Month: May 2012

Bucking up the MOUs: it will take more than record profits to heal their bruised psyches

by digby

Well, this is a big relief. Somehow, the “job creators” seem to be getting by, despite all the uncertainty and lack of confidence:

The Fortune 500 generated a total of $824.5 billion in earnings last year, up 16.4% over 2010. That beats the previous record of $785 billion, set in 2006 during a roaring economy. The 2011 profits are outsized based on two key historical metrics. They represent 7% of total sales, vs. an average of 5.14% over the 58-year history of the Fortune 500. Companies are also garnering exceptional returns on their capital. The 500 achieved a return-on-equity of 14.3%, far above the historical norm of 12%.

Unfortunately,despite these record profits and capital gains, they don’t feel quite confident enough:

Of course, that return to pre-recession level earnings hasn’t translated into job or wage growth for America’s workers. In fact, inflation-adjusted wages fell last year. Big companies are also squeezing more productivity out of their workers, with annual revenue generated per worker increasing by more than $40,000 over the last five years. CEO pay, meanwhile, increased 15 percent last year.

This data also puts the lie to the Republican claim that corporate tax cuts will spur businesses to hire. If all it took were extra cash, businesses would be hiring like crazy. However, they are clearly not doing so — and the effective corporate tax rate is already at a forty year low.

But the CEOs and investment bankers have got very hurt feelings. And until someone assures them that they are really wonderful people whom we all respect and admire above all others — and prove it by lowering their tax rates and lifting all regulations — I’m afraid they’re just going to stay in their shells, uncertain, unself-confident and insecure. These poor fellows are very psychologically fragile and we’re going to have to keep trying to buck them up. So to speak.

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Cheap and tawdry political tricks

by digby

I certainly get why liberals are sick and tired of the silly dance the administration’s doing on gay marriage, particularly after the controversy over Biden’s comments this week-end. Come on, this isn’t buying them even one vote and it’s insulting to people’s intelligence.

Still, nothing beats the sheer chutzpah of the right wingers decrying the administration’s “confusing” rhetoric and demanding that they clarify their position. Let’s take a little trip back in time to 2004, when Lynn and Dick Cheney, parents of an openly gay daughter, turned the issue into an incomprehensible mush. 8/25/04:

Vice President Dick Cheney, whose daughter Mary is a lesbian, drew criticism from both proponents and foes of gay marriage Tuesday after he distanced himself from President Bush’s call for a constitutional amendment to ban same-sex marriage.

At a campaign rally in this Mississippi River town, Cheney spoke supportively about gay relationships, saying “freedom means freedom for everyone,” when asked about his stand on gay marriage.

“Lynne and I have a gay daughter, so it’s an issue our family is very familiar with,” Cheney told an audience that included his daughter. “With the respect to the question of relationships, my general view is freedom means freedom for everyone. … People ought to be free to enter into any kind of relationship they want to.

“The question that comes up with the issue of marriage is what kind of official sanction or approval is going to be granted by government? Historically, that’s been a relationship that has been handled by the states. The states have made that fundamental decision of what constitutes a marriage,” he said.

Bush backs a constitutional amendment prohibiting gay marriage, a move Cheney says was prompted by various judicial rulings, including the action in Massachusetts that made gay marriage legal.

“I think his perception was that the courts, in effect, were beginning to change, without allowing the people to be involved,” Cheney said. “The courts were making the judgment for the entire country.”

Addressing Bush’s position on the amendment, Cheney said: “At this point, say, my own preference is as I’ve stated, but the president makes policy for the administration. He’s made it clear that he does, in fact, support a constitutional amendment on this issue.”

Ok, so the Cheneys disagree with the president on this issue. They clearly support their daughter and do not believe in the constitutional amendment to deny her equal rights. Fine. Two months later those hypocritical Cheneys had the gall to do this. 10/14/04:

Vice President Dick Cheney called himself “a pretty angry father” on Thursday after Sen. John Kerry mentioned their gay daughter during the final presidential debate — comments Kerry said were meant to be positive about families with gay children. The vice president’s wife, Lynne Cheney, called Kerry “not a good man” and his remarks about daughter Mary Cheney “a cheap and tawdry political trick.”

It was one of the weirdest displays of cognitive dissonance I’ve ever seen. It worked though. To people who hadn’t followed the campaign until the last few weeks, it felt as if Kerry had called their daughter a lesbian out of the blue, and plenty of people thought it was a dishonest smear. Certainly, you would have thought so after watching Lynne Cheney growl, “this not a good man….”

It was a cheap and tawdry political trick alright, but they were the ones who pulled it.

Watch the video.

Visit msnbc.com for breaking news, world news, and news about the economy

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Rahm talking out of school again

by digby

First, why is Rahm Emmanuel even invited to a reception for the French Ambassador in Washington? Does Chicago have a lot of trade issues with France or something?

Former White House chief of staff and currrent Chicago Mayor Rahm Emanuel appeared underwhelmed by Francois Hollande, elected yesterday to lead France, according to a report in the left-wing French newspaper Liberation.

“To me, [Hollande] has more of the head of a prime minister than of a president,” Emanuel reportedly said at a reception at the residence of the French Ambassador in Washington. When French diplomats suggested that Hollande could grow into the job, Emanuel reportedly shot back with his “professional” opinion that he couldn’t imagine Hollande “grow[ing] in office.”

But Emanuel’s office cast the exchange differently.

“What the mayor said was just the opposite,” his spokeswoman Sarah Hamilton told BuzzFeed. “What he said was: He doesn’t know him, but through the U.S. press coverage, he looks more like a prime minister than a president, but everybody grows into their job.”

I don’t know the truth of what Rahm said at that dinner, but either way it’s insulting. And why is he saying anything about this at all in this situation? He’s a mayor of a major American city now, not a presidential adviser or a congressman. He has no official role in foreign policy although his past relationship to the president could lead people to believe he speaks with some authority. I realize that he’s got a right to free speech but he really should be more careful.

On the other hand, maybe he really was speaking on behalf of the administration in which case we have a bigger problem:

The report is one of a series of ripples of the election of Hollande, a little-known figure here who didn’t visit the U.S. during his campaign, over Sarkozy, known domestically as “Sarko the American.” Though Sarkozy is a figure of the European right, he proved an important force in the Obama Administration, pushing the U.S. into a conflict in Libya, in particular.

In France, Obama was perceived to be supporting Sarkozy; in particular, Liberation writes, the White House, at the request of the Elysee, allowed Sarkozy’s aides to film the French side of a telephone conversation between the presidents.

The U.S. Administration has, however, been formally neutral, and some here look forward to a French Administration willing to push Europe away from austerity and toward stimulus spending to revive the European economy.

I’m guessing those are not members of the administration who have been talking to Rahm. Or members who authorized that TV stunt:

Days before the first-round vote in the French presidential election, on 22 April, the rare glimpse of banter between world leaders shows Obama saying of the campaign: “It must be a busy time.” He adds: “I admire the tough battle you are waging.” Sarkozy replies, grinning, with arms folded: “We will win, Mr Obama. You and me, together.” The cameras leave before the pair talk about Syria, Iran and oil.

French media wondered if the White House knew the footage would be made public, or whether Obama was set up.

Washington told Le Monde it had been aware that cameras were authorised to film the first few minutes of the conference.

Please. There are lots of reasons why President Obama may have wanted Sarkozy to win, the more prosaic being that he knows him and may like him personally. The autobiographies of world leaders often reveal that’s a bigger component of foreign policy than we may realize. But it’s also possible that the administration doesn’t want these leftists meddling in their elite economic strategy with their penchant for worrying a little bit too much about the average folk and not enough about “preserving the system.”

We’ll never know. The fact is that Hollande is president now, even if he doesn’t look “presidential” to Rahm Emmanuel and they’re going to have to deal with him. Of course, he’s going to have to deal with them too.

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Standing between them and the pitchforks

by digby

Must read of the morning, by Peter J Boyer and Peter Schweitzer at Newsbeast:

Despite his populist posturing, the president has failed to pin a single top finance exec on criminal charges since the economic collapse. Are the banks too big to jail—or is Washington’s revolving door at to blame? Peter J. Boyer and Peter Schweizer investigate:

Obama’s 2009 White House summit with finance titans, in which the president warned that only he was standing “between you and the pitchforks”

Why, despite widespread outrage, financial-fraud prosecutions by the Department of Justice are at 20-year lows

Attorney General Eric Holder’s lucrative ties to a top-tier law firm whose marquee clients include some of finance’s worst offenders

How Obama’s trumpeted “task force” for investigating risky mortgage lenders—announced in this year’s State of the Union speech—is badly understaffed and has yet to produce any discernible progress.

An excerpt:

Two months into his presidency, Obama summoned the titans of finance to the White House, where he told them, “My administration is the only thing between you and the pitchforks.”

The bankers may have found the president’s tone unsettling. Candidate Obama had been their guy, accepting vast amounts of Wall Street campaign money for his victories over Hillary Clinton and John McCain (Goldman Sachs executives ponied up $1 million, more than any other private source of funding in 2008). Obama far outraised his Republican rival, John McCain, on Wall Street–around $16 million to $9 million. As it turned out, Obama apparently actually meant what he said at that White House meeting–his administration effectively would stand between Big Finance and anything like a severe accounting. To the dismay of many of Obama’s supporters, nearly four years after the disaster, there has not been a single criminal charge filed by the federal government against any top executive of the elite financial institutions.

Strikingly, federal prosecutions overall have risen sharply under Obama, increasing dramatically in such areas as civil rights and health-care fraud. But according to the Transactional Records Access Clearinghouse, a data-gathering organization at Syracuse University, financial-fraud prosecutions by the Department of Justice are at 20-year lows. They’re down 39 percent since 2003, when fraud at Enron and WorldCom led to a series of prosecutions, and are just one third of what they were during the Clinton administration. (The Justice Department says the numbers would be higher if new categories of crime were counted.)

None of the information is something you probably don’t already know. But it’s unusual for a mainstream news magazine to report anything like this without all the usual caveats about how important it is to coddle all these Master of the Universe or they’d take their balls and go home.

Waking from the nightmare

by David Atkins

Paul Krugman, right as usual, has a predictable but necessary take on the French and Greek election result:

Both countries held elections Sunday that were in effect referendums on the current European economic strategy, and in both countries voters turned two thumbs down. It’s far from clear how soon the votes will lead to changes in actual policy, but time is clearly running out for the strategy of recovery through austerity — and that’s a good thing.

Needless to say, that’s not what you heard from the usual suspects in the run-up to the elections. It was actually kind of funny to see the apostles of orthodoxy trying to portray the cautious, mild-mannered François Hollande as a figure of menace. He is “rather dangerous,” declared The Economist, which observed that he “genuinely believes in the need to create a fairer society.” Quelle horreur!

What is true is that Mr. Hollande’s victory means the end of “Merkozy,” the Franco-German axis that has enforced the austerity regime of the past two years. This would be a “dangerous” development if that strategy were working, or even had a reasonable chance of working. But it isn’t and doesn’t; it’s time to move on. Europe’s voters, it turns out, are wiser than the Continent’s best and brightest.

What’s wrong with the prescription of spending cuts as the remedy for Europe’s ills? One answer is that the confidence fairy doesn’t exist — that is, claims that slashing government spending would somehow encourage consumers and businesses to spend more have been overwhelmingly refuted by the experience of the past two years. So spending cuts in a depressed economy just make the depression deeper.

It’s hard to believe that the entire world has bought so heavily into the austerity mania, but there it is. It’s not hard to understand how it happened. It’s just hard to understand why it persists even after the myopia of austerity has become clear.

The chain of events went as follows: increased globalization and technological advancement > ability of corporations to reduce and offshore workforce while increasing profits and productivity > need to disguise wage and employment losses among average citizens with asset growth, the democratization of debt and finance and importation of cheap foreign goods > asset bubbles and indebted citizenry, coupled with massive income inequality > burst bubbles, zombie banks and nations with large debt to GPD ratios.

It’s understandable that some nations would panic and desperately try to contract their own economies rather than do the hard work of bringing their banks to heel and cooperating with one another to rein in the unaccountable corporations causing the problems in the first place. But it’s not acceptable that once the predictably failed experiment born of panic was attempted, wiser heads did not step in to take the necessary approaches.

Here’s hoping the elections in Greece and France are the beginning of a global pushback against the global dominance of assets over wages.

Guess what? It wasn’t the Tea Partiers

by digby

I mentioned this article in passing a few days ago, but I think it’s worth discussing in more detail. It was published in the NY Times a couple of months ago and it contains a piece of information that’s extremely important for those who are gaming out legislative strategy to know and understand. There was a time when I would have just assumed that those in DC of course would get this, but I’m not longer so sure. Certainly, I’m not sure that the leadership thinks it makes a difference:

House freshmen have been caricatured as the face of Republican intransigence in Congress, portrayed as a diverse and cacophonous mob standing in the way of Republican leaders and legislative compromise.

But an analysis of voting patterns on the most contentious bills in the 112th Congress shows that House members of the Republican Study Committee — a group of both veterans and newcomers that meets weekly to hammer out a conservative agenda — have cast the bulk of “no” votes on big bills, including those important to Speaker John A. Boehner of Ohio.

The freshmen who have joined the study committee — which was founded in 1973 — play an important role in its renewed clout, having increased its membership to 163 from roughly 110 two years ago. As a group, however, the freshmen are less homogenous and less apt to buck the leadership than the study committee itself is as a whole.

In the surprising failure of a bill early last year to extend provisions of the Patriot Act, 18 (or 69 percent) of the Republicans who rejected the measure were committee members and only 9 (35 percent) were freshmen. In a defeated spending measure that included disaster aid for states pounded by tornadoes, 94 percent of the 48 Republican “no” votes came from committee members and only 40 percent from freshmen.

“A lot of people think it’s freshmen,” said Representative Kevin McCarthy of California, the House whip, whose job it is to persuade members, using pizza, pressure and occasionally spleen, to take tough votes. “It’s not. It’s older members.”

Interesting, no? Here we thought it was a bunch of crazy freshman know-nothings refusing to compromise and it turns out that it’s really just the old-time conservative faction in the House:

It was founded in 1973 by Paul Weyrich and other conservative activists to keep a watch on the House Republican leadership, which they saw at the time as too moderate. Their formation mirrored the rise of the Democratic Study Group, a liberal force in the House Democratic Caucus founded in 1948. The group’s first chairman was Phil Crane of Illinois. The group briefly dissolved in 1995 after the Republicans won control of the House for the first time in 40 years.

However, it was almost immediately refounded as the Conservative Action Team by Dan Burton of Indiana (the last chairman of the original RSC), Sam Johnson of Texas, John Doolittle of California and Ernest Istook of Oklahoma. The four founders alternated as chairmen throughout the next two Congresses until David McIntosh of Indiana became chairman in 1998. When he resigned from the chairmanship in 2000 to focus on his run for governor of Indiana, Johnson reassumed the chairmanship. John Shadegg of Arizona became chairman in 2001, renaming it the RSC soon after taking over. Shadegg increased the group’s membership from 40 members in 2001 to 70 members in 2003. Sue Myrick of North Carolina was the first woman to serve as chair from 2003 to 2005. Mike Pence of Indiana served as chairman from 2005 to 2007 and Jeb Hensarling of Texas served as chairman from 2007 to 2009. Tom Price of Georgia who succeeded Hensarling in 2009. After the Republicans regained control of Congress in the 2010 elections, Jim Jordan of Ohio was elected chairman of the RSC.

Several members of the RSC have held high positions in the House leadership. Presently, seven of the nine top Republican leaders—Majority Leader Eric Cantor, Chief Deputy Whip Peter Roskam, Conference Chairman Jeb Hensarling, Conference Vice-Chairwoman Cathy McMorris Rodgers, Conference Secretary John Carter, Policy Committee chairman Tom Price, and National Republican Congressional Committee chairman Pete Sessions–are members of the RSC. Only two members of Republican leadership are not members of the RSC: Speaker John Boehner (who is, by tradition, the leader of the House Republicans) and Majority Whip Kevin McCarthy.

The organization has long had ties to outside groups closely allied with the most conservative elements of the Republican Party, such as the National Rifle Association, The Heritage Foundation, Focus on the Family, Concerned Women for America and the conservative magazine National Review, as well as the libertarian Cato Institute.

These aren’t the Tea Partiers, and although I’m sure the Tea Partiers are sympathetic, this group seems to be happy to have the freshman Tea Partiers be their public face of obstruction. (You’ll notice they haven’t exactly been rushing to take credit for their tactics. John Boehner knows who it is though:

Last week, Mr. Boehner told Peggy Noonan, a conservative columnist for The Wall Street Journal, “My problem is with a few senior members who, they always want more.”

On measures to continue financing the government and raise the debt ceiling — in which a government shutdown and default were narrowly averted — freshmen Republicans provided more than half of their party’s “no” votes just once, while committee members routinely provided 70 percent to 100 percent of opposition votes.

These are the ideological hardcores who have been building their power for decades.
I suppose the Democrats might think they were just exerting their muscle for the election, and it’s possible they were. Maybe they’ll come back and decide they really need to meet the Democrats halfway. But if I had to guess I’d guess they have an idea of exactly where they want to go and figure they can hold out long enough to get the Democrats to follow them or get out of the way. It’s worked pretty well so far.

Either way, one thing we know for sure is that the conventional wisdom is incorrect. This “turn to the right” by the GOP after 2010 was not a result of the Tea Party. It was a faction that included senior members of the Republican Party exerting their power. That seems like a piece of information people should probably be aware of.

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QOTD: The shrill one

by digby

“The depression we’re in is essentially gratuitous: we don’t need to be suffering so much pain and destroying so many lives. We could end it both more easily and more quickly than anyone imagines — anyone, that is, except those who have actually studied the economics of depressed economies and the historical evidence on how policies work in such economies. . . .

“With a boost in spending, we could be back to more or less full employment faster than anyone imagines. . . .

“[T]he experience of Obama’s first term suggests that not talking about jobs simply because you don’t think you can pass job-creation legislation doesn’t work even as a political strategy. . . .”
— Paul Krugman, in “How to End This Depression,”
in the May 24 New York Review of Books

h/t to Ken at DWT

Paulite Shennanigans

by digby

Adele Stan at Alternet knows something about Republican presidential hopeful shennanigans having covered the Buchanan campaign in 1996. And she thinks it’s possible that the Paulites could be up to something similar this time around:

After Paul’s initial focus on the Iowa caucuses and the New Hampshire primary failed to pan out, the Paul camp began focusing on the mechanics of delegate apportionment. In order to officially win the nomination, Romney needs the votes of 1,144 delegates to the Republican National Convention. But in many states, winning a primary or caucus doesn’t automatically guarantee that the delegates chosen by the winner will be seated at the convention. In Romney’s home state of Massachusetts, for instance, the former governor won 72 percent of the primary vote. But delegates had yet to be chosen, and in the state party’s delegate-chosing caucus last week, fewer than half of the delegates designated by Team Romney won the right to be seated at the convention. The rest of the seats went to Ron Paul supporters.

Similar scenes have played out in Minnesota and Louisiana and may well do so again today in Nevada. In fact, the Republican establishment is so concerned with the Paul camp’s delegate strategy that Republican National Committee general counsel John R. Phillippe, Jr. sent a letter to the Nevada state party chairman not to mess with the delegate process, or risk “jeopardizing the seating of Nevada’s entire delegation to the National Convention.” (Phillippe did, however, acknowledge that his letter was “not binding,” according to Jon Ralston of the Las Vegas Sun.)

In Louisiana, the Paul forces swept the delegate election process last weekend, winning upwards of 70 percent of the slots, according to Policymic. (That process actually chose delegates to the June 2 statewide Republican convention, where more hijinks are likely.)

At a Minnesota delegate-selecting contest based on congressional districts two weeks ago, Ron Paul won 20 of the 24 delegates available in that contest.

In Iowa’s first-in-the-nation caucuses last January, Ron Paul finished in a respectable third place, but his supporters now control the state Republican Party, and Iowa’s entire delegation comprises “unbound” delegates, who can vote for any candidate for the nomination.

Iowa’s unbound delegation, however, is something of an outlier. Yet that doesn’t mean that delegates bound to Romney, but who not-so-secretly heart Paul, can’t cause a heap of trouble. Under party rules, Ron Paul enthusiasts, such as those in Massachusetts, who won their convention spots on a Romney slate are bound to cast their nomination vote for Romney at the convention. But they can choose whomever they want for convention chair, and vote any which way on platform issues. And they can vote for any vice presidential candidate they care to. It’s long been suspected that what Ron Paul is really after is a place on the ticket for his son, Rand, the U.S. senator from Kentucky, so those Paul-allied Romney delegates could make trouble for the nominee, should he choose a different running mate. Or they might just defy the rules altogether, and deliver a sh*t show for the television cameras.

She discusses the CW that this is all about Rand, but offers up the scintillating possibility that they could take over the platform as Buchanan did and force Mitt to run in the fall explaining an isolationist or drug legalization Party platform. Wouldn’t that be fun?

Oh, and in case you were wondering, this is the latest:

Despite former Massachusetts governor Mitt Romney’s overwhelming victory in the Nevada caucuses, Texas Rep. Ron Paul has won a majority of the state’s delegates to the party’s national convention later this year in Tampa, Florida.
Thanks to organized Paul supporters, who have been working to increase their candidate’s support at state conventions around the country, 22 of the 25 Nevada delegates up for grabs will be Paul supporters.

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Why can’t we do it on the week-end?

by digby

France had 80% voter turnout today. 60% is considered a political earthquake here. And one of the reasons is this:

American voter participation is terrible, and has been for half a century. So why do we vote on Tuesday? Absolutely no good reason. Recent laws to restrict the franchise haven’t made things any better. This year, we teamed up with Participant Media’s TakePart.com to ask presidential candidates Mitt Romney, Rick Santorum and Newt Gingrich how they’d protect your right to vote. You can join us by signing our petition in support of The Weekend Voting Act which would move Election Day to the weekend so more people can vote.

This seems like a no-brainer to me.

McCain can’t escape Palin no matter how hard he tries

by digby

The Maverick once again proves what a reflexive liar he is, thus explaining the Village’s 25 year mad crush on the man. They just love a man who can lie straight to their faces with a huge, beatific smile:

video platformvideo managementvideo solutionsvideo player

This morning on ABC’s This Week, Sen. John McCain, R-Ariz., weighed in on Mitt Romney’s hotly anticipated vice presidential pick. The former presidential candidate’s advice was clear.

“The absolute, most important aspect is, if something happened to him, would that person be well qualified to take that place?” said McCain. “I happen to believe that was the primary factor in my decision in 2008. And I know it will be Mitt’s.”

McCain picked Sarah Palin as his presidential running mate in 2008 and the decision has been much-discussed ever since. Just this year, actors Ed Harris and Julianne Moore played McCain and Palin in the HBO adaptation of the book “Game Change.”

McCain has dismissed these portrayals of his campaign as inaccurate in the past.

“I remember it well,” McCain said this morning, laughing.

I’m not including Tapper in that group of Villagers on this one, by the way. He tweeted this post from the This Week site, so I think he knew what he had. I’m thinking more of the many, many “centrist” and “evuntheliberals” who followed him around like puppies for years, extolling him as the Last Honest Man in Politics. It was always nonsense.

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