The Obama Conspiracy Theory Challenge

Leslie Savan @ The Nation


Currently playing:Serengeti Dennehy

Health Care Crucible: Public or Private?

Fits over health care reform at congressional Town Halls around the country have dominated the cable news for the past week, so the Pres weighs in with a NY Times Op-Ed. Perhaps it’s his measured style, or intended to counter the “loud voices,” but it comes off too lukewarm. Once the hysterical opposition talk about “death panels” and, gasp, “socialism” (“We gotta stop this madness before we turn into Russia,” one woman stammered in frustration. It’s still the Cold War! Later the same lady admitted on some cable news show that she didn’t hear a word of what Arlen Spector said in response to her question) blows over it’s going to come down to costs. How is this thing going to be paid for? Universal coverage means increased costs. Meaning: higher premiums. Making it illegal to deny people coverage because of their medical history is going to increase costs. Meaning: higher premiums. It is extremely hard to believe that cutting wastes and inefficiencies (networking records, bundling payments for doctor care, etc), as good as these ideas might be, will cover these increases in costs. Taxing the rich might get us universal health care but it won't stop inflation in health care premiums and costs. Or let me put that more directly: based upon what evidence could we possibly believe that health insurance companies given this scenario will NOT continue to raise premiums? Backroom handshakes w/ Big Pharma? Over the last decade or so health care premiums paid by people, families, has grown three times faster than wages. The measures to keep the insurance companies accountable that Obamacare is now talking about, at the height of the debate, involve coverage issues but not, seriously, costs. Sure, I think everybody should have access to basic health care. But Obama is still pulling punches w/ the corporations, and has apparently given up on the importance of the public option, or in his words, "keeping the insurance companies honest." Come on, the profit gouging will continue without a not-for-profit public option to keep the private insurance companies, yep, honest on costs. The NY Times prints some University of Chicago economist (also something in the Washington Post)explaining why any public option (under a "fair" set of regulations)would not impact health care costs significantly. His case is not convincing. How is it all those European countries and Canada get way more "care" for the buck than we do after all? Tell me it has nothing to do w/ the fact that as public services they don't have to pay CEO and managerial supersalaries or hundreds of millions of dollars on advertising and lobbying the government? So, apparently, we're going to get universal health care and more inflationary health care preminums and costs. This is the great democratic compromise on the table at the moment. And when costs do blowup it will be blamed on Obamacare, of course. Wall Street is going to be O’s undoing, I'm just saying.

Currently playing: Best of Tom Ze

Happy Birthday, America!

I Hear America Singing, by Walt Whitman

I hear America singing, the varied carols I hear;
Those of mechanics--each one singing his, as it should be, blithe and strong;
The carpenter singing his, as he measures his plank or beam,
The mason singing his, as he makes ready for work, or leaves off work;
The boatman singing what belongs to him in his boat--the deckhand singing on the steamboat deck;
The shoemaker singing as he sits on his bench--the hatter singing as he stands;
The wood-cutter's song--the ploughboy's, on his way in the morning,
or at the noon intermission, or at sundown;
The delicious singing of the mother--or of the young wife at work--or of the girl sewing or washing--Each singing what belongs to her, and to none else;
The day what belongs to the day--At night, the party of young fellows, robust, friendly,
Singing, with open mouths, their strong melodious songs.


America, by Cluade McKay

Although she feeds me bread of bitterness,
And sinks into my throat her tiger's tooth,
Stealing my breath of life, I will confess
I love this cultured hell that tests my youth!
Her vigor flows like tides into my blood,
Giving me strength erect against her hate.
Her bigness sweeps my being like a flood.
Yet as a rebel fronts a king in state,
I stand within her walls with not a shred
Of terror, malice, not a word of jeer.
Darkly I gaze into the days ahead,
And see her might and granite wonders there,
Beneath the touch of Time's unerring hand,
Like priceless treasures sinking in the sand.

America, by Allen Ginsberg

America I've given you all and now I'm nothing.
America two dollars and twenty-seven cents January 17, 1956.
I can't stand my own mind.
America when will we end the human war?
Go fuck yourself with your atom bomb
I don't feel good don't bother me.
I won't write my poem till I'm in my right mind.
America when will you be angelic?
When will you take off your clothes?
When will you look at yourself through the grave?
When will you be worthy of your million Trotskyites?
America why are your libraries full of tears?
America when will you send your eggs to India?
I'm sick of your insane demands.
When can I go into the supermarket and buy what I need with my good looks?
America after all it is you and I who are perfect not the next world.
Your machinery is too much for me.
You made me want to be a saint.
There must be some other way to settle this argument.
Burroughs is in Tangiers I don't think he'll come back it's sinister.
Are you being sinister or is this some form of practical joke?
I'm trying to come to the point.
I refuse to give up my obsession.
America stop pushing I know what I'm doing.
America the plum blossoms are falling.
I haven't read the newspapers for months, everyday somebody goes on trial for
murder.
America I feel sentimental about the Wobblies.
America I used to be a communist when I was a kid and I'm not sorry.
I smoke marijuana every chance I get.
I sit in my house for days on end and stare at the roses in the closet.
When I go to Chinatown I get drunk and never get laid.
My mind is made up there's going to be trouble.
You should have seen me reading Marx.
My psychoanalyst thinks I'm perfectly right.
I won't say the Lord's Prayer.
I have mystical visions and cosmic vibrations.
America I still haven't told you what you did to Uncle Max after he came over
from Russia.
I'm addressing you.
Are you going to let our emotional life be run by Time Magazine?
I'm obsessed by Time Magazine.
I read it every week.
Its cover stares at me every time I slink past the corner candystore.
I read it in the basement of the Berkeley Public Library.
It's always telling me about responsibility. Businessmen are serious. Movie
producers are serious. Everybody's serious but me.
It occurs to me that I am America.
I am talking to myself again.
Asia is rising against me.
I haven't got a chinaman's chance.
I'd better consider my national resources.
My national resources consist of two joints of marijuana millions of genitals
an unpublishable private literature that goes 1400 miles and hour and
twentyfivethousand mental institutions.
I say nothing about my prisons nor the millions of underpriviliged who live in
my flowerpots under the light of five hundred suns.
I have abolished the whorehouses of France, Tangiers is the next to go.
My ambition is to be President despite the fact that I'm a Catholic.
America how can I write a holy litany in your silly mood?
I will continue like Henry Ford my strophes are as individual as his
automobiles more so they're all different sexes
America I will sell you strophes $2500 apiece $500 down on your old strophe
America free Tom Mooney
America save the Spanish Loyalists
America Sacco & Vanzetti must not die
America I am the Scottsboro boys.
America when I was seven momma took me to Communist Cell meetings they
sold us garbanzos a handful per ticket a ticket costs a nickel and the
speeches were free everybody was angelic and sentimental about the
workers it was all so sincere you have no idea what a good thing the party
was in 1835 Scott Nearing was a grand old man a real mensch Mother
Bloor made me cry I once saw Israel Amter plain. Everybody must have
been a spy.
America you don're really want to go to war.
America it's them bad Russians.
Them Russians them Russians and them Chinamen. And them Russians.
The Russia wants to eat us alive. The Russia's power mad. She wants to take
our cars from out our garages.
Her wants to grab Chicago. Her needs a Red Reader's Digest. her wants our
auto plants in Siberia. Him big bureaucracy running our fillingstations.
That no good. Ugh. Him makes Indians learn read. Him need big black niggers.
Hah. Her make us all work sixteen hours a day. Help.
America this is quite serious.
America this is the impression I get from looking in the television set.
America is this correct?
I'd better get right down to the job.
It's true I don't want to join the Army or turn lathes in precision parts
factories, I'm nearsighted and psychopathic anyway.
America I'm putting my queer shoulder to the wheel.


Obama and I do email (although I get the eerie feeling he isn’t reading mine)—
Jack --

This weekend, our family will join millions of others in celebrating America. We will enjoy the glow of fireworks, the taste of barbeque, and the company of good friends. As we all celebrate this weekend, let's also remember the remarkable story that led to this day.

Two hundred and thirty-three years ago, our nation was born when a courageous group of patriots pledged their lives, fortunes, and sacred honor to the proposition that all of us were created equal.

Our country began as a unique experiment in liberty -- a bold, evolving quest to achieve a more perfect union. And in every generation, another courageous group of patriots has taken us one step closer to fully realizing the dream our founders enshrined on that great day.

Today, all Americans have a hard-fought birthright to a freedom which enables each of us, no matter our views or background, to help set our nation's course. America's greatness has always depended on her citizens embracing that freedom -- and fulfilling the duty that comes with it.

As free people, we must each take the challenges and opportunities that face this nation as our own. As long as some Americans still must struggle, none of us can be fully content. And as America comes ever closer to achieving the perfect Union our founders dreamed, that triumph -- that pride -- belongs to all of us.

So today is a day to reflect on our independence, and the sacrifice of our troops standing in harm's way to preserve and protect it. It is a day to celebrate all that America is. And today is a time to aspire toward all we can still become.

With very best wishes,

President Barack Obama

July 4th, 2009

P.S. -- Our nation's birthday is also an ideal time to consider serving in your local community. You can find many great ideas for service opportunities near you at http://www.serve.gov.

Reply: Thanks for the holiday wishes, President Obama. Right, I should do more, I’ll get right on that. BTW, could you ask your friends on Wall Street to do a little more to serve their communities— as opposed to extorting money from them? A more perfect union means you have to stop this long cycle of fucking over the little guy with deregulatory greed and regressive taxes. More equality, less greedy hustle. Be sure who your friends are, Mr. President. Thank you very much. Best, Jack.


Currently playing: "Poker Face," Lady Gaga

Can Wall Street Play By The Rules?

About time, sheesh. Now I await some insider analysis as to whether this is the real deal or some cover justification for more bailout money. We'll see.

Obama Proposes a First Overhaul of Finance Rules

Currently playing: "My Heart Is Open," Keith Urban

Grading O's First 100 Days

The grading period ended last Wednesday. Grades are due. Another crunch time for teachers. After 100 days, somewhere between a quarter and semester in school time, and admittedly not very much time at all in the grindingly slow speed of democracy in our nation’s capitol, Obama is like the student who you think is doing fantastic. A standout member of daily class. Regularly engaged in group discussions, he always has clever, thoughtful things to say. In collaborative activities he assumes leadership responsibilities, suggesting creative solutions to problems and pushing the group work forward. But then when grading, looking back over records of assigned work (fulfilled campaign promises?), you note they have not turned in much and what they have turned in were the simplest tasks requiring the least effort.

Establishing conservative plans to close Guantanomo and exit Iraq, getting a stimulus bill passed (that is too small), opening relations with Cuba, and releasing some memos that authorized torture during the Bush years. Welcome deeds but nothing very substantial.

Worse yet is when you pause to consider more closely the new Pres’s comments on, say, education, a subject close to my home. O’s stimulus bill includes, reportedly, the most money for education ever in an annual federal budget. One of its stated goals is to reduce job losses in education from the economic crisis. But the losses have already started. Cuts locally are being announced weekly without any word from the feds. Another round of cuts in the school district where I work is scheduled for May 15th.

O has repeated an intention that the stimulus money contribute to reforming our troubled public school system. How? Charter schools and merit-pay pop up in his spare remarks like talismans. Without clarifying details these aren’t just bad ideas but, frankly, old hat and dangerously stupid. Charter schools within the public school system, as alternatives programs (e.g., smaller schools, lower teacher-student ratios, more flexible schedules, etc) to the comprehensive high school, are a fine idea. Both comprehensive high schools and alternative programs have their place and should compliment each other in meeting the varied needs of students passing through the ruthless popularity contest and emotional minefield that is teendom. Charter schools as an end-run around teacher unions, however, by profiteering corporations seeking access to public education funding only undermines public education. (O, BTW, sends his own kids to private schools.) Early reports suggest O’s Education Secretary Arne Duncan might be no better than Bush’s Rod Paige. It’s no small irony that in these times of economic crisis public education is going to be saved, again, by corporate conceits.

Merit pay is an even bigger can of worms. Linking teaching pay to student economics—the lower the student economic demographic the higher the pay— makes some sense: certainly, in my experience, the lower the economic demographic, for a host of reasons, the greater the learning challenges and so the more difficult the teaching work. But so far O’s allusions link teacher merit-pay to standardized test scores. This would be idiotic on multiple fronts: 1) Foremost, the pressure to game the system (don’t forget Paige’s so-called “Texas Miracle”); 2) The contested reliability of standardized testing, in general; 3) The impracticality of linking annual test scores from year-to-year to a teacher without looping teacher schedules (which in the short run will weaken instruction); and 4) The tendency to reinforce the already existing tracking system in most schools that matches the more experienced teachers with the easiest to serve students and young inexperienced teachers with the hardest to serve students. I am really not a standardized test basher; such tests have their place. But at my high school the WASL takes up too much time and over time marginalizes subjects not on the test. Moreover, I’ve been to enough meetings on the subject to know the WASL has wrecked even more havoc at the elementary level. I think standardized tests should be part of a graduation portfolio (with course requirements, GPA, community service, etc), not the high stakes be-all-end-all of graduation. At any rate, tying “merit” pay to test scores, really, just continues No Child Left Behind’s punitive model of school reform and accountability. Neither of these— charter schools or merit pay— are new ideas at all. They are parcel to the privatizing, free market stratagem that is crashing down around us as I write.

At this point, perhaps inaction is the best that can be said of Obama’s education policies. His banking plan, by contrast (and still subject to change we can only hope), is already out there. It would be hard to imagine (although we might see even more over the next few years!) more concrete refuting evidence of the Reagan Revolution’s supply side, deregulatory, privatizing, free market bullshit than the current debacle on Wall Street. But rather than exposing the-- literal-- bankruptcy of this economic model, O seems bent on rallying support for necessary reforms talking the talk while at the same time spending trillions of taxpayer dollars on helping giant banks and corporations continue to cover up their gargantuan boondoggle. Bailing out the banks is crony capitalism; bailing out the auto industry, after its conduct the last 30 years, without the most heavy-handed mandates requiring a green restructuring is just plain embarrassing.

Worst, this government coddling has the bizarre effect of keeping alive right wing boilerplate about the perils of big government and socialism and entitlements when in the current context these canards should appear as merely absurd. Government should be big enough to enforce the rules, takeover, and break-up, if necessary, businesses that have become too big to fail (what could be more anti-free market than this notion of businesses too big to fail?). It should be socialist enough to ensure all citizens have the opportunity to share in our national prosperity and are protected from predatory business practices. And, yes, the citizens of this government are entitled to job opportunities, safe food and water, good health care and education, and a fair legal system. These entitlements are the very reason for the government’s existence. Entitlements of the sort (capital gains tax rates on hedge fund managers, for instance) that have generated the widest wealth inequality gap since the 1920s, and the right fiercely defends, are the ones that gotta go.

The risk here, for Obama, trying to maintain popular support while slathering more butter on corporate bread, is NOT small. Bailing out the banks to the tune of hundreds of billions, if not trillions, of dollars risks running the congressional and public wells dry before it’s time to draw support for the reforms necessary to reestablish a regulatory structure that rewards hard work and honesty and rebuilds a green based manufacturing economy that can support a living-wage working class. It’s a risk that is wrongheaded at best. Some, I know, say taking on Wall Street would be political suicide. I don’t believe this and, if not now, then when? And if not ever than things are as bad as some say.

Oh yes, this is what any leftie worth their salt would have said was inevitable given the Clinton team (including Wall Street insiders) O has teamed with in the White House. But I’m not ready to give up on Obama. If we get out of this presidency with a reasonable semblance of affordable universal health care and carbon limits factored into the economy he would be the best president since before my time. And, perhaps I’m grasping at straws, but I see something significant in the video above when Summers gives Geithner a look in the background just as Obama says that when banks play chicken with the government on bailouts he sides with workers and consumers. I still think that with the right leverage O might take a stand and provide the leadership necessary to turn his words on the economy into deeds. Not just because I think O has more to offer in terms of leadership than Clinton did but because in the world today, the pieces are there, financial collapse, threadbare infrastructure and safety net, looming environmental crisis, worldwide pressures from the have-nots, and the time is right for a paradigm shift. Messy, lurching, full of denials, it feels like we’re already in one now.

Like much of America, I’m still charmed by Obama like no President before. I’m still holding out hope that O is the man to lead us out of this wilderness. (And if I’m wrong I had hope for awhile and let it animate my actions.) For now, I recommend President Obama come in after school to catch up on his homework and get some extra tutoring support. Good luck.

Grade: C-

Currently playing: Robyn "Don't Stop The Music"

Zombie Media at Obama Press Conference

If, like me, you found yourself shaking your head at the softball (or even downright head scratching) questions the media served up at Obama's latest press conference then check out Leslie Savan's response over at The Nation. Spot on. (Also, one of my favorites writing about pop culture.) When NBC's Chuck Todd asked what sacrifices Obama wanted the public to make to solve the economic crisis I had to scramble to find something to throw at the TV. Grrr.

(The Nation.)

Ending Banker's Holiday: Part Four (It's Satan!)

I was surprised when I looked up the definition of a “bonus” on Princeton’s wordnet: “An additional payment (or other remuneration) to employees as means of increasing output." I always thought a bonus was a reward for increased output. Carl Crawford earns a million dollar bonus if he hits 25 homeruns and knocks in 100 runs this year. The bonus comes after the fact of the increased output. It’s based on performance. But Princeton’s definition seems to suggest you could write a “bonus” into an employee’s contract as a means to inspire them, in the hopes that the bonus will increase their output, or at least keep them employed.

This is what people don't understand about the 165 million dollars in bonuses paid out with tax payer money by the failing insurance giant AIG. As we learn today from CEO Edward Liddy, turns out there are “performance” bonuses and “retention” bonuses, the latter making up the biggest share of the AIG bonus pie, according to Liddy. Only problem w/ this account is that on it heels reports came out that many of the bonuses actually went to employees no longer working for the firm. So, there must be “severance” bonuses, too.

To most people it seems unconscionable that a business on the verge of bankruptcy since last summer, kept alive so far by 170 billion dollars of tax payer money, would be paying its employees anything beyond their basic salaries at all. What sort of output could warrant a bonus when a business is busy bankrupting the world economy!? But those people, the rising bubble of “populist” anger, don't understand. (There is something about these unbelievably unscrupulous circumstances that make the use of this term “populist” terribly condescending, as if to suggest that if public anger were not mere mob sentiment people might understand the legit purpose of these bonsuses to the the world of expert finance.)You give million dollar bonuses to keep people who screwed up your business so that they might fix it? You know, who better than the crook to suss the criminal mind?! So much for the efficiencies of private enterprise.

We have millions of people losing their jobs, losing their homes, and we’re giving economy-busting gamblers bonuses? What’s next, awards to companies whom lay off the most workers? bailouts to banks whom foreclose on the most homes? (Oops, we’re already doing this!) This is another one of those occasions where Obama’s cool hand (word awhile back had it O was beyond satire but his saunter and “be cool” demeanor begs for an SNL skit in times like these) is NOT up to the task. Talking ab a culture of greed and returning balance to the distribution of our economic spoils is fine and dandy on the stump. But this is a time for kicking ass and taking names.

It’s been argued that nationalizing zombie banks deemed too large to fail is un-American but when recipients of government support aren’t pulling in the same direction(obliviously stuffing their pockets, in fact) then bailouts are stupid or all too American. All too in favor of an American oligarchy elite, that is. Such bonuses on the public purse are unacceptable and should not be tolerated, obviously. If AIG would have had to file bankruptcy last fall instead of being bailed out by taxpayers, surely, no one would be getting any “bonuses” before debts were paid. Which means NEVER getting bonuses b/c if they could pay all their debts then they wouldn’t be bankrupt.

But righteous indignation won’t fix the problem, won’t prevent a collapse of this magnitude from happening again. Nor will the Obama Team’s vague generalities, I’m afraid. It’s as if the O Team has been instructed not to utter the words “derivatives” or “credit default swaps” or “hedge funds” in public lest they be asked to commit to rules that would fix the monstrous abuses wrought by these financial products. O talks a good game. But, again, there is a condescending disconnect emerging between his condemnations of greedy gamblers on Wall Street and a strained silence about any specifics that might curtail the public consequences of their conduct. What sense does it make to stimulate new investment b/f establishing new rules for investment? I mean, we want a recovery (more jobs) but not one based on another bubble bound to eventually collapse w/ such devastatng effects, right? Obama preaches patience but patience is no substitute for a concrete regulatory reform plan. And they’ve already announced they won’t even have such a plan ready for the G-20 Global Economic Summit that convenes this Friday in England, much to the chagrin of many of the other attending nations.

So the dithering continues. It’s as if the Obama Team still hoped to paper over this problem on Wall Street, wait on a recovery, and set the stage for the next bubble. Counting on the chicken-littles in the press and public to be proven wrong again. So the upswing in the stock markets last week spurred by more conciliatory utterances from Bernanke and Geigthner (promising to allow more off balance sheet accounting, most significantly) is a step in the right direction. Once an investment and job creation upswing gets going again people (populist sentiment) will forget ab regulatory reform, one would assume this reasoning goes. Meanwhile, Nightline is taping a show in Ballard on the existence of Satan in the excesses of Wall Street. See, when the public dithers in mystifying BS explanations for what's happening it’s mounting mob anger, when our Celebrity Pres dithers it’s cool leadership. But, really, condescending or pandering to the people isn't the leadership we need. I still want to believe but....

Ending Banker's Holiday: Part Three (A Rant!)

This morning on This Week this guy, George Stephanopoulos, asked those sitting ar a table, George Will, Paul Krugman, and economist Nouriel Roubini (aka Dr Doom b/c he prophesied the housing crisis 15 minutes b/f it happened)(and some lady from Business Week I don’t know), if there ought to be established something like the 9/11 Commission to learn from the current economic crisis. Everybody was non-committal to dismissive, Krugman saying sufficient discussions were already taking place. His slightly bashful dismissive was hard to read. Was he smirking about the wasteful, ineffectuality of the 9/11 Commission? Or does he really think there is nothing policy-wise to be learned from the current mess?

Soon enough the conversation veered towards a table response to this very desire to blame someone or something for our current problems. (Who needs a Commission?!) A consensus ar the table quickly emerged to make the point that 300 million people in America (and another 300 million in Europe, Krugman added) were all responsible for going on a “25 year credit spending spree,” saving little and spending beyond our means. Really? That’s the ultimate cause of the biggest global economic crash since the 1930s? We were all just maxing out our credit cards too much?

Now it’s not that I don’t think there shouldn’t be consequences for not paying your debts but didn’t congress already establish what many consider quite harsh, unforgiving bankruptcy laws in 2005? B/f the crash? And I’m not suggesting that people who took on mortgage debts they couldn’t pay shouldn’t be held responsible. But isn’t there a sense of proportion here we’re missing when pointing fingers at millions of working people for receiving 70 billion in subsidies while four or five banks will be lavished w/ up to 2.5 trillion? So why have people gone on a 25 year credit spending spree, anyway? Might it have anything to do w/ the fact that real working class wages have not risen since the 1970s?! (U.S. Bureau of Labor Statistics)

Wouldn’t it be far more accurate to say that this crisis is the result of 25 years of supply side economics that were supposed to trickle down to the rest of us but never did; that this crisis is the result of 25 years of “free market” deregulation and predatory casino capitalism fed consumer pipe dreams and Scroogy anti-labor demagoguery; that this crisis is the result of a 25 year surge in income inequality of staggering numbers not seen since the Gilded Age? (The Height of Inequality)

And wouldn’t it be important that this be said so that we might not repeat this catastrophe again? So that we might not have the same self-serving assholes that led us into this mess continue in their machinations from positions of power? The length and depth of capitalist cyclical downslides were significantly longer and deeper (during the Gilded Age) before the Depression precisely because of the sweeping government interventions and social safety net measures established by the FDR’s New Deal. It wasn’t just a bunch of government bailouts of failed industries. Now in the biggest free-fall since the Great Depression are we going to forget that?!

I’ve read it suggested that this cover-up recovery is b/c the Wall Streeters gave more money to Obama’s campaign, reportedly 10 million plus (CounterPunch), than any other constituency. But Obama amassed the biggest campaign funding war chest in history. Over 700 million or something like that. Why would 10 measly million buy so much influence? Please let this be the media chatter drama of the moment, the left’s unreconstructed doomy fatalism, the last bleats of the Right’s dying free market fundamentalist ideology, and Obama’s careful, patient, measured steps to right the ship of state. B/c this growth model, Wall Streeters hustle a bubble like mad, then go on bonus junkets to the Caribbean, while Main Streeters take it on the chin, chewing on their own pride in austerity and sacrifice, can’t last. Eventually some angry, smart young people will rally a mob to tear the whole thing apart. And it’ll be fun while it lasted for those who hit the jackpot. But there will be hell to pay for the rest of us.

Ending the Banker's Holiday: Part Two

“Politics are hard to predict,” Lawrence Summers
(aka “The Professor,” Obama’s Chief Economic Advisor)

So the first attempt by the Obama team to address the banking crisis last Tuesday was a bust. It didn’t even please Wall Street, who at this point would seem to be the only constituency being given any serious consideration. I was hoping for better but, knowing what they had to offer, Summers and Geithner could not anticipate this political reaction?! The closest to an actual “plan” was barely distinguishable from ideas floated by Henry Paulson and the Bush team last fall. And still hung-up on the same question: what price should the public pay for the “bad” assets amassed by the banks?

“Markets are a great way to organize economic activity,
but they need adult supervision.” –Wall Street Journal

Most distressing is the contrast between the Obama team’s dithering and what is emerging from smart Economists as a few obvious needed steps to be taken:

1) Quit the charade to—what?— fit some myth of private ownership that has always been a gross distortion of American history anyway. Nationalize the banks, even if only for a temporary period. It is an insult to taxpayers to pour hundreds of billions of public money into the private banks black hole, from 450 billion (Krugman) to 2.5 trillion (Reich), without any means to exercise control over how the banks spend that money. On the one hand, 18 billion paid in bonuses to bank managers since the meltdown is small potatoes; on the other, it is indicative of the fact that these people do not operate in the world where the rest of us live, where people actually have to work for a living, and is a flagrant slap in the face to the public bailout. These are NOT people we can trust to make Wall Street work for Main Street, duh.

2) Many agree that a crucial tipping point in our current predicament was the repeal of the Glass-Steagall Act in 1999. This Depression Era legislation set rules about the appropriate business of banks and established boundaries to avoid conflicts of interest in the financial sector. Its repeal— ratified by the Clinton-Rubin team, lest you’d like to blame all this on the Bushies—unleashed unsavory links between investment banks and junk money managers and fraudulent real estate mortgage companies. Prior to the repeal subprime mortgages constituted 5% of the real estate market; by 2006 the number had reached 30% (Wikipedia). Capitalism is by definition cyclical, alternating between bull runs and bear markets, but it’s the repeal of Glass-Steagall that has blown this most recent bubble to such gigantic, at this point still seemingly bottomless, toxic, world-wide proportions. (CounterPunch.)

3) The crux of this bubble trouble was the simple fact that Wall Streeters and their minions were making beaucoup dollars selling and reselling debt assets without any personal financial risk, without having to maintain any minimum of capital to debt ratio, let alone any responsibility for reporting these tenuous financial arrangements. The credit rating agencies whom should have cried foul failed miserably. Even though as early as ’03 Warren Buffett and a few other prominent members of the business community were calling unregulated derivatives markets “timebombs,” the Securities and Exchange Commission, our government watchdogs, did nothing. Perhaps the poor reception on Wall Street to the Obama team’s vague, tepid plan indicates that at this point even a majority of Wall Street has had enough of this insider’s game. How could we expect the Wall Street elite— including Geithner and Summers— to reform themselves? It’s time to clean house, closing the revolving door between Wall Street and Washington, establishing new independent government oversight that will reestablish rules that reward hard work and honesty. Isn’t this what Obama promised he’d do anyway? (Baseline Scenario.)

Steps 1 and 2 seem inevitable if it wasn’t for the dithering. But can they be carried out substantively without step 3? None of this should be surprising after watching Obama select as his economic advisors, one after another, from the Clinton team. A group as responsible as anybody for setting the stage for the current debacle. And, still, I want to hang on to something in Obama’s rhetoric. The stuff necessary to finally ending this second Gilded Age out of the simple, sober recognition— breaking with the supply-side, trickle-down delusions of the Reagan Revolution— that a healthy middle class is the most important investment for long-term economic growth.

Quotable:

“Apparently, the president has a half-brother named George Obama, who lives in Kenya, and George Obama was arrested on Saturday for possession of marijuana. He was walking around the village telling people his brother was the president, so they assumed he was high and arrested him.” -Jimmy Kimmel

Mr. President: End Banker's Holiday

Okay, it looks like some kind of stimulus bill spending near a trillion dollars is going to be passed soon. This is necessary. Consumers have stopped consuming. (Or reduced consumption significantly.) Demand is down, so production slows, and jobs disappear. Government spending (as opposed tax cuts, BTW) is the surest way to stimulate demand and create jobs and so increase consumer spending and consumption.

But don't we need to consume less? Aside from the lost jobs, might not that be a good thing for environmental reasons? In the long run, yes; it's necessary. But better we make the adjustments to a more sustainable economy gradually or at least consciously, in big reform responses to shocks to the system like the current one. The miseries in terms of job loss and poverty visited upon the vulnerable by doing nothing ab the current crisis are not something I want to see. The press mentions the possibility of 10% unemployment w/ a shudder. I don't know how dire that'd be; I lived through 11% in the early '80s and I don't remember much looting and killing. But what would 20% (it was supposed to have reached 27% at the depth of the Depression, and unemployment statistics are notoriously known to be lowball)look like? Protests in the streets, to be sure. More crime and violence, undoubtably. Child hunger? Impoverished seniors? Increased homelessness. Etc.

We want to rebuild now, get people back to work and spending, w/ programs/projects that move us towards a sustainable, green economy. And government spending is the best way to get the job started. Right now, the only way.

What I don't get is how come in the partisan stimulus debate there has been virtually no discernable talk ab what's going to be done ab fixing the financial markets that started the collapse?

Last night all the talking heads, from both sides, were going on ab how "ordinary Americans" feel ab the stimulus package, desires for jobs and tax cuts, fears of big government and deficits, etc. Right, people want jobs and job security, they want to know that what they have is still going to be worth something tomorrow. But what's hanging over the stimulus debate is the fact that Wall Street, the very people who started this titanic mess, have already been given hundreds of billions of dollars w/out any accountability; w/out any indication that the bailout fixed anything; without any sense that the bankers get that their wreckless gambling w/ "other people's money" is "shameful," unacceptable.(See link.)People want to know that this is not the foxes guarding the hen house.

The right has for the moment gained traction w/ their own standby, accusing Obama's plan of fatcat Liberal spending. Under the circumstances the argument is beyond stupid, it's dangerous. But they've been able to do this largely, I think, b/c ordinary Americans don't get why banks are getting hundreds of billions of dollars w/ no strings attached while working people continue to lose their jobs and homes. Limiting CEO salaries seems like the right thing to do, apoligizing for nominating a guy who has been in bed w/ the industry he's supposed to bring under control, okay, but this is little more than defensive PR window dressing.

The first thing Franklin Roosevelt did during the Great Depression was shut down the banks and have them audited. Then he started the Federal Deposit Insurance Corporation which, basically, required banks to hold at all times some percentage of their deposits. This is widely understood as returning stability and trust in the banking system. Not coincientally the crux of the present catastrophe has a similar ring: "loan originators retain no residual risk for the loans they make, but collect substantial fees on loan issuance, which causes unchecked degradation of underwriting standards." (Wiki) Let people play w/ other people's money and they will eventually gamble it away. Obviously, we need some new rules, and credible, transparent, independent enforcement of those rules. But nothing substantial is being done.

Ordinary Americans may not understand tranches and CDO swaps but they know that the build up to the current economic catastrophe has been an insider's game. Obama's economic team is all insiders but he got elected, at least in part, b/c he promised to change the way the government does business in Washington, to uncouple the unhealthy relationship betw big business and politics. He has believers in ordinary Americans but he needs to convince Wall Street before he loses Main Street. Do so and old arguments ab liberal spending versus tax cuts, supposedly hanging up the stimulus bill will stop getting in the way.

we voted for who we liked

“You can vote however you like,” sang the kids from Bob Clark Academy of Atlanta, Georgia. And we did. We elected Barack Hussein Obama 2008. This simple fact alone is worth savoring. But the boo birds— critics, bless ‘em— are at it already, of course. One of my faves, Paul Krugman, of the New York Times calls Obama’s inauguration speech muddled, its central argument— we need a return to responsibility, says Krugman— the same milquetoast argument Bush made in 2000. But the responsibilities Obama calls for could not be further from those advanced by Bush, right?! Just review the speech.

Consider foreign affairs first. Rejecting as false a choice between our safety and our ideals, Obama points out that our “power alone cannot protect us, nor does it entitle us to do as we please” around the world. Instead, the best way to extend our power and provide leadership is by the “justness of our cause, the force of our example, the tempering qualities of humility and restraint.” How could he repudiate any more explicitly the Bush Doctrine of pre-emptive strike and blundering militarism than with the argument made here? As I recall, this was precisely one of those moments during the speech when the camera panned to Bush with a humiliating wince. The contrast was certainly not lost on Bill O’Reilly and the other leading attack dogs of the right who have been fulminating about the implication of Obama’s remarks since the speech.

On the economic front, admittedly, Obama’s arguments aren’t always so straight-forward. He says of our current economic crisis that it is “a consequence of greed and irresponsibility on the part of some, but also our collective failure to make hard choices and prepare the nation for a new age.” Is he referring to our collective thirst for gas guzzling SUVs and, in general, the failure of consumers to demand the products of a green economy? This is a collective failure, to be sure, but it’s a bit obfuscating to link this directly to our current economic crisis. Government spending to stimulate the sagging economy should do whatever possible to lay the foundations for a sustainable green economy, for future generations, for the sake of the planet. But the lack of development in this direction has little to do with our current economic crisis. This is, literally, the bankruptcy of the deregulating “free market” philosophy that has held reign through republican and democratic administrations for almost thirty years.

Still, again, there is no mistaking Obama’s notions about our responsibilities to the market economy with those of Bush. “Without a watchful eye, the market can spin out of control,” says Obama. He continues, “A nation cannot prosper long that favors only the prosperous.” I’ll take this as an acknowledgement of one of the bitterest ironies of Bush’s and supply side economics in general. On the one hand, in the name of his “Ownership Society” Bush actively pushed for policy measures that would increase mortgage lending and home ownership. Such noblesse oblige, every American ought to own their home, right?! Unleashing entrepreneural energies from stifling rules and regulations creates wealth that trickles down to everyone, say supply-siders. Let innovators innovate, let the moneylenders make money. But, on the other hand, like every other Administration in the wake of the Reagan Revolution, the Bushies advocated anti-labor and other so-called “free market” policies that eroded the incomes of average American families. A lack of public oversight rewarded those without scruples to swindle paychecks and gamble wrecklessly with other people's money. Or, in other words, reduced the ability of most Americans to pay for their home mortgages!

Obama seems to get this but it would have been nice if he would have elaborated on his case for a more watchful eye. And, frankly, skepticism about his remarks in this area will remain until actions overcome the fact that most of his new economic advisors are old Wall Street heads (or the proteges of them) who under Clinton promoted more of the deregulations that have bred the gargantuan investment scams that are at the heart of the current economic meltdown.

Finally, culturally, Obama counts our “patchwork heritage” (as opposed to a melting pot of unity) as one of our enduring strengths. The overtures to Muslims and poor people the world over, in an address to Americans, struck me as probably unusual? We cannot ignore suffering outside our borders, Obama says, “nor can we consume the world’s resources without regard to effect.” We may not plan on apologizing to anyone for our way of life, as Obama asserts, but when is the last time a U.S. President has suggested we need to take more responsibility for our consumption of world’s resources?

Sure, Obama appeals to our sense of responsibility and sacrifice, hard to imagine an inaugural that wouldn’t. But I’d say his central argument is that key to America’s recovery from threats abroad and collapse at home is a return to the values of “hard work and honesty, courage and fair play, tolerance and curiosity, loyalty and patriotisim.” I repeat, these are NOT Bush’s responsibilities of "family values" and big business cronyism and shock and awe to any "freedom haters" who might oppose us!

At the risk of perpetuating the inflated analogies with Lincoln, seeing some of the response of the right and left since the inauguration, made me think of how both the abolitionists and slavers were typically reviling Lincoln. This is probably just the beginning.

Be honest, even those of us pulling for Obama did not think this was likely, if possible, one year ago. Whenever politicians huff and puff about America’s great diversity and opportunity I’m always reminded of the incredibly narrow demography of our presidents: every president of the U.S. has been, white, male, and not just Christian but decidedly Angloid protestant, except one. It’s astonishing what percentage of our presidents graduated from either Harvard or Yale. So our first African American president reassures elites with his Ivy League training and protestant church commitments and manly-manness (that Hilary was a scary ball breaker, right!), but, still, seven years after 9/11, the Patriot Act, two ongoing quagmires against Muslim enemies, and this country elects a black guy named Barack Hussein Obama?!

It’s cracked the smooth, hard shell of cynicism of living my entire adult life in the wake of the Reagan Revolution. Ladies like the one who told McCain at a rally late in the campaign that Obama frightened her because he was a Arab, a Muslim. I really thought there were too many of them, or too many of them that voted. But, in the end, even my parents voted for Obama. Don’t underestimate the people. (Too bad Walter Karp isn’t here to see this.)

I’m not saying calls to our enduring ideals cannot feel stale, but if a man “whose father less than sixty years ago might not have been served at a local restaurant” can’t revive these values as enduring bonds between us, giving us direction and purpose, who then possibly could? I’m aware of the naysaying from some of my favorite naysayers at Counterpunch and Eat The State but I’m not ready to let go of a sense of hope I never thought I’d feel again. This is the moment of a paradigm shift. Is Obama up to the job, I don’t know. But I can’t think of anybody better for the job. Can you?