Buck Naked Politics

SAFE Banking

by Bill Kavanagh: After the President's tough Cooper Union speech on financial reform, we're left with Senator Dodd's legislation— it helps in some ways, but doesn't stop "too big to fail" banks from dominating American finance for their own benefit, just as they did leading up to the meltdown. One sliver of hope for curbing future bubbles lies in a proposed amendment in the Senate, the Brown-Kaufman SAFE Banking Act. This legislation would break up the biggest of the megabanks and require limits on non-deposit liabilities. "Too big to fail" is just too big, say the sponsors of the amendment.

If you want to prevent the next meltdown from occurring, you can help by supporting the Brown-Kaufman amendment and making sure it gets an up or down vote. Call your Senators, Harry Reid, and the White House switchboard. Tell the folks answering that you are calling to make sure the SAFE Banking Act gets a chance to come to a vote on the Senate floor— and that without limiting bank size, financial regulation won't work.

What the hell, it's better than waiting for the bank lobbyists to kill the amendment without a fight, right?

(Kavanagh cross-posts at Bill's Big Diamond.)

Ill Fares the Land

posted by Bill: In his NY Review of Books piece on Ill Fares the Land , Tony Judt writes:

In the US, the UK, and a handful of other countries, financial transactions have largely displaced the production of goods or services as the source of private fortunes, distorting the value we place upon different kinds of economic activity. The wealthy, like the poor, have always been with us. But relative to everyone else, they are today wealthier and more conspicuous than at any time in living memory. Private privilege is easy to understand and describe. It is rather harder to convey the depths of public squalor into which we have fallen.

Regulating Derivatives

by Bill Kavanagh: Anyone who has spent time trying to understand the financial meltdown of 2008 has learned about derivatives and credit default swaps. What the general public probably hasn't learned is that nothing has happened since the markets went haywire to make the complicated and opaque derivatives market safer. No new regulatory legislation has passed and the legislation that has been introduced has loopholes big enough to burst a bubble in.

Today's NY Times editorial sheds some additional light on why derivatives need to be regulated and how the financial lobby has worked to prevent effective regulation from getting in the way of their lucrative— and unsafe— market in exotic products:

A big part of the problem is that derivatives are traded as private one-on-one contracts. That means big profits for banks since clients can’t compare offerings. Private markets also lack the rules that prevail in regulated markets — like capital requirements, record keeping and disclosure — that are essential for regulators and investors to monitor and control risk...

The big banks claim that derivatives are used to hedge risk, not for excessive speculation. The best way to monitor that claim is to execute the transactions on fully regulated exchanges, pass rules and laws to ensure stability, and appoint and empower regulators with independence and good judgment to enforce compliance.

Without effective reform, the derivative-driven financial crisis in the United States that exploded in 2008, and the Greek debt crisis, circa 2010, will be mere way stations on the road to greater calamities.

(Kavanagh cross-posts at Bill's Big Diamond.)

Putting the Fear Back in Fundraising

posted by Bill: If you were wondering what's wrong with Washington, check out this little tidbit. While creating jobs and keeping Americans in their homes has taken a backseat to posturing over who's to blame, election-year fundraising is in the ascendancy.

Case in point:

A Republican left RNC Finance Chairman Rob Bickhart's how-to-fundraise Powerpoint presentation in a hotel ballroom in Florida on February 18. Politico's Ben Smith reports on its contents.

In neat PowerPoint pages, it lifts the curtain on the often-cynical terms of political marketing, displaying an air of disdain for the party’s donors that is usually confined to the barroom conversations of political operatives...

The presentation explains the Republican fundraising in simple terms.

"What can you sell when you do not have the White House, the House, or the Senate...?" it asks.

The answer: "Save the country from trending toward Socialism!”...

In a section called "RNC Marketing 101," the following categories and motivations for giving were outlined:

"...small donors who are the targets of direct marketing are described under the heading “Visceral Giving.” Their motivations are listed as “fear;” “Extreme negative feelings toward existing Administration;” and “Reactionary.”

Major donors, by contrast, are treated in a column headed “Calculated Giving.”

Their motivations include: “Peer to Peer Pressure”; “access”; and “Ego-Driven.”

Wall St Road Trip to Greece Brings Meltdown Abroad

posted by Bill: Today's headlines are another case in point, showing how a lack of transparency and regulation in finance has led the world to the brink of economic disaster. Turns out that Greece had a little help getting to the point of fiscal catastrophe—from Goldman Sachs:

As worries over Greece rattle world markets, records and interviews show that with Wall Street’s help, the nation engaged in a decade-long effort to skirt European debt limits. One deal created by Goldman Sachs helped obscure billions in debt from the budget overseers in Brussels.

Even as the crisis was nearing the flashpoint... a team from Goldman Sachs arrived in the ancient city with a very modern proposition for a government struggling to pay its bills, according to two people who were briefed on the meeting.

The bankers, led by Goldman’s president, Gary D. Cohn, held out a financing instrument that would have pushed debt from Greece’s health care system far into the future, much as when strapped homeowners take out second mortgages to pay off their credit cards...

Howard Zinn 1922-2010

by Bill Kavanagh: We've lost Howard Zinn today. While most of the mainstream political world will have comments about a speech by the President tonight, I'm left much more affected by the reaction that we will no longer hear from the people's historian.

While President Obama delivered another elegant, yet less than progressive address to the Congress and the American people, the country won't have the benefit of one consistently honest and frank voice in response. Howard Zinn understood that, as Americans, we need to celebrate the heroism of those of people who stand up against established interests, especially when those interests oppose democracy and the rights of working people.

I'll reflect more on Zinn's legacy in the coming days. For the moment, the verbiage of State of the Union address pales by comparison to the silence Professor Zinn's absence creates. Until we can deconstruct President Obama's promises of change and hope, and compare them with the unrealized substance of his promises to working people, we will have fallen short of the tough standards to which Zinn held political leaders.

“I think people are dazzled by Obama’s rhetoric, and that people ought to begin to understand that Obama is going to be a mediocre president — which means, in our time, a dangerous president — unless there is some national movement to push him in a better direction.”

—Professor Howard Zinn

Perhaps, in remembrance of Zinn, we should apply a tougher standard to the realization of the democratic ideals the President so often invokes in his rhetoric. We might ask, "Where is the real change and hope we can believe in?"

Meanwhile, whatever the President may or may not really desire, let's take a moment for reflection on the work and life of Howard Zinn, who told the stories democracy must enshrine, not of the powerful or of the well connected, but of those who go forth, day after day, to live out the promise of government for the people, by the people, and of the people. May they not perish with Professor Zinn tonight.

(Bill cross-posts at Bill's Big Diamond.)

The Selling of Democracy

by Bill Kavanagh:  American democracy has long been corrupted by the influence of corporate cash, lots and lots of it for all parties. It's led to an orgy of giveaways and an almost total lack of oversight, a belief in markets and their wisdom, and ultimately has resulted in the disastrous meltdown of 2008-9. We're enduring unemployment and foreclosures at Depression levels, lost retirements and lost hopes as a consequence. And yet, it seems, what we've endured so far is not the limit—not by a long shot.

Now, the Supreme Court, by the same one-vote majority that brought us Bush v. Gore, has struck down any limit on corporate spending to affect elections. Corporations are now people, in the important respect that they enjoy freedom of speech. The only electoral and speech difference between me and a corporation now is the corporation's ability to print their messages everywhere you look, to hire public relations consultants to massage them into your daily life and entertainment as you contemplate your votes, and to ensure that their messages get in front of you in every possible way, while my speech is confined to this blog— or a sandwich board if I prefer to wear one.

Friday Night Highlights for the Stay-Home Set

by Bill Kavanagh: I guess Brad DeLong's Friday night was pretty dull, but it's all to our benefit this morning. His "Ten Economics Pieces Worth Reading: January 9, 2010" is a helpful scan through our current situation, financial reform, the commercial real estate bubble, big bank breakup proposals, the economics of the New Deal, China's stability, deficit reduction, and a few other things.

Personally, I didn't read anything last night, but did watch Bill Moyers Journal, which featured David Corn and Kevin Drum on financial reform (and why we'll not get any real reform). They laid out the basic reasons why Congress does Wall Street's bidding: money, money, and money. It's pretty hard to argue with their analysis when one considers how complex financial reform tends to be and how easy it is for financial firms to evade restrictions with a word change here and there— and a contribution here, there, and everywhere.

As a personal aside, I'm fascinated by how Kevin Drum has transformed into a Washington journalist in the seven or so years since I started reading his Left Coast "Calpundit" blog — and has even started wearing suits and ties. I'm not sure the sartorial changes are for the best, but it's great to see his work on magazine covers and network television (PBS is network television, right?).

(Bill cross-posts at Bill's Big Diamond.)

Courtesy of Main Street Taxpayer Dollars and Help from Our Elected Representatives, "A New Era of Wall Street Wealth"

bartleby the scrivener |  Following up on my comments on the IG's findings about the first round of AIG bonuses and Deb's piece yesterday, here's a piece at HuffPost on how the bailouts by Main Street -- still a scene of deserted store fronts as far as the eye can see -- have enriched Wall Street.  And the government's done its share to ensure that the people with all the money continue to have all the money -- not so much intentionally, but through regulations intended to get the banks back to the business of lending money to the boring people who bailed them out.  The New York Times reports:

Many of the steps that policy makers took last year to stabilize the financial system — reducing interest rates to near zero, bolstering big banks with taxpayer money, guaranteeing billions of dollars of financial institutions’ debts — helped set the stage for this new era of Wall Street wealth.

Titans like Goldman Sachs and JPMorgan Chase are making fortunes in hot areas like trading stocks and bonds, rather than in the ho-hum business of lending people money. They also are profiting by taking risks that weaker rivals are unable or unwilling to shoulder — a benefit of less competition after the failure of some investment firms last year.

So even as big banks fight efforts in Congress to subject their industry to greater regulation — and to impose some restrictions on executive pay — Wall Street has Washington to thank in part for its latest bonanza....

[T]he decline of certain institutions, along with the outright collapse of once-vigorous competitors like Lehman Brothers, has consolidated the nation’s financial power in fewer hands. The strong are now able to wring more profits from the financial markets and charge higher fees for a wide range of banking services. (NYT)

Once again, Paul Krugman was right.

Quote of the Day: The Abdication of Harry Reid

Kos:

Bill Frist never had 60 votes. Bill Frist never cared. Republicans ran the Senate as if they owned the place, even when enjoying razor-thin majorities.

Yet when Democrats took the chamber, the first thing Harry Reid did was complain that he couldn't do anything because he didn't have 60 votes.

Then voters delivered 59 votes. And Harry Reid whined that he still couldn't do anything. In fact, nothing would ever get accomplished unless they had 60, and to do that, they had to bring turncoat Joe Lieberman back into the fold..You see, we were told, Joe Lieberman is with us on everything except the war! So we need him for 60, and when we have 60, everyone will get ponies! And if Lieberman strays, why, Evan Bayh said Senate Democrats could punish him!...

Good thing we never believed his bullshit, because neither Bayh, nor Reid, nor any of the ineffective corporatist Dems would ever let this sort of thing actually happen. Lieberman knows this, which is why he's once again making common cause with Republicans.

So once again, Reid is complaining that he doesn't have 60 votes, which is why they need to anoint Olympia Snowe as de facto President of the United States. Maybe SHE will get us to 60! But we all know Snowe has no intention of voting for real reform, and yet Reid (with White House backing) continue to let themselves get played. It's all a farce.

So much for 60....So that's that. The notion of "leading" is clearly a non-starter for Reid, according to his office. Well, glad Reid's office has admitted as such. Time for new leadership.  (More)

Sing it.

.

IG for TARP Funds Says the Treasury Abdicated Its Responsibility for Oversight of AIG

bartleby the scrivener |  There.  He said it.  I feel a little better now.

"It was a failure of oversight by Treasury" that led to the spring's bonus fiasco, watchdog Neil Barofsky told the House Oversight and Government Reform Committee this morning, a failure for which he said Treasury Secretary Tim Geithner was ultimately responsible.

Treasury essentially abdicated its oversight duties of AIG's compensation structures to the Federal Reserve Bank of New York, which was "a recipe for disastrous consequences," said Barofsky...Ultimately, Geithner did not learn about the bonuses until March 10, three days before they were paid out, despite running the Treasury Department since January and, before that, the Federal Reserve Bank of New York, where officials knew about the payments last November. At that time, both parties agreed that there was no legal grounds to stop the payments, a correct determination, according to Barofsky. (ABC News)

Jon Stewart Ponders 30 GOP Votes Against Franken's Anti-Rape Amendment

HuffPost:

In 2005, Jamie Leigh Jones was gang-raped by her Halliburton/KBR co-workers while working in Iraq and locked in a shipping container for over a day to prevent her from reporting her attack. The rape occurred outside of U.S. criminal jurisdiction, but to add serious insult to serious injury she was not allowed to sue KBR because her employment contract said that sexual assault allegations would only be heard in private arbitration--a process that overwhelmingly favors corporations.

This year, Sen. Al Franken (D-MN) proposed an amendment that would deny defense contracts to companies that ask employees to sign away the right to sue.

Jon Stewart seems surprised.  I'm not.  Between protecting KBR/Halliburton's protection of rapists and protecting women from rape was a no-brainer -- fortunately for KBR/Halliburton.

The Daily Show With Jon Stewart	Mon - Thurs 11p / 10c
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www.thedailyshow.com
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Punked! Insurance Companies Contend that Obama's Health Care Plans Will Increase Policy Costs by "Thousands"

by bartleby the scrivener | Ha ha ha!  So much for the industry's much-touted "collaboration."  When will our Dems ever learn, eh?  If you lie down with dogs, you get up with rabies. "[T]he insurance industry plans to strike out against the effort on Monday with a report warning that the typical family premium in 2019 could cost $4,000 more than projected."  (WaPo)  Yep, and here's the big announcement. Apparently Congressional Dems didn't see that one coming.  I wonder why not?  As Josh Marshall says: this is news? 

Angered by the insurance industry's late-in-coming cost estimate, a spokesman for Senate Finance Committee Chairman Max Baucus, D-Mont, questioned the credibility of the numbers.

"It's a health insurance company hatchet job, plain and simple," said the spokesman, Scott Mulhauser.  (Huffington Post) 

The administration too is up in arms.  

Health Care Reform Warrior Congressman Anthony Weiner (D-NY) Debates Betsy McCaughey

October 5, 2009 Healthcare Reform Debate with Rep. Anthony Weiner (D-NY) and Dr. Betsy McCaughey, Health Policy Expert, Patient Advocate and former Lieutenant Governor of New York (1995-1998)

Watch Weiner be unstoppably awesome.

Also!:

Grayson and Ron Paul Send Letter to Senate Banking Committee Asking for Delay in Confirmation of Ben Bernanke Until He Gives Up Info on 2008 Secret Emergency Loans

by Damozel | Here's yer bipartisanship.

Alan Grayson Calls Out Fellow Dems for Obsession with Getting Support of Olympia Snowe (R-ME) for Health Care Plan; Tells GOP, "If you're against health care, just get out of the way"

by Damozel | Can I hear you say, "Amen"?  From Huff Post:

"We as a party have spent the last six months, the greatest minds in our party, dwelling on the question, the unbelievably consuming question of how to get Olympia Snowe to vote on health care reform," he said. "I want to remind us all that Olympia Snowe was not elected President last year. Olympia Snowe has no veto power in the Senate. Olympia Snowe represents a state with one half of one percent of America's population." "What America wants is health care reform," he continued. "America doesn't care if it gets 51 votes in the Senate or 60 votes in the Senate or 83 votes in the Senate. In fact, America doesn't even care about that, it doesn't care about that at all." 

Wonkette:

Keith Olbermann's Eloquent Hour Long Special Comment on Health Care System Failures: A Personal Account

by Damozel |  This 4-part video --aptly summarized here -- is extremely worthwhile and definitely worth making time for, as he discusses his father's experiences.

Part One:

Visit msnbc.com for Breaking News, World News, and News about the Economy

Senate Passes (68-30) Franken-Proposed Amendment to Prevent KBR/Halliburton from Protecting Themselves Against Sexual Assault Claims

by Damozel | Via Howie Klein: Al Franken proposed an amendment to the Department of Defense Appropriations Bill passed by the House.

S. Amend. 2566 simply prohibits "the use of funds for any Federal contract with Halliburton Company, KBR, Inc., any of their subsidiaries or affiliates, or any other contracting party if such contractor or a subcontractor at any tier under such contract requires that employees or independent contractors sign mandatory arbitration clauses regarding certain claims." The "certain claims" have to do with sexual assault....

Franken offered the amendment because a KBR employee, Jamie Leigh Jones, age 19, was raped by a bunch of KBR workers in Iraq and then locked up in a crate when she tried reporting them. After she was rescued and returned to America she was informed that she couldn't take KBR to court because there was some fine print in her -- and everyone else's -- contracts that don't permit any such thing. [See the video below.]

Senator Jeff Sessions of Alabama...of the Senate Armed Services Committee, was the key spokesperson for the GOP against the legislation which he called unfair to Halliburton, one of the biggest Republican Party contributors in history. (More at HuffPost)

Good going for Franken.  It needed to be done, and he did it.

Jon Stewart: GOP Opposes Even the Dems' Limp Cap-and-Trade Bill

The Daily Show With Jon Stewart	Mon - Thurs 11p / 10c
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Rachel Maddow: Republicans Pretend to be Shocked by Grayson's Remarks on GOP "Health Care;" Grayson: "They've Got Nothing"

Grayson and Maddow discusses the character of his comments; Maddow shows some footage of equally shocking Republicans. In other news, Maddow appears to be one of many who don't know that "holocaust" has a meaning predating World War II.  For the nation's indifference to the thousands who have died because they couldn't afford a doctor, I'd call it le mot juste.

hol·o·caust  (hl-kôst, hl-)

n.

1. Great destruction resulting in the extensive loss of life...  (the Free Dictionary)

...an act of mass destruction and loss of life (wordnetweb.princeton.edu/perl/webwn)

The annihilation or near-annihilation of a group of animals or people, whether by natural or deliberate agency (e.g., “nuclear holocaust”) (wiktionary)