Posts Tagged ‘financial reform’

The Fictional Obama

February 11th, 2012 No comments

Illustration by Gerald Scarfe

Listening to these Republican candidates talk about Obama, I often wish we actually had the kind of president they’re attacking. The paint him as some kind of progressive lion, zealously going after the super-rich on behalf of the working class, steadfastly holding to an ideology of civil liberties even if it compromises America’s safety, and systematically dismantling our empire abroad, all the while apologizing to the world for our previous transgressions. I don’t know who this person is that they keep railing against, but it’s not the Obama I know.

The fact is that the Republicans are banking on the majority of their base having a completely distorted view of the president thanks to conservative news sources like Fox News, Rush Limbaugh, etc. These media outlets have made a calculated decision to create their own narrative about who Obama is and what he wants to do, to emphasize every tiny little thing that supports that narrative and de-emphasize, ignore, or even outright lie about anything that doesn’t.

The Obama you see on Fox News is not a real person but actually a fictional character based on the stereotype of liberals that conservatives have in their minds. He wants to raise taxes, impose strict regulations on business, cut defense, eliminate gun rights, encourage more abortions and gay marriages, read terrorists their rights, and purge all religion from the public sphere. When the Republican presidential candidates talk to their debate audiences and the crowds at their campaign rallies about Obama, they’re talking about this guy, a radically liberal president who—unfortunately for them—doesn’t actually exist.

The real Obama hasn’t raised taxes. He’s far too timid to take the political risk. He’s cut taxes across the board and agreed to extend the Bush tax-cuts for two years. He says he’ll fight to let them expire next time, but I wouldn’t hold my breath.

As for the idea that he’s imposing crippling regulations on businesses, that is simply absurd. Barack Obama is the Goldman Sachs president. His entire financial team and his last two chiefs of staff have been Wall Street insiders, and according to internal memos it would appear that they dictate his every move in that area. The “historic financial reform” legislation that passed last year is widely acknowledged by bankers to be a complete joke. Not one of the people who caused the financial crisis of 2008 has been prosecuted for committing fraud, and Wall Street continues to thrive thanks to taxpayer bailouts (which Obama supported) while the rest of the country struggles.

I hear over and over again that Obama has drastically cut defense spending. Simply not true. Defense spending has increased every year since Obama took office, it’s just that the rate of increase has gone slightly down thanks to the cutting of a few strategically unnecessary projects like stealth-fighters designed to fight the Cold War. Some might say that it’s merely stretching the truth to refer to a slower rate of increase as a “cut”, but I call it lying.

And as for the whole general idea that Obama is weak on defense, consider his doubling-down in Afghanistan and the recent foray into Libya. He withdrew troops from Iraq but only because he was forced to under a treaty signed by the Bush administration which he tried and failed to renegotiate.

On gun rights, Obama has not lifted a finger to do anything about it, other than quietly write an op-ed on the issue after the Gabby Giffords shooting, in which he did not endorse a single reform that didn’t enjoy at least a 60% approval in polls. And afterwards he did absolutely nothing to attempt to initiate those reforms.

On social issues, one can point to the repeal of Don’t Ask Don’t Tell and pretend that Obama is the “fierce advocate” of gay rights that he claimed to be, but he dragged his feet on that issue for quite some time and he still refuses to publicly come out in support of gay marriage. And on abortion, what has Obama done? Nothing. He won’t even touch that issue with a ten-foot pole, so afraid is he of the potential criticism. But he will make it harder for young women to obtain birth control.

When it comes to the idea that Obama would rather read terrorists their rights than keep America safe, this is where the distance between the real Obama and the fictional Obama is at its widest. Not only has Obama continued the civil liberties abuses that began under the Bush administration, but he’s actually expanded them, to the point where now it’s written into the law that the president has the power to throw American citizens into prison without a trial purely on suspicion of ties to terrorism. He appeared to make a genuine effort to close down Guantanamo as soon as he took office, but when that failed he never brought the issue up again, and the prison remains open and could conceivably remain so for generations. He doesn’t do waterboarding anymore but he hasn’t prosecuted anyone responsible for that war crime, all the while bringing the hammer down on whistleblowers like Bradley Manning who dared to make the abuses of our military public. Finally, if you really want to know whether or not Obama is soft on terror, you can ask Osama bin Laden.

And lastly, there’s the matter of religion. Newt Gingrich told a crowd of supporters that as soon as he takes office, he’ll repeal every single anti-religious act passed by the Obama administration. That shouldn’t take long, as no such acts have been passed by the real Obama. The fictional Obama is the one carrying out this “war on religion” we keep hearing about. After all, that guy is secretly Muslim and born in Kenya, and obviously on a crusade to undermine America’s Christian moral foundation.

Running against a fictional character may work for the Republican candidates in the primary, but it’s going to blow up in their faces if they try that in the general election, which is exactly what Obama is counting on. If Mitt Romney accuses Obama in a debate of raising taxes, Obama will be poised and ready with the facts to prove that he has not. The same goes for the accusation that he’s cut defense, gone after gun rights, and so on. The major political advantage Obama has garnered for himself by going against his liberal base time and again on nearly every single issue is that the Republicans can’t make a fact-based attack on him for doing any of the things that liberal presidents are normally criticized for doing. The best they can do is say that he talked about doing such things in the 2008 campaign.

If they’re forced to run against the real Obama, there are plenty of things to criticize him for, but they are guilty of those same things themselves. Romney could expose every last way in which Obama has been a puppet of Wall Street, but he knows quite well that he’s running to be the next puppet of the very same interests.

But the truly funny thing is that aside from his ties to the financial industry, most conservatives would like the real Obama if they knew who he was. If you just changed the D in front of his name to an R and read off a list of the actions he’s taken since his term began, they’d understand him to be a moderate who is slightly left-of-center on some issues but right-of-center on most.

The real Obama governs like a moderate Republican of former days, before the party drifted off to its right-wing fringe. The real Obama would win a national election against any of these clowns the Republicans have put forward in this primary, and they know it. That’s why they have no choice but to run against a fictional character instead, and it’s why they’re going to lose the general election when the curtain is pulled back and independent voters get a good look at who Obama actually is.

The Occupiers Can Win

October 6th, 2011 No comments

“First they ignore you, then they laugh at you, then they fight you, then you win.” –Gandhi


It feels like a lifetime since I’ve posted a political blog entry, but I just can’t resist adding my voice to the chants going out from Wall Street and all across America these days. About two months ago I moved to Japan and since then my focus on politics has taken a back-seat to the major life-changes I’ve been going through. It wasn’t long after I look my leave-of-absence from the political world that thousands of my fellow citizens found themselves diving in head-first and igniting a movement that has the potential to completely change the American political landscape for a generation. This post intends to serve the dual purposes of A) spreading some of my optimism about the potential of the Occupy Wall Street movement to bring about significant political change and B) keeping with the primary purpose of my political writing which has always been to provide like-minded people with arguments to potentially sway conservative-leaning yet open-minded citizens to our point of view.

First and foremost, you should tell your conservative friends that if they like the Tea Party, they should love the Occupiers. After all, this is a grassroots movement of citizens disillusioned with the broken system standing up and demanding change. I seem to recall the pundits on Fox News and other cable channels lauding the Tea Party for that very reason—regardless of their specific views, they were participating in the political process in the full spirit of the American tradition of Free Speech and the right to organize. You’d think that even if they disagree with the message of the Occupiers, they should at least acknowledge that their zeal for peaceful demonstration is as American as it gets, and intrinsically no more or less valuable than that of the Tea Party.

Of course, we know that there is in fact a world of difference between what lies at the core of the Tea Party and what drives the Occupiers. While it’s true that most of the average citizens who go to Tea Party rallies are well-intentioned people who honestly believe in the message they’re sending, their movement is “grassroots” in name only—it is in fact a collection of various political organizations funded by right-wing think-tanks like Americans for Prosperity which are themselves funded by the wealthiest Americans and corporations, the very people who are responsible for the economic conditions the Tea Partiers’ anger is a product of. Their anger is justified and their willingness to protest is admirable, but they’ve been misled and misdirected into serving the enemies of the very kinds of change they really need.

Conversely, the Occupiers are a true grassroots movement, not funded by any billionaires but started “from the ground up” in the most literal sense of the term. Just a few hundred citizens decided to direct their anger at the very people responsible for their financial hardship and they took to the streets and kept at it—not just organizing a single protest for a day and then going home having been completely ignored by the media, but sticking to it until people finally started paying attention and more powerful allies began to join their fight.

The right-wing propaganda machine wants us to dismiss them as a bunch of left-wing hippies who don’t understand how the world really works, and this has worked so far and will continue to work on the Fox News audience for a long time to come, but they should be reminded as often as possible that just as the Tea Party was not quite the neo-Klan rally gathering of racists and bigots that the “liberal” media sometimes portrayed them as, neither can the Occupiers be characterized with such a broad brush. Fox News has constantly reminded us that there are Independents and Democrats among the Tea Party crowd, and we should all be reminded that there are indeed some Tea Partiers among the Occupier crowd as well.

The movement to restore fairness to the American economic system should not be considered either right-wing or left-wing and we should resist as much as we can the efforts of the corporate media to drive a wedge between the Occupiers and conservative-leaning citizens who would share their sentiments if only they were given an objective look.

I won’t waste time going into the justifications of the Occupy Wall Street movement itself, as anyone interested in understanding their message could read any of a thousand other blog posts, check out this website, or simply watch the movie Inside Job. The central fact—and it is a fact—behind this movement is that Wall Street traders, aided by their bought-and-paid-for tools in Washington (on both sides of the aisle) who’ve been deregulating their industry since the 1990s in exchange for campaign donations, inflated a financial bubble that dealt a crippling blow to the middle class when it burst. Moreover, those responsible for this fiasco have continued to thrive thanks to a giant taxpayer bailout, even awarding themselves record bonuses as if to spit in the faces of all the people they’d screwed over once they were through screwing us.

I’ll say it again: if you like the Tea Party you should love the Occupy Wall Street movement. The Tea Party movement was so popular (among those who failed to follow the money) due to the perception that it was a struggle of the Little Guy against the Big Guy, a reaction to the financial crisis and the ensuing bailout that enraged everybody regardless of political affiliation. Yet somewhere along the way the anger was diverted from Wall Street and directed at the handful of people in Washington who were actually trying to fix the system. The Occupiers have brought the anger back to where it started and where it belongs, and if the success of the Tea Party is any indication it will soon be a force to be reckoned with.

Just look at what the billionaires and the corporate establishment have managed to accomplish by harnessing the momentum that the Tea Party provided them with. They were nearly able to derail health care reform entirely, and while a bill was ultimately passed it was so watered-down and establishment-friendly that its main element is actually a mandate to buy insurance from the same profit-driven companies that were the reason the American health-care system was in such need of reform in the first place. They’ve prevented anything whatsoever from getting done on climate change, deflated any pressure there might have been to restore the civil liberties demolished by the Bush administration, allowed state and local governments to slash funding for education and public services while handing out corporate tax-cuts, secured at least a two-year extension of the Bush tax-rates, and in the biggest irony of all made last years’ Wall Street Reform Act so ineffective as to ensure that if nothing else is done by the time the next bubble bursts, the entire financial-collapse and subsequent taxpayer-bailout is guaranteed to happen all over again.

Much has been made by the mainstream media about the lack of “concrete demands” from the Occupier movement. The lack of specific demands never stopped the Tea Party from having such a major influence in Washington. And if the Tea Party can be said to have made any demands at all, it was always to prevent something from getting done (e.g. “Kill the Bill!”). The spirit of the Occupier movement is to get those in power to actually do something to fix the broken system. The specifics of what that is can be debated by policymakers, but without that pressure from the ground there will never even be a debate.

One of the best suggestions is this one put forward by Alex Pareene at Salon to demand that Wall Street forgive the debts of the 99% who bailed them out. It’s got both moral and practical justifications: they’d be bankrupt if not for our help so why shouldn’t they save us from bankruptcy? Not only that, but imagine the stimulative effect on the economy if all of a sudden the middle class had all that capital freed up to spend on consumer goods rather than debt payments to banks. If the Occupiers take up this idea as a rallying cry, it might just become a real issue in the 2012 election.

The timing of this movement could hardly be more perfect, as right now the Obama White House is suffering from a complete lack of momentum and yet it still has time to change course. When he came to office Obama had a movement of energized citizens behind him but his failure to harness that energy and lead the country in a different direction caused it to fizzle out in a matter of months. If he wanted to ensure his re-election there’s a new movement full of energy just waiting to be harnessed, if he just had the political courage to stand up, take the mantle, and run with it.

Among the Occupiers’ demands, I believe the immediate firing of Tim Geithner, (referred to by insiders as “Wall Street’s man in Washington”) should be near the top of the list, along with the rest of Obama’s disastrous economic team to be replaced by people actually willing to fight the bankers and hand out indictments where appropriate. Obama has done so much to appease the Wall Street crowd and yet they still aren’t satisfied, so his best chance at redeeming his administration is to give up on their support entirely, take a cue from Franklin Roosevelt, and welcome their hatred. As the Occupy movement grows it should become increasingly clear to him that making an enemy of the most hated institution in the country is not, as the establishment-insiders in their beltway-bubble would have him believe, political suicide. He won’t need their campaign cash with such strong wind at his back.

At the very least, the Occupy movement can play the same role as the Tea Party movement in providing strong and vocal support for policies to bring about more economic fairness for the middle class, throwing its support behind any politician willing to fight for their popular and just cause and fighting tooth-and-nail against all those Wall Street puppets who stand against them.

Finally, as the number one argument that will get thrown back in your face by conservatives when you insist that the rich should pay their fair share is that “the top 1% pay 40% of all federal taxes and the bottom 51% pay no taxes at all”, I just want to offer you a couple of links that will allow you to quickly shoot down that talking-point. Here it explains that between 1987 and 2008, the top 1%’s share of the national income increased at five times the rate of their share of taxes. Here you’ll find that while the top 1% do pay 40% of all federal income taxes, when you factor in other kinds of taxes including payroll tax and sales tax their actual share is actually between 22 and 28%, right in line with the 25% of the national income they control. And here you’ll find that when you don’t just cherry pick the federal income tax, the bottom 51% do indeed pay a decent chunk of their income in taxes. You can cite these facts, or you could simply remind them that when a family making less than $30,000 a year pays 13% in taxes, they have to use everything left over to pay for food, heating, car insurance, and all the other bills, while when someone making millions of dollars a year pays 34% in taxes, they’ve still got millions left over.

The Occupy Wall Street movement deserves as much support as we can give it. It’s about time we’re seeing the pent-up rage of the middle class spilling out onto the streets, and if the history of class-struggles in the United States is any guide, there’s reason to believe that they might actually succeed.

How to Fix America (In 3 Paragraphs)

July 5th, 2011 No comments

On the surface, the problems affecting America appear so varied and complex that it seems absurd to suggest there’s one quick fix. But when you get down to the core it’s actually very simple, and can be explained in very few words and in such a way that almost all people can agree on regardless of ideological background. We’re not going to get anywhere until we can brush our disagreements aside and engage with each other honestly about the heart of the matter. In the following 3 paragraphs I will identify the problem and state how we can fix it. The bold-faced sections can actually stand alone as the entire argument, but I’ve buttressed these points with brief examples and explanations. None of this will be new to anyone, but its obviousness is the whole point—if I can explain it so succinctly, anybody can. My hope is that more people will reach out to those who normally disagree with them and see if we can at least agree on this.


1. The root of the problem is that some people can make incredible sums of money by doing things that harm everybody else. Investment bankers can earn huge amounts of money by inflating financial bubbles which collapse economies when they inevitably burst, energy companies earn higher profits by not spending money to protect the environment, insurance companies profit by denying people treatment, prisons profit by taking in more prisoners, and so on. This is not necessarily due to greed—it’s simply the nature of a business to try and earn as much money as possible, and to use that money to ensure that it can continue doing the things which allow it to keep earning.

2. The secondary problem is that our political system depends on campaign contributions from private donors to fund political campaigns. Politicians have a much easier time seeking large contributions from a handful of big businesses than by attempting to amass large amounts of small donations from average citizens. In order to be competitive, politicians must take money from businesses which profit by harming society. In exchange for these contributions, the politicians agree to either fight to protect the ability of these businesses to continue profiting at society’s expense, or to at least not fight very hard to stop them. As a result, the problems caused by these businesses are never fixed, and the negative effects on average people continue to accumulate.

3. Before any of America’s problems can be fixed, this central problem must be tackled first. Money must be taken out of politics if there can be any hope of politicians acting in society’s best interests as opposed to the interests of those who fund their campaigns. As long as the banking sector supplies most of the campaign money to politicians on both sides of the aisle, we can’t expect politicians to honestly reform the banking sector. As long as our politicians take money from private insurance companies, we can’t expect them to honestly reform the health care system. As long as politicians take money from energy companies, we can’t expect them to honestly work to protect the environment. These companies should have a seat at the table, but they can’t own the table. If we want politics to be about finding real solutions to problems, campaigns must be publicly financed so that politicians are elected on the merits of their ideas as opposed to how much money they can raise. Government should be the tool with which society fixes its problems, but problems can’t be fixed with a broken tool. The only way to fix the tool is to get money out of politics. Explaining how we do that, unfortunately, would require a lot more paragraphs…

Memo to Bill Daley: Most Americans are Liberal

January 8th, 2011 No comments

America, meet Barack Obama’s new chief of staff Bill Daley:

Obama White House Shakeup

Who is Bill Daley? Well, let’s just say if you liked Rahm Emanuel, you’ll love Bill Daley. Not only does he have a background in Chicago politics (he’s the current mayor’s brother), but he’s also got ties to Wall Street as well, having served as the Midwest chairman of JPMorgan Chase. And just like Rahm, he’s bought into the widespread misperception that the country is actually significantly further to the right than it actually is.

We all know how Rahm Emanuel pushed the president to pass any kind of Wall Street reform he could get, regardless of how strong it was. And we know he had the same attitude regarding health care reform: make deals with pharmaceutical companies and private health insurers that will increase the bill’s chance of passing, no matter how much these concessions weaken it. If you were thinking that a new chief of staff would bring a different kind of advice to the president’s ear, think again.

Regarding health care reform, Bill Daley told the New York Times:

They miscalculated on health care. The election of ’08 sent a message that after 30 years of center-right governing, we had moved to center left — not left.

Apparently he thinks the watered-down health care reform legislation went too far. He believes that when the American people voted for Change, what they really wanted was for things to stay more or less the same.

There are plenty of people who still believe that this is a “center-right” country and that liberals and progressives are just a small minority. After all, the media repeatedly and relentlessly trumpets this Gallup poll showing that when asked to describe their political ideology, 40% of Americans self-identify as conservative, 35% as moderate, and only 20% as liberal. Never mind that this poll only asks people how they self-identify and doesn’t ask for their actual opinions on a single actual issue—because more people are comfortable calling themselves “conservative” than calling themselves “liberal” (I wonder if decades of right-wing talk-radio might have anything to do with that?) they consider it an irrefutable fact that most Americans are not liberal, and therefore that most Americans are opposed to things like government-run health insurance, strict Wall Street reform, and raising taxes on the rich. Most Americans, because they call themselves “conservative” must therefore believe that fixing the deficit is the most pressing issue of our time, and that this must be done through spending cuts and under no circumstances with increased taxes for the rich.

As a public service, let me help to bust this myth for you once and for all. When you’re arguing with conservatives who say that you should accept center-right policies from your Democratic president because most Americans don’t agree with you (or when you’re arguing with progressives who say that you should accept center-right policies from your Democratic president because most Americans don’t agree with us), you can tell them that they are simply mistaken.

When you go issue-by-issue, the majority of Americans support the more liberal position on almost every single question ranging from foreign policy to gay rights, as this superb study by Media Matters proves.

When it comes to Wall Street reform, an ABC News/Washington Post poll taken in April 2010 indicated that 65% of Americans wanted reform to be tougher, not weaker.

When it comes to health care, poll after poll consistently showed widespread support for the public option (i.e. “government-run” health insurance), including this New York Times/CBS poll taken in June of 2009 in which a whopping 72 percent of respondents said they were in favor. If Bill Daley thinks most Americans believe the health care bill went too far, he is just plain wrong.

And another great poll just came out this week, and it’s one I hope did not go un-noticed by Bill Daley and the rest of the folks at the White House: A 60 Minutes/Vanity Fair poll asked people what the first step they would take to balance the budget would be. 4% said cut Medicare. 20% said cut defense spending. But an overwhelming 61% said they would raise taxes on the wealthy!

Center-right country indeed.

Incidentally, only 3% of respondents said they would balance the budget by cutting Social Security, but that appears to be the course of action our “representatives” in Washington are going to take. But even though nearly two-thirds of Americans would rather raise taxes on the rich, that won’t even be considered.

Since he took office, the president has been surrounded by political advisors telling him to move to the right, to compromise on the liberal agenda because liberals don’t really matter. They’ve been telling him that most of the country is to the right of the political center.

But this is simply not true. Washington is significantly to the right of the rest of America, which is significantly to the left of the political center. President Obama doesn’t seem to understand that. And sadly, his new chief of staff Bill Daley is not going to be the one to tell him.

Fix Wall Street with a Single New Rule

October 16th, 2010 No comments

Despite the proclamations from Obama and the democrats that they passed “the most sweeping financial reform since the Great Depression”, very little has actually changed in the way Wall Street does business. The incentive structure that rewards employees for creating financial bubbles that eventually burst and cost taxpayers billions of dollars remains firmly in place. Not only that, but now that the precedent has been set that if Wall Street crashes the economy absolutely no harm will come to any of them personally, things may actually have gotten worse.

Wall Street firms are gearing up to hand out 144 billion dollars in bonuses this year. Wall Street bankers will be taking home tens of millions of dollars not because they earned it or that their talents are actually worth it, but because they’ve simply created this wealth out of thin air and don’t have to worry about losing it. If something goes wrong—and it almost certainly will—it’s the schmucks who can’t afford to buy half of Congress who’ll have to pay.

To the Wall Street types it’s nothing more than a game. There are winners and there are losers, and abstract concepts like morality and social responsibility don’t enter into it. They’ll make their strategic calculations and take the course that leads to the best financial outcome for them, even if it’s the worst possible outcome for everyone else. The only way to change the outcome of the game is to change the rules.

But it doesn’t need to be a huge, complicated piece of legislation. If we just impose one new rule on Wall Street—one that happens to be simple enough for everyone to understand—it could change everything.

William D. Cohan is the author of House of Cards: A Tale of Hubris and Wretched Excess on Wall Street. I caught him in an interview with Cenk Uygur who was filling in for Chris Jansing on MSNBC this past week, and found his suggestion to be rather brilliant.

The idea is to take the top 100 people at the Wall Street firms, the ones who make the decisions about what businesses to be in, how to deploy capital, who to hire and fire, and make them sign an agreement that they’ll put their entire net worth on the line. They’ll have to create a security out of their own personal money that would be the first thing to disappear if something goes wrong. Yes, the taxpayers would still be on the line for however many billions their reckless behavior costs the economy, but the first few hundred million will have to come directly out of their pockets.

What could be more reasonable than forcing these gamblers to actually gamble with their own money? If we do that, the incentive structure changes entirely. Yes, they can keep creating these bubbles and raking in massive amounts of short-term profit by putting the economy in jeopardy, but if they go too far and it all comes crashing down, their mansions and yachts will be the first things to go.

Right now, Wall Street bankers take all of the gains and suffer none of the losses. They’ll get their bonuses no matter what economic harm they do. But if we change the game slightly so that they’ll have to suffer the losses before anyone else, they might not want to take such huge risks. They might want to play it safe instead, to slowly accumulate wealth as the economy slowly accumulates strength. The rising tide really would life all ships in that case, rather than the way it is now with Wall Street tilting the oceans so that all of the water flows to their end while grounding the ships on the other side.

Cohan suggests that the Wall Street firms take it upon themselves to make such an agreement because it would be good for business. Investors would feel far safer putting their money in a financial firm run by people who have even more at stake than they do. It would be wonderful if a few firms started doing this and the rest were forced to follow suit.

But apparently no Wall Street firms are willing to take that risk. They’re perfectly willing to risk other peoples’ money, but not their own. That can only mean that when they make their strategic calculations they assign a high degree of probability to another financial crisis happening, otherwise there’d be no harm in making such an agreement. But they know they can make more money by inflating the bubbles and dealing with another crisis than by going back to safer tactics. With the rules as they currently exist, we guarantee another crash because another crash is in the bankers’ best financial interest.

All we need to do is change their incentives, and if they won’t do it willingly we have to impose this rule on them. Make them put their own net worth on the line, make them financially responsible for the things they do, and watch as they start doing things more responsibly.

No big pieces of legislation necessary. Just one quick fix, one proposal that everyone can understand and that would therefore be extremely politically difficult to oppose. There’s no reason this proposal can’t be made. We just need one representative willing to make it.

Obamapologists vs. Real Progressives

August 12th, 2010 No comments

I suspect that the best place to get noticed in the progressive blogosphere is Daily Kos. Thus far I’ve avoided that site because I think its founder, Markos Moulitsas, is a pompous asshole wonderful guy. But seeing as how it doesn’t matter at all who how wonderful the site’s founder is, I’ve decided to start cross-posting certain entries over there in the hopes of boosting traffic over here. This is that first post:

Hi everyone, I’m Kemstone. I’ve been blogging for a couple of years now on my own website and I’ve recently stepped up my game, adding one to three posts every day. My site doesn’t get too many views yet, so if I want comments I have to cross-post to other forums. My first few diaries will be to test the Daily Kos waters, to see what kind of reaction I get and whether it’s worth it to keep posting here. If you like what you read, I’d humbly ask you to check out my blog where you’ll find much, much more.

I wanted to introduce myself by making a specific point about a very general issue—the issue that seems to dominate the threads here lately, especially now in the wake of Robert Gibbs’ insults hurled at the “professional left”. The issue of course is whether progressives are being too hard on Obama.

We’ve all had this argument. Hell, most of you have probably had it every single day for over a year. There are those who lambaste the president for not going far enough to deliver on the kind of Change he promised, and those who point to his various accomplishments and say we should just be satisfied with what we got. I am firmly in the “Obama is not going far enough” camp, and I suspect most Kos readers are as well. My view is that even we are criticizing the president too harshly, it’s actually a good thing.

Those who rush to defend the president are what I call “Obamapologists”. You’re familiar with their arguments: The president is doing the best he can. He needs 60 votes in the senate to get anything passed so it’s not his fault if he has to make compromises. Yes, he gave up on the public option but he got health care reform passed. Yes, he didn’t break up the big banks or include the Volcker rule in financial reform but he got the bill passed. Yes, he conceded to more offshore drilling but he had to in order to get the climate bill moving forward (even though it then blew up in his face). It’s not his fault that he can’t be as progressive as those on the left would like—he has to be the president of all Americans—not just liberals—and most of the country is centrist or conservative.

We have our replies at the ready: If you look at the poll data on specific issues, you’ll see that the country actually is liberal, even though most people don’t self-identify as such. What we want from the president is leadership. The majority is behind him and if he doesn’t have the votes in the senate we’re standing ready to sign as many petitions and make as many phone calls as we need to pressure the hold-outs. To use the public option as an example, with as much as 73% of people in favor of the policy, the president could have easily leaned on conservadems to get behind it. He could have threatened to remove chairmanships or withhold electoral support, but he didn’t. And this is just one example from a very long list of battles he could have won but chose not to fight.

Meanwhile, we see him cave in to every right-wing talking point that gets hurled his way. From de-funding ACORN to throwing Shirley Sherrod under the bus, Obama bends over backwards to deflect any and all criticism that comes at him from the conservative media. He even gives Fox News a front-row seat in the White House briefing room! As for progressives, they’re either high on drugs or a bunch of “fucking retards.”

The political calculation is obvious. Obama, under the ever-so-wise guidance of Rahm Emanuel, believes that progressives are with him no matter what. He can shit all over us and we’ll still come out and vote because the republican party is so far to the wackaloon right that we can’t afford to let them win. So he moves to the right as much as possible in an attempt to pick up a few right-leaning moderates to add to the liberals he already has in-the-bag and get that 50%-plus-one victory he needs.

Whether this calculation is correct, only time will tell. Progressives really are stuck in this election, as we neither want to reward democrats for their endless capitulations nor the republicans for their endless obstructionism.

But the point I want to make is that even if you are an Obamapologist who believes the president really is doing the best he can, you’re not accomplishing anything by telling the rest of us—the real progressives—that we should shut up, stop criticizing Obama, and just celebrate whatever small amount of Change he manages to deliver. You need us. Without strong criticism from the left, the president will just happily move farther and farther to the right in pursuit of those right-leaning moderates he thinks make up the majority of the country.

Just imagine if we’d stood behind him when he abandoned the public option. “Yes, Mr. President, go ahead and do whatever you need to get the bill passed, even if it means scrapping everything and letting the republicans write the whole thing.”

Imagine if we weren’t pressuring him to appoint Elizabeth Warren to head the Consumer Financial Protection Bureau? He would have already appointed Tim Geithner, Larry Summers, or some other Wall Street tool to fill the post and make sure the Bureau doesn’t do a damn thing to protect consumers.

Strong criticism from the left is the only thing preventing this president from moving from the center-right to the far-right, and it’s the only thing that has the potential to bring him back to the center, or (if you want to be wildly optimistic) to the center-left.

That said, we need the Obamapologists as well. Someone has to defend the guy or his approval rating would drop to 0% and he wouldn’t be able to get anything done. He also needs to win in 2012, as whoever the republicans run against him is likely to be an insane moon-bat who would make George W. Bush look like Noam Chomsky. It’s important to have people reminding us of the many things Obama has accomplished, lest we forget just how awful it could potentially be.

I’m currently living in Germany, and I recently attended an anti-war protest in which the crowd was shouting “murderer” at the soldiers. I would never say that, but I appreciate the impact of someone saying it. Because Germany has such a radical left-wing fringe, the political spectrum is shifted that much father to the left and more moderate liberals are free to embrace certain socialist ideals without being accused of going off the deep-end. In America if you so much as suggest that the government should pay for anything you’re some kind of Stalinist or Maoist.

You need the far left. You may not agree with everything they say, but you should be glad that somebody is saying it. You may not believe that Obama warrants all the criticism he gets from the left, but you should be glad that the left is criticizing him.

Mr. Geithner Goes to Wall Street

August 4th, 2010 No comments

I got a kick out this story when I read it yesterday morning.

NEW YORK– Treasury Secretary Timothy Geithner traveled to New York City on Monday to tell bankers and the financial industry that new financial regulations are a good thing for business.

Geithner explained to an audience at NYU that while the law’s regulations would be a “foundation of a stronger economy,” the Obama administration would seek a balance that would safeguard business.

There are probably two reasons that Obama sent his Treasure Secretary to Wall Street with this message. First is to improve Geithner’s image as a complete tool of the financial industry by placing him in a role that makes him appear separate from it.

But the second reason is the funny one. Back in February, House Minority Whip Eric Cantor met with the titans of Wall Street to assure them that he and Republican Party would be doing everything they could to block reform and let the financial industry continue with business as usual. His pitch seems to have worked:

Months later, an emerging campaign theme is the Democratic Party’s trouble collecting Wall Street donations. The Republican Party, save for a handful of members, voted en masse against financial regulatory reform and some GOP lawmakers have pledged to repeal the final product. At the same time, it has been widely reported that Obama has a frosty relationship with the business community. And, perhaps most tellingly, Cantor has seen his campaign coffers bulge.

Data released on Wednesday morning by the good government group Public Campaign shows that Cantor received more than $460,000 from the financial sector during the second quarter of 2010.

So Wall Street is giving more money to Republicans and less money to Democrats. This is no surprise. But that fact that Tim Geithner had to go and try to make nice with the bankers seems to indicate that it came as a surprise to Obama.

His whole strategy with financial reform was to do what Geithner said and water down the bill enough for it to meet with Wall Street’s approval. He needed to pass some kind of reform to appease progressives, but the reform needed to be weak enough to appease the bankers.

Well this is what happens when you try to have it both ways. Not only are progressives disillusioned and angry that the legislation was so toothless, but Wall Street isn’t satisfied that the legislation was toothless enough. Democrats might serve their interests, but republicans serve them better.

Maybe next time Obama will actually try to fight for real change, seeing as how even his pocket change is too much for Big Industry. But considering that Tim Geithner is not only still around but still trying to cozy-up to Wall Street, I highly doubt it.

Why Elizabeth Warren is Important

July 25th, 2010 No comments

I’m on fire today, as you’ll know if you read the post below. I’m temporarily without internet access so until I take this computer to somewhere with a WiFi signal I can’t waste any time doing research and finding relevant links and videos—which is the most time-consuming part of blogging. So today I’m going old-school and just ranting straight from my head. As such I’m only covering the really important stuff—Sarah Palin will have to wait.

You wouldn’t know it unless you’ve been paying really close attention, but we’re approaching what will be one of the most defining moments of the Obama presidency. In fact, it may be the most important cross-roads that Barack Obama has ever come to. He’s faced with a choice—a choice that only he can make and for which the responsibility will rest on his shoulders alone. It would seem like a small decision, like just one of a thousand little decisions the president makes every day, but taken in the broader context it’s a decision that will define how he is perceived by the public for the remainder of his presidency. The decision is over who to appoint as head of the Consumer Financial Protection Bureau.

It’s no secret that the financial reform legislation that came out of the senate is weak and watered-down. It won’t change the way Wall Street does business and it won’t prevent future bailouts. The only thing it does that has the potential to do real, substantial good on behalf of the American people is the creation of the Consumer Financial Protection Bureau which would serve as a much-needed watchdog to protect consumers from corporate greed and abuses of power.

The Consumer Financial Protection Bureau will only be as strong as the people who control it. It it’s run by establishment insiders and friends of Wall Street bankers, it’s probably not going to do too much to protect consumers. It’ll just exist for the sake of public perception, to make it look like Obama accomplished reform.

The question on everyone’s mind is whether Obama wanted real reform and was just forced to accept what he could get from a congress drowning in Wall Street money, or whether he’s as complicit as they are and has no interest in changing the status quo either. When Obama chooses who to appoint as the head of the Consumer Financial Protection Bureau, we’ll know the answer.

Elizabeth Warren is the person who came up with the idea in the first place. From her current position as chairwoman of the Congressional Oversight Panel, she has been an incredibly forceful advocate on behalf of the middle-class and her zeal for standing up to big corporations on behalf of the little guy is well-known and celebrated by progressives everywhere. If she were put in control of the Consumer Financial Protection Bureau, there is no doubt that she would give the corporations a run for their money. She would take the strongest possible approach to dealing with Wall Street and while she might still not have the power to prevent another financial crisis, she’d be able to warn everyone when she sees it coming, and people would have to listen to her because she would be in a position of power. We need a progressive in a position of power. We need someone who is not beholden to Wall Street with the capability to exert pressure on Wall Street.

If Obama appoints Elizabeth Warren, then nearly all of my cynicism about the financial reform legislation will evaporate. I’ll bow my head and concede that at least in this instance, Obama delivered on some of the Change he promised.

Obviously, the rich and powerful are completely opposed to Elizabeth Warren. She’s their worst nightmare. They’d rather have anyone but Elizabeth Warren at the helm of the Consumer Financial Protection Bureau. Preferably, they want someone who isn’t really interested in protecting consumers. Someone like Tim Geithner whom they already know and whom they’re buddies with. Someone whose top priority will be protecting Wall Street first, and protecting consumers only insofar as it doesn’t interfere with the way Wall Street does business.

If Obama appoints someone other than Elizabeth Warren (assuming it’s not another progressive like Paul Krugman or Robert Reich), then you can rip the “Change We Can Believe In” sticker off your bumper and bury it six feet under ground, because the promise of the Obama presidency will be dead. It will be completely over. He will have raised the white flag and surrendered to the very establishment he said he was going to change.

Why is this decision so important as compared to all the others? Why will this be more of an indicator of Obama’s true character than, say, the fight over the public option? Because this time, there’s no one else to blame. This time the decision is squarely on his shoulders and there are no Joe Liebermans, Blanche Lincolns or Ben Nelsons to hide behind.

You can already see indications that the White House is leaning away from appointing Warren. They don’t want to piss off progressives too much so they keep insisting how much they like her and how great she is, but

The ‘but’ is key. They’ll say “But there are other good options” when in reality the only other names being thrown around are friends of Tim Geithner—people with the Wall Street stamp of approval. They’ll say “But she’s unconfirmable because republicans will filibuster her” but in reality Obama could appoint her with the stroke of a pen. I’m pretty sure the way the legislation is written she doesn’t need senate confirmation, but even if she does there’s the option of a recess appointment.

The point is, it can be done and the only thing that would stop it is Obama deciding not to. He knows that progressives really want him to appoint Warren, but so far his whole governing strategy has been to ignore progressives and do everything he can to try and appear like a centrist moderate (see my rant below). So far, he seems to have done everything the establishment has wanted him to do.

Will the pattern continue? Will he decide not to appoint Warren because he’d take too much criticism from Fox News? There’s no doubt they’ll be throwing the entire Socialist/Maoist smear machine directly at her, but they’ll do that to anyone he appoints even it’s Lloyd Blankfein (the CEO of Goldman Sachs) himself!

Will he decide not to appoint Warren because Wall Street won’t stand for it? They’re almost certainly threatening to pull their funding from Democratic candidates this election if he goes with Warren, so he might think he has no choice but to cave in again.

Or will he just this once actually make the right decision and appoint Warren to head the Consumer Financial Protection Bureau? Will he just this once accomplish some real Change? Will he listen to the people that got him elected just this once instead of spitting in their faces?

I doubt it. But I really hope more attention gets paid to this because it’s of monumental significance. This is a moment where Obama can really change course and begin to regain some of that progressive support he’s been losing since taking office by standing up to Wall Street and doing something that will actually help average Americans.

What’ll it be, Barack? Was the promise of Change just a big fat fucking lie that you had no intention of keeping? Or are you really trying to do the best you can? Your decision will reveal the answer, and we anxiously await it.

Tim Geithner vs. Elizabeth Warren

July 17th, 2010 No comments

Financial reform legislation is hurtling towards final passage, severely watered down and riddled with loopholes. Most economists agree that it’s not strong enough to prevent another crisis and does nothing to end Too Big Too Fail which makes taxpayer bailouts a necessity. The only silver lining in this cloud is the creation of a Consumer Financial Protection Agency, a government watchdog to keep an eye on Big Industry for the sake of average Americans. Among this agency’s many responsibilities would be to make sure credit card companies are straight with their customers, that they don’t hike up interest rates too quickly or charge excessive lateness penalties—things every credit-card user would appreciate.

Whether or not this agency will have any teeth depends to a large degree on who is in control of it. Most of the regulatory power in this bill goes to the treasury secretary, currently Wall Street’s favorite tool: Tim Geithner.

The effort to dramatically expand financial regulation bears the stamp of no one more than Geithner. The bill not only hews closely to the initial draft he released last summer but also anoints him — as long as he remains Treasury secretary — as the chief of a new council of senior regulators. The legislation also puts him at the head of the new consumer bureau until a director is confirmed by the Senate, allowing Geithner to mold the watchdog in coming months. And it will be up to him to settle a raft of issues left unresolved by the bill — for instance, which financial derivatives will be subject to the tough new trading rules and which risky activities big banks will be required to spin off.

Every step of the way, Geithner has fought against the strongest provisions in the bill. He opposed breaking up the banks, he opposed the Lincoln amendment to regulate derivatives, and he even opposed the Consumer Financial Protection Bureau, which he gets to control and mold in the interim before Obama appoints someone else to be in charge.

Progressives want Elizabeth Warren, the current chair of the Congressional Oversight Panel where she’s been a strong and consistent advocate for transparency and accountability. Not only that, she has a knack for boiling complex financial issues to the core and explaining them with crystal clarity:

If she were put in charge of the Consumer Protection Bureau, there’s good reason to believe she’d give Wall Street a run for their money. So naturally, Tim Geithner is opposing her nomination. Geithner’s philosophy is to do as little regulation as possible and let Wall Street handle itself. If it were up to him, there would probably be no financial reform whatsoever.

Now, Obama is once again put to the test. Simon Johnson, author of 13 Bankers, says this can only go two ways: Will he actually listen to progressives for once and appoint Warren to head the new agency (outcome #1), or will he side with his Treasury secretary, as he has done nearly every step of the way so far, and appoint someone else (outcome #2)?

Despite the growing public reaction, outcome #2 is the most likely and the White House needs to understand this, plain and clear – there will be complete and utter revulsion at its handling of financial regulatory reform both on this specific issue and much more broadly. The administration’s position in this area is already weak, its achievements remain minimal, its speaking points are lame, and the patience of even well-inclined people is wearing thin.

Indeed, Obama has been throwing progressives under the bus repeatedly since the beginning of his administration, and progressives have been remarkably patient thus far. But we’re not buying the line that this is the most sweeping reform since the Great Depression, and we don’t believe for a second his blatant lie that this reform means there will never be another bailout. If he sides with Geithner over his base yet again and appoints some weak-kneed tool of the industry to head the Financial Protection Bureau, that will be the last straw for many.

Unfortunately, it’s entirely possible that Obama will stick with his strategy of pleasing Wall Street at the expense of progressive goals because he knows progressives have nowhere else to turn in November. He keeps throwing us under the bus because he knows we could never vote republican, so he might as well keep those Goldman Sachs campaign contributions flowing. If you want to help send him the message that we’re not going to let him kick us around anymore and he’d better appoint Warren, you can sign the petition here.

Obama: Not a Sell-Out but a Fool?

July 2nd, 2010 No comments

Ever since becoming politically aware I haven’t been able to firmly decide if the government is made up of people who are knowingly and deliberately trying to screw us or if it’s actually just a bunch of clueless idiots who don’t know what they’re doing. To put it simply, is the demise of the average person a result of malice or just ignorance?

When it comes to Obama, I keep going back-and-forth as well. The weakness of health care reform and stories of backroom deals to get drug companies and private insurance on board led me to believe that he was a complete sell-out, another politician who won the presidency by outright lying about who he was and what he stood for. At worst, a complete tool of the power-elites, chosen and groomed for his ability to sell the American people on policies that would look like reform but would actually serve to make the powerful more powerful.

But there is the possibility that even if he was chosen and approved of by the power-elites, that he doesn’t actually know he’s working for them. He might really believe in the things he said on the campaign trail, and he might really believe that he’s doing the best he can for the American people.

Psycho-analyzing the president is always tricky business, but looking at his behavior in the run-up to the final passage of the financial reform legislation, it seems as though he really believes his rhetoric.

Ask a random economist, and it’s likely he’ll tell you that this Wall Street reform bill does even less to reform Wall Street than the health care reform bill did to reform health care. Dean Baker called it a “fig-leaf”. Paul Krugman wrote that our misguided policies are causing what will become a third Depression. John R. Talbott itemized every way in which the bill fails to implement meaningful reform.

And yet Obama is out there hailing this as the “toughest financial reforms since the ones we created in the aftermath of the Great Depression”. If he really understood what he was doing, and he knew that these reforms weren’t tough at all and another financial collapse is all-but-guaranteed, I doubt he’d be showing such swagger.

When the next financial crisis hits, he’s going to look like a damned fool. And that might very well be what he is. It’s no secret that he didn’t run on a platform of reforming the financial system. When he began his run for president, he thought he’d be campaigning against the Iraq war. He made his first major initiative health care, rather than financial reform. The guy might just not have a good grasp of macro-economics.

Neither do I, but I trust economists such as Paul Krugman and Robert Reich who point out that it was increased spending that brought us out of the Great Depression and tough rules on the banks such as the Glass-Steagall Act which prevented another collapse from happening up until the time it was repealed in 1999. This is just history. You don’t have to be a genius to just look at the charts and graphs and understand what they mean.

And yet Obama surrounded himself right from the start with people like Tim Geithner and Larry Summers, people who are nothing if not creatures of Wall Street, who believe that when all is said and done the system is fine how it is. Sure, there was a bubble and it burst, but that was just a fluke—a once-in-a-lifetime thing. The bankers have learned their lesson and they won’t let another financial collapse happen again. They were telling Obama right from the start that the most important thing was to get Wall Street back in business and the rest would follow. He’d have to pass something called “financial reform” purely for the sake of public perception, but it shouldn’t be tough enough on the banks to fundamentally change the way they operate. Everything just needed to go back to the way it was before the collapse, and the bankers would take care of the rest.

It would seem that Obama bought into this bullshit. In which case, he is not a sell-out but a fool. The bankers will do whatever is in their best short-term financial interest to do. They do not care about the economic repercussions of their actions.

The problem that caused the crisis was that it became too easy to make shitloads of money by trading bundles of pools of mortgages sold to people who couldn’t afford to repay them. It’s still too easy to do that, so of course they’re going to keep doing it. The collapse may have been prevented if the ratings agencies whose responsibility it was to accurately assess the risks of these bonds weren’t being paid by the same banks whose products they were supposed to assess. It’s still in their best financial interests to give Triple-A ratings to crappy bonds that are bound to explode, so of course they’re going to keep doing it. And the taxpayer wouldn’t have had to bail out the banks if they were small enough to collapse and not bring down the entire economy with them, but they are still Too Big to Fail so of course they’re going to keep taking these disastrous risks if they know we still have no choice but to cover their losses.

But Obama thinks he got the job done. He thinks he’s FDR. He thinks he really gave the banks a run for their money and showed them who’s boss. Meanwhile, they are laughing at him.

Then again, maybe he knows exactly what he’s doing. Maybe he’s just as much the corporate tool as every single republican is, and he’s glad he was able to help out the bankers while making it look to the American people like he really accomplished something. But if that’s the case, you’ve got to wonder what his plan is for when the next financial crisis hits. Everybody is going to look back on this moment and say, “Um…you said you fixed it. What the fuck?”

What the fuck, Obama? You’re obviously an extremely intelligent guy. I can’t believe how someone so smart could be such a damned fool.