Month: October 2009

Meritorious Losers

by digby

Today on The Situation Room Blitzer and his guests discussed the Obama administration’s initiative to limit executive pay of those who took the TARP bailout. Republican Mary Matalin launched immediately into the usual wingnut spin and said that it’s a “feel good” initiative that only makes people more worried about how much this president is interfering in the private sector. Democrat Jamal Simmons said that it’s a double edged sword. He acknowledges that the politics of setting pay limits on executives is a no-brainer because the public is furious. But he then goes on to say this:

Simmons: We are now investors in these banks and we want to have the best talent that’s available to take them out of the red and operating into the black and keep them healthy because it’s good for the system or we wouldn’t have saved them.

Blitzer: We’re talking about those companies, you see the logos, turn around and you can see, you know Chrysler, GM, the automotive center, but then Bank of America, Citi and AIG. These are companies that received billions of dollars either in loan guarantees or direct cash. And does the federal government have right to tell them, “you know what? We have a right to control your salaries of the 25 top executives?”

Matalin: That’s what happens when you have this kind of unholy alliance, in this case. Jamal’s exactly right. These guys probably would not be getting these bonuses if there wasn’t some merit to them…

Simmons: There must be some performance there.

Matalin: and we are the investors. Well said!

Simmons: You want these companies to work Wolf. The thing is, I’ve talked to a lot of people in New York about this and people who are on Wall Street and what they will tell you is, if they can’t work someplace and get rewarded, they’ll go work someplace else.

Wolf: You know what you’ll see my interview in the next hour with the watchdog, the inspector general for the TARP money, Neal Barofsky, who makes thep oint that over hte past year since the disaster, the economic debacle of over year ago, nothing in terms of regulation or oversight has been done to make the situation potentially any better.

Simmons: And that’s a totally different question. That’s a question of regulation and making sure it’s operating out of a structure that’s going to minimize risks for the investors and for the people who’s deposits they hold for the commercial banks. That’s totally different than who are you going to reward for good behavior and managing a company well.

Matalin: That’s right. These potentially meritorious workers are going to be penalized because this government could not get it together to pass the kind of reform which Republicans agree with too. Why should they be penalized for our inadequacies here in our nation’s capital?

Simmons: That said though, the billions of dollars though that they’re handing out … the banks ought to be a little bit smarter though about ratcheting back their own pay packages to make this less offensive to the American people.

I like Simmons, but he needs to spend less time with the ruling class. His comments are self-serving Randian nonsense. (And any time Mary Matalin is doing cartwheels agreeing with you should ask yourself if you are saying the right thing.)

Nobody deserves that kind of money in this economy, much less from companies that have just been bailed out by the US taxpayers. And these ridiculous pay incentives are part and parcel of the problems that got us an epic global meltdown in the first place. As for these fabulous “meritorious” workers leaving to find other work, I say let them go. The uniqueness of the talent of top executive is largely a myth, mostly perpetuated by elites to justify their obscene percentage of the national wealth. (And anyway, if they are so great, why aren’t they working for Goldman already?)

Last night, Frontline had a great program called “The Warning” about Brooksley Born’s attempt to regulate derivatives back in the 1990s and the extreme resistance she came up against from “The Committee To Save The World.” They circled the wagons and shut her down.

One of the things that struck me most forcefully about it was the commentary of Arthur Leavitt, former SEC Chief who was right in the middle of it. He said he personally knew Greenspan, Rubin, Summers and the rest very well, had socialized with them, worked with them for years. In an interview about the series he repeats his thoughts about Born at the time:

Didn’t know Brooksley Born. I was told about Brooksley Born. I was told that she was irascible, difficult, stubborn, unreasonable. I’ve come to know her as one of the most capable, dedicated, intelligent and committed public servants that I have ever come to know. I wish I knew her better in Washington, and I wish my view of her was more rounded by personal exposure. …

In my life I’ve had so many occasions of finding my impressions were incorrect and revising them, depending upon the circumstances, depending upon what stage of life I happen to be or what other factors were bearing on it. You’ve asked me about these people, and I’ve come to know all of them reasonably well. I’ve got to say to you that I have just huge affection and admiration and trust in Brooksley Born.

It’s to his credit that he admits now that he made a mistake which is more than anyone else does.

But what this really speaks to is the very close knit club to which all these Wall Street/Bankers/Regulators belong and how they reinforce their prejudices and skewed belief systems as much out of social solidarity as greed or ideology. (In Born’s case, there was likely a large dollop of sexism as well.) They know each other and trust each other, whereas those from outside the charmed circle just aren’t seen as reliable.

It’s human, but it’s dangerous for policy makers to think that way. And Jamal Simmons, a good guy, showed today just how that sort of clubby CW becomes an article of faith among political players on all sides as well. Just because Wall Street dudes are telling you that they’ll up and quit and go to other companies if their pay is cut, doesn’t mean anybody else wants to hire them. If they do, I say let them go. There’s plenty of top talent in this country that would be happy to work for less than these egomaniacs.

Update: Simmons has been remarkably easy on the bankers for some time. Odd.

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What Do We Make?

by digby

Campaign For America’s Future is looking beyond the next quarter and asking the big questions that need to be asked: how can this country thrive if it doesn’t make anything anymore?

Bob Borosage lays out the whole problem in this important piece and offers some thoughts on where we need to start looking for answers:

Where will the jobs come from? Wall Street can produce another bubble, but that won’t put the 15 million without jobs to work, one-third of which have been out of work for at least six months.

Recovery requires fundamental reform of America’s economic strategy. The old shibboleths of the conservative era—shrink government, cut top-end taxes, free multinationals to move jobs abroad, deregulate finance, wage war on labor unions, declare that trade deficits don’t matter —have failed ignominiously. They must be discarded, like yesterday’s rotted fruit.

Fundamental changes are needed. Trickle-down should be supplanted by public investment-led growth—large-scale public investments in areas vital to our future such as infrastructure, research and development, education and training. These investments should be deficit-funded until the economy actually starts putting people back to work, and then sustained and paid for through progressive tax reform. Tax speculative security transactions, generating $100 billion a year in revenue to invest in a 21st-century infrastructure that would put people to work and make the economy more productive. Raise top-end taxes, reduce inequality, and invest in making college affordable and exploring the green technologies of the future.

We’ve pursued tax cuts, promising private investments would flourish. But much of the productive investment and lavish consumption went abroad. In reality, public investment would be far more effective. We have a staggering public investment deficit that must be met for a world-efficient economy. Public investment is more likely to be invested, more likely to be spent here, more likely to create good jobs here, and far more likely to generate new technologies and productive private investments.

Read on for thoughts on where we need to focus in the immediate future if this country is going to maintain what we have, much less grow again.

I have long thought that one of the main reasons we see politicians and policy makers scrambling madly to prop up the greedheads is sheer, unadulterated panic that if they regulate this “magical” segment of the economy (financial services) that accounted for 40% of business profits before the crash, they will have nothing left. And it’s a serious worry. When you have a mature economy like ours that’s so heavily concentrated in paper pushing, gambling and middle man transactions that ridiculous risk is required to keep standing still, you have a big problem.

But the answer isn’t to stick your head in the sand and frantically keep the party going until a miracle happens. The answer is to stop depending on this risky sector and concentrate on making things that people need. (Or else start concentrating on taking over the world — which unfortunately seems to be Plan B.)

Campaign For America’s future is hosting an important conference next week in DC called “Making It In America” to discuss this very problem. (You can click the ad over in the upper left to read all about it and sign up if you can make it.) I don’t know anyone else who is devoting time and money to talking about this, but it’s a vital and important topic and policy makers need to pay attention.

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Democrats United

by digby

You’ve probably all heard this by now, from Obama’s speech last night:

“Sometimes Democrats can be their own worst enemies, Democrats are an opinionated bunch … y’all are thinking for yourselves,” he said. “I like that in you, but it’s time for us to make sure that we finish the job here. We are this close and we’ve got to be unified.”

Obama said “the bill you least like in Congress right now, of the five that are out there,” would give 29 million uninsured Americans health care, would ban preexisting conditions and would create an exchange that would encourage competition among ensurers.

This comes back to something Matt Yglesias pointed out last week, (and I commented on here.)Matt wrote:

But what these exhortations to practicality always miss is that this is a two-way street. If you think the public option isn’t that big a deal and it’s not worth spiking health reform over it, then you ought to think that it’s not worth spiking health reform in order to kill it either.

So far there’s been basically no pressure in the media on members who take this position to justify their extreme level of opposition. I get, for example, that Kent Conrad supports the Finance Committee version of health care and opposes adding a public option to it. But suppose a public option does get added. Does that suddenly take a vast package of reforms that he played a key role in crafting and turn it into a terrible bill? Why would that be? Surely Conrad is as aware as anyone else in congress that in order to pass a large, complicated health reform bill many senators are going to have to vote “yes” on a bill that contains some provisions they oppose. After all, the health reform bill contains hundreds of provisions! Are moderate members really so fanatically devoted to the interests of private health insurance companies that they would take a package they otherwise support and kill it purely in order to do the industry’s bidding on one point?

I think it’s really neat that the White House is telling everyone to unite and all. I’m not quite as impressed that he seems to be telling them that they have to unite around the minority position. Since there’s no chance of getting Republican votes, there’s no need for compromise. They should unite around the best plan and pass the damned thing.

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American Dreaming

by digby

I missed this post by Susie Madrak last week. Unbelievable:

I just got off a conference call with Arlen Specter where I asked him why the Democrats don’t talk about the wave of entrepreneurship that would be unleashed if people knew they could leave their jobs, start a business and still get affordable health coverage for themselves and their families.

He was surprised, said it hadn’t occurred to him and wants me to give him names of people who would start their own businesses if they knew they could get affordable insurance.

It just occurred to him? Really? This is one of the primary reasons you need a safety net. How are people supposed to take entrepreneurial risks and create this dynamic economy we all supposedly want if the risks are so huge that they aren’t worth taking? Fergawdsake, aside from the “entrepreneurs” who would love to start a business there are also millions of people are trapped in jobs they hate because of health insurance. When even those who are insured are petrified to get sick because they could lose everything, your “dynamic” society grinds to a halt and everyone starts getting more and more reluctant to take any risks at all.

And our leaders need to keep in mind that one of the consequences of the Great Depression was that a whole generation became tremendously risk averse and it took a long time to get Americans back to their usual entrepreneurial selves. And while it would be really nice if some of the Masters of the Universe were so affected, it’s not a great thing for average people to be so traumatized that they lose their sense that they can improve their lot and that of their children.

I know that it’s taken as a given that the American Dream is some nostalgic suburban fantasy of a nice house and a car and all that material wealth. And maybe it is for some people. But I think the real American Dream is the idea that you can always reinvent yourself and your life in this country — that it’s possible to change your circumstances, and not just in a material way, but spiritually as well. The “pursuit of happiness” made real by opportunity and social mobility. If this remains a country where you can’t make a move without worrying that your family will lose everything if your kid gets sick or you lose your job, that dream is dead.

It’s not anti-capitalist in the least to advocate for social welfare and a strong safety net. Unless you want to live in a Hobbesian jungle, it’s a requirement.

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Heartburn

by digby

Well lookie here. It seems that Taser International might be just a teensy bit afraid that their “product” might be killing people:

The maker of Taser stun guns is advising police officers to avoid shooting suspects in the chest with the 50,000-volt weapon, saying that it could pose an extremely low risk of an “adverse cardiac event.”

The advisory, issued in an Oct. 12 training bulletin, is the first time that Taser International has suggested there is any risk of a cardiac arrest related to the discharge of its stun gun.

But Taser officials said Tuesday that the bulletin does not state that Tasers can cause cardiac arrest. They said the advisory means only that law-enforcement agencies can avoid controversy over the subject if their officers aim at areas other than the chest.

This would be what is known as CYA. They are telling police agencies that if they get sued Taser cannot be held liable since it issued this disclaimer. This is the first time they’ve ever admitted that their weapon can be lethal.(They have admitted in the past that it can be dangerous since people often can’t break their falls when the electricity incapacitates them.)

Police departments across the United States and in Canada and Australia reacted immediately to the bulletin, with some ordering officers to follow Taser’s instructions and begin aiming at the abdomen, legs or back of a suspect.

The problem there is that the cases such as this one where they have the victim on her knees with her hands behind her back will still be considered “safe,” so they’re likely to keep using it on innocent, nonviolent people. And there are a lot of those cases.

The truth is that tasers are not benign, they are torture devices that are being used indiscriminately in the false belief that police have a discretionary right to subdue anyone they choose using this form of violence. And now even the manufacturer admits they can kill people:

Taser’s training bulletin states that “the risk of an adverse cardiac event related to a Taser. .. discharge is deemed to be extremely low.” However, the bulletin says, it is impossible to predict human reactions when a combination of drug use or underlying cardiac or other medical conditions are involved.

“Should sudden cardiac arrest occur in a scenario involving a Taser discharge to the chest area, it would place the law-enforcement agency, the officer and Taser International in the difficult situation of trying to ascertain what role, if any, the Taser. .. could have played,” the bulletin says.

For years, Taser officials have said in interviews, court cases and government hearings that the stun gun is incapable of inducing ventricular fibrillation, the chaotic heart rhythm characteristic of a heart attack.

Looks like their lawyers have decided they’d better hedge their bets on that one. Of course, the evidence has been clear for years.

It’s a very nice convenience for police to be able to subdue citizens with either the threat or delivery of terrible pain that will knock them to the ground. It saves time and energy and makes their jobs easier, no doubt. I’m sure they were more efficient in the days when they could take their billy club to people’s heads with impunity too. But in a free society, police aren’t at liberty to mete out punishment or demand instant compliance, particularly in a nation that has a constitution that guarantees all people certain rights to due process — even if it makes their job easier. Police work is, by definition, an unsafe profession and one simply can’t tear up the constitution and allow police to use violence in the name of efficiency and social control. The temptation to do that is one of the reasons we have a constitution in the first place.

At this point citizens are being told that they can be tasered for any reason the police choose, and have no recourse, because tasers are harmless (except for the searing pain they cause, which is evidently something we as citizens just have to put up with.) But they aren’t safe and they shouldn’t be legal, at least not the way they are used today.

Mark Silverstein, legal director of the Colorado American Civil Liberties Union, who has tracked Taser issues for years, said the bulletin means that police departments should now be asking questions about liability and reconsider how the stun gun is used.

“This is further evidence that law-enforcement agencies need to stop and ask if they have been sold a bill of goods,” he said. “This (training) bulletin confirms what critics have said for years: that Taser has overstated its safety claims.. .. (It) has to be read as if Tasers can cause cardiac arrest.”

I don’t see how this can be read as anything but Taser’s belated admission that their product is deadly. And a deadly weapon simply cannot be used on people the way it’s being used today. The police are going to have to change their policies.

h/t to CW

Medicare Part E

by digby

One can only wonder how it all might have gone if they’d done this in the first place:

Say hello to “Medicare Part E” — as in, “Medicare for Everyone.” House Democrats are looking at re-branding the public health insurance option as Medicare, an established government healthcare program that is better known than the public option.
The strategy could benefit Democrats struggling to bridge the gap between liberals in their party, who want the public option, and centrists, who are worried it would drive private insurers out of business.

While much of the public is foggy on what a public option actually is, people understand Medicare. It also would place the new public option within the rubric of a familiar system rather than something new and unknown.
The idea has bubbled up among House Democrats and leaders in the past week, most prominently in a caucus meeting last Thursday.
Rep. Mike Ross (D-Ark.) spoke out last week in favor of re-branding the public option as Medicare, startling many because he has loudly proclaimed his opposition to a public option.

When this first came up a week ago, I said let’s take yes for an answer. Of course, I assumed that Ross meant what he said, which was that people should just be able to “buy in” to Medicare, which seems eminently reasonable to me. As I said at the time, I would buy into that program in a minute.

This has come up from time to time since the beginning of the reform debate but it never seemed to go anywhere. I don’t know how serious this is, but if it is, it’s far better rhetorically and substantively than what we’ve been doing so far. I’m a little bit surprised that Mr Blue Dog is pushing it, but maybe he’s seen the light …

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How To Make Enemies And Influence Nobody

by tristero

For many reasons, Maddow’s report on Bush’s first big gig out of office is painful to watch. First, and foremost, the worst president ever – the veritable poster child for the term “miserable failure” – is being touted as an inspiration for America’s businessmen and women. There’s something seriously, gut-wrenchingly horrible about that.

That said, I don’t think for a second that George W. Bush has disgraced the high office of president of the United States by “stooping” to the level of a motivational speaker. No. His failure to protect the country, his egregious foreign policy blunders, his enthusiastic embrace of torture, his corruption of the Department of Justice, and on and on and on and on: those were the actions Bush took that disgraced the office.

Unfortunately, as cringeworthy as the idea of Bush The Inspirer truly is, Maddow’s report is equally embarrassing. This is classism and elitism at its worst, sneering not only at Junior and the hucksters perpetrating this trash – who surely deserve our scorn – but also at the people who attend these kinds of events – who most certainly don’t.*

I like Rachel Maddow a lot, but this was not her finest moment. Perhaps the best way to explain my reaction is to say that the people attending this seminar are just people, like Maddow, filled with hopes and aspirations and worries and insecurities. Some are sent their by their companies, some pay their own way. Some are smarter than others, some are less successful than others. They are people who, whatever their faults deserve far, far better than George W. Bush to speak to them. They deserve to hear from someone like…well, like Rachel Maddow.

By sneering at the attendees, Maddow made an amateurish mistake: She bought into the conservative movement’s cynical efforts to erect a false dichotomy, pitting “us” – Middle America – against “them” – liberals like Maddow (and me). It would have been just as easy for her to have sidestepped it. And she should have. These people are being sold a thorough bill of goods, often forking over their own hard-earned cash, and for what? To hear a thoroughly spoiled and pampered patrician, that paragon of elitism, George W. Bush, run through his utterly phony Man o’ The People act one more time, that’s what. And meanwhile, he gets paid – for a lousy 45 minute talk – 3 to 4 times the amount of money the typical attendee probably makes in a year.

But behaving the way she did, Maddow distanced herself from these ordinary people and made it all that easier for Bush and friends to bamboozle folks into thinking that they – not liberals – are the only ones on their side .

Maddow’s smarter than this.

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*For those amongst you who will assuredly point out that Maddow never made her contempt for them explicit, calling the attendees “losers” or whatever, her contempt, as I perceived it, was most clearly revealed in her tone of voice, especially as she paid her guest the backhanded compliment of saying he could sell Texas without the help of that motivational seminar. Perhaps you didn’t hear her the way I did, but I’m not one to react quickly to this kind of classism. If I took Maddow’s attitude that way, I’m pretty darn sure a lot of other folks did as well.

The Long War

by digby

Those of you who are interested in the enigma that is Afghanistan should do yourselves a favor and pour yourself a stiff one and then click on over to Gary Farber’s place for this long, but fascinating post on the subject.

Come Februrary of 2010, we’ll have been fighting in Afghanistan longer than we fought the American revolutionary war (April, 1775 to September, 1783 = 100 months).

(That’s by the longest possible measure: the last actual major British land offensive ended in October of 1781, when Cornwallis surrendered at Yorktown; the war formally ended with the signing of the Treaty of Paris on on September 8, 1783.)

The date on which America “began” fighting the Vietnam War is an entirely debatable question, but for argument’s sake, let’s go with the commencement of U.S. air strikes on North Vietnam with Operation Flaming Dart on February 7, 1965, and major U.S. bombing of North Vietnam in Operation Rolling Thunder on March 2nd, 1965. The deployment of the 18th Tactical Fighter Wing to Da Nang for Flaming Dart led to the almost immediate deployment, on March 8th, 1965, of a Marine brigade (3,500 troops) to protect U.S. air bases in South Vietnam from ground attack.

By April of 1965, the U.S. had 60,000 ground troops in South Vietnam.

On June 27, 1965, the U.S. launched a major ground offensive against the National Liberation Front.

By December of 1965 the U.S. had 200,000 ground troops in South Vietnam.

On January 27, 1973, the U.S. signed a cease fire, and by March 1973, all U.S. combat operations troops had left Vietnam. America’s war in Vietnam was effectively over by them, although the final collapse of South Vietnam’s corrupt shell of a government didn’t take place until, April 30, 1975, the same date the last U.S. personnel fled Vietnam, and the last two American soldiers, Marines, died under hostile fire in Vietnam.

It was a war of eight to ten years.

And as matters presently stand, America looks sure to have a longer war in Afghanistan, our longest war evah, if not as of now, our ninth year of war in Afghanistan, but within, at most, a year or two from now.

So, as a former mayor of New York City used to ask: how are we doing?

The unanimous opinion is: we’re deep in a bloody hole.

read on …

What in the hell are we doing? Does anyone really know?

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As Ye Sow

by digby

… so shall ye reap.

Here’s David Keene, president of the American Conservative Union, being confronted by Wingnut 3.0, The Palinite:

Think Progress has the whole story, culminating with a big showdown:

Ziegler ultimately left the conference on his own volition. Summarizing his experience at CPAC, Ziegler said, “If David Keene is a guy who is a leader in the conservative movement, that’s a movement I don’t want to be a part of.” Ziegler’s antics have attracted support throughout the conservative blogosphere.

This is interesting. People like Keene and Richard Viguerie carved out important roles for themselves as movement voices who fought against Republican political establishment compromise — and made a very tidy profit at it. There’s a lot of money in being the “keeper of the flame” and standing first in line to indict the Party for being insufficiently rigorous in its application of movement ideology. Now they are being attacked by a new generation of conservatives for being complacent, establishment figures themselves who have sold themselves out to the highest bidder. And they don’t like it one bit.

And it’s just too funny that those who turned St Ronnie into the second coming are offended that the Wingnut 3.0s believe Sarah Palin is their Reagan. What did they expect?

Update: Wingnut 3.0 explains himself. Awesome.

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Loanership

by digby

One of my trusted readers wrote in with this in response to my post yesterday about the fact that the Democrats can’t seem to muster 50 votes to pass the Student Loan bill:

One thing that isn’t being currently reported regarding the student loan skimming, for lack of a better term, came out during the NYstate investigation into the pay for play nature of student aid staff steering students to the for-profits, rather than to the Dept of Ed back in 2006-2007. It also came out a couple years before that when Congress tried to fix the interest rate issues pertaining to student loans. What came out then was that when the student loan program was instituted the government didn’t want to loan directly, but the banks were skeptical: give potential 100s of thousands of dollars to people with no credit history. So the government threw in a HUGE sweetener: whatever the fixed interest rate on the loan is, the government would reimburse the lenders the difference
between it and the maximum they were allowed to charge by law, which is around 19% if I recall correctly. So not only was the Federal government guaranteeing the loans, it was making sure that the banks weren’t just making their expected profits, but profits plus the difference up to the maximum interest rate against the loan principle amount.

This was fixed back in 2005-2006, but loans before that, or at least some of them, were grandfathered through. So, for instance, I have a 4.26% fixed interest rate on my loans which are in repayment. They cover my BA, two masters, and a PhD.
So when I pay my loans every month I pay the interest, I’m fortunate well off enough to pay into the principal. So the lender makes its money back. They then turn around and charge the government another 15% or so times my principle. So I’m paying my loan back responsibly and then all of us are paying an essentially usurous subsidy to the lender out of our taxes.

So the scam is even worse than most people think. Not only that, but student loan debt can’t be reworked through bankruptcy and falls to my survivors if I die. So had I been killed during my tour in Iraq, my family would’ve been on the hook to pay of my loans in full.

This is one of those obviously corrupt lobbying deals, like the bankruptcy legislation, which the Democrats are happy to give to their local and regional patrons in return for big, fat donations.

It doesn’t get any more obvious than this.

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