Even so, [Obama] said he did not find blogs to be reliable, citing the economy as one example.
“Part of the reason we don’t spend a lot of time looking at blogs,” he said, “is because if you haven’t looked at it very carefully, then you may be under the impression that somehow there’s a clean answer one way or another — well, you just nationalize all the banks, or you just leave them alone and they’ll be fine.”
Now that’s just a stupid thing to say – not only because he’s gratuitiously insulting many people who worked hard for him during his campaign – including me – but it makes him look like an idiot technologically. The problems isn’t “blogs” – and in fact, the substance of his criticism probably applies best to cable talk shows.
[digg-reddit-me]Clive Crook in his new Financial Times column faults Obama for:
telling almost all taxpayers they can have everything for nothing.
This is his second column on the subject – and he bases this claim on a small portion of Obama’s overall plan. He does not fault Obama for proposing to increase the top marginal tax rate from 35% to 39%, as Bush’s tax cut legislation actually mandates unless it is amended; he does not fault Obama for pusing for health care reform; he does not fault Obama for pursuing cap-and-trade legislation; he does not fault Obama for any range of allegedly “socialist” policies – rather he takes issue with the fact that Obama plans to cap the deduction for charitable contributions, so that those making over $250,000 get the same percentage credit for a charitable contribution as someone making less than $250,000.
In addition to this rather minor tweak of our tax system (which Crook points out will generate a large amount of revenue thanks to the extreme concentration of wealth in our society), Crook raises the more substantial issue of how health care reform and cap-and-trade legislation, both of which he favors, are being paid for:
[T]he revenues from cap and trade are spent mainly on wage subsidies and tax cuts tilted toward the working poor. The down-payment on the cost of healthcare reform is financed by an additional tax increase on the rich.
Crook seems to be trying to conjure that bane of neo-liberals and conservatives alike – class warfare! All of this based on the assumption contained in the beginning, that Obama is “telling almost all taxpayers they can have everything for nothing.”
But is this so? Crook bases his argument on the presumption that the status quo is fair. He says that if Obama is planning on paying for health care reform without levying any additional taxes on the majority of Americans, then this majority is getting something – or in the exaggerated vernacular of those who make opinons for a living, “everything” – for nothing.
But this same majority of Americans getting “something for nothing” here allows a very small minority to control a far disproportionate amount of resources. The legitimacy of these social bargains – whereby those with power and wealth are allowed to keep their power and wealth peaceably – rarely enters into the minds of those who benefit most from the bargain until we enter periods of unrest and instability. In many parts of the world – China, Pakistan, Russia, Latvia, Bulgaria, Iceland – the current crisis is calling into question the legitimacy of their social bargains in fundamental ways. In America, this crisis is calling into question the historically recent amendments to our social bargain from the Reagan revolution of the 1980s.
The crisis might have prompted a sort of reactionary liberalism that sought to rollback the Reagan revolution in its entirety – much as Reagan’s reactionary conservatism sought to undo the Great Society. But instead, liberalism is guided by Barack Obama whose liberalism accepts some of Reagan’s most profound critiques and incorporates them into a new liberalism, leavened with both the wisdom of Edmund Burke and Friedrich Hayek.
Clive Crook’s invocation of the lazy masses being offered everything for nothing strikes me as a more refined take on Rick Santelli’s famous rant about the “losers” who took out loans they could not pay for. What strikes me about both sentiments is the sense of who the “losers” are – not the corporations and Wall Street bankers who lost the most. To call them “losers” may be morally appropriate but rings hollow when you’re speaking about those who benefited the most from our societal bargain. These “losers” may be feeling the pressure from our flagging economy but having benefited disproportionately during the boom of the past thirty years – and especially the Bush recovery – are still quite well-off. Those who “lost” the most also had the most – and still, after losing so much, often have more than the majority of the population. The real “losers” in the complete derogatory sense of the word as the individuals who took on mortgages they could not afford and now will be left with nothing but bad credit and the knowledge that they too contributed to the financial meltdown.
In other words, the real losers are not those whose prosperity (based on fees generated from borrowed money) is diminished, but those whose prosperity was never quite achieved as they borrowed money (generating the above-mentioned fees) to acquire some portion of their American dream of prosperity.
Crook while complaining about those being offered everything for nothing fails to acknowledge the system itself which has been redistributing wealth upwards for some time now. What – a different version of Crook might ask – did the 95% of Americans receive for allowing the top 5% to control most wealth? They received the promise of a growing economy that would lift everyone up – and the assurance that certain basic services would be provided, even to the least of our citizens. So, if the wealthy will be paying $4.10 more per day to help maintain the stability of the society which has provided them with the opportunity to become so wealthy, I wouldn’t call that something for nothing.
The most efficacious approach [.pdf] to stemming the violence in Mexico is to recognize that just as what most newspapers blithely call “drug-related crime” is actually drug-law-related crime or even drug-law-caused crime, the wave of violence in Mexico is not caused by the inherent viciousness of the Mexican underclass or the physiological properties of drugs deemed illicit, but by the set of perverse incentives that arise when governments treat adults like children and dictate what they can ingest, attempting to prohibit plants and substances that are easily grown and formulated and for which there is a steady demand. The violence in Mexico is not “drug-related” but “drug-law-related” or even caused directly and indirectly by the laws attempting to prohibit the use of some substances.
While I do not agree with the moral aspects of Bock’s approach – which attribute the moral failings of individuals to government policy – and place the moral blame for these actions on the government – his policy analysis here strikes me as fundamentally sound.
Comedy Central vs CNBC nicely captures the cultural battle inside the American elite between “creative class” types and the business manager types. Both sides think the other side is composed of idiots, but their side is mistaken.
[digg-reddit-me]Isn’t that what Jim Cramer does on every show, you might ask? That’s a fair point.
But what if Jim Cramer has now decided that he will dedicate himself to defeating Barack Obama’s agenda, declared himself to be on the “White House enemies list;” and that what he is doing now is what he has done all along – to “fight to help viewers and readers make and preserve capital.” That’s what I call jumping the shark. Bad investment advice is what Cramer does entertainingly. But this sense of self-grandiousity – and his seeming demand to be taken seriously instead of as a ridiculous figure. That’s too much.
The self-puffery is evident as Cramer insists he is on a “White House enemies list” (his source is the noted Democratic party insider Rush Limbaugh). Cramer thinks he is on this “list” because made an outrageous comment about White House policy being designed to destroy wealth and kill kittens, and when questioned about it, the White House press secretary pointed out that Mr. Cramer’s advice on how to create wealth wasn’t what the White House was looking for.
Cramer claims he has spent his career helping viewers and readers “preserve” their capital – and that his advice now to oppose Obama is just a continuance of that. So for a moment, let’s look at the fate of those who would have followed Cramer’s advice in the past. The Consumerist points out that if one had followed Jim Cramer’s stock-picking advice since 2000, you would have been better served by flipping a coin – as Jim Cramer’s advice is slightly worse than a coin toss.
You should be buying things and accept that they are overvalued, but accept that they’re going to keep going higher. I know that sounds irresponsible, but that’s how you make the money. Right now, up is down, left is right, peace is war. [my emphasis]
Bear Stearns. Cramer recommended buying this stock on 8/17/07 at $118.20 per share. He lost 95 percent on this one – selling at just under $6 per share on 3/20/08.
Morgan Stanley. Cramer recommended buying this stock on 9/15/06 at $70.95 per share. Its recently been trading in the mid-teens.
Lehman Brothers. Cramer recommended this stock on 10/17/05 at $55.18 per share. On 9/5/08 with the stock trading at $16 per share, on CNBC, Cramer selected Lehman as a “screaming buy” and said things couldn’t get any worse for the company. The stock now trades at less than $1 per share for more than a 99 percent loss for Cramer.
Merrill Lynch. Cramer recommended buying this stock on 9/19/05 at $60.17 per share and sold it on 9/12/08 for $17.05 per share for a 72 percent loss…
(And, by the way, Cramer recommended buying financial services giant AIG on 11/7/05 at $66.34 per share and the stock currently trades around $2 per share for a 97 percent loss.)
Given his history, it’s a bit rich of Jim Cramer to claim his career has been about “preserving” anything other than his own entertaining presence. If he meant to dedicate his life to “preserving the wealth of his viewers and readers,” clearly he’s been quite a miserable failure. In terms of sheer lunacy, on the other hand, he’s still got it.
But I, for one, am grateful the White House isn’t following the Jim Cramer guide to wealth creation. And for those of you that are – I might advise you invest in a solid coin to flip, as it would apparently serve you better.
I didn’t think the Democrats were stupid enough to start talking about reimposing the Fairness Doctrine. But I was wrong.
For those not up-to-date with the Fairness Doctrine controversy, it goes back to the late 1960s when the FCC began to push radio and television stations to air material about controversial matters including some consideration for both sides of the issue. ((The Fairness Doctrine was actually created earlier, but it was not incorporated into FCC guidelines until the late 1960s.)) The justification for this government interference was that with a very limited amount of media channels available, and with the airwaves owned by the public and merely licensed to the media companies profiting from them, this was a reasonable request and a necessary one in order to encourage an informed citizenry. By the late 1960s, the powerful corporate forces in the right-wing movement had begun to bankroll a conservative movement at this point – giving enormous amounts of money to create advocacy groups, think tanks, magazines, and other means of pushing conservative messages. One of their goals was to eliminate the Fairness Doctrine – and in 1987 they succeeded. At right about this time with no more obligation to be fair or present both sides of controversial issues, right-wing talk radio took off. Simon Rosenberg publicized this sequence of events – and Steve Rendall at Commons Dreams gives an overview of the liberal take on this history which is worth a read. Since then, conservative talk radio has mobilized the conservative movement – and perpetuated quite a few lies and distrortions.
In this context, you can see why some Democrats want to bring back the Fairness Doctrine. After all, if Steve Marlsburg, nemises of this blog, can use the public airwaves to talk for two hours about how Barack Obama is evil and no good people can support him and go on and on supporting this with one lie after another distortion, wouldn’t everyone benefit from a bit of the other side getting a word in edgewise? And if a handful of media titans control almost all of the media, the concentration of power in their hands ensures that opinions they agree with are aired – and oftentimes, that opinions they disagree strongly with are not aired.
And with good reason: reimposing the Fairness Doctrine might sound like a decent idea given the above history. But there are some major reasons not to:
It won’t accomplish much. Cable and broadcast television shows already give alternative views on controversial issues. They might present one side much better than the other (think Hannity and Colmes) but they give the other side a platform as well. Listeners to conservative talk radio today choose to listen to right-wing nutjobs who don’t try to balance their opinion with facts over more serious sources of news. They have other options if they want them.
It would endanger the important goal of net neutrality. Conservatives are already calling net neutrality a “Fairness Doctrine for the internet.” This is a ridiculous claim – but it will gain some credence if those who support net neutrality also support the Fairness Doctrine. The right continues to push this meme [pdf] and has been having some success in polarizing the support for net neutrality, picking off those right-wingers who are most gullible. As I wrote earlier about this campaign to link these two very different policy ideas:
[T]his propaganda campaign [to link net neutrality and the Fairness Doctrine] does not seem directed to the public at large, but at conservative activists. The Fairness Doctrine is not something that gets the blood of the average American boiling. But it does evoke a Pavlovian response among conservative activists and right-wing radio listeners. And although these groups are not large enough to force their way, they are large enough to derail the political conversation and make it harder to enact this obvious policy.
It would also endanger other goals such as breaking up media monopolies. In terms of other issues, Rush Limbaugh in his recent Wall Street Journal op-ed began to lump in rules about “local content” and “diversity of ownership” as the Fairness Doctrine by other means. Rush Limbaugh here is clearly carrying water for Clear Channel Communications who recently gave him a $400 million contract and who would be threatened by rules regarding local content and diversity of ownership as they already own such a large portion of America’s radio stations. Byron York followed Limbaugh’s lead repeating the same talking points in a recent column.
It will provoke a backlash. Right now, aside from the musings of a few prominent liberals and impassioned editorials from liberal talk radio hosts themselves, there is no serious effort to push this idea forward. Liberal ideas are out there – on newspaper editorial pages, on political opinion shows, and most of all on the web. The people most excited by the revival of the Fairness Doctrine are the conservative talk radio hosts and the right-wing movement they lead. I follow this matter closely – reading most articles published on it – and almost every article I read is from some conservative publication or blog hyping the threat to free speech and all that is good and holy that is the Fairness Doctrine. Which is why the Heritage Foundation has this piece of trash written by Rory Cooper insisting that the White House is “rushing” to the Fairness Doctrine – despite the aforementioned opposition by the White House. (A propaganda outlet such as Heritage has not patience for such “subtlties” as facts.) Which is why Senator Inhofe is promoting the view that the Fairness Doctrine as yet another assault on the Christians. Which is why Bryon York recently penned a column linking the Fairness Doctrine to breaking up media monopolies as assaults on “media freedom.” Which is why the World News Daily has distorted Senator Sherrod Brown’s comments to claim he supports the Fairness Doctrine. Which is why Rush Limbaugh and the rest of the talking heads can’t shut up about it. This is a fight the right wants – and for good reason. It plays into the liberal stereotypes conservatives promote – especially the idea of a nanny-state attempt to control free speech. It makes the right look important; it makes the Democrats look petty; if the right loses, they will be able to claim the mantle of victimhood that conservatives seem to relish as much as any other group.
[digg-reddit-me]Opponents of Obama’s response to the financial crisis have taken a number of approaches their disagreement. As with all political opposition, these approaches begin with a seemingly common-sense question or objection – and use it as a lever to attack their opponents. Governor Bobby Jindal for example used a bit of each of the following approaches to go after Obama – though not quite committing to any of them fully. I’ve paired many of these approaches with the most prominent individuals who have become associated with them – and tried to respond to them. What is common among them all is a desire to tap into the inchoate rage that this crisis is engendering among all Americans – and to try to focus that rage on Barack Obama. What is lacking among these approaches is a compelling or plausible alternative.
I.Do we need to do anything at all? (James K. Glassman)
What Mr. Dow 36,000 failed to account for was that the stability of societies around the world is dependent on economic growth and the opportunity this brings. The opiate of the masses unhappy with their governments is no longer religion – it is the hope that results from economic growth, the miracle and curse of rising expectations.
Mr. Dow 36,000 believes that if our economic heart seems to have stopped beating, the answer is to have faith that our blood will continue to flow. “We don’t need stimulus – we need to calm down,” he says. But the only rational response is to shock the heart back into action, to stimulate it.
II. But do we need to spend all this money?
Yes, if not more. The basic theory of Keynesian stimulus is that when the aggregate market demand for goods and services enters into a decreasing spiral.
Less demand = Lower prices = Less supply = Less jobs = Less demand = Lower Prices = etcetera
When an economy enters this cycle, Keynes believed, the government must step in and increase demand by spending more than it receives in taxes. (If it taxed to make up for it’s increased spending, it would not be adding demand but merely redistributing it.) Projections indicate that the US gross domestic product will fall by $2.1 trillion in the next two years. Which is why some Nobel-prize winning economists were frustrated that Obama’s plan was so small that it will not be able to make up for the drop in demand.
Joe Scarborough pointed out on Meet the Press last Sunday that, as all deficit spending is stimululative, the last eight years of the Bush presidency have been Keynesian stimulus too:
Scarborough uses this point to make out Obama’s stimulus to be more of the same, except with the stimulus directed towards the bottom 95% of Americans instead of the top 2%. He’s not entirely wrong, but to continue the metaphor above – if someone’s lifestyle choices have put enormous pressure on their heart, as they snort cocaine or take speed or otherwise constantly overcharge their heart, the first step to getting them healthy is usually to get them to stop putting so much pressure on their heart. But if their heart beat is dropping rapidly, or their heart has stopped, then the first step is no longer to remove the cocaine from their system but to inject them with someone that will energize their heart. This is a stimulus. And this is the reason Obama’s economic team is increasing our deficit in the short term.
III. What about tax cuts? (Eric Cantor)
The Republicans proposed a $3.1 trillion dollar permanent tax cut as their alternative to Obama’s $780 billion dollar spending/tax cut stimulus. That they continued to criticize Obama for fiscal irresponsibility and accused him of “generational theft” while supporting this bill aptly demonstrates that this was a pure political play. But if nothing else, the sheer size of the Republican alternative stimulus suggests what the reports of the nonpartisan Congressional Research Office concluded: tax cuts work slower and have less stimulative effect than almost any kind of spending measures. This is why more than half of Obama’s bill is spending.
IV. Fine. But even if this works, the deficit will be out of control! (John McCain)
Damn right it will. Hell – after eight years of rapidly decreasing taxes coupled with the largest increase in domestic spending since the War on Poverty and two large and seemingly unending wars, the deficit was already out of control. Even before that, as Bush failed to respect the “lockbox” that Al Gore promised to protect with the extra funds raised by Social Security taxes, we were in trouble. But even if we had saved all of this money paid into the Social Security program which is owed to me and you in a few dozen years (or less) the rapidly escalating cost of health care would leave our government with a deficit of over $60 trillion dollars over the next few decades.
Which is why Obama has been talking about dealing with America’s long-term fiscal problems since he was on the campaign trail – and especially since he was elected. In the weeks before his election, Washington was taken with his idea of a “Grand Bargain.”
But none of this will matter if the economy doesn’t begin growing again. If the first step to recovery is deficit spending to get the economy going again – continuing the above metaphor, using paddles, injections, whatever to get our economic heart functioning again – the next step is to clean up our act and take a fiscally responsible approach to governing and entitlement spending – in other to stop the irresponsible behaviors that helped create the crisis. If our economy is still stagnant, we will need to dismantle a good portion of our federal and state governments. But if the stimulus works, and the economy begins to grow again, adjustments can be made. Another point that Obama and his Director of the Office of Management and Budget Peter Orzag have made clear is that the first step to solving America’s long-term fiscal problems is tackling the problem of our rapidly escalating health care costs – which thanks to their rapid growth make up an ungodly percentage of our unmet future commitments. This is why Obama sees health care reform as one of the first steps that needs to be taken – to stop the rapidly escalating costs of health care.
V. Do we really need to help all these losers? (Rick Santelli)
Yes, we do. Obama has described his economic team as a bunch of mechanics who are trying to fix the machine that is our economy. When a mechanic sees that a spring or a lever or a cog isn’t functioning properly – and this piece is preventing the machine from working – the mechanic knows the problem will not be fixed by lecturing the piece or letting it fail for not properly doing it’s job. The correct thing to do is to replace it or glue it or do whatever is necessary to make the piece function as it must. Yes, the bankers whose job it was to properly calculate risk and make money instead spectacularly failed to understand the risks they were taking and lost money; and yes, the liars and idiots who took our mortgages they couldn’t afford should be punished too. But while one bank failing is just, a failure of our banking system could paralyze the economy. And while an idiot who took out a loan he couldn’t afford should get his house foreclosed upon, too many foreclosures will take down a neighborhood. Both of these are part of systemic problems which has resulted in downward spirals.
Obama, in taking this approach, seems to be combining some elements of Hayek’s warnings about the limits of the discipline of economics and the failure of the best-laid plans with Keynes’s fierce urgency of now – a kind of trial-and-error, scientific approach to financial crisis management as opposed to a more ideological, morality-driven approach associated with partisans of the left and right.
VI. Obama’s plan sucks. It isn’t working yet!
The stimulus money hasn’t begun to be spent. And the banking and mortgage fixes have yet to be fully implemented – so of course it’s not working yet. Obama recently explained that the ups and downs of the stock market are a flawed indicator – just as the ups and downs of campaign polling is often flawed. Obama bet his campaign on a strategy of ignoring the day to day and conceding the daily media wars and never trying to boost his daily poll numbers. Instead, he focused on the fundamentals. And he won. His economic team’s approach to the financial crisis is similar. The falling stock market is merely a symptom of the crisis. It is a waste of time to treat a symptom when the root cause is not being addressed – but if one is able to treat the root cause, the symptom will be cured as well.
Obama has elected to do what needs to be done to fix the economy as a whole – and this means helping people whose decisions were poor, people who were greedy, people who were stupid, and yes, losers too. No matter how distasteful, the situation bankers and mortgagees must be helped in order to fix the economy.
To reiterate, the Obama plan has several steps:
Fixing the mortgage and banking mess.
Arresting the downward economic spiral touched off by these messes with government spending to stimulate demand.
Put our government on a fiscally sane path by tackling the enormous gap between our spending promises and revenue generation in the area of entitlements – and at the same time, reigning in deficit spending as soon as this crisis has passed. (These steps are necessary to prevent those who we currently owe from panicking.)
VII. I hope he fails! Socialist! Communist! Marxist! Terrorist! Black Hitler! The Antichrist! Nobama! (Rush Limbaugh)
In fairness to Rush, he’s only publicly expressed a few of these sentiments. I’m not sure that he’s called Obama a black Hitler yet – but I’m sure he’s joked about it. This approach presumes that Obama has a quasi-secret agenda he is trying to impose on America – and that this agenda is so awful, it would be better to suffer another Great Depression or worse than to capitulate. Rush has described Obama as acting in bad faith, as being deranged, as having a mental illness (which Rush diagnoses as liberalism), and as all manner of awful and un-conservative things. Rush is a true propagandist and ideologue – and he has become the rallying point for movement conservatives.
His critiques now have power as the anticipatory fear of what Obama might do overwhelms the sense of what Obama is doing – and if Obama fails, Rush will be hailed as a visionary and a leader. But if Obama continues to display the conservative temperament and pragmatism that won him the election, then he will be as little remembered as Father Coughlin with his anti-Roosevelt screeds.
Rush – like proponents of failed ideologies everyone – continues to maintain that the conservative movement did not fail, but rather that it never truly had the power to achieve it’s agenda.
“As we look at 2009, on every issue, with the single exception of Iraq, everything is worse…Pakistan is worse. Afghanistan is worse. Russia is worse. Emerging markets are worse. Everything big out there is worse, and some will be made even worse by the economic crisis.”
There is a geopolitical storm coming, concluded Bremmer, “and it is not priced into the market yet.”
As a legal matter, we are compelled to investigate by the Convention Against Torture, a binding treaty, that requires its signatories to investigate and refer for possible prosecution credible evidence of torture under their jurisdiction.
That obligation has been triggered by, among other things, the admissions that C.I.A. interrogators used waterboarding on at least three suspects with the express approval of Vice President Dick Cheney and other Cabinet officials, and by the finding of Susan Crawford, head of military prosecutions at Guantanamo, that interrogators there, acting under orders of then Defense Secretary Donald Rumsfeld, tortured Mohammed al-Qahtani. If we do not investigate such evidence, foreign courts have the right to pursue torture prosecutions of U.S. officials under the principle of “universal jurisdiction.”
In other words, as per our treaty obligations, we must investigate any credible allegations of torture. If we do not, many top Bush administration officials will not be able to leave the country for fear of arrest and the worst of America’s abuses over the past years will be revealed by foreign nations.
We must take responsibility. We cannot pass the buck.
The nexus, if it was anywhere, was in Pakistan – a nuclear state whose national hero sold parts to the highest bidder, whose intelligence service backed the Taliban, and whose North-West Frontier Province became a refugre for al Qaeda.
WMD proliferation, al Qaeda, assorted other religious extremists – all these combine in the unstable nation of Pakistan which the New York Times explained is “edging ever closer to the abyss.” Pakistan’s military and intelligence services are not clearly on America’s side – perhaps hoping to outlast our interest in the region. Niall Ferguson reports that Pakistan’s stabilizing middle class has been hit hard by this financial crisis; the religious extremists have fought the central government almost to a standstill in the frontier regions of Pakistan – and a truce is now being negotiated. Pakistan’s civil society movement which drove General Musharaff from power is now rising up against the civilian government thanks to political shenanigans to marginalize opposition parties. Corruption seems endemic. The military and intelligence services seem to be implicated in some way in the recent Mumbai attacks – as well as numerous other terrorist incidents and A. Q. Khan’s nuclear black market.
