The Dems Need a Shove. Will Obama Give It?

In the last week and a half, Obama has rediscovered his voice on health care--telling audiences he is determined to achieve comprehensive reform, not some piecemeal version, and that he is willing to fight for it. And, administration officials say, the sentiments are genuine. Obama has instructed his staff not to abandon the pursuit of a full reform package, even though, it seems, that's what some advisers would prefer--and even though the Democrats no longer have the sixty votes necessary to break Republican filibusters in the Senate.

Is Tim Geithner Paying Attention To the Global Economy?

In an interview that will air Sunday on ABC, Treasury Secretary Tim Geithner says, “”We have much, much lower risk of [a double-dip recession] today than at any time over the last 12 months or so … We are in an economy that was growing at the rate of almost 6 percent of GDP in the fourth quarter of last year. The most rapid rate in six years. So we are beginning the process of healing.”

The timing of this statement is remarkable because, while the US is finally showing some signs of recovery, the global economy is bracing for another major shock – this time coming from the European Union.

GOP Budget Proposes to Ration Medicare, Privatize Social Security

By Jon Perr
Friday Feb 05, 2010 8:00am

Throughout the bitter debate over health care reform, talking points about "rationing" and "cuts to Medicare" have been the twin pillars of Republican fear mongering. For example, Senate Minority Leader Mitch McConnell in June warned of reform that "denies, delays, or rations health care," only to falsely charge weeks later that Democrats "are going to pay for this plan by cutting Medicare, that is cutting seniors." But with the publication of the Republican "shadow" budget by Rep. Paul Ryan (R-WI), the GOP is now proposing exactly what just weeks ago it claimed to decry: rationing Medicare:

Last year, 137 House Republicans voted to convert the Medicare program that provides 46 million Americans with health insurance into a system of vouchers. (In September, Sarah Palin penned a Wall Street Journal op-ed which similarly called for "providing Medicare recipients with vouchers that allow them to purchase their own coverage.") Now, as Ezra Klein, Matthew Yglesias and TPMnew Republican deficit reduction gambit.

Did Bush Leave Us Bankrupt, Corrupt, Ungovernable?

by: DaveJ

Sat Feb 06, 2010 at 18:00

When you sell the farm, the farm's gone.

It is already too late for America? I'm starting to think that the anti-tax, anti-government conservative movement that started in the mid-70s, elected Reagan and led to the terrible Bush Presidency may have effectively destroyed the country, leaving it bankrupt, corrupt,ungovernable, ruled by a wealthy elite -- and we're only now just starting to realize it. To cover tax cuts we stopped maintaining the infrastructure and started borrowing. To satisfy their hatred of government we increasingly stripped away rule of law, regulation, and belief in one-person-one-vote. We are seeing the consequences of all of that coming back to roost now.

Why liberals should be condescending

by: Chris Bowers

Fri Feb 05, 2010 at 13:55

A Sunday Washington Post editorial asks why liberals are so damn condescending. Seriously:

Why are liberals so condescending?

By Gerard Alexander
Sunday, February 7, 2010

Every political community includes some members who insist that their side has all the answers and that their adversaries are idiots. But American liberals, to a degree far surpassing conservatives, appear committed to the proposition that their views are correct, self-evident, and based on fact and reason, while conservative positions are not just wrong but illegitimate, ideological and unworthy of serious consideration.

Yet more persecuted conservative syndrome, not to mention more misuse of the word "ideological."

But really, why shouldn't liberals should be condescending, and committed to the proposition that their views are based in fact and reason?

The Lynch Mob Mentality

by Glenn Greenwald

If I had the power to have one statement of fact be universally recognized in our political discussions, it would be this one:

The fact that the Government labels Person X a "Terrorist" is not proof that Person X is, in fact, a Terrorist.

That proposition should be intrinsically understood by any American who completed sixth grade civics and was thus taught that a central prong of our political system is that government officials often abuse their power and/or err and therefore must prove accusations to be true (with tested evidence) before they're assumed to be true and the person punished accordingly. In particular, the fact that the U.S. Government, over and over, has falsely accused numerous people of being Terrorists -- only for it to turn out that they did nothing wrong -- by itself should compel a recognition of this truth. But it doesn't.

Paul Krugman: Fiscal Scare Tactics

These days it’s hard to pick up a newspaper or turn on a news program without encountering stern warnings about the federal budget deficit. The deficit threatens economic recovery, we’re told; it puts American economic stability at risk; it will undermine our influence in the world. These claims generally aren’t stated as opinions, as views held by some analysts but disputed by others. Instead, they’re reported as if they were facts, plain and simple.

Yet they aren’t facts. Many economists take a much calmer view of budget deficits than anything you’ll see on TV. Nor do investors seem unduly concerned: U.S. government bonds continue to find ready buyers, even at historically low interest rates. The long-run budget outlook is problematic, but short-term deficits aren’t — and even the long-term outlook is much less frightening than the public is being led to believe.

So why the sudden ubiquity of deficit scare stories? It isn’t being driven by any actual news. It has been obvious for at least a year that the U.S. government would face an extended period of large deficits, and projections of those deficits haven’t changed much since last summer. Yet the drumbeat of dire fiscal warnings has grown vastly louder.

How Corporations Secretly Move Millions to Fund Political Ads

by Brad Jacobson

The Supreme Court's seismic January ruling that corporations are free to spend unlimited amounts of their profits to advertise for or against candidates may have been the latest shakeup of campaign finance - but gaping holes already allow corporations to spend enormous sums without leaving a paper trail, a Raw Story investigation has found.

Campaign finance experts confirmed that though disclosure rules remained intact in the new Supreme Court decision, there are effective methods to circumvent them.

Big Banks Are Feeding Like Parasites on the Govt.'s Money

By Dean Baker, Boston Review
Posted on February 4, 2010, Printed on February 5, 2010
http://www.alternet.org/story/145511/

Wall Street bankers, along with the rest of the players in the financial industry, like to think of themselves as swashbuckling capitalists. They battle cutthroat competition with one hand and oppressive government bureaucracy with the other. In reality, the financial industry is deeply dependent on the government. Far from the rugged, go-it-alone types they wish they were, they are more like well-dressed, coddled adolescents. And this is true in good times and bad.

The industry's dependency takes five main forms:

* an explicit safety net provided by government deposit insurance;

* an implicit safety net provided by "too big to fail";

* a special privilege of being the only untaxed casino;

* an open invitation to raid state and local governments for fees;

* a right to change contract terms after the fact.

These dependencies are entrenched, and, despite loud protests to the contrary, the removal of government from the financial sector is not really on the agenda.

Shadow Elite: How the World's New Power Brokers Are Upending Our Democracy

By Janine Wedel, AlterNet
Posted on February 4, 2010, Printed on February 5, 2010
http://www.alternet.org/story/145533/

Editor's Note: Any time you turn on the television these days, you'll find pundits sounding off on the policy debate du jour. Labeled something along the lines of "military experts" or "Democratic consultants," you have to wonder what they're hiding behind those vague-sounding titles. In an era when mainstream media turns to punditry to shape the American public's view of the most important policy issues, it's worth looking into who these so-called experts are and what effect they're having on our society. As Janine R. Wedel writes in her new book, Shadow Elite: How the World's New Power Brokers Undermine Democracy, Government, and the Free Market (excerpted below), the rise of a new breed of confidence men and women -- think-tank members, government advisers, business consultants and television pundits -- upend our democracy. Because they are technically individual actors, they claim to hold no allegiances; in fact, they usually hold too many.

* * *

We live in a world of flexibility. We have flex time, flex workers, flex spending, flex enrollment, flex cars, flex technology, flex perks, mind flex—even flex identities. “Flex" has become an integral part not only of how we live, but of how power and influence are wielded. While influencers flex their roles and representations, organizations, institutions, and states, too, must be flexible in ways they haven’t been before. The mover and shaker who serves at one and the same time as business consultant, think-tanker, TV pundit, and government adviser glides in and around the organizations that enlist his services. It is not just his time that is divided. His loyalties, too, are often flexible. Even the short-term consultant doing one project at a time cannot afford to owe too much allegiance to the company or government agency. Such individuals are in these organizations (some of the time anyway), but they are seldom of them.

Goldman Sachs And The Republicans

I testified yesterday to the Senate Banking Committee hearing on the “Volcker Rules” (full pdf version; summary). My view is that while the principles behind these proposed rules are exactly on target – limiting the size of our largest banks and preventing any financial institution backed by the government, implicitly or explicitly, from taking big risks – the specific rule changes would need to be much tougher if they are to have any effect.

Wall Street is strongly opposed to the Volcker Rules (link to the written testimony; webcast) and the discussion elicited some classic Goldman Sachs moments. Gerry Corrigan, a senior executive at Goldman and former head of the New York Fed, suggested that Goldman Sachs has an impeccable approach to risk management and seemed to imply that the firm was not in trouble in fall 2008. When pressed on why Goldman requested and was granted a banking license – and access to the Fed’s discount window – in September 2008, he fell back slightly, “There is no question whatsoever that when you look at totality of the steps that were taken by central banks and government, particularly in 2008, that Goldman Sachs was a beneficiary of this.”

Paul Krugman: Fiscalizing Failure

If you read much of what’s being said these days by respectable people, you’d believe that deficits are always and everywhere the main source of economic problems. But, you know, that’s not really true.

A couple of samples from today’s Times — not terrible examples, but illustrative of the prevailing conventional wisdom. David Sanger asserts that

the United States could begin to suffer the same disease that has afflicted Japan over the past decade. As debt grew more rapidly than income, that country’s influence around the world eroded.

Is that really true?

The Republican Plan

The Republican Plan, I: People Will Die

So the Republicans have a deficit reduction and a health care plan, all wrapped into one, the “Roadmap for America’s Future.” It’s being pushed by Paul Ryan, in part because he’s the ranking member of the House Budget Committee, in part because he’s good-looking and articulate, in part to provide the party plausible deniability if it flops (like Bobby Jindal a year ago). The CBO says that it will balance the budget and even eliminate the national debt by 2080. Ezra Klein and Matt Yglesias have commented on it. Klein says, “I wouldn’t balance the budget in anything like the way Ryan proposes. His solution works by making care less affordable for seniors. . . . But his proposal is among the few I’ve seen that’s willing to propose solutions in proportion to the problem.” Yglesias says “it’s totally unworkable.” But they’re both being much too kind.

The Republican Plan, II: You’re On Your Own

In my previous post on the Roadmap for America’s Future, I discussed how the Republican plan is based on converting Medicare into a voucher program and then slashing the vouchers drastically relative to current Medicare spending projections, leaving seniors without the ability to buy anything close to what they get from Medicare today. In that post, I compared projected Medicare vouchers under the Roadmap to projected Medicare spending under current law. If you assume that, in the Roadmap world, the cost of Medicare-equivalent health insurance will be the same as currently projected Medicare spending, then people will die.

The Republican Plan, III: Comic Relief

(This is a multi-post series on the Republicans’ Roadmap for America’s Future. Part I was on how it slashes Medicare spending. Part II was on how it shifts risk from the government to individuals.)

The Roadmap brings up the issue that there is little price transparency in the health care market. This is the solution:

You're Rich. Get Over It.

People who make $250,000 or more a year can afford a tax hike.

By Daniel GrossPosted Wednesday, Feb. 3, 2010, at 11:28 AM ET

Here we go again. Whenever the subject of taxes comes up—and it's come up in the debate over the Obama administration's decision to let many of the Bush-era tax cuts expire this year—we're treated to a chorus of complaints that people who make $250,000 a year aren't really rich. Raising taxes on these people, we're told, would be raising taxes on the middle class. Media Matters has assembled a few choice quotes on the topic.

As I argued in an article in August 2008, now reprised and updated, I have two pieces of bad news for the over-$250,000 crowd. First, the reversal of some of the temporary Bush tax cuts is probably inevitable, given the appalling mismanagement of fiscal affairs between 2001 and 2008. (It's rich when Bush-era economic officials, like Edward Lazear, Greg Mankiw, and Keith Hennessey, carp about the fiscal situation.) Second, for those of you making more than $250,000, I regret to inform you yet again: Yes, you are indeed rich—any way you slice it.

Thomas Frank: Populism Is Democracy at Work

The president is merely speaking for the people.

By THOMAS FRANK

Late last month, the success of an idea made newspaper headlines. "Populism" was on the march. After the surprise victory of a Republican in the Massachusetts Senate race, a number of Democrats in the U.S. Senate swerved abruptly to the left, momentarily casting into doubt Ben Bernanke's second term as Federal Reserve chairman.

"Populist Backlash Puts Bernanke Under Siege," screamed a page-one headline in the Washington Post; those who read further would also have discovered that the "populist brushfire" was also responsible for the declining value of stocks. In a New York Times column published a few days later, David Brooks deplored "The Populist Addiction." The possibility that President Barack Obama would also fall to this advancing idea struck Washington Post columnist George Will as so cosmically wrong that he likened it to "Fred Astaire donning coveralls and clodhoppers."

What is populism? To judge by this coverage, populism is a trick that politicians perform—a clumsy disguise they adopt or a fake-folksy rhetorical line they try to put over. Populism is a species of demagogy, a backwoods form of class war, a sinister cross of Lenin with Li'l Abner.

Why bipartisanship can't work: the expert view

I got this note from someone with many decades' experience in national politics, about a discussion between two Congressmen over details of the stimulus bill:

"GOP member: 'I'd like this in the bill.'

"Dem member response: 'If we put it in, will you vote for the bill?'

"GOP member: 'You know I can't vote for the bill.'

"Dem member: 'Then why should we put it in the bill?'

"I witnessed this myself."

I wrote back saying, "Great story!" and got the response I quote below and after the jump. It is worth reading because its argument has the valuable quality of being obvious -- once it is pointed out.

No Help in Sight, More Homeowners Walk Away

By DAVID STREITFELD

Published: February 2, 2010

In 2006, Benjamin Koellmann bought a condominium in Miami Beach. By his calculation, it will be about the year 2025 before he can sell his modest home for what he paid. Or maybe 2040.

“People like me are beginning to feel like suckers,” Mr. Koellmann said. “Why not let it go in default and rent a better place for less?”

Whatever Happened to the Neocons’ Grand Schemes to Control Iraq’s Oil?

By Michael Schwartz, Tomdispatch.com
Posted on February 2, 2010, Printed on February 3, 2010
http://www.alternet.org/story/145522/

Americans have largely stopped thinking about Iraq, even though we still have approximately 110,000 troops there, as well as the largest "embassy" on the planet (and still growing). We've generally chalked up our war in Iraq to the failed past, and some Americans, after the surge of 2007, even think of it as, if not a success, at least no longer a debacle. Few care to spend much time considering the catastrophe we actually brought down on the Iraqis in "liberating" them.

Remember when we used to talk about Saddam Hussein's "killing fields"? The world of mayhem and horror that followed the U.S. invasion and occupation delivered new, even larger "killing fields" that we don't care to discuss, or that we prefer to consider the responsibility of the Iraqis themselves. Even with violence far lower today, Baghdad certainly remains one of the more dangerous cities on the planet. The bombs continue to go off there regularly and devastatingly, while the killing, even if not of American troops who rarely patrol any longer and are largely confined to their mega-bases, has not ended, not by a long shot; nor has the anger, suspicion, and depression that go with all of this.

Family Research Council Calls for Criminalization of Gay Sex

In an astounding exchange last night on MSNBC’s “Hardball” about the proposed repeal of the military’s “Don’t Ask, Don’t Tell” policy for LGBT service members, Family Research Council fellow Peter Sprigg called for the criminalization of all gay sex, whether in the military or not.

If you had any doubts about the relationship between the murderous proposed Anti-Homosexuality law in Uganda — a nation that has been the focus of anti-gay missionary activity by the U.S. religious right — and our home-grown demonization of LGBT people, they should be laid to rest by the video shown below.

The Second Great Depression Bogeyman

By Dean Baker - February 1, 2010, 12:50PM

Our political leaders continually assert that we should be thanking them that we are not in a second Great Depression rather than complaining about how bad things are. The second Great Depression theme came up repeatedly in the debate over the reappointment of Federal Reserve Board Chairman Ben Bernanke. It also featured prominently in Treasury Secretary Timothy Geithner's defense of his handling of the AIG bailout.

While we should all be thankful that we are not in a second Great Depression, just as we should be thankful that the world has not been destroyed by nuclear war, the "Great Depression" defense is a tool of fools and liars. Exactly what set of events in the world would have given us a second Great Depression, defined as a decade of double-digit unemployment?

The Bad Economics and Worse Political Science of Fiscal Retrenchment

I’m normally a skeptic about the power of ideas to change politics—I normally think of it all coming down to a hard-boiled clash of power and interests—but if you want a good example of Keynes’ theory that ideas matter a great deal, I think you can’t look much further than the current misguided global obsession with fiscal retrenchment.

Deficit Fever

By Digby
February 2, 2010 - 2:33pm ET

Suddenly, you can't turn around without getting a panicked lectureabout the deficit. But in all the discussions about the horrifying, worse-than-terrorism, scarier-than-nuclear-war threat to everything we hold near and dear, nobody ever seems to discuss the fact that much of the deficit is due to unemployment. (Gosh, it turns out that if everyone were working, they'd be paying more taxes and the government would have more money!) We are supposed to believe that the deficit stems from profligate spending on old people and undeserving little dark children who refuse to get a job.

Terror adviser: All Gitmo detainees who returned to terror released by Bush

By John Byrne
Tuesday, February 2nd, 2010 -- 12:15 pm

In a letter to congressional leaders released Monday, the counterterror chief for President Barack Obama says that a review has found that no detainees released on Obama's watch have returned to terror -- but that in cases where they may have, the Bush Administration was responsible.

Paul Krugman: Good and Boring

In times of crisis, good news is no news. Iceland’s meltdown made headlines; the remarkable stability of Canada’s banks, not so much.

Yet as the world’s attention shifts from financial rescue to financial reform, the quiet success stories deserve at least as much attention as the spectacular failures. We need to learn from those countries that evidently did it right. And leading that list is our neighbor to the north. Right now, Canada is a very important role model.

Yes, I know, Canada is supposed to be dull. The New Republic famously pronounced “Worthwhile Canadian Initiative” (from a Times Op-Ed column in the ’80s) the world’s most boring headline. But I’ve always considered Canada fascinating, precisely because it’s similar to the United States in many but not all ways. The point is that when Canadian and U.S. experience diverge, it’s a very good bet that policy differences, rather than differences in culture or economic structure, are responsible for that divergence.

How Bush's grandfather helped Hitler's rise to power

Rumours of a link between the US first family and the Nazi war machine have circulated for decades. Now the Guardian can reveal how repercussions of events that culminated in action under the Trading with the Enemy Act are still being felt by today's president

Ben Aris in Berlin and Duncan Campbell in Washington
The Guardian, Saturday 25 September 2004 23.59 BST

George Bush's grandfather, the late US senator Prescott Bush, was a director and shareholder of companies that profited from their involvement with the financial backers of Nazi Germany.

The Guardian has obtained confirmation from newly discovered files in the US National Archives that a firm of which Prescott Bush was a director was involved with the financial architects of Nazism.

His business dealings, which continued until his company's assets were seized in 1942 under the Trading with the Enemy Act, has led more than 60 years later to a civil action for damages being brought in Germany against the Bush family by two former slave labourers at Auschwitz and to a hum of pre-election controversy.

How the Pentagon Counts Coups in Washington

by Tom Engelhardt

Sometimes it pays to read a news story to the last paragraph where a reporter can slip in that little gem for the news jockeys, or maybe just for the hell of it. You know, the irresistible bit that doesn't fit comfortably into the larger news frame, but that can be packed away in the place most of your readers will never get near, where your editor is likely to give you a free pass.

So it was, undoubtedly, with New York Times reporter Elisabeth Bumiller, who accompanied Secretary of Defense Robert Gates as he stumbled [1] through a challenge-filled, error-prone [2] two-day trip to Pakistan. Gates must have felt a little like a punching bag by the time he boarded his plane for home having, as Juan Cole pointed out [3], managed to signal "that the U.S. is now increasingly tilting to India and wants to put it in charge of Afghanistan security; that Pakistan is isolated... and that Pakistani conspiracy theories about Blackwater were perfectly correct and he had admitted it. In baseball terms, Gates struck out."

CIA moonlights in corporate world

By: Eamon Javers
February 1, 2010 12:57 AM EST

In the midst of two wars and the fight against Al Qaeda, the CIA is offering operatives a chance to peddle their expertise to private companies on the side — a policy that gives financial firms and hedge funds access to the nation’s top-level intelligence talent, POLITICO has learned.

In one case, these active-duty officers moonlighted at a hedge-fund consulting firm that wanted to tap their expertise in “deception detection,” the highly specialized art of telling when executives may be lying based on clues in a conversation.

At National Prayer Breakfast, Obama to Address Shadowy Christian Group Tied to Uganda's 'Kill the Gays' Bill

By Adele M. Stan, AlterNet
Posted on February 1, 2010, Printed on February 1, 2010
http://www.alternet.org/story/145366/

The National Prayer Breakfast, an annual Washington exercise attended by politicians of all stripes who wish to demonstrate their piety, is one of those must-go events for the U.S. president, or so the conventional wisdom has it. Every president since Dwight D. Eisenhower has attended.

But the prayer breakfast, however benign it may seem on the surface, is really a display of power for an underground religious group that often shapes U.S. foreign policy in ways not easy to see, and sometimes at odds with the policy goals of the government. This Thursday, President Barack Obama is expected to address the gathering, as he did last year. But if there was ever a year for the president to have a sudden scheduling conflict, it's this one.

Frank Rich: The State of the Union Is Comatose

By FRANK RICH

Published: January 30, 2010

HANDS down, the State of the Union’s big moment was Barack Obama’s direct hit on the delicate sensibilities of the Supreme Court Justice Samuel Alito. The president was right to blast the 5-to-4 decision giving corporate interests an even greater stranglehold over a government they already regard as a partially owned onshore subsidiary. How satisfying it was to watch him provoke Alito into a “You lie!” snit. Here was a fight we could believe in.

There was more to admire in Obama’s performance as well. He did not retreat into the bite-size initiatives — V-chips, school uniforms — embraced by an emasculated Bill Clinton after his midterm pummeling of 1994. The president’s big original goals — health care, economic recovery, financial reform — remained nominally intact, as did his sense of humor. In a rhetorical touch William Safire would have relished, Obama had the wit to rush the ritualistic “our union is strong” so it would not prompt the usual jingoistic ovation.

Five myths about America's credit card debt

By Robert D. Manning

Sunday, January 31, 2010

They're yuppie food stamps. They give new meaning to the question "paper or plastic?" And they're in everyone's wallet. Americans have nearly 700 million all-purpose bank credit cards, plus nearly 500 million retail store cards -- and they have transformed how we live and consume. Today, Americans are more dependent on credit than savings, a radical departure from the last major economic crisis, in the 1930s. Congress's effort to change that, the Credit Card Accountability, Responsibility and Disclosure (CARD) Act signed by President Obama last spring, will go into effect in a few weeks. But it won't fix everything. Or maybe not much of anything. Here are the myths that muddle our understanding of how we've racked up so much credit card debt.

How to Reform Our Financial System

By PAUL VOLCKER

PRESIDENT OBAMA 10 days ago set out one important element in the needed structural reform of the financial system. No one can reasonably contest the need for such reform, in the United States and in other countries as well. We have after all a system that broke down in the most serious crisis in 75 years. The cost has been enormous in terms of unemployment and lost production. The repercussions have been international.

Aggressive action by governments and central banks — really unprecedented in both magnitude and scope — has been necessary to revive and maintain market functions. Some of that support has continued to this day. Here in the United States as elsewhere, some of the largest and proudest financial institutions — including both investment and commercial banks — have been rescued or merged with the help of massive official funds. Those actions were taken out of well-justified concern that their outright failure would irreparably impair market functioning and further damage the real economy already in recession.

Now the economy is recovering, if at a still modest pace. Funds are flowing more readily in financial markets, but still far from normally. Discussion is underway here and abroad about specific reforms, many of which have been set out by the United States administration: appropriate capital and liquidity requirements for banks; better official supervision on the one hand and on the other improved risk management and board oversight for private institutions; a review of accounting approaches toward financial institutions; and others.