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Month: April 2009

Not Family Viewing

by digby

Susan Roesgen of CNN reports from the Chicago Tea Party:

Kira Phillips: Susan Roesgen getting a taste of that Chicago style tea. Does that come with a pizza too?

Roesgen: Well you know Kira, this is a party for Obama bashers. I have to say that this is not entirely representative of everybody in America. This was organized by three different conservative groups and if you lok at some of the signs Kira … Let me intorduce you to this guy. Could you come over here please?

(Pointing to picture of Obama dressed as Hitler) You know, what is this supposed to mean? What do you mean by that?

Dittohead freak: Well, I mean he’s a fascist, the real pirates …

Roesgen: Wait, why do you say he’s a fascist? He’s the president of the United States.

Dittohead freak: I think he’s a fascist.

Roesgen, Do you realize how offensive that is?

DF: I think he’s a fascist

Roesgen: Why?

DF: Beacuse he is. He’s a fascist.

Roesgen: Why can you say that?

DF: beacuse the real pirates are in the white house and the senate and in the congress. We need one term limits for all these elected politicians.

Roesgen: Why be so hard on the president of the United States with such an offensive message?

DF: Because he is. He’s a fascist.

Roesgen: hooookay (moves away) We’ve got a fascist … uh… allright

(points to other signs)

“Drop the taxes, drop socialism”

(approaches man)

Ok, you’re here with your two year old and “you’re already in debt” (referring to sign he’s holding) Why do you say that?

Ditto head freak 2: Because I hear a president say that he believed in what Lincoln stood for. Lincoln’s primary thing was that he believed that people had the right to liberty.

Roesgen: Sir, what does this have to do with taxes? What does this have to do with your taxes?

DF2: Let me finish speaking!

Roesgen: Do you realize that you are eligible for a 400 dollar …

DF2: Let me finish my point. (Crowd getting surly, yelling at Rojan to shut up) Lincoln believed that people had ther right to share in the fruits of their own labor and that government should not take it. And we have clearly gotten to that point.

Roesgen: Alright. Did you know that the state of Lincoln gets 50 billion dollars out of this stimulus? That’s 50 billion dollars for this state sir.

DF2: (looking at someone off camera) Can you stop this sir? (people milling closely around, Rojan looking harried. )

Roesgen: Ok Well, Kira, we’ll move on over here. I think you get the general tenor of this. Uh, it’s anti government, anti-CNN since this is highly promoted by the right wing conservative network Fox. And since I can’t really hear much more and I think this is not really family viewing, toss it back to you, Kira.

Media Matters caught the vid:

Update: C&L captures a Fox news anchors talkin’ fascism at a rally, (video at the link):

Fox Business Network anchor Cody Willard didn’t appear to be very “fair and balanced” as he let out his opinion of Democrats’ economic policy during a tea party protest in Boston. “When are we going to wake up and start fighting the fascism that seems to be permeating the country?” asked an excited Willard. “The fascism — the definition of it is big business and government getting in bed together. That is what these people are fighting. We have about 700 people here. They are starting to rally,” he said.

Don’t Look At The Light

by digby

I know we all hate the government today because it’s tax day and all, but it’s more important than ever to keep out eyes on the ball. Dday has written a nice primer for all your tea bag party needs. And here’s another little something that should inform your teabagging friends that the tax on teabags is actually not the problem:

Even as the U.S. economy went into a tailspin, the median salary for CEOs of 200 large corporations increased by 4.5 percent to $1.08 million. On top of that, these corporations keep plying executives with generous freebies, despite the public outcry over private jets and other executive perks. The 2009 AFL-CIO Executive PayWatch site, which launches today, points out that the perks for executives rose on average by 12.5 percent in 2008 to $336,248—or nine times the median salary of a full-time worker. Even more appalling is the practice of rewarding executives who drive their companies into the ground. For example, the site reports that in 2007—the year the financial crisis began to unfold—the top 10 recipients of the federal government’s Troubled Asset Relief Program (TARP) collectively paid their CEOs a combined $242 million in total annual compensation. That averages nearly $25 million per CEO to run companies that might have gone bankrupt if not for billions of dollars in taxpayer assistance. The PayWatch site also features an e-mail action. Click here to send a letter to Rep. Barney Frank (D-Mass.) and Sen. Christopher Dodd (D-Conn.), chairmen of the House Financial Services Committee and the Senate Banking, Housing and Urban Affairs Committee, respectively. Let them know we’re counting on them to draft legislation that truly strengthens our financial regulations and begins curing the disease that has infected our economic system. […]
Here are other prime examples in the case studies of corporate failure:

  • While retirees worry over the fate of Deere & Co.’s pension surplus, which is shrinking because of stock market losses, the value of Deere CEO Robert Lane’s retirement income increased $5.5 million in fiscal 2008 to $22.5 million. Lane and other senior executives participate in not one but three different pension plans.
  • SunTrust Bank, which received $4.9 billion from the federal bailout fund, wants shareholders to approve a mega-grant of $7.7 million in stock options for James Wells, its chairman and chief executive officer, even as investors have lost billions.
  • While workers who are laid off in these tough economic times are lucky if they receive anything more than their last paycheck, Richard Bond, who retired as CEO of Tyson Foods in January, stands to collect more than $14 million in “golden parachute” severance payments.

Want to know what your CEO made last year? The Executive Paywatch site offers three user-friendly ways to find out. And if you want to have a little fun at the CEO’s expense, play the “Boot The CEO” game and kick the money out of the greedy CEO’s hands.

Their arrogance knows no bounds:

In 2008, despite the worst economic meltdown in over 75 years, U.S. chief executives continued to take home over 300 times more pay than their workers. That’s a gap ten times wider than the gap between top execs and workers that existed just a generation ago. Corporate boards of directors seem determined to keep this massive gap intact. Most corporations are refusing to make even symbolic gestures toward more common-sense executive compensation. Remember last fall’s firestorm over executive jets? In 2008, over half America’s big corporations — 104 of the 200 the Wall Street Journal tracked — continued to foot the bill for the personal air travel of their top executives, only three fewer than the year before. CEOs have to report the personal air travel subsidies they get, along with whatever other perks they receive, as taxable income. Over a third of America’s biggest corporations last year actually gave their executives extra money to pay the taxes on all this perk income. The dollars devoted to this tax reimbursing — or “grossing up,” as power suits refer to the process — averaged $16,400 last year. That sum might not sound like much, given the millions CEOs take home overall, but, in 2008, average American workers had to labor five months to make $16,400. The Wall Street Journal doesn’t include perks like free air travel and tax gross-ups in its $7.6 million figure for 2008 CEO “direct compensation.” The New York Times $8.4 million total does. Neither paper’s pay totals for 2008 include the gains CEOs registered last year cashing out the stock options they collected in previous years. These cashouts generated some staggering personal paydays. Occidental Petroleum’s Ray Irani, for instance, took home $49.9 million in “total direct compensation,” according to the Wall Street Journal figures. But he gained another $215.9 million in 2008 from options and other long-term “incentives” that Occidental had stuffed in his personal portfolio before last year. Corporate boards have essentially created what amounts to a perpetual motion pay machine that year in and year out gins up millions in executive compensation, no matter what may be happening economically in the real world. In “good” times, with revenues and profits up, boards hand executives stock awards and cash bonuses as rewards for their fine “performance.” In hard times, boards keep the stock awards coming — as an incentive to stick around and perform better in the future.

And thus continues the delusion that the wealthy are the most productive members of society which requires that they be allowed to dictate the terms by which the burden of their failure and mismanagement is borne by others.
The corporate aristocrats are working hard to keep the rubes focused on the big, bad gummint because if they ever realize just how thoroughly they’ve been scammed by these Masters of the Universe, who knows what might happen?

Further Thoughts On The Eliminationists

The moral heart of David Neiwert’s absorbing new book, The Eliminationists: How Hate Talk Radicalized the American Right, is Chapter 8, “Eliminationism in America: A Brief History.” It is a heartbreaking narrative of virulently hateful rhetoric and bigotry sparking hundreds of years of unspeakably atrocious crimes against Native Americans, against Africans and African Americans, against Chinese Americans, against Japanese Americans, against Jews, Irish, Italians, against anyone who didn’t look like, speak like, act like, or think like those in the dominant white culture. The goal was to extirpate the different by any means necessary, including rape, torture, and murder.

And Dave doesn’t shy from the awful truth: from the standpoint of the bigoted, it’s worked. For example:

…while the South actively oppressed its nonwhite population, Americans in most of the rest of the country chose not to even tolerate their presence and actively engaged in an ongoing campaign of eliminationist violence to drive them out, forcing them to cluster in large urban areas for their own self-protection and survival.

Thus, our many, many lily-white Northern suburbs.

Given the ghastly record of success Americans have had when they’ve indulged their tendencies to expunge the Other, both here and abroad, this modern call to exterminate the brutes, from John Podhoretz, should come as no surprise:

What if the tactical mistake we made in Iraq was that we didn’t kill enough Sunnis in the early going to intimidate them and make them so afraid of us they would go along with anything? Wasn’t the survival of Sunni men between the ages of 15 and 35 the reason there was an insurgency and the basic cause of the sectarian violence now?

To counter such hate requires the positing of moral axioms that transcend the narrow space carved out by racial, ethnic, and national identities. In short, an effective response to America’s tropism for exterminative violence requires liberalism. Modern conservative ideologies won’t cut it: They have become saturated with the prejudices of the far-right’s rhetoric, frameworks, and obsessions. The modern day conservative movement privileges – no, fetishizes – eliminationism, whether it takes the form of drowning the baby of government]; Coulter’s proposal to invade the Middle East, kill their leaders, and convert the populace to Christianity; liberal hunting permits, or Glenn Beck’s latest rightwing belches.

Countering modern American fascists and para-fascists is easier said than done. In the last chapter of his book, Neiwert calls for urban liberals to understand better where their rural fellow-citizens are coming from:

For all of its logic and love of science, a consistent flaw weighs down mooern liberalism: an overweening belief in its own moral superiority. (Not, of course, that conservatives ate any better in this regard; factoring in the religious Right and the “moral values” vote, they are objectively worse.) This tendency becomes especially noticeable in urban liberal societies, which for all their enlightenment are maddeningly and disturbingly intolerant of the “ignorance” of their rural counterparts. This is not an omnipresent attitude but it is pervasive enough that rural dwellers’ perceptions of it are certainly not without basis. There’s a similar stigma attached to religious believers as well, especially among the more secular liberals, and that, in turn, has given birth to a predictable counterreaction that is only partially informed by misunderstanding.

Here, Dave and I slightly disagree. Or rather, as an urban liberal who, unlike Neiwert, grew up in essentially an urban liberal milieu, the situation looks to me to be far more complex.

“Religious believers” make up the vast majority of urban liberals, for example. We go to every denomination of church, put our children through the training for a Bar or Bat Mitzvah, volunteer in religiously-run charity groups, celebrate the major holidays, keep kosher, wear ash crosses on our foreheads on Ash Wednesday, and so on. There are very, very few genuinely “secular liberals” anywhere in the United States, including liberal urban areas. There are even less atheists. (There are however, many, many Americans who, despite their strongly held religious beliefs, nevertheless affirm a robust separation of church and state.)

American urban liberals have no problem with “people of faith” for the very simple reason that the vast majority are also people of faith who openly honor the traditions of their various religious backgrounds. What disturbs urban liberals really is not religious belief, but fanaticism. Likewise, what positively infuriates and drives us to our own expressions of intolerance are not expressions of faith. Rather, what strikes us as galling are all the smug, self-righteous proselytizers and moralizers, not to mention the blatant political opportunism indulged in by a narcissistic, vocal minority who try to dictate to the rest of us what is Religiously or Culturally Correct. This is especially so when it comes to science: put bluntly, the promoters of “intelligent design” creationism on rural school boards are dangerously ignorant. (Not that most non-scientific liberals have any reason to feel superior: Urban liberals are typically just as ignorant of basic science as their rural cousins. But at least we have the cultural decency not to support organizations which proactively advocate ignorance as official public policy.)

Even, so, even with the common urban liberal intolerance for religious and political extremism of the Rushdoony/Randy Weaver ilk, I was reminded, when I read Dave’s book, of the relationship Michael Pollan developed with Joel Salatin in The Omnivore's Dilemma: A Natural History of Four Meals. Pollan is the epitome of an elite liberal urban foodie – his final section on hunting wild pig is an excruciating embarrassing ordeal to read even, or maybe especially, for a liberal- yet he forms what seems to be genuine admiration, even friendship, for Salatin, a “beyond organic” dairy farmer who happens to be a born-again graduate of the reprehensible Bob Jones University. Even with all their differences, however, Salatin’s deep knowledge of sustainable, responsible farming, as well as the fact that he practices what he preaches, provide him with a rich set of values that Pollan – and many of us who care about food quality – can share. Indeed, through Pollan’s eyes, we more than tolerate Salatin: we deeply respect him to the point that we are shocked when Pollan reports the vulgar intolerance of a fellow urban foodie who – in perfect illustration of Neiwert’s point – is contemptuous of the fish signs that adorn Salatin’s front door.

But note where a sharing of values between the “secular” cosmopolitan and fundamentalist rural cultures occurs – not inside a specific religious tradition, but within the secular moral space created by the structure of American governance, a structure which produces a tolerant environment by denying the establishment of any religion. In other words, it is only within a liberal cultural space that such a genuine tolerance and respect of radically disparate worldviews, such as Pollan for Salatin, can find a home.

This brings me back to the question that has puzzled me from the day I began trying to find active ways to confront the right in an effective manner: How can liberals prevent proto-fascists, para-fascists, and fascists from seizing power in America (and I would add, although Dave probably wouldn’t, “again” )? Surely, as Neiwert urges, we always need to better understand our world – not only our own values but the values of those who disagree with us. But that is nowhere near enough.

Fascism feeds on oversimplifications, bigotry, and violent provocation. It parries logic with toxic nationalisms, tribalism, and a fist. No amount of calm persuasion will open the mind of a Christian Reconstructionist, a white supremacist, or their more cleaned-up-for-primetime enablers like Coulter, Limbaugh, Bachmann, and Palin.

To counter the modern American right will take a rhetoric that surely places reality, reason, and logic front and center. But that rhetoric needs also to contain a healthy dollop of ridicule and contempt (thank you, Jon Stewart and Steven Colbert). It must know when to confront the buffoons (such as Dave’s willingness to rebut Jonah Goldberg), and when to usefully ignore them (e.g., well-known scientists’ refusal to debate creationists).

And it will take books as compelling as The Eliminationists.

A Graph-Heavy Guide To Tax Day

by dday

Happy Tax Day! Today we recognize that taxes are the price we pay for a free society, and that America is worth paying for. So you’re armed with the facts in case you get randy and go out for some teabagging, here’s a little primer:

First of all, people are more satisfied with the level of income tax that they pay than at any time since 1956 – with 48% believing the amount they pay is “just about right,” and 61% regarding the amount of tax they pay as fair. Since a good amount of people pay no income tax, this means that the majority of people who pay anything think they’re paying too much, which stands to reason, but the shift from previous years is significant, and anyway people don’t necessarily differentiate between the different kinds of taxes they pay. Gallup surmises, and I agree, that the reason for this satisfaction is the Making Work Pay tax credit in the stimulus, the largest tax cut on the middle class in history, and the idea that people finally might get something in exchange for those taxes.

Now, the real problem conservatives have with taxation is that the code is too progressive and too many lucky duckies don’t pay anything. And they manipulate statistics to show how terribly burdened the overclass is (the top 10% pay 72% of the taxes is a common statistic used). But the more important statistics are the percentage of total income earned by the top 10%, and therefore the effective tax rate.

When I look at the CBO’s dataset on long-term tax trends, I see plenty of things that are important besides the share of federal tax liabilities. Most important is the top decile’s share of the national income. In 2001 the top decile earned 37.5% of the national pretax income. In 2006 the same decile earned 41.6% of the income. In 2001, households in the top decile earned an average pretax income of $294,700. In 2006 it was $366,400.

Why should we be surprised that this group pays more in taxes? It earns more money.

Another trend is the effective tax rate. Between 2001 and 2006, the top effective income tax rate fell from 18.7% to 16%. The top rate for all federal taxes fell from 28.5% to 27.5%. So while the top decile is paying a larger share of federal taxes, it is being taxed at a lower rate.

When you add state and local taxes, most of which are flat or regressive, the share of total income and the share of total taxes match up pretty evenly. Conservatives conveniently leave this out.

And of course, a lot of these numbers don’t take into account the multitude of tax breaks, loopholes and work-arounds that have made the actual tax receipts collected less fair over time.

Thirty years ago, the tax code was broadly progressive, reflecting shared contributions to public investments and our common good. Loopholes were fewer and covered such items as home mortgages that everyone could understand and appreciate.

Now the tax code is a scam. Billionaire hedge fund managers pay taxes at lower rates than their receptionists. Corporations get tax breaks for moving jobs overseas. Oil companies with the largest profits in corporate history receive annual tax breaks worth $14 billion, roughly twice the budget of the Environmental Protection Agency.

While rich people reap tax breaks, working people struggle just to keep even. Adjusted for inflation, weekly wages were lower in 2007 than they were in 1979 […]

Income inequality is rising — measured by the ratio of after-tax income of the top one percent (1.1 million people) to after-tax income of the whole middle 60 percent (68.3 million people). Top-end taxes are declining — measured as the average effective tax rate of the top one percent. The trend lines for top-end tax cuts and income inequality since 1980 form the X in the chart on this page and in the report.

Our report explains the X. Inequality rose 144 percent; top-end taxes dropped 15 percent.

One way we could make the tax code more fair, and make the broad majority of people even more satisfied with their taxes by giving them more and better services, is by adding more marginal brackets.

It’s well known that tax rates on top incomes used to be far higher than they are today. The top marginal rate hovered around 90 percent in the 1940s, ’50s and early ’60s. Reagan ultimately reduced it to 28 percent, and it is now 35 percent. Obama would raise it to 39.6 percent, where it was under Bill Clinton.

What’s much less known is that those old confiscatory rates were not as sweeping as they sound. They applied to only the richest of the rich, because yesterday’s tax code, unlike today’s, had separate marginal tax rates for the truly wealthy and the merely affluent. For a married couple in 1960, for example, the 38 percent tax bracket started at $20,000, which is about $145,000 in today’s terms. The top bracket of 91 percent began at $400,000, which is the equivalent of nearly $3 million now. Some of the old brackets are truly stunning: in 1935, Franklin D. Roosevelt raised the top rate to 79 percent, from 63 percent, and raised the income level that qualified for that rate to $5 million (about $75 million today) from $1 million. As the economist Bruce Bartlett has noted, that 79 percent rate apparently applied to only one person in the entire country, John D. Rockefeller.

Today, by contrast, the very well off and the superwealthy are lumped together. The top bracket last year started at $357,700. Any income above that — whether it was the 400,000th dollar earned by a surgeon or the 40 millionth earned by a Wall Street titan — was taxed the same, at 35 percent. This change is especially striking, because there is so much more income at the top of the distribution now than there was in the past. Today a tax rate for the very top earners would apply to a far larger portion of the nation’s income than it would have years ago.

It’s even worse at the state level – in California, you pay the same income tax rate on every dollar from $47,500 to $999,999. The genius of the marginal tax rate system, lost on conservatives, is that it rewards work over wealth, and only taxes those dollars earned above that particular marginal rate at the higher number. More than any cap on executive compensation or bonuses, this would actually promote the highest standard of living for the most Americans, and discourage the rampant inequality that helped this crisis along.

When you teabag, it’s good to have the facts. Consider yourselves armed.

.

The Order of Things

by tristero

Don’t bother with the article, it’s essentially just an extended advertisement for frozen biscuits. Wowie Zowie. But check out the photos (there are more on the page 2).

Notice anything about the people working hard to make those biscuits? Notice anything different about the person enjoying those biscuits? And the person who profits from them?

Same as it ever was.

Tale Of Two Hitlers

by digby

Robert Parry observes an important Beltway phenomenon:

Watching Glenn Beck of Fox News rant about “progressive fascism” – and muse about armed insurrection – or listening to mainstream pundits prattle on about Barack Obama as the “most polarizing President ever,” it is hard to escape the conclusion that today’s U.S. news media represents a danger to the Republic.

By and large, the Washington press corps continues to function within a paradigm set in the 1980s, mostly bending to the American Right, especially to its perceived power to destroy mainstream journalistic careers and to grease the way toward lucrative jobs for those who play ball.

The parameters set by this intimidated (or bought-off) news media, in turn, influence how far Washington politicians feel they can go on issues, like health-care reform or environmental initiatives, or how risky they believe it might be to pull back from George W. Bush’s “war on terror” policies.

[…]

…the American Left never took media seriously, putting what money it had mostly into “organizing” or into direct humanitarian giving. Underscoring the Left’s fecklessness about media, progressives have concentrated their relatively few media outlets in San Francisco, 3,000 miles away – and three hours behind – the news centers of Washington and New York.

By contrast, the Right grasped the importance of “information warfare” in a modern media age and targeted its heaviest firepower on the frontlines of that war – mostly the political battlefields of Washington – thus magnifying the influence of right-wing ideas on policymakers.

One consequence of this media imbalance is that Republicans feel they can pretty much say whatever they want – no matter how provocative or even crazy – while Democrats must be far more circumspect, knowing that any comment might be twisted into an effective attack point against them.

So, while criticism of Republicans presidents – from Ronald Reagan to the two Bushes – had to be tempered for fear of counterattacks, almost anything could be said against a Democratic president, Bill Clinton or now Barack Obama, who is repeatedly labeled a “socialist” and, according to Beck, a “fascist” for pressuring hapless GM chief executive Rick Wagoner to resign.

Just in case anyone thinks that’s hyperbolic, here’s a little trip down memory lane from just five years ago:

What MoveOn.org wanted was for people to submit 30-second ads that were critical of President Bush, but what the liberal-leaning organization got was a controversy over one entry that compared Bush to Adolf Hitler.

The ad in question used a tape recording of the Nazi leader speaking while it showed images of Hitler and German military prowess during World War II. At the end of the ad, a photo of Bush raising his hand to take the oath of office is seen.

“A nation warped by lies. Lies fuel fear. Fear fuels aggression. Invasion. Occupation. What were war crimes in 1945 is foreign policy in 2003,” the ad said.

Republican groups and Jewish organizations expressed outrage over the ad, which has been removed from the MoveOn.org Web site. The Republican National Committee (search) called on all nine Democratic candidates to condemn the ads.

RNC Chairman Ed Gillespie (search) called the ad, “the worst and most vile form of political hate speech.”

[…]

MoveOn.org spokesman Trevor Fitzgibbon said, “we had no idea the Hitler thing even existed.”

Here’s Beck this past weekend:

When a liberal activist group accidentally put a 30 second citizen generated ad featuring a comparison between Bush and Hitler on its web site, the political establishment goes nuts.

Glenn Beck, a highly paid television pundit spends an entire hour comparing Hitler, Stalin and Mussolini to Obama and the political establishment acts like it’s perfectly normal.

Daily Beck

by digby

“So I’m sorry, California, but I don’t want to go down your road. You can’t force me to go down your road. Does the individual have any right anymore? Does the state have any right any more? And I know, because I’ve heard it from all of the conservative – you know, historians and scholars and everything else, but you can’t convince me that the founding fathers wouldn’t allow you to secede. The Constitution is not a suicide pact. And if a state says “I don’t want to go there because that’s suicide,” they have a right to back out. They have a right – people have a right to not commit economic suicide. “Oh, no, that was all solved in the—“ Really? The founder never intended – so wait a minute. I sign into this union and I can never, ever get out no matter what the government does? I can never get out? Well that only leaves you with one other option. That doesn’t seem like a good option. Texas says “go to hell, Washington,” which, by the way, has been said before. I believe it was Davy Crockett, that as he was standing there in the well of the Senate and they were all yelling and screaming at him, he said – he looked them right square in the eye and said, “Hey, you know what? You can all go to hell. I’m going to Texas. About time somebody says that again.

You’re telling me that states can’t say “Washington, we’re not going to commit suicide with you.” This is what I was trying to explain yesterday when the guest that we had unfortunately, David Buckner, he’s a friend of mine. On the TV show he – probably, if you’ve read the Drudge Report you’ve seen him – he passed out in the middle of the show. And I thought he was joking because he was like “I’m going to pass out.” We were talking about how we have destroyed – we are just taking cancer from the private sector, from the banks, from the brokerage houses, from the cities, and we’re just piling them – all of them – right into the Treasury. We’ve taken cancer from one patient, and we’ve put cancer into another patient. Well, gang, somebody’s still going to die from cancer. Yeah. This time it’s going to be you and our country.”

He’s quite the historian, you know. What do you want to bet that he thinks Lincoln would agree with him?

Via Media Matters

The Obama Speech: Best And Worst

by dday

I decided to take in the President’s economic speech today (text here). Ultimately, speeches mean far less than actions, and right now the actions still reflect a mixed picture. But a speech can move the public, can get them comfortable with the big picture of the President’s program aside from the day-to-day ups and downs, and on that front I think Obama did a solid job. These were the key set of paragraph, to me:

It is simply not sustainable to have a 21st century financial system that is governed by 20th century rules and regulations that allowed the recklessness of a few to threaten the entire economy. It is not sustainable to have an economy where in one year, 40% of our corporate profits came from a financial sector that was based too much on inflated home prices, maxed out credit cards, overleveraged banks and overvalued assets; or an economy where the incomes of the top 1% have skyrocketed while the typical working household has seen their income decline by nearly $2,000 […]

There is a parable at the end of the Sermon on the Mount that tells the story of two men. The first built his house on a pile of sand, and it was destroyed as soon as the storm hit. But the second is known as the wise man, for when “…the rain descended, and the floods came, and the winds blew, and beat upon that house…it fell not: for it was founded upon a rock.”

We cannot rebuild this economy on the same pile of sand. We must build our house upon a rock. We must lay a new foundation for growth and prosperity – a foundation that will move us from an era of borrow and spend to one where we save and invest; where we consume less at home and send more exports abroad.

That’s a very strong perspective, particularly the highlighted portion, addressing inequality and the out-of-balance economy. But the very best part of the speech didn’t appear in the prepared remarks; once again, we get some interesting truths from the ad-libs. Talking about education, he paused to say that we need American students to make things again. Here’s a rough transcript:

And by the way, one of the changes that I’d like to see, and I’m going to be talking about this in the weeks to come. It’s once again seeing our best and our brightest commit themselves to making things. Engineers, scientists, innovators. For so long, we have placed at the top of our pinnacle folks who can manipulate numbers. And engage in complex financial calculations. And that’s good, we need some of that. But you know, what we could use are some more scientists and engineers who are building and making things that we can export to other countries.

This is the rot at the heart of the American economy right now, a sinking feeling that we are no longer creative, that we no longer have the same spirit in the 21st century that we assumed to hold in the 19th and 20th, the feeling of sloth, the idea that the world is passing us by, the unease as we try to sustain ourselves through selling each other lead-filled Chinese toys and pushing numbers around on a page. This is exactly the risk at the center of an unbalanced economy, much like an unbalanced stock portfolio. Having given away innovation, having given away industry, we turned Wall Street into the manufacturing capital of the nation, much to our peril. The jobs of the future cannot remain in the same fields as the jobs of the past. We need a continued focus on green jobs, not just at the level of engineering and innovation and technology, but at the lower levels of building and creating from raw materials the new energy devices and smart grids and high speed rail cars. And we can only do this by shrinking the size of the financial sector relative to the overall economy, and diversifying our economic picture so we are not at the mercy of the banksters.

For the first time, I get the sense that the President recognizes this imbalance and is committed to reversing course. But this is not to say that I completely agree with his methods – for instance, Obama offered a full response to critics on the left who think the banks have leveraged their power to prevent the necessary solutions to the financial crisis, like nationalization:

On the other hand, there have been some who don’t dispute that we need to shore up the banking system, but suggest that we have been too timid in how we go about it. They say that the federal government should have already preemptively stepped in and taken over major financial institutions the way that the FDIC currently intervenes in smaller banks, and that our failure to do so is yet another example of Washington coddling Wall Street. So let me be clear – the reason we have not taken this step has nothing to do with any ideological or political judgment we’ve made about government involvement in banks, and it’s certainly not because of any concern we have for the management and shareholders whose actions have helped cause this mess.

Rather, it is because we believe that preemptive government takeovers are likely to end up costing taxpayers even more in the end, and because it is more likely to undermine than to create confidence. Governments should practice the same principle as doctors: first do no harm. So rest assured – we will do whatever is necessary to get credit flowing again, but we will do so in ways that minimize risks to taxpayers and to the broader economy. To that end, in addition to the program to provide capital to the banks, we have launched a plan that will pair government resources with private investment in order to clear away the old loans and securities – the so-called toxic assets – that are also preventing our banks from lending money.

Greg Sargent reads the tea leaves and thinks that Obama substantively responded by saying he wasn’t ideologically opposed to nationalization. I think that’s less important that this new, substantive disagreement, that nationalization would prove more costly. Which is not false – we saw in the IndyMac receivership that the eventual cost totals were much larger than expected, and as Matthew Yglesias notes, nationalization would require up front money that Congress would be highly unlikely to appropriate. However, there’s a bit of a false frame here. Lining up the PPIP against nationalization and saying that the PPIP is cheaper only makes sense if you think both have an equal potential of working. If, as I do, you think that the PPIP probably won’t work, and that the problem is not one of liquidity but insolvency, then getting to nationalization quickly before throwing hundreds of billions more down a rathole would be significantly cheaper.

And evidence on my side of things, that the banks are insolvent, can be seen in the silly games some of them are playing to try and look profitable.

Goldman Sachs reported a profit of $1.8 billion in the first quarter, and plans to sell $5 billion in stock and get out of the government’s clutches, if it can.

How did it do that? One way was to hide a lot of losses in not-so-plain sight.

Goldman’s 2008 fiscal year ended Nov. 30. This year the company is switching to a calendar year. The leaves December as an orphan month, one that will be largely ignored. In Goldman’s earnings statement, and in most of the news reports, the quarter ended March 31 is compared to the quarter last year that ended in February.

The orphan month featured — surprise — lots of write-offs. The pretax loss was $1.3 billion, and the after-tax loss was $780 million.

Ingenious – dump all the write-downs into a missing month.

When you scratch the surface of all this, you can plainly see that even the banks announcing record profits are hopelessly insolvent, and will continue to spiral downward as the economy remains stuck.

Wells Fargo & Co., the second- biggest U.S. home lender, may need $50 billion to pay back the federal government and cover loan losses as the economic slump deepens, according to KBW Inc.’s Frederick Cannon.

KBW expects $120 billion of “stress” losses at Wells Fargo, assuming the recession continues through the first quarter of 2010 and unemployment reaches 12 percent, Cannon wrote today in a report. The San Francisco-based bank may need to raise $25 billion on top of the $25 billion it owes the U.S. Treasury for the industry bailout plan, he wrote.

First-quarter net income rose 50 percent to about $3 billion, Wells Fargo said last week in announcing preliminary results that topped the most optimistic Wall Street estimates and sparked a 32 percent jump in the stock. The bank attributed the profit to a surge in mortgage originations and revenue from Wachovia Corp., acquired in December. Full results are scheduled for April 22.

The $120 billion in “stress losses” kind of puts that whole $3 billion quarterly profit in perspective, don’t it?

So while I agree that nationalization would be more expensive on a one-to-one basis, and I don’t even totally fault Obama for, given the institutional constraints, giving some separate option the old college try, the inevitability of dealing with the insolvent banks argues for a quick remedy.

My final analysis is that Obama understands the problems in the structural imbalances of our economy, but still relies on the arguments of his advisers, which will restrict opportunities for the fundamental reform we need.

.

Defining Presidents

by digby

Jamison Foser makes a good catch:

Washington Post reporter Michael Fletcher, today:

Think of the instant analysis after political debates about who “won.” Remember Al Gore’s eye roll? What did that have to with the substance of his answers? But did it say something about his personality? Rightly or wrongly, these incidents often come to define presidents, and I don’t think it is just because of the media coverage.

Given that polls taken immediately after Gore’s debates with Bush found that viewers thought Gore won – and that much of the immediate post-debate media analysis suggested that he had won as well – it’s pretty clear that the media’s obsessive focus on his sighing and other nonsense is precisely the reason why those incidents came to define him. Viewers reacted positively to Gore.

It’s certainly true that the press hostility to Gore is what changed the impression people had of the debates. But that’s only part of the story. Let’s not ever forget how much of their “data” came from their bffs, Barbara Comstock and Tim Griffin (of US Attorney scandal fame) at the RNC oppo-research department:

In the film we see RNC glee as AP accepts their oppo research on a Gore misstatement during the first debate . During their months of filming BBC producers also observed producers for NBC’s Tim Russert among others calling to enquire if the team had any new material. This was apparently normal trading on both sides. RNC researcher Griffin comments in the film: “It’s an amazing thing when you have topline producers and reporters calling you and saying ‘we trust you…. we need your stuff.'” […]
And so – on the night of the first debate – we see a pumped-up Tim Griffin (deputy head of RNC Research) barking orders to his large team of “oppos.” Lehrer tosses Gore the question about him having cast doubt on whether Bush has sufficient experience to lead. Gore demurs and parses his response. Griffin leaps into loud action. Within minutes his team have tracked down an obscure Gore quote buried within the transcript of a lengthy speech. Gotcha! “It directly contradicts what he just said in the debate! He just lied!” crows Griffin. Seconds later Griffin has fed the contradiction to the Associated Press. This is beyond post-debate spin. This is play-by-play impeachment. And incredibly effective.

As Foser says, Fletcher picked a very bad example. And that he also doesn’t seem to understand how these narratives are shaped by shallow reporters being willingly spun by political operatives demonstrates the ongoing problem with the press.

Saving The Rich With Pitchforks

by digby

The tea bag parties are a lot of fun and I will be among the first to mock and jeer tomorrow. But it’s not a good idea to ignore their potential for serious business down the road if the economy continues to be under stress. Whether they are organized by Republican hacks or not, if they provide people with a way to understand their current circumstances, they could end up being a problem.

I am a worrywart about these things, I know. But it continues to concern me that in the absence of a clearer explanation of what caused this financial meltdown and resultant recession, people will simply fall back on the conservative propaganda of the past two decades to explain their problems. And that is an opportunity the Republicans should not be given.

Here’s a random comment I lifted from a story about the tea bag parties:

The Tea Parties are TAX PROTESTS. The bailouts are a hot topic, & their cost & mismanagement are made possible by the oppressive & counterproductive tax system we have in place now.

I know that’s convoluted, but it fits very comfortably in the rhetorical grooves that have been deeply worn into our political dialog for decades. What the GOP wants to do in this moment is channel anger at the bailouts to the Democrats and taxes. After all, they don’t want the anger to be pointed at the corporations and the wealthy — that’s their bread and butter — and they want to find a way to take political advantage. So the familiar language of the tax revolts are being employed to redirect the populist anger at Wall Street and the wealthy to the government.

Here’s Stephen Moore from yesterday’s Hardball trying to squeeze all this into a coherent form:

STEPHEN MOORE, “WALL STREET JOURNAL”: Well, you know, if you think back to the Reagan era, you know, when the kind of Republican revolution was really begun, Chris, remember that was started on the heels of Proposition—remember Proposition 13…

MATTHEWS: Sure.

MOORE: … in the summer, I think, of 1978. So I‘ve actually been to a few of these tea parties, because remember, a number of them have happened already around the country and some of them are happening later in the week, many of them are on April 15th.

The one thing that really struck me when I was at one in Wisconsin was that this really isn‘t something that‘s being driven, A, by the Republican Party, or B, by the national conservative groups. You got to give credit where credit is due on this, Chris. It really is a genuine kind of grass roots thing that just spontaneously combusted around the country.

And so I think it‘s mainly people—and by the way, one last point.

It‘s not so much about taxes, Chris, it‘s about the bail-outs. People…

MATTHEWS: OK…

(CROSSTALK)

MATTHEWS: So it‘s the notion that—as Rick Santelli well put out, this notion that, basically, people out there who were totally unreliable, who brought homes they shouldn‘t have paid for…

MOORE: That‘s right.

MATTHEWS: … people who helped them buy those houses they shouldn‘t have bought, are now getting our money.

MOORE: That‘s it! That‘s exactly right, Chris!

The people I talk to, yes, they are upset about taxes, and they are upset about debt, but they really think, fundamentally, that the bailouts of the banks, the bailouts of the homeowners who took out bad mortgages, the bailouts to the auto companies…

MATTHEWS: Well, where we these…

MOORE: … it‘s unfair.

MATTHEWS: OK.

MOORE: They think it‘s unfair and unwise…

MATTHEWS: Well, the question I have—back to you, Steve—is that a lot of this money—I love the fact that some of the newspapers are printing the checks. They are showing what the checks look like, at least recipients of the checks, the beneficiaries of all this bailout money.

It‘s not Joe Blow from San Diego. It‘s somewhere in New York in a big bank.

(LAUGHTER)

MATTHEWS: I mean, the checks are being made out to rich people in these bailouts.

MOORE: Well, that‘s what makes people angry, Chris.

I mean, you‘re exactly right. I mean, look, nobody was more angry than I was when people were getting bailout—when they were getting bonuses for—for companies that lost billions of dollars.

It adds to the sense of frustration that real people—and these are middle-class folks. These are not people who are rich in three-piece suits. And the thing I would say about this is, I really think it‘s not partisan. I really believe, Chris, if Republicans were doing the policies the Democrats were doing—and this—you‘re right.

This started under George Bush, no question about it—that people are just angry that Washington isn‘t listening to the little guy.

Stephen Moore as a populist is pretty hilarious, but there you have it.

As you can see they haven’t quite been able to find the right rhetorical formula yet either, but they are getting closer. The key is to find a way to turn the anger at the bankers into anger at Obama for bailing them out. Right now most people don’t feel that taxes are the proximate cause of the nation’s problems but a prolonged recession along with continued bailouts could change that if the conservatives can find a way to synthesize their anti-tax message with the current populist anger.

Right now, Obama’s popularity is keeping that at bay. But nobody should believe that people are supporting the government’s actions because they understand Keynesian principles or that the government has to solve the liquidity crisis because they don’t. And Democrats have not exactly made a compelling case for liberal economics lately other than a vague promise that it’s better than the other guys’ in the wake of gilded age excess. We certainly didn’t see any serious discussion of it during the campaign when everyone was talking about lowering taxes and extolling Reagan.

An awful lot of what the government is doing right now feels completely counter-intuitive and there is plenty of legitimate anger that these wealthy pricks just can’t shut up and refuse to take responsibility. And also keep in mind that much of what the government is doing, such as stimulus, is as much preventive as anything else, and nobody ever gets much credit for preventing problems only solving them. (I would guess that Roosevelt was given so much slack by the public because he inherited 20% unemployment and a deep national despair, something that Obama — fortunately! — doesn’t have.) The sheer complexity of the issues and the failure of the Democrats to articulate an alternative economic philosophy leaves a mile wide opening for right wing demagoguery.

We don’t know what these tea bag parties are going to bring tomorrow. It’s likely they will be McCain rally freak shows, of which they really are an extension. But if they manage over the next few months to get a coherent message together and the corporate backed front groups can successfully manage them, they could turn into something more troubling — a right wing populist movement aimed at government. Not good.

SaveTheRich is an excellent frame to start beating this back. May the best populist win.

Update: I just saw Obama’s economic speech. I wish he’d been making it for the past two years.

Update II: Taibbi weighs in on the same subject.