D-Day For Obama Anoche

Worth clicking on for careful examination

You heard the clowns last night. Anything you didn't expect? Anything even worth talking about at all? Public Policy Polling, the country's most accurate firm, reported that Perry is sweeping the South in their surveys. Maybe it's time for a nonviolent, adult talk about how to divide the place up-- better that than the civil war Matt Taibbi thinks the radical right may be dragging the country into.

Lofgren, in describing the reasons for his defection from the Republican party, describes a Republican camp that increasingly acts not like a traditional peacetime political organization, but more like an apocalyptic cult or one of the authoritarian movements from early 20th century European history.

In particular, the insane decision to turn the once-routine procedure of raising the debt ceiling (Lofgren notes it was done 87 times since WWII) into a political crisis revealed that the GOP party mainstream had sunk to the level of terrorism-- holding our economic system hostage in exchange for political concessions. 

This was a form of violence, and a serious escalation even from the days of George W. Bush, when the party was mostly limited in its willingness to use human beings as pawns in homicidal ploys for political power. Bush and Rove were willing to sacrifice Iraqi lives, and the lives of American servicemen, for oil and votes. But this current crew of Republicans shook canisters of kerosene over the entire American population and threatened to light a match if it didn't get what it wanted. 

As Lofgren notes, this was insurrectionary, revolutionary behavior. Only the massive scale of the gambit prevented it from being easily identified as terrorism and criminal blackmail. If in exchange for not defaulting on our debt Boehner, Hensarling, Cantor and the rest of them had asked for a billion dollars worth of gold bullion deposited in Swiss bank accounts, or the release of a dozen Baader-Meinhofs from German prisons, it could hardly have been much different from what they actually did.

I think most Americans can agree that reducing the public debt is a goal we can all share-- and in the old days of thirty or forty years ago, when congress operated on a more collegial model that involved members from opposing parties getting together on weekends to achieve reasonable compromises over golf and highballs, the Rs and Ds could have found a way to press forward with reasonable deficit reduction plans without pushing us all to the edge of a cliff. 

But for the new GOP, compromise of any kind defeats their central purpose, which is political totale krieg. This party's entire reason for being is conflict and aggression. There is no underlying patriotic instinct to find middle ground with the rest of us, because the party doesn't have a vision for society that includes anyone outside the tent.

I've always been queasy about piling on against the Republicans because it's intellectually too easy; I also worry a lot that the habit pundits have of choosing sides and simply beating on the other party contributes to the extremist tone of the culture war. 

But the time is coming when we are all going to be forced to literally take sides in a political conflict far more serious and extreme than we're used to imagining. The situation is such a tinderbox now that all it will take is some prominent politician to openly acknowledge the fact of a cultural/civil war for the real craziness to begin. 

Reading Lofgren's piece, and a piece by John Judis of the New Republic, makes one realize that we came pretty close to real chaos in that debt ceiling debate. Had Obama invoked emergency powers to raise the debt limit unilaterally-- and I think he had good reasons to do that-- we might have had a revolt on our hands. 

Most people aren't thinking about this because we're so accustomed to thinking of America as a stable, conservative place where politics is not a life-or-death affair but more something that people like to argue about over dinner, as entertainment almost. But it's headed in another, more twisted direction. I'm beginning to wonder if this election season is going to be one none of us ever forget-- a 1968 on crack. Anyway, I hope I'm wrong, and I hope everyone reads this Lofgren piece, which is a rare piece of insider insight.

President Obama is famous for saying the president he most admires is Abraham Lincoln. Does he have the intestinal fortitude of Abraham Lincoln? If so, he's been very successful at hiding it since first coming to Washington. Tonight he'll address that part of the nation-- a rapidly dwindling part I'm guessing-- that is still interested in what he has to say, as opposed to those on the fascist/plutocratic and racist right who have always viewed him as illegitimate and those on the left who are finished with his soaring rhetoric and grubby record of action. Early reports are that he'll try to woo his enemies on the right with a jobs plan they've already rejected and that won't do the trick anyway, simply because he's wasting time trying to woo the right-wing nihilists. Watch Raúl Grijalva explain on TV yesterday why he's afraid Obama is blowing it by not being bold and courageous:

Austerity, Rigour... And Why Do Rich People Always Just Get Greedier When They Get Richer?

Market jitters? The American financial industry is pointing to Europe and warning that a collapse of the banking system there could be nigh-- and could be catastrophic for everyone.

Insurance on the debt of several major European banks has now hit historic levels, higher even than those recorded during financial crisis caused by the US financial group's implosion nearly three years ago.



Credit default swaps on the bonds of Royal Bank of Scotland, BNP Paribas, Deutsche Bank and Intesa Sanpaolo, among others, flashed warning signals on Wednesday. Credit default swaps (CDS) on RBS were trading at 343.54 basis points, meaning the annual cost to insure £10m of the state-backed lender's bonds against default is now £343,540.



The cost of insuring RBS bonds is now higher than before the taxpayer was forced to step in and rescue the bank in October 2008, and shows the recent dramatic downturn in sentiment among credit investors towards banks.



"The problem is a shortage of liquidity-- that is what is causing the problems with the banks. It feels exactly as it felt in 2008," said one senior London-based bank executive.



"I think we are heading for a market shock in September or October that will match anything we have ever seen before," said a senior credit banker at a major European bank.

France isn't calling it Austerity, but the proud nation is being dragged into the clutches of the banksters and calling it a "rigour package." Compared to the Austerity measures being proposed in the U.S.-- Obama even floated a trial balloon yesterday that sounded like bringing back indentured servitude-- the French version sounds down right benign.

The measures in the rigour package, dubbed by some the "financial turn of the screw," include:



• An "exceptional contribution" of 3% on taxable earnings for those earning above €500,000 to remain in place until France's deficit had been reduced to 3% of GDP.



• Higher taxes on tobacco and alcohol.



• A modification of capital gains tax on property.



...Among other measures, Nicolas Sarkozy, the French president, is reported to be considering the abandonment of tax-free overtime for workers. This was one of the measures that, under the slogan "work harder to earn more," was a pillar of his election campaign in 2005, but it has cost an estimated €4.5bn in lost revenues. The government is also looking at ending tax breaks for companies.



Having recently abolished the "financial shield," which set a limit on the total amount of tax that the rich were expected to pay, a new tax on the wealthy would avoid accusations that his austerity measures would hit those lower down the income scale in the run-up to next year's elections.



France and Germany are also discussing proposals for a tax on financial transactions-- a measure that is vehemently opposed by Britain.

Not just Britain... Wall Street is going insane at the idea and is spending millions of dollars in lobbying and in direct bribes campaign contributions to it's most dedicated mouthpieces in government. The 25 worst Wall Street shills in the House (this year only):

John Boehner (R-OH)- $986,787

Eric Cantor (R-VA)- $610,250

Chris Murphy (D-CT)- $380,500

Jeb Hensarling (R-TX)- $350,350

Dave Camp (R-MI)- $343,800

Scott Garrett (R-NJ)- $320,185

Ed Royce (R-CA)- $318,004

Kevin McCarthy (R-CA)- $315,200

Spencer Bachus (R-AL)- $309,115

Pat Tiberi (R-OH)- $300,549

Steve Stivers (R-OH)- $282,485

Robert Dold (R-IL)- $272,006

Nan Hayworth (R-NY)- $240,006

Jim Himes (D-CT)- $233,500

Steny Hoyer (D-MD)- $226,670

Randy Neugebauer (R-TX)- $224,133

Steve Israel (D-NY)- $204,000

Carolyn Maloney (D-NY)- $199,750

Debbie Wasserman Schultz (D-FL)- $197,900

Joseph Crowley (D-NY)- $193,750

Shelley Berkley (D-NV)- $189,660

Peter Roskam (R-IL)- $188,700

Denny Rehberg (R-MT)- $187,330

Francisco Canseco (R-TX)- $183,852

Paul Ryan (R-WI)- $181,400

Bolded names are members of the Financial Services Committee, charged with "regulating" the banksters to keep them from ripping off consumers and society at large. Alan Grayson was on that committee when he was in Congress. Wall Street wasn't giving him money then and, now that he's campaigning to get back into Congress they're not donating to him either. I called Alan-- who's just back from a trip to Ghana-- this morning to get his take on all this. He told me he "always found it puzzling that business interests gave lockstep support to Republicans, despite their fondness for auctioning off the law to the highest bidder." He was just warming up:

The Republican Party may be the party of Big Business, but it is also the party of Economic Failure.

 

Let’s take the stock market, that very apt measure of how rich the rich are.  In Tommy McCall’s classic 2008 article Bulls, Bears, Donkeys and Elephants, he pointed out that $10,000 invested in the stock market under Democratic presidents would have grown to $300,671, while $10,000 invested under Republican presidents would have “grown” to $11,733. That’s a 2907% Democratic profit versus a 17% Republican profit. Is that still true? Sure enough, the stock market started to recover less than one month after Barack Obama was sworn in.

 

Since federal spending alone now equals almost a quarter of GNP, is it really good for business to make government small enough to “drown in the bathtub,” as Grover Norquist always demands?

 

And how, exactly, is the banking system supposed to function without regulations? Reserve requirements are regulations. They are the only limits on the banks’ unbridled speculation and gambling with other people’s money. Remove the regulations and a crash will quickly follow. That wouldn’t be good for business.

 

Republican economic mismanagement takes down both the rich and the poor. In other countries, the rich seem to understand that, but not here. Here, the blanket support for Republicans by Big Business and the filthy rich amounts to an economic death wish.

 

There is an old saying: “if you’re so smart, how come you ain’t rich?” I have a different question: when it comes to political self-interest, how can rich people be so dumb?

If we can't count on Congress to protect us-- and we can't-- who can we turn to? That was the whole idea of why Elizabeth Warren came up with the Consumer Financial Protection Bureau-- and why Wall Street fought so hard to cut it off at the knees. Obama has been nearly as friendly to Wall Street as any Republican president and it would be foolish to expect him to change his stripes. Matt Taibbi has done some great reporting in Rolling Stone about one of the few places where consumers can look for redress: New York's crusading Attorney General, Eric Schneiderman. Basically, Wall Street and their political puppets-- from Obama and the GOP to the rest of the states' attorney generals-- have "cooked up a deal that would allow the banks to walk away with just a seriously discounted fine from a generation of fraud that led to millions of people losing their homes." Schneiderman is the odd man out.

The idea behind this federally-guided “settlement” is to concentrate and centralize all the legal exposure accrued by this generation of grotesque banker corruption in one place, put one single price tag on it that everyone can live with, and then stuff the details into a titanium canister before shooting it into deep space.



This is all about protecting the banks from future enforcement actions on both the civil and criminal sides. The plan is to provide year-after-year, repeat-offending banks like Bank of America with cost certainty, so that they know exactly how much they’ll have to pay in fines (trust me, it will end up being a tiny fraction of what they made off the fraudulent practices) and will also get to know for sure that there are no more criminal investigations in the pipeline.  



...But Schneiderman, who earlier this year launched an investigation into the securitization practices of Goldman, Morgan Stanley, Bank of America and other companies, is screwing up this whole arrangement. Until he lies down, the banks don’t have a deal. They need the certainty of having all 50 states and the federal government on board, or else it’s not worth paying anybody off. To quote the immortal Tony Montana, “How do I know you’re the last cop I’m gonna have to grease?” They need all the dirty cops on board, or else the whole enterprise is FUBAR. 



In addition to the global settlement, Schneiderman is also blocking an individual $8.5 billion settlement for Countrywide investors. He has sued to stop that deal, claiming it could “compromise investors’ claims in exchange for a payment representing a fraction of the losses.”



If Schneiderman thinks $8.5 billion is an insufficient, fractional payoff just for defrauded Countrywide investors, then you can imagine how bad a $20 billion settlement for the entire industry would be for the victims.



In that particular Countrywide settlement deal, it looks like Bank of New York Mellon, the New York Fed, Pimco and other players negotiated on behalf of defrauded investors. They told the Times they were happy with the deal, but investors outside the talks told Gretchen they weren’t happy with the settlement.  



Schneiderman apparently listened to those voices instead of the Mellon-Fed-BofA crowd, which infuriated the insiders who struck the actual deal. In a remarkable quote given to the Times, Kathryn Wylde, the Fed board member who ostensibly represents the public, said the following about Schneiderman:



It is of concern to the industry that instead of trying to facilitate resolving these issues, you seem to be throwing a wrench into it. Wall Street is our Main Street-- love ’em or hate ’em. They are important and we have to make sure we are doing everything we can to support them unless they are doing something indefensible.



This, again, is coming not from a Bank of America attorney, but from the person on the Fed board who is supposedly representing the public!



This quote leads one to wonder just what Wylde would consider “indefensible,” given that stealing is pretty much the worst thing that a bank can do-- and these banks just finished the longest and most orgiastic campaign of stealing in the history of money. Is Wylde waiting for Goldman and Citi to blow up a skyscraper? Dump dioxin into an orphanage? It’s really an incredible quote.

Remember this?







She's running for the Senate now, in Massachusetts, against Wall Street's "favorite" senator, Scott Brown. Wall Street and the financial services industry are financing his campaign. Can you help Elizabeth's? Our House candidates worthy of help, like Grayson, are on another page-- this one.

Is There Such A Thing As An Austerity Riot That Isn't "Political"... Anywhere?

While Matt Taibbi, on this side of the Atlantic, asks the question we all know the answer to-- Is the SEC covering up Wall Street crimes?-- and an increasingly uncomfortable English public on the other side of the Atlantic wants to understand what happened to the independence of their judiciary, Naomi Klein bridges the vast expanse of ocean by explaining just how "political" Austerity Riots are. Let's start with the massive looting in post-invasion Baghdad.

Back then the people on cable news thought looting was highly political. They said this is what happens when a regime has no legitimacy in the eyes of the people. After watching for so long as Saddam and his sons helped themselves to whatever and whomever they wanted, many regular Iraqis felt they had earned the right to take a few things for themselves. But London isn’t Baghdad, and British Prime Minister David Cameron is hardly Saddam, so surely there is nothing to learn there.



How about a democratic example then? Argentina, circa 2001. The economy was in freefall and thousands of people living in rough neighborhoods (which had been thriving manufacturing zones before the neoliberal era) stormed foreign-owned superstores. They came out pushing shopping carts overflowing with the goods they could no longer afford-- clothes, electronics, meat. The government called a “state of siege” to restore order; the people didn’t like that and overthrew the government.



Argentina’s mass looting was called El Saqueo-- the sacking. That was politically significant because it was the very same word used to describe what that country’s elites had done by selling off the country’s national assets in flagrantly corrupt privatization deals, hiding their money offshore, then passing on the bill to the people with a brutal austerity package. Argentines understood that the saqueo of the shopping centers would not have happened without the bigger saqueo of the country, and that the real gangsters were the ones in charge.



But England is not Latin America, and its riots are not political, or so we keep hearing. They are just about lawless kids taking advantage of a situation to take what isn’t theirs. And British society, Cameron tells us, abhors that kind of behavior.



This is said in all seriousness. As if the massive bank bailouts never happened, followed by the defiant record bonuses. Followed by the emergency G-8 and G-20 meetings, when the leaders decided, collectively, not to do anything to punish the bankers for any of this, nor to do anything serious to prevent a similar crisis from happening again. Instead they would all go home to their respective countries and force sacrifices on the most vulnerable. They would do this by firing public sector workers, scapegoating teachers, closing libraries, upping tuitions, rolling back union contracts, creating rush privatizations of public assets and decreasing pensions-- mix the cocktail for where you live. And who is on television lecturing about the need to give up these “entitlements”? The bankers and hedge-fund managers, of course.



This is the global Saqueo, a time of great taking. Fueled by a pathological sense of entitlement, this looting has all been done with the lights left on, as if there was nothing at all to hide. There are some nagging fears, however. In early July, the Wall Street Journal, citing a new poll, reported that 94 percent of millionaires were afraid of "violence in the streets.” This, it turns out, was a reasonable fear.



Of course London’s riots weren’t a political protest. But the people committing nighttime robbery sure as hell know that their elites have been committing daytime robbery. Saqueos are contagious.



The Tories are right when they say the rioting is not about the cuts. But it has a great deal to do with what those cuts represent: being cut off. Locked away in a ballooning underclass with the few escape routes previously offered-- a union job, a good affordable education-- being rapidly sealed off. The cuts are a message. They are saying to whole sectors of society: you are stuck where you are, much like the migrants and refugees we turn away at our increasingly fortressed borders.



David Cameron’s response to the riots is to make this locking-out literal: evictions from public housing, threats to cut off communication tools and outrageous jail terms (five months to a woman for receiving a stolen pair of shorts). The message is once again being sent: disappear, and do it quietly.



At last year’s G-20 “austerity summit” in Toronto, the protests turned into riots and multiple cop cars burned. It was nothing by London 2011 standards, but it was still shocking to us Canadians. The big controversy then was that the government had spent $675 million on summit “security” (yet they still couldn’t seem to put out those fires). At the time, many of us pointed out that the pricey new arsenal that the police had acquired-- water cannons, sound cannons, tear gas and rubber bullets-- wasn’t just meant for the protesters in the streets. Its long-term use would be to discipline the poor, who in the new era of austerity would have dangerously little to lose.



This is what David Cameron got wrong: you can't cut police budgets at the same time as you cut everything else. Because when you rob people of what little they have, in order to protect the interests of those who have more than anyone deserves, you should expect resistance-- whether organized protests or spontaneous looting.



And that’s not politics. It’s physics.

Extra credit if you put together Taibbi's hypothesis with Naomi's:

For the past two decades, according to a whistle-blower at the SEC who recently came forward to Congress, the agency has been systematically destroying records of its preliminary investigations once they are closed. By whitewashing the files of some of the nation's worst financial criminals, the SEC has kept an entire generation of federal investigators in the dark about past inquiries into insider trading, fraud and market manipulation against companies like Goldman Sachs, Deutsche Bank and AIG. With a few strokes of the keyboard, the evidence gathered during thousands of investigations-- "18,000 ... including Madoff," as one high-ranking SEC official put it during a panicked meeting about the destruction-- has apparently disappeared forever into the wormhole of history.



...Many of the destroyed files involved companies and individuals who would later play prominent roles in the economic meltdown of 2008. Two MUIs involving con artist Bernie Madoff vanished. So did a 2002 inquiry into financial fraud at Lehman Brothers, as well as a 2005 case of insider trading at the same soon-to-be-bankrupt bank. A 2009 preliminary investigation of insider trading by Goldman Sachs was deleted, along with records for at least three cases involving the infamous hedge fund SAC Capital.



Even Chuck Grassley (R-IA) seems to have noticed that "it looks as if the SEC might have sanctioned some level of case-related document destruction... "It doesn't make sense that an agency responsible for investigations would want to get rid of potential evidence. If these charges are true, the agency needs to explain why it destroyed documents, how many documents it destroyed over what time frame and to what extent its actions were consistent with the law."



No rioters or looters will have this in mind when they're rioting and looting, but no understanding of the cause will be complete without it. And Joel Kotkin over at Forbes seems as pessimistic as I am about anything ameliorating the roots causes of what looks like will be some pretty bad upheavals worldwide.

The riots that hit London and other English cities last week have the potential to spread beyond the British Isles. Class rage isn’t unique to England; in fact, it represents part of a growing global class chasm that threatens to undermine capitalism itself.



The hardening of class divisions has been building for a generation, first in the West but increasingly in fast-developing countries such as China. The growing chasm between the classes has its roots in globalization, which has taken jobs from blue-collar and now even white-collar employees; technology, which has allowed the fleetest and richest companies and individuals to shift operations at rapid speed to any locale; and the secularization of society, which has undermined the traditional values about work and family that have underpinned grassroots capitalism from its very origins.



All these factors can be seen in the British riots. Race and police relations played a role, but the rioters included far more than minorities or gangsters. As British historian James Heartfield has suggested, the rioters reflected a broader breakdown in “the British social system,” particularly in “the system of work and reward.”



In the earlier decades of the 20th century working class youths could look forward to jobs in Britain’s vibrant industrial economy and, later, in the growing public sector largely financed by both the earnings of the City of London and credit. Today the industrial sector has shrunk beyond recognition. The global financial crisis has undermined credit and the government’s ability to pay for the welfare state.



With meaningful and worthwhile work harder to come by-- particularly in the private sector-- the prospects for success among Britain working classes have been reduced to largely fantastical careers in entertainment, sport or all too often crime. Meanwhile, Prime Minister David Cameron’s supporters in the City of London may have benefited from financial bailouts arranged by the Bank of England, but opportunities for even modest social uplift for most other people have faded.



The great British notion of idea of working hard and succeeding through sheer pluck-- an idea also embedded in the U.K.’s former colonies, such as the U.S.-- has been largely devalued. Dick Hobbs, a scholar at the London School of Economics, says this demoralization has particularly affected white Londoners. Many immigrants have thrived doing engineering and construction work as well as in trades providing service to the capital’s affluent elites.



A native of east London himself, Hobbs maintains that the industrial ethos, despite its failings, had great advantages. It centered first on production and rewarded both the accumulation of skills. In contrast, by some estimates, the pub and club industry has been post-industrial London’s largest source of private-sector employment growth, a phenomena even more marked in less prosperous regions. “There are parts of London where the pubs are the only economy,” he notes.



What’s the lesson to be drawn? The ideologues don’t seem to have the answers. A crackdown on criminals-- the favored response of the British right-- is necessary but does not address the fundamental problems of joblessness and devalued work. Similarly the left’s favorite panacea, a revival of the welfare state, fails to address the central problem of shrinking opportunities for social advancement. There are now at least 1 million unemployed young people in the U.K., more than at any time in a generation, while child poverty in inner London, even during the regime of former Mayor “red Ken” Livingstone last decade, stood at 50% and may well be worse now.



Hobbs claims that the current “pub and club,” with its “violent potential and instrumental physicality,” simply celebrates consumption often to the point of excess. Perhaps it’s no surprise that looting drove the unrest.



This fundamental class issue is not only present in Britain. There have been numerous outbreaks of street violence across Europe, including in France and Greece. One can expect more in countries like Italy, Spain and Portugal, which will now have to impose the same sort of austerity measures applied by the Cameron government in London.



And how about the United States? Many of the same forces are at play here. Teen unemployment currently exceeds 20%; in the nation’s capital it stands at over 50%. Particularly vulnerable are expensive cities such as Los Angeles and New York, which have become increasingly bifurcated between rich and poor. Cutbacks in social programs, however necessary, could make things worse, both for the middle class minorities who run such efforts as well as their poor charges.



A possible harbinger of this dislocation, observes author Walter Russell Mead, may be the recent rise of random criminality, often racially tinged, taking place in American cities such as Chicago, Milwaukee and Philadelphia.



Still, with over 14 million unemployed nationwide, prospects are not necessarily great for white working- and middle-class Americans. This pain is broadly felt, particularly by younger workers. According to a Pew Research survey, almost 2 in 5 Americans aged 18 to 19 are unemployed or out the workforce, the highest percentage in three decades.



Diminished prospects-- what many pundits praise as the “new normal”-- now confront a vast proportion of the population. One indication: The expectation of earning more money next year has fallen to the lowest level in 25 years. Wages have been falling not only for non-college graduates but for those with four-year degree as well. Over 43% of non-college-educated whites complain they are downwardly mobile.



Given this, it’s hard to see how class resentment in this country can do anything but grow in the years. Federal Reserve Chairman Ben Bernanke claimed as early as 2007 that he was worried about growing inequality in this country, but his Wall Street and corporate-friendly policies have failed to improve the grassroots economy.



The prospects for a widening class conflict are clear even in China, where social inequality is now among the world’s worse . Not surprisingly, one survey conducted the Zhejiang Academy of Social Sciences found that 96% of respondents “resent the rich.” While Tea Partiers and leftists in the U.S. decry the colluding capitalism of the Bush-Obama-Bernanke regime, Chinese working and middle classes confront a hegemonic ruling class consisting of public officials and wealthy capitalists. That this takes place under the aegis of a supposedly “Marxist-Leninist regime” is both ironic and obscene.



This expanding class war creates more intense political conflicts. On the right the Tea Party-- as well as rising grassroots European protest parties in such unlikely locales as Finland, Sweden and the Netherlands-- grows in large part out of the conviction that the power structure, corporate and government, work together to screw the broad middle class. Left-wing militancy also has a class twist, with progressives increasingly alienated by the gentry politics of the Obama Administration.



Many conservatives here, as well as abroad, reject the huge role of class. To them, wealth and poverty still reflect levels of virtue-- and societal barriers to upward mobility, just a mild inhibitor. But modern society cannot run according to the individualist credo of Ayn Rand; economic systems, to be credible and socially sustainable, must deliver results to the vast majority of citizens. If capitalism cannot do that expect more outbreaks of violence and greater levels of political alienation — not only in Britain but across most of the world’s leading countries, including the U.S.

Scary to think of the mediocre individuals offering themselves up for leadership at this time-- Obama and Romney-- or the much less than mediocre-- a Michele Bachmann or Rick Perry. Why not the very best for a change, someone with real vision and real political courage... a Bernie Sanders?

Job Creation-- Or Another Opportunity To Give Our Tax Dollars To Wall Street Fascists Again?

Yesterday Politico published a scorching OpEd by neo-liberal economist Jeffrey Sachs. Sachs isn't a one-dimensional drooling right-wing ideologue and, although his overall theme is anti-Keynsian claptrap, there is plenty in what he says that can't be denied.

Almost the entire country seems to agree that the debt deal is miserable. Yet the shouting does little to clear up what is really wrong with the deal and with the U.S. economy. Democrats blame Republicans, and Republicans blame Democrats. But both parties are partners in America’s decline.

We need a new direction in the country, and that requires taking on the powerful interests represented by both political parties.

President Barack Obama has failed to lead the country out of crisis. This is not just because of right-wing opposition, but also because Obama has promoted the wrong ideas. He came to office following the end of a Wall-Street-fueled consumption binge that had started during the Clinton administration and collapsed in 2008.

...Obama surrounded himself with the Wall Street types who had deregulated the financial sector and thereby created the bubble economy under President Bill Clinton – Robert Rubin, Larry Summers, Gene Sperling and many others.

What kind of economic policy can one expect when nearly every senior administration official on the economic team is tied to Wall Street? The answer is predictable: One that is unfair, shortsighted and loaded with gimmicks. Yet in our exhausted, post-binge economy, the gimmicks don’t even create a blip in jobs and growth, much less a sustained recovery.

...The Republican opposition is, of course, far nastier and its economics are even worse. The GOP holds that there is one and only one answer to every problem: lower taxes on the rich.

In the Republican ideology, the super-rich are the job-creators and therefore deserve all the money we can shove their way, even as tens of millions of Americans struggle to make ends meet. There is also the idea that the poor are unworthy-- for example, an illegal minority migrant household.

The Republicans forever prey on a divide-and-conquer mentality, which is indeed leaving our country divided and conquered by hate and fear.

Sachs may be feted as a great thinker of the 21st Century but Matt Taibbi is a far keener analyst of real life politics and how it interacts with real life economics. There's probably a lot they agree on but Taibbi's work is more informative, more practical and better suited to a non-academic real world. His latest column in Rolling Stone takes on the dreaded corporate tax holiday concept still being pushed-- vigorously-- by neo-liberal freaks on Wall Street and K Street and in the offices of Republicans and Blue Dogs. In fact corporate whores Kevin Brady (R-TX) and Jim Matheson (Blue Dog-UT) are co-sponsoring a bill, the Freedom to Invest Act, which would “temporarily” lower the effective corporate tax rate to 5.25 percent for all profits being repatriated to America from overseas profits.

Essentially, this is a one-time tax holiday rewarding companies for systematically offshoring their profits since 2004-- the last time they did this “one-time” deal.

The Brady bill is still alive and in speaking to three different Hill staffers (on the House side) over the last few days, I’m hearing that it was “unaffected” by the debt deal and that it continues to gain momentum, thanks in large part to a lobbying effort that two different staffers described as intense and ongoing.

For people interested in this story, I definitely recommend reading this Bloomberg article focusing on Cisco, one of the biggest lobbyers in favor of the tax holiday. This is a company whose CEO, John Chambers, wrote an editorial last October in the Wall Street Journal predicting that the tax holiday would generate a trillion dollars in repatriated earnings, money that Chambers insisted would outdo even Barack Obama’s stimulus as a job-creation engine:

"The amount of corporate cash that would come flooding into the country could be larger than the entire federal stimulus package, and it could be used for creating jobs, investing in research, building plants, purchasing equipment, and other uses."

And yet: Chambers’s company, Cisco, would not commit to creating so much as a single job if the tax holiday is passed. As it is, the company has already committed to a wave of layoffs. When asked a question about Cisco's plans w/regard to a potential tax holiday, the company’s spokesman, John Earhardt, declined to answer. From the Bloomberg piece:

"It’s unclear whether any jobs would come from Cisco, which announced plans in May to shed an unspecified number of workers. Earnhardt, the spokesman, declined to comment on hiring plans for the company, whose customers include Verizon Communications Inc. (VZ) and AT&T Inc. (T)

Matt with Olbermann this week:

Who Lied About How They Would Vote On The Satan Sandwich?

Congratulations to Gabby Giffords for making it back to Congress to vote and being the surprise-- except for Wasserman Schultz and Pelosi-- 95th Democratic Party vote for the Republican agenda, tying the 95 actual Democrats who opposed it. As my old pal Susan Klein remarked on Twitter, it was the most dramatic comeback performance since Judy Garland at Carnegie Hall in 1961. Gabby's appearance meant much more to the assembled politicians-- actually, of both parties-- than Judy's did to anyone but the gays. It was a good moment for the nation-- and a great smokescreen for the supposed defenders of working people, like Wasserman Schultz-- who could use it to change the subject when anyone wondered why she had just given John Boehner 98% of what he wanted.

Debbie Wasserman Schultz's vote was never in doubt of course. She's the ultimate political hack and always has been. Rahm didn't pick her for a leadership role at the DCCC and Obama didn't pick her to head the DNC because she's got an independent spirit or a conscience. She's very nice on women's issues, though... more than one can say about many of the Blue Dogs she relentlessly promotes. But at least Debbie never held out hope that she might take the side of working families and reject the Satan Sandwich. How about the duplicitous Democrats who signed the Grijalva-Ellison letter to Pelosi pledging to never vote for any bill that jeopardizes Social Security, Medicare and Medicaid, which, despite indignant protestations to the contrary by the likes of Debbie Wasserman Schultz, this bill certainly does? The Caucus itself only lost 15 members in the vote yesterday but some of the non-Caucus signers found Wasserman Schultz's and Obama's arguments to back everything Boehner wanted suddenly very persuasive.

The vast majority of the 87 Democrats who signed the letter were true to their word and voted NO-- against the Satan Sandwich. Who broke their word and betrayed their constituents?

Karen Bass (CA)
David Cicciline (RI)
William Lacy Clay (MO)
Jerry Costello (IL)
Mark Critz (PA)
Danny Davis (IL)
Ted Deutch (FL)
Lloyd Doggett (TX)
Chaka Fattah (PA)
John Garamendi (CA)
Luis Gutierrez (IL)
Mazie Hirono (HI)
Sheila Jackson Lee (TX)
Eddie Bernice Johnson (TX)
Hank Johnson (GA)
Dale Kildee (MI)
Jim Langevin (RI)
Stephen Lynch (MA)
Cedric Richmond (LA)
Steve Rothman (NJ)
Frederica Wilson (FL)
David Wu (OR)

A bigger shock came when three Blue Dogs who rarely take the side of working families over Big Business came over to the progressive side in Monday's night's vote-- Leonard Boswell (IA), Dennis Cardoza (CA) and, most shocking of all, Mike McIntyre (NC).


Even before Kissinger's infamous tweet, Matt Taibbi made the same point in Rolling Stone.

The popular take is that Obama is a weak leader of a weak party who was pushed around by canny right-wing extremists. Observers like pollster Sydney Greenberg portray Obama and the Democrats as a group of politically tone-deaf bureaucrats who fail because the public associates them with a corrupt government that benefits the rich and connected.

The Democrats, Greenberg argues, could change their situation by showing the public that they genuinely represent the interests of ordinary working people... But to a bunch of hired stooges put in office to lend an air of democratic legitimacy to what has essentially become a bureaucratic-oligarchic state, what good does such advice do? Would it have made sense to send the Supreme Soviet under Andropov or Brezhnyev a list of policy ideas for enhancing the civil liberties of Soviet citizens?

The Democrats aren't failing to stand up to Republicans and failing to enact sensible reforms that benefit the middle class because they genuinely believe there's political hay to be made moving to the right. They're doing it because they do not represent any actual voters. I know I've said this before, but they are not a progressive political party, not even secretly, deep inside. They just play one on television.

For evidence, all you have to do is look at this latest fiasco.

The Republicans in this debt debate fought like wolves or alley thugs, biting and scratching and using blades and rocks and shards of glass and every weapon they could reach.

The Democrats, despite sitting in the White House, the most awesome repository of political power on the planet, didn't fight at all. They made a show of a tussle for a good long time-- as fixed fights go, you don't see many that last into the 11th and 12th rounds, like this one did-- but at the final hour, they let out a whimper and took a dive.

We probably need to start wondering why this keeps happening. Also, this: if the Democrats suck so bad at political combat, then how come they continue to be rewarded with such massive quantities of campaign contributions? When the final tally comes in for the 2012 presidential race, who among us wouldn't bet that Barack Obama is going to beat his Republican opponent in the fundraising column very handily? At the very least, he won't be out-funded, I can almost guarantee that.

And what does that mean? Who spends hundreds of millions of dollars for what looks, on the outside, like rank incompetence?

It strains the imagination to think that the country's smartest businessmen keep paying top dollar for such lousy performance. Is it possible that by "surrendering" at the 11th hour and signing off on a deal that presages deep cuts in spending for the middle class, but avoids tax increases for the rich, Obama is doing exactly what was expected of him?

So let me go back to the Blue America statement penned for us by Alan Grayson:

We who sign this make the following pledge, to the voters of our districts and to all the American People:

We Are Against Any and Every Cut to Social Security, Medicare and Medicaid benefits. Not today, not tomorrow, and not ever. No way, no how. Not on your life, and not on mine, because both your life and my life may depend on it.

N-E-V-E-R.

Every Blue America candidate has either signed this letter or issued their own statement in their own words equally powerful. Blue America won't be endorsing any incumbents who voted for the Satan Sandwich and won't be endorsing any challengers who don't embrace this pledge to the American people. It's the bottom line. I still hope Mazie Hirono beats Ed Case in Hawaii, of course, but as of yesterday, Blue America ceased raising funds for her. Give your donations to Bernie Sanders instead. One of our Blue America-endorsed candidates, Nick Ruiz (D-FL), the first to sign the pledge, went on to explain what's gone wrong the day after the vote:

All of the American people can’t be wrong.

All of their needs can’t be wrong.

What is wrong is the turn down the Republican rabbit hole. Lost, we are. BHO abdicates executive responsibility by refusing to act to the point of inertia. Republican John Boehner (OH-8) and Company acted extremely. All Cuts are therefore “IN.” In accompaniment, HSBC announces they will shed 30,000 jobs in 2011-2012. This is the coming Age of Austerity. What a howler- cut New Deal programs at the very same time that practically every large corporation in America is cutting jobs and hording cash. ‘Satan sandwich’ anyone?

The American people could be celebrating a democratic victory, if there was one to recognize. Instead, we are faced with the nuts and bolts of the reality of being sold-out under the auspices of a short term ceiling hike and a long term hatchet committee with an appetite for New Deal destruction.

How to put it back together again, as they tear it apart? 2012.

The 2012 playbook is very simple: reject any and every candidate that stands in the way of progressive democracy. Reserve your support; however you give it, for those progressive Democratic candidates that would act in your interest.

You’ll have to be savvy-– because the all too corporate party machinery will be out to trick you with the ruse of mechanical candidates and party-line robots. But the power to represent us is yours to take or give. The power is in your vote. It’s in your contributions. It’s in the time you volunteer. It’s in your letters to the editors of newspapers and blogs.

Hope? Change? No, we haven’t. But I promise you-- we will.

Polar Opposites: Dave Lutrin And Sean Duffy (AKA- Paul Ryan, Jr.)

Sean Duffy, clearly a mindless acolyte of Paul Ryan, himself a mindless acolyte of admitted Jesus-hater Ayn Rand, was reminded, if just subliminally, by the SEIU this week, that Gore, Kerry and Obama all carried, by increasingly large margins, Wisconsin's 7th congressional district. Perhaps his boyfriend Paul saved his ass by directing the gerrymandering of the district to include more Republicans and fewer Democrats. Perhaps. But McCain only won 43% of the district and next year Duffy's opponent, state Senator Pat Kreitlow, is widely acknowledged one of Wisconsin's most talented political leaders-- as well as the adored and respected longtime evening news anchor for WEAU-TV in Eau Claire, the heart of the district. And he has an impressive legislative record of accomplishment for Wisconsin working families... unlike Duffy, who just "me-too's" everything Ryan ever says and was the lead sponsor this week on the bill to eviscerate Dodd-Frank, making it easier for his Wall Street campaign donors to prey on unsuspecting consumers. Matt Taibbi didn't mention Duffy in his latest Rolling Stone piece, but he was certainly describing him.

"We're seriously talking about defaulting on our debt, and cutting Medicare and Social Security, so that Google can keep paying its current 2.4 percent effective tax rate and GE, a company that received a $140 billion bailout en route to worldwide 2010 profits of $14 billion, can not only keep paying no taxes at all, but receive a $3.2 billion tax credit from the federal government. And nobody appears to give a shit. What the hell is wrong with people? Have we all lost our minds?"

I doubt Duffy-- or even his mentor for that matter-- would understand a word of any of that. These are purely political creatures out to make a buck for themselves. They get their marching orders from Wall Street and Big Business-- the folks who finance their careers. When Obama was still insisting Ryan was "serious" and worth paying attention to, Nobel Prize-winning economist Paul Krugman had already alerted the country to the fact that Ryan's ideas were worthless and that Ryan himself is nothing but a Flimflam Man. Duffy is just a Flimflam wanna-be. Thursday Krugman was on Ryan and all the little nihilistic Ryan wanna-be's again.

[W]e’re looking at not one but two looming crises, either of which could produce a global disaster. In the United States, right-wing fanatics in Congress may block a necessary rise in the debt ceiling, potentially wreaking havoc in world financial markets. Meanwhile, if the plan just agreed to by European heads of state fails to calm markets, we could see falling dominoes all across southern Europe-- which would also wreak havoc in world financial markets.

We can only hope that the politicians huddled in Washington and Brussels succeed in averting these threats. But here’s the thing: Even if we manage to avoid immediate catastrophe, the deals being struck on both sides of the Atlantic are almost guaranteed to make the broader economic slump worse.

In fact, policy makers seem determined to perpetuate what I’ve taken to calling the Lesser Depression, the prolonged era of high unemployment that began with the Great Recession of 2007-2009 and continues to this day, more than two years after the recession supposedly ended.

Let’s talk for a moment about why our economies are (still) so depressed.

The great housing bubble of the last decade, which was both an American and a European phenomenon, was accompanied by a huge rise in household debt. When the bubble burst, home construction plunged, and so did consumer spending as debt-burdened families cut back.

Everything might still have been O.K. if other major economic players had stepped up their spending, filling the gap left by the housing plunge and the consumer pullback. But nobody did. In particular, cash-rich corporations see no reason to invest that cash in the face of weak consumer demand.

Nor did governments do much to help. Some governments-- those of weaker nations in Europe, and state and local governments here-- were actually forced to slash spending in the face of falling revenues. And the modest efforts of stronger governments-- including, yes, the Obama stimulus plan-- were, at best, barely enough to offset this forced austerity.

So we have depressed economies. What are policy makers proposing to do about it? Less than nothing.

The disappearance of unemployment from elite policy discourse and its replacement by deficit panic has been truly remarkable. It’s not a response to public opinion. In a recent CBS News/New York Times poll, 53 percent of the public named the economy and jobs as the most important problem we face, while only 7 percent named the deficit. Nor is it a response to market pressure. Interest rates on U.S. debt remain near historic lows.

Yet the conversations in Washington and Brussels are all about spending cuts... For those who know their 1930s history, this is all too familiar. If either of the current debt negotiations fails, we could be about to replay 1931, the global banking collapse that made the Great Depression great. But, if the negotiations succeed, we will be set to replay the great mistake of 1937: the premature turn to fiscal contraction that derailed economic recovery and ensured that the Depression would last until World War II finally provided the boost the economy needed.

Did I mention that the European Central Bank-- although not, thankfully, the Federal Reserve-- seems determined to make things even worse by raising interest rates?

There’s an old quotation, attributed to various people, that always comes to mind when I look at public policy: “You do not know, my son, with how little wisdom the world is governed.” Now that lack of wisdom is on full display, as policy elites on both sides of the Atlantic bungle the response to economic trauma, ignoring all the lessons of history. And the Lesser Depression goes on.

The fiscal catastrophe of the 30's brought on something else in much of the world, the rise of Big Business financed faux populist movements-- fascists-- that have too many similarities to our own Teabaggers to ignore. So be better not. However, at the same time, there was a heightened consciousness among working families that weren't sucked in by the allure of fascism. While Hitler, Franco and Mussolini rose in Europe, Franklin Roosevelt vanquished the Republican fascists here in America. Obama is no FDR by any stretch of anyone;s imagination, but there are political leaders in every part of America, some in Congress, some in state government, some not in any governmental positions, ready to fight back. I want to point one out I hope we'll be hearing a lot more from this year.

David Lutrin was a Democratic candidate for Florida's 16th CD in 2006... until Rahm Emanuel forced him out of the race to make way for a self-funding Republican willing to switch his party registration. Emanuel's candidate won, went on to be as big a pervert as the Republican he replaced (Mark Foley) and lost reelection-- after voting with the GOP for two miserable years. Now the district is represented by a rich right-wing asshole, Tom Rooney, perhaps the worst member of Florida's congressional delegation (not counting Allen West). I wonder if we could persuade Dave Lutrin to run again. From the sound of this video, he's still as passionate about the issues the country faces as ever:

Making War In Libya... For Goldman Sachs And J.P. Morgan?

An overwhelming majority of Americans don't like our involvement in the bombing campaign against Libya but whether you think that what looks like the congressional wrist slap goes far enough, the resolution Webb and Corker are proposing on that war, it certainly guarantees that there will be a debate on U.S. policies there and-- at least in theory-- if Obama can't make an argument on the merits (and so far he hasn't been able to), then Congress will be bound to restrain the executive branch over reach. That would be a first in many decades. This is the press release that went out with S.J.Res, 18 this week:

Senators Jim Webb (D-VA) and Bob Corker (R-TN) today introduced a joint resolution requiring the Administration to provide a detailed justification of U.S. operations in Libya and prohibiting the deployment of U.S. troops on the ground there. It further calls on the President to request authorization for the continuation of U.S. involvement in NATO activities and states that Congress should fully debate such a request expediently. Nearly 90 days after the initiation of force in Libya, such debate has not occurred.

The bipartisan resolution states, “The President has failed to provide Congress with a compelling rationale based upon United States national security interests for current United States military activities regarding Libya.” It calls for an unclassified report to provide essential information to Congress and the American public to evaluate U.S. involvement in Libya and appropriately debate it.

“When we examine the conditions under which the President ordered our military into action in Libya, we are faced with the prospect of a very troubling historical precedent that has the potential to haunt us for decades,” said Senator Webb. “The issue for us to consider is whether a President-- any President-- can unilaterally begin, and continue, a military campaign for reasons that he alone defines as meeting the demanding standards worthy of risking American lives and expending billions of dollars of our taxpayers’ money. It is important for Congress to step in and clearly define the boundaries of our involvement.”

“It has now been more than 80 days since the United States first launched military action in Libya in what was supposed to be only a very limited operation, but neither the Congress nor the American people have any clearer view of the administration’s stated mission or end game for our military involvement in Libya. Having been denied answers, repeatedly, to these fundamental questions or even a comprehensive debate to consider the merits of U.S. involvement in such an engagement, it’s long past time to set a final deadline to get the information every man and woman who puts on a uniform and every taxpayer who funds the operation deserves,” Senator Corker said.

The joint resolution, which would have the force of law, requires the Administration to publicly answer a detailed series of questions about the Libya operation within 14 days of enactment. Parts of the resolution mirror bills passed in the House of Representatives.

Someplace Webb and Corker don't have the imaginations or the will to go is to ask what the hell we're doing bombing the hell out of this small country in the first place. Why Libya instead of, say, Syria or Bahrain, each of which is doing far worse to its citizens, the ostensible "reason" we're involved with this massive attack on Libya? In a pair of powerful investigative articles that would do far more credit to the Senate than the toothless joint resolution, journalist Russ Baker posits that evidence makes it clear that Qaddafi has been set up and that the U.S. in part of a plan to create an “Arab Spring” for the Good Old Boys-- CIA, banks, oil companies. Hopefully, you've been following Matt Taibbi's exciting reporting on the relationship between Qaddafi and the bandits at Goldman Sachs.

Libya was eager to join the big leagues of finance, and its investors were “awed” by an Arabic-speaking Goldman executive who urged them into an options deal that bet on the fortunes of companies including Citigroup Inc. C +0.23% , Allianz DE:ALV -1.33% and Italy’s UniCredit IT:UCG +2.08%.

The LIA, Libya’s sovereign wealth fund, was charmed by the demonstration and decided to go all-in with a $1.5 billion bet. Goldman very quickly lost them 98 percent of that money.

I never knew it was even possible to lose 98 percent of an investment that quickly. If you sent a blind, three-legged donkey into Caesar’s palace with $1.5 billion in chips, it could probably stay solvent longer than this options package Goldman sold to Qaddafi.

How could the Libyans be enticed to take such a crappy deal? See if this sounds familiar: according to the Wall Street Journal, the Libyan fund manager felt that Goldman had "misrepresented" the fantastic investment opportunity Goldman sold to them, and also made trades "without proper authorization."

...Having managed to get their bankers out of Libya with their heads still attached to their shoulders, Goldman decided to make up for losing $1.5 billion of Qaddafi’s money by offering the international pariah a $3.7 billion equity stake that would have made him one of the largest single owners of the bank.

In con-man parlance, this is called the reload. You beat someone in a Ponzi scheme for his life’s savings, and when he shows up at your door with an axe, you get him to mortgage his house to buy a stake in the Brooklyn Bridge. After blowing $1.5 billion of Libya’s money almost instantaneously, Goldman’s solution to the problem was to immediately get Qaddafi reaching back into his pocket for a cash sum over twice the size of the original losses. It’s really hard not to admire the sheer balls of the whole deal.

Baker starts by asking if there is any actual evidence that the claims by Qaddafi’s defecting Justice Minister, Mustafa Mohamed Abud Al Jeleil, that Qaddafi was the culprit behind the bombing of Pan Am 103 are true. "This story," he points out, "made it into major news media throughout the world, without anyone stopping to raise questions about the propaganda benefit of the statement, or of the timing." And though no one has seen any of the promised "evidence," the original headlines did the trick-- anyone watching television or reading stories then would have been led to believe that Qaddafi was behind the Lockerbie tragedy. That's when Obama called on Qaddafi to step down and started down the road to the "humanitarian" attacks on Tripoli.

By December 2010, when a Tunisian man set himself on fire, the Arab Spring revolt was under way—in Egypt, Bahrain, and elsewhere. Pretty quickly, it was clear to everyone that the Western powers were in danger of losing crucial oil suppliers—and vital military bases.
It certainly was convenient that, right about that time, Libya showed signs of moving in the opposite direction-- into the US camp. Read our piece here about the CIA ties to the Libyan uprising.

Then consider the timing of February’s ramped-up claim by the defecting Libyan official, that Qaddafi himself had ordered the Lockerbie bombing.

If that wasn’t enough in the propaganda department to get the global public worked up, next came the Libya rape story. The average person doesn’t have the time or appetite to follow the kinds of complex corporate maneuverings that fascinate us here, but they do understandably get upset about bombs on civilian aircraft and rape.

...We noted the timing of the story, the alacrity with which the Western press grabbed it and spread it, and the simple fact that there’s no evidence tying Qaddafi in any way to any such act. Even the woman herself doesn’t claim that.  Yet it infuriated untold millions and postings all over the Web show that it moved a lot of public opinion into the column supporting military action to remove the Libyan leader.

That the corporate media cannot see what is going on here, or refuses to see, tells us how far we have not come since the Gulf of Tonkin Resolution.

Still, we can hear the other shoe dropping if we listen carefully enough. For example, the website Politico ran a little item the other day on a powwow between Hillary Clinton and corporate executives over business opportunities in Iraq.

FIRST LOOK: WALL STREET IN IRAQ? – Secretary of State Hillary Clinton and Deputy Secretary Tom Nides (formerly chief administrative officer at Morgan Stanley) will host a group of corporate executives at State this morning as part of the Iraq Business Roundtable. Corporate executives from approximately 30 major U.S. companies-- including financial firms Citigroup, JPMorganChase and Goldman Sachs-- will join U.S. and Iraqi officials to discuss economic opportunities in the new Iraq. Full list of corporate participants.

Give it a couple of years, and they’ll be having the same party celebrating a more sympathetic regime in Libya.