Will Wall Street Try To Sabotage Elizabeth Warren's Senate Campaign? They Already Are!

This goes beyond class warriors Darrell Issa and Patrick McHenry using a Wall Street lobbyist disguised as a "staffer" to sabotage Elizabeth Warren's testimony in Congress. Keep in mind that Wall Street has showered Scott Brown with cash. His biggest single source of campaign "contributions" comes from the financial predators Elizabeth Warren has been urging government to protect consumers from. So far the financial sector has donated over $1.8 million to Brown's short career in federal politics. This year alone, he's taken in more money than any other Republican senator other than Bob Corker (TN) of the Banking Committee and, more to the point, the Subcommittee of Securities, Insurance and Investment. The crooks who run the big players in this sector will pay anything to keep Corker and Brown in office and in Brown's case-- to keep Elizabeth Warren out of office. The idea of her in the Senate drives the banksters insane.

Elizabeth Warren’s combative history with Wall Street could create a fundraising dilemma for her burgeoning Senate campaign. 



Her ardent grassroots following on the left-- forged during stints as TARP watchdog and as mastermind of the Consumer Financial Protection Bureau-- would likely make her a formidable Senate candidate in Massachusetts.



But her reputation as sheriff to Wall Street could also be a liability against Sen. Scott Brown (R-Mass.), a popular Republican who has been stockpiling campaign cash in anticipation of a tight 2012 race.



..."I think it's pretty clear she's going to run the classic, grassroots campaign here in Massachusetts," said Mary Anne Marsh, a longtime Democratic operative in the state. "That means she's going to rely on folks here to give low-dollar donations here a number of times."



But without the support of heavy-hitting donors in Massachusetts, many of whom work at hedge funds and other financial firms, Warren might find it difficult to keep up with Brown’s fundraising juggernaut.



Dubbed “Wall Street’s Favorite Congressman” in a Forbes article last year, Brown reported having more than $9.6 million in the bank at the end of June. A good portion of that money came from the financial-services sector, according to data compiled by the Center for Responsive Politics.



Employees of the Boston-based Fidelity Investments are the single biggest group of donors to Brown’s campaign committee, contributing more than $85,000 since 2007, according to the watchdog’s data. Employees at Goldman Sachs, Bank of New York Mellon, Morgan Stanley and Bank of America are also top donors.

Warren, on the other hand, is going to have to depend on... Americans who want to take back their government from the avaricious banksters. Last week, Paul Krugman made it clear just what that means: Finally, Someone to Run Against Wall Street

One of the truly amazing things about American politics in the Lesser Depression is that nobody in political life has been willing to run as the champion of ordinary Americans against the financial wheeler-dealers who brought this disaster on us. Republicans won’t, of course, because their worldview says that greed is good and government the only source of evil. But Obama has also been almost weirdly unwilling to express even the slightest populism.



So I’m glad to hear that Elizabeth Warren will apparently run for Senate. She’s no Huey Long-- her manner is more schoolteacher than rabble-rouser-- but that makes her more credible. And she’s got the best credentials on the financial crisis of any prominent figure in American life.



This should be edifying.

Yes, edifying... and expensive. Can you chip in? Blue America has only endorsed two candidates for the Senate this year, Warren and Bernie Sanders. We want to see both of them working together for regular American families... somewhat of a rarity in the good ole boys club that is the U.S. Senate. Hard to say exactly what will happen this early in the cycle but my guess is that Blue America may endorse one or possible two more Senate candidates this year. That's it. We want THE BEST, not "better than the horrible alternative."

My Friend Larry Goldstein Had A Canary Named Perry When I Went To PS-197

Those Texan jaw muscles look very much in practice, don't you think?

Judging by the media clamor Monday, Texas Governor George W. Bush Rick Perry won the Iowa straw poll and is the Republican front runner. One almost feels sorry for Romney-- I mean it is his turn and he has been anointed by the Elders of Plutocracy-- and Bachmann, who fancied herself the anti-Mitt. Her success at anti-Mittdom, though, is what motivated the Elders to push Pawlenty and, now, Perry, to run. Neither is remotely equipped to actually be president, nor even run a competent campaign, but both are said to appeal to the brainless zombies Fox and Limbaugh have worked so hard to create and have been so firmly behind Bachmann. Pawlenty failed... dismally. So Perry's taking a shot at her constituency and Pawlenty obediently faded away... the same weekend. My guess is that Perry will win over enough of Bachmann's crowd-- I mean, in the end, for those folks, she's just a woman, obedient or not, and he's... an all-American cowboy-- with good hair! Yahooo.



Presumably he'll run on the Texas Economic Miracle, something local Texas bloggers have been working hard to illustrate for the uninitiated at Perry For President FML. That's the go-to site for everything anyone might want to know about Rick Perry... in convenient bite-sized bits (so even Republican primary voters can understand it). Many thoughtful commentators, from Jed Lewison, Dylan Matthews and Brad Plumer to Paul Krugman took a closer, in-depth look at the Perry Miracle and spit their coffees out all over their breakfast tables. Krugman, who has a knack of being able to see through fairy-tales and tall-tales, particularly of the economic variety. He went right after Perry's likely campaign claim that he can restore prosperity to America by applying the same policies at a national level that he used to bring on the "Texas Miracle," which he flatly terms "a myth... and more broadly that Texan experience offers no useful lessons on how to restore national full employment."

It’s true that Texas entered recession a bit later than the rest of America, mainly because the state’s still energy-heavy economy was buoyed by high oil prices through the first half of 2008. Also, Texas was spared the worst of the housing crisis, partly because it turns out to have surprisingly strict regulation of mortgage lending.



Despite all that, however, from mid-2008 onward unemployment soared in Texas, just as it did almost everywhere else.



In June 2011, the Texas unemployment rate was 8.2 percent. That was less than unemployment in collapsed-bubble states like California and Florida, but it was slightly higher than the unemployment rate in New York, and significantly higher than the rate in Massachusetts. By the way, one in four Texans lacks health insurance, the highest proportion in the nation, thanks largely to the state’s small-government approach. Meanwhile, Massachusetts has near-universal coverage thanks to health reform very similar to the “job-killing” Affordable Care Act.



So where does the notion of a Texas miracle come from? Mainly from widespread misunderstanding of the economic effects of population growth.



For this much is true about Texas: It has, for many decades, had much faster population growth than the rest of America-- about twice as fast since 1990. Several factors underlie this rapid population growth: a high birth rate, immigration from Mexico, and inward migration of Americans from other states, who are attracted to Texas by its warm weather and low cost of living, low housing costs in particular.



And just to be clear, there’s nothing wrong with a low cost of living. In particular, there’s a good case to be made that zoning policies in many states unnecessarily restrict the supply of housing, and that this is one area where Texas does in fact do something right.



But what does population growth have to do with job growth? Well, the high rate of population growth translates into above-average job growth through a couple of channels. Many of the people moving to Texas-- retirees in search of warm winters, middle-class Mexicans in search of a safer life-- bring purchasing power that leads to greater local employment. At the same time, the rapid growth in the Texas work force keeps wages low-- almost 10 percent of Texan workers earn the minimum wage or less, well above the national average-- and these low wages give corporations an incentive to move production to the Lone Star State.



So Texas tends, in good years and bad, to have higher job growth than the rest of America. But it needs lots of new jobs just to keep up with its rising population-- and as those unemployment comparisons show, recent employment growth has fallen well short of what’s needed.



If this picture doesn’t look very much like the glowing portrait Texas boosters like to paint, there’s a reason: the glowing portrait is false.



Still, does Texas job growth point the way to faster job growth in the nation as a whole? No.



What Texas shows is that a state offering cheap labor and, less important, weak regulation can attract jobs from other states. I believe that the appropriate response to this insight is “Well, duh.” The point is that arguing from this experience that depressing wages and dismantling regulation in America as a whole would create more jobs-- which is, whatever Mr. Perry may say, what Perrynomics amounts to in practice-- involves a fallacy of composition: every state can’t lure jobs away from every other state.



In fact, at a national level lower wages would almost certainly lead to fewer jobs-- because they would leave working Americans even less able to cope with the overhang of debt left behind by the housing bubble, an overhang that is at the heart of our economic problem.



So when Mr. Perry presents himself as the candidate who knows how to create jobs, don’t believe him. His prescriptions for job creation would work about as well in practice as his prayer-based attempt to end Texas’s crippling drought.

Matthew Yglesias reminds us that Perry "wrote" a book in 2010 Fed Up! Our Fight To Save America From Washington. He may have left out the ending And Turn It Over To Our Wonderful, Generous Corporations. Ygelsias decided this would be a good week to go back over the book and pick out the 10 weirdest-- no not in the Mormon sense-- ideas:

— 10. Social Security Is Evil: According to Perry Social Security is “by far the best example” of a program “violently tossing aside any respect for our founding principles.” (page 48)



— 9. Private Enterprise Blossomed Under Conscription and Wartime Price Controls: Not only does he argue that the New Deal failed to end the Great Depression, but he asserts “recovery did not come until World War II, when FDR was finally persuaded to unleash private enterprise.” (page 48)



— 8. Medicare is Too Expensive But Must Never Be Cut: Both establishing Medicare in 1965 and expanding it to include prescription drugs in 2003 are examples of “an irresponsible culture of spending in Washington” (page 63), but establishing “‘councils of experts’ and panels of various sorts” to assess the cost effectiveness of different Medicare-eligible treatments is a “frightening” “scheme” that “undermines freedom” and can be fairly labeled “death panels” (page 81).



— 7. All Bank Regulation Is Unconstitutional: Criticizing the Security and Exchange Commission’s rulemaking process under the Dodd-Frank financial regulation bill, Perry asserts that “if the Constitution were shown the appropriate respect, Washington regulation writers wouldn’t have to worry about underrepresented views, because they wouldn’t have control over them in the first place” (page 94).



— 6. Consumer Financial Protection Is Unconstitutional: Further reiterates his view that all federal financial regulation is illegitimate, listing the SEC on page 44 as part of a “federal alphabet soup” in which “undemocratic unelected Washington bureaucrats” are “now (dubiously) empowered to dictate their own preferences to the American people.”



— 5. Almost Everything Is Unconstitutional: Regrets the existence of jurisprudence construing the Commerce Clause to permit “federal laws regulating the environment, regulating guns, protecting civil rights, establishing the massive programs and Medicare and Medicaid, creating national minimum wage laws, [and] establishing national labor laws.” Perry makes a partial exception for laws barring racial discrimination which he says fulfill “the intent behind the passage of the Reconstruction Era amendments.” (page 51)



— 4. Federal Education Policy Is Unconstitutional: Cites the willingness of Republicans to vote for reauthorization of the Elementary and Secondary Education Act as a “perfect example” of “losing sight of the fact that perfectly laudable policy choices at the local level are not appropriate (much less constitutional) at the federal level.” (page 87)



— 3. Al Gore Is Part Of A Conspiracy To Deny The Existence Of Global Cooling: Jokes that the Social Security Trust Fund “must be somewhere in Al Gore’s lockbox, right next to his notes from inventing the Internet and that global cooling data he doesn’t want anyone to see” (page 60). Argues that moderates oppose curbing greenhouse gas emissions because “they know that we have been experiencing a cooling trend” (page 92).



— 2. Not Only Is Everything Unconstitutional, Activist Judges Are a Problem: Having called the majority of the duly enacted modern welfare state and federal regulatory apparatus unconstitutional, Perry pivots to the complaint that “the [Supreme] court too often chooses to take it upon itself to govern and to develop policy” (page 114).



— 1. The Civil War Was Caused By Slaveowners Trampling On Northern States’ Rights: Rather than simply citing chattel slavery as an exemption to his “states’ rights are good” principle, Perry argues that slaveholder activism in the 1850s was an example of big government federal overreach. “In many ways it was the northern states whose sovereignty was violated in the run-up to the Civil War,” he argues, citing the Fugitive Slave Act and completely ignoring the human rights of the enslaved African-Americans of the South. He says “we can never know what would have happened in the absence of federal involvement,” ignoring again the fact that federalism would have bought peace at the price of continued slavery.

Actual new ad in the Austin Statesman this week

I guess this is what Obama is counting on to bring out the voters regardless of what a thoroughly mediocre and disappointing president he's been. Could work too. Even Karl Rove slapped Perry around today-- and for more than just his not-ready-for-rime-time call for violence against Bernanke.

It's no secret that Team George W. Bush and Team Rick Perry are not exactly close. And with Perry flailing after he accused Federal Reserve chair Ben Bernanke of "almost treasonous" behavior, one of Team W's biggest names is taking the opportunity to twist the knife.



"You don't accuse the chairman of the federal reserve of being a traitor to his country. Of being guilty of treason," Karl Rove told Fox News Tuesday. "And, suggesting that we treat him pretty ugly in texas. You know, that is not, again a presidential statement."



...Rove's not pulling any punches, suggesting that Perry's comments are a sign of a candidate destined to be gaffe-prone.



"If Rick Perry were to be elected president he'd be saddled with Ben Bernanke who has a term. He's an independent chairman of the federal reserve board, appointed by president and confirmed by Congress and serves for a term and the president couldn't even ask him to resign," Rove said. "So, this is -- I hope this is not the first of sort of over the top statements."



As ThinkProgress reports, Rove also took on Perry over his attempts to distance himself from Bush, whom he served with as Lt. Gov. of Texas before ascending to the big chair when Bush moved to the White House.

Interesting discussion of Perry's chances to win by Rachel Maddow and Howard Dean last night:

Americans Need Jobs, Not A Right-Wing Austerity Agenda To Make The Rich Even Richer

Trustfund jerk Harold McGraw III uses the company his grandpa built to crash the stock market to bolster his pal Mitt Romney

Worldwide stock markets crashed Monday as determined and uncompromising right-wing nihilism was being factored into everyone's economic calculations. Oddly enough, U.S. treasuries, the target in the S&P downgrade, actually improved. But no one seems to care about that odd detail. Yesterday Paul Krugman asked his readers to behold the power of a stupid narrative, which seems impervious to evidence.

1. US debt is downgraded, sparking demands for more ill-advised fiscal austerity



2. Fears that this austerity will depress the economy send stocks down



3. Politicians and pundits declare that worries about US solvency are the culprit, even though interest rates have actually plunged



4. This leads to calls for even more ill-advised austerity, which sends us back to #2

Meanwhile, the Mitt Romney supporter who controls the S&P, Harold W. McGraw III, hereditary grandson of the McGraw-Hill founder, and like most hereditary grandchildren, a rapid right-wing moron with a tiny little dysfunctional brain, has now started downgrading municipal and state bonds as well.

While not unexpected, the move has far-reaching implications for thousands of local governments already burdened by steep deficits.



Among those affected so far:



• Tacoma, WA.



• Atlanta Downtown Development Authority, GA.



• The Board of Governors of the University of North Carolina



• Miami, FL.



Additional federal debt was also downgraded, including some issued by The Architect of the Capitol and the Department of Transportation.

A report from Reuters was more optimistic on muni bonds:

Two positive factors give the market a shot at hanging onto last week's sparkling gains, when yields on some top quality bonds tumbled as much as 40 basis points: the lack of supply and the safe-haven bid for Treasuries.



"It's so hard to predict, but I don't foresee this announcement by S&P as being a catalyst for selling," said Robert Nelson, managing analyst for Municipal Market Data, which is part of Thomson Reuters.



"The possibility of this downgrade was already known to this marketplace as it traded up so aggressively last week," he said.



Though the municipal market only partly shared the Treasury market's extraordinary rally, analysts say the tax-free market is getting some safe-haven buying from investors unnerved by the stock market's plunge last week.



On Monday, Standard & Poor's is expected to downgrade the ratings of pre-refunded municipal bonds, U.S. mortgage agencies and other credits tied tightly to the federal government. Late Friday, S&P cut the country's credit rating to "AA-plus" from "AAA" and gave a negative outlook to the long-term rating.



Perhaps the downgrading of the U.S. rating might have had more impact on municipals in previous years, when there was a bit of an expectation that the U.S. federal government might ride to the rescue of beleaguered states or cities.



..."I think we've heard from a number of officials in the federal government, and I think that at the same time the federal government is not in any position to bail out states, so in the muni market I think most recognize that the notion of the federal government as a backstop has been pretty largely discounted," Nelson said.



The immediate market impact of the U.S. credit downgrade might be somewhat muted by the tax-free market's traditional strengths.



Many of the tens of thousands of tax-free issuers, from states to counties and schools, raise revenue from their own taxes and fees, independently of the federal government. The default rate historically has been under 1 percent.



"I don't see a tremendous flight out of municipals; you might see credit spreads widening for lower-rated issues, but we also think a lot will hold their ratings," said Evan Rourke, a portfolio manager with Eaton Vance in New York.



"Our feeling is that you can still have an AAA-rated credit ... you could have AAA-rated credits in an AA-plus-rated country," he said.

Wall Street's "solution" is to sell off Social Security and Medicare and leave the elderly to their tender mercies. That isn't likely to happen if the voters elect progressives next year instead of conservative Democrats or reactionary Republicans, the double-headed enemy of America's working families. Carol Shea Porter is running for her old seat in New Hampshire, now that voters there have had a shocking taste of what happens when you trust Republicans with the keys to the car. She has a very different view of the debut "crisis" and what to do about the economy that the conventional anti-family "wisdom" on Wall Street.

Washington is awash in congratulations and claims of noble compromise. House Republicans are bragging about becoming fiscally responsible while maintaining a morally responsible budget. There’s just one problem. It's not true. The only thing they should feel good about now is their vote to keep the United States from a catastrophic default.

 

The national debt is a staggering 14.3 trillion dollars. The debt ceiling deal they struck with Republican Tea Partiers (who the very conservative Wall Street Journal called "tea-party Hobbits") will only reduce the yearly deficits. It will not vigorously take on the debt. That's like paying the new monthly bills on your credit card each month without significantly reducing the overall balance. And most importantly, it will hurt the already struggling middle class and the poor, and drastically reduce the city and state government services our citizens need and rely on. It also will not create jobs; rather, it will eliminate jobs.

 

In order to properly function, this country must raise revenue. And Republicans in Congress have made it perfectly clear that they would have let this great nation crash into default and ruin our credit rather than raise revenue. They would not ask their campaign benefactors to do what the overburdened middle class has been doing for years-- pay up. Republicans refused to close tax loopholes for oil companies and other corporations. They refused to take subsidies away. They refused to give up the Bush-era tax cuts. Just last year, they convinced the president and Congress to extend them as part of a deal to continue long-term unemployment benefits, even though, as the Center on Budget and Policy Priorities demonstrated, the rise in debt would stop if they simply let the Bush tax cuts expire. They know that the top 1% doesn't need those tax cuts since they already receive almost 25% of all income and control more than 40% of the nation's wealth, but Republicans refuse to reclaim that much-needed revenue that could help the debt problem. Republicans also refused to change the tax code, which, as the General Accountability Office warned us back in February of 2009, allowed 67% of US corporations and 68% of foreign corporations to pay zero income taxes. That's right. Zero. Republicans simply would not raise any revenue. This is equivalent to the head of a family simply refusing to earn income, telling the family to instead just stop spending on essentials.



The Republicans refused to raise a single dime to pay down the debt, and President Obama could not get them to compromise at all. They refused to listen to Ronald Reagan's former Director of the Office of Management and Budget, who warned them last summer, "If there were such a thing as Chapter 11 for politicians, the Republican push to extend the unaffordable Bush tax cuts would amount to a bankruptcy filing." They refused to listen to any plea for more revenue, but this country needs everyone, not just small businesses and the middle class, to pay their fair share if we are to reduce our debt.

 

Both New Hampshire members of Congress played follow the leader and took that tea-party/partisan stance, refusing to raise any revenue anywhere on anyone or anything, even if we cut Social Security and Medicare, even if we cut health care, even if we did not repair bridges, even if we cut jobs. These two members have the Republican problem-- they have all signed a pledge, not to their constituents, but to Grover Norquist, the head of Americans for Tax Reform, and they would be severely punished if they violated "the pledge." They would be targeted and attacked on TV, radio, and by mail if they dared to even consider raising revenue from the dodgers.



So here we are, saddled with a Republican majority so beholden to a pledge to protect corporations and the top 1% that they cannot and will not defend the middle class or work to protect essential programs. We have a President who is surrounded by these partisans who threaten to bring down the economy if their demands are not met. And we have an exhausted and all too frequently unemployed middle class that is left wondering why corporations don't have to pay taxes, why the top 1% aren't included in the "shared sacrifice" formula, and why this nation can't pay its debts. But they don’t have to look far for an answer. With this debt-ceiling fight, their Republican leaders just showed the people who they actually work for.

Obama Working With The Republicans To... Undermine Obama

To combat President Obama's goal of bringing down unemployment, the Republican party has systematically-- both in Congress and on a state basis in places like Wisconsin, Michigan, Ohio, Florida, Georgia, Maine, where they have installed fascist-leaning governors and legislatures-- slashed "government" jobs. Obama's tepid, go-slow approach to stimulus, didn't factor in determined Republican opposition to fixing the jobs problem. Why would Republicans do that? Two overriding reasons: to hamper Obama's chance for reelection by keeping unemployment high, "on his watch," and for the reason right-wing parties always oppose full employment-- to keep the price of labor low and the power of unions minimal.

In today's NY Times Emory University psychology professor Drew Westen, author of The Political Brain: The Role of Emotion in Deciding the Fate of the Nation, take a look at the other half of the equation, what happened to Obama? We could have seen what was coming on Inauguration Day.

When Barack Obama rose to the lectern on Inauguration Day, the nation was in tatters. Americans were scared and angry. The economy was spinning in reverse. Three-quarters of a million people lost their jobs that month. Many had lost their homes, and with them the only nest eggs they had. Even the usually impervious upper middle class had seen a decade of stagnant or declining investment, with the stock market dropping in value with no end in sight. Hope was as scarce as credit.

In that context, Americans needed their president to tell them a story that made sense of what they had just been through, what caused it, and how it was going to end. They needed to hear that he understood what they were feeling, that he would track down those responsible for their pain and suffering, and that he would restore order and safety. What they were waiting for, in broad strokes, was a story something like this:

“I know you’re scared and angry. Many of you have lost your jobs, your homes, your hope. This was a disaster, but it was not a natural disaster. It was made by Wall Street gamblers who speculated with your lives and futures. It was made by conservative extremists who told us that if we just eliminated regulations and rewarded greed and recklessness, it would all work out. But it didn’t work out. And it didn’t work out 80 years ago, when the same people sold our grandparents the same bill of goods, with the same results. But we learned something from our grandparents about how to fix it, and we will draw on their wisdom. We will restore business confidence the old-fashioned way: by putting money back in the pockets of working Americans by putting them back to work, and by restoring integrity to our financial markets and demanding it of those who want to run them. I can’t promise that we won’t make mistakes along the way. But I can promise you that they will be honest mistakes, and that your government has your back again.” A story isn’t a policy. But that simple narrative-- and the policies that would naturally have flowed from it-- would have inoculated against much of what was to come in the intervening two and a half years of failed government, idled factories and idled hands. That story would have made clear that the president understood that the American people had given Democrats the presidency and majorities in both houses of Congress to fix the mess the Republicans and Wall Street had made of the country, and that this would not be a power-sharing arrangement. It would have made clear that the problem wasn’t tax-and-spend liberalism or the deficit-- a deficit that didn’t exist until George W. Bush gave nearly $2 trillion in tax breaks largely to the wealthiest Americans and squandered $1 trillion in two wars.

And perhaps most important, it would have offered a clear, compelling alternative to the dominant narrative of the right, that our problem is not due to spending on things like the pensions of firefighters, but to the fact that those who can afford to buy influence are rewriting the rules so they can cut themselves progressively larger slices of the American pie while paying less of their fair share for it.

But there was no story-- and there has been none since.

In similar circumstances, Franklin D. Roosevelt offered Americans a promise to use the power of his office to make their lives better and to keep trying until he got it right. Beginning in his first inaugural address, and in the fireside chats that followed, he explained how the crash had happened, and he minced no words about those who had caused it. He promised to do something no president had done before: to use the resources of the United States to put Americans directly to work, building the infrastructure we still rely on today. He swore to keep the people who had caused the crisis out of the halls of power, and he made good on that promise. In a 1936 speech at Madison Square Garden, he thundered, “Never before in all our history have these forces been so united against one candidate as they stand today. They are unanimous in their hate for me-- and I welcome their hatred.”

...[W]hen faced with the greatest economic crisis, the greatest levels of economic inequality, and the greatest levels of corporate influence on politics since the Depression, Barack Obama stared into the eyes of history and chose to avert his gaze. Instead of indicting the people whose recklessness wrecked the economy, he put them in charge of it. He never explained that decision to the public-- a failure in storytelling as extraordinary as the failure in judgment behind it. Had the president chosen to bend the arc of history, he would have told the public the story of the destruction wrought by the dismantling of the New Deal regulations that had protected them for more than half a century. He would have offered them a counternarrative of how to fix the problem other than the politics of appeasement, one that emphasized creating economic demand and consumer confidence by putting consumers back to work. He would have had to stare down those who had wrecked the economy, and he would have had to tolerate their hatred if not welcome it. But the arc of his temperament just didn’t bend that far.

The truly decisive move that broke the arc of history was his handling of the stimulus. The public was desperate for a leader who would speak with confidence, and they were ready to follow wherever the president led. Yet instead of indicting the economic policies and principles that had just eliminated eight million jobs, in the most damaging of the tic-like gestures of compromise that have become the hallmark of his presidency-- and against the advice of multiple Nobel-Prize-winning economists-- he backed away from his advisers who proposed a big stimulus, and then diluted it with tax cuts that had already been shown to be inert. The result, as predicted in advance, was a half-stimulus that half-stimulated the economy. That, in turn, led the White House to feel rightly unappreciated for having saved the country from another Great Depression but in the unenviable position of having to argue a counterfactual-- that something terrible might have happened had it not half-acted.

To the average American, who was still staring into the abyss, the half-stimulus did nothing but prove that Ronald Reagan was right, that government is the problem. In fact, the average American had no idea what Democrats were trying to accomplish by deficit spending because no one bothered to explain it to them with the repetition and evocative imagery that our brains require to make an idea, particularly a paradoxical one, “stick.” Nor did anyone explain what health care reform was supposed to accomplish (other than the unbelievable and even more uninspiring claim that it would “bend the cost curve”), or why “credit card reform” had led to an increase in the interest rates they were already struggling to pay. Nor did anyone explain why saving the banks was such a priority, when saving the homes the banks were foreclosing didn’t seem to be. All Americans knew, and all they know today, is that they’re still unemployed, they’re still worried about how they’re going to pay their bills at the end of the month and their kids still can’t get a job. And now the Republicans are chipping away at unemployment insurance, and the president is making his usual impotent verbal exhortations after bargaining it away.

...The average voter is far more worried about jobs than about the deficit, which few were talking about while Bush and the Republican Congress were running it up. The conventional wisdom is that Americans hate government, and if you ask the question in the abstract, people will certainly give you an earful about what government does wrong. But if you give them the choice between cutting the deficit and putting Americans back to work, it isn’t even close. But it’s not just jobs. Americans don’t share the priorities of either party on taxes, budgets or any of the things Congress and the president have just agreed to slash-- or failed to slash, like subsidies to oil companies. When it comes to tax cuts for the wealthy, Americans are united across the political spectrum, supporting a message that says, “In times like these, millionaires ought to be giving to charity, not getting it.”

When pitted against a tough budget-cutting message straight from the mouth of its strongest advocates, swing voters vastly preferred a message that began, “The best way to reduce the deficit is to put Americans back to work.” This statement is far more consistent with what many economists are saying publicly-- and what investors apparently believe, as evident in the nosedive the stock market took after the president and Congress “saved” the economy.

So where does that leave us?

Like most Americans, at this point, I have no idea what Barack Obama-- and by extension the party he leads-- believes on virtually any issue. The president tells us he prefers a “balanced” approach to deficit reduction, one that weds “revenue enhancements” (a weak way of describing popular taxes on the rich and big corporations that are evading them) with “entitlement cuts” (an equally poor choice of words that implies that people who’ve worked their whole lives are looking for handouts). But the law he just signed includes only the cuts. This pattern of presenting inconsistent positions with no apparent recognition of their incoherence is another hallmark of this president’s storytelling. He announces in a speech on energy and climate change that we need to expand offshore oil drilling and coal production-- two methods of obtaining fuels that contribute to the extreme weather Americans are now seeing. He supports a health care law that will use Medicaid to insure about 15 million more Americans and then endorses a budget plan that, through cuts to state budgets, will most likely decimate Medicaid and other essential programs for children, senior citizens and people who are vulnerable by virtue of disabilities or an economy that is getting weaker by the day. He gives a major speech on immigration reform after deporting a million immigrants in two years, breaking up families at a pace George W. Bush could never rival in all his years as president.

It's painful for those who bought into Obama's campaign themes of Hope and Change but Westen goes on, demanding yo know "why the president seems so compelled to take both sides of every issue, encouraging voters to project whatever they want on him, and hoping they won’t realize which hand is holding the rabbit" and playing right into the hands of very able and very well-financed right-wing propagandists. Westen's several hypotheses explaining Obama's behavior are all tragically unappealing and his conclusion is chilling-- unless you're a Mitt Romney enthusiast-- or a revolutionary zealot ready for action.

[T]he arc of history does not bend toward justice through capitulation cast as compromise. It does not bend when 400 people control more of the wealth than 150 million of their fellow Americans. It does not bend when the average middle-class family has seen its income stagnate over the last 30 years while the richest 1 percent has seen its income rise astronomically. It does not bend when we cut the fixed incomes of our parents and grandparents so hedge fund managers can keep their 15 percent tax rates. It does not bend when only one side in negotiations between workers and their bosses is allowed representation. And it does not bend when, as political scientists have shown, it is not public opinion but the opinions of the wealthy that predict the votes of the Senate. The arc of history can bend only so far before it breaks.

Without digging into Obama's conservative voting record in the Senate, Krugman not only loudly agreed with Westen's analysis today, he wrote that "If you paid attention to what he actually said during the primary and the election, he was always a very conventional centrist. Progressives who flocked to his campaign basically deluded themselves, mistaking style for substance. I got huge flack for saying that at the time, but it was true, and events have borne it out... I went back to look at my own reactions to the inaugural speech; I’m sorry to say that my misgivings at the time have proved all too justified." At the time (January 22, 2009) Krugman wrote in the Times that "I ended Tuesday less confident about the direction of economic policy than I was in the morning. [O]ne wishes that the speechwriters had come up with something more inspiring than a call for an 'era of responsibility'-- which, not to put too fine a point on it, was the same thing former President George W. Bush called for eight years ago. But my real problem with the speech, on matters economic, was its conventionality. In response to an unprecedented economic crisis-- or, more accurately, a crisis whose only real precedent is the Great Depression-- Mr. Obama did what people in Washington do when they want to sound serious: he spoke, more or less in the abstract, of the need to make hard choices and stand up to special interests. That’s not enough. In fact, it’s not even right..."

And Obama still is... and it still isn't right.

Will Progressives Abandon Obama... Even With Fascists Burning Down The Country (Literally)?

We have our own brand problems now

Earlier today, Digby started a brilliant post explaining what's gone down in the debt ceiling kabuki by quoting a jubilant George Will:

"Conservatives are saying it's imperfect, to which one must say, the Sistine Chapel is probably in some sense imperfect."

This morning Paul Krugman was on ABCNews with Christiane Amanpour. He'd sure make a better leader-- or poker player-- than Obama. He sees the same thing Will sees, although his reaction is more sympathetic to the victims of Austerity, most of us:

"From the perspective of a rational person-- in other words a progressive-- we shouldn't be talking about spending cuts at all now. We have 9% unemployment. These spending cuts are going to worsen unemployment. It's even going to hold the long-run fiscal picture because we have a situation where more and more people are becoming permanent long-term unemployed... We used to talk about the Japanese and lost decade. We'll look at them as a role model. They did better than we're doing. this is going to go on. I have nobody I know who thinks the unemployment rate will be below 8% at the end of next year. With the spending cuts it might be above 9% at the end of next year. There is no light at the end of this tunnel. We're having a debate in Washington, all about, 'Gee, we'll make the economy worse, but will we make it worse on 90% of the Republicans' terms or 100% of Republicans' terms?' The answer is 100%."

I'm a happy guy; I don't let things get me down. Nothing depresses me. Last night at dinner, 3 savvy progressives asked me what country I thought would be best to move to after the 2012 elections. (I lived in Europe during the Nixon/Vietnam War years.) I ain't movin' anywhere again. This time I'm staying and fighting.

Last night, right after the outline of Obama's complete surrender to the Far Right came out, someone tweeted that the White House was denying that there's a deal. Let me see if I can find it. Ah... there it is: a tiny little hope in the firestorm:


Turns out to be a false hope. As John Conyers pointed out, it was Obama who put Social Security cuts on the table for the corporate overlords, not the Republicans who want it so badly but are too (wisely) scared. And it's been Obama who has been feeding their hated anti-Medicare mania. Another scrap of hope-- a really far-fetched one this time:


Obama didn't win California's 55 electoral votes in 2010 because of the one I, on a leap of faith, cast for him. 8,274,473 Californians voted for him, more than 3 million the number who came out for John McCain. If Obama can't win California without my vote, he's not going to come close to winning in states he needs, like Ohio, Florida, Colorado, Virginia, Pennsylvania, North Carolina and New Hampshire. How many more progressive Democrats, like me, have made up their minds to withhold their votes from Obama next year-- not in California, where it is easy to take the high ground, but in the swing states, where an election is decided? Today's NY Times sees a problem with the base if Obama is really signing on to this dreadful deal the Republicans have forced him into. This morning Jackie Calmes wrote about the rightward tilt and the party rift.

However the debt limit showdown ends, one thing is clear: under pressure from Congressional Republicans, President Obama has moved rightward on budget policy, deepening a rift within his party heading into the next election.

Entering a campaign that is shaping up as an epic clash over the parties’ divergent views on the size and role of the federal government, Republicans have changed the terms of the national debate. Mr. Obama, seeking to appeal to the broad swath of independent voters, has adopted the Republicans’ language and in some cases their policies, while signaling a willingness to break with liberals on some issues.

That has some progressive members of Congress and liberal groups arguing that by not fighting for more stimulus spending, Mr. Obama could be left with an economy still producing so few jobs by Election Day that his re-election could be threatened. Besides turning off independents, Mr. Obama risks alienating Democratic voters already disappointed by his escalation of the war in Afghanistan and his failure to close the Guantánamo Bay prison, end the Bush-era tax cuts and enact a government-run health insurance system.

“The activist liberal base will support Obama because they’re terrified of the right wing,” said Robert L. Borosage, co-director of the liberal group Campaign for America’s Future.
But he said, “I believe that the voting base of the Democratic Party-- young people, single women, African-Americans, Latinos-- are going to be so discouraged by this economy and so dismayed unless the president starts to champion a jobs program and take on the Republican Congress that the ability of labor to turn out its vote, the ability of activists to mobilize that vote, is going to be dramatically reduced.”

Borosage is a friend of mine but I disagree with him. Members of he liberal activist base, or at least many of them, are abandoning Obama despite the false threat of BACHMANN!!!!!-- which the Republican Establishment will never let happen. Pawlenty was supposed to knock her out of the primaries in return for the Romney VP nomination. T-Paw turned out to be the biggest political dud since Fred Thompson... so they recruited Texas dullard, Rick Perry-- yes, dumber than Bush-- to do the job for them.

Obama, in his failed effort for greater deficit reduction, has put on the table far more in reductions for future years’ spending, including Medicare, Medicaid and Social Security, than he did in new revenue from the wealthy and corporations. He proposed fewer cuts in military spending and more in health care than a bipartisan Senate group that includes one of the chamber’s most conservative Republicans.

To win approval of the essential increase in the nation’s $14.3 trillion borrowing ceiling, Mr. Obama sought more in deficit reduction than Republicans did, and with fewer changes to the entitlement programs, because he was willing to raise additional revenue starting in 2013 and they were not. And despite unemployment lingering at its highest level in decades, Mr. Obama has not fought this year for a big jobs program with billions of dollars for public-works projects, which liberals in his party have clamored for. Instead, he wants to extend a temporary payroll tax cut for everyone, since Republicans will support tax cuts, despite studies showing that spending programs are generally the more effective stimulus.

Even before last November’s election gave the Republicans control of the House, Mr. Obama had said he would pivot to deficit reduction after two years of stimulus measures intended first to rescue the economy and then to spur a recovery from the near collapse of the financial system. With Republicans’ gains in the midterm elections, that pivot became a lurch. Yet Congressional Republicans say Mr. Obama seeks a debt limit increase as “a blank check” to keep spending.

“The Republicans won, and they don’t know how to accept victory,” said Robert D. Reischauer, a former director of the Congressional Budget Office.

...“The president’s proposing cuts to Social Security and Medicare has the potential to sap the energy of the Democratic base — among older voters because of Medicare and Medicaid and younger voters because of the lack of jobs,” said Damon A. Silvers, policy director of the A.F.L.-C.I.O. “And second, all these fiscal austerity proposals on the table will make the economy worse.”

Mr. Obama’s situation has parallels with the mid-1990s, when President Bill Clinton shifted to the center after Republicans took Congress and battled them on deficit reduction and a welfare overhaul. Many Democrats were angered by his concessions, by a sense of being left out of negotiations and by a fear of alienating Democratic voters. Mr. Clinton was re-elected in 1996.

But Mr. Obama is likely to face the voters with a weaker economy and higher unemployment than during Mr. Clinton’s era. Still, his advisers express confidence that voters will reward Mr. Obama either for winning a bipartisan deal, if that were to happen, or for at least having a more balanced approach that does not remake Medicare and Medicaid and asks for more revenue from the wealthy. And they suggest another potential parallel with the Clinton years of divided government: that Republicans risk a voter backlash with their uncompromising stands.

There are going to be a lot of people aliented from "mainstream" politics now, even as the radical-- now fascist-- right turns more and more to crap like this:

Fire officials in La Crosse are continuing to investigate a Saturday blaze that destroyed the regional offices of We Are Wisconsin, a union political action committee (PAC) that has pumped millions of dollars into supporting Democratic candidates in the upcoming recall elections.

The La Crosse Tribune reports that the cause of the fire, which started at about 9:30 a.m., remains unknown. Firefighters thought they had the blaze under control in the afternoon, however, that wasn't the case and it continued into the evening, the newspaper reported.

We Are Wisconsin used the building at 432 Jay St. to oversee its efforts in the 32nd Senate District recall election, which will be held Aug. 9. Incumbent Republican state Sen. Dan Kapanke is being challenged by Democratic state Rep. Jennifer Shilling in that district.

A spokesman for the group told the La Crosse Tribune that the group's office was a total loss.
We Are Wisconsin is a political action committee made up by a coalition of unions that has spent more than $2 million supporting Democratic recall candidates around Wisconsin, according to the Wisconsin Democracy Campaign.

Obama Isn't Really Like Nixon... Not The Essential Richard Nixon

Obamabots have been upset with Paul Krugman lately. Yesterday's President Pushover didn't help much and last week's Obama/Nixon was probably the last straw with many of them, since it is the ultimate heresy to say aloud what is so obvious to anyone willing to open their eyes, namely that "Obama has governed as a moderate conservative, somewhat to the right of Richard Nixon." Not that it's doing Obama-- let alone the country-- any good at all.

[I]f you ask what Mitt Romney would probably be doing if he were in the White House and not trying desperately to convince his party that he shares its madness, it would look a lot like what Obama is doing.

There are, however, two crucial points to understand.

First, Obama gets no credit for his moderation, and never will. No matter how far right he moves, Republicans will move further right; and nothing he can do will keep them from denouncing him as a radical socialist.

Second, moderate conservatism isn’t working as a policy matter. As I’ve tried to tell everyone from the beginning of the Lesser Depression, a deeply depressed economy in which monetary policy is up against the zero lower bound turns the normal rules of policy upside down. We’re in a world in which conventional prudence is folly, in which playing it safe is extremely risky. And we have, alas, a conventionally prudent, play-it-safe president-- the kind of president who might have done fine in the 1990s, but not now.

Then today right-wing operative Bruce Bartlett penned a feature for the Fiscal Times, Barack Obama: The Democrats' Richard Nixon?. He posed it as a question but Barlett, a former George Bush and Ronald Reagan staffer, is convinced.

Liberals hoped that Obama would overturn conservative policies and launch a new era of government activism. Although Republicans routinely accuse him of being a socialist, an honest examination of his presidency must conclude that he has in fact been moderately conservative to exactly the same degree that Nixon was moderately liberal.

Here are a few examples of Obama's effective conservatism:

* His stimulus bill was half the size that his advisers thought necessary;

* He continued Bush’s war and national security policies without change and even retained Bush’s defense secretary;

* He put forward a health plan almost identical to those that had been supported by Republicans such as Mitt Romney in the recent past, pointedly rejecting the single-payer option favored by liberals;

* He caved to conservative demands that the Bush tax cuts be extended without getting any quid pro quo whatsoever;

*And in the past few weeks he has supported deficit reductions that go far beyond those offered by Republicans.

But when most Americans, especially Democrats, see comparisons with Nixon, "moderate conservatism" isn't what comes galloping to the fore. Disgraceful, criminal behavior is the touchstone. And that brings up something I've been meaning to share, something I've recently learned and something with no relation to Krugman or Obama. Why do these right-wingers have so much money compared to liberals? Keep in mind we're going to be talking about trillions of dollars worth of loot, not billions, TRILLIONS. I found an answer in The Nazi Hydra In America by Glen Yeadon. Have you ever heard of the Golden Lily? I hadn't, although after reading about it, I came across a series of YouTube videos on the topic, like this one:

In 1940, Prince Chichibu was appointed to head the Golden Lily. He and Takeda traveled throughout China and Southeast Asia, overseeing the looting and shipping the treasure back to Japan aboard hospital ships. By 1943, the United States submarine blockade of the home islands became effective. This forced Prince Chichibu to move his Golden Lily headquarters from Singapore to Luzon. He spent the next two and half years inventorying and hiding the treasure in a series of vaults, tunnels, and caves. The treasure was hidden in a total of 172 sites.78 The hope was Japan could arrange a cease-fire and be allowed to hang onto the Philippines as a territory and then recover the treasure at their leisure.

Besides using the Philippines to hide the treasure in the last year of the war, Japan hid gold at sea by scuttling ships. .. The Allies had made it clear that they intended to prosecute Japanese war criminals in the same manner as Nuremberg. However, unlike Germany, only a few generals and admirals were ever convicted. The archives in Japan had vanished. The United States took exclusive control over Japan, unlike the four zones in Germany. President Truman appointed MacArthur as the Supreme Commander. For six years after the surrender of Japan, MacArthur held virtually unchallenged power. As Supreme Commander he ignored the Far Eastern commission of eleven nations. MacArthur had the power to reform the country, but instead left it in the same hands that bombed Pearl Harbor. The only reform implemented was the successful land reform that went ahead before it could be blocked. Washington D.C. was at least partially responsible for the lack of reforms. The liberals in Washington wanted reform while the conservatives blocked all reform efforts. The conservative Democrats and the Republicans held Congress until the 1946 election when the Republicans regained a majority of seats, putting Congress solidly in the conservative camp.

There were great plans for reforms, such as the dissolution of the zaibatsu, conglomerates, banking reforms, and a new constitution as well as restitution payments to nations ravaged by Japan. None of these plans were ever implemented. MacArthur killed those plans and was soon backing away from punishment of war criminals. To protect the ruling elite, MacArthur soon banned all labor demonstrations and canceled the right of labor unions to strike.

Just as the denazification of Germany had been sabotaged, the democratization of Japan was sabotaged by MacArthur and his staff with additional help coming from the former ambassador to Japan, Joseph Grew, and former President Herbert Hoover. Grew had been ambassador to Japan appointed to the post by Hoover in 1932 and was acting secretary of state in 1945. His wife was a grand niece of Commodore Perry and her mother was a Cabot. Grew was from the top society of Boston and was deaf to those beneath his stature in society. Grew’s family had longtime ties to Asia. The Grews had been bankers, who underwrote the opium clipper ships of the 1800s.

Grew had started sabotaging the democratization of Japan during the war. During the war Grew held private talks with Japan’s ambassador to Switzerland and promised that the United States would not prosecute Hirohito and that he would be allowed to keep his throne. Such a promise was adamantly opposed by both the Roosevelt and the Truman administrations, which both called for unconditional surrender and prosecution of war criminals.

...Hoover’s and Grew’s plan to cleanse the emperor and the Japanese government of any war crimes had to be kept secret. There were still far too many, bitter war memories from Pearl Harbor, the Bataan death march, and Japanese forced labor camps. As late as 1945, Congress had voted that Hirohito should be tried as a war criminal. Fellers and another Grew protégé, Max Bishop, engineered the cleansing process. First, to discover the true extent of Hirohito’s guilt, they questioned Japanese officials and indicted war criminals in secret. Once all the facts had been assembled, they sanitized each incriminating bit of information by suborning witnesses. Before the trials could begin, several adverse witnesses conveniently died. American POWs on their way home were forced by US intelligence to sign documents forbidding them to talk about the harsh treatment they received at the hands of the Japanese.

While MacArthur was quietly trying to stop the trials, he received a blunt reminder from the Joint Chiefs to get serious about bringing the Emperor to trial. Despite such orders, MacArthur would not permit a trial of Hirohito. MacArthur even put Hirohito on the public relations circuit, showing him shaking hands and portraying him as a great pacifist. Behind the scenes, MacArthur and Fellers were castigating anyone not falling in line with the opinion that the war was the fault of the military.

...By 1952, when the occupation ended, all leftists had once again been purged and the conservatives were in control of Japan. The Emperor’s fortune still laid under the waters of Tokyo Bay and in other locations. The first recovery of a portion of the Golden Lily is known as the Santa Romana recovery. In the Philippines during the waning days of the war, Filipino guerillas observed the Japanese transporting heavy bronze cases and hiding them in a cave. An OSS major was with the group that observed the burial. After the treasure was hidden in the cave, the entrance was dynamited shut and concealed. The OSS agent reopened the cave and found the cases to contain gold. Following the war, between 1945 and 1948, the gold was recovered. The operation was known to Wiliam Donovan, MacArthur, Fellers, Edward Langsdale, and Herbert Hoover. Later, Allen Dulles knew of the operation. Donovan and Langsdale were assigned the recovery. No attempt was ever made to return the gold to its rightful heirs. Instead, the gold was deposited in 176 bank accounts in 42 different countries. It became the basis of the CIA off the books financing. This financing was done by issuing gold certificates to influential people, binding them to the CIA. One account in Langsdale’s name in the Geneva branch of Union Banque Suisse contained 20,000 metric tons of gold. The insiders squirreled some of the bullion away for private use. Documents confirm that one of the largest accounts was in the name of MacArthur.

Other documents indicated Herbert Hoover had an account containing $100 million in gold bullion. One can be certain that Hoover’s deep concern over Japan was based on his ability to smell a big payoff in gold from his previous experiences in China and Australia. The large holding of gold by Hoover was confirmed after his death, when his son sought out government approval to dispose of a large sum of gold bullion. The large accounts of MacArthur and Hoover suggest that the cleansing of Hirohito came at a high price.

Edwin Pauley, a rich oilman, had been dispatched to Japan to assess Japan’s ability to pay reparations. Pauly was informed of the $2 billion dollars of gold in Tokyo Bay shortly after his arrival in Japan. Yet, Pauley concluded Japan was in shambles and could not pay its fair share of expenses of the American occupation, let alone to anyone else’s rebuilding efforts. Largely due to Pauley’s assessment, Japan’s bill for reparations came to only one billion dollars. If such a sum had been distributed equally to the next of kin of the 20 million people who died as a result of Japan’s aggression, each would have received the paltry sum of $30. In the immediate post war scramble for reparations, the wealthy in Japan who had profited from the war and hid their profits submitted their own claim for reparations, totaling $5 billion. Many of these claims were paid.

...[C]onsiderable treasure has been recovered from the Golden Lily, ending up in the hands of those involved in intelligence and right wing causes. Was this gold put to private use or the use of the CIA? It’s most likely that a portion was skimmed for private use while the bulk of the remainder was used to fund clandestine CIA operations. It is interesting to note that those connected with the secret recoveries: Herbert Hoover, MacArthur, Allen Dulles, and others were the very ones that worked the hardest in derailing the reform of Japan and Nazi Germany. Their sole objective was to reestablish the cartels and get on with business as usual, and to hell with war crimes. Moreover, it seems certain that a large portion of the Nazi treasure and the Golden Lily was used in rebuilding Germany and Japan with the explicit approval of the right wing in America.

...Henry Stimson, Secretary of War, first proposed using gold recovered from the Nazis as a secret slush fund during the Roosevelt administration. The Nazis had already did the dirty work and re-smelted the gold, making it hard trace the gold's origin. Many of the owners had perished in the war and many of the pre-war governments had ceased to exist. With many of the eastern countries falling under the influence of the Soviet Union, returning any gold to these countries was out of the question with the cold warriors.

Stimson’s special assistants on this topic were John McCloy, Robert Lovett, Clark Clifford, and Robert Anderson. Both McCloy's and Lovett's backgrounds have been discussed in previous chapters. Anderson was a former Texas Republican legislator. In 1953, he was appointed Secretary of the Navy by President Eisenhower, and in 1954, Secretary of Defense. Some sources say he was appointed as Secretary of the Navy based solely on the need to move gold from the Philippines. In 1957, he was appointed Secretary of the Treasury. In 1987, he pled guilty to running an off shore bank after being caught up in the BCCI scandal. The same scandal also ensnared Clark Clifford.

The idea of the Black Eagle Trust was first discussed with the Allies in secret during July 1944, at Bretton Woods. This has been confirmed by CIA Deputy Director, Ray Cline, who as late as the 1990s has sought to control Japanese war booty sitting in the vaults of Citibank.

After briefing Truman, Stimson, Lovett, and others Lansdale returned to Tokyo with Anderson in November. From there MacArthur and Anderson accompanied Lansdale on a secret flight to Manila. Santy had by then already opened the sites and MacArthur and Anderson strolled down row after row of gold bullion stacked two meters tall. This was only the gold that had not reached Japan once the home islands were blockaded in the war.

Cline and others have confirmed that the gold recovered by Santy and Lansdale was covertly moved by ship to 176 accounts in 42 different countries. Truman had been informed that if such a large quantity of gold became public knowledge that the fixed $35 an ounce price would collapse. Other documents show large deposits of gold and platinum were made in various Swiss banks between 1945 and 1947.

Secrecy was vital to the success of the Black Eagle Trust. The United States declared Japan was broke from the very beginning. The United States elite lead by Herbert Hoover, wanted to maintain Japan as a staunch anticommunist state in the Far East. The Japanese elites were hard-core conservatives and alarmed by the communist threat. The most ardent of the anti-communist were the indicted war criminals. As noted earlier only a few Japanese war criminals were ever punished due to a large part of the interference by MacArthur in cleansing the Emperor of all crimes.

Such secrecy led to immediate abuses and the misleading of the American and Japanese people. Those most responsible for the war were left in power. The 1951, peace treaty between the Allies and Japan was greatly skewed by considerations for the Black Eagle Trust. To shield Japan from war reparations, John Foster Dulles secretly negotiated the treaty with three Japanese officials. One later became Prime Minister and served repeatedly as Minister of finance, Miyazawa Kiichi.

Article 14 of the peace treaty states as follows:

"It is recognized that Japan should pay reparations to the Allied Powers for the damage and suffering caused by it during the war. Nevertheless it is also recognized that the resources of Japan are not presently sufficient… the Allied Powers waive all reparations claims of the Allied Powers and their nationals arising out of any actions taken by Japan."

By signing the treaty, Allied countries waived all rights to any claims, including claims by their citizens and service men forced into slave labor by the Japanese warlords.

Because the Black Eagle Trust and the political actions funds that it has spawned remain off the books and invisible, the potential for abuse by falling into unscrupulous hands remain high to this day. In 1960, Vice President Nixon gave one of the largest funds, the M Fund, to the leaders of the Japanese Liberal Party in return for kickbacks to his election campaign. The fund, then valued at $35 billion and now estimated as worth over $500 billion, has served to keep the Liberal Party in power and effectively reduce politics in Japan to a one party dictator with a block on any meaningful reforms. This is readily evident in the troubled economic state of Japan. Even after sliding into an economic abyss fifteen years ago, Japan has still not addressed their economic policies in any meaningful manner. In effect, Nixon’s action has left Japan with an inept, corrupt and weak regime that has not even confronted its role in starting WWII.

Just sharin'. In fact, since I mentioned it above and it's totally awesome and you might have missed it, why don't I share that Elizabeth Drew feature from yesterday's NY Review of Book, What Were They Thinking?. You should read the whole thing; it might make you wish things were as black and white as they were in Nixon's day. But here's the first paragraph:

Someday people will look back and wonder, What were they thinking? Why, in the midst of a stalled recovery, with the economy fragile and job creation slowing to a trickle, did the nation’s leaders decide that the thing to do—in order to raise the debt limit, normally a routine matter—was to spend less money, making job creation all the more difficult? Many experts on the economy believe that the President has it backward: that focusing on growth and jobs is more urgent in the near term than cutting the deficit, even if such expenditures require borrowing. But that would go against Obama’s new self-portrait as a fiscally responsible centrist.

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:

Swing Voters Will Blame Obama, At Least In Part, For The Terrible Economy He Inherited And Didn't Fix-- Should They?

Republicans have a point of view-- it isn't based on fact; it's based on huge amounts of money supplied by special interests with larcenous agendas

Early in his Op-Ed Sunday, Krugman acknowledges the usual Republican treason and sabotage when it comes to the economy. (It was much worse when they and their Big Business allies went "on strike" during World War II so they could give a leg up to their fascist allies in Germany.) Krugman: "[C]reating jobs in a depressed economy is something government could and should be doing" [but] "the House is controlled by a party that benefits from the economy’s weakness." He was talking about Boehner, Cantor, Ryan and the rest of the pack of treacherous vampires ready to feast on the corpses of working families. He then goes on to point out how Obama, who is, after all, president and whose party more or less runs the Senate.

Our failure to create jobs is a choice, not a necessity-- a choice rationalized by an ever-shifting set of excuses.

Excuse No. 1: Just around the corner, there’s a rainbow in the sky.

Remember “green shoots”? Remember the “summer of recovery”? Policy makers keep declaring that the economy is on the mend-- and Lucy keeps snatching the football away. Yet these delusions of recovery have been an excuse for doing nothing as the jobs crisis festers.

Excuse No. 2: Fear the bond market.

Two years ago the Wall Street Journal declared that interest rates on United States debt would soon soar unless Washington stopped trying to fight the economic slump. Ever since, warnings about the imminent attack of the “bond vigilantes” have been used to attack any spending on job creation.

But basic economics said that rates would stay low as long as the economy was depressed-- and basic economics was right. The interest rate on 10-year bonds was 3.7 percent when the Wall Street Journal issued that warning; at the end of last week it was 3.03 percent.

How have the usual suspects responded? By inventing their own reality. Last week, Representative Paul Ryan, the man behind the G.O.P. plan to dismantle Medicare, declared that we must slash government spending to “take pressure off the interest rates”-- the same pressure, I suppose, that has pushed those rates to near-record lows.

Excuse No. 3: It’s the workers’ fault.

Unemployment soared during the financial crisis and its aftermath. So it seems bizarre to argue that the real problem lies with the workers-- that the millions of Americans who were working four years ago but aren’t working now somehow lack the skills the economy needs.

Yet that’s what you hear from many pundits these days: high unemployment is “structural,” they say, and requires long-term solutions (which means, in practice, doing nothing).

Well, if there really was a mismatch between the workers we have and the workers we need, workers who do have the right skills, and are therefore able to find jobs, should be getting big wage increases. They aren’t. In fact, average wages actually fell last month.

Excuse No. 4: We tried to stimulate the economy, and it didn’t work.

Everybody knows that President Obama tried to stimulate the economy with a huge increase in government spending, and that it didn’t work. But what everyone knows is wrong.

Think about it: Where are the big public works projects? Where are the armies of government workers? There are actually half a million fewer government employees now than there were when Mr. Obama took office.

So what happened to the stimulus? Much of it consisted of tax cuts, not spending. Most of the rest consisted either of aid to distressed families or aid to hard-pressed state and local governments. This aid may have mitigated the slump, but it wasn’t the kind of job-creation program we could and should have had. This isn’t 20-20 hindsight: some of us warned from the beginning that tax cuts would be ineffective and that the proposed spending was woefully inadequate. And so it proved.

It’s also worth noting that in another area where government could make a big difference-- help for troubled homeowners-- almost nothing has been done [let alone the prosection of all the criminal behavior in the banking industry that caused the mess]. The Obama administration’s program of mortgage relief has gone nowhere: of $46 billion allotted to help families stay in their homes, less than $2 billion has actually been spent.

So let’s summarize: The economy isn’t fixing itself. Nor are there real obstacles to government action: both the bond vigilantes and structural unemployment exist only in the imaginations of pundits. And if stimulus seems to have failed, it’s because it was never actually tried.

Listening to what supposedly serious people say about the economy, you’d think the problem was “no, we can’t.” But the reality is “no, we won’t.” And every pundit who reinforces that destructive passivity is part of the problem.

Now watch this short Robert Reich tutorial: