Tag Archives: President Obama

Today on Let’s Make a Deal

09 Thursday Dec 2010

Posted by in budget, Congress, economy, Obama, Politics, Taxes

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The latest on “The Deal”:

President Obama at Tuesday’s press conference: [I]t’s a big, diverse country, and people have a lot of complicated positions, it means that in order to get stuff done we’re gonna compromise…This country was founded on compromise.”

Yesterday:

“Vice President Biden told House Democrats on Wednesday that the tax agreement the White House struck with Republicans was essentially final, forcing the divided caucus to decide whether to press its fight for changes in the package. “It’s up or down,” Biden told the caucus in a closed-door meeting, according to Rep. Yvette Clarke (D-N.Y.).

“So far as the administration is concerned, it’s take it or leave it,” Rep. Peter DeFazio (D-Ore.), one of the most vocal critics of the tax deal, told The Hill after the meeting. “I would say [Biden] was pretty specific about that.”

[…]

“It’s fair to say that he said, ‘We’ve negotiated with the Republicans, but we’re not going to negotiate with the Democrats,” Rep. Anthony Weiner (D-N.Y.) said in paraphrasing the vice president.

Larry Summers is saying, ‘One wrong move and the economy gets it.’

“One of President Obama’s top economic advisers warned on Wednesday that the nation could slip back into recession if Congress did not pass the administration’s tax cut deal with Republicans, as the White House sought to press Democrats into backing the plan.

“Failure to pass this bill in the next couple weeks would materially increase the risk that the economy would stall out and we would have a double-dip” recession, Mr. Summers told reporters at a briefing.”

But in September:

“Maintaining tax cuts for top wage-earners should take a back seat to other more pressing measures, White House economic advisor Larry Summers said…”With deficits looming as seriously as they are, why is now the right moment to lock in several hundred billion dollars of tax cuts for 2 percent of the population when we could be using those revenues to strengthen incentives for investment in the country’s future?”

What a difference 3 months makes.

President Obama’s Republican “friends” are making clear their intentions on the so-called “temporary” reduction in Social Security payroll taxes:

“Republicans acknowledged that the expiration of the tax holiday will be treated as a tax increase. “Once something like this goes into place, a year from now, when it expires, it’ll be portrayed as a tax increase,” said Sen. Bob Corker (R-Tenn.). So in a body like Congress, precedents matter and this is setting a precedent. I think that certainly is going to create some problems down the road if it passes.”

“Once you bring a rate down, if it goes back up, people will feel that. They’ll feel their paycheck being less and that argument” — that letting it expire amounts to a tax hike — “eventually is bound to be made,” said Sen. Mike Johanns (R-Neb.).

[…]

Lamar Alexander, the Senate’s number-three Republican, also said that reform of Social Security should be tied to moving that tax rate back up. “My personal hope is that it doesn’t become permanent unless we deal with a way to make Social Security solvent over the long term,” he told HuffPost. “You have to remember, the payroll tax funds Social Security and I like the idea of a lower payroll tax contribution, but we’ve got to make sure Social Security is solvent, which we should be doing this next year as the first order of business.” The way to make the program “solvent” and keep taxes low, of course, is to reduce benefits.

On a related note, this is what happens when you go down the road of giving in to the demands of “hostage takers.” The line starts to form:

“Here’s what Sen. Susan Collins (R-ME) told Senate Majority Leader Harry Reid that she needs to support a full Senate debate on the defense authorization bill (the vehicle for Don’t Ask, Don’t Tell repeal): 15 guaranteed votes on amendments (10 for Republicans, and 5 for Democrats), and somewhere around four days to debate the bill.

Senate Majority Leader Harry Reid already promised her the 15 amendments, but his initial offer was for a day or two of debate. Here’s her response to reporters tonight, after a Senate vote.

“The majority leader’s allotment of time for to debate those amendments was extremely short, so I have suggested doubling the amount of time, assuring that there would be votes, and making sure that the Republicans get to pick our own amendments as opposed to the Majority Leader.”

“If he does that I will do all that I can to help him proceed to the bill. But if he does not do that, then I will not,” she added.”

Reaction of a Sanctimonious Purist

09 Thursday Dec 2010

Posted by in budget, Congress, economy, Obama, Politics, Taxes

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In response to President Obama’s Tuesday hissy fit press conference:

Mr. President,

At the risk of going all sanctimonious and purist here, and not wanting to sound like an ungrateful pie-in-the-sky idealist who fails to recognize your greatness and the magnitude of your accomplishments, excuse me for being so bold as to assume I have even a smidgen of your knowledge and grasp of the issues and humbly offer a few points of “hope”fully constructive criticism.

The overall problem with your Grand Compromise is not so much the parts but the sum of the whole. You have surrendered to (oops, I mean compromised on) the Republican notion that tax cuts somehow equals economic stimulus. If that were true….well, no need to beat that long-dead supply-side horse.

You say that you were forced into this “deal” because Republicans pretty much had you backed into a corner and were holding middle-class tax cuts “hostage.” Maybe if you hadn’t waited until the last 2 weeks of this session of Congress to do something about the expiring Bush tax cuts (you were aware of the expiration date prior to this month, I assume) that wouldn’t have happened.

You said that your Republican “friends” (those “friends” who have stated their top priority as doing everything in their power to make you a one-termer) had to “swallow some things they didn’t like” in this deal. What would that be? The goal of most Republican policy in oh, say the last 30 years or so, has been two-fold—look out for the rich and….look out for the rich. Seems to me with the permanent temporary extension of the Bush tax rates on income, capital gains, dividends, and the unexpected gift of lower estate taxes thrown into the pot, they just about achieved their nirvana.

The overall numbers might look like you got the best of your “friends,” but on closer examination, not so much. The tax cut measures you wanted total out to $216 billion as opposed to the $125 billion in cuts the Republicans got. But that $125 billion goes to 1% of the people and the $216 billion gets divided among the other 99%. We get a few hundred, they get a few hundred thousand, if not more.

Obviously, you’re still not over the public option debate, and how your sellout of compromise on that aspect of health care reform was somehow misinterpreted by the “purists” as a sign of weakness and not an accurate measure of your “core principles.” Maybe if you hadn’t continued to voice your support for it months after cutting a secret deal with hospitals and insurance companies to not include it in the final legislation, we might have had a better idea of what those “principles” were and taken that into account in the search for “purity.”

Speaking of that, sir. You seem to not miss an opportunity and take great pleasure in browbeating and chastising members of your own party and those who supported you in 2008. I guess it gives you a warm, fuzzy, bi-partisany feeling all over. Good luck with that strategy paying off in 2012.

Shorter Frank Rich: ‘We’re Screwed’

29 Monday Nov 2010

Posted by in Campaign Financing, Democrats, economy, Obama, Politics, special interests, Wall Street

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This quote by Virginia Senator Jim Webb referenced in Frank Rich’s op-ed yesterday entitled, “Still the Best Congress Money Can Buy” says all we need to know about our broken, corrupt, two-party system:

“Webb has pushed for a onetime windfall profits tax on Wall Street’s record bonuses. He talks about the “unusual circumstances of the bailout,” that the bonuses wouldn’t be there without the bailout.

“I couldn’t even get a vote,” Webb says. “And it wasn’t because of the Republicans. I mean they obviously weren’t going to vote for it. But I got so much froth from Democrats saying that any vote like that was going to screw up fundraising.”

More from Rich:

“Now corporations of all kinds can buy more of Washington than before, thanks to the Supreme Court’s Citizens United decision and to the rise of outside “nonprofit groups” that can legally front for those who prefer to donate anonymously. The money laundering at the base of Tom DeLay’s conviction by a Texas jury last week — his circumventing of the state’s post-Gilded Age law forbidding corporate campaign contributions directly to candidates — is now easily and legally doable at the national level.

[…]

The story of recent corporate political donations — which we may never learn in its entirety — is just beginning to be told. Bloomberg News reported after Election Day that the United States Chamber of Commerce’s anti-Democratic war chest included a mind-boggling $86 million contribution from the insurance lobby to fight the health care bill. The Times has identified other big chamber donors as Prudential Financial, Goldman Sachs and Chevron.”

How do Democrats plan to combat this influx of corporate cash? By playing the same game:

“Since the election, the Obama White House has sent signals that it will make nice to these interests.”

Such as:

“President Barack Obama is preparing new overtures to business that may start with a walk into the headquarters of the U.S. Chamber of Commerce and a retreat with corporate chief executive officers, according to people familiar with his plans.”

And:

“To address corporate criticism, Obama is also contemplating bringing business leaders into his administration. Unlike his two immediate predecessors, Obama hasn’t had a prominent corporate leader in a high-level administration job.”

That was kind of the whole point of “change,” wasn’t it?

A Milestone in Colossal Stupidity

27 Saturday Nov 2010

Posted by in Afghanistan, Obama, Obama administration, Pentagon, war on terror

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Proving Santayana right, today marks a milestone in the Afghanistan quagmire. A milestone in colossal stupidity:

“On Saturday Nov. 27, the United States and its allies will reach a grim milestone: they will have been in Afghanistan a day longer than the Soviet Union had been when it completed its 1989 withdrawal.”

And the end is not in sight:

“Pentagon spokesman Geoff Morrell last week made clear that the 2014 date for an end to combat operations agreed by NATO was an “aspirational” deadline. And an Afghanistan progress report by the Pentagon to the U.S. Congress released Tuesday made clear that despite the Obama Administration’s “surge” of some 30,000 extra American soldiers into the war zone, progress has been modest and the insurgency continues to expand.”

2014? What happened to July 2011?

“…it appears as if President Obama isn’t prepared to cut his losses in the war and order a sharp drawdown of troops next July, when, at least according to his stated policy, US forces will begin to leave Afghanistan. Worse, it looks like the much anticipated December 2010 presidential review of war policy is being reduced to a rubber-stamp approval of General David Petraeus’s counterinsurgency scheme.

…Obama is increasingly in harmony with Petraeus. The president and the general are “meshing well, advisers say,” they reported, adding that the president strikes a “deferential tone” toward Petraeus even though Petraeus “has made clear that he opposes a rapid pullout of troops from Afghanistan beginning next July.”

A “deferential tone?” Who’s in charge here? That would be a rhetorical question, the answer is obvious.

“When asked by a reporter about the US “exit strategy” for Afghanistan, the senior defense official took issue with the term. “We don’t have an exit strategy. We have a transition strategy. The US commitment to Afghanistan is continuing, enduring, and long-lasting.”

A “transition” that, according to the former number two U.N. diplomat in Afghanistan, Peter Galbraith, could take 100 years:

“We’re talking about something that will take 100 years, generations,” says Galbraith, “You can equip them. You can provide some training, but you can’t make them honest. You can’t make them literate. You can’t make them committed to the notions of policing that we have in the West,” he says.”

Once again, we’ve been here before. Apparently the lesson was unlearned. More on the Pentagon’s report to Congress, with the appropriate editing inserted:

“The Pentagon’s semiannual report to Congress on the war in Vietnam Afghanistan paints a picture of a country where corruption remains rampant, violence has increased, and a well-funded Vietcong Taliban insurgency continues to make troubling gains.

The report, “Progress Toward Security and Stability in Vietnam Afghanistan,” which was released this week, actually cites little in the way of progress in the war, a major US undertaking that is rapidly losing popular support among Americans and threatens to become a political burden on President Johnson Obama.”

The song remains the same, only the names have changed.

Look in the Mirror, Democrats

02 Tuesday Nov 2010

Posted by in Democrats, Obama, Politics, Republicans

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If the election results go as expected tonight and Republicans take control of at least the House, the hand-wringing and ‘what happened?’ from the Democratic side of the aisle will commence shortly thereafter. In the search for someone or something to blame I suggest Democrats, including President Obama, need look no further than the nearest mirror. This blurb from Politico pretty much sums up the problem:

“…even White House advisers quietly admit a far more jobs-focused, targeted stimulus would have been more effective as a policy and political tool.”

Ya think? Do ya freakin’ think so? That epiphany comes about 18 months too late, but I guess better late than never. Maybe if the president had listened to someone outside of his inner circle jerk of “advisers” who were saying that from the get-go he wouldn’t be preparing to deal with a Republican Congress in January.

But that wasn’t the only serious misstep that put Obama and the Democrats in the situation in which they find themselves. It goes back to before Inauguration Day of 2009. Beginning when the candidate who said he wanted to change the way business was done in Washington named a poster child of the way business is done in Washington to be his chief of staff.

Then, faced with an economic crisis not seen in this country since the 1930′ s, he named as his chief economic adviser one of the main culprits in creating the conditions that led to the financial meltdown, Larry Summers. He then nominated as his Treasury Secretary Tim Geithner, a protégé of another architect of the collapse, Robert Rubin. Enjoy your stay at the henhouse, Mr. Fox.

This was the change we could believe in?

When it came to the stimulus package there were a number of economists (outside of that sacred inner circle) who were saying that it needed to be bigger and focused almost entirely on spending to create jobs. They were summarily ignored. An arbitrary figure was arrived at–$1 trillion–which for political purposes the stimulus could not exceed. And in the spirit of bi-partisanship, a good chunk of the package was made to include tax cuts. This was done to supposedly draw Republican support for the stimulus. How did that work out?

Just as an aside here, President Obama later said that he underestimated the size and intensity of the opposition from Republicans in Congress. Was he asleep during the 90’s when Republicans impeached a Democratic president for…well, you know what for. His estimation of the GOP opposition should have been Clinton X 10.

On health care reform, the candidate who ran on a public option and no individual mandate did a sudden 180 and became the president of no public option and an individual mandate. The candidate who promised lower prescription drug prices by way of drug importation from Canada and elsewhere cut a backroom deal with Pharma to insure their monopoly.

Also on health care reform, if the president and Democrats would ask those who supported them in ‘08 (instead of calling them whiners and telling them to buck up) they might find out that just as many, if not more, will tell them too little was done in the way of “reform,” not too much.

The candidate who railed against the Bush “war on terror” constitutional and civil liberties abuses not only continued those policies but now seeks to increase them by expanding the government’s wiretap powers and targeting American citizens who are suspected of terrorist ties for assassination. Not to mention tripling down on the number of troops in Afghanistan,  and expanding the drone war and covert operations into Pakistan, Yemen, and only God and the CIA knows where else.

And they wonder why there’s an enthusiasm gap?

Democrats in Congress don’t escape blame either. In two consecutive elections, 2006 and 2008, they were given overwhelming majorities in both Houses of Congress, including a filibuster-proof number in the Senate, plus the White House. Memo to Democrats: American voters didn’t  give you those majorities because of your sparkling personalities, they wanted things done.

Just for future reference, if and when you get that kind of power again—use it. Don’t squander it bickering amongst yourselves. Take a page from the Republican playbook and enforce some party discipline. By whatever means necessary. It would help to have a Senate Majority Leader with something resembling a spine. You had the Republican Party down for the count, but you let them up and look at what is about to happen.

Obama Invokes “State Secrets” in Assassination Plot

26 Sunday Sep 2010

Posted by in Bill of Rights, Constitution, Justice Department, Obama administration, torture, war on terror

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“If tyranny and oppression come to this land, it will be in the guise of fighting a foreign enemy.”—James Madison, often referred to as the father of that antiquated, outdated, document known as the Constitution of the United States, which is now little more than an a la carte menu.

When the president of the United States has the power to order the assassination of an American citizen suspected of terrorist activities but charged with no crime, that is tyranny. And that is exactly the power President Obama is seeking, under the ever-increasing justification of preserving “state secrets.”

“The Obama administration on Friday asked a federal judge to throw out a lawsuit seeking to stop the government from killing an American citizen [Anwar al-Awlaki] accused of ties to Al Qaeda…In a legal brief, which was filed shortly before midnight, the administration included the contentious argument that litigating the matter could reveal state secrets.”

Glenn Greenwald at Salon:

“…in other words, not only does the President have the right to sentence Americans to death with no due process or charges of any kind, but his decisions as to who will be killed and why he wants them dead are “state secrets,” and thus no court may adjudicate its legality.”

From the ACLU and the Center for Constitutional Rights (remember those?):

“The idea that courts should have no role whatsoever in determining the criteria by which the executive branch can kill its own citizens is unacceptable in a democracy.”

Obstruction of Justice Department spokesman Matthew Miller:

“If al-Awlaqi wishes to access our legal system, he should surrender to American authorities and return to the United States, where he will be held accountable for his actions.”

Why would al-Awlaki, who is thought to be in Yemen, surrender to authorities when he has not been charged with, or indicted for, any crime? Sure, give himself up and be on the next plane to Jordan or Morocco or wherever the latest outsourcing torture extraordinary rendition site is, to be tortured and meet an untimely, accidental death. Oops.

But few people will notice and even fewer will care. Republicans don’t care because it’s one of “them” who is being targeted for assassination, never mind that al-Awlaki is a US citizen. He don’t look like a reel ‘Murrican. And they’ll take full advantage of the expanded powers of the Executive Branch the next time a Republican occupies the Oval Office. Democrats don’t care because their guy is in there now and they trust him with this power, for some reason that escapes me. Never mind that they would be screaming about the president shredding the Constitution if George Bush was still in office.

Making Sense of the Tax Cut Extension Contradictions

11 Saturday Sep 2010

Posted by in Congress, Democrats, economy, lobbyists, Obama, Politics, Republicans, special interests

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A couple of things don’t make sense in this debate over letting the tax cuts for the top 2% expire. Don’t make sense on the surface, that is. Dig a little deeper and it becomes perfectly clear.

Why is there such angst in Congress about raising taxes on the wealthy? Members of both the House and the Senate in both parties say they are so concerned with the deficit, but yet extending the cuts will add about $700 billion to the deficit. Many say raising taxes will kill job creation, but those same cuts led to little or no job creation during the 9 years they have been in effect. So what’s the big deal about raising taxes on millionaires?

Because they would be voting to raise taxes on themselves. One percent of Americans are millionaires, but 44% of the members of Congress are millionaires—237 out of 535. They would be voting not only to raise taxes on themselves, but their friends, their associates, and most importantly to them, the people who write the large campaign contribution checks.

Here’s the other thing that doesn’t appear to make sense. Naturally, most Republicans are against letting the cuts expire, for no other reason than that President Obama is in favor of it. But why are an increasing number of Democrats coming out in favor of an extension? Besides the fact that many if them are included in that number of millionaires, that is.

I know some probably get tired of me beating the drum for the importance of organized labor, but unions were once the largest constituency group and voting bloc who stood up and spoke out for working and middle-class people. Into the “vacuum” left by decreasing union membership and its influence on politicians and policy has stepped corporate interests and their money. From Winner-Take-All Politics via Kevin Drum at Mother Jones:

“Unions…are the particular focus of business animus. As they decline, they leave a vacuum. There’s no other nationwide organization dedicated to persistently fighting for middle class economic issues and no other nationwide organization that’s able to routinely mobilize working class voters to support or oppose specific federal policies.

With unions in decline and political campaigns becoming ever more expensive, Democrats eventually decide they need to become more business friendly as well. This is a vicious circle: the more unions decline, the more that Democrats turn to corporate funding to survive. There is, in the end, simply no one left who’s fighting for middle class economic issues in a sustained and organized way. Conversely, there are lots of extremely well-funded and determined organizations fighting for the interests of corporations and the rich.”

In my opinion, this also explains why some who vote Republican and support Republican policies, other than those who are simply anti-anything Obama related, are against raising taxes on the wealthy even though very few would be affected by an increase on those making over $250,000 a year. They’ve bought into the corporate-interest saturated media theme that unions are evil and that the wealthy special interests are looking out for them.

What Hath 9/11 Wrought?

11 Saturday Sep 2010

Posted by in Bill of Rights, Constitution, Justice Department, Obama administration, terrorism, torture, war on terror

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September 11, 2001 has been dubbed ‘The Day That Changed America’ and indeed it did. Indeed it did—and not for the better. It changed America from the land of the free and the home of the brave to the land of the increasingly less free and the home of ‘do whatever it takes to keep us safe.’ It changed us from a country governed by the founding principles of due process, equal justice, and the rule of law to a country where indefinite detention without charges or trials are an accepted practice. Where the Executive Branch, aided and abetted by the Judicial Branch, can be exempted from accountability from what were once considered war crimes simply by invoking the vague and all-encompassing claims of “state secrets” and “national security interests.”

These changes were exemplified in a decision by the Ninth Circuit Court of Appeals on Wednesday when it dismissed a suit by five men who allege they were imprisoned and tortured under the Bush administration’s rendition program. The decision was also considered a “major victory” for the Obama administration, who appealed an earlier ruling which said the suit should go forward.

“In a 6-5 ruling issued this afternoon, the 9th Circuit Court of Appeals handed the Obama administration a major victory in its efforts to shield Bush crimes from judicial review, when the court upheld the Obama DOJ’s argument that Bush’s rendition program, used to send victims to be tortured, are “state secrets” and its legality thus cannot be adjudicated by courts.  The Obama DOJ had appealed to the full 9th Circuit from last year’s ruling by a 3-judge panel which rejected the “state secrets” argument and held that it cannot be used as a weapon to shield the Executive Branch from allegations in this case that it broke the law.”

Not that this is any shift in direction. It’s just the latest effort by the current administration to continue, and in some cases expand upon, the policies of the former administration—policies candidate Obama denounced but President Obama embraces:

“Among other policies, the Obama national security team has also authorized the C.I.A. to try to kill a United States citizen suspected of terrorism ties, blocked efforts by detainees in Afghanistan to bring habeas corpus lawsuits challenging the basis for their imprisonment without trial, and continued the C.I.A.’s so-called extraordinary rendition program of prisoner transfers — though the administration has forbidden torture and says it seeks assurances from other countries that detainees will not be mistreated.”

The reaction to the decision from the ACLU:

“This is a sad day not only for the torture victims whose attempt to seek justice has been extinguished, but for all Americans who care about the rule of law and our nation’s reputation in the world. To date, not a single victim of the Bush administration’s torture program has had his day in court. If today’s decision is allowed to stand, the United States will have closed its courtroom doors to torture victims while providing complete immunity to their torturers.”

Andrew Sullivan at The Daily Dish:

“The case yesterday is particularly egregious because it forbade a day in court for torture victims even if only non-classified evidence was used. Think of that for a minute. It shreds any argument that national security is in any way at stake here. It’s definitionally not protection of any state secret if all that is relied upon is evidence that is not secret. And so this doctrine has been invoked by Obama not to protect national security but to protect war criminals from the law. There is no other possible interpretation.

The Bush executive is therefore now a part of the American system of government, a system that increasingly bears no resemblance to the constitutional limits allegedly placed upon it, and with a judiciary so co-opted by the executive it came up with this ruling yesterday. Obama, more than anyone, now bears responsibility for that. We had a chance to draw a line. We had a chance to do the right thing. But Obama has vigorously denied us the chance even for minimal accountability for war crimes that smell to heaven.

And this leviathan moves on, its budget never declining, its reach never lessening, its power now emboldened by the knowledge that this republic will never check it, never inspect it, never hold its miscreants responsible for anything, unless they are wretched scapegoats merely following orders from the unassailable above them.”

To those who would “look forward” and give the Obama administration a pass here, ask yourself a few questions. If it were the Bush administration would you be so lenient? Let’s be very honest. If one administration is guilty of authorizing and condoning war crimes, is not the following administration, as evidenced by its actions, guilty of being an accessory to the commission of war crimes? I don’t see how any other conclusion can be reached.

Another thing to consider for those who may trust this far-reaching and unchecked expansion of Executive Branch power in the hands of President Obama—the power doesn’t leave with him when he leaves office. Would you trust it in the hands of President Palin? Think about it.

First they came for the suspected terrorists, and I didn’t care because I wasn’t a suspected terrorist………

Why Tim Geithner Opposes Elizabeth Warren as Head of the CFPB

20 Tuesday Jul 2010

Posted by in bailout, economy, financial reform, financial regulation, Obama administration, Politics, too big to fail, Wall Street

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Elizabeth Warren should be a no-brainer as President Obama’s choice to head the newly-created Consumer Financial Protection Bureau (CFPB). She is a long-time advocate for the rights of consumers, the person most responsible for the Bureau’s inclusion in the recently-passed financial reform legislation, and its most notable and vocal supporter. She has this crazy notion that a consumer protection agency should actually…you know…protect consumers against the abusive practices of the big banks.

As chair of the TARP oversight committee Warren regularly clashed with what those banks consider to be in their best interests, as well as those in the administration who make a habit of carrying the banker’s water, namely Treasury Secretary Timothy Geithner. Which is why it wasn’t surprising when Huffington Post reported last week that Geithner opposed Warren’s nomination.

Then came this, a piece by John Talbott (also in the Huffington Post) on Sunday. The reason for the treasury secretary’s opposition:

“The [financial reform] bill has been written to put a great deal of power as to how strongly it is implemented in the hands of its regulators, some of which remain to be chosen. The bank lobby will work incredibly hard to see that Warren, the person most responsible for initiating and fighting for the idea of a consumer financial protection group, is denied the opportunity to head it.

But this is not the only reason that Geithner is opposed to Warren’s nomination. I believe Geithner sees the appointment of Elizabeth Warren as a threat to the very scheme he has utilized to date to hide bank losses, thus keeping the banks solvent and out of bankruptcy court and their existing management teams employed and well-paid.”

The “scheme” to which Talbott refers began with Geithner’s predecessor as Treasury Secretary, Hank Paulson, and is being continued by Geithner and his partner in crime in the Obama administration, Larry Summers. In short it goes like this:

The $700 billion in TARP money was originally supposed to go to get bad loans, the so-called toxic assets, of the bank’s books. Immediately after TARP was passed, Paulson did a 180 and decided to use it as a direct cash infusion into the big banks rather than buying bad loans. (Nothing to do with him being a former Goldman CEO, I’m sure).

That left the banks with trillions of dollars of toxic assets still on the books, where they remain today. Geithner’s plan is for the banks to:

“…earn their way out of their solvency problems over time so the banks are continuing to slowly write off their problem loans but at a rate that will take years, if not decades, to clean up the problem.

And this is where defeat of the nomination of Elizabeth Warren becomes critical for Geithner. For Geithner’s strategy to work, the banks have to find increasing sources of profitability in their business segments to balance out their annual loan loss recognition from their existing bad loans in an environment in which they continue to recognize new losses in prime residential mortgages, commercial real estate lending, sovereign debt investments, bridge loans to private equity groups, leverage buyout lending and credit card defaults.

The banks have made no secret as to where they will find this increase in cash flow. They intend to soak their small retail customers, their consumer and small business borrowers, their credit card holders and their small depositors with increased costs and fees and are continuing many of the bad mortgage practices that led to the crisis

[…]

It is exactly these types of unwarranted fees on small consumers and poorly designed products that Elizabeth Warren will fight against as head of the new consumer finance protection group. And it is why Geithner sees her as so threatening. Unless the banks are allowed to raise fees and charges on their smaller consumer customers, Geithner’s and Summers’ scheme for dealing with the banking crisis by hiding problem loans permanently on the banks’ balance sheets will be exposed for what it is, an attempt at preserving the jobs of current bank executives at the cost of dragging out this recovery needlessly for years in the future.”

After much thought and careful consideration (which took about 1.5 seconds) I have a suggestion for how President Obama can resolve this conflict. Warren’s in, Geithner’s out. Problem solved.

Obama and Axelrod’s Mixed Messages

12 Monday Jul 2010

Posted by in Congress, Democrats, economy, Obama, Obama administration, Politics, Republicans

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To whom it may concern at the White House and the DNC:

If you want to lose the House and possibly the Senate in November, if you want to increase the possibility of the 2 most dreaded words in the English language—President Palin—becoming a reality in 2012, keep the lack of a cohesive message coming. And keep on waiting for the GOP to get on board.

First have President Obama come out on a Thursday with a speech focusing on job creation—saying how we can’t afford to give the keys back to the Republicans because they’re the ones whose policies “gave us the economic crisis” and drove the economy into the ditch. This is called firing up the base for the upcoming mid-term elections. (BTW, mid-term elections are all about turning out the base, and in case you haven’t noticed the Republican base is ready to vote today).

Then have David Axelrod go on This Week on Sunday and say that “there is no great desire on Capitol Hill” for more spending to stimulate the economy and that “we’re hoping we can persuade enough people on the other side of the aisle to put politics aside and join us.”  This makes your base throw up their hands (or just throw up) and say ‘For cryin’ out loud, somebody get a freakin’  clue. The Republicans don’t want anything that resembles economic growth, now or in the next 2 years. When are you guys gonna get it?’

Here are some steps you might want to consider and some advice you might want to listen to. First from Atrios:

“So let’s say Obama’s people have correctly deduced that there’s no chance in hell of getting anything through Congress. They have two basic options. First, they could get on the teevee every day and say, “This is my plan to help. Republicans in Congress won’t pass it.” They could hold rallies in Maine. Allies could run ads. At least people would know who is for and who is against…and just what it was that people are for or against.”

Option two is back off proposals you’ve previously made and have Axelrod get on the teevee and say, “there is some argument for additional spending in the short-run to continue to generate economic activity.”

Paul Krugman adds:

“I have no idea what they’re thinking. It would be one thing if polls suggested a tolerable outcome in November, so that playing it safe could possibly make sense as a political strategy. But that’s not the way it is; and it’s hard to see what possible motivation there is for pulling punches.”

Steve Benen at Washington Monthly:

“My sense is that President Obama really hates — and actively avoids — picking fights he fully expects to lose…The defeat would leave him weaker, exacerbate intra-party tensions, and at the same time signal that the White House lacks confidence in the strength of the economic recovery.

But the current alternative is far worse, especially given the fact that the White House should lack confidence in the strength of the economic recovery. It makes a lot more sense to push an ambitious jobs bill — like, now — invite Republicans to do what they always do, give Democrats something to fight for, and have the debate.

[…]

Yes, Republicans will block any measure intended to improve the economy, and it’s largely too late for a new stimulus effort to boost the economy before November. But it’s still worth having the fight — force the GOP to stand in the way of job creation, and show the public that Democrats are prepared to fight to improve on an unsatisfactory status quo.”

To sum up, you’re quickly approaching (if not already at) ‘nothing to lose’ stage. In sports terminology, this is not the time for basketball’s 4-corner offense or football’s prevent defense. (Long-time Houston fans can tell you how both of those work out, and it ain’t good. See UH–NC State and Oilers vs. Buffalo Bills). For those who don’t follow sports, let’s go with “faint heart never won fair maiden.” And faint heart never kicked the shit out of an obstructionist Republican either. It’s time to go bold and force the other team to re-act to you, not you to them.

Just my $0.02.