Endorsement: Vote Row E for WFP

If you are a regular reader, then I expect that you can guess what I’m going to say when it comes to choosing the next president of the United States. If you call yourself a liberal, or a progressive, or a lover of individual liberty and reproductive choice; if you want quality, affordable healthcare to be accessible to all Americans, if you want to restore some modicum of equity to the tax code, and some degree of sanity to our foreign policy; if you want to approach energy independence and global warming with the seriousness and the urgency those matters deserve; if you want a government staffed with experts instead of ideologues that is led by a man who trusts his intellect enough to be intellectually curious—or even if you just want some portion of all this—then there is only one way to vote on Tuesday: Barack Obama for president.

BUT, if you live in New York, there are actually two ways you can vote for Obama—you can go the old, stodgy, predictable route, and pull the lever or mark your box for Barack Obama (D), Democrat, or, if you really, really believe in all that I laid out above, you can vote for Barack Obama (WFP), Working Families Party.

As I have discussed in elections past, New York has something called “fusion” voting; this allows a candidate to receive the endorsement of more than one party, and to be listed on the ballot under multiple party lines. All the votes for a single candidate, however, are combined to count for the final total. A vote for Obama on Row E—the Working Families Party line—counts just as much as a vote on the Democratic line. . .

. . . and more.

More, because the Working Families Party is more than a social club or the vestigial organ of some moribund New York political machine, the WFP is an active and organized party that has been fighting for progressive ideals for better than a decade. They stand for universal healthcare, tax equity, and equal representation under the law. They have lead fights for a living wage, for green jobs and green homes, and affordable housing. They advocate for better-funded public schools so that every child gets a quality education, no matter where he or she lives, and the public financing of elections to get the corrupting corporate money out of the system.

Earlier this month, WFP teamed with organized labor and local activists to protest New York City Mayor Mike Bloomberg and Speaker Chris “Quisling” Quinn’s naked power grab vis-à-vis term limit “extensions.” The effort did not prevent Bloomberg from buying enough influence on the City Council to win his rule change, but working together, the WFP and the people of NYC made a lot of noise and called a lot of attention to the undemocratic way that the mayor and speaker went about overriding the existing law. Because of this effort, the fight to unseat these arrogant plutocrats next year has a big head start.

By voting for Obama—and for other cross-endorsed candidates—on the Working Families line, you are showing candidate and country that you stand for these kinds of progressive ideals. A vote for BHO (WFP) Row E shows that you want our next president to embrace the progressive potential that has brought you to his side.

By voting for state candidates on the WFP line, you will help shape the next generation of New York politics. Democrats are poised to gain the majority in the state senate for the first time in over 40 years, and thus will control both houses of the legislature and the governor’s mansion. It will present a tremendous opportunity to reform a dysfunctional state government; a vote for the Working Families Party will give the left better leverage in the battles that lay ahead.

The Nation, The Albany Project, Daily Gotham, and Democrats.com have all endorsed a Row E WFP vote because they all know that strengthening the role of the Working Families Party is a solid step toward building a statewide progressive movement. Voting for Obama on the same line brings that voice to the national dialogue.

Barack Obama has promised change, and I truly believe that his election will noticeably transform the style and substance of our national leadership. What kind of change, how much change, and how directly that difference will affect the lives of hard working Americans, however, still hangs in the balance. The progressive direction advocated by the Working Families Party is the kind of change Democrats have been fighting for lo these many months and years—it is change we can believe in.

Vote Row E.


UPDATE: Thanks to the courts, we have a late-breaking exception to this rule in Western New York—NY-26, to be specific. Please vote for Democrat Alice Kryzan on the Democratic line.


(cross-posted on guy2k, The Seminal, and Daily Kos)


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NYT endorses Obama; makes a mistake

Easy, easy. . . there’s a semicolon up there. . . so, please, just read on.

In a lengthy editorial, published Friday, the New York Times endorsed Barack Obama for president:

The United States is battered and drifting after eight years of President Bush’s failed leadership. He is saddling his successor with two wars, a scarred global image and a government systematically stripped of its ability to protect and help its citizens — whether they are fleeing a hurricane’s floodwaters, searching for affordable health care or struggling to hold on to their homes, jobs, savings and pensions in the midst of a financial crisis that was foretold and preventable.

As tough as the times are, the selection of a new president is easy. After nearly two years of a grueling and ugly campaign, Senator Barack Obama of Illinois has proved that he is the right choice to be the 44th president of the United States.

Mr. Obama has met challenge after challenge, growing as a leader and putting real flesh on his early promises of hope and change. He has shown a cool head and sound judgment. We believe he has the will and the ability to forge the broad political consensus that is essential to finding solutions to this nation’s problems.

In the same time, Senator John McCain of Arizona has retreated farther and farther to the fringe of American politics, running a campaign on partisan division, class warfare and even hints of racism. His policies and worldview are mired in the past. His choice of a running mate so evidently unfit for the office was a final act of opportunism and bad judgment that eclipsed the accomplishments of 26 years in Congress.

Well, I could quibble with just what the Times might call McCain’s accomplishments, for most are ephemeral or singularly self-serving, but that is nothing to get too up in arms about really. Within a generation, John McCain’s “career,” for lack of a better term, will be reduced to an interesting footnote; the editorial’s reference to “accomplishments” might be little more than a rhetorical flourish.

Instead, I take umbrage at an assumption quite casually tossed out in the section of the endorsement labeled “National Security”:

The American military — its people and equipment — is dangerously overstretched. Mr. Bush has neglected the necessary war in Afghanistan, which now threatens to spiral into defeat. The unnecessary and staggeringly costly war in Iraq must be ended as quickly and responsibly as possible.

While Iraq’s leaders insist on a swift drawdown of American troops and a deadline for the end of the occupation, Mr. McCain is still talking about some ill-defined “victory.” As a result, he has offered no real plan for extracting American troops and limiting any further damage to Iraq and its neighbors.

Mr. Obama was an early and thoughtful opponent of the war in Iraq, and he has presented a military and diplomatic plan for withdrawing American forces. Mr. Obama also has correctly warned that until the Pentagon starts pulling troops out of Iraq, there will not be enough troops to defeat the Taliban and Al Qaeda in Afghanistan.

[emphasis added]

While I wholeheartedly advocate a quick end to the US occupation of Iraq, even if the next president engineers that exit, there will not be enough troops to defeat the Taliban and Al Qaeda in Afghanistan—because as numerous experts, General McKiernan, and even Barack Obama understand, there is no military solution to the problems in Afghanistan.

While I personally find it infuriating enough that it is accepted as dogma that the US invasion of Afghanistan in 2001 was moral, necessary, and unavoidable (if our goal was to apprehend Osama bin Laden, other options were on the table), it is now even more exasperating to hear talk of escalation in that theater treated as if it were America’s strategic “big duh” moment. The Times’ asserted consensus ignores both recent experience and centuries of history, but, even more concretely, it ignores the current debate.

Take, for example, former New York Times Berlin and Istanbul Bureau Chief Stephen Kinzer, writing earlier this month in the Boston Globe:

The McCain-Obama approach to Afghanistan, like much of US policy toward the Middle East and Central Asia, is based on emotion rather than realism. Emotion leads many Americans to want to punish perpetrators of the Sept. 11, 2001 attacks. They see war against the Taliban as a way to do it. Suggesting that victory over the Taliban is impossible, and that the United States can only hope for peace in Afghanistan through compromise with Taliban leaders, has been taken as near-treason.

. . . .

In fact, long-run success in Afghanistan - defined as an acceptable level of violence and assurance that Afghan territory will not be used for attacks against other countries - will only be possible with fewer foreign troops on the ground, not more.

A relentless series of US attacks in Afghanistan has produced "collateral damage" in the form of hundreds of civilian deaths, which alienate the very Afghans the West needs. As long as the campaign continues, recruits will pour into Taliban ranks. It is no accident that the Taliban has mushroomed since the current bombing campaign began. It allows the Taliban to claim the mantle of resistance to a foreign occupier. In Afghanistan, there is none more sacred.

The US war in Afghanistan also serves as a recruiting tool for Al Qaeda. It is attracting a new stream of foreign fighters into the region. A few years ago, these jihadists went to Iraq to fight the Great Satan. Now they see the United States escalating its war in Afghanistan and neighboring regions of Pakistan, and are flocking there instead.

Civilian deaths alienating a local population, the honor inherent in resisting a foreign occupier, a US presence serving as a recruiting tool for Al Qaeda—it all should sound chillingly familiar to even the most casual news consumer (no less a newspaper). It certainly seems to for at least one US Senator. . . and that one would be Russ Feingold:

We need to ask: After seven years of war, will more troops help us achieve our strategic goals in Afghanistan? How many troops would be needed and for how long? Is there a danger that a heavier military footprint will further alienate the population, and, if so, what are the alternatives? And – with the lessons of Iraq in mind – will this approach advance our top national security priority, namely defeating Al Qaeda?

. . . .

Regardless of whether we send more troops, we need to understand that, as in Iraq, there is ultimately no military solution to Afghanistan's problems. Unless we push for diplomacy and a regional approach, work to root out corruption, stamp out the country's narcotics trade, and step up development and reconstruction efforts, Afghanistan will probably continue its downward trajectory.

Not every paragraph of the Feingold piece is as clear as the ones above (if those are even that clear); in many ways, Feingold hedges his bets by refusing to rule out options and posing much in the form of questions. But at least he is asking a question. The New York Times (and, to an extent, the man that they endorsed) has not.

To be fair to Obama, I think he has made it pretty clear that he is a stronger advocate for multinational, diplomatic solutions than either Bush or McCain. But the nature of that diplomacy is yet undefined, while the “need” for more US troops in Afghanistan is a stated given. If and when a President Obama must make his plans more concrete, he would do well to enlist Feingold as an ally, and let the Democrat from Wisconsin ask him the questions quoted above. Obama would also be well served by talks with people who think like Kinzer:

Even if the United States de-escalates its war in Afghanistan, the country will not be stable as long as the poppy trade provides huge sums of money for violent militants. Eradicating poppies is like eradicating the Taliban: a great idea but not achievable. Instead of waging endless spray-and-burn campaigns that alienate ordinary Afghans, the United States should allow planting to proceed unmolested, and then buy the entire crop. Some could be turned into morphine for medical use, and the rest destroyed. The Afghan poppy crop is worth an estimated $4 billion per year. That sum would be better spent putting cash into the pockets of Afghan peasants than firing missiles into their villages.

Deploying more US troops in Afghanistan will intensify this highly dangerous conflict, not calm it. Compromise with Al Qaeda would be both unimaginable and morally repugnant, but the Taliban is a different force. Skillful negotiation among clan leaders, based on a genuine willingness to compromise, holds the best hope for Afghanistan. It is an approach based on reality, not emotion.

Perhaps the New York Times editorial board should give Kinzer a call as well.

* * *

But the Times actually needn’t go out of house. Here’s Nicholas Kristof from their own editorial pages:

Our intuitive approach to fighting terrorists and insurgents is to blow things up. But one of the most cost-effective counterterrorism methods in countries like Pakistan and Afghanistan may be to build things up, like schooling and microfinance. Girls’ education sometimes gets more bang for the buck than a missile.

A new study from the RAND Corporation examined how 648 terror groups around the world ended between 1968 and 2006. It found that by far the most common way for them to disappear was to be absorbed by the political process. The second most common way was to be defeated by police work. In contrast, in only 7 percent of cases did military force destroy the terrorist group.

I quoted Kristof in a post last August. I also quoted Iliana Segura, who looked at the same RAND study and also applied it to Afghanistan:

If the United States really wants to improve the situation in Afghanistan, it should start by ending the occupation. It should then cough up money for humanitarian aid and reconstruction. (One estimate puts the tab at $10 billion.) This is not just for the sake of Afghanistan, but for the sake of Americans as well, who are no safer today than they were when the planes hit the towers. Ending the occupations of Iraq and Afghanistan is the first, crucial step in that elusive goal of "winning hearts and minds" that the United States claims to be so committed to in the region. As Iraq has demonstrated, occupying armies are not a deterrent to terrorism. Occupying armies breed terror.

Most important, it's time to stop thinking of Afghanistan as the "right front" of the so-called "War on Terror" -- an idea that has been perpetuated by everyone from Barack Obama to Jon Stewart (who idiotically told Colin Powell in 2005, "the Afghanistan war, man did I dig that. I'd like to go again") -- and start questioning the legitimacy of the "War on Terror" itself. . . .

"Terrorists should be perceived and described as criminals, not holy warriors, and our analysis suggests that there is no battlefield solution to terrorism," wrote Seth Jones, the lead author of the study. "Military force has rarely been the primary reason for the end of terrorist groups, and few groups within this time frame achieved victory."

I added my own two cents to those two fine columns, but you can go back and read those with a simple click. I expect Barack Obama has at least glanced at that RAND report; what could it hurt to sit down with Kristof and Segura, too?


(cross-posted on The Seminal)

The wages of sin: your wages, their sin

Now that our great and glorious leader Michael Bloomberg and Council Speaker Christine Quinn Quisling have succeeded in their power play, here’s a little question to consider this fine fall weekend: at what cost?

I am not asking about the political cost, which is, in many ways, immeasurable—at least as yet—I am talking about the real cost in New York City tax dollars that have already gone or will have to go quite literally to pay homage to our new born king. For along with the millions upon millions that have already been spent out of the mayor’s publicly financed slush fund to buy the votes he needed on the City Council (an impeachable offense, as best I can tell), NYC will now have to spend more taxpayer dollars to defend itself against the lawsuits that naturally had to arise from this extralegal end run around the city charter (two have already been filed, with the promise of more on the way).

It will certainly be in the millions of dollars—how many millions, I can’t say. I doubt anyone in the city government would dare give an estimate.

But, millions and millions of city dollars have been spent, and millions and millions of city dollars will be spent. . . all so that we can keep Mike Bloomberg and his supposedly irreplaceable expertise in place to guide the city through the dire fiscal crisis to come.

* * *

By the way, Mike and Chris caught the eye and ire of the national media on Thursday, making Keith Olbermann’s list of Worst Persons in the World.




(cross-posted on Daily Kos, guy2k and The Seminal)

Liar, liar

Sensing a groundswell of increasingly organized opposition to the Bloomberg-Quinn term limits override plan, City Council Speaker Christine Quinn has rush-scheduled a vote on the proposal for tomorrow, Thursday, 10/23.

A new Quinnipiac poll shows a “dramatic swing” away from support for billionaire Bloomberg’s power grab: 51% of NYC voters now oppose a third term for Mayor Mike, up from 42% just two weeks ago. The same poll revealed that city residents prefer changing the term limits law through referendum by a whopping 89% to 7%.

Bloomberg could probably buy himself another election, but has continued to push his cheaper plan. As detailed yesterday, the mayor has used both public dollars from a previously secret slush fund, and donations from his philanthropies to buy what he thinks is enough support inside the City Council to avoid a less predictable plebiscite.

Democracy is messy. Bloomberg is famously phobic of messy.

You know what else can be messy? The facts. So, naturally, Hizzoner (his dishonor?) doesn’t like them, either:

Asked about the public’s preference that term limits be decided through referendum, Mr. Bloomberg said it was too late and too legally problematic to call for a special election or referendum. He also dismissed suggestions that he chose to work through the Council since he could be more confident of the result.

“I’m not trying to manipulate the system for an outcome,” he said, during an event at the P.S. 1 Contemporary Art Center. . . .

He then hightailed it back to City Hall. . . where he continued to meet in private with nominally wavering council members.

One of those who had been officially undecided, Peter Vallone Jr., decided—he’ll stay bought support the mayor.

“I’m doing what I think is right,” said Mr. Vallone, the son of a former City Council speaker who is also an avid supporter.

Vallone then said, “If you’ll excuse me, I have to go back to counting my money.”

Metaphorically, anyway. Vallone Jr. received $400,000 from Bloomberg’s slush fund (making him the third largest beneficiary), and has been granted a discretionary budget of $1.1 million—about twice the council average—for both 2008 and 2009.

I guess if you take the second-term councilman’s statement to mean that he is doing what he thinks is right for himself, then I guess that Vallone isn’t a liar. . . so I would still need a second liar to justify my headline. . . .

Well, there is billionaire Republican Ronald Lauder, who (as previously mentioned) bankrolled the previous two term limit referendums. Lauder has publicly decided that in Bloomberg’s case, his previous efforts shouldn’t count:

It was Mr. Lauder’s money and advocacy that originally paved the way for term limits, and it was only recently that Mr. Bloomberg convinced a reluctant Mr. Lauder that the economic crisis necessitated a third term for the mayor. In exchange for Mr. Lauder’s support, Mr. Bloomberg promised him a seat on a charter revision commission that would probably try to restore the two-term limit in a subsequent referendum, likely in 2010.

“I believe very strongly that the mayor should get the extra term and the City Council should get a third term,” Mr. Lauder said in an interview. “That is part of the deal. But I never spoke about the first-term council members.”

Well, actually, Lauder is being kind of honest there, isn’t he? He is publicly announcing to all the world that he cut a deal with Michael Bloomberg. Yes, that’s right, the laws can change because two billionaires made a deal.

But only for the mayor and some of the council members—not the first term-ers. Gosh, that’s not how the deal is being sold by Council Speaker Chris Quinn. As she sells tells it, the one time extension to three terms applies to the mayor, the whole council, and the city’s comptroller, public advocate, and five borough presidents. Could the City Council be voting Thursday on something other than what they’ve been told?

I think we’ve found our second liar.


(cross-posted on guy2k and The Seminal)

Impeach Bloomberg

And, while you’re at it, impeach Quinn, Markowitz, Felder, Recchia, Valone, Dilan, and Sears, too.

I know I should learn more about the rules and bylaws that govern New York City’s impeachment process—and maybe I’ll get to that later—but right now I don’t care. All I know is that there is already a stack of stories on how Mayor Michael Bloomberg has used both personal and public funds in a covertly choreographed attempt to buy the support he needs to override the city’s term limits law, and he can no longer be trusted as an honest steward of our interests.

He has also used our tax dollars for his master plan, so, beyond being forced from office, he probably belongs in jail.

Someday. . . I’ll call upon you to do a service for me. . . .

It has now been reported that Bloomberg and/or Deputy Mayors Linda Gibbs, Edward Skyler, and Kevin Sheekey (all New York City employees, paid with tax dollars, in case that’s not obvious) placed calls to at least five community, arts, and neighborhood groups that had received city contracts and/or large donations from Bloomberg’s private philanthropies. The mayor and his deputies asked if those organizations might testify before the City Council on behalf of Bloomberg, or lobby council members behind he scenes to vote for the mayor’s position postponing term limits.

One leader of a civic group made it clear that it was an offer they couldn’t refuse.

Yet, when representatives from these organizations testified before the council late last week, none revealed their financial ties to Bloomberg.

It has also been revealed that money from the mayor’s previously secret slush fund (it was discovered in June after a similar, City Council Speaker slush fund was exposed) was disproportionately ferried to City Council members who sit on the committee that must first approve Bloomberg’s third term scheme before it can come to a vote before the entire council.

City Council Speaker Christine Quinn, a close ally of the mayor who made her support known last week, and Brooklyn Borough President Marty Markowitz, a vocal advocate for the Bloomberg plan, were also recipients of supersized amounts of Mayor Mike’s munificence.

And, just to reiterate, this largess is public money. It is from a kitty funded by New York City taxpayers.

Does not pass the smell test

Not surprisingly, two mayoral hopefuls are not pleased:

“It is an abuse of power, and it must stop,” said the city’s top financial watchdog, the New York City comptroller, William C. Thompson Jr., who may run for mayor next year.

Representative Anthony D. Weiner, another likely candidate for mayor, said that “if you rely on the mayor or the administration to fund your organization, saying no when the mayor calls is not an option.”

Mr. Bloomberg’s tactic, he said, “walks right up to the line of coercion, and it’s very corrosive.”

But there are plenty of others from many different sectors that find these abuses equally (or even more) untoward:

Kenneth Sherrill, a political science professor at Hunter College, said it was inappropriate for the mayor to be asking the groups that are so dependent on his good graces to take a position on his legislation.

“It’s distasteful. And what’s distasteful about it is leaning on weak people — people who are vulnerable,” Mr. Sherrill said. “The problem is in the implicit threat that if you don’t help, we’re going to remember.”

….

Fred Siegel, a professor of history at Cooper Union who has studied New York City politics for decades, said Mr. Bloomberg had cynically “reversed the flow of money” in politics to build the illusion, if not the reality, of widespread support.

“The traditional politicians are bought by special interest groups, but Bloomberg buys special interest groups,” he said.

But wait, there’s more:

Mr. Bloomberg’s critics argue that changing term limits will not expand choice because it will all but guarantee his re-election, given his willingness, in two previous campaigns, to spend $80 million to win the office.

Gene Russianoff, a senior lawyer for the New York Public Interest Research Group, said that asking groups who receive city money to support the term limits bill “looks like an administration desperately abusing its power to stay in office. It just does not pass the smell test.”

Betsy Gotbaum, New York City’s public advocate, called the tactic “wrong.” She added, “You have the right to give all the money you want, but because you give support, you shouldn’t have to get support.”

Well, “you”—meaning Billionaire Bloomberg—might have the right to give all you/he wants. . . of his money! But if public funds are allocated on a quid pro quo, that would be not just smelly, but almost certainly illegal.

And, though not yet illegal, perhaps we need a law that requires full disclosure of financial ties from those testifying before public bodies. There needs to be some counter balance, some disincentive for this and future mayors and their client organizations.

Mike Bloomberg’s obscene wealth and the way he used it to pollute the electoral process has always been problematic (to say the least), but this current power play has crossed a new and more dangerous line. The use of personal funds to create the illusion of widespread support and to, let’s face it, bribe public officials should probably be made illegal. The use of taxpayer dollars to do the same sorts of things almost certainly already is.

Forget a third term; Mayor Bloomberg should not be allowed to finish his second.

(h/t DM)


(cross-posted on guy2k, The Seminal, and Daily Kos)

November 5th comes early:Newsweek’s conservative cover story tries to make winners out of losers, and vice-versa

It is paragraphs like this one that make it hard to get all dewy-eyed over the predicted death of the dead-tree media:

So are we a centrist country, or a right-of-center one? I think the latter, because the mean to which most Americans revert tends to be more conservative than liberal. According to the NEWSWEEK Poll, nearly twice as many people call themselves conservatives as liberals (40 percent to 20 percent), and Republicans have dominated presidential politics—in many ways the most personal, visceral vote we cast—for 40 years. Since 1968, Democrats have won only three of 10 general elections (1976, 1992 and 1996), and in those years they were led by Southern Baptist nominees who ran away from the liberal label. "Is this a center-right country? Yes, compared to Europe or Canada it's obviously much more conservative," says Adrian Wooldridge, coauthor of "The Right Nation: Conservative Power in America" and Washington bureau chief of the London-based Economist. "There's a much higher tolerance for inequality, much greater cultural conservatism, a higher incarceration rate, legalized handguns and greater distrust of the state."

Writing the cover story for the October 27th issue of Newsweek, Jon Meacham wastes his magazine’s ink and its readers’ time arguing that the United States is (and always has been) a right-of-center country, and will continue to be, no matter what happens two weeks from Tuesday. Should Obama attempt to govern otherwise, Meacham opines, there will be hell to pay—most notably by the new President himself.

It is, firstly, an editorial masquerading as news—and that alone should earn Newsweek’s editors a harsh reproach—but the sheer number of factual and logical errors in Meacham’s screed, compounded by the dialectic straw men, sins of omission, and an over-reliance on conservative columnists and frustrated, fading DLC-ers for the framing of his argument, should make the news weekly’s entire subscriber base wonder if there aren’t cheaper ways to line a birdcage.

Let’s start with the paragraph above (though many others would prove my point equally as well). Twice as many people might “call themselves conservatives as liberals,” but when a self-described conservative can just as easily be a Wall Street CEO pocketing his bailout billions as he can be “Joe the Plumber” simultaneously relishing and ruing his fifteen minutes, I’m not sure what lesson we are supposed to learn from such a “fact.” (Further, as is mentioned in the piece, Rick Perlstein notes that after a generation of equating “liberal” with “all that is distasteful and alarming,” that side of the ID equation is messed up, as well.)

The real truth, as it has been for some time now in poll after poll, is that on the issues, American voters are what we used to call “liberal,” or “left-of-center,” or now might call “progressive.” Be it on the role of government, on minimum wage, on tax equity, the environment, universal healthcare, or stem cell research, the population of America is allied with the Democrats—and not so-called conservative or centrist Democrats, but progressive Democrats. On the supposedly more difficult and divisive issues like equal rights and pay for women, racial minorities, and homosexuals, the upholding of Roe v. Wade, and licensing requirements for guns, the preponderance of evidence again says that Americans are, in reality, liberal, whether they call themselves such or not.

That the United States does not elect presidents by popular vote should give anyone pause before declaring that the Oval Office is an accurate bellwether of our collective political proclivity; that fewer than half that could vote do vote should render it a non sequitur. In addition, it is hard to argue on the one hand that the Democrats that won the White House did so because they did not attach themselves to core Democratic ideals, but then contend on the other that their defeats and failures were rebukes of the Democratic Party.

I can’t dispute that parties on the European left are a measure further to that end of the spectrum than the US Democrats are as a party, but as many of the poll numbers alluded to above will show, the American people might be much closer to their European brethren than Meacham’s lot would care to believe. And, to Meacham’s use of Adrian Wooldridge, since when is “a much higher tolerance for inequality, much greater cultural conservatism, a higher incarceration rate, legalized handguns and greater distrust of the state”—even if true—an admirable space for a people to inhabit?

Almost every paragraph in the article is worthy of this multipoint takedown. For the sake of argument, let’s sample one more:

Like the apostles of Jesus who expected their Messiah to return in triumph before they themselves died, many liberals are almost certain to be disappointed in a President Obama. "I think right now people are in a pragmatic mood, not an ideological mood," says David Axelrod, Obama's chief strategist. Perhaps, but on the off chance that ideology is on the mind of a voter or two, Axelrod's candidate has taken care to avoid the L word. Obama opposes gay marriage; talks about tax cuts, God and veterans' benefits; and is spending money to try to remain competitive in traditionally Republican states such as Virginia, North Carolina and even West Virginia, where Hillary Clinton trounced him earlier this year. "I think he will govern a little right of center," says Harold Ford Jr., the former Tennessee congressman and chairman of the Democratic Leadership Council. "He is not an ideologue."

Some number of liberals might, after a certain amount of time, indeed find themselves disappointed or frustrated with a President Obama should he fail to realize and take advantage of his political moment—but if they are, they will have a lot of company. If the electorate is left wanting—if Obama is stymied by obstructionist blocs in Congress, or just fails on his own to push hard enough for the change he seems to promise—then they might show less enthusiasm come the 2010 midterms. But that will not be because Obama was too much the liberal Democrat—it will be because he was not able to deliver the progressive policies that the majority want and perhaps will soon expect.

In that regard, Obama could be the next Clinton (though I hope that this will not be the case). However, keep in mind that when I make this comparison, I am seeing Clinton as a failure not because he was too liberal, but because his first two years failed to make real the liberal benefits he promised during his 1992 campaign.

As for avoiding the “L” word, if Meacham were to be taken at face value, if Americans are not keen to call themselves “liberals,” then why on earth would a smart candidate use that word? And that is doubly so when you understand that the term is as meaningless as it is problematic.

Let’s use Meacham’s own metric: Sure, Obama is on record as a opposing “gay marriage,” but he is, as are a majority of Americans, pro civil unions, and Obama is also staunchly opposed to the federal “defense of marriage” act. Legally defining marriage as solely the union between one man and one woman is the conservative position; Obama is opposed to that position—and America is, too.

Obama talks about tax cuts. . . for the middle class—a segment that has been squeezed by the conservative approach to tax policy. Obama is also just as open about advocating a return to pre-Bush tax rates on those making over $250,000, or the top few percent of the entire country. It is the conservatives—for lack of a better word—that want to extend the inequitable, failed, and unpopular Bush tax cuts for the wealthiest among us.

As for God and veterans’ benefits—since when are either of those the province of conservatives? In fact, in the case of the veterans, it has been the Democrats who have pushed for more and better equipment in the field, and more and better care at home. It has been the conservative Republicans who have opposed these efforts every step of the way, up to and including the new GI bill.

That Obama is now spending money and making campaign stops in “Virginia, North Carolina, and even West Virginia” (especially when he doesn’t necessarily need these states to win) doesn’t mean that he is acting less like a liberal—it means that voters in those states are noticeably turning away from Republican conservatives. That this bit of “analysis” made it into the final version of this article is only slightly more astounding than the idea that Jon Meacham, after submitting it, still has a job.

Meacham’s quoting Harold Ford Jr., a man desperately trying to stay relevant (and if he has to undermine his nominally fellow Democrats, so be it) is hardly worth mentioning. But it is worth mentioning what almost no one in the establishment media ever does: that conservative Democrat Ford was the only Democratic candidate for Senate in 2006 to lose his contest.

This is all but a sample of the inanity that is supposed to sell copies of Newsweek this week, but it would be too easy to just point at it—and its author—and roll on the floor laughing our asses off. Meacham, Ford, Ronald Brownstein, and David Brooks, and even those conservatives like Christopher Buckley that have more openly embraced Obama, are scrambling to remake the next president in something akin to their own image, even before he is elected. It’s a rough job—trying to both claim that they played a part in Obama’s post-partisan success while pre-chastising him for refusing to embrace the failed ideology of the conservative movement—but establishment outlets like Newsweek, the New York Times, CNN, and the National Journal are all proving up to the task. Without a substantial pushback from the other side—the liberal side—claptrap like Meacham’s might become a policy trap for the Democrats.

Newsweek does offer an asymmetrical counterpoint to Meacham’s “news” story. In a shorter article, indeed labeled “counterpoint” (a dismissive appellation, I must note—Meacham gives us a “news” item, while this is mere “opinion”), Jonathan Alter argues that “We’re heading left once again.” Where Meacham grandstands for caution, Alter contends that if Obama pulls his punches, he can’t possibly win the fight to re-right and de-right the country.

Alter points to FDR, who used his first 100 days to push bold and sweeping government initiatives. The depression might have lasted another eight years, but Roosevelt showed that he had heard the voters, that he was on their side, and demonstrated just what an engaged government acting in the public interest could do for its people.

We are again at a place where a president could and should do what FDR did, much to the chagrin of Meacham and the movement conservative minority. That they are in fact an unpopular minority shouldn’t be in doubt—just look at Newsweek.com’s lists of most viewed and most e-mailed stories. In both cases, Alter’s “The country is heading leftward” is number one; Meacham’s “We’re a conservative country” is number two.

Is there any doubt on which side the presidential winner should be?


(cross-posted on Daily Kos and The Seminal)

Continuity this!

OK, I’ve put it off long enough. . . I suppose it is time for me to give up my copper on New York City Mayor Michael Bloomberg’s little plan to abrogate override extend term limits, allowing him to run for buy another four years in office.

I probably have more than two cents to add. . . I probably should have been down at the City Council hearings on Thursday, watching the goings on in the packed, stuffy room, impatiently waiting the 10, 12, 14 hours it might have taken for them to get to my two minutes of “fame.” But, truth be told, I had to spend 20 hours fighting with Time Warner about my dead internet connection, and, truth be told again, I was afraid that if I went, I would wind up with my own set of plastic bracelets. . . .

Yes, I am that angry. (I was that angry with Time Warner, too, but I had the benefit of being able to just slam the phone down when I though I was getting out of control.)

Let me just say straight out: I hate, hate, hate term limits. I believe that they are undemocratic. I believe they deny we the people the opportunity to fully exercise our franchise. In other words, I believe we already have term limits—they’re called elections.

Yes, we have a problem of entrenched incumbents, we do, but they are entrenched because incumbency can too easily become an entrée to influence peddling. It gives politicians easy access to powerful, moneyed interests who are all too happy to spread the wealth (sorry, Johnny Mac) in exchange for tax breaks, zoning changes, pay-to-play contracts, and a myriad of other secret-handshake and/or look-the-other-way deals.

But the way to end all this numismatic noblesse oblige is not to force out the good with the bad. Incumbency in-and-of itself is not a bad thing. There is a lot to be said for a professional government, one with institutional memory, one that knows how to grab the reigns of power, build coalitions, plumb the obscure depths of the law, and actually get things done on behalf of the electorate. And I believe that there are incumbents who behave in just that manner. . . and many who might even do more for their constituents if it weren’t for the incessant necessity of raising money for the next election.

Unless, of course, you are so disgustingly rich that you don’t have to work on that level—but more on that later. . . .

Term limits are a blunt instrument (dare I say “a hatchet?”); a quick fix that isn’t really a fix at all. And, perhaps worse, they are cynical. Inherent in the term limits equation is the assumption that all politicians are the same, and that this same is something just this side of pond scum. If I believed that, I would probably never vote again. I have a feeling that for some in the ruling class, it would be just fine if my cohort and I went to just such an unhappy place. “Democracy” is so much more manageable when most of us turn off, tune out, and stay home.

Instead of encouraging such cynicism, I’d rather we discourage the cronyism. Full public financing of political campaigns—coupled with laws and initiatives that protect, ease, and encourage near universal participation of those eligible to vote—would go a long way toward solving both the problem of incumbent-coddling influence peddling and the problem of the supremely wealthy simply buying their way in.

So, if term limits disappeared tomorrow, and we could start working on public financing and universal participation, well, that would very much calm my jangled nerves.

So, yeah, I hate term limits. . . but, you know what? I think I hate Mike Bloomberg—and, now, City Council Speaker Christine Quinn—even more.

Don’t get me wrong, if those two—the tweedle deaf and tweedle dumb of this current battle—were actually proposing to do away with term limits altogether, and to do it by putting it to a popular vote (because the term limits were imposed by popular vote), I would probably hold my nose and salute. (What kind of salute? Well, uh, let’s move on. . .) If Mayor Mike would spend half as much as he did to get elected (or reelected—when he spent even more) to campaign for the repeal of term limits rather than glad handing, arm twisting, and featherbedding his way to a city council majority, I bet he could get the result he wanted.

(The fact of the matter is, we only really have term limits because another billionaire, Republican and failed gubernatorial candidate Ronald Lauder (with some help from conservative billionaire and failed gubernatorial candidate Tom Golisano), flooded the airways and mailboxes of New York with pro-term limit propaganda. They outspent the anti-term limits groups by such a factor as to render them invisible. It was not a fair fight; it was not—thanks to the corrupting influence of money—an honest plebiscite. Ironic, no?)

But Bloomberg—previously a staunch defender of a two-term limit—has not done that. He actually said he thought that a popular vote would be “distracting” and “messy.” Democracy is a bitch (when you’re rich). The mayor has instead chosen to pursue the cleaner (cheaper?) route: a mere 26 members of the City Council.

Step one toward corralling the 26: include them in on the deal.

Oh, and I should probably mention what that deal is.

What it is not is an abolition of term limits. No. It is simply an extension of term limits. A one-term extension. Oh, and, not forever, either. Nope. It is a one time, one term extension.

Because that’s the deal that Bloomberg had to cut with Ron Lauder to keep him—and his money—on the sidelines.

Is this all feeling creepy enough for you yet? Wait, there’s more.

With much of the City Council also about to be term limited out of office, they have a dog in the fight, too—a lap dog.

It’s another of the problems with term limits. By the time you make a name for yourself in city politics, by the time you build connections or coalitions, by the time you have enough alliances to, say, get elected Speaker of the council, it’s the legally mandated time to leave. If you want to continue in city politics, you have to change jobs. But there are only so many jobs to go around—Mayor, Borough President, maybe Comptroller. That’s not really enough to give everybody a chance to achieve “greatness,” or even, just maybe, build a couple of new libraries or push for a change in the tax laws.

Christine Quinn, for instance, has been running for mayor pretty much from the day she was elected Speaker. She has to—she’s in her last term. Several other council members also would like to sow a few more seeds; part of the deal that Quinn struck to get the Speaker’s gavel was to agree to take up term extensions.

Quinn commissioned a private poll. The numbers didn’t look good; it would reflect badly on Quinn if she pushed it. So, she let the issue of an extension quietly drop.

This time around, Speaker Quinn waited ten days from the mayor’s official announcement before she publicly decided to side with Bloomberg. That shouldn’t be a surprise. Quinn, who had fought the Mayor on several issues in her pre-Speaker days, has been thisclose to Millionaire Mike for the last three years.

But that’s not really why you shouldn’t be surprised. I have a feeling Quinn spent those ten days doing some other polling. Already well behind US Representative Anthony Weiner in fundraising, Quinn might have seen that she would lose not only to Weiner, but also to City Comptroller William Thompson, if a Democratic Mayoral primary were held today.

Realizing that she had nowhere to go but nowhere, Quinn took a meeting (or two) with Bloomberg, and a deal was cut. I have no idea what that deal might look like—OK, I have some idea—but pretty much only Chris and Mike are pretending there is no Quinn pro quo.

So, we have Mayor Bloomberg, a man who a few years back threatened to veto a term limit extension, and Speaker Quinn, a woman who pretended to think this over, now united in extending term limits for themselves, for just this once. . . . And get this, this is what really has me. . . they are doing it for us.

It’s the economic crisis, you see—a cataclysmic event so distractingly perfect if it weren’t real, they’d have to create it. (Wait a minute there. . . oh, never mind.)

Apparently, in times this desperate, this scary—this undercapitalized—there is only one billionaire that can save us. Only one, one, one!

Absurd, ridiculous, insulting even—I mean, really fucking insulting—but that’s not the worst of it. Both Bloomberg and Quinn have said that in these troubled times we need a “continuity of government.”

Continuity of government. Now, I know, its taken me a long time to get here, but it is the use of this term that would have had me screaming and waving my finger at council members should I have been crazy enough to head downtown. That term, continuity of government, is what we in democracies talk about when we talk about the transition from one elected officeholder to another. Continuity of government refers to the system, not to the people. It refers to the rule of law—and how it does not change at the mere whim of the current executive—because (and, beware, I am going to go all caps on you) WE HAVE A GOVERNMENT OF LAWS; NOT A GOVERNMENT OF MEN!

To use “continuity of government” to mean the polar opposite is positively (negatively) Orwellian. Worse, it is. . . well, like with the salute, I won’t go there. . . .

Let’s just say that it is not leadership through a crisis. And it is certainly not what those of us who truly, passionately, and objectively hate term limits advocate for: democracy.

No, instead, it is part and parcel of the problem that gave us this economic crisis. It is plutocracy—the rule of a society by its wealthiest members. And it is this continuation of such rule that Billionaire Michael Bloomberg is trying to ram down the throats of New Yorkers under the war-equals-peace, poverty-equals-wealth twisting of the term, the concept, the ideal of continuity of government.

Well, Michael—and Christine—continuity this!

[Insert the gesture of your choice]


(cross-posted on The Seminal and Daily Kos)

Mr. Hanky’s reverse Midas touch

I have, in recent days, taken to calling Treasury Secretary Henry “Hank” Paulson Mr. Hanky, not because of any complex metaphor, but more because I just knew he was full of shit. Well, thanks to his most recent actions, Hank has given my allusion a new, improved accuracy.

As discussed in recent days, Paulson changed his position on stock injection, and decided to use $250 billion of bailout money to pump equity into troubled banks. He made his announcement after Still President Bush broke the ice for him on Tuesday morning. . . which was a day after Hank made the directors of America’s nine largest banks an offer they couldn’t refuse. . . .

Or so the story goes.

The thing is, it was an offer that the bankers couldn’t refuse, but not in that Godfather way. It was an offer they couldn’t refuse because the deal was so sweet!

As Dean Baker noticed:

[T]here is a big issue about the terms under which they were given capital. Secretary Paulson decided that a 5 percent rate of return on preferred share was good enough for the taxpayers. Warren Buffet got a 10 percent return for his investment.

No one would confuse Henry Paulson for Warren Buffet, but come on -- he could get a 4.0 percent return buying treasury bonds. I can't believe that he had such bad business sense when he was CEO of Goldman Sachs.

And a commenter on Baker’s post noticed even more:

[I]t's not just the 5% "coupon" (dividend, technically), that marks this as bad relative to the Buffet deal. Buffet received an equivalent amount ($5 billion) of favorably-priced common stock warrants that he can exercise anytime during the next five years. The rough plan for Paulson, as I understand it, is for the Treasury to get warrants equal to just 15% of the preferred stock injection.

Also striking is how different this is than the Treasury-AIG deal. I understand that the AIG bailout was for different purposes -- AIG was going immediately bankrupt whereas the solvency of the banking system over the next, say, 24 hours, is relatively assured (with diminishing levels of confidence the farther one goes out) -- but the Treasury charged AIG for its loan facility a rate of LIBOR + 8.5%. While I understand that there is a difference between a loan and a preferred stock purchase, they are not all that different: preferred stock is like a bond, but with fewer recovery protections, and like a stock for capitalization purposes, but it doesn't share in the broader common stock market gains. The important point with the present Paulson action is, to my eye, that the Treasury picked a very low fixed rate for a LONG time (five years!) without reference to LIBOR.

OK, kind of technical there, but the point is clear: Paulson took what was a fairly good idea as structured by Gordon Brown (or even by Warren Buffet), and turned it into shit. Don’t believe me, check out what investors thought (again from Baker):

The markets gave Paulson's investment strategy a big thumbs down from the taxpayer perspective. Goldman Sachs shares jump 10.7 percent after the details were made public. Shares of Bank of America rose 16.4 percent and Citigroup's stock rose 18.2 percent. Obviously the market thinks that Paulson gave the banks a really good deal.

Conversely, the United Kingdom’s big three all saw their stock prices fall after Brown exchanged equity for preferred and common shares and exercised their voting rights to make changes in bank leadership.

(This might sound a little counterintuitive, but if you are not a board member of a bank, you actually want to see this result, at least in the short term. It actually means that screwing up has repercussions—which means less of that “moral hazard” that so many of the serious set warn us about when plans to help those facing home foreclosure are mentioned.)

The former King of Goldman has turned what was his Midas touch when it came to private capital, and turned it into the reverse for his public service. Even when shown a golden blueprint by the UK, Paulson’s fingerprints changed the result into a shitpile.

So, congratulations, Mr. Hanky, the Treasury Poo, you’ve now wholly embraced your nickname. Alas, it is the rest of us that are left holding the bag. . . .


(cross-posted on The Seminal)

How cute. . .

Hank is going to let Bush pretend he’s still in charge. . . .

The Treasury Department, in its boldest move yet, is expected to announce a plan on Tuesday to invest up to $250 billion in banks, according to officials. The United States is also expected to guarantee new debt issued by banks for three years — a measure meant to encourage the banks to resume lending to one another and to customers, officials said.

And the Federal Deposit Insurance Corporation will offer an unlimited guarantee on bank deposits in accounts that do not bear interest — typically those of businesses — bringing the United States in line with several European countries, which have adopted such blanket guarantees.

. . . .

Treasury Secretary Henry M. Paulson Jr. outlined the plan to nine of the nation’s leading bankers at an afternoon meeting, officials said. He essentially told the participants that they would have to accept government investment for the good of the American financial system.

Of the $250 billion, which will come from the $700 billion bailout approved by Congress, half is to be injected into nine big banks, including Citigroup, Bank of America, Wells Fargo, Goldman Sachs and JPMorgan Chase, officials said. The other half is to go to smaller banks and thrifts. The investments will be structured so that the government can benefit from a rebound in the banks’ fortunes.

President Bush plans to announce the measures on Tuesday morning. . . .

Henry Paulson, who himself had to be dragged kicking and screaming to this equity injection plan, worked out the details in private with the biggest players on Monday. . . and then kept it on the QT so that Still President Bush could come out on Tuesday morning and make it seem like he had some role to play in all this.

He didn’t.

Truth is, Mr. Hanky didn’t much either. Democrats in Congress inserted the language (over Paulson’s objections) in the TARP bill that gave Treasury the authority to do this; Paulson then did nothing for ten days, until markets tanked, credit got tighter, and UK PM Gordon Brown got most of the Europe on board with a similar plan. Hank Paulson is just desperately trying to keep up.

Meanwhile, Hank’s old pals at Goldman Sachs have cut a deal with New York state to headquarter their newly configured full-service bank in New York City. So, they get more from the federal government, and a state tax break, too.

How cute.


(cross-posted on The Seminal)

We are not amused

Something you might have missed amid the economic chaos and last week’s broader slime slinging—I, myself, have just noticed this item:

This week, hundreds of absentee ballots were sent out to voters who are registered in Rensselaer County with the names of two presidential candidates on them: John McCain and Barack Osama. Yep, that's right, Osama.

Both Democratic and Republican officials insist this is a typo, but according to the Albany Times-Union, everyone feels pretty embarrassed. Roughly 300 voters received the ballots. "Is it a Freudian slip, intentional act or a mistake?" asks the paper. "Voters are sure to have opinions, and one pol pointed out that the letters 's' and 'b' are not exactly keyboard neighbors."

Missing from this item on NY Mag’s Daily Intel is any information about who received these ballots or what is being done to make sure that those voters receive fresh ballots with the actual name of the Democratic candidate (I won’t humor them by calling it “the correct spelling”). In fact, you are looking at the sum total of the whole, droll post—minus one sentence.

I say “droll” because that is how Chris Rovzar, the author, wants us to see it.

Here’s that other sentence:

Is it weird that during this freakishly contentious week, a minor screwup like this seems kind of fun?

No, it is not “weird.” Nor is it “minor.” Nor is it necessarily a “screwup,” now, is it? These tainted ballots might seem like a small event when compared with Sarah Palin’s violent rhetoric or the massive efforts to discredit the election by inventing charges of voter “fraud” in several battleground states, but it is far from “fun.” It is extremely hard to believe that this is a “typo” since the way a name is to be listed on a ballot is a multi-step process that involves a back-and-forth between the candidate’s campaign, the Secretary of State, and the locale for which that ballot is designed and printed, and as noted, the letters are not next to each other on a keyboard. In a year with such heightened sensitivities, this is not something likely to just slip through.

A look at the original story from the Albany Times Union has Rensselaer County officials swearing otherwise, and the Obama campaign has accepted their explanation. There will be some attempt made to replace the bad ballots, according to officials, though the story is not clear on how this will happen. One additional concern beyond the obvious taint—there is a fear that some folks will attempt to correct the spelling themselves on their ballot. “Election law is quite clear that any corrections done on a ballot will nullify the vote,” says a county official. . . see the problem? If the ballots are not replaced, and the people who care about the proper name of the Democrat in the race try to fix it, it will not only negate their vote for president, it will nullify the entire ballot. (Most of Rensselaer County is in NY-20, where frosh Democrat Kirsten Gillibrand was once thought vulnerable, but is now expected to win reelection. The county executive has been a Republican since the post was created in 1972.)

But back to the questionable jocularity of the Obama/Osama substitution. . . . It is much more likely that this is a symptom of the larger and growing problem spreading like a virus throughout the country: the persistent definition, identification, or categorizing of Senator and maybe President Barack Obama as “other,” somehow not American, somehow illegitimate.

As likely as it now seems that Obama will be elected our next president, it is probably even more likely that a group of movement conservatives are going to refuse to accept or acknowledge that result. Claiming that Obama is secretly in league with those that wish America ill is laying the groundwork for a perpetual campaign against a sitting, elected president. It will be an orchestrated effort like we saw during Clinton’s second term, but on a Wagnerian scale.

The movement will not do one thing; they will do many things. Claiming voter fraud and media bias, claiming Obama’s victory isn’t a mandate because McCain wasn’t a real conservative and ran such a poor campaign, claiming that, yes, Obama is a Muslim, or an Arab, or heaven forbid, both!

Sending out ballots printed “Barack Osama” is neither the biggest nor the sneakiest of these efforts, but it is not nothing.

And it is certainly not “fun.”


(cross-posted on The Seminal)

What’s the opposite of leadership?

When last we spoke, the Dow was starting Friday in freefall while all eyes turned to a meeting of the G7 called by the chief executive of the United States, George W. Bush Henry Paulson. During the course of Friday, the Dow did a bit of a rollercoaster rebound, but I am not going to tell you it was because investors were expecting x or y from the G7 or the US Treasury Department, or because there was some bargain hunting, or because Mercury was in retrograde. (I utterly despise this kind of Stock Market analysis—it’s post-hoc hooey—so when you catch me doing it, and I assure you I will, take it with appropriate measures of sodium.)

What happened next? Well, the G7 released an abysmal document pledging future efforts, sunshine and lollipops, etc., but when it came to the details of actually doing something, one can sum it all up with, “splunge!” The next day, the IMF mostly followed the G7’s “lead.”

That was all very bad news.

As I wrote last week, economists out here in the real world had coalesced around a “stock injection” or “equity injection” plan, coupled with government guarantees on interbank loans—essentially a partial nationalization of banks willing to enter into the bargain—as the best way to quickly loosen up the credit market (and, ideally, provide time for more and better long-term changes to our global economic systems). It was an option that Hank Paulson rejected outright in late September. However, language permitting an equity injection was inserted into the $700 billion bailout signed into law ten days ago.

Still, Paulson did nothing last week to use that new authority. Never mind asking about the actual president of the United States. . . what was he up to? (You can’t see me, but I’m tipping my head back and pointing my right thumb toward my mouth while mimicking gulping sounds.) Well, there were those morning pep talks. . . zheesh!

Prime Minister Gordon Brown of the UK, however, did float the idea of equity injection and guarantees last Wednesday—and, late Sunday night, Brown made the float flesh, moving to pump 50 billion quid into British banks, and guarantee interbank lending, to boot. The European Union appears to be following suit.

Lo and behold, Hong Kong, European, and London markets are up sharply this morning. (You see, I told you I’d do it.) (Afternoon update: the Dow is also up sharply. The US and Japanese exchanges have Monday off.)

Which all raises an interesting question: If Brown came to Washington’s G7 confab with the equity plan in tow, and we now see that the EU was ready to go along with that framework, then why was the G7’s statement so unproductively obtuse? In other words, who prevented the G7 from simply issuing a statement saying, “What Gordon said”?

Hmmm. . . .

There is, clearly, only one possibility—Why, hi-de-ho, it’s Mr. Hanky!

And perhaps even more amazing, today, Monday, after the UK and EU have taken decisive action, the US Department of Treasury has let it be known that they will maybe, probably start injecting some of our bailout billions directly into banks in exchange for equity. . . but they have not issued any instructions or details of how, or who, or when, and they are offering this without the other part of the Brown plan, the guarantees!

What is Paulson’s rationale? What is the opposite of leadership? (Again, forget about “the leader of the free world”—and again, head tipped back, glug, glug, glug.)

Paulson fought against getting this authority, and now, once granted it, despite movement from economies much smaller than “his,” he still drags his feet. Contrast this with Hammerin’ Hank, say, September 17, hyperventilating and threatening the end of civilization as we know it if he didn’t get his 70 billion Benjamins to spend however he pleased. How can we explain the difference?

Well, as we seem to have to say too much these days, we can’t know what is in a man’s heart. . . but might the behavior gap have something to do with the ideological purity of this administration, and the company Paulson supposedly left behind to gallantly take over at Treasury?

Yeah, that was a rhetorical question.

First, the Bush Administration’s—hell, the whole Republican/Conservative movement’s—“private good, public bad,” “markets know best” philosophy not only helped usher in this nightmare, it lead to a stunning inability to entertain any viable solutions.

Second, from the beginning (or before the beginning) of this credit calcification and market tumble, it seems that Treasury has worked to protect, and even enrich, Goldman Sachs.

Just look at some of this: Lehman Brothers, a direct competitor of Goldman, was allowed to fail. Treasury said it had to draw a line. But a week later, the government steps in to save AIG by injecting capital (at first $80 billion; now well over $100 billion) in exchange for equity. It turns out that AIG owed Goldman something like $30 billion—in fact, a representative from Goldman Sachs was in the room when the AIG bailout was being negotiated.

With the big five investment banks reduced to the big two, many expected Goldman would be the next to go. Investors start shorting Goldman stock. The government’s response? Ban all short selling (not just naked short selling, as some had recommended).

That was quickly revealed to be a disastrous move for a variety of reasons, and the ban was lifted. Paulson went back to demanding his near trillion dollar blank check so that he could buy toxic assets off the hands of banks. . . investment banks included. Never mind that Paulson never was able to explain how that plan would actually solve the problems at hand.

All of this dicking around took weeks, of course; weeks where markets tanked, credit froze, jobs were lost, and the whole mess, by most accounts, grew worse and more expensive to fix.

By the way, there is a downside to the equity injection plan—that is if you own bank stock. If you own shares in a bank that opts in to an injection plan, a bank like, maybe, say, Goldman Sachs, the value of your shares will be diluted because the bank will have to issue additional preferred shares to exchange for government capital.

You don’t think that might adversely affect Hank’s “blind” trust, or the coffers of many of Paulson’s pals, now, do you?

I guess that’s a kind of leadership.


. . . .

Congratulations to Paul Krugman, Nobel Laureate.



(cross-posted on Daily Kos and The Seminal)

Paul Krugman, Hank Paulson, and me

Why, it seems like only yesterday (but was, in fact, Monday) that I was wondering out loud about the chances the US Treasury would exercise an option written into the final version of the bailout law to demand stock in exchange for the money funneled to the banks. This so-called “stock injection” plan sounded to me like the preferable way to spend our $700 billion (give or take), seeing as it gives the government some real equity in exchange for our real cash, it is has both longstanding (FDIC) and recent (AIG) precedent, and could provide for some of that accountability demanded by most of us on streets named other than Wall.

Well, on Wednesday, New York Times columnist/Princeton economist Paul Krugman, and, as you will read, UK PM Gordon Brown, gave my laymen’s interpretation a little street cred:

Readers ask what I think should be done about the financial crisis. The answer is, what Gordon Brown in doing in Britain: a bailout, yes, but one that gives the government an ownership stake in the bailed-out institutions. That plus a serious fiscal stimulus plan that includes emergency aid to state and local government.

The Brown plan, by the way, is 50 billion pounds; scaled by GDP, that would be the equivalent of a $500 billion plan here. The headline number would be smaller than the Paulson plan, but the probable effectiveness much, much greater. Not so incidentally, my reading of the TARP as passed is that thanks to the equity participation provisions, it could be converted into a version of the Brown plan at the Treasury secretary’s discretion; let’s hope that he does so discrete, or something like that, as soon as possible.

Which leads us to Thursday morning’s revelation.

Having tried without success to unlock frozen credit markets, the Treasury Department is considering taking ownership stakes in many United States banks to try to restore confidence in the financial system, according to government officials.

Treasury officials say the just-passed $700 billion bailout bill gives them the authority to inject cash directly into banks that request it. Such a move would quickly strengthen banks’ balance sheets and, officials hope, persuade them to resume lending. In return, the law gives the Treasury the right to take ownership positions in banks, including healthy ones.

. . . .

The American recapitalization plan, officials say, has emerged as one of the most favored new options being discussed in Washington and on Wall Street. The appeal is that it would directly address the worries that banks have about lending to one another and to other customers.

This new interest in direct investment in banks comes after yet another tumultuous day in which the Federal Reserve and five other central banks marshaled their combined firepower to cut interest rates but failed to stanch the global financial panic.

Now, I don’t know if Paulson had something like this in the back of his mind all the time (it wasn’t exactly spelled out in the original “three-page plan”), or if someone like Senator Chris Dodd or Senator Chuck Schumer clued him in to what was added to his authority; I don’t know if Hank checks out Planet Money, Paul Krugman, any of a number of other fine economist bloggers, or me (OK—pretty sure he doesn’t check out me). . . or if the Secretary of the Treasury just has no other flipping idea what to do. . . but Paulson let the idea of equity for injection slip out in a press conference late Wednesday. . .

Now, I will pull back the curtain just a touch, and confess that all of the above was written about 24-hours ago—so what has happened since?

Well, the short answer is: Nothing.

OK, let me be a little less short. The Dow dropping another 678 points is not nothing—the industrials average is now off 40% from its record high exactly one year ago. The Nikkei is in full-on panic mode—it suffered its worst one-day loss in 21 years on Wednesday, and is plunging more as I write this. European markets are also opening with big, big losses. The feds guaranteed AIG another 38 billion samolians because they have almost burned through their initial $80 billion.

And John McCain has revised his merely crappy half-assed mortgage proposal (scrubbing from his website the line about buying mortgages at their current, lower values) so that it is now a completely terrible half-assed proposal. . . wait, that is pretty much nothing.

But the other things—the continued downward rush of economic indicators (including things like the LIBOR and the TED Spread—neither of which I dare try to explain because I barely understand it all myself)—those are something. . . something that makes one want to do, uh, something.

Unless you are Secretary of the Treasury, Henry Paulson. . . because, as best I can tell, he has done (and here’s why I use this word) nothing.

What is now weeks after Hammerin’ Hank and Sideshow Bob Bernanke laid it all (supposedly) on the line and warned Congressional leaders that if they didn’t act immediately (immediately!), we would have no economy to rescue, and weeks after those Congressional leaders and Still President Bush and much of the establishment media all lit their own hair on fire to reify the bubble boys’ hysterical frame, and, now, a week after said Congress and president gave Paulson all he could have wanted, and, frankly more, what has the SecTreas done?

Weeeeeelllllllllllllllllll. . . he has appointed a (another) Goldman Sachs alum to start designing some sort of system to purchase the shitpile of bad. . . you know I was going to say “assets,” but that just doesn’t seem like the right word anymore, especially when you are not only dealing with subprime mortgages but intangible gambler’s chits like credit default swaps. Anyway, there is now a guy working on a plan—maybe some sort of reverse auction, maybe just a way to shrink wrap bricks of 10,000 $100,000 bills—that should be ready in, eh. . . four or five weeks.

As mentioned by me, and even floated by Paulson, Hank now has the authority to give banks a direct cash infusion in exchange for equity—so why is he sitting on his hands?

I have read that Paulson might have caught deflationary disease. This is the idea that things are rapidly losing value—so, why buy some chunk of equity today, when the same amount of money could get you a bigger chunk tomorrow? Sounds like a sound investment strategy, right? Well, if you were a traditional investor, maybe. . . but the federal government wasn’t empowered by the bailout bill to act as an investor—at least that’s what I thought—supposedly, this “TARP” was supposed to be thrown quickly over this drowning pool. . . . OK, enough with the metaphors—Paulson is supposed to use this money and his new authority to backstop the financial system, to loosen up credit markets, to buoy investor confidence (there is some debate about whether that third point is a good idea).

Instead, it seems like the Treasury Secretary, after yelling “Fire!” (new metaphor, sorry) in a crowded theater, is now watching everyone stampede out (trampling many on the way), and waiting until the fire gets big enough to justify his earlier histrionics.

Of course, some will argue that it was behavior very much like this that helped transform the Crash of 1929 into the Depression of 1933.

And, of course, none of this—none—does the first thing to help the here-and-now, day-to-day economic problems of working or formerly working Americans.

So, what now, mes amis? (Wow, I’m like the French John McCain!)

It seems most economists agree that Paulson needs to use his stock injection authority, and pronto. He needs to give the banks a good chunk of change with the understanding that they will, in turn, start lending again. The US government will get bank stock in exchange—but I want to make sure that we taxpayers get preferred stock, and, I’ll go further and demand voting shares. Without voting shares, it will be impossible for the government to ensure that banks act in the interests of the American people and the global economy. Everybody claims they want accountability—exchanging cash for voting shares is the way to get that accountability. (Of course, this assumes that we have a government that acts in the interests of its people—big assumption, I know.)

Then—and this is equally important—Congress needs to come back and pass some real economic stimulus. No, I am not talking about some winky tax rebate—too small and too slow. I, as mentioned before, support a FICA holiday on the first $10,400 earned by every working American (because this will start putting money in the pockets of those that need it most starting the same week that such a law was enacted), coupled with New Deal-style programs to support and educate the poor, repair our nation’s aging infrastructure, and begin planning and building the electronic infrastructure needed for this information century.

Or, at least, find a way to put real money quickly in the pockets of those hit hardest by this recession (yes, we can now use that word without qualifiers)—then come back in late January with a new Democratic president and bigger majorities in Congress, and pass a full, new New Deal, adding affordable healthcare for all, tax equity, and investment in post-hydrocarbon technologies and green jobs to the programs mentioned above.

OK, more backstage news: I wrote up to this point, and before posting, I decided to open up (electronically speaking) Friday’s New York Times, and read what Paul Krugman had to say. Well, surprise, surprise:

[K]ey policy players have largely wasted the past four weeks. Now they’ve reached a moment of truth: They’d better do something soon — in fact, they’d better announce a coordinated rescue plan this weekend — or the world economy may well experience its worst slump since the Great Depression.

. . . .

[W]hen Mr. Paulson announced his plan for a huge bailout, there was a temporary surge of optimism. But it soon became clear that the plan suffered from a fatal lack of intellectual clarity. Mr. Paulson proposed buying $700 billion worth of “troubled assets” — toxic mortgage-related securities — from banks, but he was never able to explain why this would resolve the crisis.

What he should have proposed instead, many economists agree, was direct injection of capital into financial firms: The U.S. government would provide financial institutions with the capital they need to do business, thereby halting the downward spiral, in return for partial ownership. When Congress modified the Paulson plan, it introduced provisions that made such a capital injection possible, but not mandatory. And until two days ago, Mr. Paulson remained resolutely opposed to doing the right thing.

But on Wednesday the British government, showing the kind of clear thinking that has been all too scarce on this side of the pond, announced a plan to provide banks with £50 billion in new capital. . . together with extensive guarantees for financial transactions between banks. And U.S. Treasury officials now say that they plan to do something similar, using the authority they didn’t want but Congress gave them anyway.

The question now is whether these moves are too little, too late. I don’t think so, but it will be very alarming if this weekend rolls by without a credible announcement of a new financial rescue plan, involving not just the United States but all the major players.

And Krugman finishes with this cheery bit of encouragement:

[T]he time to act is now. You may think that things can’t get any worse — but they can, and if nothing is done in the next few days, they will.

So, with that, I think I better wrap this up and post it—the economic situation is evolving rapidly, and, who knows, Hank might need some ideas!


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I would be terribly remiss if I did not recommend that everyone interested in these sorts of things read this amazingly comprehensive post by Stirling Newberry. Yes, it is long, but it provides a level of insight and clarity too scarce during this time of economic turmoil. Stirling gives us a great deal of history and makes proposals far more radical than mine. I was going to quote a little, but I can’t possibly do it justice, so please click on over and give it a look.



(cross-posted on Daily Kos)