Digby's Hullabaloo Posts

Perspective

by digby

David Letterman deftly illustrates why nobody takes wingnuts seriously anymore:

h/t to bb

Budgetry

by digby

Apparently, quite a few Dems are (surprise!) starting to waffle on the budget so liberal groups are doing a full court press to help Obama get it passed. Move-On is asking for some money to put ads on the air. CAF has a calling campaign going as well as the Dog the Blue Dogs action.

Bob Borosage explains:

The budget is getting strafed by politicians in both parties for its deficits and debt. (The deficit is the annual shortfall between revenue and spending; debt is essentially the accumulation of net deficits over time). Republicans, having joined Rush Limbaugh in betting that Obama fails, have done most of the ranting. Sen. Judd Gregg, lead Republican on the Senate budget committee, fulminates that if we pass Obama’s budget, “this country will go bankrupt. People will not buy our debt. Our dollar will become devalued.” Richard Shelby, top Republican on the banking committee, warns Cassandra-like that Obama’s budget will put the country on “the fast road to financial destruction.” Eric Cantor, the hyperbolic House Republican Whip, brings it down to his favored level, railing about wasteful spending like “money that goes to remove pig odor.” Conservative Democrats are chiming in also. Sen. Evan Bayh has formed what must be the twentieth new democratic rump group, arguing that “families and businesses are tightening their belts to make ends meet — and Washington should too.” Kent Conrad, Democratic head of the budget committee, is pushing for deep cuts in spending on domestic programs. “Moderate” Senators are expressing growing opposition to the president’s spending plans. Even the Chinese, America’s biggest creditor, are wringing their hands about U.S. deficits, suggesting perhaps a new international currency might be needed to replace the dollar. Before this babble completely drowns out reason, a little common sense might be useful. 1. The new-found Republican fiscal probity is worth less than a drunkard’s morning-after regret. For the last decade, they merrily embraced the Dick Cheney dictum that “Reagan taught us that deficits don’t matter. They doubled the national debt when the economy was growing, exactly at the height of the business cycle when they should have moved budgets into balance and reduced debt burdens. Fully $1.4 trillion of the largest annual “Obama” deficit — the $1.8 billion the CBO projects for FY 2009 that ends this October — was bequeathed to him from George Bush; the remainder comes from worsening conditions and the Obama stimulus spending to put people back to work.. Now as the economy verges on a depression, Republicans are indicting Obama for raising spending and deficits. This is like a gambling addict squandering the family fortune in a Las Vegas blowout and then scolding his wife for borrowing money to keep the kids in college. Had Republican leaders any sense of decency, they would just shut up and let adults address the mess they have left. 2. The greater worry in the short term is that the deficits may be too small, not too large. We’ve just suffered what Warren Buffett calls an “economic Pearl Harbor.” The accelerating downturn is turning into a global collapse. Consumers are cutting back; businesses laying off workers; exports have plummeted. The Fed has already cut interest rates to near zero. The only thing lifting this economy is deficit spending at the federal level. Senators intoning the comfortable mantras of the last years like Even Bayh can’t seem to grasp that we’re in a big-time trouble. If we took his advice, and cut federal spending and deficits, it would simply contribute to a downturn that is already the worst since the 1930s. That’s why the high-church of economic conservatism, the International Monetary Fund, is calling on countries across the world to borrow more to stimulate the economy, not less. And that’s why all the talk about deficits in the out years — six, eight, ten years from now — is simply a dangerous distraction. The Congress isn’t passing the budget for a 2019. It is passing one for next year, and it should be spending more, not less, to put people to work and get the economy going. Once the economy recovers, we can act to bring deficits down to a sustainable level. 3. We can afford to take on the debt. Before joining Judd Gregg in rending garments and mumbling darkly about the end of the world, legislators would be well advised to inhale deeply, calm themselves and look around. The Congressional Budget Office predicts budget deficits will total some $9.3 trillion over 10 years (Obama’s budget which is more optimistic about the pace of recovery projects $6.97 billion). That’s a lot of money. But this is a very big economy at $15 trillion a year and hopefully soon growing again. Bill Gates undoubtedly carries more debt than I or you do. But the burden of that debt — the carrying charges in relation to his income or the debt in relation to his assets — is far less than mine or thine. He can afford to take on more debt. After years of conservative misrule, the US isn’t in as good shape as Bill Gates, but it isn’t broke either, particularly in comparison to other industrial nations. The current US public debt is about 40% of our annual economic production (GDP). It’s been far higher — reaching as much as 109% of GDP coming out of World War II. Post-war growth brought the burden down to about 25% GDP until Reagan gave us over to the seductive supply-siders and doubled the debt burden to about 49% GDP. Clinton brought it down to 33% and Bush drove it back up to about 40% even though the economy was growing. Under Obama’s plans, the national debt will rise as a percentage of the economy to about 65-67%. That’s a big change. But the reason countries carry low levels of debt is so they can borrow when trouble comes. And this is the mother of all trouble. But what is notable about that increase is that it will leave the US carrying only about the same debt burden that Germany, France and Canada were carrying –before they began adding to it in the current economic downturn. According the analysis of the Central Intelligence Agency in 2008, Germany’s public debt was at 65%, France at 66%, and Canada at 64%. The Italians, always somewhat more fiscally dissolute, were at 106%. Sober Japan, coming out of its lost decade, carried a public debt that was182% of its country GDP. None of these countries are going bankrupt. The Euro isn’t turning into toilet paper. The Japanese haven’t boarded up the country. We are urging all of these countries to borrow and spend more to help counter the downturn. We can afford the Obama deficits and more if necessary to lift us out of what looks increasingly like a global depression. (And that’s why if the Chinese are looking for a new currency to supplant the dollar, they’ll have to invent it.) 4. The most dangerous deficit is our public investment deficit. Fact is we can’t really afford to cut the public investments Obama would make in education, new energy, health care and 21st century infrastructure. For too many years, we’ve starved basic investments to pay for adventure abroad or top end tax cuts at home. Now we have a national security imperative to invest in new energy, reduce our dependence on foreign oil and begin to address catastrophic climate change. We can’t compete as a high wage economy in a global economy without providing our children with a world-class pre-K to college (or advanced training) education. We must make the changes needed to provide Americans affordable high quality health care while getting health care costs under control. And we’ve paid the costs everyday of allowing our basic infrastructure to decay — from unsafe water to gridlocked roads to falling bridges to the outmoded electric grid. Obama’s budget and recovery plans run up deficits to put people back to work while making a down payment on investments vital to our future. His domestic spending plans are, if anything, already too austere, reducing domestic discretionary spending to a lower percentage of the economy than under Reagan or Clinton or the Bushes. He argues correctly that we have to make investments in these areas to move our economy to sustainable growth, and away from the disastrous bubble economy that has now exploded in our faces. It is notable that his Republican critics don’t dispute him on this point. They simply stand firm against any tax increases on the wealthy, while calling for cutting spending to reduce the deficits — without ever offering a budget of their own to let us know exactly what it is they think should be cut.

We all know what this “deficit” nonsense is really all about. It’s to preserve wealthy privilege and choke off progressive initiatives that benefit the middle class and the poor. It’s not brain surgery.
Unfortunately, the public has been denied this side of the argument and has instead internalized the well-funded, relentless Republican propaganda, which results in far too many people being suckers for slick, simple nonsense.

Obama is very popular and his popularity needs to be brought to bear against these wavering Democrats. If you have money and time, it’s worth it to put them to work to help pass this budget. If you only have one, it’s still worth it. If you can’t do anything, pass the links on to someone who does. If the budget fails, the agenda is probably dead. It needs to pass.

.

Punch A Hippie Moment #2,938

by dday

So I was on NPR’s Marketplace this morning, and when we taped the interview yesterday I was asked what kind of questions are likely to come from the online audience at the President’s Open For Questions town hall. And immediately the question on the legalization of marijuana came to mind, and I thought “If I say this, the impression will be that everyone online is a pot-smoking dirty hippie,” so I talked about bread-and-butter issues like health care and jobs, and then at the end I said “you’ll see questions that are totally off limits to the traditional media, like the legalization of marijuana.” It just slipped out.

Of course, that’s what NPR used.

And the question was indeed asked at Obama’s online town hall, and while I didn’t see it, the President apparently snickered, along with his snickering staff, made a crack like “This is a very popular question to you online folks,” (did he mime taking a hit off a doobie at this point?) and then categorically said no, that it wouldn’t grow the economy, and moved on. Thus insulting the audience about their very popular question and giving it little respect.

Here’s how the liveblog at TechPresident discussed it, and I basically agree:

12:10
[Comment From Karen]
Not sure making fun of the “online audience” for asking is the best way to have handled that.

12:11
[Comment From Josh]
Probably not, he turned the question into a joke

12:11
[Comment From Andy]
Only good way to deal with it if you don’t want to deal with it.

12:11
[Comment From Gene]
Is that going to feed the trolls or placate them

12:11
Matthew Burton: Too bad that he laughed off the most popular topic

12:11
[Comment From Josh]
feeds the trolls

12:11
Matthew Burton: Josh is right. There will be blowback from this.

12:12
[Comment From Karen]
Now how many million people feel that they weren’t taken seriously? Frustrating. At least the room approved.

12:13
[Comment From Gene]
Blowback from a relevant segment of the audience?

12:13
Matthew Burton: He made it even more likely that the most popular questions in future town halls will be about marijuana

12:13
[Comment From Josh]
The fact that he made light of one of the most popular questions being asked does not say a whole lot for mr. obama

12:13
Joan McCarter: It was a simplistic response on the pot question, particularly in light of the border violence that Napolitano talked about yesterday. There’s a connection he could have drawn to give a serious answer.

There are two issues here. First, legalization actually does deserve a serious response. You don’t have to agree with it – I’m not certain that I do – but you ought to engage with it. The war on drugs has utterly failed, so it’s not like the status quo is any less silly. But the second issue is even more damaging. Obama’s Administration wants to bypass the media filter and open the tools of communication to a much larger community. And then a non-Village approved question gets asked and he snickers about it? For a real community interaction to work there has to be a certain level of respect, and that was apparently sorely lacking.

Then again, the only caucus Obama has not met with on Capitol Hill is the Progressive Caucus, so this is not surprising. In Washington, every day is Punch a Hippie Day.

.

Extortion

by digby

From TPM:

AIG Financial Products chief Gerry Pasciucco told a meeting of his European based derivatives gurus that the money vortex CEO Ed Liddy’s request that they return their bonuses amounted to “blackmail.” That’s according to a London-based recipient of one of the bonuses — London, you’ll recall, is where the inimitable Joseph Cassano was employed — who furnished the news agency with emails showing that AIG compliance officer David Haig had actually asked the country’s Serious Organised Crime Agency to probe whether the (voluntary) requests could be legally considered extortion. Well what a fascinating use of government-bankrolled hours for the taxpayers of both countries!! But wait, don’t shoot yourself, hear the anonymous employee out…

“The vast majority of people in London have made the decision that the request is pretty offensive,” the employee said. “It effectively constitutes blackmail whether it is criminal or not. There is no moral reason to give it back

It’s tempting to rant again about Ayn Rand and her bizarre concept of capitalist morality, but I have to admit that even she would probably be appalled at someone like this considering himself to be a heroic entrepreneur. After all, there is nothing more “parasitic” than those AIGFP playahs.

I have to admit that it’s really rich that the people the president describes like this:

It’s almost like they’ve got — they’ve got a bomb strapped to them and they’ve got their hand on the trigger. You don’t want them to blow up. But you’ve got to kind of talk them, ease that finger off the trigger.”

… are carping about being extorted. Nobody can ever accuse these people of lacking brass.

.

Alien Life Forms

by digby

Driftglass ponders Jake DeSantis:

I genuinely feel for Mr. DeSantis, but I also have to wonder from what solar system he originally hails that he has come to this moment in history so deaf to the tone and tenor of our country and our times.

Or was he perhaps raised in captivity in the Context-Oblivious wing of some life-sized Habitrail cultural petting zoo, shielded from the unhappy knowledge that millions of people in this country are worked like rented mules by carnivorous employers every day for wages that wouldn’t cover the interest on his bonus. Unaware that year in and year out, boom or bust, in every season since forever and through no fault of their own, tens of thousands of the working poor — who toil at incredibly hard jobs for shitty pay — are summarily kicked to the curb without a second thought because their employers made bad decisions, or got unlucky, or could get someone cheaper, or wanted someone prettier or younger or more sexually compliant, or just didn’t like the way they parted their hair that day.

There’s more…

I would love to see some data on how people see this kind of thing. It’s possible that I’m off base, but I suspect that beyond the working poor and the blue collar guys that Drifty mentions in his piece, women and minorities are also gobsmacked at the shocked reaction of these well paid executives at having to put up with screaming congressmen and an angry public over their bonuses. In the unglamorous, everyday world of work that most of us spend our lives in, the idea of having to feel sorry for someone who is being asked to return half of his $750,000 bonus at a time when his company just registered the largest corporate loss in history is ludicrous. Many people get furloughed and left with nothing everyday for reasons far less compelling than a massively failed company.

It’s not that I can’t see why this person would be upset at being swept up in the anger at those in his division who caused all these problems. I can see why he would resent being asked to give up money he believes he earned with the sweat of his brow working 12 hours a day. What I can’t understand is why he would think that anyone besides the handful of people at the very top would be particularly sympathetic with his plight at a time like this. He’s not losing his house. He’s not even losing his job. He’s obviously already a millionaire many times over if he can afford to give the money to charity. The righteous anger he expressed in his column may even be justified, but it is a very high class problem that 99% of the people in this country would love to have right now.

He is speaking from pride, which I understand on a human level, but which is an immensely insensitive, stupid thing to do in this environment. I guess what continues to surprise me about it is that these guys are supposed to be smart and they’re being so dumb. In fact, it isn’t pride — it’s hubris. And that’s the essence of the problem with our nation’s ruling class.

Update: Emptywheel reports on the Geithner hearing:

Joe Donnelly asked Tim Geithner whether we ought to eliminate naked default swaps. Geithner said that it’s too hard to distinguish hedges from gambling. Donnelly pointed out that we’re taking money out of truck drivers’ pockets and waitress’ pockets to pay off Wall Street’s gambling debts. Ultimately, though, Geithner said we don’t need to–and that it would be very hard to–do that. I guess the truck drivers will still be asked to pay off rich men’s gambling debts.

Update II: Just saw this from cartoonist David Rees, via Atrios:

And mind you, when I received these threats, I wasn’t working in some high-security office building and living in a fancy gated community with no sidewalks where you need a passcode just to go to the golf course. Hardly. I was a schlub in a bathrobe living in a third-story Brooklyn walk-up. The only way I could’ve been a softer target would be if I was made out of Yoplait. And I wasn’t exactly getting paid millions of dollars for my troubles, either. I was temping part-time for $20/hour and GIVING ALL MY GODDAMN MONEY AWAY, because it was post-9/11 America and we were all supposed to pull together and chip in for the common good. Remember when? My God, though — if I had been making that sweet AIG money, not only would I have happily endured a few more death threats, I WOULD HAVE ACTIVELY LET PEOPLE TRY TO KILL ME. Pay me $700,000 a year, or however much the AIG guy whining in today’s New York Times made, and you can threaten me with death all goddamn day. Because do you have any idea how much money that is??? Hell, I’ll let you throw rocks at me. I’ll let you poison my soup. You can slash my tires and spray-paint my driveway. AND ONCE I GET ALL THAT MONEY, I’M TOTALLY PAYING OFF SOME STUDENT LOANS AND FIXING THE GARAGE ROOF AND BUYING SOME NEW PANTS. Because that’s an insane amount of money.

Like I said — high class problem.

.

All Hail Joe The Plumber

by tristero

Gail Collins. David Brooks. William Kristol. Thomas Friedman. With stiff competition like that, it’s hard to believe, but I think that Nick Kristof may get the prize for having typed the stupidest thing ever written by a Times columnist. It starts off almost reasonably, but it isn’t:

Ever wonder how financial experts could lead the world over the economic cliff?

One explanation is that so-called experts turn out to be, in many situations, a stunningly poor source of expertise. There’s evidence that what matters in making a sound forecast or decision isn’t so much knowledge or experience as good judgment — or, to be more precise, the way a person’s mind works.

Uh, no. That can’t be right. Kristof has started to set up a false dichotomy between knowledge/experience and judgment. As the column goes on, that false dichotomy morphs into an accepted fact. And so, after discussing some studies, Kristof is led to this (with apologies to Somerby) spectacular howler:

Other studies have confirmed the general sense that expertise is overrated.

Well, I’m gonna remember that the next time I’m looking for a string quartet to play my music. Or the next time I need to have surgery on my abdomen. Or hey! when I need to call a plumber, why I’ll just call the most famous plumber in the land! Who cares if he’s not even a licensed plumber?

This is one of the silliest pseudo-American myths, pure Norman Rockwell, that the average Joe (never a Jane) can perceive The Bigger Truth that somehow eludes the so-called pointy-headed experts. No one really believes it about anything really important in a personal sense. Kristof isn’t gonna let me fix his car if it breaks down, despite the fact that, if I say so myself, I usually have darn good judgment, generally. (Note: sarcasm). But the myth persists about the Big Stuff, the notion that anyone with the right attitude can make the right decision when it comes to “solving” the financial crisis, invading Iraq, or running a country.

It’s dangerous bullshit. Of course, judgment matters. But judgment without expertise and knowledge is suspiciously close to what is meant by…I believe the technical term is ” wild guess.” If judgment is mostly what matters, generally – which is exactly what Kristof is saying – then everyone’s opinion is worth the same. The brain surgeon who looks at Terri Schiavo’s brain images is no more qualified to determine whether she is in a persistent vegetative state than the ignorant television anchor who tries to tell the doctor that she may recover. (This actually happened. Anyone have the link?)

And it’s a simple step from this kind of flattening of authority to the construction of totally bogus experts. For example, take the case of Middle Eastern “expert” Laurie Mylroie. According to Peter Bergen (in a private email), despite her Harvard degree, Mylroie has never bothered to learn Arabic. Nevermind, that this clueless paranoid was doing analytical work for the US government as late as 2007: after all, Bush was in power so the hiring of long-discredited neocon nuts was common. No, the real problem is that for the longest time, no one – and I mean no one, including prominent liberals I discussed this with – believed that an “expert’s” failure to learn Arabic meant s/he could not actually be an expert on the Middle East. *

Indeed, it takes good judgment to make a sound decision. It also takes knowledge and expertise. Real knowledge and expertise. And exactly what is meant by these concepts – judgment, knowledge, expertise – is very fuzzy. But from what I can tell, Kristof completely misunderstood the point of Tetlock’s book. It’s not that expertise generally doesn’t matter as much as judgment. Rather, it’s that certain cognitive styles provide more accurate analyses than others of expert knowledge, including the evaluation of who is an expert.

I have no doubt that is true and that future studies will further refine not only the notion of good judgment, but also what is meant by genuine expertise. But to create a dichotomy, as Kristof does, between expertise and judgment is simply idiotic. It leads to a decadent, brain-dead populism. It gives us, in all his glory, Joe the Plumber. And folks, that’s the last thing this country needs.

*In a comment, Laurie Mylroie asserts that she has studied Arabic and directs us to her website, lauriemylroie.com for confirmation. I regret the error and can’t help but note that this is one case when a cognitive style provided a far less accurate conclusion than one might like from her expertise.

Disaster Capitalist Humor

by digby

Here’s Jonathan at ATR again:

There’s been a common phenomenon in the third world over the past three decades or so. A country’s financial sector, in collaboration with the larger financial world, would create some type of gigantic economic fuck up. The IMF would then (in collaboration with the local financial elites) step in and provide loans in return for what was called “structural adjustment.” Structural adjustment involved getting rid of any kind of social spending that made life bearable for everyone else. In other words, the country’s financial elites would use the catastrophes they’d created themselves in order to do what they’d always wanted to but couldn’t get away with in normal times. They took the profit, and then imposed all the costs on everyone else. I’ve long believed U.S. elites would attempt to do this for America as soon as they had the opportunity. Here’s Treasury Secretary Timothy Geithner today at the Council on Foreign Relations having a jolly laugh with moderator and investment banker Roger Altman about the process now getting under way—all thanks to propaganda assistance from investment banking billionaire Pete Peterson. For those without a decoder ring, “everyone” being a fiscal hawk means that due to the current financial disaster, they’ll soon be coming after Social Security and Medicare:

GEITHNER: Of course, we are all fiscal hawks now because of Pete Peterson. (Laughter.) There are no doves left on the fiscal side. (Laughter.) ALTMAN: And he deserves credit for that.

Yes, the coming massacre of American lives will be quite funny indeed. (Laughter.)

Hilarious stuff.

.

Moderates For Moderation Behaving Moderately

by dday

You have to be something of a Kremlinologist to decipher the true meaning of Senate Democratic statements these days. In all of these matters it helps to focus on actions. For example, Kent Conrad (D-ND). As the chair of the Senate Budget Committee, he has been the most vocal about the widening deficit, the new CBO scoring showing that deficit widening even further, and how President Obama’s plans are simply too ambitious for words. Sounds like the old fiscal responsibility thing, right? Well, the actual budget summary from Conrad is entitled “Laying Foundation for Long-Term Economic Security With Investments in Energy, Education, and Health Care,” and the proposals do track the President’s major long-term goals. And the supposed “cost-savings” in his budget plan are mainly derived from a bunch of gimmicks.

…someone who was genuinely alarmed by the fact that the CBO scored Obama’s plans as leading to large deficits in the final years of his ten year budget would not have “solved” this problem by abandoning Obama’s ten-year budget window switching to a five-year window. Similarly, re-inserting the “let’s pretend will use the AMT to raise taxes on the upper-middle class and then not actually do that” approach to budgeting, though now a time-honored trick of the Bush years, is not an actual deficit reduction measure.

Long story short, Senator Conrad cares about the deficit and is taking some action to make it smaller. But he also cares a great deal about being seen as a deficit hawk, the kind of guy who’s not afraid to take an axe to the president’s proposals. And in this instance the administration rather smartly eschewed a lot of this kind of pain free “virtual” deficit reduction, thus making it possible for interested Senators to deploy favored accounting patches on their own initiative and take credit for more reduction than they actually produced.

The White House seems to have no problem with the changes made, because the changes for the most part are made of air. And in some sense, Conrad actually enhanced the prospect of health care reform, by offering revenue-neutral space for a reform fund and allowing that particular budget item to be scored on a 10-year timeline, so that the savings in the later years can allow for an up-front deficit. And while Conrad deleted reconciliation for health care and energy proposals, because they exist (at least for health care) in the House version, they can be imported at a later date, meaning the threat can still be held over the heads of Republicans.

So Conrad appears to me to be someone who wants to appear like a centrist while facilitating the needs of a progressive budget, in direct contrast to Evan Bayh, Tom Carper and Blanche Lincoln, who want to appear like supporters of the President while obstructing and hacking up his agenda:

We formed our working group because we recognize both the difficulty and the urgency of accomplishing a huge and ambitious agenda. We must act quickly and decisively to repair our financial markets and start to turn the economy around. In addition, we believe that President Obama is correct when he says that we cannot afford to wait any longer to fix health care and transition to a clean-energy economy.

These are titanic and complicated tasks, and we believe that many worthwhile policy solutions can be found in the practical center — ideas that also have the benefit of appealing to vast segments of the American electorate. Unfortunately, the Republican leadership has basically decided to stay on the sidelines to let the Democrats carry the load of reform alone.

As moderate leaders, it is not our intent to water down the president’s agenda. We intend to strengthen and sustain it. Moderation is not a mathematical process of finding the center for its own sake. Practical solutions are practical because they offer our best chance to make a difference in people’s lives today without forcing our children to pick up the tab tomorrow.

The stakes are too high for Democrats to fear a policy debate. Such debates produce better legislation. On nearly all important votes, a supermajority of 60 senators will be needed to pass legislation. Without Democratic moderates working to find common ground with reasonable Republicans, the president’s agenda could well be filibustered into oblivion.

It’s really not possible to take these people seriously. The whole “practical solutions are great because they are practical” part really gives you the sense of who you’re dealing with here. They live in a magical pony and fairy land where they, only they, can bring the nation together, despite all evidence to the contrary, by just clicking their heels and magically finding those “reasonable” Republican votes for anything but the most watered-down policy. They are also very worried that if Obama passes the agenda on which he ran, moderates who voted for him will be very upset and will throw Democrats out of office in 2010. That’s really their response. And none of them, just like their partner in crime Susan Collins can actually name anything they’d cut, or explain why a 51-vote majority is undemocratic:

“I’m very concerned that the levels of debt that the president’s budget would entail are simply unsustainable and would pose a significant threat to the health of our economy,” said Sen. Susan Collins, a Maine Republican who plays a pivotal role in Senate negotiations. “I’ve had conversations with several centrist Democrats who have exactly the same concerns I do.”

Well, what would you cut? “One of the areas I would look at are the huge agricultural subsidies,” she said. Those farm payments are one of the few cuts Obama has already proposed, which Collins added was “to his credit.”

Anything else? “I thought I did pretty well coming up with one right off the top of my head,” she said […]

Sen. Mary Landrieu (D-La.) said she leans no on Obama’s budget because of its size but is open to being convinced. She’s not looking forward to cutting it, however. “That’s always the problem. How to cut back and what to cut back,” she said.

Yet the main change that Landrieu would like to see highlights the political contradiction at work. Tax hikes on independent oil and gas producers, many of whom operate in the Gulf, she said, are a “non-starter.” Removing that tax hike, though, increases the deficit […]

“Reconciliation should not be used to impose a major policy change. It’s unfair to those who hold a minority view,” Collins added.

Isn’t that undemocratic? Collins was asked why she and a handful of senators should wield so much power over the nation’s policy.

“I don’t really think I have all that much power but I’m glad you think so,” she said, laughing.

“I don’t think it has anything to do with the power structure of moderates,” she added. “People want to see healthcare reform, want to see us deal with major issues, but not in an undemocratic fashion. I think people want to see fuller debate and deliberation and more involvement by the minority.”

But isn’t the need for 60 votes undemocratic? Didn’t the nation have a full debate, followed by an election in which people voted for major change?

“I disagree totally with that,” said Collins. “I do not believe the American people voted to short circuit debate and prevent people with a minority view on both sides of the aisle from having the ability to amend a bill.”

Behold the reasonable, responsible moderates who will save us from this crisis and return America to glory again.

Pardon me while I go throw myself in the ocean.

.

Seeing The Forest

by digby

I’ve always thought Eric Cantor was a putz, but this piece in The Hill makes me wonder if he isn’t smarter than I thought:

A rising star in the Republican Party has dimmed over the past week.

House Minority Whip Eric Cantor (Va.), a politically shrewd up-and-comer in the GOP, has broken with his party on two high-profile issues. And the defections on last week’s AIG bonus tax bill and the Obama administration’s troubled assets plan have exasperated some members in the GOP conference.

The grumbling started when Cantor unexpectedly voted with Democrats last week on a measure to recoup the bonuses of AIG executives. Many Republicans called the bill unconstitutional, with more than half of the GOP conference rejecting it. Cantor, who has been labeled “Mr. No” by some Democrats, was one of only two Republican leadership officials who voted for the bill. Rep. Cathy McMorris Rodgers (Wash.) was the other.

“All the unconstitutional stuff aside, if you don’t believe in raising taxes, why would you vote to raise taxes?” House Republican Conference Secretary John Carter (Texas) said.

Rep. Louie Gohmert (R-Texas) added that supporting the retroactive tax cut “sets a terrible precedent, just terrible.”

But Cantor voted for that retroactive tax, saying that he didn’t want to “reward failure,” meaning the AIG officials would keep their bonuses if the legislation hadn’t passed.

Yet Cantor’s vote last Thursday now looks even worse to some of his GOP colleagues. AIG employees are vowing to give their bonuses back and Democratic leaders say their bill — even if it’s not passed — accomplished its mission. The legislation appears to be dead.

The vote last week was a tough one for most Republicans amid the public’s outrage over the $165 million in bonuses after the company received $170 billion in bailout funds. Most politically vulnerable Republicans backed the Democratic bill, but there were some conservatives other than Cantor who voted yes, including Reps. Dave Camp (Mich.), Joe Barton (Texas), Paul Ryan (Wis.) and Roy Blunt (Mo.), who is running for the Senate.

A Republican legislator said, “Some members wanted to stick it to AIG — bonuses and recipients — but at some point in time your obligation is to stand in front of the mob and say, ‘Look, we’re going in the wrong direction, let’s think about this.’ ”

Another Republican suggested more members might have voted no if Cantor had.

The GOP legislator who rejected the Democratic bill said sarcastically, “When your whip votes against you, it’s kind of tough to whip for it.”

Cantor’s colleagues in leadership called the bill “a sham.” Minority Leader John Boehner (R-Ohio) said that it was “more than an attempt to cover someone’s rear end because of the political damage that’s out there.”

Boehner told reporters last Thursday that he did not know how Cantor was going to vote on the bill. Boehner voted no early on, while Cantor waited until late to register his vote of yes.

But a leadership aide privy to conversations among GOP leaders said that in the end, Cantor “got spooked.”

Throughout his career, Cantor has made many wise political moves as he climbed the leadership ladder. Some thought he could have supplanted Boehner as GOP leader this year, but Cantor opted to be patient and easily claimed the No. 2 GOP post in the House.

Cantor remains quite popular among his Republican peers, though his handling of the AIG bill has some members believing he has more to learn before he can helm the GOP conference.

[…]

The 45-year-old lawmaker issued a statement that excoriated the administration’s proposal.

Meanwhile, Wall Street and Republican leaders in the Senate embraced the plan as the Dow Jones Industrial Average spiked nearly 7 percent.

Cantor called it a “shell game that hides the true cost of the program from the taxpayers that will be asked to pay for it.”

The top Republican on the Senate Budget Committee labeled it “a genuine and sincere effort.”

Boehner distanced himself from Cantor’s characterization of the assets initiative.

Boehner told reporters on Tuesday that Republicans were going to take a wait-and-see approach before offering an alternative.

“We’ll wait for more details before we prescribe what we think would be a better solution,” Boehner said.

Senate Minority Leader Mitch McConnell (R-Ky.) said on Monday that he was willing to “give the secretary of the Treasury credit for finally turning to the real issue here.”

For some reason, Cantor is one of the few Republicans who gets the populist mood of the moment. His votes are actually the smart move for the GOP if they are to get any traction in this environment. Wealthy gasbags like Limbaugh are the ones who are out of touch on this and are taking their party down the wrong path.

But hey, it’s fine with me if they want to follow the plutocrats over the cliff. I’m just shocked Eric Cantor not only has the brains to see it but the guts to act on it. I’m going to take him a little bit more seriously from now on. He could be dangerous.

Update: And yet, he’s still a putz:

There was more than one whip at last night’s Britney Spears concert in Washington DC. Three GOP aides confirm to the Huffington Post that House Minority Whip Eric Cantor (R-Va.) attended the pop star’s event at the Verizon Center, where she appeared on stage brandishing a leather lash. “He went at the request of a fundraiser,” said one GOP staffer.

.

Corporate Narcissism

by digby

Jonathan at A Tiny Revolution notices something important:

The Washington Post published an op-ed today by Martin Feldstein. Feldstein explains how Obama’s proposed limitation on the deductibility of charitable contributions by upper-income taxpayers is a horrible idea. He’s identified as “an economics professor at Harvard University [and] president emeritus of the National Bureau of Economic Research.” One affiliation the Post left out is that Martin Feldstein is a longtime member of AIG’s Board of Directors. He’s also a member of the board’s Finance Committee.

Read the rest for the second punchline. And then read this petulant whine from someone who made a $750,000 bonus from AIGFP and feels so hurt and betrayed by all the mean things that are being said about him that he’s going to quit and give his bonus to charity. No word about whether he thinks he should get his charitable deduction, but I’ll bet he’ll scream bloody murder if he doesn’t get it.
This person said that despite the fact that he worked for AIGFP he was in the commodities division and had nothing to do with the CDOs and is, therefore, blameless. And for all I know, that’s true. But what he seems not to want to recognize is that the whole company would have gone down without the government intervening and he would have been left with nothing. It happens every day. Bonus contracts with bankrupt companies really aren’t worth the paper they’re printed on. This crisis in AIG required that people such as this, who admittedly made a ton of money over the years, work for very little for a time until they could get the company back on its feet. They might not be rewarded to the tune of 750 thousand dollars for a years work, but if they made arrangements for deferred compensation down the road, after the taxpayers were repaid, I have little doubt they would have made out very well in the long run. Instead they are having a public tantrum at a time when they should be keeping the lowest possible profile. (Why are we supposed to believe these people are so smart that thes ecompanies can’t do without them, again? I keep forgetting.) I mentioned narcissism in passing yesterday and got an interesting email from journalist and author Tim Hall, who wrote an extremely interesting article for the NY Press on the subject during the Enron scandal. He explains what Narcissistic Personality Disorder is and interviews a well known expert on the subject:

I’m very interested in the concept of corporate narcissism. Many companies are successful without also engaging in criminal behavior. In your opinion, how much of the recent wave of business scandals in the U.S. is attributable to a corporate “culture of narcissism,” and how much to a number of very misguided—and possibly narcissistic—individuals?

The “few rotten apples” theory ignores the fact that affairs like Enron and WorldCom were not isolated incidents—nor were they conducted conspiratorially and surreptitiously. What is now conveniently labeled “misconduct” was an open secret. Information—albeit often relegated to footnotes—was available. The charismatic malignant narcissists who headed these corporations were cheered on by investors—small and institutional alike. Their grandiose fantasies were construed as visionary. Their sense of entitlement—never commensurate with their actual achievements—was tolerated forgivingly. Their blatant exploitation of co-workers and stakeholders was part of the ethos of the virile Anglo-Saxon, natural selection, can-do, dare-do version of capitalism. Everyone colluded in this mass psychosis. There are no victims here—only scapegoats.

In the late 1990s, you couldn’t swing a dead cat on lower Broadway without hitting a dozen Internet “visionaries,” touting companies that then went bankrupt. These individuals seemed to literally come out of nowhere—suddenly everybody was a Genius with a Big Idea. Do you have any thoughts on whether certain business cycles (like the Internet boom) actually create narcissists? Or do they simply attract preexisting narcissists looking for quick and easy wealth? The latter. Pathological (or malignant) narcissism is the outcome of a confluence of an appropriate genetic predisposition and early childhood abuse by role models, caretakers or peers. It is ubiquitous, because every human being—regardless of the nature of his society and culture—develops healthy narcissism early in life. Healthy narcissism is rendered pathological by abuse—and abuse, alas, is a universal human behavior. By “abuse” I mean any refusal to acknowledge the emerging boundaries of the individual. Thus, smothering, doting and excessive expectations are as abusive as beating and incest. Pathological narcissism, though, can be latent and induced to emerge by what I call “collective narcissism.” The way pathological narcissism manifests and is experienced is dependent on the particulars of societies and cultures. In some cultures, it is encouraged. In others suppressed. In collectivist societies, it may be projected onto the collective; in individualistic societies, it is an individual’s trait. Families, businesses, industries, organizations, ethnic groups, churches and even whole nations can be safely described as “narcissistic” or “pathologically self-absorbed.” The longer the association or affiliation of the members, the more cohesive and conformist the inner dynamics of the group, the more shared are its grandiose fantasies (“the vision thing”), the more persecutory or numerous its enemies, the more misunderstood and exclusionary it feels, the more intensive the physical and emotional experiences of its members—the stronger the bonding myth. The more rigorous the common pathology. Such an all-pervasive and extensive malaise manifests itself in the behavior of each and every member. It is a defining—though often implicit or underlying—mental structure. It has explanatory and predictive powers. It is recurrent and invariable—a pattern of conduct melded with distorted cognition and stunted emotions. And it is often vehemently denied. What steps might a corporation take to protect itself from being ruined by this kind of narcissistic contagion? The first—and most obvious—step is screening. Mental health management is often considered a low organizational priority—frequently with calamitous outcomes. Employees on all levels—especially the upper echelons—should be tested periodically and regularly by professional diagnosticians for personality disorders. Those who test positive should be sacked. There is no way of containing narcissism. It is contagious—weaker people tend to emulate narcissists, stronger ones tend to adopt narcissistic behaviors in order to fend off the narcissist’s unwelcome attentions and overweening demands.

I would have to say that this particular virus is contagious among the ruling class in general.

Here’s how MSNBC covered it just now:

Carlos: Is the angry mob trying to destroy any chance of recovery? JP Morgan Chase says making the financial industry the enemy hurts the chances at a rebound.
Contessa: Across the country, there are angry Americans who I know probably scoff at that but an executive vice president at AIG was so furious at the way he was being treated both by the company and the government that he resigned and had the NY Times actually publish his resignation letter today. Jake DeSantis says (she reads the letter) Let’s talk to Melissa Francis from CNBC. You wrote about it and we talked about it yesterday. A lot of concern from people in the financial industry that “you keep doing this and you’re going to destroy the very people who can help the nation make a comeback..” Melissa:Yeah. This is really the case in point of the danger of mob rule. This is somebody who had already agreed to work for a dollar a year. He was in there unwinding a business this Jake DeSantis that he had built for more than a decade. He had nothing to do with the credit default business that had caused so many problems at AIG and he felt like basically he’s spending ten, twelve, fourteen hours a day away from his family and for what? You know, to be abused, to be abused in the media, to be abused by congress. And now he’s saying, you know,m the ultimate sticking it to everyone, he’s not going to give the money back, he’s going to give it to charity.
Carlos: Melissa can I play the skeptic here? I read the story by executive vice president Jake DeSantis and he writes that he’s an executive vice president, MIT grad, the son of a modest upbringing, and he said, “although I was a vice president I didn’t know what was going on.” I find that hard to believe. This guy was an executive vice president and he was in the company for eleven years, they’re doing literally billions of dollars worth of risky and crazy trades and he’s saying that he doesn’t know what’s going on?Melissa; His division was completely separate from what was going on. And I’m glad you raised that question because, …
Carlos: When you say that his division was separate, I know and you know that when you’re an executive in a large company you sit in those senior management meetings you hear what’s going on in other parts of the business. I find it hard to believe that and I look at the comments on NY Times.com, over 600 comments, and most of the people were a lot like me, saying “come on, you didn’t know what was going on?”Melissa: Yeah. I think that you can hold the CEO and the board of directors to that kind of standard. This is somebody who was in charge of hundreds of people and he knew what his hundreds of people were doing. I don’t think he was in charge of this other group. This is a company, you have to understand, that sprawls nations, I mean across oceans. I mean, it’s an enormous company. You can hold the CEO to that standard and the board of directors, but I think this person was in charge of a lot of people and, you know, the credit default swap unit wasn’t part of that group.
Contessa: And regardless of whether there’s credit to be made from that argument, we do know that letting mob mentality leaves no room for logic.

Kudos to Carlos for at least putting up a fight.

I’m afraid that Melissa is ill-informed. Our boy Jake wasn’t selling life insurance in Mayberry. He was an EVP for the commodities division AIGFP which was where the crimes took place:

Joseph Cassano and Thomas R. Savage helped start the group in 1987. AIGFP businesses specialize in aircraft and equipment leasing, capital markets, consumer finance and insurance premium finance.

AIGFP focused principally on OTC derivatives markets and acted as principal in nearly all of its transactions involving capital markets offerings and corporate finance, investment and financial risk management products. AIGFP played key roles in the acquisition of London City Airport and, in one of the largest private equity transactions announced in 2006, the management-led buyout of Kinder Morgan Inc.

AIGFP’s commodity derivatives and commodity indices helped stimulate the development of this new asset class. AIGFP’s sponsored a major study on the historical performance of commodity futures by professors Gary Gorton and K. Geert Rouwenhorst.[1] AIGFP created a specialized credit business. AIGFP focused its business on structured products like CDO’s. In 2003, it absorbed subsidiary, AIG Trading Group (AIG-TG) which dealt primarily in over the counter derivatives and created the Dow Jones-AIG Commodity Index (DJ-AIGCI) from their offices in Greenwich, CT. The DJ-AIGCI is a leading commodity benchmark composed of 19 futures contracts on physical commodities. As of the end of June 2007, there was an estimated $38 billion invested in financial products that track the DJ-AIGCI on a global basis.[2]

From 1987 to 2004, AIGFP contributed over $5 billion to AIG’s pre-tax income. During that period, AIG’s market capitalization increased from $11 billion to $181 billion, and its stock price increased from $4.50 per share to $62.34 per share.

AIGFP’s trading in credit derivatives led to enormous losses. These losses at AIGFP division essentially bankrupted the entire AIG operation, and forced the United States government to bail out the insured.

It’s very hard to believe that this person knew nothing of the CDO business since it was the focus of the division in which he worked. I’m sure it’s very embarrassing for him to be associated with the criminal side of AIG, but he is, whether he likes it or not. It’s just a good thing he made many millions of dollars over the past decade so that he might be comforted through this time of terrible unfairness and injustice.

The smart move for all of them is to shut up rather than whine publicly at a time like this. But corporate narcissists can’t help themselves. All you have to do is think of names like Kenny Boy Lay, Jeff Skilling, Bernard Ebbers,Bernie Madoff, Joseph Cassanno and the list goes on, to know that this personality type is rampant among our Masters of the Universe. Rather than being the rational heroes of their Randian dreams (who would be smart enough to STFU at this moment) they are actually seriously screwed up human beings who found the perfect outlet for their disorder in our millennial gilded age.

Risk and growth are absolutely necessary for a dynamic capitalist economy. But this isn’t that. This is an organizational and cultural disease and it’s landed the economy on life support. These people either need to submit to the cure or be quarantined in their gated communities.

Update: I should be clear that I’m not saying DeSantis was involved in the credit default swaps. But he was Executive VP in the AIG division that did it. It is not reasonable to believe that he didn’t know about it — or profit from it. And even if he didn’t, the fact that he worked in the unit that put the entire world financial system at risk and stands to cost the US taxpayers trillions of dollars means that he is going to suffer for their sins. It’s the way the world works. Look at Arthur Anderson– they ceased to exist because of their role in the Enron scandals, and a lot of employees, good and bad, lost their livlihoods. I’m sorry people are being rude about all this but these people need to man up and realize that they are going to take some heat. Maybe they can distract themselves from their troubles by counting their money.

.