Friday Reads

Good Morning!

Much is being made of the election results that delivered a sound thumping to Republicans and their agenda to restrict the rights of women and minorities and to provide benefits to the wealthy and powerful.  A record number of women will be serving in the US Senate.  Five new women will be headed there.  Of all the significant races, Senator-elect Elizabeth Warren appears to have garnered the most hope and angst. Simon Johnson considers her election “important”.

Senator Warren is well placed, not just to play a role in strengthening Congressional oversight but also in terms of helping her colleagues think through what we really need to make our financial system more stable.

We need a new approach to regulation more generally – and not just for banking. We should aim to simplify and to make matters more transparent, exactly along Senator Warren’s general lines.

We should confront excessive market power, irrespective of the form that it takes.

We need a new trust-busting moment. And this requires elected officials willing and able to stand up to concentrated and powerful corporate interests. Empower the consumer – and figure out how this can get you elected.

Agree with the people of Massachusetts, and give Elizabeth Warren every opportunity.

Laura Gottesdiener thinks Warren’s election may usher in the end of the Tea Party.

Warren, who beat out the incumbent Republican Scott Brown in a bitter election, ran a campaign centered on connecting the dots between economic policies and personal values. A Harvard bankruptcy-law professor, Warren trumpeted a platform that called for economic reform, financial regulation and the protection of Social Security, Medicare and other safety-net programs.

“We said this election is about whose side you’re on,” Warren told The Huffington Post . “I think of this as an election where we stuck to our values: Make sure Social Security and Medicare benefits are protected, and millionaires and billionaires pay their fair share. To me, that’s the heart of it. That’s really where the basic social contract is reaffirmed.”

This type of populist platform became increasingly risky after Citizens United allowed for the infusion of billions of dollars into state elections. Warren was already well disliked on Wall Street for her role in creating and heading the Consumer Financial Protection Bureau, a watchdog agency that seeks “to make markets for consumer financial products and services work for Americans — whether they are applying for a mortgage, choosing among credit cards, or using any number of other consumer financial products.”

 Warren may be given a seat on the powerful senate banking committee which has to be worrying Wall Street.

Senior Senate Democratic aides, speaking on condition of anonymity, said the Massachusetts senator-elect is a logical fit for the committee, even though it is rare for a freshman senator to get such a plum assignment.

If she gets the slot, Warren’s bully pulpit would be replaced with real power.

The bipartisan panel can greatly influence policy decisions through its oversight of financial services, international trade, insurance, housing, securities and economic issues.

Warren, who has called for breaking up the big banks, could move to block legislative tweaks to the 2010 Dodd-Frank financial oversight law that would blunt the full impact of profit-pummeling reforms.

She would also be able to forcefully push for regulators to use all the powers available to them to write strict interpretations of rules.

That could mean stronger curbs on Wall Street trading, higher capital buffers and rules that would compel mega-banks to shrink.

Warren and other Senators will have to watch the President and Speaker of the House as they battle of the so-called fiscal cliff before getting their say in the budget.

While no can say for sure how the negotiations to avoid the so-called “fiscal cliff” — the expiration of the Bush tax cuts and impending across-the-board spending cuts — will unfold, the betting here is it will get ugly before it gets better.

First, virtually no one believes what happened last time will happen this time: President Obamawon’t cave on extending tax cuts for upper income earners.

So will House Republicans come to the table voluntarily, before the first of the year? Or will it require all hell breaking loose — an expiration of the income and payroll tax cuts, sequestration, the estate tax, and the AMT kicking in, cap gains and dividend rates rising — before they are forced to come kicking and screaming to an agreement?

The president holds a lot of leverage here — not just because he just won, Democrats expanded their majority in the Senate, and gained seats in the House. He holds leverage because, structurally, we’re talking about tax cuts that are expiring. His position is clear: The rate for the wealthiest will be allowed to go up. If he is willing to go to the wall and let the the lower rates expire, pressure shifts to House Speaker John Boehner to make a deal before his conference is isolated by the business community, which more than anything wants D.C. to just cut a deal, and Senate Republicans, who cut a deal and sold Boehner out last time. Add to that a tanking market and mounting economic hysteria, and that’s a lot of pressure on the House GOP true believers, Allen West or no Allen West.

The conventional wisdom is that Obama and Republicans will make a short term deal on taxes and sequestration — kicking that can down the road yet again — contingent on agreement on a “framework” for tax reform to be done in the first part of 2013.

There is incentive for Boehner to try and make an early deal, before the first of the year. The question, as always, is will he have the votes to allow tax rates on the wealthy to rise? Seems doubtful. He would have to be a pretty firm and big commitment from Obama on tax and entitlement reform to get them to go along.

Is it a matter of who will blink first?  Here’s a conversation between Ramesh Ponnuru and Margaret Carlson.  This is Ponnur’s take.

Does Boehner mean that tax reform should raise money by cutting tax breaks more than it cuts tax rates? Or does he mean that it should raise money just by encouraging economic growth?

If it’s the first, Boehner is going to have a problem with conservatives — especially Grover Norquist, the party’s anti- tax enforcer. If it’s the second, he’s not talking about much revenue.

That’s a bargain that sounds grand to me, but liberals who just won an election might disagree, don’t you think? My guess is he’s being ambiguous so he can gauge the reaction.

Another question: What leverage does Boehner have, and what leverage does he think he has? Obama doesn’t have to cut any deal to get a lot of extra revenue. He can let taxes go up as scheduled and challenge the Republicans to cut them only for the middle class. Republicans can either go along or decide not to and then blame him for the resulting middle-class tax hikes. Who likes their odds better in that fight?

Republicans have another bit of leverage, beyond the threat of blaming Democrats for tax increases: We’re getting close to hitting the debt ceiling again, and in the normal order of thingsHouse Republicans would have to agree to lift it.

Carlson has this to say.

In an election that was otherwise a debacle for Republicans, the House held its majority, and Boehner holds the gavel as long as he coddles his most extreme members. So he will.

Meanwhile, the president (unless you see something in him, Ramesh, that I don’t) still believes in this hope-y, change-y stuff Republicans consider a joke. He still sees himself as a historic figure that can bridge the partisan divide.

It is Boehner’s tiny, eensy-weensy bit of openness to dealing with Obama that is enraging conservatives. At the same time, it is playing to Obama’s view of himself. The president’s signature trait is an inability to negotiate from strength. He leads with his best offer. If Obama were buying a car, he’d probably pay full price and leave without radial tires.

In fairness to Obama, it’s foolish to call the bluff of an opposition that’s already shown it will allow the U.S. to default on its debt.

You’re right, Ramesh, that Obama doesn’t have to do anything at all to raise revenue. But he can’t risk raising taxes on the working and middle classes when the economy is still shaky. Republicans, by contrast, are willing to risk anything.

One of the quiet victories of the election is the failure of the NRA whose candidates didn’t do well this election.

The Sunlight Foundation, a campaign watchdog group, found that the NRA’s Political Victory Fund – the political arm of the nation’s largest gun lobbying organization – spent almost $11 million for or against individual candidates in the general elections, but got less than a 1 percent return on its investment.

The NRA, for instance, spent more than $7.4 million in opposition to President Obama and almost $1.9 million in support of Mitt Romney, according to Sunlight. But Obama was the victor on Tuesday, and the NRA had similar bad luck trying to influence Senate and House races.

For example, the group put almost $538,000 behind Indiana Senate contender Richard Mourdock (R), who lost, and spent more than $512,000 to oppose Sen. Sherrod Brown (D-Ohio), who won, according to Sunlight.

Conversely, Planned Parenthood did an outstanding job!

Planned Parenthood’s political wing trounced other groups with a near perfect return on its election spending, according to a new numbers review.

The Sunlight Foundation found that Planned Parenthood’s advocacy arm and super-PAC spent about $5 million and $7 million, respectively, to oppose Republicans and support Democrats in the general election.

In the end, the two groups saw returns on investment of about 98 and 99 percent, according to Sunlight.

The figures come as election-watchers pick apart the most expensive cycle in history. Republicans’ loss in the presidential race and failure to claim the Senate came as a surprise to outside donors, many of whom spent millions to ensure GOP victories.

Planned Parenthood’s political wing played an outsized role in the general election, compared to cycles past. The flood of political activity came as Republicans vowed to end Planned Parenthood’s federal funding as a healthcare provider for low-income women. Conservatives argue that while the law technically bans public funds from supporting abortions, taxpayer money need not flow to a group that performs the procedures.

The election covered a wide range of women’s health issues in addition to public funds for Planned Parenthood, giving the group ample chance to advocate in favor of abortion rights and access to free birth control.

The only outside groups that came close to beating Planned Parenthood’s return on investment were Majority PAC, which fought for Democratic Senate candidates, with a success rate of about 88 percent, and the Service Employees International Union PEA-Federal, with about an 85 percent success rate.

I’ll end with offering some beautiful finds in a Thracian burial site in Bulgaria.

The researchers found fragments of a wooden box, containing charred bones and ashes, along with a number of extremely well-preserved golden objects, dated from the end of the 4th and the beginning of the 3rd century B. C.. They include four spiral gold bracelets, and a number of intricate applications like one which shows the head of a female goddess adorned with beads, applications on horse riding gear and a forehead covering in the shape of a horse head with a base shaped like a lion head. The objects weigh 1.5 kg, but the excavations continue.

The precious find also contains a ring, buttons and beads. Gergova explains that it seemed the treasure was wrapped in a gold-woven cloth because a number of gold threads were discovered nearby.

The Professor says these were, most likely, remnants from a ritual burial, adding the team expects to discover a huge burial ground, probably related to the funeral of the Gath ruler Kotela, one of the father-in-laws of Philip II of Macedon. She notes this is a unique find, never before discovered in Bulgaria.

What’s on your reading and blogging list today?