Check It Out for Saturday, May 9th
Matt Taibbi at True/Slant via AlterNet writes about the financial crisis and phony claims of the dangers of populist anger.
"Of all the truly revolting political developments of the financial crisis age -- and there have been a lot of them -- probably nothing is more disgusting than the weirdly intense media backlash against "populist anger," anger that is inevitably described by media sages like Hiltzik as irrational, unfounded, and pointedly unhelpful. The public is depicted as a great dumb beast lashing out wildly at shadows and hallucinations, with the poor diligent hardworking members of the financial class (slaving away to pump much-needed capital into the bloodstream of international commerce) suffering the collateral damage. And while commentators are always careful to note that much of the anger "may" or "could" be justified, rhetorically these lines always lead to a but clause. Rick Perlstein of Newsweek, for instance, noted that some populist anger is useful, but it can very easily transform into the " 'bad' kind of populism -- the hateful kind; the violent kind; the demagogic kind." Author Robert Frank talked about the public anger over the AIG bonuses being reasonable up to a point, but "if we're not careful, we could end up shooting ourselves in the foot," as "any broader effort to cap executive salaries would do more harm than good."
"This is another of the typical features of the anti-populism argument, the false dichotomy. We are constantly being told that we have to stem this populist anger or we'll have communism, hard caps on executive salaries, lynch mobs, pitchforks, etc. Except that in reality the consequences of "populist" anger in this country are somewhat, uh, less severe. Think about it: when in American history has populist outrage ever led to serious punitive measures directed at rich people?
"When the financial class nearly destroyed the American economy via the Savings and Loan crisis in the eighties, what was the punishment? Answer: we gave the people who did the fucking up $124 billion in taxpayer money. When currency speculators overbet the peso in 1994, what did we do? We bailed them out, with about $50 billion. Long Term Capital's punishment? A bailout. Emerging-markets speculators who went in the tank in the late eighties? They got bailed out in front and in back, through a variety of bailout programs.
"How about the insane exuberance for the internet bubble economy? The same politicians and central bankers who felt that intervention was necessary to correct the market's irrational decision to wipe out Long Term and all those speculators in the economies of Southeast Asia and Russia -- the same people who felt that government intervention was needed to correct "irrational" declines in investment value -- saw no problem at all with the obviously overvalued, far more irrationally exuberant tech market. And when it all blew up, wiping out billions in value, Wall Street was "punished" with sweeping tax cuts, further deregulation, and massive cuts in the staff budgets of enforcement agencies like the SEC and the OTS (which saw its already-miniscule staff of 1200 slashed by 25% between the years 2001 and 2004).
"And this isn't about vengeance, it's about policy: if the "consequence" for blowing a $4 trillion hole in the economy is seeing masses of government officials line up to hurl billions of taxpayer dollars at you, that doesn't provide much of an incentive to fix your behavior. This is one area where there should have been a seamless melding of public outrage and government policy: we should have swooped in, rounded up 200 of the most guilty executives, hauled them before congress in a public trial, and packed them all off to a Supermax in Florence, Colorado to do real time with murderers, rapists and terrorists. Reality shows should have been quickly greenlighted to track their progress in the hole (can you imagine the ratings for a show called Project D-Block starring John Thain, Angelo Mozilo and Dick Fuld?).
"All joking aside, this would have been an incredibly healthy step for our society to take -- just as it would have been healthy (and still might be) for someone to go to jail for torture during the Bush years, or for contracting fraud in Iraq, or for any of the other countless crimes committed this past decade that will almost certainly go unpunished. The social contract has to be considered broken when some dumb schmuck can go to jail for five real years for selling a bag of weed while a guy who went to Harvard and Wharton and had all possible advantages gets nothing but a bailout and a temporarily lowered bonus regime for destroying billions of dollars of public wealth.
"I'm tired of hearing about how dangerous it is when the public gets angry about this stuff. You know what? Let's let it be dangerous, and see what happens. It'd be a nice change."
Helen Cobban writes at IPS News that President Obama's US assistant secretary of state has put Israel's nuclear weapons in the diplomatic mix.
"Last month in Prague, President Barack Obama vowed that he would seek a world without nuclear weapons. On Tuesday, U.S. Assistant Secretary of State Rose Gottemoeller spelled out that this policy would apply to Israel, as well.
"Speaking at a conference on the 1970 Nuclear Non-Proliferation Treaty (NPT), Gottemoeller said that "Universal adherence to the NPT itself, including by India, Israel, Pakistan and North Korea ... remains a fundamental objective of the United States."
"Israel is judged to have between 100 and 200 advanced nuclear weapons either ready to deploy, or only a few minutes away from being so.
"Gottemoeller’s words sparked speculation that this arsenal might re-emerge as an issue in Israel’s relations with Washington. That would end a 40-year period in which Washington colluded with Israel in maintaining the fiction that Israel’s nuclear weapons capabilities were unknown, and anyway should never be openly discussed.
"Throughout those years, Washington was also vigorously combating the acquisition by any other Middle Eastern state of "weapons of mass destruction" (WMD), including chemical or biological weapons, as well as the far more lethal nuclear weapons. Many around the world accused Washington of maintaining a damaging "double standard" on nuclear weapons and all other WMD.
"Israel has always fended off calls that it join the NPT. Beyond that, most Israeli leaders have gone actively on the offensive against the NPT, arguing that it has not been effective in preventing the proliferation of nuclear weapons worldwide. (The NPTs many supporters strongly contest that assertion. One hundred and eighty-nine states are members of the treaty.)
"Egypt and Saudi Arabia have argued strongly, for many years now, for the establishment in the Middle East of a "Nuclear Weapons-Free Zone", such as already exists in South America. Other states and international bodies like the International Atomic Energy Agency support the wider concept of a Middle East free of all WMD.
"Serious advocates of both proposals insist, however, that Israel’s nuclear weapons have to be included in the negotiation.
"Now, it looks as if Washington may be preparing to join this movement toward stressing Israeli transparency and accountability. This would take the Obama administration back to the stance adopted by Pres. John F. Kennedy in the early 1960s. Just a few years later, however, in 1969, Pres. Richard Nixon signed off on a policy that Israeli nuclear policy expert Avner Cohen has described as one of "don’t ask, don’t tell."
Mike Lillis at The Washington Independent writes how White House doomed the bankruptcy reform and paved the way for the "cramdown" crash.
"Though mortgage bankruptcy reform has been a central component of the Obama administration’s foreclosure prevention strategy, the White House all but abandoned the proposal in the days leading up to last week’s Senate vote, providing some Democrats with the political cover to kill the bill and leaving supporters scratching their heads in wonder why the administration didn’t push harder for passage.
"The proposal, sponsored by Sen. Richard Durbin (D-Ill.), would have empowered bankruptcy judges to reduce, or “cramdown,” the terms of primary mortgages, allowing some struggling homeowners to avoid foreclosure. Obama supported the measure on the campaign trail last year, and endorsed it again in February as he unveiled his anti-foreclosure plan.
"Yet in the days before Thursday’s Senate vote, the silence emanating from the White House was palpable. Unlike Obama’s high-profile support for legislation to reform the credit card industry, the president made no public statements on cramdown, nor did he pressure Democratic lawmakers to support the bill.
“ 'When the time came to stand up to the banking lobbies and cajole yes votes from reluctant senators — the White House didn’t,' The New York Times wrote in a biting editorialMonday.
"The administrative hush led some lawmakers to believe that issue was no longer a priority for the White House. Indeed, a spokesperson for Sen. Michael Bennet (D-Colo.) — who opposed the proposal, saying it was too broad and would have raised interest rates — told The Denver Post that a “no” vote was not inconsistent with Obama’s position.
"That sentiment allowed on-the-fence Democrats to oppose the measure without being perceived as defying the White House. Indeed, the measure failed 45 to 51 — 15 votes shy of defeating the GOP filibuster — with 12 Democrats joining every Republican to kill the bill.
"The vote arrived at a time when foreclosure rates are skyrocketing and more and more homeowners find themselves “underwater” — owing more on their mortgages than their homes are worth.
"In another curious move, the White House issued a statement last week reiterating its support for “appropriately tailored bankruptcy language” as part of its anti-foreclosure strategy. But the statement wasn’t released until a day after the Durbin’s cramdown amendment had already failed on the Senate floor.
“ 'There’s no doubt in our minds,' said David Berenbaum, executive vice president of the National Community Reinvestment, 'that the number of foreclosures will go up as unemployment goes up.'
"Former chairman and CEO of Honeywell and CNBC financial analyst Larry Bossidy this week predicted 3 million foreclosures this year. “Housing’s still in the dumps,” he said.
"And in February, Obama unveiled a $75 billion anti-foreclosure plan, which provides financial incentives to mortgage servicers to modify loans to keep homeowners in their homes. Already, 13 servicers, representing almost 80 percent of the market, have signed up to participate in the voluntary program, according to Melanie Roussell, spokeswoman for the Department of Housing and Urban Development.
"Yet neither the Obama plan nor the Senate bill provide significant help “underwater” homeowners.
"The Obama plan, for example, encourages refinancing for homeowners with loans taken out through Fannie Mae and Freddie Mac, but only in cases when they owe less than 105 percent of the home’s value. Lending advocates are urging the administration to increase that number to include more underwater homeowners."
Joan Brunwasser at OpEd News interviewed Dr. Margaret Flowers, co-chair of the Maryland branch of the 16,000-member Physicians for a National Health Program arrested Tuesday at the Senate hearing on health care reform.
"Our first goal was to have a seat at the table. That has been a request to Congress throughout this year, really since the presidential election. All we've asked is that when the government looks at options for health care reform that single payer is given equal attention. We would like the Congressional Budget Office to review the cost of improving and expanding Medicare to everyone. We know that this is an affordable way to provide health care to everyone.
"If we couldn't get a seat, at least we could expose the insincerity of the current attempt at health care reform and show that single payer was actively being excluded.
" I risked arrest because I hear what my colleagues are going through. I hear their frustration at trying to deliver high quality health care but running into obstacles placed by the insurers. I hear frustration when the physician knows what the correct treatment is but can't get the treatment authorized because an insurance administrator who has no medical background is telling the doctor what he or she can and cannot do. I hear the frustration caused by the huge amount of money and time that is spent by physician practices trying to get reimbursed by health insurers for health care that has been delivered. I hear physicians saying that they wish they could spend more time with their patients, but they are squeezed because they have to see a certain number of patients in order to keep their practices going and pay their staff. I see my primary care colleagues working without pay and many of them leaving private practice. And I meet patients who can't get the health care they need, even if they are insured. I see health insurance policies that deny care that could improve the quality of life of a patient with chronic illness and actually save money in the long run by keeping them healthier or allowing them to return to work.
"And I know that we could solve these problems by creating a national health system that is based on health care as a human right. The public wants a national health system and providers want a national health system, but the Senate won't listen and actively excludes our voices."
Comments