As Barack Obamas job approval rating dips below 50% in several polls, he has started to crank up the populist rhetoric against reckless fat cat bankers and Republicans who have allied with financial industry lobbyists to block meaningful financial reform. But while the Obama administration talks about limiting executive compensation and adjusting lending standards to help small businesses, the too-big-to-fail banks are recording profits again and paying back their bailouts. Now, under the antiquated rules of the Senate that require 60 votes to pass Go, all the financiers need to do is keep Sen. Joe Lieberman, and perhaps a couple other Democratic senators, in their pocket to stop the Senate from enacting substantial reforms.
The House approved a financial reform bill (12/11) that would create a Consumer Financial Protection Agency to protect consumers from abusive lending practices but it would not allow bankruptcy judges to restructure mortgage payments. The bill, steered by Rep. Barney Frank (D-Mass.), passed on a 223-202 vote, as 27 Dems voted with the GOP against the bill. Republicans objected to a fee on financial companies that would generate a $150 bln fund to cover the costs of dissolving companies that run into financial troubles. Conservative Dems and Repubs failed, 223-208, in an attempt to replace the Consumer Financial Protection Agency with a council made up of existing regulators. But the House rejected an effort to allow bankruptcy judges to cramdown mortgage terms to help troubled homeowners keep their houses. Senate Banking Chairman Christopher Dodd (D-Conn.) is preparing his own sweeping financial reform bill that would, among other things, strip the Federal Deposit Insurance Corp. and Federal Reserve of supervisory powers and give them to a new banking super-regulator. He is still developing that bill, which the Banking Committee is expected to consider next year.
Obama tried to get Wall Street bankers together in the White House on 12/14, only to find that Lloyd Blankfein, CEO of Goldman Sachs, John Mack, chairman of Morgan Stanley, and Richard Parsons, chairman of Citigroup, opted to participate by speakerphone because fog delayed commercial flights into Washington, D.C. Now that Citigroup has repaid $20 bln in bailout money and Wells Fargo has announced it will return the $25 bln it got last year, Andrew Ross Sorkin noted in the New York Times (12/15), whatever leverage Washington had over the financial services industry seems to be quickly eroding. Jamie Dimon of JPMorgan made it to the White House but, Sorkin wrote, inevitably public perception will issue its harsh ruling, and it goes something like this: If the meeting were really that important to Mr. Blankfein, Mr. Mack and Mr. Parsons, they would have found a way to get there. Sorkin noted that the bankers all made it to Washington last year when they were seeking the bailouts.
Obama said the bankers received extraordinary assistance from American taxpayers and now he expected an extraordinary commitment from the bankers to help rebuild the economy. The way I see it, having recovered with the help of the American government and the American taxpayers, our banks now have a greater obligation to the goal of a wider recovery, a more stable system, and more broadly shared prosperity, he said.
ACORN RISING. After reviewing right-wing narratives accusing ACORN, the community organizing group, of sinister activities, former Massachusetts Atty. Gen. Scott Harshbarger issued a report (12/7) that found no pattern of intentional, illegal conduct by ACORN staff, though he did spot a lack of training, a lack of procedures, and a lack of on-site supervision. (See ACORN videos were propaganda, by Joe Conason, page 13.) Then US District Judge Nina Gershon (12/11) found that Congress de-funding of ACORN was unconstitutional and enjoined its enforcement. This is a major victory not only for ACORN, but also for the Constitution, Glenn Greenwald noted at Salon.com (12/11). The reasons the Founders barred such bills of attainder are perfectly highlighted by the ACORN case. During the reign of abusive Kings, it was a favorite instrument for enabling unpopular parties to be convicted, punished and deprived without benefit of a trial. Under the Constitution, parties arent supposed to be found guilty of wrongdoing as a result of a Fox-News-led witch hunt joined by cowardly members of Congress. The recent finding of the Massachusetts Attorney General that ACORN had not committed crimes in connection with the notorious prostitution videos underscores the danger of the states assuming someones guilt outside of the judicial process. Congress is especially ill-suited to pass judgment on whether a particular party has violated the law, as they are far more likely to protect the powerful and popular and punish the weak and unpopular (which is one reason, incidentally, why it was wrong for Congress to retroactively immunize rich and powerful telecoms based on the consummately judicial finding that they acted in good faith when violating eavesdropping laws).
The US Department of Housing and Urban Development has suspended contracts providing up to $60,000 a year to ACORN to provide services to public housing residents. ACORN also had contracts or pending contracts with the departments of Agriculture, Commerce and the Environmental Protection Agency.
The Center for Constitutional Rights, which represented ACORN in the lawsuit, released a statement (12/11): Our Constitution forbids lawmakers from singling out a person or group for punishment without a fair investigation and trial, precisely to avoid the kind of political retribution and grandstanding we saw in the case of ACORN.
A. Serwer noted at Prospect.org (12/14), Congress behavior in this case underscores the absurdity of the right-wing narrative surrounding ACORN. ACORN was vulnerable precisely because they are an organization focused on the needs of Americas low to moderate income residents. If they were Halliburton or Xe (formerly Blackwater) which is to say, if they had anything remotely like the access to power they were alleged to have had they never would have been treated this way, regardless of their institutional problems.
CONRAD EYES ENTITLEMENT CUTS. Senate Budget Chairman Kent Conrad (D-N.D.) is joining Republican calls to create a commission to study the need to cut Social Security and Medicare benefits and submit the cuts to Congress for an up-or-down vote. Conrad and the Budget Committees ranking Republican, Sen. Judd Gregg (R-N.H.), have introduced a bill (S.2853) called the Bipartisan Task Force for Responsible Fiscal Action Act of 2009 to create the commission and make recommendations that would be voted on after the 2010 election. More than 40 progressive groups have signed a petition to oppose the effort, including the AFL-CIO and Change to Win labor groups, Alliance for Retired Americans, NAACP, National Organization for Women, National Hispanic Council on Aging, Progressive Democrats of America and United Methodist General Board of Church and Society (see ourfuture.org/budgetcommission).
Roger Hickey, co-director of Campaign for Americas Future and a leader of the opposition to the commission, noted that Social Security is not responsible for any part of the deficit. The 2009 Annual Report of the Board of Trustees stated that Social Security ran a surplus of $180 bln last year with a reserve of $2.4 tln and the Congressional Budget Office in August said that full benefits can continue to be paid at least until 2043, leaving ample time to make any necessary adjustments through the usual legislative process. The best way to get Medicare under control, Hickey wrote, is by reforming the health care system, not by cutting benefits to the millions of people whose health is at stake.
In a speech on the Senate floor (12/10), Senate Finance Chairman Max Baucus (D-Mont.) said that the commission would create a fast-track process to cut Social Security and Medicare. Thats what this commission is all about. Its a big roll of the dice for Social Security and Medicare, he said. But there is a process to address the budget deficit, he added. Its called the Congressional Budget Process. ... If the Chairman and Ranking Republican Member of the Budget Committee are in such broad agreement on their goals, why dont they just skip the commission and go straight to their recommendation? That is exactly why Congress created the budget resolution and the reconciliation bill.
Baucus also noted that the Congressional Budget Office says that the Senate health-care reform would cut the deficit $130 bln in the first 10 years and $650 bln in the second 10 years. Thats nearly $800 bln in CBO-certified deficit reduction in health-care alone, he said. And next year, the Senate will undertake tax reform.
The Washington Post endorsed the concept of a fiscal task force with an editorial (12/14) that claimed, Its time to stop worrying about the deficit and start panicking about the debt, but economist Dean Baker noted at Prospect.org (12/14) that the debt rose in 2009 from 41% of GDP to 53% (not including what the government has borrowed from its own trust funds), but the reason was not profligate spending by Congress or even irresponsible tax cuts. The reason for the surge in the debt was the economic crisis brought about by the collapse of the housing bubble.
SOCIAL SECURITY PRIVATIZATION ZOMBIE RISES. Republicans are still pushing the privatization of Social Security despite the market plunge of 2008-09. In an interview with Bloomberg News Al Hunt, Sen. Jim DeMint (R-S.C.) blasted Social Security as socialistic and urged reviving President George W. Bushs plan to privatize the retirement system. Pat Garafalo noted at ThinkProgress.org (12/14), As CNN Moneys Allan Sloan wrote back in January, someday, Social Security privatization will come back into vogue. When that happens, Ive got two words that will remind you why its a bad idea: Remember 2008. Its quite shocking that were not even through 2009 yet, and 2008, at least for DeMint, is already forgotten. The Center for American Progress Action Fund reported that under a Bush-style privatization plan, a retiree in October 2008 would have lost $26,000 in the market plunge. By March 2009, US stock markets lost more than half their value. And as the Cunning Realist pointed out at cunningrealist.blogspot.com (3/9), failed investment banks Bear Stearns and Lehman Brothers were both blue chips, the sort of companies that proponents of private accounts insisted any new system would be limited to. Garafalo noted, Can you imagine the mess that would have occurred and the leverage those companies would have held had not only the financial systems health, but the retirement accounts of untold seniors, been tied up in them?
The Center for Economic and Policy Research found in February that, as a result of the collapse of the housing bubble, the vast majority of baby boomers will be approaching retirement with little wealth outside of Social Security. Privatization would have had seniors sacrifice that safety net as well.
TECHS RECOVER 22M BUSH EMAILS. Computer technicians say have found 22 mln emails from 94 days that the Bush White House claimed were lost. Citizens for Responsibility and Ethics in Washington (CREW) and the National Security Archive (NSA) had sought emails that might shed light on the scandal involving the Justice Departments firing of US attorneys who wouldnt participate in political prosecutions as well as the investigation of the Valerie Plame-CIA leak scandal. In announcing settlement of their lawsuits against the White House, CREW and NSA said the 22 mln emails were reconstructed from backup tapes. The emails will be sent to the National Archives for preservation but are not expected to be made public until 2014. CREW said the documents show that the Bush White House was lying when officials claimed no emails were missing. We may never know exactly what happened to all the missing emails, and which Bush administration officials were involved in the coverup, but we do know the American public never got the full story, said Melanie Sloan, CREWs executive director. After the Obama administration produces all the promised records, CREW will release a report, providing as much detail as possible. Sloan continued, The Obama administration, which inherited the lawsuits and the dysfunctional White House email system, has done a terrific job straightening out the mess. Thanks to the Obama White House, a critical part of our nations missing history will be restored. This is yet another example of the administration living up to its promise of accountability and transparency.
SENATE RACES TAKE SHAPE. Conservative Democratic senators who will be up for re-election in 2010 include Evan Bayh (D-Ind.), Blanche Lincoln (Ark) and Arlen Specter (Pa.), who already has drawn a primary challenger in moderate Rep. Joe Sestak. Dems also hope to pick up Republican seats in Ohio, Missouri, Kentucky and New Hampshire, where George Voinovich, Kit Bond, Jim Bunning and Judd Gregg are retiring, and Florida, where Mel Martinez already has quit. Also, David Vitter (R-La.) faces a challenge from conservative Dem Charlie Melancon. But Republicans hope to pick up several Senate seats now held by Dems, including those held by Michael Bennett (Colo.), Christopher Dodd (Conn.), Harry Reid (Nev.), Specter, Lincoln and open seats in Illinois and Delaware.
DEMS REBOUND AS INDIES RECOIL FROM GOP. The good news for Dems is that the Gallup Poll, which in November had reported Republicans taking a 4-point lead (48%-44%) in the generic Congressional ballot, in December showed Democrats with a 3-point lead (48%-45%) as independent voters shifted back toward the Dems. In the latest poll (12/11-13) indy voters tilted toward the GOP 44%-40%. In November, indies preferred Repubs 52%-30%.
EDUCATION IN US DECLINES. Virtually everywhere in the world people tend to be more educated than their parents. This is no longer true in the United States, Daniel Luzer noted at WashingtonMonthly.com (12/8). A report by the American Association of State Colleges and Universities indicates that the US is one of only two nations on Earth in which people aged 25 to 34 have lower educational attainment than their parents.
INDIVIDUAL MANDATE WORKS IN MASS. While Congress is considering whether to mandate health insurance coverage, fewer Massachusetts taxpayers were penalized for lacking required health insurance last year than in 2007. More than 96%, or 3.8 mln, of the states taxpayers said they had health insurance for at least part of 2008 and 45,000 were penalized up to $76 for each month they went without coverage, depending on a sliding scale. In 2007, the first year that residents had to report on their tax returns whether they were covered under the states insurance coverage mandate, 95% said they were insured and 60,000 were penalized. People with incomes greater than 150% pay the penalty, which is pegged to half the cost of the lowest premium offered by the Commonwealth Health Insurance Connector, Elizabeth Cooney reported at the Boston Globe blog (12/9).
EUROPE GETS 62 MPG FORD. Ford will offer a Focus model this spring that is capable of getting 62 mpg, MatterNetwork.com reported (12/3). Susan Kraemer writes that US regulations make it hard to build the engines to meet US specs, but European laws force carmakers to adhere to strict low-emisson standards which also result in better mileage. Ford is preparing to offer US buyers a Fiesta that will get just 40 mpg in 2011.
S.C. FORGIVES GOP ADULTERER. In the wake of Jenny Sanford filing divorce from her husband, Gov. Mark Sanford (R-S.C.), for cheating on her with an Argentine woman, Public Policy Polling found that while 45% of all South Carolina voters want Sanford to resign, only 33% of the self-described moral and family values crowd wants him to quit. And only 28% of values voters think Sanford should be impeached, compared with 32% of all S.C. voters. PPPs Tom Jensen wondered at publicpolicypolling.blogspot.com (12/11), Where do you think these folks stood on impeaching Bill Clinton? Its clear there is forgiveness for politicians who cheat on their wives and abuse state resources to do so as long as theyre Republicans.
LIEBERMANS LACK OF PRINCIPLES. Ezra Klein commented at the Washington Post blog (12/14) that Joe Lieberman (I-Conn.), in his opposition to a public option and a Medicare buy-in as part of health-care reform legislation, appears to be driven more by a pathological dislike of the liberals who defeated him in the 2006 Democratic primary, forcing him to run for re-election as an independent, than by any remotely rational policy judgment: If you had attempted to forecast Liebermans behavior based on his past positions, you would have failed. His support for Medicare buy-in, and for various other health-care bills, would quickly have misled you. If you had attempted to forecast his behavior based on the attitudes of his constituents, you would also have failed. They support the public option and oppose health-care reform, while Lieberman professes to believe the opposite. But if you had attempted to forecast Liebermans positions based on his ongoing grudge match with the liberals who defeated him in the 2006 primary, youd have nailed it perfectly. He has, at every point, taken aim at the policies that liberals support, even when they are policies that Lieberman himself has supported.
DEAD PRINT MAG TALLY DOWN. In what passes for good news in the magazine industry, MediaFinder.com reports that 428 titles have ceased publication in 2009, through 12/14. That is down significantly from the 613 thut shut down in 2008 and the 643 that died in 2007, Vanessa Voltolina reported at Foliomag.com (12/14). But there also have been fewer launches, with only 275 startups this year vs. 335 in 2008.
From The Progressive Populist, January 1-15, 2010
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