words of one participant, “scared the hell out of everybody.”It was Sept. 18. Lehman Brothers had just gone belly-up, overwhelmed by toxic mortgages. Bank of America had swallowed Merrill Lynch in a hastily arranged sale. Two days earlier, Mr. Bush had agreed to pump $85 billion into the failing insurance giant American International Group. The president listened as Ben S. Bernanke, chairman of the Federal Reserve, laid out the latest terrifying news: The credit markets, gripped by panic, had frozen overnight, and banks were refusing to lend money. Then his Treasury secretary, Henry M. Paulson Jr., told him that to stave off disaster, he would have to sign off on the biggest government bailout in history. Mr. Bush, according to several people in the room, paused for a single, stunned moment to take it all in. “How,” he wondered aloud, “did we get here?”Eight years after arriving in Washington vowing to spread the dream of homeownership, Mr. Bush is leaving office, as he himself said recently, “faced with the prospect of a global meltdown” with roots in the housing sector he so ardently championed. There are plenty of culprits, like lenders who peddled easy credit, consumers who took on mortgages they could not afford and Wall Street chieftains who loaded up on mortgage-backed securities without regard to the risk. But the story of how we got here is partly one of Mr. Bush’s own making, according to a review of his tenure that included interviews with dozens of current and former administration officials.

We know how the Mayberry Machiavellis worked, so we also know that this was politics rather than principle. The term “ownership society” was essentially a campaign slogan to sell their plans to privatize social security, first and foremost. (It also applied to their generous proposal to allow us to pay for our own health insurance and educations.) They were trying to create a legacy phrase like The New Deal (by destroying the New Deal programs.)

But it’s also true that the policies they put into place on homeownership were used to try to expand their electoral base by encouraging minority home ownership and, of course, paying off their contributors in the financial world. No news there. But it was all politics, from beginning to end, even if Bush himself had some starry eyed delusion that he was making everybody in America an “owner.”

Mr. Bush populated the financial system’s alphabet soup of oversight agencies with people who, like him, wanted fewer rules, not more.The president’s first chairman of the Securities and Exchange Commission promised a “kinder, gentler” agency. The second was pushed out amid industry complaints that he was too aggressive. Under its current leader, the agency failed to police the catastrophic decisions that toppled the investment bank Bear Stearns and contributed to the current crisis, according to a recent inspector general’s report. As for Mr. Bush’s banking regulators, they once brandished a chain saw over a 9,000-page pile of regulations as they promised to ease burdens on the industry. When states tried to use consumer protection laws to crack down on predatory lending, the comptroller of the currency blocked the effort, asserting that states had no authority over national banks. The administration won that fight at the Supreme Court. But Roy Cooper, North Carolina’s attorney general, said, “They took 50 sheriffs off the beat at a time when lending was becoming the Wild West.”The president did push rules aimed at forcing lenders to more clearly explain loan terms. But the White House shelved them in 2004, after industry-friendly members of Congress threatened to block confirmation of his new housing secretary. In the 2004 election cycle, mortgage bankers and brokers poured nearly $847,000 into Mr. Bush’s re-election campaign, more than triple their contributions in 2000, according to the nonpartisan Center for Responsive Politics. The administration did not finalize the new rules until last month.Among the Republican Party’s top 10 donors in 2004 was Roland Arnall. He founded Ameriquest, then the nation’s largest lender in the subprime market, which focuses on less creditworthy borrowers. In July 2005, the company agreed to set aside $325 million to settle allegations in 30 states that it had preyed on borrowers with hidden fees and ballooning payments. It was an early signal that deceptive lending practices, which would later set off a wave of foreclosures, were widespread.Andrew H. Card Jr., Mr. Bush’s former chief of staff, said White House aides discussed Ameriquest’s troubles, though not what they might portend for the economy. Mr. Bush had just nominated Mr. Arnall as his ambassador to the Netherlands, and the White House was primarily concerned with making sure he would be confirmed.“Maybe I was asleep at the switch,” Mr. Card said in an interview.Brian Montgomery, the Federal Housing Administration commissioner, understood the significance. His agency insures home loans, traditionally for the same low-income minority borrowers Mr. Bush wanted to help. When he arrived in June 2005, he was shocked to find those customers had been lured away by the “fool’s gold” of subprime loans. The Ameriquest settlement, he said, reinforced his concern that the industry was exploiting borrowers.In December 2005, Mr. Montgomery drafted a memo and brought it to the White House. “I don’t think this is what the president had in mind here,” he recalled telling Ryan Streeter, then the president’s chief housing policy analyst.It was an opportunity to address the risky subprime lending practices head on. But that was never seriously discussed. More senior aides, like Karl Rove, Mr. Bush’s chief political strategist, were wary of overly regulating an industry that, Mr. Rove said in an interview, provided “a valuable service to people who could not otherwise get credit.” While he had some concerns about the industry’s practices, he said, “it did provide an opportunity for people, a lot of whom are still in their houses today.”

This is what comes of having the president’s political hit man intimately involved in policy.
None of this is to suggest that this wasn’t based on the noxious free market fundamentalism of the conservative movement. It certainly was. They would have tried to deregulate and remove all oversight of the industry no matter what. But Bush-Rove-Cheney were a unique trio who were able to use the federal government to not only advance their self-serving economic and foreign policy ideology for the benefit of their rich contributors, they were also obsessed with using every lever of government as political tools to advance their electoral prospects and destroy the political opposition. The problem is that they thought they could control forces that no government can control through marketing, lies and propaganda. And they got schooled. Unfortunately, everyone else is going to have to pay the price.
Read the whole article if you get the chance. It’s yet another illustration of the stupidity, myopia, greed, arrogance and incompetence of the Bush administration — and the total bankruptcy of conservative ideology when put into practice.

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It’s A Bloggy Holiday

by digby

Yes, it’s that time of year again, the time when I ask all of my loyal readers to pitch in a penny or two to keep Ye Olde Blogge up and running for another year. And this year it’s harder for me to make that request. Everyone is hurting a little bit, or scared they will be shortly. And we’ve all just spent an exhausting year throwing our spare money to politicians to try to end the horrors of the Bush years. So, I know it’s tough.

But I decided to ask anyway in the hopes that we will be able to keep this blog going, and the financial model that supports it, through this treacherous time ahead. A lot of businesses are going to fail and a lot of people are going to be out of work, but I’m hopeful that independent blogs like this one can continue to be a source of information, analysis and community while we all go through it together.

Thank the Gods and Goddesses of your choice that we have a new president, blessed with brains and common sense, during this period. (Seriously, if the Republicans had managed to extend their run I don’t think I could have kept doing this while I amassed my survival gear and headed out to the Brook Range in Alaska to await the end times.) But as it is, there is cause for hope (yes there is!) and good reason to stick this out and remain engaged as we face these tough times ahead.

Everything’s about to take a bit of a shift, of course. The netroots and the Progressive Movement are no longer strictly an oppositional force. And I, like bloggers everywhere, have struggled with how to deal with that. But I think I pretty much always come back to the same place, which is that I just muddle along daily like everyone else, sorting out what I think is happening and how I feel about it, right here in front of all of you. And I admit that with the new political order, it’s sometimes hard to figure out exactly what that is — I simply don’t know yet how the Obama revolution is going to affect the village or how they are going to react to it. It’s all unfolding in a most fascinating and absorbing way.

When I started this blog six years ago, we were a very tiny group of liberal political junkies fighting against an overwhelming tide of jingoistic conservatism everywhere. The community was intimate and friendly, like a small group of outcasts banding together for comfort and validation. Obviously, a lot has changed since then. The blogosphere has been professionalized and monetized and little blogs like mine are now dinosaurs. Indeed, Tina Brown’s new venture The Daily Beast is backed by Barry Diller with untold millions and she’s hired professional writers like Tucker Carlson(!) to write for big bucks. Reporters and editors are all blogging and tweeting and IMing like crazy these days. It’s a new world.

But I’m hopeful that there will still be room for the outsider types like me to keep doing this based on the shoestring model we developed back in the day — reader donations, ads and some help here or there from liberal institutions if it’s offered. It’s the freest form of writing there is, we do not answer to any single entity (certainly not Tina Brown and Barry Diller) and no advertiser pays enough to make it worthwhile to sell ourselves out. If we get any support from liberal institutions it’s with the understanding that it’s to keep doing what we’re doing. It’s a great model as long as you don’t have any ambition to get rich, but rather just want to maintain the privilege of writing your blog every day.

And I do mean every day. I realized last night as I was thinking about this that I haven’t taken a day off in over a year. Not one. But the amazing thing is that I didn’t realize that until I thought about it. Blogging isn’t work, it’s just … my life. But obviously, I have to generate money like everyone else and your kind contributions over the last three years have made it possible for me to keep this up. So, if you have it, and can spare it, I’d be grateful once again for any change you can put in the paypal tip jar over there (or via snail mail at the address shown) to make this a Very Bloggy Holiday.

On behalf of my friends and contributors, the fabulous dday, tristero and Dennis, I want to thank all of you for spending time with us, slogging through our scribblings, sharing our passions and keeping us on our toes whether we like it or not. There would be no Hullabaloo without community and none of us would do it weren’t for you fine folks reading and participating and always making us feel like it’s a worthwhile way to contribute.

Happy Hollandaise everyone.

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