The Bubble Next Time

Regulations that will stop us from acting crazy next time there's an irrational boom.

By Daniel Gross
Posted Saturday, Feb. 28, 2009, at 7:42 AM ET

When financial historians look back at the last six months, they'll be hard-pressed to explain precisely why our advanced financial system suffered such a catastrophic failure. So many of the developments—a $1.2 trillion subprime-mortgage market, a $62 trillion unregulated, nontransparent credit-default-swap market, $50 billion private-equity buyouts of cyclical companies, hedge funds going public—seem, on their face, to be irrational, silly nonstarters. And yet the players pulling off these deals were lionized as geniuses, as transformational business figures. They were the Smart Money. They turned out to be the Dumb Money. How did the crown jewel of American capitalism—our financial-services industry—transform into cubic zirconia? How did a nation shift seamlessly from the dot-com bubble into a more inclusive housing and credit bubble? And, most important, how can we stop it from happening again

Asymmetrical class warfare

by Jamison Foser

The media are outraged at the "class warfare" supposedly present in President Obama's budget plans. In the past few days alone, Michelle Bernard said Barack Obama "was almost declaring class warfare" in his speech to Congress; CNBC's Carlos Quintanilla said, "I don't want to call it class warfare, although that's what it may end up being in the end, this debate over wealth redistribution"; the AP's Jennifer Loven asked White House press secretary Robert Gibbs, "Are you all worried at all that that kind of argument, that 'class warfare' argument could sink the ability to get some of these big priorities through?" Politico ran a Jeanne Cummings article headlined "Class warfare returns to D.C." And this afternoon, MSNBC joined the pile-on, with a segment asking: "Is there a war against the wealthy? Do we have a class war developing?"

Michael Kinsley: Words for a Shaken People

"We're having an earthquake," said my wife. It was early one recent morning, as we sat drinking coffee and reading the day's gloomy economic news. Was she being metaphorical? At this hour? We sat in nervous silence for a few seconds, mentally listing our regrets. (Her: Why didn't we put flashlights in all the bedrooms? Me: Why didn't we sell all these bedrooms and rent?) Then we resumed our day.

"The American Earthquake" is what the critic Edmund Wilson called his collection of reportage (mostly for the New Republic) about the Great Depression, and as a metaphor it's a good one. It captures, as "Depression" does not, the element of surprise, the panic, the remorse and the disbelief as it seems more and more likely that this actually is "the big one."

Glenn Greenwald: The Corruption of the Cocoon

The Atlantic's Marc Ambinder writes (h/t Andrew Sullivan):

Get Out Of Your D$*#( Shells

Here's a simple way to increase intellectual cross-pollination on the web: honest bloggers of the left and the right should try to interview at least one author/historian/politician from the other side of the aisle at least one a month. So -- Media Matters shouldn't just criticize Bernard Goldberg; they should interview him. Glenn Greenwald should, I don't know, see if Jack Goldsmith from Harvard would chat with him online. Bill Kristol should interview Jane Mayer. Pajamas Media needs to interview Democrats and Democratic experts, and not just each other, or Joe the Plumber, or Sen. Jim DeMint. Righties interviewing righties has gotten so boring and repetitive; lefties fawning over lefties is lazy. Who's going to be brave enough to reach out to an ideological or intellectual opponent, promote their new book, or interview them?

I agree with this almost entirely, but there's an assumption here that isn't quite accurate: the lack of such interviews and debates isn't evidence that there are no such attempts being made. To the contrary: not only politicians, but a huge portion of pundits and journalists, simply refuse to acknowledge any criticisms, let alone engage critics.

Our political discourse is so stratified that politicians and pundits can get all the exposure they want while confining themselves to hospitable venues and only speaking to sympathetic journalists.

Insight: Time to expose those CDOs

Published: February 26 2009 16:34 | Last updated: February 26 2009 16:34

Just how much should a debt vehicle backed by subprime mortgage bonds be worth these days? Two years ago, most banks and insurance companies assumed the answer was close to 100 per cent of face value – or more.

Since then, however, that “price” has clearly collapsed, triggering tens of billions of dollars worth of writedowns, particularly in relation to a product known as collateralised debt obligations of asset-backed securities (CDO of ABS.)

But as the zeroes relating to writedowns multiply, a peculiar – and bitter – irony continues to hang over these numbers. Notwithstanding the fact that bankers used to promote CDOs as a tool to create more “complete” capital markets, very few of those instruments ever traded in a real market sense before the crisis – and fewer still have changed hands since then.

Paul Krugman: Climate of Change

Elections have consequences. President Obama’s new budget represents a huge break, not just with the policies of the past eight years, but with policy trends over the past 30 years. If he can get anything like the plan he announced on Thursday through Congress, he will set America on a fundamentally new course.

The budget will, among other things, come as a huge relief to Democrats who were starting to feel a bit of postpartisan depression. The stimulus bill that Congress passed may have been too weak and too focused on tax cuts. The administration’s refusal to get tough on the banks may be deeply disappointing. But fears that Mr. Obama would sacrifice progressive priorities in his budget plans, and satisfy himself with fiddling around the edges of the tax system, have now been banished.

James Galbraith: Obama Isn't Doing Enough to Solve the Financial Crisis

— By Nick Baumann | Thu February 26, 2009 7:14 AM PST

The financial crisis is even worse than people think (and people already think it's pretty bad), and we aren't doing enough to stop it, economist and Mother Jones contributor James K. Galbraith told the House Financial Services Committee on Thursday morning. From his prepared testimony:

In 1930, John Maynard Keynes wrote, "The world has been slow to realize that we are living this year in the shadow of one of the greatest economic catastrophes of modern history." That catastrophe was the Great Crash of 1929, the collapse of money values, the destruction of the banking system. The questions before us today are: is the crisis we are living through similar? And if so, are we taking adequate steps to deal with it? I believe the answers are substantially yes, and substantially no.

Anthrax spores don't match dead researcher's samples

Poisonous anthrax that killed five Americans in the weeks after the Sept. 11, 2001 terror attacks doesn't match bacteria from a flask linked to Bruce Ivins, the researcher who committed suicide after being implicated by the Federal Bureau of Investigation, a scientist said.

Spores used in the deadly mailings "share a chemical 'fingerprint' that is not found in the flask linked to Bruce Ivins," Roberta Kwok wrote in Nature News, citing Joseph Michael, a scientist at the Sandia National Laboratories in Albuquerque, New Mexico.

Texas governor considering political suicide

by schroed

Thu Feb 26, 2009 at 08:19:28 AM PST

In Texas politics there is a phrase for leaving federal money on the table: "political suicide"

By now everyone has heard the news that Governor Rick Perry of Texas (a.k.a. Governor Goodhair), along with several other southern Republican governors, is considering rejecting part of the stimulus package that would provide $555 million in unemployment benefits for out-of-work Texans.

What might not be as widely known..

Rush from Reality

By Rick Perlstein

Created 02/26/2009 - 9:25am

I've been listening to Rush Limbaugh for going on twenty years now—since 1989, when my summer job after my first year of college involved driving a daily route which took me from Milwaukee to a little town two hours away. I listened to the whole thing. Every day.

He had been on nationally for only a year [1]. He was not yet a national phenomenon, and when I discovered him, I realized I had stumbled upon something important and extraordinary. I knew about Father Coughlin [2], the para-fascist "radio priest" of the New Deal Years—I'd read about him in history books—and had an inkling that I'd someday be reading about this "Rush Limbo" (as I first misheard his name) in books as well. For as has been frequently remarked, Rush is an astonishingly gifted talent when it comes to filling the air on the radio. Already, in 1989, people were packing auditoriums around the hinterlands to hear him dispense his wisdom on his "Rush to Excellence" tours. Already, he was an exceptionally commanding presence.

Partisanship, by the Bye

by Hendrik Hertzberg
February 23, 2009

Throughout the fortnight-long Battle of the Stimulus Package—the Capitol Hill confrontation that culminates this week in a signing ceremony for a historically unprecedented piece of legislation that will inject more than three-quarters of a trillion dollars’ worth of adrenaline into America’s fluttering economic heart—one question preoccupied commentators and observers, especially those desperate for relief from the daunting substance of the matter: was President Obama being “bipartisan” enough?

Some discussed the question calmly, others less so; but there was something like a consensus that if non-trivial numbers of Republican legislators failed to support the stimulus bill the fault, and the obloquy, would be Obama’s. “The bill will be judged a political success not simply if it becomes law, but if it’s deemed ‘bi-partisan,’ ” ABC’s “The Note” Web site warned. The Los Angeles Times, while calling the bill’s quick passage in the House of Representatives a “big legislative victory” for Obama, cautioned that “it was clear that his efforts so far had not delivered the post-partisan era that he called for in his inauguration address.” (The man had been in office for eight days—a tight schedule for era-delivering.) On the Senate floor, the remarks of Lindsey Graham, of South Carolina, provided evidence that an age of perpetual political peace had not yet dawned. “This bill stinks!” Senator Graham exclaimed.

Will Obama Go After Social Security? My Editor and I Have a Bet

By Joshua Holland, AlterNet
Posted on February 26, 2009, Printed on February 26, 2009
http://www.alternet.org/story/128915/

I have a bet with my editor, Jan Frel. He thinks that President Barack Obama is going to go after Social Security. It's a huge honeypot sitting in a country that's had an enormous amount of wealth shaken out of it, and if it were looted, it might produce enough in fat management fees alone to resuscitate Wall Street's ailing financial giants.

Jan's not alone. William Greider, writing in The Nation, noted that "Governing elites in Washington and Wall Street have devised a fiendishly clever 'grand bargain' they want President Obama to embrace in the name of 'fiscal responsibility.' "

Backstage at the theater of 'terror'

By Pepe Escobar

Afghanistan is not only the graveyard of empires; it's a graveyard of misconceptions.

Al-Qaeda leader Osama bin Laden believed that the mujahideen single-handedly defeated the Soviet empire; so a more compact mujahid band, al-Qaeda, would be the vanguard in defeating the American empire. It was never that simple.

Corruption Touched CIA’s Covert Operations

by Marcus Stern, ProPublica - February 25, 2009 12:00 am EST

Paramilitary agents for the CIA's super-secret Special Activities Division, or SAD, perform raids, ambushes, abductions and other difficult chores overseas, including infiltrating countries to "light up" targets from the ground for air-to-ground missile strikes. This week the government acknowledged for the first time that some of SAD's sensitive air operations were swept up in a fraud conspiracy that reached the highest levels of the CIA and cost the government $40 million.

That information was contained in a series [1] of court [2] filings [3] released in advance of the long-awaited sentencing of Kyle Dustin "Dusty" Foggo, the disgraced former No. 3 official at the CIA.

Obama: The Cap on Carbon Is Coming...

By Bill Scher

Created 02/25/2009 - 11:55am

...but obstructionists and lobbyists are right behind.

President Barack Obama yesterday made a very specific demand for averting a climate crisis[1] and transitioning to a clean energy economy when he said, "I ask this Congress to send me legislation that places a market-based cap on carbon pollution and drives the production of more renewable energy in America."

And even more notably, the White House Press Secretary Robert Gibbs yesterday confirmed[2] earlier reports that the President's budget proposal will presume the "cap-and-trade" proposal will generate new revenue.

Thomas Frank: Richard Perle's Apologia

Maybe next time the neocons will win.

Governing was always difficult for conservatives, but as they return to the opposition, they are rediscovering their skill at blame evasion.

After all, this is a movement that is most comfortable imagining itself as an outsider. This is a movement that whirls through the pages of recent history taking credit for everything good and feeding the grisly bits to its chosen scapegoats.

GOP hates earmarks - except the ones its members sponsor

By David Lightman | McClatchy Newspapers

WASHINGTON — Republicans are expected to deliver a daylong rant Wednesday against Democratic spending legislation, yet the bill is loaded with thousands of pet projects that Republican lawmakers inserted.

Rep. Ralph Hall, R-Texas, included $142,500 for emergency repairs to the Sam Rayburn Library and Museum in Bonham, Texas. Sen. John Ensign, R-Nev., joined state colleagues to include $1.425 million for Nevada "statewide bus facilities." The top two Republicans on Congress' money committees also inserted local projects.

Financiers Used "Hotline" to SEC Examiners

Tuesday 24 February 2009

by: Matt Renner, t r u t h o u t | Report

Washington, DC - In a hearing which exposed failures by the government's financial police, Congressman Stephen Lynch (D-Massachusetts) highlighted the existence of a "hotline," which he said could be used by Wall Street firms to call off government inspectors. The existence of a "hotline" has been confirmed by the Securities and Exchange Commission (SEC), though its purpose has been disputed.

Long hours link to dementia risk

Long working hours may raise the risk of mental decline and possibly dementia, research suggests.

The Finnish-led study was based on analysis of 2,214 middle-aged British civil servants.

It found that those working more than 55 hours a week had poorer mental skills than those who worked a standard working week.

How You Can Green Your Home and Cash in on Stimulus Money

By G. Jeffrey MacDonald, Christian Science Monitor
Posted on February 24, 2009, Printed on February 25, 2009
http://www.alternet.org/story/128617/

Hampton Falls, N.H. -- Energy-saving systems for the attic, basement, and in between have effectively gone on sale, courtesy of the United States Congress.

But whether shoppers will take advantage -- or even notice available discounts -- remains an open question.

Tax incentives to encourage investments in energy efficiency took effect last week when President Barack Obama signed the $787 billion economic stimulus bill. That means homeowners with drafty windows, old heating systems, or other root causes of high energy bills can be rewarded in tax season if they make improvements in 2009 or 2010.

Obama Makes a Persuasive Pitch for His Progressive Agenda

By Dylan Loewe, Huffington Post
Posted on February 24, 2009, Printed on February 25, 2009
http://www.alternet.org/story/128750/

In 50 minutes last night, the president of the United States used his first speech to a joint session of Congress as a launching point, a chance to transform the bulk of his entire campaign platform into the core of a bold first year agenda. In one of his most compelling arguments to date, he laid out a blueprint going forward, rich with clarity and powered by an ever-accruing political capital.

What was most impressive about the speech was not its cadence and tone, but the framing used to sell its contents. Obama couched his unabashedly progressive agenda as critical to the country's long term economic future. Where President Clinton became famous for taking Republican ideas and wrapping them in Democratic arguments, President Obama called for some of the most liberal policies in a generation, and did so using the voice of a fiscal conservative.

A planet at the brink?

By Michael T Klare

The global economic meltdown has already caused bank failures, bankruptcies, plant closings, and foreclosures and will, in the coming year, leave many tens of millions unemployed across the planet. But another perilous consequence of the crash of 2008 has only recently made its appearance: increased civil unrest and ethnic strife. Someday, perhaps, war may follow.

A scam at the heart of the US

By Julian Delasantellis

Travelers visiting New York city from Americas's rural heartland in the 1980s might have been able to regale the folks back home with tales of encounters with knife-wielding drug addicts and/or disease-scourged prostitutes, but it's not like their predecessors who made the same trek back in the 1950s didn't have a tale to tell around the cracker barrel as well. They might have come back to the square dance and talked about playing and losing at the game of three-card monte.

"Basically, It's a Disaster"

By Bernhard Warner Posted Tuesday, February 24, 2009 - 3:54am

Today's Business Press

More than a decade's worth of gains have now been wiped out. The Dow on Monday sunk to a low last plumbed in the Clinton-Gore years in what BusinessWeek calls "the stock market's frightful slide." The blue-chip index is down to April 1997 levels, and the S&P 500 has lost half of its value since the start of 2008. For long-term investors, it all makes for grim accounting. "If you bought into the overall stock market—represented by the S&P 500—at any point in the last 11 years, your shares are now worth less than you paid for them," BusinessWeek writes. The Wall Street Journal points out that the latest downturn is particularly unsettling, as it's not just the banks pulling down the markets. Technology and commodity stocks like U.S. Steel have also fallen.

Judge questions law giving telecoms immunity

Bob Egelko, Chronicle Staff Writer

Tuesday, February 24, 2009

(02-23) 17:32 PST SAN FRANCISCO -- A federal judge in San Francisco is raising questions about the constitutionality of a law designed to dismiss suits against telecommunications companies accused of cooperating with government wiretapping.

Chief U.S. District Judge Vaughn Walker has asked President Obama's Justice Department to present its views by Wednesday on whether the law gives the attorney general too much power to decide whether a company is immune from lawsuits. Obama supported the measure as a senator when Congress approved it last year.

AP falsely reported Obama called Social Security "the single most pressing fiscal challenge we face by far"

Summary: AP's Liz Sidoti falsely reported that at his fiscal responsibility summit, President Obama "called the long-term solvency of Social Security 'the single most pressing fiscal challenge we face by far.' " In fact, Obama made that comment in reference to "the rising cost of health care."

Will's climate change column sparks outrage in environmental community

After Post refuses to address numerous global warming falsehoods, leading environmental organizations join Media Matters in calling for correction

Today, Media Matters for America President Eric Burns joined Sierra Club Executive Director Carl Pope, League of Conservation Voters President Gene Karpinski, and Friends of the Earth President Brent Blackwelder in issuing a letter to Washington Post ombudsman Andy Alexander asking him to address several blatant falsehoods in George Will's February 15 column about global warming.

Health insurance essential for health and well-being

Action urgently needed from President and Congress to solve crisis of the uninsured

WASHINGTON -- The evidence shows more clearly than ever that having health insurance is essential for people's health and well-being, and safety-net services are not enough to prevent avoidable illness, worse health outcomes, and premature death, says a new report from the Institute of Medicine. Moreover, new research suggests that when local rates of uninsurance are relatively high, even people with insurance are more likely to have difficulty obtaining needed care and to be less satisfied with the care they receive.

The number of people who have health insurance continues to drop, and employment-based coverage -- the principal source of insurance for the majority of Americans -- is eroding, a situation that is getting worse with the current economic crisis, the report notes. In 2007, nearly one in 10 American children and one in five non-elderly adults had no health insurance. The average amount employees paid per year for family coverage in an employer-sponsored plan rose from $1,543 in 1999 to $3,354 in 2008. If there is no intervention, the decline in health insurance coverage will continue, concluded the committee that wrote the report.

Why the GOP Really Hates Unions

By Art Levine, Huffington Post
Posted on February 23, 2009, Printed on February 24, 2009
http://www.alternet.org/story/128297/

The Hoover-like GOP has been working overtime to oppose President Obama's stimulus package while hoping he fails. Meanwhile, a report released yesterday by the Center for American Progress Action Fund essentially underscores the real reasons Republicans and the business community have taken another equally short-sighted economic stance: fighting workers' right to organize. As Unions Are Good For the American Economy points out with irrefutable statistics, unionization raises wages and boosts the economy because it puts more money in the pockets of American workers.

(The report itself, of course, doesn't directly accuse the GOP and corporate interests of opposing economic growth and recovery, but reading its measured analysis of the economic benefit of unions leads to the inescapable conclusion that anti-union business leaders have a misguided zeal for low wages at all cost -- regardless of the impact on their own workers, their firms' productivity, their own long-term profits or the broader economy.)

Wall Street Sharks Have Lost Everything, and Now They're Coming After Us

By Robert Kuttner, The Washington Post
Posted on February 24, 2009, Printed on February 24, 2009
http://www.alternet.org/story/128511/

With the enactment of a large economic stimulus package, fiscal conservatives are using the temporary deficit increase to attack a perennial target -- Social Security and Medicare. The private-equity investor Peter G. Peterson, who launched a billion-dollar foundation last year to warn that America faces $56.4 trillion in "unfunded liabilities," is a case in point. Supposedly, these costs will depress economic growth and crowd out other needed outlays, such as investments in the young. The remedy: big cuts in programs for the elderly.

The Peterson Foundation is joined by leading "blue dog" (anti-deficit) Democrats such as House Budget Committee Chairman John Spratt of South Carolina and his counterpart in the Senate, Kent Conrad of North Dakota. The deficit hawks are promoting a "grand bargain" in which a bipartisan commission enacts spending caps on social insurance as the offset for current deficits.

The Spectacular, Sudden Crash of the Global Economy

By Joshua Holland, AlterNet
Posted on February 24, 2009, Printed on February 24, 2009
http://www.alternet.org/story/128412/

The worldwide economic meltdown has sent the wheels spinning off the project of building a single, business-friendly global economy.

Worldwide, industrial production has ground to a halt. Goods are stacking up, but nobody's buying; the Washington Post reports that "the world is suddenly awash in almost everything: flat-panel televisions, bulldozers, Barbie dolls, strip malls, Burberry stores." A Hong Kong-based shipping broker told The Telegraph that his firm had "seen trade activity fall off a cliff. Asia-Europe is an unmit­igated disaster." The Economist noted that one can now ship a container from China to Europe for free -- you only need to pick up the fuel and handling costs -- but half-empty freighters are the norm along the world's busiest shipping routes. Global airfreight dropped by almost a quarter in December alone; Giovanni Bisignani, who heads a shipping industry trade group, called the "free fall" in global cargo "unprecedented and shocking."

Glenn Greenwald: Ryan Lizza's People Magazine love letter to Rahm Emanuel

White House Chief of Staff Rahm Emanuel -- who The New York Times described as "arguably the second most powerful man in the country" -- is certainly one of the most controversial figures in Washington. Prior to joining the Obama administration, Emanuel -- in the Clinton administration and then as a high-ranking member in the House Democratic caucus -- was at the center of countless political and personal controversies. Emanuel has played the central role in much of the Blue Dog dominance in the House and many (if not most) of the worst Democratic capitulations to the Bush agenda. Even in the four weeks that he's been in his current job, Emanuel has been the target of severe criticisms of his management skills from many precincts for his role in the Judd Gregg and Rod Blagojevich fiascoes and the Obama administration's questionable negotiating tactics in the stimulus package. Both Jane Hamsher and Howie Klein yesterday identified just some of the current and past controversies that Emanuel has triggered.

Dumb Money

The villains of the financial catastrophe aren't criminals. They're morons.

By Daniel GrossPosted Monday, Feb. 23, 2009, at 1:21 PM ET

In the past few months, we've been riveted and disgusted by the exploits of scamsters like Bernard Madoff and Allen Stanford (characters who, if they didn't exist, would have to be invented by Tom Wolfe). It's both easy and convenient to hold them up as the ultimate symbols of the just-ended boom. But we shouldn't. While there was some crime in the mortgage industry, law-abiding, respectable, upstanding citizens caused the overwhelming majority of financial losses suffered thus far. Skeezy money managers and mobbed-up boiler rooms didn't create the economic catastrophe. It was visited on us by firms in the Dow Jones Industrial Average and S&P 500—companies that trace their origins back to the 1800s, run by graduates of Yale and Harvard. The people who blew up the system weren't anarchists. They were members of the club: central bankers and private-equity honchos, hedge-fund geniuses and Ph.D. economists, CEOs and investment bankers. And the (overwhelmingly legal) con they perpetuated on themselves, their colleagues, their shareholders and creditors, and, ultimately, on us taxpayers makes Madoff's sins look like child's play.

Laissez-Faire Capitalism Has Failed

Nouriel Roubini, 02.19.09, 12:01 AM EST

The financial crisis lays bare the weakness of the Anglo-Saxon model.

It is now clear that this is the worst financial crisis since the Great Depression and the worst economic crisis in the last 60 years. While we are already in a severe and protracted U-shaped recession (the deluded hope of a short and shallow V-shaped contraction has evaporated), there is now a rising risk that this crisis will turn into an uglier, multiyear, L-shaped, Japanese-style stag-deflation (a deadly combination of stagnation, recession and deflation).

Diebold 'offices' listed in yellow pages are mostly Wal-Marts

Filed by Joe Byrne

Across the country, curious bloggers are calling up their local Diebold offices, and no one is answering.

Utah is among the number of states that now use a partial or fully electronic election system, and Premier Election Solutions, a subsidiary of Diebold, is the company that sold the machines to the state. To convince Utah decision-makers that Diebold was a big company with a substantial presence, Kathy Dopp, founder of UtahCountVotes.org, reported that a company representative told the decision-makers in 2006 that Diebold “has about 20 offices in Utah.” When pressed further, the representative refused to give the locations of any of the offices. In fact, the White Pages lists 18 Diebold offices.

Paul Krugman: Banking on the Brink

Comrade Greenspan wants us to seize the economy’s commanding heights.

O.K., not exactly. What Alan Greenspan, the former Federal Reserve chairman — and a staunch defender of free markets — actually said was, “It may be necessary to temporarily nationalize some banks in order to facilitate a swift and orderly restructuring.” I agree.

The case for nationalization rests on three observations.

Poll: Most Americans fearful about state of country

By Paul Steinhauser
CNN Deputy Political Director

WASHINGTON (CNN) -- A new national poll indicates that nearly three out of four Americans are scared about the way things are going in the country today.

Seventy-three percent of those questioned in a CNN/Opinion Research Corporation survey released Monday say they're very or somewhat scared about the way things are going in the United States. That's six points higher than in an October poll.

Obama will not immediately repeal Bush tax cuts.

The New York Times reports today that President Obama plans to “set a goal this week to cut the annual deficit at least in half by the end of his term,” in large part through withdrawing from Iraq and raising taxes on the wealthy. Obama, however, will not immediately repeal the Bush tax cuts, instead letting them expire on their own in 2010:

Democrats Resisting Obama on Social Security

By JACKIE CALMES

Published: February 22, 2009

WASHINGTON — President Obama is eager to seek a bipartisan solution to ensure the long-term solvency of Social Security, people who have spoken with him say, but he is running into opposition from his party’s left and from Democratic Congressional leaders who contend that his political capital would be better spent on health care and other priorities.

Obama nixed full surge in Afghanistan

By Gareth Porter

WASHINGTON - United States President Barack Obama decided to approve only 17,000 of the 30,000 troops requested by General David McKiernan, the top commander of US and North Atlantic Treaty Organization troops in Afghanistan, and General David Petraeus, the Central Command chief, after McKiernan was unable to tell him how they would be used, according to White House sources.

But Obama is likely to be pressured by McKiernan and the Joint Chiefs to approve the remaining 13,000 troops requested after the completion of an Afghanistan-Pakistan policy review next month.

Glenn Greenwald: Fox News "War Games" the Coming Civil War

Bill Clinton's election in 1992 gave rise to the American "militia movement": hordes of overwhelmingly white, middle-aged men from suburban and rural areas who convinced themselves they were defending the American way of life from the "liberals" and "leftists" running the country by dressing up in military costumes on weekends, wobbling around together with guns, and play-acting the role of patriot-warriors. Those theater groups -- the cultural precursor to George Bush's prancing 2003 performance dressed in a fighter pilot outfit on Mission Accomplished Day -- spawned the decade of the so-called "Angry White Male," the movement behind the 1994 takeover of the U.S. Congress by Newt Gingrich and his band of federal-government-cursing, play-acting-tough-guy, pseudo-revolutionaries.

What was most remarkable about this allegedly "anti-government" movement was that -- with some isolated and principled exceptions -- it completely vanished upon the election of Republican George Bush, and it stayed invisible even as Bush presided over the most extreme and invasive expansion of federal government power in memory. Even as Bush seized and used all of the powers which that movement claimed in the 1990s to find so tyrannical and unconstitutional -- limitless, unchecked surveillance activities, detention powers with no oversight, expanding federal police powers, secret prison camps, even massively exploding and debt-financed domestic spending -- they meekly submitted to all of it, even enthusiastically cheered it all on.

The Nitty Gritty of Obama's Mortgage Plan

— By Nick Baumann | Wed February 18, 2009 12:11 PM PST

Speaking in Phoenix, Arizona on Wednesday, President Obama said his $75 billion home mortgage rescue plan would "save ourselves the costs of foreclosure tomorrow," but "not help speculators who took risky bets on a rising market." As David Corn highlighted earlier, Obama tempered his appeals to populism and community feeling with a call for responsibility. "Solving this crisis will require more than resources – it will require all of us to take responsibility," Obama said. Great. But how does the plan actually work? Here's a primer.

The first part of the plan is a fairly simple regulatory fix that allows homeowners with Fannie Mae and Freddie Mac mortgages who owe between 80 and 105 percent of what their homes are worth to refinance those mortgages. Previously, only borrowers who had at least 20 percent home equity could refinance. By refinancing at a lower rate, borrowers could save thousands of dollars annually on their mortgage payments.

Volcker: Crisis May be Even Worse than Depression

The global economy may be deteriorating even faster than it did during the Great Depression, Paul Volcker, a top adviser to President Barack Obama, said on Friday.

Volcker noted that industrial production around the world was declining even more rapidly than in the United States, which is itself under severe strain.

"I don't remember any time, maybe even in the Great Depression, when things went down quite so fast, quite so uniformly around the world,'' Volcker told a luncheon of economists and investors at Columbia University.

Frank Rich: What We Don’t Know Will Hurt Us

AND so on the 29th day of his presidency, Barack Obama signed the stimulus bill. But the earth did not move. The Dow Jones fell almost 300 points. G.M. and Chrysler together asked taxpayers for another $21.6 billion and announced another 50,000 layoffs. The latest alleged mini-Madoff, R. Allen Stanford, was accused of an $8 billion fraud with 50,000 victims.

“I don’t want to pretend that today marks the end of our economic problems,” the president said on Tuesday at the signing ceremony in Denver. He added, hopefully: “But today does mark the beginning of the end.”

Does it?

The Gatekeeper

Rahm Emanuel on the job.

Ryan Lizza
March 2, 2009

Rahm Emanuel’s office, which is no more than a three-second walk from the Oval Office, is as neat as a Marine barracks. On his desk, the files and documents, including leatherbound folders from the National Security Council, are precisely arranged, each one parallel with the desk’s edge. During a visit hours before Congress passed President Barack Obama’s stimulus package, on Friday, February 13th, I absently jostled one of Emanuel’s heavy wooden letter trays a few degrees off kilter. He glared at me disapprovingly. Next to his computer monitor is a smaller screen that looks like a handheld G.P.S. device and tells Emanuel where the President and senior White House officials are at all times. Over all, the office suggests the workspace of someone who, in a more psychologized realm than the West Wing of the White House and with a less exacting job than that of the President’s chief of staff, might be cited for “control issues.”

Because the atmosphere of crisis is now so thick at the White House, any moment of triumph has a fleeting half-life, but the impending passage of the seven-hundred-and-eighty-seven-billion-dollar stimulus bill provided, at least for an afternoon, a sense of satisfaction. As Emanuel spoke about the complications of the legislation, he was quick to credit colleagues for shepherding the bill to victory—Peter Orszag, the budget director; Phil Schiliro, the legislative-affairs director; Jason Furman, the deputy director of the National Economic Council––but, in fact, nearly everyone in official Washington acknowledges that, besides Obama himself, Emanuel had done the most to coax and bully the bill out of Congress and onto the President’s desk for signing.

Crop Scientists Say Biotechnology Seed Companies Are Thwarting Research

By ANDREW POLLACK

Biotechnology companies are keeping university scientists from fully researching the effectiveness and environmental impact of the industry’s genetically modified crops, according to an unusual complaint issued by a group of those scientists.

“No truly independent research can be legally conducted on many critical questions,” the scientists wrote in a statement submitted to the Environmental Protection Agency. The E.P.A. is seeking public comments for scientific meetings it will hold next week on biotech crops.

Iraqis Have Voted: Will the U.S. Be Kicked Out the Door Soon?

By Robert Dreyfuss, The Nation
Posted on February 21, 2009, Printed on February 22, 2009
http://www.alternet.org/story/127846/

For the first time in six years, it's possible to see the light at the end of the tunnel in Iraq. Despite all their flaws -- and there were many -- the January 31 elections in fourteen of Iraq's eighteen provinces ratified the resurgence of secular nationalism. A large majority of voters repudiated the Shiite and Sunni religious parties and the Kurdish separatists. And in so doing, they broke free of the rigid confines of the ethno-sectarian politics that has dominated the Iraqi scene since 2003. The results mean that the Obama administration may soon have to deal with a vastly different cast of characters in Iraq -- politicians less willing to tolerate a long-term US presence and firmly opposed to a special relationship between Baghdad and Washington.

10 Dirty Tricks Wall Street Con Artists Will Pull to Keep the Rip-offs Going

By Paul B. Farrell, Wall Street Journal
Posted on February 22, 2009, Printed on February 22, 2009
http://www.alternet.org/story/128241/

Yes, America wants an economic recovery. A brand new bull. And nobody wants it more than Wall Street. It gets rich off bull markets. Yes, Warren Buffett may be buying, but the odds are against Wall Street now.

The financial sector's in the tank: Stocks are huge losers. Earnings stink. Bonuses are down. And if they ask for TARP money, CEO salaries get capped, there are no lavish conferences and you fly commercial -- very humbling for a big boss used to making a million bucks a week.

Saving social security

Here's a cheap and effective form of economic stimulus – tell America's baby boomers that their welfare benefits are safe

Dean Baker
guardian.co.uk, Monday 16 February 2009 18.30 GMT

The stimulus bill approved by Congress last week - and due to be signed into law by President Obama tomorrow - is a very good first step toward slowing the economy's decline, but it clearly is not large enough to accomplish the job. The US economy will be seeing a loss of close to $2.6 trillion in demand over this year and next due to the collapse of housing and commercial property bubbles.

To counteract this collapse, Congress gave President Obama just over $700bn in real stimulus. President Obama will have to make further requests from Congress to close the gap between what the economy needs and the stimulus package approved last week.

Paul Krugman: Who’ll Stop the Pain?

Earlier this week, the Federal Reserve released the minutes of the most recent meeting of its open market committee — the group that sets interest rates. Most press reports focused either on the Fed’s downgrade of the near-term outlook or on its adoption of a long-run 2 percent inflation target.

But my eye was caught by the following chilling passage (yes, things are so bad that the summarized musings of central bankers can keep you up at night): “All participants anticipated that unemployment would remain substantially above its longer-run sustainable rate at the end of 2011, even absent further economic shocks; a few indicated that more than five to six years would be needed for the economy to converge to a longer-run path characterized by sustainable rates of output growth and unemployment and by an appropriate rate of inflation.”

Thomas Frank: Bipartisanship Is a Silly Beltway Obsession

It's good policy that matters.

Last week, President Barack Obama spoke at town-hall meetings in cities hit hard by the recession. With only one exception -- a woman who thought Mr. Obama needed to have a beer with Sean Hannity -- the questions the president received in these places were all concerned with bread-and-butter economic issues: mortgage problems, funding for education, and the difficulties of low-wage work.

Over the weekend, after Congress had approved a massive economic stimulus package, it was the news media's turn to ask the questions. Here, a different concern permeated the discussion: The nation's desperate need for bipartisanship, and the president's failure to usher in a new era of brotherly love between Republicans and Democrats.