That hiss you hear

It’s been a slow news cycle these last couple of days; we used up all the available hot air in the rescue bill, I guess. Of course some of us … You Know Who … are still inflating like Jolly Jumps at a kids party.

When we were behind the 8-ball of the Bush regime, we squealed and screamed and decried the policies that were implemented, talking endlessly about how the nation was being taken down a primrose path toward fascistic corporatocracy. And aside from the occasional anonymous bloggers’ growls and spits, we didn’t go surly … at least not to start with; Clueless George eventually made us froth. But early on, we stuck with the facts and their probable outcome; we were called unrealistic tree-huggers by the respectful … and traitorous whatever else, by those who weren’t.

Not a month into Obama’s administration, the Right has turned cranky and dangerous. Odd how when they held the upper hand, the Looney Left was just a bunch of badly-behaved children that needed to be ignored and hidden behind closed doors, but now … as their numbers drop and their voices raise … they are crusaders for free-market, patriots of limited spending and moral revisionism, soothe-sayers warning of a nation dropped into the Atlantic to drown by Obamamania.

Like we weren’t already wearing snorkels after years of Katrina-like problems both created and ignored by those who wanted to drown us. They’re a little late to this party, and the blow-up boat they’re rowing has a slow leak … hear that hiss?

They’re eager to hand off the results of their tenure — a clever piece of Righty writing surfaced that shows how they’re doing this [open here for an interesting read.] Note the simple framing:

George Bush paid for Barack Obama’s expansion of government with the proceeds from a fire sale on his last remaining free-market principles.

I’m surprised he included Dubby, even to get to his point of “irresponsible expansion.” If you want an example of the Left framing successfully, open this link and read about how Axelrod works the press; obviously, it can be done but we’ve got to stop behaving like we’re asking Mr. Bumble for more. We’re not orphans, we’re citizens and supporters of the Majority Party!

Lincoln shares a birthday with Darwin, and there were a lot of interesting articles out there examining both in the last few days. Here’s the thing I don’t get about the Christocrat/Righty rejection of Charles Darwin’s selection theory.

Domination by the strongest hereditary traits seems like a winner for Righties everywhere: they’re happiest as the Great Unwashed die slow, painful death by neglect and elitism … they think that the victor has rightful ownership of the spoils … and they think the John Wayne model creates a patriot with leadership skills to keep the tribe viable. What’s not to love, in the Take All Republican mind, about this food-chain?

When it’s not them running the show, that’s what — and they aren’t. They’re taking a DNA hit right now, and into the foreseeable future. The screams have given rise to a NeoPub petrie dish that’s not really new at all … think Gingrich, and you’re there. Which means, in a time of national emergency and reconfiguration — they have nothing to offer us.

Nothing. At. All. So then, natural selection ain’t working for them; I guess that’s where this theory has its fallibility’s … better to go with the creation business, ‘cuz you can’t question God and that old “dominion” argument … pass me a Bud, willya Billy Bob??

So they don’t have ideas, but they’ve got all that hot air … a new iteration of Gingrich named Eric Cantor … and a level of fanaticism that we can’t even wrap our Progressive hearts around. Here’s a link [.pdf] you should read; forewarned is forearmed.

By the way, a cautious Dubby stepped out of his hidey-hole, sniffed the air and went to Canada to deliver a speech and augment his coffers this weekend; our Northern neighbors won’t arrest him for war crimes. One aside — he had to apply for a waiver because of his DUI.

LMAO!

Here are a few really good reads about the current political hijinks, including Frank Rich, and a nice bonus piece by Galbraith, last, on what the economists should do … maybe later … after all the hot air goes out of the balloon, and the system’s broken to bits, eh?

I still think the best idea … passed along by Jon Stewart, among others … is to just give the bailout bucks to those who need it to pay off their bills, beefing up the public AND the banks and putting us at square zero again, like a big reset button; but that would take the air out of the Whole System, wouldn’t it.

Anybody got a pin?

Jude

The Gingrich-ization Of Conservatives
Faiz Shakir, Amanda Terkel, Satyam Khanna, Matt Corley, Benjamin Armbruster, Ali Frick, and Ryan Powers, Think Progress
February 17, 2009

From the presidential campaign to his election and inauguration, President Obama often pledged to reach out to Republicans in an effort to change the bitter partisan tone in Washington. “The monopoly on good ideas does not belong to a single party,” Obama said last month. “If it’s a good idea, we will consider it.” Indeed, in the run-up to the passage last week of the American Recovery and Reinvestment Act, Obama acted in good faith by preemptively including Republican-favored tax cuts in the original House version of the bill, meeting personally with House and Senate Republicans, and stripping stimulative spending initiatives because of GOP complaints. But conservatives ended up taking their cues from hate radio host Rush Limbaugh, who declared early on that he hoped Obama fails in his effort to rebuild the economy. As a result, Obama received support from just three Senate Republicans, while zero House Republicans voted for the bill, with many participating in a campaign to perpetuate myths and falsehoods about the plan’s specifics before the final vote. Sen. Arlen Specter (R-PA), one of the three Republicans who voted for the package, said bluntly that the GOP risks becoming “the party of Hoover” because of its near complete rejection of the stimulus. But while Limbaugh is leading the rhetorical battle, conservatives appear to be looking for political strategy from former Republican House Speaker Newt Gingrich.

LEADER GINGRICH: The GOP has been scrambling to pick up the pieces after two devastating elections, in which they lost control of the House, Senate and the White House, and Gingrich is seizing upon the leadership vacuum. Last September, Gingrich “was whipping against” President Bush’s TARP plan “up until the last minute” and was reportedly in part responsible for the GOP voting against it. As House Speaker from 1995 to 1999, Gingrich whipped his colleagues into opposing most of President Clinton’s policy agenda, most famously health care reform. Now he is advising the GOP leadership to follow the same path with Obama’s agenda. The New York Times reported this weekend that House Minority Whip Eric Cantor (R-VA) “had studied Mr. Gingrich’s years in power and had been in regular touch with him as he sought to help his party find the right tone and message.” “I talk to Newt on a regular basis,” Cantor said.

SMART STRATEGY?: Yesterday on MSNBC, host Chris Matthews noted that “the Republicans plan to say, ‘I told you,’” if Obama’s recovery plan fails. He asked, “So how smart is it for the Grand Old Party to place all its chips on the grand defeat of the American economy?” Also, how smart is it to follow Gingrich’s lead? Conventional wisdom suggests Gingrich’s obstruction tactics in the early 1990s were a success, but as Center for American Progress Action Fund Fellow Matt Yglesias pointed out, “those tactics included lockstep opposition to a Clinton economic program” that “laid the groundwork for years of prosperity.” Obstructing Clinton’s health care reform initiatives in the ’90s have been costly. Nearly 10 million more Americans have joined the rolls of the uninsured and health care costs “surpassed $2 trillion in 2006, almost three times the $714 billion spent in 1990.” Gingrich’s credibility on major issues is also in question. In 1993, he warned that Clinton’s budget proposals “will lead to a recession next year. This is the Democrat machine’s recession, and each one of them will be held personally accountable.”

Moreover, the American public became disgruntled with Gingrich’s political tactics, especially during the budget standoff that led to the government shutdowns of 1995-96. Newsday reported on Nov. 11, 1995, that a “USA Today/CNN poll released yesterday suggested Americans by wide margins have soured on the Republican agenda, with 60 percent saying he [Clinton] should veto the budget bill and 33 percent saying he should sign it.” And on the first day of the government shutdown, a CNN/USA Today/Gallup poll found that 36 percent favored the GOP position while 49 percent favored the Democratic position.

A BLEAK FUTURE: Newly-elected Republican National Committee Chairman Michael Steele said recently that he hopes to return to “the principles” of the Gingrich era. “We had a contract with America, 1994, with the American people and the party bound together in agreement that these would be some 10 principles that we would follow. We moved away from that…the principles that we espoused then are still true and good today,” he said. The GOP also plans to bring back elements of the old K Street Project, a pay-to-play machine set up by former representative Tom DeLay where lobbyists were given influence over legislation in exchange for contributions to Republicans and refusal to hire Democrats. And like the days of Gingrich, the GOP is also beginning a campaign to obstruct Obama’s health care reform agenda. House Minority Leader John Boehner (R-OH) announced the creation of a task force that will devise “free-market solutions” to health care and highlight the “consequences” of a “government-dominated health care bureaucracy.” The panel is also stacked with lawmakers cozy with the health care industry. But it seems that the GOP’s move toward Gingrich and the far right is already having consequences. The New York Times reports today that the GOP’s charge against Obama’s recovery package has led to a “disconnect” between Republicans in Congress and GOP governors, some of whom openly and avidly support Obama’s plan. “It really is a matter of perspective,” Florida Gov. Charlie Crist (R) said. “As a governor, the pragmatism that you have to exercise because of the constitutional obligation to balance your budget is a very compelling pull.” ++

They Sure Showed That Obama
FRANK RICH, NYT
February 14, 2009

AM I crazy, or wasn’t the Obama presidency pronounced dead just days ago?

Obama had “all but lost control of the agenda in Washington,” declared Newsweek on Feb. 4 as it wondered whether he might even get a stimulus package through Congress. “Obama Losing Stimulus Message War” was the headline at Politico a day later. At the mostly liberal MSNBC, the morning host, Joe Scarborough, started preparing the final rites. Obama couldn’t possibly eke out a victory because the stimulus package was “a steaming pile of garbage.”

Less than a month into Obama’s term, we don’t (and can’t) know how he’ll fare as president. The compromised stimulus package, while hardly garbage, may well be inadequate. Timothy Geithner’s uninspiring and opaque stab at a bank rescue is at best a place holder and at worst a rearrangement of the deck chairs on the TARP-Titanic, where he served as Hank Paulson’s first mate.

But we do know this much. Just as in the presidential campaign, Obama has once again outwitted the punditocracy and the opposition. The same crowd that said he was a wimpy hope-monger who could never beat Hillary or get white votes was played for fools again.

On Wednesday, as a stimulus deal became a certainty on Capitol Hill, I asked David Axelrod for his take on this Groundhog Day relationship between Obama and the political culture.

“It’s why our campaign was not based in Washington but in Chicago,” he said. “We were somewhat insulated from the echo chamber. In the summer of ‘07, the conventional wisdom was that Obama was a shooting star; his campaign was irretrievably lost; it was a ludicrous strategy to focus on Iowa; and we were falling further and further behind in the national polls.” But even after the Iowa victory, this same syndrome kept repeating itself. When Obama came out against the gas-tax holiday supported by both McCain and Clinton last spring, Axelrod recalled, “everyone in D.C. thought we were committing suicide.”

The stimulus battle was more of the same. “This town talks to itself and whips itself into a frenzy with its own theories that are completely at odds with what the rest of America is thinking,” he says. Once the frenzy got going, it didn’t matter that most polls showed support for Obama and his economic package: “If you watched cable TV, you’d see our support was plummeting, we were in trouble. It was almost like living in a parallel universe.”

For Axelrod, the moral is “not just that Washington is too insular but that the American people are a lot smarter than people in Washington think.”

Here’s a third moral: Overdosing on this culture can be fatal. Because Republicans are isolated in that parallel universe and believe all the noise in its echo chamber, they are now as out of touch with reality as the “inevitable” Clinton campaign was before it got clobbered in Iowa. The G.O.P. doesn’t recognize that it emerged from the stimulus battle even worse off than when it started. That obliviousness gives the president the opening to win more ambitious policy victories than last week’s. Having checked the box on attempted bipartisanship, Obama can now move in for the kill.

A useful template for the current political dynamic can be found in one of the McCain campaign’s more memorable pratfalls. Last fall, it was the Beltway mantra that Obama was doomed with all those working-class Rust Belt Democrats who’d flocked to Hillary in the primaries. The beefy, beer-drinking, deer-hunting white guys - incessantly interviewed in bars and diners - would never buy the skinny black intellectual. Nor would the “dead-ender” Hillary women. The McCain camp not only bought into this received wisdom, but bet the bank on it, pouring resources into states like Michigan and Wisconsin before abandoning them and doubling down on Pennsylvania in the stretch. The sucker-punched McCain lost all three states by percentages in the double digits.

The stimulus opponents, egged on by all the media murmurings about Obama “losing control,” also thought they had a sure thing. Their TV advantage added to their complacency. As the liberal blog ThinkProgress reported, G.O.P. members of Congress wildly outnumbered Democrats as guests on all cable news networks, not just Fox News, in the three days of intense debate about the House stimulus bill. They started pounding in their slogans relentlessly. The bill was not a stimulus package but an orgy of pork spending. The ensuing deficit would amount to “generational theft.” F.D.R.’s New Deal had been an abject failure.

This barrage did shave a few points off the stimulus’s popularity in polls, but its approval rating still remained above 50 percent in all (Gallup, CNN, Pew, CBS) but one of them (Rasmussen, the sole poll the G.O.P. cites). Perhaps the stimulus held its own because the public, in defiance of Washington’s condescending assumption, was smart enough to figure out that the government can’t create jobs without spending and that Bush-era Republicans have no moral authority to lecture about deficits. Some Americans may even have ancestors saved from penury by the New Deal.

In any event, the final score was unambiguous. The stimulus package arrived with the price tag and on roughly the schedule Obama had set for it. The president’s job approval percentage now ranges from the mid 60s (Gallup, Pew) to mid 70s (CNN) - not bad for a guy who won the presidency with 52.9 percent of the vote. While 48 percent of Americans told CBS, Gallup and Pew that they approve of Congressional Democrats, only 31 (Gallup), 32 (CBS) and 34 (Pew) percent could say the same of their G.O.P. counterparts.

At least some media hands are chagrined. After the stimulus prevailed, Scarborough speculated on MSNBC that “perhaps we’ve overanalyzed it, we don’t know what we’re talking about.” But the Republicans are busy high-fiving themselves and celebrating “victory.” Even in defeat, they are still echoing the 24/7 cable mantra about the stimulus’s unpopularity.

This self-congratulatory mood is summed up by a Wall Street Journal columnist who wrote that “the House Republicans’ zero votes for the Obama presidency’s stimulus ‘package’ is looking like the luckiest thing to happen to the G.O.P.’s political fortunes since Ronald Reagan switched parties.” There hasn’t been this much delusional giddiness in these ranks since Monica Lewinsky promised a surefire Republican sweep in the 1998 midterms.

Not all Republicans are so clueless, whether in Congress or beyond. Charlie Crist, the moderate Florida governor who appeared with the president in his Fort Myers, Fla., town-hall meeting last week, has Obama-like approval ratings in the 70s. Naturally, the party’s hard-liners in Washington loathe him. Their idea of a good public face for the G.O.P. is a sound-bite dispenser like the new chairman, Michael Steele, a former Maryland lieutenant governor. Steele’s argument against the stimulus package is that “in the history of mankind” no “federal, state or local” government has ever “created one job.” As it happens, among the millions of jobs created by the government are the federal investigators now pursuing Steele for alleged financial improprieties in his failed 2006 Senate campaign.

This G.O.P., a largely white Southern male party with talking points instead of ideas and talking heads instead of leaders, is not unlike those “zombie banks” that we’re being asked to bail out. It is in too much denial to acknowledge its own insolvency and toxic assets. Given the mess the country is in, it would be helpful to have an adult opposition that could pull its weight, but that’s not the hand America has been dealt.

As Judd Gregg flakes out and Lindsey Graham throws made-for-YouTube hissy fits on the Senate floor, Obama should stay focused on the big picture in governing as he did in campaigning. That’s the steady course he upheld when much of the political establishment was either second-guessing or ridiculing it, and there’s no reason to change it now. The stimulus victory showed that even as president Obama can ambush Washington’s conventional wisdom as if he were still an insurgent.

But, as he said in Fort Myers last week, he will ultimately be judged by his results. If the economy isn’t turned around, he told the crowd, then “you’ll have a new president.” The stimulus bill is only a first step on that arduous path. The biggest mistake he can make now is to be too timid. This country wants a New Deal, including on energy and health care, not a New Deal lite. Far from depleting Obama’s clout, the stimulus battle instead reaffirmed that he has the political capital to pursue the agenda of change he campaigned on.

Republicans will also be judged by the voters. If they want to obstruct and filibuster while the economy is in free fall, the president should call their bluff and let them go at it. In the first four years after F.D.R. took over from Hoover, the already decimated ranks of Republicans in Congress fell from 36 to 16 in the Senate and from 117 to 88 in the House. The G.O.P. is so insistent that the New Deal was a mirage it may well have convinced itself that its own sorry record back then didn’t happen either. ++

True Bipartisanship, Not Grand Old Puling, Saves An Economy
Donna Brazile
2/12/2009

Along with the Democratic majority and a few brave Republicans, President Barack Obama has worked hard and in good faith to get this economy back on its feet. Which is why it astounds me that as the economy continues to slide with thousands losing their jobs daily, the opposition party insists on reducing itself to GOP-style “business as usual,” seeking to politicize the emergency stimulus bill for partisan gain.

Now that the Democratic-controlled Congress has moved forward with its plan to save or create more than 3 million jobs and make critical investments in our nation’s infrastructure, Obama should sign this vital piece of legislation the moment it arrives on his desk. Heck, given its emergency, Obama should sign it before it leaves the U.S. Capitol.

More than one-third of the bill is dedicated to providing tax relief for the middle class. It cuts taxes for 95 percent of American workers. And state governments ailing under the deepening recession will also get a lifeline, allowing them to help people where it is needed the most.

Yet, as Senate Majority Leader Harry Reid, D-Nev., noted, “The American people understand that the legislation we send to the president’s desk will not solve this crisis overnight. We cannot say for certain when this crisis will end, but we do know for certain that this is when recovery must begin.”

Reid is right. Congress could not wait until things worsen. The American people could not afford one more month of record unemployment. As Obama stated throughout the campaign, “This is our moment. This is our time.” And it’s past time that we help ordinary people struggling to make ends meet.

Nevertheless, the opposition continues to talk down the significance of the bipartisan compromise that led to this bill’s passage. At some point, they too should remember how we got here — and under whose watch it occurred.

Obama inherited a recession and a soaring deficit. The Bush administration created the conditions that call for this bold action, not only with its reckless economic policies, but also its total disdain for oversight and accountability. It is particularly relevant because while Republicans rail against this bill, they offered no new ideas, no new vision — they merely want to repeat the same mistakes that got us into this mess to begin with.

Meanwhile, why should anyone listen to these men and women who are responsible for the economy “cratering”? For close to six long years, the Republican-controlled Congress rubberstamped every spending bill that came their way from the Republican leader in the White House. They were shopaholics, spending every dollar in sight and borrowing against our children’s future. President Bush, with their blessing, racked up a gargantuan national debt — the largest under any president in U.S. history.

Meanwhile, as Republicans like Sens. Arlen Specter, Olympia Snowe and Susan Collins sought to find common ground with both the president and leading moderates in the U.S. Senate, their fellow Republicans spent the week just complaining about the legislation being too bloated, nitpicking over stimulus monies for the arts and, in the same breath, having the nerve to ask for more tax cuts for the rich.

Are you kidding? This is not the path to bipartisanship.

And it’s surely not the path to giving hard-working taxpayers the very best rationale for why the government must step in to ease the suffering of so many people across our great nation. At some point — and this statement is not just directed at Republicans but Democrats, too — our leaders need to stop politicizing issues for partisan advantage, which they too often do, even when it’s at the expense of the nation’s security and survival.

The three moderate Republicans deserve credit for breaking ranks, for looking out for the country’s best interest rather than the opportunity to score a few cheap political points. The same shout-out of thanks should also go to Republican governors, especially California’s Arnold Schwarzenegger and Florida’s Charlie Crist.

Going forward, Democrats must not allow Republicans to define bipartisanship as the ability to appease the fringe elements of their party. Nor should Republicans have to appease the fringe elements of the Democratic Party to earn the bipartisan title. Neither parties should make demands based solely on some worn-out dogma nor request a certain numerical quota to move legislation when the majority votes should prevail or, in the case of the Senate, the two-thirds it takes to invoke cloture.

In the end, I suspect that moderate Republican members like Specter, Collins and Snowe will continue to work with the White House and their Democratic counterparts in Congress to build a true bipartisan coalition. These members, working with the White House, will seek the common good in future bipartisan agreements based on common principles. That’s bipartisanship. That’s leadership.

The opposition who voted in lock-step to defeat the American Recovery and Reinvestment Act did not act out of principle, unless “regain and retain power” as a guiding goal is now considered a principle.

They sought, by their near-unanimous opposition, to create chaos and confusion by cherry-picking through the legislation rather than offer an alternative that could garner the support of the majority. This is not what bipartisan means.

And Obama must continue to invite Republicans, lawmakers, governors, mayors and, yes, ordinary citizens to help usher in a new era in American politics.

As President Obama admitted in his first televised news conference, “The plan’s not perfect. No plan is.” He went further at a town hall meeting in Florida to take full responsibility for its success or failure. That’s refreshing.

But in listening to and reading the talking points of those who opposed the American Recovery and Reinvestment Act, it’s clear they sought to exercise a permanent minority veto over the direction chosen by the people in the 2008 presidential election.

This is not real change. It’s just going back to more of the same. ++

Republican Stupid Idea of the Day: Nationalize the Banks!
Was I dreaming?
Please Cut The Crap blog
February 16, 2009

Didn’t the Republican noise machine spend the last few months of the presidential campaign trying to portray Barack Obama as a socialist?

So, what the hell is this? This is from Lindsay Graham yesterday, speaking on ABC’s This Week:

“I would not take off the idea of nationalizing the banks” from the table, Graham, R-S.C., told George Stephanopoulos on ABC’s “This Week” program

“This idea of nationalizing banks is not comfortable, but I think we have gotten so many toxic assets spread throughout the banking and financial community throughout the world that we’re going to have to do something that no one ever envisioned a year ago, no one likes,” Graham said. “But, to me, banking and housing are the root cause of this problem. And I’m very much afraid that any program to salvage the bank is going to require the government..”

The first question I have is, why the HELL are Republicans still all over the goddamn talking head shows, spouting their bullshit, while Democrats, who are in charge, are still standing on the sidelines, when it comes to the major media?

It’s a good question, but one I’ll get into that in another post, though. Let’s talk about this, the stupidest damned idea to EVER come down the pike from a Republican, and that’s saying a hell of a lot.

One thing I have always wondered is why, exactly, do these schmucks always talk a great game about a “free market” that doesn’t exist, but when it comes to actual markets, they lean toward consolidation, and limits on competition.

The problem with the banking business is really simple, and it’s all about deregulation. Removing regulations from the industry that handles money was a disaster waiting to happen. Even the Founding Fathers saw this one coming, folks, which is why they put regulation of commerce into the Constitution. It’s also why they rejected the creation of a United States bank over 200 years ago.

See, in the old days before deregulation, banks competed for usiness openly and (relatively) honestly, and even a smallish entrepreneur could start a bank or other financial institution, and provide the community with funds to make it grow and prosper. The idea behind a bank was that everyone from the community put their money into it, and those who wanted to buy a home, or start a business.

For some reason, that model worked, and worked well, for 200 years. And it would still work, if we went back to the original model, wherein COMMUNITIES, or at least states, had their own banks, and controlled their own finances and destiny.

The Founders also rejected the notion of a government-owned national bank at the time, because to allow the people who run the country, and the Treasury, to run the banks would create an untenable situation. There is a reason that even the Federal Reserve is allowed to operate independently of the government.

Imagine, if you will, that an incompetent boob became president, and had a rubber-stamp Congress acquiescing to everything he wanted to do. (I know it’s a stretch, but think hard.)

If that president and that Congress had complete control of the banks (which is what would happen under nationalization), what would prevent them from using your bank money (not just your tax money, but ALL of your money) to finance, say, an illegal and immoral war? Or worse yet, to invest that money in any number of unwise investments. For instance, if the government owned the banks, how would we have prevented them from investing Social Security money into Mortgage Backed Securities? After all, the government allowed for the creation of those instruments in the first place, and they are the key to the current economic decline. Imagine if they were in charge of the entire money supply, top to bottom.

And if you read between the lines, you can see why a schmuck like Lindsay Graham is even considering the nationalization of the banking system.

You see, the Republican Party’s main goal is to make the rich as rich as they can possibly be. The reason they have championed the insane concept of “supply-side” economics, even after 30 years of not working, is because they are looking for any way possible to funnel as much money as possible to the already-rich, and away from everyone else. The reason they wanted to “privatize Social Security” was because the influx of investment money would have created another bubble, and floated the stock market even higher than it already was, which would then rationalize the continued theft of billions of dollars from the financial system.

And the only reason they want to control the banking system is because they want to be able to control the financial system from both ends. Imagine what they could do with an unlimited pool of money, and the ability to invest that money wherever they want, while at the same time declining investment in anything they don’t want?

Whoever controls the money controls the economy. And in a system in which freedom is greatly dependent upon how much money you control, well…

You do the math.

The solution is to break up the big banks, return most of the regulation to the states, with the feds regulating the interstate activities of banks. And watching what they do. Re-enact usury laws, limit the fees they can charge, and make sure banks realize that it’s not their money they’re investing.

Here’s a final thought. Banks are a market-based activity. Health care is not. So, why would a Republican Senator be four-square against a national health insurance system, while considering the nationalization of the banking system?

Why aren’t more people suspicious of this? ++

bonus

What is to be Done? Next Steps for Economic Recovery
James K. Galbraith, FireDogLake
Monday February 16, 2009

The compromises necessary to pass the recovery bill in the Senate damaged it in several ways. The overall size of the package was reduced, evidently for the cosmetic purpose of keeping the top-line number below $800 billion. And funds urgently needed to stabilize state and local governments and for construction were cut back, along with the credit against the payroll tax – evidently to make room for a rollback of the alternative minimum tax, a step with a strong political constituency but a weak economic rationale.

In my local paper Thursday morning, I read of $20 million that will be cut from our city budget next year, including a day labor center, public library hours, and overtime for the police force. Cuts like that – and in many places they are far deeper than here – are going on everywhere, and the bill as passed will help but it will not stop them. Contrary to Grover Norquist’s comment in this space, police, libraries and day labor are part of the productive economy, as much as anything else.

It is difficult to know what the so-called moderate Senators were thinking. Do they have special insight into this crisis? Do they have their own forecasters, with deep understanding and good track records in these matters? Do they have their own models? Do they have, in other words, any ground for believing that less than $800 billion, spread over two years, will be enough to bring the economy back? If so, they weren’t saying so, so far as I could tell.

We have a bill. In the most likely case, it will slow the collapse but not stop or reverse it. And it will come into effect alongside a bank rescue plan that stands very little chance of reviving the credit markets. So we have one part of a recovery plan that is helpful but probably insufficient, and another part that most likely will not work at all. The prospects for an early exit from the slump are therefore not encouraging, just yet.

What is to be done? On the fiscal front, for the moment, nothing more. There seems to be no alternative now to waiting for events. Notwithstanding job losses at half a million a month for three months — almost the workforce of the state of Maine, three times over — Olympia Snowe and Susan Collins seem to need better evidence than they’ve seen so far. In four to six months, if job losses don’t reverse, the country will demand more action.

If that’s correct, the gaps and hesitations in this recovery bill should be the first things we repair. To wit:

– make aid to states and localities flexible and open-ended. The goal should be to stop all cuts in public services and layoffs of staff. States and localities should be offered a simple deal: no service cuts and no changes in tax rates. In exchange, the federal government will cover the gap in their revenue for the duration. Alternatively, the federal government could simply offer general revenue sharing on a per capita basis.

– establish and fund a full-fledged National Infrastructure Fund with the capacity to finance and to coordinate public investment projects on an ongoing basis. Congress would therefore largely delegate decisions over the type of local capital investment, including school construction which was cut from the Senate bill for no defensible reason.

– increase Social Security benefits across the board. The purchasing power of the elderly as a group is now gravely eroded by the collapse of stock market values, and the policymaking community needs to realize that the grand experiment in funding retirements via the stock market is ending. For the future we will need more Social Security, not less. And that means that the historic political link between Social Security benefits and the revenues from the payroll tax should be suspended.

– declare a full payroll tax holiday for the duration of the crisis. A holiday has advantages over the credit scheme, as it can be implemented at once for all workers and employers. The holiday could be made subject to a trigger, so that when the economy does begin to recover rapidly, part of the tax can be restored.

– pursue the foreclosure moratorium just announced, establishing the equivalent of a Home Owners Loan Corporation to deal with troubled mortgages, via renegotiation or conversion to rentals. This can be done, largely, through Fannie Mae, Freddie Mac and the Federal Reserve Board, but it will require sufficient staff to inspect and supervise mortgages at the retail level. Apart from this, and the ongoing nationalization of commercial paper markets, there isn’t much more to expect from the Federal Reserve at this point.

It would be useful for friends of these ideas, in Congress and in the public interest community, to establish working groups to build support for them during the months ahead, if and as the crisis deepens.

Meanwhile, the most urgent need is for the Treasury department to re-examine the basic premise of its plans for the banking system. Present plans provide unjustifiable guarantees for bad assets, bank shareholders and the incumbent management, at huge taxpayer expense, with no prospect that normal credit relationships will be restored. So long as this is the case, the scale of taxpayer losses and the necessary scale of the next fiscal recovery plan will grow and grow. ++

“So keep fightin’ for freedom and justice, beloveds, but don’t you forget to have fun doin’ it. Lord, let your laughter ring forth. Be outrageous, ridicule the fraidy-cats, rejoice in all the oddities that freedom can produce. And when you get through kickin’ ass and celebratin’ the sheer joy of a good fight, be sure to tell those who come after how much fun it was.”
~ Molly Ivins, 1944 - 2007

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Add comment February 17th, 2009