Month: January 2012

Bring back thecircus

by digby

Newtie’s upset:

“I wish in retrospect I had protested when Brian Williams took [the crowd] out of it because I think it’s wrong,” he said. “I think he took them out of it because the media is terrified that the audience is going to side with the candidates against the media, which is what they’ve done in every debate.”
Gingrich’s debate performances are widely viewed as having propelled him to an overwhelming victory at Saturday’s South Carolina primary.

His fiery performances often came at the expense of the debate moderators for questions he deemed inappropriate, and the conservative crowds often rewarded the former House Speaker with applause and even a standing ovation for his attacks against the media.

But NBC asked the crowd to hold their applause until the breaks, and moderator Brian Williams didn’t offer any opportunities for Gingrich to go after him.

As a result, some of Gingrich’s attacks that might have energized his supporters at previous debates seemed to fall flat. At one point Gingrich even seemed flustered, and paused in silence to collect his thoughts.

“We’re going to serve notice on future debates that we won’t tolerate — we’re just not going to allow that to happen,” Gingrich continued. “That’s wrong — the media doesn’t control free speech. People ought to be able to applaud if they want to. It was almost silly.”

Uh, no. Not silly enough obviously.

He’s a cheerleader not a politician. Without the “fans” screaming for blood his allegedly brilliant debating skills fall flat.

As Alan Grayson said:

“The Republicans can’t give them bread so they just give them circuses.”

*Who knew Florida had become forced childbirth central? Santorum should do well once they find out about his macabre practices.

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The wingnut test of wills

by David Atkins

Newt Gingrich has surged into the lead not only in Florida, but nationwide as well.

That means one thing: the GOP has about a week to discover who is more powerful: its establishment or its base. If Newt Gingrich wins an upset in Florida and proceeds to roll through to nomination in spite of all predictions, he will almost certainly lose the general election against a vulnerable President. The conspiracy-minded will declare that the big money men are pleased with Obama and are throwing the race to ensure four more years. But that assumes a level of coordinated puppeteering that doesn’t likely exist. Even if one assumes that on certain issues the Parties don’t differ all that greatly, there are a very large number of influential people who depend on the tendrils of power and influence that alter depending on whether a Democrat or a Republican holds the White House. There is simply no way that the vast bulk of the Republican establishment is lying down for four years, allowing its favored sons and daughters to languish while Democrats fill all the appointments in the White House’s power.

No, the Republicans want to win in 2012. They have to. They’ve spent enough time, energy and money labeling the first African-American President a socialist, communist unAmerican professorial elite aligned with Black Panthers and food stamp cultures of dependency, that they can’t afford to lose to him and still save face.

That’s the danger of using ridiculous hyperbole to smear your opponents. If you lose, it means that the people either didn’t believe the best lies your money could tell, or worse, believed them and didn’t care.

The Republican establishment can’t afford to see Gingrich win the nomination. But the base isn’t about to let a Mormon governor from Massachusetts with a more moderate record be their standard-bearer.

In the next week, we’ll find out if the GOP wizards are still in control of their monster, or if their monster is about to eat them alive. If the former, the monster won’t exactly be happy about going back in its cage. If the latter, it could mean no less than the beginning of the end for the Republican Party: the year when its rabid base officially seized control, hastening the demise of a political party in rapid demographic decline.

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Debate night drinking game

by digby

Drink on “frankly” and prepare for a massive hangover.

But it will be nothing compared to the hangover in the GOP if Newtie pulls this off:

SCHMIDT: Look, I think, not only are we not moving towards a coalescing of support by the Republican establishment for Newt Gingrich, we’re probably moving toward the declaration of war on Newt Gingrich by the Republican establishment. And if Newt Gingrich is able to win the Florida primary, you will see a panic and a meltdown of the Republican establishment that is beyond my ability to articulate in the English language.

People will go crazy and you will have this five week period until the Super Tuesday states which is going to be as unpredictable, tumultuous as any period in modern American politics. It will be a remarkable thing to watch should that happen in Florida.

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Sir It Gets Better Sir

by digby

I don’t think anything can illustrate the change in our society better than this:

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Mitt Romney, Uncreative Destructor

by David Atkins

Mitt Romney had a fascinating take on the foreclosure mess today. Dave Dayen and Digby have superb rundowns of Romney’s comments particularly as they relate to strategic default and the Administration’s foreclosure settlement, but I want to focus on a specific part of Romney’s answer to struggling homeowners:

“The banks are scared to death, of course, because they think they’re going to go out of business,” Romney said. “They’re afraid that if they write all these loans off, they’re going to go broke. And so they’re feeling the same thing you’re feeling. They just want to pretend all of this is going to get paid someday so they don’t have to write it off and potentially go out of business themselves.”

“This is cascading throughout our system and in some respects government is trying to just hold things in place, hoping things get better,” Romney continued. “My own view is you recognize the distress, you take the loss and let people reset. Let people start over again, let the banks start over again. Those that are prudent will be able to restart, those that aren’t will go out of business. This effort to try and exact the burden of their mistakes on homeowners and commercial property owners, I think, is a mistake.”

It takes a while to think through what Romney is saying here, but at its core what you get is a terrifying view of Romney’s perspective as a vulture capitalist.

The single silver lining to the cloud of vulture capitalism is the principle of creative destruction. From a business point of view, creative destruction rests on the notion that while killing and carving up struggling firms may entail short-term pain, in the long run the economy benefits by freeing up capital and resources to function in smaller, more dynamic parts or even just the broader economy. It’s not much of a silver lining to those who lose their jobs or to the towns that die when factories are closed, but a halfhearted case for the role of vulture capital in helping along creative destruction can be made by an economist.

So when Romney says to simply flush all the bad debt out of the system for both homeowners and banks alike, he’s resting on this same worldview: that things will be better off once the current mess is destroyed, so that the housing market and banking market can be rebuilt from the ground up. It’s the same perspective he had when he insisted that Detroit be allowed to go bankrupt. Creative destruction is the name of Romney’s game. It also serves the Libertarian economic project fairly well, because the alternative to creative destruction is direct intervention, usually by a government entity.

But applying the principle of creative destruction to the entire housing and banking market is nothing short of terrifying. It’s one thing to do it in the Rust Belt or Silicon Valley, where factories and offices can be liquidated so that mechanics and engineers can theoretically be assigned to more productive industries. It rarely works out that way, of course: usually the engineers and mechanics stay unemployed or are rehired at far lesser wages, even as the vulture capitalists make off like bandits. But at least there’s a sound theory behind it.

Banking isn’t like manufacturing or technology, though. Banks don’t produce anything but loans and interest on investment. You can’t take a banker and reassign her to a more productive type of finance, even in theory. Banks are less like factories themselves, and more like cogs in an economic machine that are allowed to take profits in return for the service they provide. Banking is a boring and often ugly business that is in many ways a necessary evil–so much so that most societies have historically placed stringent, usually religious rules or even bans on the activity, forcing social outcasts to provide the service. “Creativity” in banking is almost always a bad thing, as is financialization of economies. There’s no “creativity” to be had in destroying banks; rather, the only reason for destroying banks is essentially to regulate them by limiting their power.

Homeownership is even less subject to the rules of creative destruction, unless one is literally leveling homes in a process similar to gentrification–which even then, obviously, has its own social costs. Homes are not an economic engine, or rather they’re not supposed to be. They’re places where people live, grow up, raise families and retire. Turning families out of their homes isn’t like turning them out of a dead-end job with the hope of their landing a more productive, economically efficient job later. It simply means another transplanted or homeless family.

That the big zombie banks should be broken up rather than allowed to stagger on pretending their bad debts will be repaid is without question. That homeowners with no home of repaying their mortgage should have alternatives to walking away, such as own-to-rent or mortgage write-downs, seems intuitive.

But Romney’s stated approach of simply allowing the housing market to bottom out and the banks to go under without government intervention is not only cruel; it’s economically insane. It’s not creative, just destructive. It’s the approach of a man who understands only the business of vulture capital, not the business of running an economy.

It’s proof that the last thing America needs in office is a businessman, or at least one who cut his chops in the financial sector.

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Romney the socialist

by digby

This is pretty amazing:

Richard Wood of Bradenton, Fla., told Romney he’d folded his title insurance company in October 2010. “I invested in some real estate, some rental properties, made what I considered to be very conservative investments during the boom times and right now I am negotiating with the same bank who has mortgages on each of those and an approximate $200,000 deficiency,” he said. “We have been exploring the possibility of moving to another to another country where we might be able to live on our retirement and our Social Security.”

“Yeah. It’s just tragic, isn’t it? Just tragic, just tragic,” Romney said. “We’re just so overleveraged, so much debt in our society, and some of the institutions that hold it aren’t willing to write it off and say they made a mistake, they loaned too much, we’re overextended, write those down and start over. They keep on trying to harangue and pretend what they have on their books is still what it’s worth.”

“Also, Gov. Romney, we got hit with a double whammy,” Wood continued. “My wife, she’s a Realtor — she is in the process of filing for bankruptcy on some debts that she needed to take out in order to try and stay in business the past five years. I’m probably right behind her.”

“That’s tragic,” Romney said. “In some cases, if the debt is not in something you can service, it’s like you have to move on and start over away from those debts. It’s helpful if you get an institution that’s willing to work with you, but if you don’t you have no other option.”

The Sunshine State had the seventh-highest foreclosure rate of any state in 2011, according to RealtyTrac, an online foreclosure marketplace and data firm. All of the homeowners at the table Monday said they owed more than their homes were worth and that their banks wouldn’t negotiate on modifications or refinancing. More than 22 percent of all residential properties in the U.S. are “underwater,” according to housing research firm CoreLogic. In Florida, a full 44 percent of mortgage properties are underwater.

“The banks are scared to death, of course, because they think they’re going to go out of business,” Romney said. “They’re afraid that if they write all these loans off, they’re going to go broke. And so they’re feeling the same thing you’re feeling. They just want to pretend all of this is going to get paid someday so they don’t have to write it off and potentially go out of business themselves.”

“This is cascading throughout our system and in some respects government is trying to just hold things in place, hoping things get better,” Romney continued. “My own view is you recognize the distress, you take the loss and let people reset. Let people start over again, let the banks start over again. Those that are prudent will be able to restart, those that aren’t will go out of business. This effort to try and exact the burden of their mistakes on homeowners and commercial property owners, I think, is a mistake.”

Wow. This seems to me to be a huge move in a very different direction than any politician in the race. He’s supporting the concept of strategic default which until now has been considered something only very sophisticated rich people were allowed to do. The CW is that it’s a huge moral hazard for the rubes.

In fairness, these people sound as if they were heavily involved in Real Estate speculation and weren’t just your average homeowner screwed by the crash, so maybe it’s not as unusual after all. But still, the language the “empathy” the idea that it’s “prudent” for non-billionaires to get a restart are all anathemas to the 1%ers. I will be shocked if Romney doesn’t walk this back if it’s picked up by the press. It’s a class betrayal of epic proportions.

That’s if he means what he’s saying which I very much doubt. This has all the hallmarks of Mitt’s compassion chip misfiring and mistakenly saying what these voters want to hear. If it isn’t, and he sticks with it, we will see Romney to the left of the administration on the foreclosure crisis, which is fairly shocking. After all, this is what’s happening right now:

Rumor has it that on Monday, after months of negotiation with big banks, the White House may announce a settlement that would let the banks off the hook for their role in the foreclosure crisis — paying a tiny fraction of what’s needed in exchange for blanket immunity from future lawsuits.

We hope these rumors are untrue.

President Obama has the ability to stop and change the direction of this sweetheart deal. He should reject any deal that benefits the one percent and lets the big banks get away with their crimes. Instead, the president should stand with the 99 percent and push for real accountability and a solution that will help millions of people in this country.

Here are the hard facts about the housing crisis we face:

3.5 million Americans are homeless.
18.5 million homes sit vacant.
Since 2007, more than 7.5 million homes have been foreclosed.
Default and foreclosure rates are now several times higher than at any time since the Great Depression.

If President Obama is serious about solving this crisis, he must ensure three things:

First: The banks must pay a minimum $300 billion in principal reduction for homeowners with underwater mortgages and/or restitution for foreclosed-on families. This is essential. Every effort to date to reboot the housing market has failed because it has not done the most essential thing — actually reduce the massive debt load carried by homeowners.

As it stands, the deal likely to be announced Monday would have the banks pay only $20 billion, an astonishingly small fraction of what’s needed. Add up all the underwater homes in America, and there’s an estimated $700 billion in negative equity in the country, according to a recent study. If banks fix what they broke and write down principals for all underwater mortgages, this would free up millions of people to pump billions of dollars back into local economies, create jobs, and ultimately generate revenue to help invest in things that will help our economy grow.

This was addressed on Up with Chris Hayes yesterday with Eliot Spitzer:

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Florida has been ground zero for foreclosure fraud and the housing slump. It stands to reason that the GOP would be trying to find a populist appeal to the average people in the state. It will be especially helpful to them if the administration does their dirty work for them and they can run against this settlement. The politics are very, very stupid. On the merits, it’s just plain wrong.

Update: Also too, this:

The nation’s top six banks — Bank of America, JPMorgan Chase, Wells Fargo, Citigroup, Morgan Stanley and Goldman Sachs — paid out $144 billion in bonuses and compensation for 2011, second only to the record $147 billion they paid out in 2007 at the height of the economic boom, according to a report released today by The New Bottom Line. Four banks – Bank of America, JPMorgan Chase, Wells Fargo, and Morgan Stanley – were awarded record high bonuses and compensation in 2011, despite their bleak stock performance during the year.

“Even though top bank executives have claimed that bonuses are down as much as 30 percent for 2011, total compensation has not decreased at all,” according to The New Bottom Line’s report, “Pulling Back The Curtain: The 1% Behind The 2011 Big Bank Bonuses.”

Update: Dday has a detailed analysis of Mitt’s comments. (I had missed the part where he praised Pam Bondi .. oy vey, he is confused.) His political analysis is the same as mine.

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Help out a pal

by digby

Susie Madrak, writer, blogger extraordinaire had to have gallbladder surgery and it cost more than she has:

In addition to paying for the health insurance, I have a $5000 copay on the surgery and about $30,000 in assorted medical bills from when I was hospitalized previously. I don’t expect to pay all of that, but I will have to pay something.

Obviously, some of you are in the same leaky financial boat and the last thing I want is for my readers to donate to me when they’re in bad shape themselves. But for those of you who can spare a few bucks, and would like to support what I do, I’d really appreciate your help.

Click over to her page and throw in a couple of bucks if you have it. It’s Ayn Rand’s world and we have to live in it.

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The age of Citizens United

by digby

This is an interesting discussion on Up With Chris Hayes yesterday morning about campaign finance.

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The disagreement between Eliot Spitzer and Melissa Harris Perry is instructive. It’s clear that many of us are confused about Citizens United — the fact is that nothing any wealthy individual like Sheldon Adelson is doing in this cycle is a result of that ruling. Citizens United lifted the restrictions on corporations and union spending in elections, period. It had nothing to do with wealthy individuals donating to PACs in order to support candidates. That has been legal since 1976:

The Supreme Court’s ruling in Buckley v. Valeo (1976) held that expenditures made independently of a candidate’s campaign could not be limited under the Constitution. If expenditures are made in “coordination” with a campaign, however, they may be regulated as contributions.

Citizens United brought about the SuperPAC in order to facilitate the newly legal unlimited corporate giving, but the huge donations from wealthy individuals to these PACs is something they always could have done. Indeed, the single largest donation to Romney’s SuperPAC is “John Paulson, a billionaire and hedge fund manager who is, according to Politico, ‘famous for [having enriched] himself by betting on the collapse of the housing industry.'” There was nothing stopping him from doing this before either.

So why the big change? I think it has to do with two things, one cultural and one economic. The first is simply that wealthy benefactors are willing to put their names on their politics. The overt lobbying for Randroid values among the super wealthy has been well documented. They are shameless.

The second, and probably more important, is that these wealthy people have so much more money than they had before. Adelson is the 8th richest man in the United States. The Koch Brothers are the 4th and 5th. And their wealth has grown exponentially in recent years as everyone else has been struggling:

State intrusion

by digby

It’s good that Rand Paul is taking on the TSA’s security theatre by refusing to comply with a pat down request. Perhaps it will lead to more discussion about why this is a ridiculous approach to anti-terrorism. When the authorities find themselves groping a US Senator’s crotch in public without any suspicion of criminal activity, something’s gone wrong.

Having said that, I cannot help but be reminded of the fact that his home state of Texas just passed a law that goes a good deal further: forced vaginal probes of women seeking an abortion. To me, that seems like at least an equally intrusive state action, but when asked about it his allegedly highly principled father replied:

When GOP presidential hopeful Ron Paul was asked today about Tuesday’s federal court ruling upholding an aggressive new sonogram law in his home state of Texas, the congressman said the requirement that women seeking an abortion first get a sonogram “should always have been a Texas state position.’’

“Like Roe v Wade should never have been heard in the Supreme Court,” he said after a midday speech and rally at the Columbia Metropolitan Airport at the Eagle Aviation Building…

This is the usual dodge. Paul could claim that since abortion would be illegal in Texas (as it surely would) there would be no need for intrusive sonograms. But in states where abortion is legal, if they wanted to pass this law, he would be perfectly fine with it.

Brian Williams should ask him tonight at the debate whether he would agree that a state government has the right to demand pat-downs at its airports. I’d be curious to hear the answer.

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Reading the Tea Leaves

by David Atkins

The latest poll out of Florida:

Newt Gingrich leads Mitt Romney by eight points in Florida, according to a poll conducted the day after the former House speaker won the South Carolina primary.

According to the Insider Advantage poll, Gingrich has 34 percent support, Romney has 26 percent, Texas Rep. Ron Paul has 13 percent, and former Pennsylvania Sen. Rick Santorum garners 11 percent.

But there’s just one problem: Newt has a +34 unfavorable rating with the American public. The latest PPP poll shows that 60% of Americans have an unfavorable opinion of Gingrich, compared to only 26% who like him. Ouch. Mitt Romney’s, meanwhile, is only +18 unfavorable.

The President has only a +10 job disapproval, making him more popular than either leading Republican in spite of everything. If the economy continues to improve over the next year (no sure thing, of course), that number will only get better.

In a national matchup, President Obama beats Gingrich by 7 points, but only beats Romney by 5.

What does all of this mean? Watch for the long knives from the GOP establishment to come out against Mr. Gingrich over the next week. They know that Mitt Romney for all his 1% vulture capital warts, is the only one with a prayer of taking the White House in 2012.

And then watch in response as the Tea Party base spits fury at the Republican Party.

It’s helpful in these situations to remember that Democrats aren’t the only Party with a serious “base” problem. If anything, the Republicans have it worse right now.

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