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Category: Economics
McCain has been an impassioned deregulator, and thus bears responsibility for the banking crisis we are in now.
Not exactly. While McCain has always voted in favor of deregulation, he has never been impassioned about the economy until the market tanked. As one prudent individual said, “I certainly don’t fault Sen. John McCain for these problems. I do fault the economic philosophy he subscribes to.”
Dear American:
I need to ask you to support an urgent secret business relationship with a
transfer of funds of great magnitude.
I am Ministry of the Treasury of the Republic of America. My country has had
crisis that has caused the need for large transfer of funds of 800 billion
dollars US. If you would assist me in this transfer, it would be most
profitable to you.
I am working with Mr. Phil Gram, lobbyist for UBS, who will be my
replacement as Ministry of the Treasury in January. As a Senator, you may
know him as the leader of the American banking deregulation movement in the
1990s. This transactin is 100% safe.
This is a matter of great urgency. We need a blank check. We need the funds
as quickly as possible. We cannot directly transfer these funds in the names
of our close friends because we are constantly under surveillance. My family
lawyer advised me that I should look for a reliable and trustworthy person
who will act as a next of kin so the funds can be transferred.
Please reply with all of your bank account, IRA and college fund account
numbers and those of your children and grandchildren to
[email protected] so that we may transfer your commission for
this transaction. After I receive that information, I will respond with
detailed information about safeguards that will be used to protect the
funds.
Yours Faithfully Minister of Treasury Paulson
Unfortunately, I cannot claim credit for this. Apparently it is in an email going around. I actually came across this virtually simultaneously here and here.
[digg-reddit-me]
Seeing this headline in the New York Post made me furious. The Democrats – and a number of Republicans – are insisting on some basic accountability measures and a pledge that they will be able to pass some sort of relief for those affected by the crisis who aren’t millionaires. Each of these requests is reasonable. The first request is absolutely essential. The Post‘s attempts to “stampede the herd” into accepting whatever it is Paulson wants are dangerous.
Everyone from Newt Gingrich to Paul Krugman to William Kristol to Matt Yglesias to NRO’s Yuval Levin has urged caution and some sort of oversight mechanism as the least.
The proposed bill would give Secretary Paulson authority to “take such actions as the Secretary deems necessary to carry out the authorities in this Act,” giving him extremely broad powers to unilaterally control the market in addition to the $700 billion. In addition to these dictatorial powers, Paulson would be granted legal immunity for all of his actions:
Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.
Although I doubt Paulson would use this crisis to personally profit – nothing in the law would prevent him. And if he did, no action could be taken against him. This is incredibly reckless.
This law would remain in effect for two years – which would allow Obama’s Secretary of the Treasury as well as Paulson to, in exercising authority under this law, do virtually anything and be immune from any consequences.
This is how the Patriot Act was pushed through Congress in the dead of night, with no one reading the weighty tome. This is how democracies are given away in a moment of crisis, in that Roman tradition of granting a temporary dictatorship over Rome until a crisis passes. Power is never given away easily – and so, in the end, the democracy with temporary dictators became a permanent dictatorship. In this age of terrorism and globalization, the crisis is never fully past us; and a new one is always on the horizon.
I don’t think anyone has any definite idea about what will work in this situation. And this is a time for pragmatism, not ideology. But even – and especially – in a crisis, there must be accountability and limits. This fear-mongering by the Post and other Republican puppets represents the worst impulse we can have at this time. We must act quickly but deliberately – because in our understandable haste, we might accidentally give away more than we intend.
The New York Times reported on the struggle Obama is facing trying to break through the media fog that has focused on the small daily controversies the McCain camp keeps feeding the press. From Lipstick on a Pig to questions of patriotism and the never used Logan Act, this is the McCain camp’s deliberate strategy – distract and hope that by the time people start paying attention to the issues, it will be too late.
Given the financial crisis unfolding, and in an attempt to break through this fog, Obama released this simple ad – just two minutes of Obama speaking to the camera.
The Plan he asks you to check out is here.
Excerpts from his original speech on the subject a year ago today is here.
His follow-up speech as the crisis began to deepen this March is here.
My summary of his broad economic agenda is here.
The New York Times’ attempt to understand the underpinning of “Obamanomics” is here.
Some lies being spread about Obama’s tax plan and economic issues are here. The ad McCain released echoing these lies is here.
Categories
A year ago today…
A year ago today, long-shot candidate Barack Obama gave a speech at Nasdaq calling on Wall Street to support his program to revitalize our economy:
Seventy-five years ago this week, Governor Franklin Delano Roosevelt took his campaign for the presidency to the Commonwealth Club in San Francisco.
It was a time when faith in the American economy was shaken – a time when too many of our leaders clung to the conventional thinking that said all we could do is sit idly by and wish that our problems would go away on their own. But Franklin Roosevelt challenged that cynicism. Amid a crisis of confidence Roosevelt called for a “re-appraisal of values.” He made clear that in this country, our right to live must also include the right to live comfortably; that government must favor no small group at the expense of all its citizens; and that in order for us to prosper as one nation, “…the responsible heads of finance and industry, instead of acting each for himself, must work together to achieve the common end.”
This vision of America would require change that went beyond replacing a failed President. It would require a renewed trust in the market and a renewed spirit of obligation and cooperation between business and workers; between a people and their government. As FDR put it, “Faith in America, faith in our tradition of personal responsibility, faith in our institutions, and faith in ourselves demands that we all recognize the new terms of the old social contract.”
Seventy-five years later, this faith is calling us to act once more…
In recent years, we have seen a dangerous erosion of the rules and principles that have allowed our market to work and our economy to thrive. Instead of thinking about what’s good for America or what’s good for business, a mentality has crept into certain corners of Washington and the business world that says, “what’s good for me is good enough.”
…The quick kill is prized without regard to long-term consequences for the financial system and the economy. And while this may benefit the few who push the envelope as far as it will go, it’s doesn’t benefit America and it doesn’t benefit the market. Just because it makes money doesn’t mean it’s good for business…
In this modern, interconnected economy, there is no dividing line between Main Street and Wall Street. The decisions that are made in New York’s high-rises and hedge funds matter and have consequences for millions of Americans across the country. And whether those Americans keep their homes or their jobs; whether they can spend with confidence and avoid falling into debt – that matters and has consequences for the entire market.
We all have a stake in each other’s success. We all have a stake in ensuring that the market is efficient and transparent; that it inspires trust and confidence; that it rewards those who are truly successful instead of those who are just successful at gaming the system. Because if the last few months have taught us anything, it’s that we can all suffer from the excesses of a few.
[And after outlining his economic agenda, summarized here by me, and in the speech by the Senator – and fleshed out more in this speech several months later.]
I ask for your support for this economic agenda, both in this campaign and if I should get the chance to enact these policies as your President. I will not pretend it will come without cost, but I do believe we can do achieve this in a fiscally responsible way – certainly more so than the current Administration that’s given us deficits as far as the eye can see.
I know some may say it’s anathema to come to Wall Street and call for shared sacrifice so that all Americans can benefit from this new economy of ours. But I believe that all of you are as open and willing to listen as anyone else in America. I believe you care about this country and the future we are leaving to the next generation. I believe your work to be a part of building a stronger, more vibrant, and more just America. I think the problem is that no one has asked you to play a part in the project of American renewal.
I also realize that there are some who will say that achieving all of this is far too difficult. That it is too hard to build consensus. That we are too divided and self-interested to think about the responsibilities we have to each other and to our country. That the times are simply too tough.
But then I am reminded that we have been in tougher times and we have faced far more difficult challenges. And each time we have emerged stronger, more united, and more prosperous than the last. It is faith in the American ideal that carries us through, as well as the belief that was voiced by Franklin Roosevelt all those years ago this week: “Failure is not an American habit; and in the strength of great hope we must all shoulder our common load.” That is the strength and the hope we seek both today – and in all the days and months to come.
At this time last year, John McCain wasn’t talking about economics, despite the growing sense of a forthcoming crisis on Wall Street. He was talking about Iraq – predicting that the troops would be home soon. His only mention of economics during this week last year that I have been able to find was in discussing Iraq.
The New York Times had two useful columns this morning – one by Paul Krugman explaining how McCain’s lies about Obama are even worse than Bush’s lies about Kerry or Gore:
[T]he muck being hurled by the McCain campaign is preventing a debate on real issues — on whether the country really wants, for example, to continue the economic policies of the last eight years.
But there’s another answer, which may be even more important: how a politician campaigns tells you a lot about how he or she would govern…
I’m talking…about the relationship between the character of a campaign and that of the administration that follows. Thus, the deceptive and dishonest 2000 Bush-Cheney campaign provided an all-too-revealing preview of things to come. In fact, my early suspicion that we were being misled about the threat from Iraq came from the way the political tactics being used to sell the war resembled the tactics that had earlier been used to sell the Bush tax cuts.
I give Krugman a lot of grief for his attacks on Obama – which resemble small-minded tantrums. But despite these frustrations with Krugman, I have always acknowledged he can be quite effective. He is simply a polemicist – and he will force the facts to fit into his pre-conceived arguments (except perhaps on economics where he is more subtle.) But when the facts happen to fit his pre-conceived arguments well – then his columns are a thing of beauty, like this past one, making a very important point.
David Brooks, conservative, writes the other column worth reading today. He attempts to explain the next steps the Republican party has to take in order to seriously address the major issues facing the nation:
If there’s a thread running through the gravest current concerns, it is that people lack a secure environment in which they can lead their lives. Wild swings in global capital and energy markets buffet family budgets. Nobody is sure the health care system will be there when they need it. National productivity gains don’t seem to alleviate economic anxiety. Inequality strains national cohesion. In many communities, social norms do not encourage academic achievement, decent values or family stability. These problems straining the social fabric aren’t directly addressed by maximizing individual freedom.
And yet locked in the old framework, the Republican Party [has a] knee-jerk response…
The irony, of course, is that, in pre-Goldwater days, conservatives were incredibly sophisticated about the value of networks, institutions and invisible social bonds. You don’t have to go back to Edmund Burke and Adam Smith (though it helps) to find conservatives who understood that people are socially embedded creatures and that government has a role (though not a dominant one) in nurturing the institutions in which they are embedded.
Brooks is describing here Barack Obama’s economic plans. Although I think he still is prejudiced enough against liberals and Democrats – assuming they will act irresponsibly if they are in power – that he cannot support Obama. And he seems to have a very positive feeling towards McCain that will lead him to hope that McCain will adopt Obama’s economic plan with a slightly more conservative tilt – despite what McCain is promising now – rather than to back the man with the plan he agrees with.
But despite this, it is because he writes columns like this that I truly look to David Brooks as an almost independent-minded thinker – even if he still remains tethered to the Republican party.
Obama sees his health care plan as part of an attempt to soften the effects of globalization.
His plan calls for every American who wants to preserve their health insurance plan to be able to keep it. His plan even includes incentives that reward employers that do provide health insurance and penalizes employers that do not (with exceptions for small businesses.) In addition to this, Obama’s plan will open up the government health care plan used by members of Congress to allow consumers – in a free market – to opt into it. Obama’s plan is designed to create incentives within our current system to gradually close the huge holes in insurance coverage and over time bring down costs. It’s a conservative plan, in the best sense of that word.
John McCain’s health care plan is radical. McCain says he wants to:
Reform The Tax Code To Offer More Choices Beyond Employer-Based Health Insurance Coverage
In other words, McCain wants employers to stop providing health insurance coverage. He proposes to include the cost of health care in each employee’s taxable income – and to offset this by offering a $2,500.00 tax rebate for individuals and $5,000.00 for families. This isn’t enough to purchase health insurance coverage in many states, so in addition, McCain proposes to effectively deregulate the insurance market and allow insurance to be sold across state lines – eliminating the consumer protections states provide, including protections for those with pre-existing conditions.
The theory behind the McCain plan is that we already have too much health insurance coverage and are going to the doctor too often because we don’t have to pay every time we do. So he proposes that every individual – or family – purchase individual or family health insurance – a radical change, and one that places much greater power in the hands of the insurance industry. As a matter of fact, it would be accurate to say it is exactly what the health insurance industry is asking for.
Stephen Kotkin reviews Thomas Friedman’s new book, Hot Flat, and Crowded, for the business section of the New York Times today. Friedman himself has a bi-weekly column in the opinion section of the Times, which makes Kotkin’s review all the more pleasurable. Kotkin captures the formula Friedman inevitably uses to write his columns – and his books:
The content and method will be familiar to Mr. Friedman’s legions of readers: source, anecdote, pop metaphor. Repeat point. In italics. The unfamiliar reader should prepare for hyperbole, neologisms and aphorisms. “Affluenza.” “Code Green.” “The new Energy Climate Era (E.C.E.).” “We’ve already hit the iceberg.” We’re “the proverbial frog in the pail on the stove” (boiled to death after failing to jump out because the temperature rose only incrementally). “We are the flood, we are the asteroid. We had better learn how to be the ark.”
I have to admit that I have a bit of a soft spot for Friedman. I generally read his column and have read several of his books. I read them with the same attention I give to reading a Grisham thriller – as both authors take big ideas and make them entertaining. (Grisham is a far superior entertainer however.) I find that reading Friedman forces me to think – because he describes great changes that are going on and then attempts to explain and solve them by using simple, salesmen’s terms: “The World Is Flat!” or “Obama-Cheny 08!” He takes interesting ideas and then trivializes them before their gravity sinks in. The New Republic, in an article written in 2004 or 2005, criticized Friedman for being a salesman for globalization rather than an analyst of it’s effects. And while Friedman certainly is enamored with globalization, I think the real issue with Friedman’s work is how he so crassly simplies every issue. However, it is probably this skill that has made his work so palatable and popular to those who shy away from serious writing on economic and foreign policy issues.
For all my criticism of him, I have to give Friedman credit for having been consistently pushing – for the past dozen years – what has become the obvious next step to achieve a greater measure of national security, to drain the funding of our strategic adversaries around the world, to stop climate change, and to establish America as a leader in a new worldwide industry. Again, from Kotkin’s review:
Mr. Friedman has an unabashedly American-centric solution: the United States can regain its national purpose and save the world via green innovation. This can happen, he says, if Americans recognize — in the words of John Gardner, founder of Common Cause — “a series of great opportunities disguised as insoluble problems.”
Friedman told the story on Meet the Press this morning of what he says to young Chinese who justify China’s increasing pollution:
Friedman: You know, I was just in China a week or 10 days ago, Tom, and you know, young Chinese, you know, whenever I go here, they say to me, you know, “Mr. Friedman, you guys got to grow dirty for 150 years, now it’s our turn.” To which I always say to them, “You know what, you’re right. It is your turn. Take your time. Grow as dirty as you want. Because I think we just need five years to invent all the clean power technologies you’re going to need before you choke to death and then we’re going to come over and we’re going to sell them to you and we’re going to clean your clock in the next great global industry.” That’s when I see the headsets of the translators adjusting, “What is he saying?”
Clearly, Friedman has become a salesmen for green technology. He’s not analyzing – he’s advocating. Even if his presentation rankles, it’s worth listening to – and hopefully, he’s changing some minds.