How rich

By Mustang Bobby

The latest trend in electoral campaigns is the super-rich running as an outsider. We're seeing it here in Florida with Rick Scott, a conservative who made a pile by running Columbia/HCA healthcare -- and dodging fraud charges -- running for governor, and Jeff Greene, another billionaire with some questionable dealings in his past, running in the Democratic primary for the Senate. Elsewhere we have Carly Fiorina, who was once the CEO of HP, running for the Senate in California along side Meg Whitman, who used to be the president of e-Bay, trying to replace Arnold Schwarzenegger. They're all over the place, including Wisconsin, where Sen. Russ Feingold, perhaps the most outspoken liberal in the United States Senate, has to run ads touting his conservative endorsements in his race to win re-election against Ron Johnson, who is -- you guessed it -- rolling in it and with the backing of the Tea Party.

Hey, this is America and anyone with enough lungpower and connections can run for any office they want. But it's interesting to see not only are the super-rich getting involved in politics, they're doing their best to try to portray themselves as just like you and me. Of course, they're not. As F. Scott Fitzgerald once noted, "The rich are different from you and me." To which Ernest Hemingway is said to have retorted, "Yes, they have more money." (The retort is a misquote, but it still rings true.) The idea of a rich person running for office -- usually for the first time -- as an outsider and just plain folks is one of those paradoxes that makes politics in America the maddeningly fascinating game that it has come to be.

Americans have a love/hate relationship with the wealthy. We admire them for their enterprise and their drive to accumulate massive sums of money, perhaps envisioning that somehow, some way, it could happen to us, and yet we hate them for their palatial homes and fancy boats and cars and $1,000 bottles of wine. We think that they have the secrets of success and we want it for ourselves, and yet we sneer at anything about them that hints at elitism, and love seeing them acting like one of us, which explains the booming business in celebrity gossip ("Look! Brad Pitt buys food at a grocery store!") That's why the super-rich running for office go to such pains to portray themselves as ordinary folks. That's why Sarah Palin can talk about being a hockey mom and going huntin' and trappin' and collect $100,000 and fly first class to deliver the talk about being just like you. That's why Rick Scott and Jeff Greene go around Florida trying to make it look like they're out there for the little guy, creating jobs and getting to work for us. They'll do anything to show that while they're rich, they're not elitists. Elitism is a charge that only works in the third person; we're rich, and that's great, but they are elites. Boo hiss. (Steve M. has a primer on the difference between being rich and being elitist.)

Of course the reality is that if you're rich in America, you're not an outsider. You worked the system, you know the people in power in places where knowing them helped you get rich. There's nothing wrong with that; that's how America is supposed to work. But let's not kid ourselves; no one running for office who is financing their own campaign with the couple of million bucks of loose change that fell out of their pockets can truly call themselves an outsider no matter how many beat-up pick-up trucks they drive or how many ads they film talking to farmers or ranchers or people of color. The only reason that it works is because they know that the people watching the ads are all thinking, "Hey, that could be me" in the same way they think that wearing Calvin Klein underwear will turn them into a well-muscled hunk or eating NutriSystem will turn them into a skinny runway model. And it works.

(Cross-posted from Bark Bark Woof Woof.)

Craziest Republican of the Day: Mike Pitts

By Michael J.W. Stickings

From The Palmetto Scoop:

South Carolina will no longer recognize U.S. currency as legal tender, if State Rep. Mike Pitts has his way.

Pitts, a fourth-term Republican from Laurens, introduced legislation earlier this month that would ban what he calls "the unconstitutional substitution of Federal Reserve Notes for silver and gold coin" in South Carolina.

If the bill were to become law, South Carolina would no longer accept or use anything other than silver and gold coins as a form of payment for any debt, meaning paper money would be out in the Palmetto State.

Pitts said the intent of the bill is to give South Carolina the ability to "function through gold and silver coinage" and give the state a "base of currency" in the event of a complete implosion of the U.S. economic system.

This is clearly insane, just as the proposed law would be clearly unconstitutional. Indeed, the whole think is just... impossible. Here's our friend Libby Spencer, who knows a think or two about South Carolina, given how close she is to it:

Forget about the legality, think about the practical aspects of this idea. How does Mr. Pitts suggest they make the transition? I'm assuming most people don't have gold and silver bars stashed in their junk drawer. How are they going to pay their electric bill. Haul some gold coins down to local office? Can't send a check because checking systems run on federally insured paper. How do they make change at the convenience store? Meaning just how big is one dollar's worth of gold by weight? And think of the fun the out of state tourists will have at Myrtle Beach, trying to find an exchange kiosk for their US dollars, that aren't legal tender in the state.

In a way I hope they go through with it. Any state that would re-elect this fool four times, deserves to go under, as they surely would if this hare-brained scheme actually became law.

And it's always nice when Republicans show us just how truly retrograde they really are. Generally, though, they prefer the 1950s, not the 1750s, which makes this all the more crazy.

Best. Onion. Headline. Ever.

By Michael J.W. Stickings

U.S. Economy Grinds To Halt As Nation Realizes Money Just A Symbolic, Mutually Shared Illusion

Read the whole thing. It's brilliant. Because, well, because it could very well be true. If only people would wake up and see just what sort of bizarre matrix they're living in.

(I'm looking at you, John Locke, among others. I get why money is necessary, but that doesn't make it any less of an illusion.)

Pennies from Loomis!

By J. Thomas Duffy

Well, actually, a lot more than pennies ...

Try about $160,000!

You gotta love stories like this, and it comes with a h/t to Maria Stuart over at Open Salon:

It’s raining dead presidents in Detroit

It’s been a week since motorists and passersby competed with armored truck crews and police for money that landed like litter along the I-75/Chrysler freeway in Detroit.

It was about 8:30 a.m. on June 11 when a Loomis armored car transporting an unknown amount of cash lost part of its load, reportedly newly printed $20 and $100 bills. No one’s yet sure how it happened. The freeway was closed for about an hour as Loomis crews and police recovered as much of the cash as they could.

But they had competition. According to news reports, dozens of motorists and passersby scrambled along the freeway to grab up as much money as they could.

In the end, there’s $160,000 missing.

The Detroit News called it a "Freeway Lottery," "as dozens of drivers stopped to compete with Loomis guards in scooping up scads of cash lying on the roadway and in the waist-high grass leading to the service drive."

Stuart's post goes on to say that Loomis offered a 10% reward for any money returned, which was accompanied by the club-in-hand threat of prosecution for those that don't.

Yeah, good luck with that one, Loomis.

Especially when you read the ClickonDetroit story:

Police are also looking at surveillance video from cameras mounted along I-75, in hopes of figuring out who took the cash.

"Any monies that are lost are obviously guaranteed by Loomis to the people who own them," said Loomis spokesman Pat Flaharty.

One driver told Local 4 that police were picking up the cash, otherwise she might have tried to pick up some bills.

Take it away, Louie!

Louis Prima - Pennies from the Heaven




(Cross-posted at The Garlic.)

Chris Matthews and the velocity of sexism

By Michael J.W. Stickings

This morning, I referred to Chris Matthews's "egotism and sexism." Earlier this afternoon, Media Matters sent out this latest example of the former.

Matthews was interviewing CNBC financial reporter Dylan Ratigan. In this clip (see below), Ratigan discusses the movement of money in the economy, specifically the frequency of movement, or activity, or what is known as the velocity of money. In terms of economic stimulation, the key is not just to inject more money into the economy but to increase the velocity of money in the economy.

Now, Ratigan's a decent reporter, and he's talking here about a rather complicated subject. And you would think that any good interviewer, and any decent person, would engage him with similar gravitas.

Not Matthews, who, evidently in well over his head, pulls out a typically lame and predictably sexist comeback:

Well, maybe if husbands should pay their wives for cooking dinner tonight, we can move the money around.

There's Chris Matthews for you. As charming as ever.

Activists still in a box

By Carol Gee

"We are in a box. The United States' current economic crisis has four corners, just like any regular box," was how I framed the issue in my Friday post, "Squaring off." Again today, activists -- people who are trying to influence what Congress does about the financial crisis -- are boxed in by fears,# by anger, by confusion, and by disappointment. Today's post examines how those prevailing emotions are driving what Democrats, Republicans, plain citizens and the power elites are doing to respond to the Bush administration's demands.* Activists turned loose by anger may have set new records this week, as they called* and e-mailed their Representatives.

Of two minds, with an uncomfortable feeling of ambivalence -- I really like what Rep. Dennis Kucinich (D-Ohio) said in his recent e-mail about what really should be done: "We are told that we must stabilize markets in order for the people to be protected. I think we need to protect peoples' homes, bank deposits, investments, and pensions, to order to stabilize the market." I also like what Rep. Chris Shays (R-Conn) said in an e-mail on the other side of the argument: "While this is not 1929 all over again, it could be if we step aside and let the wonders of the market work its will in this environment. We can’t let the foolishness and greed on Wall Street bring down Main Street; at least I don’t intend to." Perhaps this ambivalence is what kept me from trying to call members of Congress. But a huge unknown number of people had no such problem with mixed feelings. Their fierce opposition meant that, as reported by by Paul Kiel, ProPublica - 9/30/08, "Despite Lobbying, Popular Opposition Sinks Bailout Bill." And now there is a desperate GOP spin going on to shift the blame.

Democrats in the Senate did not let disappointment immobilize them. An article at Politico.com headlines an edgy reality: "Bailout not dead yet," by Ryan Grim & Martin Kady II (9/30/08). To quote:

Senate leaders have decided to take up the failed House version of the $700 billion economic rescue bill, and plan to add a widely supported change in the Federal Deposit Insurance Corp. caps.

In what is shaping up to be yet another historic vote, presidential candidates Barack Obama and John McCain will return to Washington tonight for a late night vote.

Sen. Charles Schumer (D-N.Y.), embraced the idea as well, but sought to give Reid credit for attaching the FDIC measure and a widely popular tax extenders bill to the bailout.

"I'm getting to the point in my life where I can't start over" signals a kind of resignation in the story of how fast the situation has evolved in just a few hours. Now people are looking at "a second chance (and thoughts) on the House bail-out vote,#" in Time (10/1/08). To quote:

Representative Elton Gallegly, 64, a California Republican . . . says he doesn't regret his "No" vote. Gallegly is adamant that the House must pass a bill to stabilize the nation's fragile financial markets. Whereas phone calls to his office were once running 40 to 1 against the bill, now they're "a mixed bag . . ."

It's amazing what a 778-point drop in the Dow Jones Industrial Average, wiping out $1.2 trillion in equity, can do to change public opinion. An ABC News/Washington Post poll taken following the failed vote showed that 88% of Americans are concerned that the collapse of the bill could worsen the economic turndown and that 51% are confident that a bill will eventually pass. And where the people go, politicians very quickly follow. Most members explained their votes opposing the bill Monday as a reflection of their constituents' anger about a rescue package for Wall Street. "Since the vote, it's about half and half," Representative Tim Murphy, a Pennsylvania Republican who voted against the bill, says of the calls coming into his office. "Half say, Do something — I'm worried about my business or my retirement; and the other half still say, Don't vote for the bailout."

Though we plain citizens remain anxious, angry, confused and disappointed, I am not sure that we can change now. I feel that the weight of influence has now shifted to the power elites, the investor class, such as the U.S. Chamber of Commerce, etc. Regarding who's likely to get the second chance, I conclude this post with a comment from Pseudocyants on my post from yesterday that presents a logical prediction by this reader, along with some good advice. To quote:

Barron's is attempting to set-up a soft-landing for the Republicans who will end up voting for the next version of the bail-out:
----------------
After the House of Representatives Monday dramatically rejected legislation to establish a $700 billion rescue package for the financial system and helped to trigger more than $1 trillion loss in the value of U.S. stocks, Congress worked Tuesday to put together a bill that could gain passage, perhaps by the end of the week.

What changed? Reports say that House members, who previously had been besieged with messages from constituents who reacted with blind anger over the prospect of laying out $700 billion in what they saw as a bailout for Wall Street fat cats, heard a very different tune Tuesday. America's investor class reacted just as angrily at the losses suffered in their retirement and college-savings accounts as what they saw as the result of the House defeat of the bill.

Randall W. Forsyth, "Congress Reads the Returns -- of Minus $1 Trillion," Barron's, October 1, 2008

Mighty broad definition of the "investor class", if you ask me. In reality, the investor class are those who are pissed off about how big a percentage of their wealth now needs to be expended purchasing their monocle polish.

A great number of the persons opposed to the bail-out lost money in their 401-Ks and children's college funds. It ain't gonna be the Democrats would walked after the ACORN initiatives were excluded from the package who will return with a yea vote, because ACORN is off the table. It just won't do for the "investor class" if po' folk get a piece of the bail-out pie.

The Barron's article goes on to describe the mark-to-market accounting rules required by Sarbanes/Oxley as a "relatively esoteric matter". Really? A financial institution having to mark their assets to present day valuations is called transparency, and if this passes, there will be more trouble down the road, guaranteed.

My prediction is that there will be a bail-out passed by no later than next Monday, and that many of the Republicans who voted no previously will be onboard. It will be billed as bipartisan cooperation. Whenever the word bipartisan is mentioned in the same sentence as $700 billion, go and put on your best pair of steel trousers, because politicians are about to tear you a new one.

The proper way to handle this crises is to force all corporations who need government funding to completely and honestly mark down their bad debt publicly, forcing their share price to tank down to the real market value. Then whatever monies they receive, the Federal Government should receive stock warrants on a dollar for dollar basis at that value. As soon as the market stabilizes, and the Government is able to realize a profit from these warrants, they should be sold to the highest bidders at open auction, and the monies derived from these sales to be placed directly into the treasury, not siphoned off into pet projects. If Congress played free-market hardball with the financial corporations, most would suddenly discover new avenues of previously untapped investment capital, and would no longer be crying for a hand-out. Never extend credit to a lousy gambler. It's like giving money to a junkie.

Additional References:

• "Breaking on the web -- Wall Street crisis edition." From ProPublica


• "History of U.S. government bail-outs" a fascinating "cloud" chart in color, from ProPublica


• "18 Tough Questions and Answers"# from Time Magazine


• "American financial crisis sparks German schadenfreude"# from The Local

Hat Tip Key: Regular contributors of links to leads are "betmo"* and Jon#.

(Cross-posted at South by Southwest.)

A phenomenal nine days

By Carol Gee

The deal between the administration and Congress is far from set -- Even though it truly feels like the sky is falling, Congress needs to resist pressure that will be enormous to make an agreement. If a solution is to be found to end the crisis, it must be able to pass Congress. But some members of Congress have their backs up. The assumptions under which the financial sector and the administration are operating have been and continue to be seriously flawed, exhibiting a sense of entitlement that is amazing. "Democrats battling to add restrictions to $700 billion bailout" is at McClatchy today. To quote:

"The Bush administration has called on Congress to rubber-stamp its bailout legislation without serious debate or efforts to improve it. That will not happen," said Senate Majority Leader Harry Reid, D-Nev.

People close to the negotiations said that at least three areas of disagreement remained: limits on executive compensation at troubled firms, the terms of oversight of the Treasury's management of the bailout and whether taxpayers would gain an equity stake in companies that benefit from the bailout so that taxpayers could share in the firms' later profits.

Perhaps at the end of the week something will have happened, but many urge that the administration's plan has serious policy deficits, lacks accountability and likely badly underestimates what the actual bailout cost will be. "As Hill Debates Bailout, Wall St. Shifts Continue -- Paulson, GOP Oppose Democrats' Proposal to Limit Executive Pay." The Washington Post (9/23/08) has the story, from which I quote:

Senate Banking Committee Chair Christopher Dodd says it might be possible may meet approve the bailout by Friday, but it might take longer. . . . Congressional Democrats considering the Bush administration's emergency plan to shore up the U.S. financial system countered with their own demands yesterday, presenting draft legislation giving the government power to cut salaries of chief executives at firms that participate in the bailout and slash severance packages for their top management.

As an example of what some people in Congress are saying, I quote from an article Rep. Bernie Sanders wrote a few days ago (9/19/08) at The Huffington Post: "Billions for Bailouts! Who Pays?."# To quote:

The current financial crisis facing our country has been caused by the extreme right-wing economic policies pursued by the Bush administration. These policies, which include huge tax breaks for the rich, unfettered free trade and the wholesale deregulation of commerce, have resulted in a massive redistribution of wealth from the middle class to the very wealthy.

In my view, we need to go forward in addressing this financial crisis by insisting on four basic principles. . . Specifically, to pay for the bailout, which is estimated to cost up to $1 trillion, the government should:

1) The people who can best afford to pay and the people who have benefited most from Bush's economic policies are the people who should provide the funds for the bailout.

a) Impose a five-year, 10 percent surtax on income over $1 million a year for couples and over $500,000 for single taxpayers. That would raise more than $300 billion in revenue;
b) Ensure that assets purchased from banks are realistically discounted so companies are not rewarded for their risky behavior and taxpayers can recover the amount they paid for them; and
c) Require that taxpayers receive equity stakes in the bailed-out companies so that the assumption of risk is rewarded when companies' stock goes up.

(2) There must be a major economic recovery package which puts Americans to work at decent wages. . . (3) Legislation must be passed which undoes the damage caused by excessive de-regulation. . . (4) We must end the danger posed by companies that are "too big too fail," that is, companies whose failure would cause systemic harm to the U.S. economy.

A little heads up about what the Republicans will argue about the cause of the crisis comes from Josh Marshall* at TPM: Quote: "Democrats created the crisis by forcing banks to give too many loans to black people and other minorities." And Think Progress points out that "McCain Campaign Has Strong Ties To Corporate Lobbyists At Center Of Bailout."

This bears repeating as Congress and the White House negotiate -- "Meltdowns and Morality" by Ed Kilgore from The Democratic Strategist newsletter of 9/15/08. To quote:

As we all watch anxiously to see what the various maneuvers of the Fed and the Treasury and Wall Street mean for the rest of us, Matt Yglesias has made a simple but profound point that tends to get lost at times like these:

Unlike the guy who runs Lehman Brothers, the guys who clean the bathrooms in the Lehman Brothers office have, as best one can tell, been doing an excellent job. And yet if the company going under results in everyone involved losing their jobs, the guy who runs Lehman will wind up being better off than the guys who clean the bathrooms. This is because in the United States of America, hard work is the way to get ahead.

"Confronting Economic Meltdown" a forum -- The Washington Note's Steve Clemons is moderating a meeting this morning on at the New American Foundation. Participants include Congressman Walter Jones, former Senator Fritz Hollings and a panel of experts. (Link to streaming live). At the same time Ben Bernanke and Hank Paulson are testifying about the economy before a congress committee.

Background Stories -- a couple of analytical pieces for those who need to know a bit more.

• "Global financial meltdown"# comes from Global Research (9/19/08).


• A Yahoo! News story headlined - "Radical bailout plan has a jawdropping price tag."#

Hat Tip Key: Regular contributors of links to leads are "betmo"* and Jon#, who said, "The changes that Phil Gramm et.al. put in place are responsible for all this financial mess... Since we all are part owners of AIG, do we get a discount on our insurance?"

(Cross-posted at South by Southwest.)

Where were the regulators?

By Carol Gee

Wow! Last week will surely go down in the economic record books. According to the New York Times today, a group of major banks is pooling $7 billion each to offset crises similar to the Lehman Brothers expected bankruptcy, indicating that,"Washington officials and Wall Street have grave concerns about future losses." The U.S. Treasury and the Federal Reserve appear to be taking a harder line and temporarily relaxing some regulations at the same time. The Fed will accept more high risk collateral, "potentially putting more taxpayer money at risk." The Federal Reserve has loosened the emergency loan standards for Wall street investment banks. In a stunning related story to that of the fall of Lehman Brothers, Merrill Lynch has agreed to be purchased by Bank of America.

The question on many lips is, where were the regulators? The answer is "lais·sez faire n." Welcome to the wonderful world of rule by corporatocracy, begun by Ronald Reagan's era of deregulation decades ago. What disappeared more recently under the Bush administration was the bedrock of ethics and plain common sense. According to About.com., laissez faire means:

An economic theory from the 18th century that is strongly opposed to any government intervention in business affairs. Sometimes referred to as "let it be economics."

Investopedia Says:
People who support a laissez faire system are against minimum wages, duties, and any other trade restrictions. Laissez faire is French for "leave alone."

1. An economic doctrine that opposes governmental regulation of or interference in commerce beyond the minimum necessary for a free-enterprise system to operate according to its own economic laws.

Where was the Department of Justice hiding for all these years? For a while it was headed by Bush crony Alberto Gonzales, who was busy helping our current president expand his unitary presidency. Meanwhile nobody was watching the store. For example, an investigation by Paul Kiel from ProPublica was published on 9/8/08, with this headline: "DoJ: Credit Suisse Brokers Lied About Subprime Securities." To quote (author's links):

In one case, according to an SEC complaint against the pair also filed last week, they used $20 million of a client's money to buy a security backed by mobile home loans. But in an e-mail to his client, Bulter changed the name of the security from "Greenpoint Credit" to "Greenpoint Student Assistance." . . .

This is the second criminal case on Wall Street involving the subprime meltdown. Earlier this summer, the Justice Department filed its first major indictment, accusing two Bear Stearns hedge fund managers of misleading investors. The FBI is currently investigating 22 corporations involved in the subprime mortgage industry, FBI spokesman Bill Carter said. The FBI hasn’t named them. (See our overview of subprime-related investigations.)

Ethics violations* were in abundance in the Bush administration where government regulation was an anathema. Investigative journalist from ProPublica, Paul Kiel wrote this on 9/10/08: "New Report Details Wide-Ranging Ethics Scandal at Interior Dept." Quote: "According to a series of reports sent to Congress today by the department's inspector general, Interior employees rigged oil contracts, took money as oil consultants, had sexual relationships with oil and gas company representatives, and engaged in other misconduct." The same story by Amanda on 9/11/08, was posted on AlterNet: "Bush Administration Officials Rewrote Ethics Rules to Accommodate Partying."# To quote:

According to the new Interior Department Inspector General (IG) report, nearly a third of the Denver Minerals Management Service’s 55-person office “received gifts and gratuities from oil and gas companies.” Several employees have tried to claim that they were unaware of federal ethics guidelines.

. . . RIK officials often bragged about the “RIK way of doing business,” which aimed to “be a part of industry.” In the summer of 2006, RIK employees wrote up a document titled, “Initiative to Clarify Guidance for RIK Interaction with Industry,” which would codify their “uniqueness.” In short, RIK officials wanted to rewrite the ethics rules to cover up their misdoings.

. . . In a statement today, House Speaker Nancy Pelosi (D-CA) criticized “how cozy the relationship between Big Oil and the Administration’s regulators have been,” which has “cheated the American taxpayer out of billions of dollars owed them by the oil companies.”

The ripple effect is being felt all over the country and will ultimately impact the upcoming presidential election, says Politico.com. You can bet that Senator McCain would continue with the cozy corporatocracy, despite any protestations to the contrary. Those of us who are a bit older remember McCain's involvement with the Charles Keating scandal that resulted in the government bail-out of the savings and loan industry. My belief is that Senator Obama will demand much more accountability. By Mike Allen, the opinion is headlined, "Bank meltdown wallops campaigns." To quote:

America’s banking instability could upend the final 50 days of the presidential campaign, with both candidates forced to confront a calamity that has gotten only glancing attention during the first 20 months of the race for the White House.

Red flags about the nation’s economic infrastructure have been popping up at least since the collapse in March of the investment bank Bear Stearns. But neither Sen. John McCain (R-Ariz.) nor Sen. Barack Obama (D-Ill.) has talked in detail about the potential consequences for voters and the government.

Until now, the crisis seemed like a confusing Wall Street story. That all ended with the fast-moving events of Sunday, which The New York Times called “one of the most extraordinary days in Wall Street’s history.” A CNBC special report on Sunday night called it “a complete realignment of Wall Street.”

A few senators are still plugging away trying to make things better. The news from The Raw Story (9/10/08) is that, "Sen. Feingold to hold hearing on 'Restoring the Rule of Law.'"# Several planned witnesses include various experts, law professors, historians and advocates to provide input as to what remedial actions the next president and Congress should take. The hearing will be held September 16, so watch for it tomorrow. To quote:

Senator Russ Feingold (D-WI), Chairman of the Senate Judiciary Committee's Constitution Subcommittee, has announced a hearing on how to best prepare the next president to foster an environment of accountability and responsible use of power seen lacking in the years President Bush and Vice President Cheney have been in office.

Next week the Subcommittee will hear testimony from legal and historical experts on what actions the next president and Congress need to take in order to "repair the damage done by the Bush Administration to the rule of law." The purpose of the hearing is to give the next president the "full range" of proper guidance in restoring and maintaining checks and balances in areas such as wiretapping, interrogations, government secrecy, violations of privacy, detention policy, proper use of executive power and efforts to not mislead Congress.

The country will be watching and holding its breath that the Wall Street woes will not end in a complete meltdown of our financial system. Would that the regulators and ethics watchdogs had made appearances long ago when problems were apparent. It did not have to reach this level of crisis. Credit Republicans for this, as you are holding your breath -- and your nose.

Hat Tip/Key to regular contributors (Jon-#) and ("betmo"*) for the marked links.

(Cross-posted at South by Southwest.)

Money-ethics-money-ethics . . .

By Carol Gee

The mother's milk of politics is golden -- As with McCain-Feingold, in the days of old, Republican presidential candidate Senator John McCain recently called lobbyists "birds of prey," according to Politico.com. But this was a very new development in his campaign. "The topic of lobbyists is sensitive for McCain because several of his top aides had lucrative lobbying practices," the story explained. The problem is that Senator McCain talks a good game regarding campaign financing, but the unfolding of his own campaign belies his rhetoric.

McCain's top foreign policy adviser is Randy Scheunemann. Zachary Roth at TPM Muckraker (8/26/08) says, for example, "Scheunemann Lobbied Against Bill to Keep Guns From Terrorists." So this is not over, as McCain tries to down play this ethics story. And the Republican convention promised to be written as a very different lobbying influenced event, in the opinion of Think Progress. Like crows attracted to shiny objects, lobbyists flock to where the money gathers.

Investigative reporters are also curious. Paul Kiel, who used to be at TPMMuckraker, is now at ProPublica. On point on Monday (8/25/08), he posted this great piece, "Partying Under Adversity." To quote:

It depends on how you look at it. This week's Democratic National Convention (and in September, the Republican convention) is a week-long orgy for special interest money, same as it ever was. Alternatively, what was once the quadrennial triumph for corporations and lobbying firms, the Olympics for influence peddling, has been ruined by a litany of new ethics rules; those brave enough to even put on an event are doing so in an atmosphere of fear.

. . . This year's conventions are the first to occur under the 2007 lobbying ethics and reform bill, which among other things, further limited what gifts a lawmaker could receive and what sort of events they could attend.

Daily Kos' Markos Moulitsas' curiosity was raised by an invitation to a Denver convention party. Kos posted about it with "Lobbyist central" the day before yesterday. It is an illustration of whether or not any "adversity" is really involved with the party hosts. To quote:

I just got an invitation for the "Spirits of Denver" party, . . August 25, 2008. Here are the sponsors. See if you can figure out the pattern:

Distilled Spirits Council of the United States (lead sponsor)
2008: 59% Dems, 41% Reps
2006: 48% Dems, 48% Reps
2004: 39% Dems, 61% Reps
2002: 32% Dems, 68% Reps
**********
Lockheed Martin
2008: 57% Dems, 43% Reps
2006: 42% Dems, 58% Reps
2004: 41% Dems, 59% Reps
2002: 39% Dems, 61% Reps
**********
. . . seeing the political winds turn, they [PACS] are working feverishly to buy the Democratic Party so that government can continue the same destructive policies that have gotten us to today's messes.

While Obama may not be taking PAC money, most other Democrats aren't following suit. And while there are many PACs friendly to progressive principles, the group hosting and funding this party is not.

In the midst of all this, the House Ethics Committee is without its chairman, the late Stephanie Tubbs Jones, who recently died tragically of a brain hemorrhage. The consequences of her loss were explored by Politico.com's John Bresnehan on 8/21/08: "House shocked by Tubbs Jones' death." To quote:

Still shocked by the death of Rep. Stephanie Tubbs Jones Wednesday, Democratic insiders don’t expect House Speaker Nancy Pelosi to move quickly in replacing the Ohio Democrat as chairwoman of the House ethics committee.

. . . Democratic insiders said Pelosi faces a challenge in balancing the need for a working ethics committee against showing proper respect for Tubbs Jones, a five-term member whose death was the seventh by a sitting House member during this 110th Congress.

References on presidental campaign financing:

• "In a shift, Obama rejects public funding" -- Boston Globe (6/20/08). To quote:
  
  

  Barack Obama rejected public funding for the fall presidential campaign yesterday, a dramatic blow to 1970s good-government reform that has been overwhelmed by an explosion of private money.
  
  John McCain confirmed later yesterday that he will take $84.1 million in taxpayer funding for the general election, and accused Obama of reneging on a pledge to do the same. "He has completely reversed himself and gone back, not on his word to me, but the commitment he made to the American people," McCain told reporters.



• "Election panel sides with McCain" -- Los Angeles Times (8/15/08). To quote:
  
  

  Republican John McCain won a round against Democrats on Thursday when the Federal Election Commission rejected their contention that he violated campaign finance laws during the GOP primary.
  
  The FEC's draft opinion affirms McCain's right to bypass the public financing system and the spending limits that come with it.

The body politic has yet a ways to go on all this.

(Cross-posted at South by Southwest.)

Paradigms Found

By Carl

The only freedom which deserves the name, is that of pursuing our own good in our own way, so long as we do not attempt to deprive others of theirs, or impede their efforts to obtain it. Each is the proper guardian of his own health, whether bodily, or mental and spiritual. Mankind are greater gainers by suffering each other to live as seems good to themselves, than by compelling each to live as seems good to the rest. (emphasis added)

What is "freedom"?

Much has been made on the right wing of this body politic of the word freedom.

Conservatives claim to be the protectors of our freedom, but in reality, theirs is not a protection as much as it is a raping, for they honor the first part of this clause, the part that reads "pursuing our own good in our own way," while ignoring the balance of the equation, the "tyranny of the majority."

If you contemplate this dynamic, of almost libertine allowance of the plundering of our national resources, natural and human, you understand the great flaw of the right wing. One must give back to the community, because the community is what is being plundered for the self. The sheer act of plunder creates a situation where you "deprive others" of their freedom.

As a liberal and libertarian, to me, government is the balance for the equation. Good government guarantees individual freedom. Bad government steals it. For the past eight years, we've seen horrific government. We've allowed our freedoms to be eroded, and in return have seen nothing but heartache and misery.

The underlying flaw of any political or economic system -- democracy, capitalism, socialism, communism, even dictatorship -- is the human element: people cannot be easily predicted or controlled. In the right wing interpretation of a capitalist democracy, there is simply no accounting for the greed, avarice and rapaciousness of individuals.

Even Adam Smith, the father of modern capitalism, warns of this and suggests the only power great enough to deflect these basic human impulses is government.

The Republicans would ignore this, in the mode of Gordon Gecko of the movie Wall Street: Greed is good.

How much is enough? The world is not a win-win game, we've learned that hard lesson over the millenia.

How many billions must one billionaire have, and why? Those billions are earned on the backs of, well, billions of other people. It not only takes a village to raise a child, it takes a village to raise a millionaire and a planet to raise a billionaire.

The essence of humanity is to compete with each other, unless you've subsumed the Buddhist philosophy of not wanting. To want is to fight, to fight is to either win or lose.

It is the losers that government should protect. Government's sole responsibility should be to provide protection and opportunity for the people who need the most help, and not grease the wheels for those who are already on their way to success, such as it is defined in the current vernacular.

In point of fact, protecting the "losers", providing opportunity, promoting the general welfare, provides us all with a richer and yes more competitive atmosphere.

Smith's contention that individual self-interest benefits us all through innovation and efficiency's is not wrong and it is not lost in an economy that is governed by oversight, refereed with justice and judgement. It is enhanced. It lowers barriers to entry, deflects predatory practices (could you imagine the subprime mortgage market if there had been someone to say "Stop!" three or four years ago?), and makes rational choices, choices that humans in large numbers are incapable of, precisely because competition forces their hands to make irrational choices.

To cheat. To lie. To steal. These are "rational" only in terms of the game of capitalism, which honors fairness and honesty only when these are breached.

As liberals, we need to stress that we espouse "fair enterprise," to riff off the "fair trade" movement, capitalism with the human element recognized and protected.

(Cross-posted to Simply Left Behind.)

The fundraising phenomenon continues

By Creature

Obama brought in $52 million for June. Not bad for a slow, post-primary, summer month when people are focused elsewhere. And, as far as giving goes, I'm with Libby. I think it's time to throw some money Obama's way. His Iraq, Afghanistan, and terror framing has been dead-on of late and deserve a little support.

(Cross-posted at State of the Day.)

Money, money, money (and Obama's incredible contribution to American democracy)

By Michael J.W. Stickings

Like it or not, it's what drives American politics.

You want the completely public financing of campaigns, or a strict (and low) limit on campaign spending? -- fine. But that's just not the way it is right now.

And right now, money matters. A lot. And in a country of 300 million-plus, with campaigns that go on and on, with both primary and general elections on which to spend, it makes sense that money matters. After all, it costs a lot to get the message out to so many prospective voters. Campaign finance reform may be desirable goal -- and I'm all for it, if done properly -- but there may be no way around the centrality of money to the American political process.

And so it is rather impressive -- is it not? -- that Obama raised $55 million last month, a new record. Clinton did well, too, taking in $35 million (and she was done extremely well since Tuesday's primaries), but Obama at this point is far more than a candidate. He is the leader of a movement that is mobilizing Americans seemingly like never before. Consider these numbers (via Ben Smith of The Politico, linked above):

* Contributors: 727,972
* First Time Contributors: 385,101
* Total Contributors — Campaign to Date: 1,069,333

Online Fundraising:

* More than $45 million raised online in February
* More than 90% of online donations were $100 or less
* More than 50% of online donations were $25 or less
* More than 75% of online donors in February were first-time online donors
* More than a third of those new online donors in February went on to engage in volunteer activity on My.BarackObama.com (planning their own offline events, making phone calls from home, joining local grassroots volunteer groups)

The number of contributors, including first-time contributors, is impressive enough. But consider that last number. The donors to Obama's campaign aren't just giving money, voting, and walking away. They're choosing to be active participants in Obama's campaign and in the movement of which he is the leader. For them, democracy isn't just about voting, it's about getting involved in a meaningful way in the political process, about giving of themselves and their time, about making a commitment and sticking to it.

Is that not a large part of what Obama is all about as a presidential candidate? He is genuinely inspirational, but it isn't all hollow rhetoric, as his opponents, McCain and Clinton alike, have suggested. Apart from the substance -- and there is a lot there, listen to his speeches or read up on his policy positions -- there is the mobilization all across America of thousands and thousands of donors and thousands and thousands of volunteers. Rising up to strengthen America's democracy, they have been inspired by Obama, by his campaign, by what he stands for, and yes, by his brilliant speeches, by his call for change, by his leadership.

There's nothing hollow about that.

The legacy of George “Herbert Hoover” Bush

By J. Kingston Pierce

I was an early subscriber to Vanity Fair magazine when it was relaunched (after more than four decades out of print) in the 1980s. However, I soon fell out of love with its concentration on Hollywood celebs and the rich and famous, and ceased subscribing. It is only in the last few years, as editor Graydon Carter (formerly of the wonderful Spy magazine) has taken VF in a decidedly more political direction, even devoting his monthly editor’s note to detailed criticisms of the Bush administration, that I’ve started to pay attention to the magazine again. I guess I can forgive VF its movie-star profiles and continued willingness to publish Christopher Hitchens and Dominick Dunne, along with a monthly horoscope, so long as it turns out powerful stories such as this one, and produces outstanding covers (examples A and B).

Renowned American economist Joseph E. Stiglitz’s analysis, in the December issue, of why George W. Bush has been such a disastrous force on the U.S. economy only reinforces my conviction that Vanity Fair is a must-read these days. Coming on the heels of McClatchy Newspapers’ characterization of Dubya as “the biggest-spending president since Lyndon B. Johnson,” an ABC News/Washington Post poll showing that a phenomenal 74 percent of Americans think “the country is headed in the wrong direction” (“the most since the government shut down in a contentious budget battle in early 1996”), and historic voter dissatisfaction with Bush’s performance as president (“Fifty percent of Americans now say they strongly disapprove,” according to the latest Gallup poll); and released amid front-page stories about stock market declines, a slowdown in housing sales, the plummeting value of the U.S. dollar, and Bush’s wasteful spending on a war in Iraq that he isn’t mature enough to end, or at least rethink, Stiglitz’s devastating assessment should serve as a wake-up call to any Americans who haven’t yet connected the dots on how destructive Republican’t Bush’s economic policies have been.

You really need to read the whole essay. However, a few choice excerpts should get you started. In this first one, Stiglitz pre-emptively responds to likely GOP attacks on the credibility of his arguments:

I can hear an irritated counterthrust already. The president has not driven the United States into a recession during his almost seven years in office. Unemployment stands at a respectable 4.6 percent. Well, fine. But the other side of the ledger groans with distress: a tax code that has become hideously biased in favor of the rich; a national debt that will probably have grown 70 percent by the time this president leaves Washington; a swelling cascade of mortgage defaults; a record near-$850 billion trade deficit; oil prices that are higher than they have ever been; and a dollar so weak that for an American to buy a cup of coffee in London or Paris--or even the Yukon--becomes a venture in high finance.

And it gets worse. After almost seven years of this president, the United States is less prepared than ever to face the future. We have not been educating enough engineers and scientists, people with the skills we will need to compete with China and India. We have not been investing in the kinds of basic research that made us the technological powerhouse of the late 20th century. And although the president now understands--or so he says--that we must begin to wean ourselves from oil and coal, we have on his watch become more deeply dependent on both.

Up to now, the conventional wisdom has been that Herbert Hoover, whose policies aggravated the Great Depression, is the odds-on claimant for the mantle “worst president” when it comes to stewardship of the American economy. Once Franklin Roosevelt assumed office and reversed Hoover’s policies, the country began to recover. The economic effects of Bush’s presidency are more insidious than those of Hoover, harder to reverse, and likely to be longer-lasting. There is no threat of America’s being displaced from its position as the world’s richest economy. But our grandchildren will still be living with, and struggling with, the economic consequences of Mr. Bush.

Later in the piece, Stiglitz writes:

You’ll still hear some--and, loudly, the president himself--argue that the administration’s tax cuts were meant to stimulate the economy, but this was never true. The bang for the buck--the amount of stimulus per dollar of deficit--was astonishingly low. Therefore, the job of economic stimulation fell to the Federal Reserve Board, which stepped on the accelerator in a historically unprecedented way, driving interest rates down to 1 percent. In real terms, taking inflation into account, interest rates actually dropped to negative 2 percent. The predictable result was a consumer spending spree. Looked at another way, Bush’s own fiscal irresponsibility fostered irresponsibility in everyone else. Credit was shoveled out the door, and subprime mortgages were made available to anyone this side of life support. Credit-card debt mounted to a whopping $900 billion by the summer of 2007. “Qualified at birth” became the drunken slogan of the Bush era. American households took advantage of the low interest rates, signed up for new mortgages with “teaser” initial rates, and went to town on the proceeds.

All of this spending made the economy look better for a while; the president could (and did) boast about the economic statistics. But the consequences for many families would become apparent within a few years, when interest rates rose and mortgages proved impossible to repay. The president undoubtedly hoped the reckoning would come sometime after 2008. It arrived 18 months early. As many as 1.7 million Americans are expected to lose their homes in the months ahead. For many, this will mean the beginning of a downward spiral into poverty.

Looking ahead to the challenges facing whoever takes up the White House reins from Bush in 2009, Stiglitz opines:

The most immediate challenge will be simply to get the economy’s metabolism back into the normal range. That will mean moving from a savings rate of zero (or less) to a more typical savings rate of, say, 4 percent. While such an increase would be good for the long-term health of America’s economy, the short-term consequences would be painful. Money saved is money not spent. If people don’t spend money, the economic engine stalls. If households curtail their spending quickly--as they may be forced to do as a result of the meltdown in the mortgage market--this could mean a recession; if done in a more measured way, it would still mean a protracted slowdown. The problems of foreclosure and bankruptcy posed by excessive household debt are likely to get worse before they get better. And the federal government is in a bind: any quick restoration of fiscal sanity will only aggravate both problems. ...

Some portion of the damage done by the Bush administration could be rectified quickly. A large portion will take decades to fix--and that’s assuming the political will to do so exists both in the White House and in Congress. Think of the interest we are paying, year after year, on the almost $4 trillion of increased debt burden--even at 5 percent, that’s an annual payment of $200 billion, two Iraq wars a year forever. Think of the taxes that future governments will have to levy to repay even a fraction of the debt we have accumulated. And think of the widening divide between rich and poor in America, a phenomenon that goes beyond economics and speaks to the very future of the American Dream.

As I said before, though, you ought to read all of Stiglitz’s analysis. It is a cautionary tale of what can happen when an arrogant ideologue, more determined to reward his deep-pocketed friends than to the help the majority of Americans live a better life, and unconcerned with public opinion, is rewarded with election to the highest office in the land. I hope our grandchildren can forgive us the economic carnage Bush leaves behind.

(Cross-posted at Limbo.)

Closing the door on open government

By Libby Spencer

Funny, I could have sworn the Democrats were aware that they were put back into power because the people were fed up with the back room dealing and selling us out to the corporations. Maybe they forgot already. How else to explain this secret free trade deal that I understand was basically written by corporate lobbyists?

This is a deal that Bush wants and corporate interests love. The DLC and the Democratic leadership endorse it but half the Democrats are reported to oppose it. I'd suggest the "leadership" and the rest of the old guard machine politicians heed their warnings. If we wanted more policy making like this, we could have just cloned Dick Cheney.

Mid-sized American manufacturers and labor organizations already oppose the deal based on what little information they've been able to get from the press releases. The details are still a secret. A secret. What possible justification is there for keeping the business of the people, from the people? This is of major import. We want to be in on the whole process. The negotiations on this deal should be conducted openly and with opportunity for public debate.

Any politician that endorses the methodology used to reach this devil's pact on the future of worker's rights should stop shopping around for a buyer for their DC digs. After the next election, they won't need them. You might want to remind them of that and send an easy one step email to your Representative and Senators here at Public Citizen.

(Cross-posted at The Impolitic.)

Grab that cash with both hands and make a stash

By Michael J.W. Stickings

It's all about the money, stupid:

Sen. Barack Obama raised at least $25 million for his presidential campaign in the first quarter of the year, nearly matching Sen. Hillary Rodham Clinton's record-setting total and making it all but certain that Democrats will face a costly and protracted battle for their party's nomination.

Collectively, the Democratic candidates raised nearly $80 million in the first quarter, outpacing the Republican field for the first time since the Federal Election Commission began closely tracking such figures in the 1970s. Republicans took in just over $50 million in that same time frame, suggesting that a restive electorate and creative Internet strategies have fundamentally shifted the fundraising landscape for both parties.

Well, okay. There does seem to be "a restive electorate" and the landscape may very well have been "fundamentally shifted". And, to the extent that this helps the Dems, I'm fine with it.

BUT.

Let's not get too excited about it. Beyond 2008, that is, beyond our immediate electoral interests, lies the very serious problem of the buying of political office.

To be sure, money has always played a key role in political life. What is going on now -- the focus on fundraising long before the election -- isn't new. And it may not be all bad. In fact, it may, in its own way, be rather democratic. As Steve Benen puts it, "the number of donors this year is at least as impressive as the dollar amounts". This reflects "a fundamental shift in how engaged Americans participate in the process". "There’s never been anything like this level of involvement in campaign history. Ever."

Fair enough.

But is American democracy -- or democracy generally -- truly served by what amounts to the monetarization of the process? Or, rather, are the American people truly served by the primacy of money in their political system? Although more and more people may be donating, there remains the obvious fact that most people do not donate. The system may be more democratic, broadly speaking, now that more people are donating, but democracy, strictly speaking, is not defined by political donations. It is, to be precise, a system of popular rule, not a system of popular donations to the rulers. And, indeed, it is hardly a stretch to argue, as many do, that money, however "democratic" in origin, compromises the integrity -- that is, corrupts -- democracy.

Just look at the numbers: Clinton raised $26 million in Q1 2007, Obama raised $25 million, and Edwards raised $14 million. On the other side, Romney raised $23 million, Giuliani raised $15 million, and McCain raised $12.5 million. That's big money. And that's what people are now talking about -- who's ahead and who's behind in the money game that has taken over so much of big-time American politics. Because money may not guarantee victory, but it sure helps.

Which is not to say that I advocate the public funding of American politics -- for reasons associated with the work I do, I don't want to get into that here. What I would ask, however, is if a system that essentially requires candidates to spend so much time fundraising, including those who are already in office and who seek to remain there, a system in which money matters to such a degree that winning or losing often depends on how much of it, or how little of it, a candidate has, is truly democratic.

Or is this so-called "democracy" rather more like Major League Baseball? Occasionally a "small-market" team (A's, Twins) wins, or at least comes close, but more often than not the "big-market" teams (Yankees, Red Sox, Mets, Cardinals, Angels, Dodgers, Braves), that is, the teams with the most money to spend, and even more narrowly the teams that can blow through the luxury tax threshold, are the ones left competing for the World Series year after year.

Baseball fans, it seems to me, are best served by a league in which there is genuine competitiveness, in which teams win or lose because of how they play and how they are managed, not because of how much money they have. Likewise, the American people, like all democratic rulers, are best served by a political system in which candidates win or lose because of who they are and what they stand for, not because of how well they play the money game, that is, by a system in which voters choose who will represent them based on whatever factors they individually and collectively deem significant, not by a system in which candidates seek to outdo each other with respect to raising money and buying office, however "democratic" their monetary support might be.

**********

For more, see the Anonymous Liberal, who examines "the absurdity of the money race": Iowa is the key primary state, and "there's only so much money you can spend in Iowa.