Month: March 2009

Leftist Cranks

by digby

Gasbag wisdom:

Tamron Hall: Paul Krugman, he says that the plan “fills me with a sense of despair.” Is he alone in that criticism? The Dow is up 313 points.

Chuck Todd: There are a lot of reformers on the left who want to see massive reform of the financial system, who don’t like this plan, who believe it’s too worried about making sure Wall Street is just as comfortable with this whole idea as it pertains to Main Street.

But a little context to Paul Krugman. He rarely has liked anything that Obama has done, when he was a presidential candidate and now as president. So I think the White House doesn’t take his criticism as seriously simply because he has been so critical on pretty much every single initiative, both as a candidate and now as president. But they’re mindful of the criticism and it is a growing chorus on the left, that’s for sure.

John Harwood: Well Chuck, I was going to say, if the White House to choose between praise from Paul Krugman or plus 300 points on the Dow, I suspect that they would happily take the latter.

Krugman has not been critical of every single thing Obama has done. That’s ridiculous. But he was critical of his campaign health care proposal which refused to endorse a mandate (now abandoned, btw, and conceded to have been a political ploy rather than a matter of principle) and his current economic policy, believing it to be too timid. He is hardly alone, but he does have the biggest perch from which to voice that view and so gets the attention. Krugman has an exceptional track record over the past decade, however, and it is a mistake for the anyone to dismiss his criticisms out of hand because of a perception that he has some personal animus.

More important than that however, is this idea that criticisms of Obama’s economic policies are coming from sort of leftist fringe when the fact is that it’s coming from mainstream economists. I don’t know if he’s parroting the White House but it’s concerning. John Harwood’s silly rejoinder about Wall Street being more important than an economist is a typically insular way of reporting on this issue (and to Todd’s credit he did respond that the administration is loathe to use the Dow as a yardstick.) It’s great that the Dow is rallying so crisply this past couple of weeks, but it operates on its own logic that doesn’t really mean anything when you are talking about these fundamental, economic issues as Krugman is. Honestly, if Todd and Harwood are indicative of the political establishment’s view that systemic reform of the financial system is some kind of silly leftwing joke then we are in deeper shit than I thought.

The arguments aren’t about right vs left, they are about insider vs outsider, wall street vs main street, what works vs what doesn’t work. Trying to use the old DFH line and saying Krugman is shrill is no more correct now than it was when the Bush administration did it. It’s a lazy, outmoded paradigm.

Update: And if you want to see bankrupt thinking, check out the man who would have been Obama’s commerce secretary on the budget.

Norah O’Donnell: Ok Senator, you’re going to criticize it. You won’t propose or put together and alternative.

Judd Gregg: No actually …

O’Donnell: If you had a line item pen andcould go through the president’s budget, name the top three things that you would excise.

Gregg: Well, basically I would limit his attempt to dramatically expand the cost of health care. We already pay 17 percent of our GDP in health care. we do not need to increase that number. Significantly, the fact is that we spend more on health care than any other industrialized nation. So there is enough money in the system for health care, you don’t have to dramatically expand it because … he wants to expand it because he wants to quasi – nationalize it.

I would also limit his attempt to nationalise the education loan program. that’s not an effective or efficient way to deliver education loans. that’s a big mistake.

I would also freeze discretionary spending which would save around 900 billion dollars over ten years.

In addition I would step into the entitlement accounts and say listen it’s time for us to rein in the growth of the entitlement accounts and aggressively promote fiscal responsibility there.

O’Donnell then went on to quote Judd saying that using the budget reconciliation is a “Chicago style” strongarm tactic.

I can’t help but find it a little bit ironic that the man who said that was invited to come into Obama’s cabinet, but Krugman is dismissed as a crank.

Update II: From the Krugman is a shrill leftist file, here’s the Wall Street mouthpiece Erin Burnett:

This is essentially a sophisticated plan that treasury Secretary Hank Paulson tried to do last fall. It took quite a while to get it up and running. Timothy Geithner, the Treasury Secretary, was the man who was working on it ever since then.

.

Good Obama Meets Bad Obama Mid-Answer

by dday

Barack Obama says all the right things in this riposte to Dick Cheney about Guantanamo, right up until the point where he makes a distinction between terrorist suspects and suspects of any other criminal stripe:

PRESIDENT OBAMA: I fundamentally disagree with Dick Cheney. Not surprisingly. You know, I think that– Vice President Cheney has been– at the head of a– movement whose notion is somehow that we can’t reconcile our core values, our Constitution, our belief that we don’t torture, with our national security interests. I think he’s drawing the l– wrong lesson from history.

The facts don’t bear him out. I think he is– that attitude, that philosophy has done incredible damage– to our image and position in the world. I mean, the fact of the matter is after all these years how many convictions actually came out of Guantanamo? How many– how many terrorists have actually been brought to justice under the philosophy that is being promoted by Vice President Cheney? It hasn’t made us safer. What it has been is a great advertisement for anti-American sentiment. Which means that there is constant effective recruitment of– Arab fighters and Muslim fighters against U.S. interests all around the world.

STEVE KROFT: Some of it being organized by a few people who were released from Guantanamo.

PRESIDENT OBAMA: Well there is no doubt that– we have not done a particularly effective job in sorting through who are truly dangerous individuals that we’ve got to– make sure are not a threat to us, who are folks that we just swept up. The whole premise of Guantanamo promoted by Vice President Cheney was that somehow the American system of justice was not up to the task of dealing with these terrorists.

I fundamentally disagree with that. Now– do these folks deserve Miranda rights? Do they deserve to be treated like a shoplifter– down the block? Of course not.

STEVE KROFT: What do you do with those people?

PRESIDENT OBAMA: Well, I think we’re going to have to figure out a mechanism to make sure that they not released and do us harm. But– do so in a way that is consistent with both our traditions, sense of due process, international law. But this is– this is the legacy that’s been left behind. And, you know, I’m surprised that– the Vice President is eager– to defend– a legacy that was unsustainable. Let’s assume that we didn’t change these practices. How– how long are we going to go? Are we going to just keep on going until– you know, the entire Muslim world and Arab world– despises us? Do we think that’s really going to make us safer? I– I don’t know– a lot of thoughtful thinkers, liberal or conservative– who think that that was the right approach.

If Obama could spend every day reacting to Dick Cheney quotes, I imagine it would please him and his staff greatly. But he could have ended with the fundamental disagreement that the American justice system is not up to the task of dealing with terrorists. But I guess politics intruded, or some knee-jerk reaction toward moderation, and Obama makes a truly puzzling hedge, that terrorist don’t deserve to be treated like shoplifters. On the grounds of their post-conviction sentence, that makes perhaps some sense, and maybe on bail being set, but not at all on the grounds of anything else. You cannot set up parallel justice systems, that’s the entire point of disagreeing that it’s insufficient to deal with terrorists. A process of indefinite detention with good intentions remains a flawed process.

This is a troubling pattern. I mean, continued airstrikes against Al Qaeda suspects in Pakistan may be legally justifiable. They may be consistent with international norms. They may even be effective in the short term. But they inspire the exact same passions among the citizenry being bombed, especially when those bombs are errant and hit things like wedding parties and peaceful villages, that Obama condemned Dick Cheney for inspiring with his indefinite detention and torture process at Guantanamo. Since entering office Obama has stepped up the unmanned Predator drone attacks dramatically, in a continuum with the Bush Administration’s practice after Pervez Musharraf left office. The strategic consequences are not only immense but PRECISELY AS OBAMA OUTLINED with respect to Guantanamo. Obama seems mindful of the long-term strategic impact of engaging the Muslim world and winning the battle of public opinion, and yet there are very legitimate consequences to airstrikes that can kill civilians, anger populations, and disrupt political dynamics in an unstable country. In fact, that’s supposed to be WHY we’re sending more troops to Afghanistan.

Colin Cookman writes:

While these strikes may bear some meaningful short- and medium-term successes, as a long-term strategy their value is less clear. Research from the RAND Corporation into the case histories of 648 terrorist organizations that carried out attacks between 1968 and 2006 found that only 7 percent were successfully eliminated through direct military force. This is in contrast to 43 percent who dropped their violent activities after some form of political accommodation and 40 percent who were broken up successfully through some combination of local policing, infiltration, and prosecution.

I imagine that the President has weighed the costs and benefits and decided that short-term disruptions in Al Qaeda leadership are worth the price. And there’s the time-honored Democratic practice of “looking tough” in the White House. But the dissonance between the stated vision and reality is a little bit hard to swallow.

.

All American Common Senseby digby
Here’s Perlstein in Newsweek:

Our pundits worry that a populist rage is loose in the land—pitchforks everywhere! My first reaction upon hearing that was to dismiss the word “populist” as a distraction, an epithet meant to recall episodes in which mass rage made sound policy deliberation impossible. Think of dispossessed 19th-century farmers letting their righteous rage at bankers tumble easily into free-floating anger at “Jewish bankers” and then simply at Jews; of 1970s white South Boston parents stabbing busing advocates with American flags. My second reaction was to dismiss the word as inaccurate. What makes this rage “populist”? This is ordinary rage, rational and focused. The lead pitchfork bearers, after all, are people like New York Times business columnist Joe Nocera, who wrote that AIG’s Financial Practices Group was guilty of a “scam” at which “we should be furious.” You might more accurately call that common sense. Casting my eye over the broader sweep of history, though, I no longer fear populism. The habit of messily dividing the world into “the people” and “the elite”—whether it’s left calling out right, or right calling out left—is distinctively, ineluctably American. It’s not going away. And there’s much more to it than the name-calling of angry political factions. It is the governing folk wisdom of a nation without an inherited aristocracy, distrustful of privilege that is not “earned.” It is our American common sense. read on.

This is where the right took its big wrong turn in recent years with its Randian insistence that wealthy dealmakers are the smartest, most productive people in the world. I don’t suppose people care much during good times, but in bad times that’s the kind of talk that makes a working person start to see pitchforks dancing in their heads.
I think I am still most bemused by the fact that these MOUs are so out of touch that they think they can actually convince people that they are not only indispensible but that they deserve to be rewarded for their failure by average working people. They are proving, once again, that they aren’t nearly as good as they think they are.
.

Trading Eights With Digby

by tristero

Trading eights: [Jazz.] Also ‘trading fours,’ etc. Soloists taking turns at improvising, playing for eight (or four, etc.) bars at a time.”

In her recent post about socialism, Digby writes:

This crisis is reawakening the left in some ways it hasn’t been tested in some time. It’s been a long series of bubbles and political setbacks over decades and there aren’t a whole lot of people who have been engaged in these issues on a philosophical basis for quite some time. The argument among us took place between the economic neoliberalism of the DLC and lukewarm, leftover Great Society articles of faith. But there is more on the left spectrum than that (or full throated Marxism.) It’s necessary to expand the conversation in a time of crisis.

On the main point, I totally agree. We really need to hear leftwing voices in the mainstream media. Where we may disagree is, to some extent, on a labeling or definition refinement, which will probably strike youngsters and newcomers to American politics as merely semantic:: liberals are not leftists. Or, ito be more precise, most liberals are smack in the center of American politics. For example, most people would agree that Nobel laureate Paul Krugman is a liberal (by the way, read his column and weep). But few, other than the kind of rightwing nuts who argue – still! – that FDR was as Marxist as Stalin, would argue that Krugman, who worked for Ronald Reagan, is in any way, shape, or form a leftist. LIkewise, while it is quite clear that the great Rachel Maddow is to the left of center, her liberalism is not cut from the same cloth as the kind of socialism Mike Davis espouses in the Moyers interview that Digby discusses.

What we need in the mainstream media are not only more people as liberal (and as intelligent) as Paul Krugman and Rachel Maddow – and less people as incoherently right-centrist (and stupid) as Tom Friedman – but also genuinely leftwing voices. As a liberal in rough agreement with Maddow on most issues, I am talking about the necessity of hearing more from people to my political left, people who, in the Sixties, reviled liberals as enthusiastically as they did Nixon and Agnew. What a pleasure it would be to turn on cnn and vehemently disagree with someone because they were too far to the left! I’m not talking about just Amy Goodman who, while surely left, is still close enough to the mainstream to invite Krugman on her show (even if she is never invited on Press The Meat), or even the much=reviled Noam Chomsky (who by the way, enjoys a tremendous reputation nearly everywhere but here). I’m talking about… and there’s the problem.

As it happens, the March 23, 2009 Issue of The Nation is all about socialism and the left. And among the articles is one by Immanuel Wallerstein, of Yale who can’t help bringing up:

the structural crisis of capitalism as a world system, which is facing, in my opinion, its certain demise in the next twenty to forty years.

Uh, huh. Riiiiiiiiiiight.

And that’s the problem, at least from this liberal’s perspective. There are a lot of crappy writers on the left who, like Mr. Wallerstein, just can’t resist the apocalyptic mode. Yes, we need genuinely leftwing voices in the mainstream media, but not just any leftwing voices. The last thing American public discourse needs, after countless decades of giving rightwing nuts predicting Armageddon a free pass, are lefttwing nuts predicting Armageddon.

Of course, there are more thoughtful leftists out there. In their lead article to The Nation issue, Barbara Ehrenreich and Bill Fletcher, Jr. are, to some extent, those kinds of voices we need to hear more of, even if they first appear to caution against precisely the hyperbole Wallerstein indulges, and then indulge in it themselves:

If you haven’t heard socialists doing much crowing over the fall of capitalism, it isn’t just because there aren’t enough of us to make an audible crowing sound. We, as much as anyone on Wall Street in, say, 2006, appreciate the resilience of American capitalism–its ability to regroup and find fresh avenues for growth, as it did after the depressions of 1877, 1893 and the 1930s. In fact, The Communist Manifesto can be read not only as an indictment of capitalism but as a breathless paean to its dynamism. And we all know the joke about the Marxist economist who successfully predicted eleven out of the last three recessions.

But this time the patient may not get up from the table, no matter how many times the electroshock paddles of “stimulus” are applied. We seem to have entered the death spiral

Barbara, Bill, trust me on this: we haven’t. Oh, it’s gonna be awful, the next few years, but no. No death spiral.

Fortunately, Ehrenreich and Fletcher have something quite constructive to add: They identify a serious, contemporary economic condition that all but requires leftists to fashion entirely different critiques and proposals than those of the past, even the recent past of the 60’s and 70’s:

What is most galling, from a socialist perspective, is the dawning notion that capitalism may be leaving us with less than it found on this planet, about 400 years ago, when the capitalist mode of production began to take off. Marx imagined that industrial capitalism had potentially solved the age-old problem of scarcity and that there was plenty to go around if only it was equitably distributed. But industrial capitalism–with some help from industrial communism–has brought about a level of environmental destruction that threatens our species along with countless others. The climate is warming, the oil supply is peaking, the deserts are advancing and the seas are rising and contain fewer and fewer fish for us to eat..

As Ehrenreich and Fletcher admit, the left doesn’t yet have a coherent plan to meet this lack of abundance. But – and I agree it is to the left’s credit – they recognize they must develop one. That is a vast improvement over the magical laissez-faire delusion of the right, the assertion that no plan is the best plan.

I’ll never be anything close to a socialist (you’re welcome to try to convince me, but you won’t) and I’ll always be a liberal. What that means, among other things, is that I can recognize a smart idea when I hear it. Ehrenreich and Fletcher are genuinely on to something and I look forward not only to more left voices in the media but to pondering the left’s answers to the questions and problems these two writers pose.

[Revised slightly after the original post, to clarify my sense of Amy Goodman’s position in the media.]

The Detainees In North Korea

by dday

Just a quick word on this: it is exceedingly weird to me to know the subject of a major news story, and even weirder to know the subject of an international incident. Euna Lee is an editor I knew briefly when I lived in San Francisco, as we worked at the same place. She moved on to Current TV and was sent to China to film around the Tumen River border area with North Korea. North Korean authorities picked up her and her fellow journalist Laura Ling and have detained them for several days now, claiming that they entered DPRK territory. The latest reports put the two in Pyongyang, and the State Department has opened talks for their release.

It is completely irresponsible of Current to send these two young women alone to a dangerous border region, particularly at a time when the North Korean government wants to test their limits with a new Administration. Current’s whole “citizen journalist” model doesn’t mean you airdrop citizens into difficult circumstances and essentially ask them to poke a bear with a stick. But at this point, we have to hope the State Department can extract their release. Give them a second of your thoughts if you can. I don’t really know what else can be done, but if you have ideas, throw them in the comments.

.

Protean Putz

by digby

I’ve been meaning to link to this masterful post by Batocchio for some time but seeing David Rivkin on TV today reminded me of it. This is just a taste:

I haven’t conducted an exhaustive review of all of Rivkin’s statements, but I’ve caught enough to see him argue that: torture is appalling, waterboarding may not be torture, waterboarding cannot be torture if American personnel undergo it, waterboarding is not torture, waterboarding is torture, and torture works. The protean logic and contradictions are rather dizzying, and that’s precisely their intent. They make much more sense if the person offering them isn’t trying to make a coherent argument – like a good defense attorney, he’s trying to muddy the waters and seed doubt in the minds of jurors.

He goes on to excerpt some of Rivkin’s appearances to illustrate that point and continues:

Foreman picks up on the flaw in Rivkin’s last argument, about waterboarding American personnel in SERE training:

FOREMAN: But we’re waterboarding our own people to give them an idea of what they would encounter if they were captured by somebody else.

RIVKIN: Well, forgive me, as a matter of law and ethics, if the given practice like slavery and prostitution is officially odious, you cannot use it no matter what our goals is, you cannot even use it to volunteers. So, if all forms of waterboarding are torture then we are torturing our own people, and the very same instructor who spoke before Congress the other day about how it’s torture, is guilty of practicing torture for decades. We as a society have to come up with the same baseline using (inaudible) in all spheres of public life instead of somehow singularizing this one thing, which is interrogation of combatants and we need to look at it in a broader way.

Rivkin and others have offered this argument several times. It may not be convincing, but it is inventive. (It seems to have first emerged as an attempted rebuttal of former SERE trainer Malcolm Nance’s authoritative 10/31/07 piece, “Waterboarding is Torture… Period.” Nance, a “former Master Instructor and Chief of Training” at the U.S. Navy SERE School, who testified before Congress, appears to be the “very same instructor” Rivkin’s claiming is hypothetically “guilty of practicing torture for decades.”) Rivkin’s also pulling a fast one here, trying to set up a paradox to befuddle the listener. Torture is odious and immoral. SERE training, while tough, is not. Rivkin tries to skip to his conclusion without proving it. He ignores Foreman’s common sense objection and makes a substitution. Looking at the explicit and implicit claims in this exchange, it goes something like this:

RIVKIN: Waterboarding cannot be torture if we subject American personnel to it.

FOREMAN: But SERE training is not torture.

RIVKIN: Aha! But torture is always wrong! Therefore, you must either prosecute our brave men and women in uniform, or not prosecute Bush officials for authorizing torture!

This is precisely the paradox and uncertainty Rivkin wants to sow in listeners’ minds. Rivkin hasn’t actually addressed Foreman’s point, but pushes past it to offer a statement most everyone will agree with – torture is odious – while pretending that he has proven that SERE training is torture. Comparing torture to slavery and prostitution is fine, but Rivkin’s conclusions depend on accepting the false premise that SERE training is torture. It’s certainly not under U.S. law, and Rivkin can’t honestly believe it is – but he’s trying to defend his “clients” in the Bush administration here. Slavery and prostitution are not at all analogous to SERE training (or military service in general – and Rivkin is implicitly comparing American troops to prostitutes here). Looked at another way, Rivkin’s essentially arguing that all sex is rape or vice versa. He does mention that volunteering doesn’t matter, but argues this in relation to torture, while treating as a given a separate point which Foreman has just directly contested – that SERE training is torture. Rivkin ignores the crucial elements of consent, control, purpose, trust and short duration that differentiates the brief waterboarding in SERE training from the illegal and immoral torture technique of waterboarding. Rivkin’s line of argument is particularly despicable given that SERE training is meant to prepare American military personnel against possible torture upon enemy capture, not to justify the torturing of prisoners under American control. SERE training is a defense against an evil practice, not an endorsement of that evil. Most of the American military do not view torture as either moral or legal, and much of the internal pushback against the Bush administration’s policies of torture, abuse and indefinite detention came from military lawyers, many of them conservatives.

I now have an involuntary reflexive response to people like him and I just start throwing food at the TV when he comes on the screen. If you are less far gone than I am, read batocchio’s whole post for a thorough dismantling of Rivkins disingenuous, insulting arguments.

And speaking of insulting, this article in The Week by Francis Wilkerson asks the question that nobody else has thought to ask: why is Dick Cheney all over television?

In the background, behind all the noise and fury about misspent billions and AIG bonuses, there is the story that won’t go away. President Obama and his aides express no interest in it. Major news reports about it are intermittent at best. Yet in twenty, even fifty years, long after the AIG bonuses are forgotten, today’s background story may be as vivid a historical marker as the Palmer raids or the internment of Japanese-Americans during World War II. Slowly, not yet surely, America is moving toward a reckoning with torture.

Few people, in the press or elsewhere, seem to want it. The big news organizations have mustered an army of reporters to sort through the financial wreckage. But the torture beat has been largely relegated to lefty bloggers, The New Yorker and a few outraged conservatives. Americans feel bad enough about the general state of affairs. Who wants to wallow in what, in the end, may turn out to be the biggest national guilt trip since Zippo lighters in Vietnam?

[…]

The medium is not the message in politics, but it can provide clues about intent. Some have speculated that Cheney’s television appearances are an attempt to burnish his legacy. But cable television is not where legacies are cast or reconstructed. For that, there is the publishing industry (President Bush has just signed his book deal); the pages of Foreign Affairs; even the op-ed pages. By contrast, television is immediate—a conduit of today’s battles, not history’s.

Cheney seems determined to establish a real-time record of rancor with the new administration, to write his name in neon on a very public White House enemies list. Perhaps he’s genuinely angry. Or perhaps at some future, still hypothetical, date, his current belligerence might prove a useful shield, allowing the vice president to claim that he is being targeted for his political opposition, being made a scapegoat for denouncing his successors. Perhaps Dick Cheney, too, suspects his days of discussing torture may not be over.

If only.
.

Armchair Constitutionalists

by dday

Whenever I hear media stars like Lawrence O’Donnell and Howard Fineman pontificating over whether something is Constitutional or not, I get extremely wary, particularly considering they have spent several years arguing about detainee policy and wiretapping and torture in mostly POLITICAL terms instead of the constitutional aspects. Suddenly when Congress tries to set tax policy toward a particular class of wealthy people the media gets out their social studies texts. I imagine there can be a fair amount of reasonable argument around this, but Scott Lemieux, claims the Constitutional concerns are groundless.

Ed — regrettably echoing the hapless Charles Krauthammer — says that “Bills of attainder” and “ex post facto” are two phrases well-known to high school freshmen taking mandatory civics classes, so they must certainly be known to Congressmen.” The ex post facto clause, however, has been held since the early 19th century to apply exclusively to criminal cases. The prohibition on bills of attainder is even less relevant; it certainly prohibits Congress from convicting AIG traders of criminal offenses without a trial, but says absolutely nothing about Congress’s ability to set tax policy.

Another blogger, in addition to the clearly erroneous claims, asserts that the bill violates the equal protection clause. The obvious problem with this argument, however, is that it proves too much. The tax code discriminates in countless ways — against renters and wage earners and in favor of homeowners and investment income earners, for example. It was been well-settled for decades that such discrimination require only some rational relationship to a legitimate government interest. The policy taxing bonuses for corporations that would have gone bankrupt without public support bears a much clearer relationship to a legitimate public objective than a law preventing anyone but an optometrist or ophthalmologist from putting lenses in glasses frames, which the Supreme Court upheld unanimously.

The debate about whether a large excise tax is good public policy ought to go forward. But let’s be clear what these Constitutional questions are all about. The average salary of practically everyone you see on the teevee is well beyond the national average, and in most cases beyond the $250,000 a year cited in the House bill, and used as a dividing line in Obama’s budget to reset marginal tax rates from 35% to 39%. And so, for Overton Window purposes, characterizing any effort to reduce income inequality as unconstitutional makes a whole lot of sense. Take a look at Mark Haines, CNBC’s latest hero, arguing that no company can be “run well” by anyone making under $250,000 a year. Because they’ve been run so well by the overclass to this point.

Here’s a separate interview between Haines and Rep. Brad Sherman (D-CA):

HAINES: It does not go far enough, sir?
SHERMAN: Absolutely — it doesn’t deal with the Merrill Lynch bonuses, since they were paid in December, and worse than that it doesn’t deal with million-dollar-a-month salaries. More importantly, we should have AIG in receivership, they should’ve been put in receivership months ago, and we would have saved tens of billions of dollars. We wouldn’t see tens of billions going to the richest on Wall Street, and overseas — and of course, these bonus contracts would have been voided. We need receivership, and we need limits on salaries as well as bonuses.

HAINES: Well, receivership … I think most people agree, that would have caused some systemic problems.

SHERMAN: Most people on Wall Street agree. But most people on Main Street do not.

HAINES: And what do the people on Main Street know about running a financial system?

SHERMAN: What do AIG executives know about running a financial system? [crosstalk] They only know how to destroy one.

HAINES: This is witch-huntery. I’ll be perfectly honest with you.

SHERMAN: We don’t have to hunt the witches. We know who they are.

HAINES: You and people who share your opinions seem to think, you know, let’s hold salaries on Wall Street to $100,000. Do you have any idea what Wall Street would look like if you do that?

SHERMAN: Well, first of all, I wouldn’t set the limit at $100,000.

HAINES: Well, whatever. $250[,000]. All the business would go — all the business would go overseas, that’s the bottom line.

SHERMAN: Obama’s position is $500,000 plus unlimited restricted stock. That’s where I’m at as well, although I was actually at a higher level before Obama’s statement. But for you to assume that Wall Street is acting in the national interest flies in the face of recent reality.

There’s a multi-pronged attack here. Congress cannot tax exorbitant bonuses of companies they bailed out because it’s unconstitutional. Corporations can only be run well by the rich because greed is virtuous. Only investor participation can save the financial system, so government had better not get any ideas about capping executive compensation. And those executives must be kept happy and lavished with gifts because they are so wise in the ways of exotic financial instruments that they are the only ones who can defuse them, a fairly ridiculous idea.

Similar arguments made during the 1997 Asian financial crisis, when currencies and stock markets collapsed in much of Southeast Asia, turned out to be a smokescreen to protect the executives who were partly responsible for the mess. Recovery from that crisis required Indonesia, South Korea and Thailand to close or consolidate banks. In all three countries, bankers protested, claiming that their connections with borrowers were critical to recovery.

In South Korea, cozy relationships between banks and the large conglomerates called chaebols were a major reason for the crisis. But after the crisis hit, Korean bankers and companies insisted that the complexity of chaebols like Samsung and LG — with their many separate but interwoven businesses — meant that outsiders would not be able to distinguish good loans from bad.

In Thailand, some argued that the preponderance of family-owned businesses — and the lack of clarity about precisely which family members were really in charge — meant that only bankers already working in big institutions like Bangkok Bank and Siam Commercial Bank could determine which borrowers were creditworthy.

The leaders of Thailand and South Korea did not listen to such arguments, and thank goodness. Some of the leading Thai banks were taken over by the government. After the crisis, a civil servant in charge of one such bank noted that its bad loans were much bigger than had been indicated before the takeover, largely because of an internal coverup. Only when outsiders took over did the public discover the full scope of the losses.

We have a major inequality problem in this country. Wages for workers have stagnated while the rich grow ever richer. It is well within the public interest to address that, and because this has become so extreme as to affect consumer spending and economic activity, it’s more vital now than ever. Wall Street has decoupled salary from performance and perpetuated a culture of greed in the belief that such greed made sense for the overall economy. But an oversized financial sector that produces nothing but imagined wealth actually debilitates a country. Simply put, astronomical profits from making side bets on the economy should be discouraged, making the same profits from inventiveness and innovation would be encouraged in the exchange.

If it turns out that you can make a comfortable living at zombie institutions but can’t earn big bucks there, then smart, confident, ambitious, greedy people will leave their jobs and go do other things. In a good way! Maybe they’ll start small businesses. Maybe they’ll join non-enormous, better-managed firms and help them grow and prosper. That’s the kind of thing smart, confident, ambitious, greedy people ought to be doing. Putting their talents to work in the pursuit of profitable market exchanges. Not putting their talents to work trying to run scams at taxpayer expense.

There are promising signals that the Administration is taking concerns about executive compensation seriously, although there are far better ways than having a secretive institution like the Federal Reserve “oversee” giant corporations (which they failed to do in the run-up to this crisis). Perhaps one way is to actually tie pay to performance through Silicon Valley-style compensation schemes, but the best way is through the tax code with rates at the highest marginal levels (I’d insert an additional rate above $1 million or more) that look more like the pre-Reagan era. Which is why those who wed themselves to the establishment elite get so nervous with clawback provisions like the AIG bonus tax. They don’t want anyone in Washington getting any funny ideas about marginal tax rates. After all, it’s unconstitutional.

.

Waking Up

by digby

There was a lot of sturm and drang a week or so ago about the NY Times asking Obama whether or not he was a socialist. (dday wrote a great post on the subject.) The accusation against Obama is, of course, idiotic — something designed to please the wingnut rubes, who react in Pavlovian fashion and don’t have any idea what they are so upset about. But socialism is a real system and it’s practiced in some degree throughout the world. So I’ve wondered why nobody is talking to them right now.

Bill Moyers did that on his show this week, speaking with Mike Davis, professor at UC Riverside an card carrying socialist. He’s also an American and someone who lives in the real world so he doesn’t prescribe strictly socialistic solutions to our current problems, but he had some very interesting things to say about the role of the left at a time like this, which I found very thought provoking.

MIKE DAVIS: Well, I mean, the role of the Left or the Left that needs to exist in this country is not to be to come up with a utopian blueprints and how we’re going to run an entirely alternative society, much less to express nostalgia about authoritative bureaucratic societies, you know, like the Soviet Union or China. It’s really to try and articulate the common sense of the labor movement and social struggles on the ground. So, for instance, you know, where you have the complete collapse of the financial system and where the remedies proposed are above all privileged the creditors and the very people responsible for that, it’s a straightforward enough proposition to say, “Hey, you know, if we’re going to own the banking system, why not make the decisions and make them in alliance with social policy that ensures that housing’s affordable, that school loans are affordable, that small business gets credit?” You know, why not turn the banking system into a public utility? Now, that doesn’t have to be in any sense an anti-capitalist demand. But it’s a radical demand that asks fundamental question about the institution and who holds the economic power. You know, why isn’t the federal government taking a more direct role in decision making? I mean, I believe, for instance, during the Savings and Loan Crisis there was a period when the.

BILL MOYERS: 1980s, late.

MIKE DAVIS: Yeah.

BILL MOYERS: Late ’80s, right.

MIKE DAVIS: Yeah, I mean, the Resolution Trust Corporation was set up to you know, buy up the abandoned apartments and homes and then sold them at fire sale to private interests. For a year or two it had the means of resolving much of the housing crisis, you know, in the United States. Why shouldn’t the federal government basically turn that housing stock, into a solution for people’s housing needs? Sell them directly to homeowners at discounts you know, rent them out? In other words, the role of the Left is the ask the deeper questions about who has power, how institutions work, and propose alternatives that seem more common sensical in terms of the direct interest of, you know, of satisfying human needs and equality in this society. I think President Obama and the liberal Democrats that still exist should actually welcome a revival of the Left. It only strengthens them in a way. It’s like being Martin Luther King without having Malcolm X. The problem with the Democrats is they fold. The Democrats tend to concede to the Republicans a power and to give them a veto ability that is has shaped legislation that they needn’t to. We need something of the spirit of Roosevelt in 1937, 1938 when he tried to take on you know, the right wing of his own party, the Supreme Court, the right wing of the Republican Party.

BILL MOYERS: He was accused of being a socialist. And they tried to paint him with that. He was accused of conducting class war as, in fact, now Obama is being accused by conservative forces of launching a class war because he wants to return the tax rate to 39.9 percent, which is where it was in the Clinton era. But how do you deal with this charge of class war coming from the “Wall Street Journal” and the Heritage Foundation and others?

MIKE DAVIS: Well, I think you deal with it by saying, yeah, we want class war, too. And here’s what class war means, that the only possibility of getting this country out of the crisis, the only possibility that really deep set reforms can occur, including the protection and renewal of the productive base of the economy is labor has to become more powerful. We need more protests. We need more noise in the street. At the end of the day, political parties and political leaderships tend to legislate what social movements and social voices have already achieved in the factories or the streets or, you know, in the Civil Rights demonstration. And the problem is that so many progressives, so many liberals now treat the new President as if he were, you know, El Commandante. And we line up, follow, you know, follow his leadership. But he’s maneuvering in a relationship of forces where people on the Left, progressives, even the Black Caucus doesn’t account for that much. He’s appeasing Blue Dogs. He’s having to deal with Republicans.

BILL MOYERS: Conservative…

MIKE DAVIS: And to an absolutely unnecessary extent, I think he’s following the template of the Clinton years. And, of course, the Clinton years were years of the closest collaboration between financial industry and the White House that produced financial deregulation. I think the best thing the President has done is the stimulus. The worst thing has been to continue the bailout along the same lines that it was initiated by Treasury Secretary Paulson, a bailout that’s truly rejected by the majority of the American people and seen as a reward you know, to the very people who, you know, ignited this crisis in the first place. But the deep questions about, how do you rebuild the productive economy? The necessary role of the public sector in providing employment, whether fair trade is impossible.

The whole interview is very interesting and provides a view that you just aren’t allowed to hear in the mainstream media.

This crisis is reawakening the left in some ways it hasn’t been tested in some time. It’s been a long series of bubbles and political setbacks over decades and there aren’t a whole lot of people who have been engaged in these issues on a philosophical basis for quite some time. The argument among us took place between the economic neoliberalism of the DLC and lukewarm, leftover Great Society articles of faith. But there is more on the left spectrum than that (or full throated Marxism.) It’s necessary to expand the conversation in a time of crisis.

The right is tapped out — they’ve had free rein for a couple of decades and have tried everything from the old conservatism of reliance on aristocratic institutions to Ayn Rand’s radical pseudo-philosophy of greed. Their run has shown the limitations of unbridled capitalism as vividly as the Soviet experiment showed the limitations of communism. Philosophies which rely on utopian human behavior aren’t very realistic.

Anyway, now is the time for the left to assert itself. As Mike Davis pointed out elsewhere in his interview, the left was vibrant and energetic during the 30s and provided a necessary voice in the political discussion, which influenced many of Roosevelt’s successful policies. Right now, the public is engaged and ready to hear new things. The left needs to be willing to say them.

.

“Qu’ils mangent de la brioche”

by digby

Jeffrey Sachs writes:

The great scholars of capitalism, from Adam Smith to John Maynard Keynes, understood full well that a functioning economic system depends not on greed, but on moral sentiments and an acceptable social contract between the rich and the rest of society. The rich can make money, of course, but they must not flaunt it or consume it frivolously. Instead, they must invest their wealth for social benefit, whether in business or in philanthropy, or in both as in the case of history’s most celebrated capitalist-philanthropists, from Andrew Carnegie and John D. Rockefeller to Bill Gates and Warren Buffett. It is only the dangerously arrogant rich or the servants of the rich who believe that morals don’t matter in the great matters of finance

They didn’t believe they were being immoral. And we can blame our chain-smoking, Dexi-popping, overstimulated cougar philosopher Ayn Rand for taking one of the seven deadly sins and calling it a moral system.

The moral purpose of a man’s life is the achievement of his own happiness. This does not mean that he is indifferent to all men, that human life is of no value to him and that he has no reason to help others in an emergency. But it does mean that he does not subordinate his life to the welfare of others, that he does not sacrifice himself to their needs, that the relief of their suffering is not his primary concern, that any help he gives is an exception, not a rule, an act of generosity, not of moral duty, that it is marginal and incidental—as disasters are marginal and incidental in the course of human existence—and that values, not disasters, are the goal, the first concern and the motive power of his life. The Virtue of Selfishness — Ayn Rand.

Alan Greenspan admitted that for forty years he had believed Wall Street actually operated that way — and that that meant that they were incapable of making decisions that would endanger the entire system. After all, they were rational beings doing the most exalted work one can do — make money for themselves. Each one of the people involved in the CDS scheme were rationally making money for themselves and fulfilling their duty to themselves to make as much money as they could. They were being entirely rational and, therefore, extremely virtuous.

Now there is confusion among the masters of the universe. They don’t understand why they should not continue to be rewarded today for their virtuous behavior. It feels as if their whole moral system is askew, they are being unfairly condemned, the “parasites” are taking over. It is not their livelihoods or their reputations or their industry that is under threat. It’s their religion. That’s why they are fighting so hard.

.

Saturday Night At The Movies

Rorschach/Nixon?

By Dennis Hartley

Love is blue: Akerman and Crudup in Watchmen

I was a weird kid. I never really went for the superhero comic books in a big way. I do vaguely recall going through a Classics Illustrated period (Journey to the Center of the Earth kicked MAJOR ass, and I think I wore out my copy of Treasure Island). Then, when I was around 10 or 11, I discovered MAD magazine…and all bets were off. I made an exception when I was turned on to the Adventures of Tin Tin books, but generally stayed clear of caped crusaders, endowed with Special Powers and clad in skin tight suits.

So, I knew going in that I was likely not a member of the target audience for Watchmen, the latest graphic novel-to-film adaptation from the DC Comics stable. For those unacquainted with the concept of the modern graphic novel, just think Classics Illustrated with hot sex, ultra-violence and just enough substantive exposition to help you convince yourself that you’re reading something more akin to, um, literature (sounds like a great pitch for an HBO series). Despite my misgivings about the genre, I was unexpectedly dazzled by Sin City a few years back; I really dug the atmospheric, alt-noir vibe. I got the impression that Watchmen was in the same ballpark, so I thought I’d give it a shot. Okay…I saw that Carla Gugino (*sigh*) was in this one too, alright? So sue me.

Director Zack Snyder (300) had a formidable task on his hands here; not only did he have to condense a 12 volume series of graphic novels into feature film length, but he had to deliver a product that would both placate the detail-obsessed fan boys and entertain the rest of us without leaving us confounded (or dozing) when the auditorium lights come up.

I can’t speak for the fan boys, but I found the establishing premise of the film intriguing. The story is set in a sort of parallel universe version of mid-1980s America, where an altered course of history has radically changed the socio-political fabric of the country from WW 2 onward. The ‘x’ factor lays in an assortment of free-agent superheroes (and heroines) who have lent their talents to the U.S. armed forces since the 1940s. Actually, super-‘spooks’ might be a more accurate descriptive, as an Oliver Stone style back-story montage under the opening credits seems to indicate (sure to give JFK conspiracy theorists some uneasy chuckles). In this version of history, thanks to the assistance of these caped crusaders, America handily “wins” the Vietnam War (now that definitely establishes this story as pure fantasy). And in the most disturbing turn of all, President Richard M. Nixon has been elected for a fifth term (in this reality, Woodward and Bernstein have been “neutralized”). The Cold War is still in full swing, with a possible nuke-out with the Soviets looming on the horizon. In our post 9-11 world, with the economy on the brink of collapse, this actually plays like a quaint scenario, n’est-ce pas?

With one exception, these superheroes are not necessarily blessed with invulnerability; they are just as fragile and flawed as any schmuck on the street (the moral compass doesn’t always exactly point to Truth, Justice and the American Way, either). By 1985, the vigilantes have fallen out of favor with the fickle public; masked avenging has been subsequently outlawed and most have been driven into retirement, or gone underground. When one of the retirees is brutally murdered, it’s time to get the band back together, spearheaded by one Rorschach (Jackie Earle Haley). The mystery, as they say, is afoot.

After this promising start, the story bogs down a bit. The screenplay (adapted by David Hayter and Alex Tse) is admirably complex and cerebral for what is essentially an action film, but (I never thought I’d hear myself saying this) perhaps a bit too much for its own good. Pains are taken to flesh out the back stories of each principal protagonist; this is a good thing, but it can be a double edged sword. On the one hand, it raises the bar on the comparative cardboard characterizations you usually get in a superhero movie. Unfortunately, it also accounts for most of the hefty 162 minute running time. By the time the denouement rolled around, I’d almost forgotten that there WAS a mystery afoot.

Still, there was a lot I liked about the film. It has a great “dark city” noir atmosphere that I’m a real sucker for, as well as great costume and set design. The performances are a bit uneven, but that could be attributed to the sometimes overreaching script. Jackie Earle Haley is a standout as Rorschach; I enjoyed his Chandleresque voiceover performance, which vacillates somewhere between Clint Eastwood’s menacing whisper and Lawrence Tierney’s caustic growl. Billy Crudup, Malin Akerman, Patrick Wilson, Jeffrey Dean Morgan and, uh, Carla Gugino are all quite good. I didn’t recognize Matt “Max Headroom” Frewer as “Moloch the Mystic” until the credits rolled! The film has an interesting soundtrack; although I had mixed feelings about hearing a lengthy lift from Philip Glass’ symphonic score for Koyaanisqatsi(a film I’ve watched at least 25 times).

I believe I have already established that I’m not a huge devotee of films based on comic books, but still, the sci-fi geek/film noir enthusiast inside of me was hooked by the Blade Runner-like mash-up of those two genres (not that I’m suggesting that this is in the same league as Ridley Scott’s cult classic). You can take that as a guarded recommendation.

Previous posts with related themes:

Iron Man
The Dark Knight